SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)
*        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
*       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From .......... to ..........
Commission file number 0-19989

FM Properties Inc.
(Exact name  of  Registrant  as  specified in Charter)
DELAWARE                                    72-1211572
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                  Identification No.)

1615 Poydras Street
New Orleans, Louisiana                                  70112
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code:  (504) 582-4000

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock Par Value $0.01 per Share
Preferred Stock Purchase Rights

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during  the  preceding  12  months  (or for such shorter period that the
registrant was required to file such reports),  and  (2)  has been subject to
such filing requirements for the past 90 days.
Yes X  No

Indicate by check mark if disclosure of delinquent filers  pursuant  to
Item  405  of  Regulation  S-K  is  not  contained  herein,  and  will not be
contained, to the best of the registrant's knowledge, in definitive  proxy or
information  statements  incorporated  by  reference in Part III of this Form
10-K or any amendment to this Form 10-K.    X  

The aggregate market value of the voting  stock  held by non-affiliates
of the registrant was approximately $44,148,000 on March 14, 1997.

On March 14, 1997, there were issued and outstanding  14,285,770 shares
of Common Stock, par value $0.01 per share of the registrant.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement dated March  27,  1996, to
be  submitted  to  the  registrant's stockholders in connection with its 1997
Annual Meeting to be held  on  May 8, 1996 are incorporated by reference into
Part III of this Report.
TABLE OF CONTENTS

Page

Part I.......................................................................1

Items 1. and 2.  Business and Properties...................................1
Overview.................................................................1
Recent Developments......................................................1
Real Estate..............................................................2
Competition..............................................................3
Regulation and Environmental Matters.....................................3
Employees................................................................3
Relationship with FTX................................................... 3
Cautionary Statement.................................................... 4

Item 3. Legal Proceedings..................................................7

Item 4. Submission of Matters to a Vote of Security Holders................7
Executive Officers of the Registrant..............................7

Part II......................................................................8

Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters...................................................8

Item 6. Selected Financial Data............................................8

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................................9

Item 8. Financial Statements and Supplementary Data.......................13

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.................................................22

Part III....................................................................22

Item 10. Directors and Executive Officers of the Registrant...............22

Item 11. Executive Compensation...........................................22

Item 12. Security Ownership of Certain Beneficial Owners and Management...22

Item 13. Certain Relationships and Related Transactions...................22

Part IV.....................................................................22

Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K..............................................22

Signatures.................................................................S-1

Financial Statement Schedules..............................................F-1

Exhibits...................................................................E-1
PART I

Items 1. and 2.  Business and Properties.

OVERVIEW

FM Properties Inc., a Delaware  corporation  ("FMPO" or the "Company"),
was  organized  in  March  1992  and  operates  through  its   99.8%  general
partnership  interest  in  FM  Properties  Operating Co., a Delaware  general
partnership  (the  "Partnership").  The remaining  0.2%  general  partnership
interest is held by  Freeport-McMoRan  Inc., a Delaware corporation listed on
the New York Stock Exchange, which also  serves as the Partnership's managing
general partner ("FTX" or the "Managing General  Partner").   The Partnership
was  formed to hold, operate and develop substantially all domestic  oil  and
gas properties  of,  and substantially all domestic real estate then held for
development by, FTX and  certain  of  its subsidiaries.  The Partnership also
assumed  substantially  all  of  the  liabilities  related  to  such  assets,
including approximately $500 million of  indebtedness,  substantially  all of
which was guaranteed by FTX.

Since  the formation of the Company, the primary objective of managing,
developing and  operating the Partnership's assets has been the retirement of
its indebtedness and the elimination of the debt guarantees, establishing the
Company as a stand-alone  entity.   The Partnership sold virtually all of its
producing oil and gas properties in 1993  and  currently  is  engaged  in the
development  and marketing of real estate in the Austin, Dallas, Houston  and
San  Antonio,  Texas  areas.   During  1996,  the  Partnership  was  able  to
capitalize on enhanced  sales  opportunities  at its properties in the Austin
area brought about by several positive legislative  and judicial developments
that   occurred  during  1995.   As  a  result,  the  Partnership   generated
significantly higher operating cash flows which enabled it to reduce its debt
by $63 million to $58.3 million at December 31, 1996.

The ability of the Partnership to make future payments of principal and
interest,  and  to comply with the covenants relating to its debt, is largely
dependent upon the Partnership's future performance, which will be subject to
numerous economic  and  other  factors, including factors beyond its control.
The Company has incurred operating  losses  in each year since inception from
the real estate activities conducted by the Partnership.   The  Partnership's
future  performance and the financial viability of the Company are  dependent
on the future  cash  flows  from  the Partnership's assets.  These cash flows
will  be  significantly affected by future  real  estate  values  and  future
interest rate  levels.   There  can be no assurance that the Partnership will
generate cash flow or obtain funds  sufficient  to make required interest and
principal  payments.   Considering  the  anticipated   cash   flows   of  the
Partnership and the maturities of its debt, the Partnership will be required,
not  later  than February 1998, to refinance its debt or sell assets in order
to generate cash then required for principal payments.

RECENT DEVELOPMENTS

Revenues for 1996 totaled $79.2 million, consisting of $44 million from
the  sale  of developed  properties  and  $35.2  million  from  the  sale  of
undeveloped  properties.   Sales  of developed properties include $25 million
from the sale of the Barton Creek Country  Club and Conference Resort and $19
million from the sale of 393 single-family home  sites in the Austin, Houston
and San Antonio areas.  Revenues from undeveloped  property sales include two
tracts  within  the  Barton  Creek  development totaling  105  acres  for  an
aggregate $4.8 million, the first sales  under  the  Water Quality Protection
Zone  legislation  enacted in 1995, the sale of commercial  and  multi-family
tracts in the Dallas  area  totaling 79 acres for an aggregate $12.6 million,
and the sale of 535 acres in  the Austin, Dallas and San Antonio areas for an
aggregate $17.8 million.

During 1996 the Partnership  generated  operating  cash  flow  of $68.7
million,  which  after funding capital additions, enabled FMPO to reduce  the
debt of the Partnership  and  Circle C Land Corp., its consolidated affiliate
("Circle C"), by $63 million, from  $121.3  million  on  December 31, 1995 to
$58.3 million on December 31, 1996.

In  the  fourth  quarter  of 1996, the Partnership amended  its  credit
agreements extending all maturities  until  February  1998, reducing interest
rates,  lowering  available  borrowing  capacity under the  revolving  credit
agreement to $10 million, and eliminating  the  guarantee of Freeport-McMoRan
Copper  & Gold Inc. ("FCX").  All of the Partnership's  and  Circle C's  bank
debt is now  guaranteed  only  by  FTX.   FTX  has liens on the Partnership's
assets that may be subordinated to its lenders under certain conditions.

While such debt is currently guaranteed by  FTX, there is no commitment
by FTX to guarantee any such debt after February 1998,  and  there  can be no
assurance  that  any  such  further  guarantee  will  be provided.  FMPO will
continue to seek to reduce its need for financing through the sale of assets,
and will also seek new financing alternatives, which may  involve issuing new
debt  or  common  or  preferred  equity, with a view to eliminating  the  FTX
guarantee.   Management  believes  that   the   ongoing   reduction   of  the
Partnership's debt will significantly improve its financing alternatives.  If
the FTX guarantee is eliminated, FMPO would have the ability to remove FTX as
Managing General Partner and dissolve the Partnership, thereby enabling  FMPO
to  manage  its  business  without  the restrictions currently imposed by its
relationship with FTX.  While FMPO believes a new financial structure will be
beneficial to the long-term interests  of its shareholders, an elimination of
the FTX guarantee may increase near-term financing costs significantly.  FMPO
will seek to establish a long-term base of capitalization that will enable it
to pursue its business plan of developing and selling real estate.

During September 1996 the Partnership entered into an agreement to sell
the remaining assets of Circle C for $34  million;  however,  in January 1997
the   agreement   expired   and  the  Partnership  retained  the  prospective
purchaser's $1 million performance deposit.

REAL ESTATE

As a result of the transactions  closed  in  1996  and  described under
"Recent  Developments,"  above,  the  Partnership's  principal  real   estate
holdings  in  the Austin, Texas area currently consist of approximately 2,900
acres of undeveloped residential, multi-family and commercial property within
the  Barton Creek  development,  approximately  1,000  acres  of  undeveloped
commercial and multi-family property within the Circle C Ranch development in
the City  of  Austin  owned  by  Circle  C,  and  approximately  500 acres of
undeveloped  residential, multi-family and commercial property known  as  the
Lantana tract,  south  of and adjacent to the Barton Creek development in the
City of Austin.

The  Partnership also  owns  or  has  interests  in  approximately  308
developed lots,  262 acres of additional undeveloped residential property and
208 acres of additional  undeveloped  commercial  and  multi-family  property
located  in  Dallas,  Houston  and San Antonio, Texas that are being actively
marketed.   These real estate interests  are  managed  by  professional  real
estate developers  who have been retained to provide master planning, zoning,
permitting,  development,   construction   and  marketing  services  for  the
properties.   Under  the terms of these agreements,  operating  expenses  and
development costs, net  of  revenues,  are funded by the Partnership, and the
developers are entitled to a management  fee  and  a  25% interest in the net
profits, after recovery by the Partnership of its investments  and  a  stated
return, resulting from the sale of properties under their management.

Pursuant  to  a  joint  venture  agreement  between FMPO and IMC-Agrico
Company  ("IMC-Agrico"),  a  joint venture between Freeport-McMoRan  Resource
Partners, Limited Partnership,  an affiliate of FTX, and IMC Global Inc., the
Company  may  also participate in the  development  of  up  to  approximately
171,000 acres of land in Florida owned by IMC-Agrico that has been or will be
reclaimed following  completion  of  IMC-Agrico's  mining  activities  on the
properties.   No  significant development activity is expected in Florida  in
the near future.

Real estate markets  have  historically been subject to strong periodic
cycles driven by numerous factors  beyond the control of market participants,
such as general economic conditions,  changes  in  interest  rates, inflation
rates and the cost and availability of borrowing.  In addition,  the business
of  real  estate  development  is subject to numerous inherent risks such  as
local  and national real estate market  conditions,  changing  environmental,
zoning and  other governmental regulation, overbuilding and the level of real
estate taxes  and  other  carrying  costs.   The  timing and nature of future
development and sale of the Partnership's real estate  assets  will depend on
various  factors  beyond  its  control,  including continuing improvement  in
market conditions, supply and demand of the  particular  types  of properties
owned  by  the  Company,  the  level  of  competition,  and  zoning and other
governmental regulation.

COMPETITION

The  Company's  business  is  highly  competitive.   A large number  of
companies and individuals are engaged in the real estate business,  and  many
of  them  possess  financial  resources greater than those of FMPO.  In every
real estate market in which the Company competes, it does so not only against
local developers who are committed  primarily to particular markets, but also
against  national developers who acquire  properties  throughout  the  United
States.

REGULATION AND ENVIRONMENTAL MATTERS

FMPO's  real  estate investments are subject to applicable local, city,
county  and  state  rules   and  regulations  regarding  permitting,  zoning,
subdivision,  utilities and water  quality  as  well  as  federal  rules  and
regulations regarding  air  and  water  quality  and protection of endangered
species and their habitats.  Such regulation has and  may  continue  to delay
development  of  the  Company's properties and result in higher developmental
and administrative costs.  See Item 3.  Legal Proceedings.

The Company is making,  and  will  continue  to make, expenditures with
respect to its real estate development for the protection of the environment.
Increasing emphasis on environmental matters may result  in  additional costs
in  the future.  Upon analysis of its operations in relation to  current  and
presently  anticipated  environmental  requirements,  the  Company  does  not
anticipate  that  these  costs  will have a significant adverse impact on its
future operations or financial condition.

EMPLOYEES

Since January 1, 1996, FM Services  Company, a Delaware corporation 50%
owned  by  each of FTX and FCX ("FMS"), has provided  executive,  accounting,
legal, financial,  tax,  insurance,  personnel and management information and
similar services pursuant to a services agreement between the Company and FMS
(the "Services Agreement").  The Services  Agreement is terminable by FMPO at
any time upon 90 days' notice.  Prior to 1996, FTX provided similar services.
Since July 1995, these services have been provided  by  FTX  and  FMS  for an
annual  fee of $500,000, subject to annual cost of living increases beginning
in the first  quarter of 1997.  Prior to July 1995, the cost of such services
was determined and allocated by FTX.

At December  31,  1996,  the  Company  had a total of 10 employees, who
coordinate the Company's operations and the functions  of FMS personnel under
the Services Agreement.

RELATIONSHIP WITH FTX

FMPO's  sole  asset is its 99.8% general partnership  interest  in  the
Partnership.   Pursuant   to   the  Partnership  Agreement,  the  Company  is
prohibited from transferring its  interest  in  the  Partnership  without the
consent of the Managing General Partner.  The Company has no source  of funds
other  than  distributions  from  the  Partnership.   Under  the  Partnership
Agreement,  the  Managing General Partner has the right to make distributions
in its sole discretion,  except  that,  to  the  extent  net cash flow of the
Partnership is available, the Managing General Partner is  required  to  make
distributions to the Company to cover taxes and administrative expenses.   So
long  as  any  debt  of  the  Partnership  or  its  affiliates is owed to, or
guaranteed by, FTX or any of its affiliates, Partnership  net  cash flow will
be applied to repay such debt and no distributions will be made,  other  than
as described above.

The  Partnership  was  created  with  substantial  financial  leverage,
assuming   approximately   $500   million   of  FTX  indebtedness,  including
approximately  $375  million  under  a  credit  agreement  between  FTX,  the
Partnership and a group of banks led by Chemical  Bank.  In 1995 and again in
1996  Partnership debt maturities were extended (see  "Recent  Developments")
and as of December 31, 1996 total Partnership long-term debt had been reduced
to $58.3  million.   All  such debt is guaranteed by FTX, which currently has
first priority liens on certain  real  estate  assets  as  security  for  its
guaranty.   Under  the  terms  of  the  Partnership's  new  credit agreement,
however, the lenders can impose a lien on the Company's assets  under certain
circumstances  that would subordinate the FTX liens.  The guaranty  agreement
between  FTX  and  the  Partnership  contains  covenants  that  would  become
effective upon  the  termination  of  FTX as Managing General Partner or upon
payment pursuant to the guarantee.  These covenants prohibit distributions to
holders of interests in the Partnership and severely restrict the disposition
of assets, affiliate transactions, the  incurrence  of  debt and transactions
outside the ordinary course of business.

Under the Partnership Agreement, FTX, as the Managing  General Partner,
is generally responsible for managing the affairs of the Partnership, subject
to specified review and approval by a Partnership Committee consisting  of  a
representative from each of FTX and the Company.  Such review and approval by
the  Partnership  Committee  include, among other things, matters such as the
dissolution of the Partnership,  the  approval  of  the  annual budget of the
Partnership, and the approval of a merger of the Partnership  or acquisitions
or  dispositions  of  assets  having  a  fair  market value greater than  $10
million.   However, no Partnership Committee approval  is  required  for  the
disposition  of  any  asset, or for the making of any capital expenditure, if
FTX as the Managing General  Partner  determines  in its discretion that such
disposition or expenditure is reasonable and prudent, in view of the probable
insufficiency of cash flows from operations available  to the Partnership, in
order to enable the Partnership to pay when due any of its  indebtedness.  As
a  result, if net cash flow from operations is insufficient to  satisfy  such
obligations,  the Partnership may dispose of assets before it would otherwise
have done so, and at lower prices than it might otherwise obtain.

FTX is permitted  under  the  terms  of  the  Partnership  Agreement to
compete  with  the  Partnership  and  to  engage  in  transactions  with  the
Partnership  or  with others that conflict, or potentially conflict, with the
interests of the Company and the Partnership, including the sales of property
to and the purchase  of  property from the Partnership and possible loans and
provision of services to the Partnership.

As a general partner  of the Partnership, the Company is liable without
limitation to third parties for all obligations of the Partnership.  However,
pursuant to the Partnership Agreement,  FTX  is  liable  for  any Partnership
losses  in  excess  of the positive capital account balances of FTX  and  the
Company as described below.  Under the Partnership Agreement, the Partnership
will indemnify each of  FTX  and  the  Company  as  general  partners for any
liabilities or expenses arising from any action or omission on  behalf of the
Partnership,   except   for   any  such  liabilities  or  expenses  primarily
attributable to such person's gross negligence or willful misconduct.

The Partnership maintains  capital  accounts  of the partners which are
adjusted for income, gains, losses and deductions of  the  Partnership, which
are  generally allocated 99.8% to the Company and 0.2% to FTX.   However,  so
long as  the outstanding balance of all Partnership liabilities guaranteed by
or owed to FTX exceeds the deficit balance, if any, in the capital account of
FTX, the Company  will  be  allocated  losses  until  its  capital account is
reduced to zero, and all additional losses will be allocated  entirely to FTX
until  the  deficit  balance  in FTX's capital account equals the outstanding
balance of all Partnership liabilities  guaranteed  by or owed to FTX.  After
such point, all losses will be allocated 99.8% to the  Company  and  0.2%  to
FTX.   Subsequent  income  will  be  similarly allocated to the extent of any
losses so allocated after such point and  then  will be allocated entirely to
FTX until FTX has recouped losses allocated entirely to it.

CAUTIONARY STATEMENT

This report includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section  21E  of the Securities
Exchange  Act  of  1934.  All statements other than statements of  historical
fact included in this  report,  including, without limitation, the statements
under the headings "Business and Properties," "Market for Registrant's Common
Equity and Related Stockholder Matters,"  and  "Management's  Discussion  and
Analysis  of  Financial Condition and Results of Operations" regarding FMPO's
financial position  and  liquidity,  payment  of  dividends, strategic plans,
future  financing  plans,  development  and  capital  expenditures,  business
strategies, and other plans and objectives of management  of  the Company for
future operations and activities, are forward-looking statements.

Although FMPO believes that the expectations reflected in such forward-
looking  statements  are  reasonable,  it  can  give  no assurance that  such
expectations will prove to have been correct.  Important  factors  that could
cause  actual  results  to  differ  materially  from  FMPO's expectations are
disclosed in this report including, without limitation,  in  conjunction with
the forward-looking statements included in this report.  These statements are
based on certain assumptions and analyses made by the Company in light of its
experience  and  its  perception  of  historical  trends, current conditions,
expected  future developments and other factors it believes  are  appropriate
under  the circumstances.   Such  statements  are  subject  to  a  number  of
assumptions,  risks  and  uncertainties, including the risk factors discussed
below, and in the Company's  other  filings  with the Securities and Exchange
Commission (the "Commission"), general economic  and business conditions, the
business opportunities that may be presented to and  pursued  by the Company,
changes  in laws or regulations and other factors, many of which  are  beyond
the control  of  the Company.  Readers are cautioned that any such statements
are  not  guarantees   of  future  performance  and  the  actual  results  or
developments may differ  materially  from  those  projected  in  the forward-
looking   statements.    All  subsequent  written  and  oral  forward-looking
statements  attributable to  FMPO  or  persons   acting  on  its  behalf  are
expressly qualified in their entirety by these cautionary statements.

Performance of the Real Estate Industry

The real  estate  activities  of  the  Company  are subject to numerous
factors  outside of the control of management, including  local  real  estate
market conditions  (both  where its properties are located and in areas where
its  potential  customers  reside),   substantial   existing   and  potential
competition,  the  cyclical  nature  of  the  real  estate  business, general
national  economic  conditions, fluctuations in interest rates  and  mortgage
availability and changes in demographic conditions.  Real estate markets have
historically been subject  to  strong  periodic  cycles  driven  by  numerous
factors beyond the control of market participants.

Real  estate investments are relatively illiquid and market values  may
be adversely  affected  by these economic circumstances, market fundamentals,
competition and demographic  conditions.   Because  of  the  effect  of these
factors on real estate values, it is difficult to predict with certainty  the
level  of  future  sales or sales prices that will be realized for individual
assets.

Financing and Leverage

Although substantial  reductions  in  the  Partnership's and Circle C's
debt have been made during 1996, the Company remains  highly  leveraged.  The
Company's future performance and financial viability are dependent  on future
cash flows from the Partnership's assets, and there can be no assurance  that
the  Partnership will generate cash flow or otherwise obtain funds sufficient
to  make   required   interest   and  principal  payments.   Considering  the
anticipated cash flows of the Partnership and the maturities of its debt, the
Partnership will be required, not  later than February 1998, to refinance its
debt or sell additional assets to generate  cash  then required for principal
payments.  The Company's ability to refinance debt  at  that  time  could  be
adversely effected by a tightening of the credit markets.

Although  all  of  the  Company's  outstanding  bank  debt is currently
guaranteed  by  FTX, which also serves as the Partnership's managing  general
partner, there is  no  commitment  by  FTX  to  guarantee any such debt after
February 1998, and there can be no assurance that  any such further guarantee
will be provided.

The  Company's  real  estate  operations are also  dependent  upon  the
availability and cost of mortgage financing  for  potential customers, to the
extent  they  finance  their  purchases,  and  for buyers  of  the  potential
customers' existing residences.

Recent Operating Results

The Company has incurred operating losses  in each year since inception
from the real estate activities conducted by the Partnership.   The Company's
current business strategy includes the sale of larger undeveloped  tracts  of
land.   These  transactions  by  their nature can cause significant period to
period variations in the Partnership's  revenues,  operating  income and cash
flow.   Although  the  Partnership has recently generated positive  operating
income and cash flow as  a result of this strategy, there can be no assurance
that this trend will continue.

Regulatory Approval

Before the Company can  develop a property, it must obtain a variety of
approvals from local and state  governments  with  respect to such matters as
zoning, density, parking, subdivision, architectural design and environmental
issues.   Because  of  the discretionary nature of these  approvals  and  the
concerns often raised by  various  government  agencies  and special interest
groups during the approval and development processes, the  Company's  ability
to  develop  properties and realize future income from its projects could  be
delayed, reduced or prevented.

The City  of Austin has long opposed certain of the Partnership's plans
in the Austin area.   In  1995  the  City's  "Save Our Springs" ordinance was
invalidated by a District Court and Texas state  legislation was enacted that
removed  much  of the Partnership's Austin area properties  from  the  City's
jurisdiction.  The  City  appealed the District Court's ruling and received a
favorable ruling during 1996  (see Item 3.  Legal Proceedings).  The City has
also  sought  court  intervention  to  declare  certain  of  the  legislation
unconstitutional.  These  court proceedings are being actively opposed by the
Partnership and other interested  parties.   Moreover,  management  does  not
believe   unfavorable   rulings   will   have  an  adverse  affect  upon  the
Partnership's  property  holdings;  however,   because   of   the  regulatory
environment  that  continues  to  exist in the Austin area, there can  be  no
assurance that such expectations will  prove  to  have  been correct.  A more
complete discussion of these matters is set forth elsewhere  in this Form 10-
K.

Environmental Regulation

Real estate development is subject to state and federal regulations and
to  possible   interruption  or  termination  on  account  of  environmental
considerations, including,  without  limitation,  air  and  water quality and
protection of endangered species and their habitats.  Certain  of  the Barton
Creek  Project  property  includes  nesting  territories for the Golden Cheek
Warbler, a federally listed endangered species.  In February 1995 the Company
received a permit from the U.S. Wildlife Service  pursuant  to the Endangered
Species  Act  (the "ESA"), which to date has allowed the development  of  the
Barton Creek Project,  free  of  restrictions  under  the  ESA related to the
maintenance of habitat for the Golden Cheek Warbler.

The  Company  is  making, and will continue to make, expenditures  with
respect to its real estate development for the protection of the environment.
Increasing emphasis on environmental  matters  may result in additional costs
in the future.

Effect of Competition

The  Company's  business  is highly competitive.   A  large  number  of
companies and individuals are engaged  in  the real estate business, and many
of them possess financial resources greater  than  those  of the Company.  In
each  of the Company's markets it competes against local developers  who  are
committed   primarily   to  particular  markets  and  also  against  national
developers who acquire properties throughout the United States.

Geographic Concentration and Dependence on the Texas Economy

The Company's real  estate  activities  are  located  entirely  in  the
Austin,  Dallas,  Houston  and  San  Antonio,  Texas  areas.   Because of the
Company's  geographic  concentration  and  limited  number  of projects,  its
operations  are  more  vulnerable  to  local  economic downturns and  adverse
project-specific risks than those of larger, more diversified companies.

The performance of the Texas economy affects sales of the Partnership's
properties  and consequently has an impact on the  income  derived  from  the
Partnership's  real  estate  activities and the underlying values of property
owned by the Partnership.  While  the  Texas  economy has remained healthy in
recent years, there can be no assurance that this trend will continue.

Natural Risks

The  Company's  performance  may  be  adversely   affected  by  weather
conditions that delay development or damage property.

Item 3. Legal Proceedings.

During 1996, the State Court of Appeals overturned  the  favorable 1995
District  Court ruling which invalidated the City of Austin "SOS"  ordinance;
however, the  appeals  court  upheld  the lower court's favorable ruling with
respect to the interpretation of certain  grandfathered rights for previously
platted  land.   A  significant  portion  of the  Partnership's  Austin  area
properties  was  previously platted and is expected  to  benefit  from  these
grandfathered rights.   An  application  for Writ of Error was filed with the
Texas Supreme Court in January 1997.  An unfavorable  final  judgment  is not
expected  to adversely affect the Partnership's property holdings because  of
its grandfathered  rights  and because the Partnership's property was removed
from the jurisdiction of the  City  pursuant  to the water quality protection
zone  at  Barton Creek and the Southwest Travis County  Water  District  (the
"District")  at  Circle  C,  both  of  which  were  authorized by Texas state
legislation enacted in 1995.

In  October  1996, the City filed a petition for  declaratory  judgment
asserting that the legislation that created the District is unconstitutional.
The District has indicated  that  it  intends  to  defend  itself against the
City's  claim.  Approximately 1,000 acres owned by Circle C are  included  in
the District.   None  of  the  Partnership's  other  properties  are  in  the
District.

During  February  1997,  FMPO filed a petition for declaratory judgment
against Phoenix Holdings, Ltd. in  order  to  secure its ownership of certain
Municipal   Utility   District   receivables   that   pertain   to   existing
infrastructure which serves the Circle C development.   A  favorable  outcome
would  result  in  significant  refunds  of prior capital expenditures to the
Partnership over the next several years.

Although the Company may be from time to time involved in various other
legal proceedings of a character normally  incident to the ordinary course of
its businesses, the Company believes that potential  liability  in  any  such
pending or threatened proceedings would not have a material adverse effect on
the  financial condition or results of operation of the Company.  The Company
maintains   liability  insurance  to  cover  some,  but  not  all,  potential
liabilities normally  incident  to  the  ordinary course of its businesses as
well  as  other  insurance coverage customary  in  its  business,  with  such
coverage limits as management deems prudent.

Item 4.  Submission of Matters to a Vote of Security Holders.

Not applicable.

Executive Officers of the Registrant.

Certain information,  as  of  March  11,  1997, regarding the executive
officers of the Company is set forth in the following  table and accompanying
text.

Name                Age         Position or Office

Richard C. Adkerson    50          Chairman of the Board and Chief
Executive Officer

W. H. Armstrong, III   32          President, Chief Operating
Officer and Chief
Financial Officer

John G. Amato          53          General Counsel

Mr.  Adkerson is also Vice Chairman of the Board of FTX  and  has  held
that position  since August 1995.  Mr. Adkerson also serves as Executive Vice
President of FCX  and Co-Chairman of the Board and Chief Executive Officer of
McMoRan Oil & Gas Co. ("MOXY").  From 1992 to August 1995, Mr. Adkerson was a
Senior Vice President of FTX and a Vice President of FTX prior to 1992.

Mr. Armstrong  has  been  employed by FMPO since its inception in 1992.
Previously,  Mr.  Armstrong  was  a  member   of  the  Finance  and  Business
Development  Group  of FTX with responsibility for  real  estate  activities.
Prior to joining FTX, Mr. Armstrong spent five years with Sonnenblick-Goldman
Corp., a national real  estate investment banking and advisory firm, where he
last served as vice president.

Mr. Amato is also General  Counsel  of MOXY.  Prior to August 1995, Mr.
Amato served as General Counsel of FTX and FCX.  Mr. Amato currently provides
legal  and  business advisory services to FTX  and  FCX  under  a  consulting
arrangement.

PART II

Item 5.  Market  for  Registrant's  Common  Equity  and  Related  Stockholder
Matters.

The Company's common stock trades on The Nasdaq Stock Market  (National
Market  System)  under the symbol FMPO.  The following table sets forth,  for
the periods indicated, the range of high and low sales prices, as reported by
Nasdaq.

1996                   1995     
High     Low           High    Low
First Quarter            $ 2 7/8  $ 1 1/2      $ 3 3/4  $ 2 1/2         
Second Quarter             2 5/8    2 1/16       3        2                   
Third Quarter              3 1/16    2 1/8       2 3/4    1 13/16
Fourth Quarter             3 5/16    2 3/4       2 1/8    1 1/2         

The Company  has  not  in  the  past  and  does  not  anticipate in the
foreseeable  future  paying  cash dividends on its common stock.   While  the
decision whether or not to pay  dividends  and  in  what amounts is generally
within the discretion of the Company's board of directors, the Company's sole
source of funds is its interest in the Partnership.  Distributions of cash or
other  property  from  the  Partnership  are  generally  determined   in  the
discretion of the Managing General Partner; however, so long as the Company's
existing credit arrangements remain in effect, no distributions will be  made
by the Partnership to the Company except, to the extent of available net cash
flow, to cover certain administrative expenses and taxes.

As  of  March  14, 1997 there were 11,386 record holders of the Company
common stock.

Item 6.  Selected Financial Data.(1)
1996      1995       1994       1993       1992
(In Thousands, Except Per Share Amounts)
Years Ended December31:
Loss from the Partnership   $(346)   $(571)    $(118,741) $(24,057)  $(16,747)
Operating loss               (566)   (2,367)    (122,869)  (27,526)   (18,170)
Net income (loss)               76      153     (86,290)   (18,814)   (12,144)
Net income (loss) per          .01      .01       (6.04)     (1.32)      (.85)
share
Average shares              14,383     14,286     14,286     14,286    14,286
outstanding
At December 31:
Investment in the           56,055     56,401     56,972    193,415   217,472
Partnership
Total assets                60,985     60,897     60,903    193,637   217,719
Stockholders' equity        59,599     59,523     59,370    145,660   164,474

___________

(1)   Reflects the Company's  investment  in the Partnership under the equity
basis of accounting.  See Note 1 to the financial statements.

Item 7.  Management's Discussion and Analysis of Financial
Condition and Results of Operations.

OVERVIEW

FMPO operates through its 99.8 percent  interest  in  the  Partnership,
with   0.2   percent  owned  by  the  Managing  General  Partner,  FTX.   The
Partnership's  most significant investments include approximately 3,400 acres
of primarily undeveloped  land  in  and  around  the  Barton  Creek Community
located  near  Austin,  Texas,  and  approximately 1,000 acres of undeveloped
commercial and multi-family property in  the  Circle C development located in
Austin,  Texas.   The  Partnership is also engaged  in  the  development  and
marketing of real estate in the Dallas, Houston and San Antonio, Texas areas.

FTX has certain rights  regarding  the Partnership's operations as long
as it guarantees any of the Partnership's  debt.  However, once the
FTX guarantee is eliminated, FMPO will have the authority  to  remove  FTX as
the  Managing  General  Partner  and such rights would be eliminated.  During
1996, following discussions with the  staff  of  the  Securities and Exchange
Commission, FMPO determined that, because of FTX's rights,  it  would be more
appropriate to reflect its investment in the Partnership on the equity  basis
of  accounting  (prior  year  consolidated  financial  information  has  been
restated  to  reflect this presentation).  FMPO has no significant operations
or sources of funds other than its interest in the Partnership.

RESULTS OF OPERATIONS

1996       1995       1994
(In Thousands)
Loss from the Partnership          $ (346)     $ (571)  $(118,741)
Operating loss                       (566)     (2,367)   (122,869)
Net income (loss) a                    76         153     (86,290)

a.    Includes  tax benefit of $0.5 million in 1996, $2.7 million in 1995 and
$36.8 million in 1994 (Note 3).

As noted above,  FMPO  operates  through the Partnership.  Accordingly,
the following discussion and analysis addresses the results of operations and
the capital resources and liquidity of the Partnership.

During 1996, the Partnership was able  to  capitalize on enhanced sales
opportunities at its properties in the Austin area  brought  about by several
positive  legislative  and  judicial developments that occurred during  1995.
Prior to late 1995, development  of  the Partnership's Austin area properties
had been delayed principally because of disagreements with the City of Austin
(the City) over ordinances governing development  activities  in  the  Barton
Creek  and  Circle  C  areas.   The  Partnership's  summary operating results
follow:

1996       1995       1994
Revenues                                   (In Thousands)
Developed properties             $44,016    $35,024    $27,268
Undeveloped properties and        35,161    13,146      13,167
other
Total revenues                      79,177    48,170      40,435
Operating income (loss)              3,534    (2,308)   (119,611)b
Net loss                              (346)    (571)a (118,979)b

a. Includes a $2.6 million gain from a bankruptcy settlement with a customer.

b. Includes a $115.0 million charge for the write-down  of real estate assets.

Revenues from developed properties during 1996 included the sale of the
Barton  Creek Country Club and Conference Resort for $25.0  million  and  the
sale of 393  single-family  homesites  located in the Austin, Houston and San
Antonio areas for $19.0 million.  Revenues from undeveloped properties during
1996  included two separate sales of undeveloped  tracts  within  the  Barton
Creek development  totaling 105 acres for $4.8 million, the first sales under
the Water Quality Protection  Zone legislation enacted in late 1995; the sale
of several undeveloped, commercial and multi-family tracts in the Dallas area
totaling 79 acres for $12.6 million;  and  the  sale of 535 other undeveloped
acres in the Austin, Dallas and San Antonio areas  for  $17.8 million.  These
sales of undeveloped tracts to sub-developers are an integral  part of FMPO's
business strategy as they provide funds to reduce debt, lower future carrying
and  development  costs and establish values for the Partnership's  remaining
properties.

Revenues from  developed properties for 1995 consisted of $15.8 million
from the sale of the Circle  C  residential properties and $19.2 million from
the sale of 393 single-family homesites.   Revenues from developed properties
in 1994 represented the sale of 628 single-family  homesites  and  4  houses.
Revenues  from undeveloped properties for 1995 and 1994 represented the  sale
of 340 and 620 undeveloped acres, respectively.

General  and  administrative expenses of the Partnership, combined with
those incurred by FMPO,  were  reduced to $2.5 million in 1996, compared with
$4.2  million  in 1995 and $6.2 million  in  1994.   The  reduction  in  1996
reflects the benefit  of  steps  taken in the third quarter of 1995 to reduce
costs.   These  actions,  which  included   reducing   personnel,  legal  and
consulting costs, and the costs of certain management services (Note 4), were
taken,  to  a  significant  extent,  in  response to the reduced  permitting,
engineering   and  administrative  burden  resulting   from   the   favorable
legislative and judicial developments during 1995.

Interest  expense  incurred  by  the  Partnership during 1996 increased
because of reduced capitalized interest, partially  offset  by  lower average
debt levels and interest rates.

During 1996, FMPO agreed to sell the remaining assets of Circle  C  for
$34.0  million.   The Partnership received a $1.0 million non-refundable cash
deposit,  with the balance  of  the  purchase  price  due  in  January  1997.
However, the investor group was unable to complete the sale and the agreement
expired.  The Partnership has no further obligation to the investor group and
is proceeding  with  developing  and  marketing  the  Circle C commercial and
multi-family properties.

FMPO's business strategy includes the sale of larger undeveloped tracts
of land.  These transactions by their nature can cause significant variations
in  operating  results between accounting periods, which  may  create  future
operating  losses.    Additionally,   the   Partnership   is  evaluating  the
development  of  income  producing  properties on certain of its  tracts  and
continues to consider opportunities to  enter  into  significant transactions
involving  its  properties.   Consequently, past operating  results  are  not
necessarily indicative of future trends in profitability.

CAPITAL RESOURCES AND LIQUIDITY

The  Partnership's  increased  sales  activity  during  1996  generated
significantly higher operating cash flows which enabled it to reduce its debt
by $63.0 million.  Additionally,  FMPO  amended  the  Partnership's  existing
credit agreements to extend all maturities until February 1998 and reduce its
interest rates.  The Partnership's debt was previously guaranteed by
FTX  and  FCX.  In connection with the Partnership's debt amendment, the  FCX
guarantee was  eliminated  resulting  in  FTX  becoming  the guarantor of all
remaining  outstanding  debt.   The  future  performance  and  the  financial
viability  of  FMPO are dependent on future cash flows from the Partnership's
assets.  These cash  flows  will  be  significantly  affected  by future real
estate  values  and  future interest rate levels.  There can be no  assurance
that the Partnership will  generate  cash  flow or obtain funds sufficient to
make required interest and principal payments.

FMPO continues to seek a permanent financial  restructuring,  which may
include  obtaining  a  new bank credit facility or issuing new debt or equity
instruments, and believes  that  the  ongoing  reduction of the Partnership's
debt will significantly improve its alternatives.  An  objective in arranging
new financing will be to eliminate FTX's guarantee of the Partnership's debt.
If the FTX guarantee is eliminated, FMPO would have the  authority  to remove
FTX  as  Managing  General  Partner  of  the  Partnership  and  dissolve  the
Partnership, thereby enabling FMPO to manage its business without the current
restrictions  imposed  by  its  contractual  relationships  with  FTX.  A new
financing that would allow FMPO to establish itself as a stand-alone  company
by  eliminating  the  FTX  guarantee  may  increase  FMPO's  financing  costs
significantly.   The  extent  of  any refinancing, including any need to sell
properties in connection therewith,  will  determine the future net cash flow
available to FMPO to recover its investment in the Partnership.

Net  cash provided by the Partnership's  operating  activities  totaled
$68.7 million  in 1996, $47.5 million in 1995 and $11.8 million in 1994.  The
1996 period included  $25.0  million from the sale of the Barton Creek County
Club and Conference Resort  while  1995 benefited from the sale of Circle C's
single-family residential real estate  properties  and  related amenities for
$15.8  million.   Net cash provided by (used in) the Partnership's  investing
activities totaled  $(5.9) million in 1996, $(35.2) million in 1995 and $29.0
million in 1994.  Real  estate capital expenditures were $5.9 million in 1996
versus $25.5 million in 1995  and  $54.8  million  in  1994.  The decrease in
expenditures resulted from reduced development requirements  brought about by
the positive legislative and judicial events which occurred during  1995  and
the Partnership's success in marketing and selling undeveloped tracts to sub-
developers.   The  Partnership's  investing  cash flows during 1994 benefited
from the receipt of the final proceeds from the  1993  oil  and  gas property
sales.   These  proceeds  were  partially  offset by payments to working  and
royalty interest owners for a natural gas contract settlement, the final $9.7
million  payment  of which was made in 1995.   Financing  activities  of  the
Partnership consisted of a net reduction in borrowings totaling $63.0 million
in 1996 compared with $11.2 million in 1995 and $42.1 million in 1994.  As of
February 28, 1997, $9.0 million of additional borrowings were available under
the Partnership's credit facility.

During 1996,  the  State Court of Appeals overturned the favorable 1995
District Court ruling which  invalidated  the City of Austin "SOS" ordinance;
however, the appeals court upheld the lower  court's  favorable  ruling  with
respect  to the interpretation of certain grandfathered rights for previously
platted land.   A  significant  portion  of  the  Partnership's  Austin  area
properties  was  previously  platted  and  is  expected to benefit from these
grandfathered rights.  An application for Writ of  Error  was  filed with the
Texas  Supreme Court in January 1997.  An unfavorable final judgment  is  not
expected  to  adversely affect the Partnership's property holdings because of
its grandfathered  rights  and because the Partnership's property was removed
from the jurisdiction of the  City  pursuant  to the water quality protection
zone  at  Barton Creek and the Southwest Travis County  Water  District  (the
"District")  at  Circle  C,  both  of  which  were  authorized by Texas state
legislation enacted in 1995.

In  October  1996, the City filed a petition for  declaratory  judgment
asserting that the legislation that created the District is unconstitutional.
The District has indicated  that  it  intends  to  defend  itself against the
City's  claim.  Approximately 1,000 acres owned by Circle C are  included  in
the District.   None  of  the  Partnership's  other  properties  are  in  the
District.

During  February  1997,  FMPO filed a petition for declaratory judgment
against Phoenix Holdings, Ltd. in  order  to  secure its ownership of certain
Municipal   Utility   District   receivables   that   pertain   to   existing
infrastructure which serves the Circle C development.   A  favorable  outcome
would  result  in  significant  refunds  of prior capital expenditures to the
Partnership over the next several years.

ENVIRONMENTAL

Increasing emphasis on environmental  matters  is  likely  to result in
additional costs, which will be charged against the Partnership's  operations
in  future  periods  when  such  costs  can be estimated.  Present and future
environmental laws and regulations applicable to the Partnership's operations
may  require substantial capital expenditures,  could  adversely  affect  the
development  of  its  real  estate interests, or may affect its operations in
other ways that cannot be accurately predicted at this time.

CAUTIONARY STATEMENT

Management's discussion  and  analysis contains certain forward-looking
statements.  Important factors that might cause future results to differ from
these projections are described in more detail under Items 1 and 2 above.

____________________

The  results  of  operations reported  and  summarized  above  are  not
necessarily indicative of future operating results.
REPORT OF MANAGEMENT

FMPO is responsible for the preparation of the financial statements and
all  other  information contained  in  this  Annual  Report.   The  financial
statements  have   been   prepared  in  conformity  with  generally  accepted
accounting principles and include  amounts  that  are  based  on management's
informed judgments and estimates.

FMPO  maintains  a  system of internal accounting controls designed  to
provide reasonable assurance  at reasonable costs that assets are safeguarded
against  loss  or  unauthorized  use,   that  transactions  are  executed  in
accordance with management's authorization and that transactions are recorded
and summarized properly.  The system is tested  and  evaluated  on  a regular
basis by FMPO's internal auditors, Price Waterhouse LLP.  In accordance  with
generally accepted auditing standards, FMPO's independent public accountants,
Arthur   Andersen  LLP,  have  developed  an  overall  understanding  of  our
accounting  and  financial  controls  and  have conducted other tests as they
consider necessary to support their opinion on the financial statements.

The Board of Directors, through its Audit  Committee composed solely of
non-employee  directors,  is  responsible for overseeing  the  integrity  and
reliability of FMPO's accounting  and  financial  reporting practices and the
effectiveness of its system of internal controls.   Arthur  Andersen  LLP and
Price Waterhouse LLP meet regularly with, and have access to, this committee,
with  and  without  management present, to discuss the results of their audit
work.

Richard C. Adkerson                     William H. Armstrong, III
Chairman of the Board                       President and
and Chief Executive Officer             Chief Financial Officer

Item 8.  Financial Statements and Supplementary Data.

FM PROPERTIES INC.
BALANCE SHEETS

December 31,
----------------------
1996          1995
----------    ----------
(In Thousands)

ASSETS
Current assets:
Accounts receivable and other        $       56    $      298
Income tax receivable                       503         2,693
Amounts receivable from the
Partnership                              4,371         1,505
----------    ----------
Total current assets                    4,930         4,496
Investment in the Partnership
(Note 2)                                56,055        56,401
----------    ----------
Total assets                         $   60,985    $   60,897
==========    ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Other liabilities                    $    1,386    $    1,374
Stockholders' equity:
Preferred stock, par value $0.01,
50,000,000 shares  authorized and
unissued                                     -             -
Common stock, par value $0.01,
150,000,000 shares authorized,
14,285,770 issued and outstanding          143           143
Capital in excess of par value of
common stock                           176,445       176,445
Accumulated deficit                    (116,989)     (117,065)
----------    ----------
59,599        59,523
----------    ----------
Total liabilities and
stockholders' equity                $   60,985    $   60,897
==========    ==========

STATEMENTS OF OPERATIONS

Years Ended December 31,
------------------------------------
1996          1995          1994
----------    ----------    ---------

(In Thousands, Except Per Share Amounts)

Loss from the Partnership            $     (346)   $     (571)   $ (118,741)
General and administrative
expenses                                  (220)       (1,796)       (4,128)
----------    ----------    ----------
Operating loss                             (566)       (2,367)     (122,869)
Other income (expense), net                 116          (173)         (202)
----------    ----------    ----------
Loss before income tax benefit             (450)       (2,540)     (123,071)
Income tax benefit                          526         2,693        36,781
----------    ----------    ----------
Net income (loss)                    $       76    $      153    $  (86,290)
==========    ==========    ==========

Net income (loss) per share                $.01          $.01        $(6.04)
====          ====        ======

Average shares outstanding               14,383        14,286        14,286
======        ======        ======

The accompanying notes, including financial statements of the 
Partnership, are an integral part of these finacial statements.

FM PROPERTIES INC.
STATEMENTS OF CASH FLOW
Years Ended December 31,
---------------------------------
1996          1995          1994
----------    ----------    ----------
(In Thousands)
Cash flow from operating activities:
Net income (loss)                    $       76    $      153    $  (86,290)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Deferred income taxes                       -             -       (30,173)
Excess of equity in losses of the
Partnership over distributions
received                                 346           571       136,443
(Increase) decrease in working
capital:
Accounts receivable and other        (2,624)       (1,780)          201
Accounts payable and accrued
liabilities                             12            16        (8,361)

Accrued income and other taxes        2,190         1,215       (11,645)
----------    ----------    ----------
Net cash provided by operating
activities                                   -           175           175
----------    ----------    ----------

Cash flow from investing activities:
Net cash provided by investing
activities                                   -             -             -
----------    ----------    ----------

Cash flow from financing activities:
Repayment of debt                             -          (175)         (175)
----------    ----------    ----------
Net cash used in financing
activities                                   -          (175)         (175)
----------    ----------    ----------
Net increase in cash and cash
equivalents                                  -             -             -
Cash and cash equivalents at
beginning of year                            -             -             -
----------    ----------    ----------
Cash and cash equivalents at
end of year                         $        -    $        -    $        -
==========    ==========    ==========

Interest paid                        $        -    $        -    $        -
==========    ==========    ==========

Income taxes paid                    $        -    $        -    $    5,036
==========    ==========    ==========

The accompanying notes, including financial statements of the 
Partnership, are an integral part of these finacial statements.

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting.  The operations of FM Properties Inc. (FMPO) are
conducted through its investment in FM Properties Operating Co.
(the Partnership).  At December 31, 1996, FMPO owned a 99.8 percent
general partnership interest in the Partnership and Freeport-McMoRan
Inc. (FTX), FMPO's former parent, owned a 0.2 percent general
partnership interest and served as Managing General Partner.  FTX has
certain rights regarding the Partnership's operations as long as it
guarantees any of the Partnership's debt (Note 2).  However, once the
FTX guarantee is eliminated, FMPO will have the authority to remove
FTX as the Managing General Partner and such rights would be
eliminated.

During 1996, following discussions with the staff of the
Securities and Exchange Commission, FMPO determined that, because of
FTX's rights, it would be more appropriate to reflect its investment
in the Partnership on the equity basis of accounting (prior year
consolidated financial information has been restated to reflect this
presentation).

Use of Estimates.  The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

2.  FM PROPERTIES OPERATING CO.
FMPO has no significant operations or sources of funds other than its
interest in the Partnership.  Therefore, the accompanying financial 
statements of the Partnership should be read in conjunction with
FMPO's financial statements.

3.  INCOME TAXES
Income taxes are recorded pursuant to SFAS 109.  FMPO has provided a
valuation allowance equal to its deferred tax assets because of the
expectation of incurring tax losses for the near future.  The
components of deferred taxes follow:

December 31,
-----------------------
1996          1995
----------    ----------
Deferred tax asset:                       (In Thousands)
Alternative minimum tax credits    $      529    $    1,000
Future deductible items                 8,756         8,116
Valuation allowance                    (9,285)       (9,116)
----------    ----------
$        -    $        -
==========    ==========
FMPO recognized tax benefits of $0.5 million in 1996 and $2.7
million in 1995, for the carryback of each year's tax loss  to recoup
taxes paid in previous years.  Income taxes credited to income follow:

1996          1995          1994
----------    ----------    ----------
Current income taxes                             (In Thousands)
Federal                            $      526    $    2,693    $    4,724
State                                       -             -         1,885
----------    ----------    ----------
526         2,693         6,609
Deferred federal income taxes                 -             -        30,172
----------    ----------    ----------
$      526    $    2,693    $   36,781
==========    ==========    ==========
Reconciliations of the differences between the income tax
benefits computed at the federal statutory tax rate and the income tax
benefits recorded follow:

1996                  1995              1994
--------------------       -----------        -----------
Amount       Percent     Amount  Percent   Amount  Percent
----------    ----------   ------  --------  ------- -------  
(Dollars In Thousands)
Income tax
benefit
computed
at the
federal
statutory
income
tax rate    $  158           35%        $ 889    35%      $43,158     35%
Increase
(decrease)
attributable
to:
Change in
valuation
allowance    (169)          (37)       1,209      48     (10,325)    (8)
State taxes
and other     537           119          595      23      3,948        3
----------    --------     --------    ----    ------     ------
Income tax
benefit     $   526           117%       $ 2,693    106%   $36,781     30%
==========    ==========    ==========  =====   ======  =======  

The Partnership maintains capital accounts of FMPO and FTX which
are adjusted for income, gains, losses and deductions of the
Partnership, which are generally allocated 99.8 percent to FMPO and
0.2 percent to FTX.  However, so long as the outstanding balance of
all Partnership liabilities guaranteed by or owed to FTX exceeds the
deficit balance, if any, in the capital account of FTX, FMPO will be
allocated losses until its capital account is reduced to zero and all
additional losses will be allocated entirely to FTX until the deficit
balance in FTX's capital account equals the outstanding balance of all
Partnership liabilities guaranteed by or owed to FTX.  After such
point, all losses will be allocated 99.8 percent to FMPO and 0.2
percent to FTX.  Subsequent income will be similarly allocated to the
extent of any losses so allocated after such point and then will be
allocated entirely to FTX until it has recouped losses allocated
entirely to it.

4.  TRANSACTIONS WITH FMS AND EMPLOYEE BENEFITS

Management Services.  FMPO has a limited number of employees.  Since
January 1996, pursuant to a Services Agreement between FMPO and FM
Services Company (FMS), 50 percent owned by each of FTX and FCX, FMS
has provided services necessary for the business and operations of
FMPO and the Partnership.  Since July 1995, these services have been
provided for a fixed annual fee of $0.5 million, subject to annual
cost of living increases beginning in the first quarter of 1997.
Prior to 1996, substantially the same services were provided by FTX at
a cost of $1.7 million in 1995 and $3.4 million in 1994.  The Services
Agreement is terminable by FMPO at any time upon 90 days notice.

Stock Options.  FMPO's stock option plan provides for the issuance of
up to 850,000 stock options and stock appreciation rights (SARs) at no
less than market value at time of grant.  Generally, stock options are
exercisable in 25 percent annual increments beginning one year from
the date of grant and expire 10 years after the date of grant.  A
summary of stock options outstanding, including 200,000 SARs, follows:

1996                      1995
-----------------------    --------------------
Average                    Average
Number of    Option        Number of    Option
Options      Price         Options      Price
----------   ----------    ----------   ----------
Beginning of year     535,000         $3.23       425,000         $3.60
Granted               305,000          1.79       110,000          1.81
Expired/Forfeited     (50,000)         1.81             -             -
----------                  ----------
End of year           790,000          2.77       535,000          3.23
==========                  ==========

At December 31, 1996, options for 300,000 shares were available
for new grants.  Summary information of fixed stock options
outstanding at December 31, 1996 follows:

Options Outstanding             Options Exercisable
---------------------------      ------------------------
Weighted                           Weighted
Range of                     Average                           Average
Exercise        Number     Remaining               Number      Option
Prices        of Options     Life     Price       of Options   Price
- --------       ---------     -----    ------      -----------  -------  
$1.50 to
$1.81          290,000     9.0 years   $1.56        15,000      $1.81
$2.63 to
$2.75           75,000     9.5 years    2.69         -             -
$5.25           225,000     6.5 years    5.25       225,000       5.25
----------                            ----------
590,000                              240,000
==========                            ==========
FMPO has adopted the disclosure-only provisions of SFAS 123 and
continues to apply APB Opinion No. 25 and related interpretations in
accounting for its stock-based compensation plans.  Accordingly, no
compensation cost has been recognized for FMPO's fixed stock option
grants.  FMPO's 1996 and 1995 results would not have been materially
impacted had compensation cost for FMPO's fixed stock option grants
been determined based on the fair value at the grant dates for awards
under those plans consistent with SFAS 123.  For the pro forma
computations, the fair values of the fixed option grants were
estimated on the dates of grant using the Black-Scholes option pricing
model.  These values totaled $1.46 per option in 1996 and $1.45 per
option in 1995.  The weighted average assumptions used include a risk-
free interest rate of 6.4 percent, expected lives of 10 years and
expected volatility of 70 percent. The pro forma effects on net income
for 1996 and 1995 are not representative for future years because they
do not take into consideration grants made prior to 1995.  No other
discounts or restrictions related to vesting or the likelihood of
vesting of fixed stock options were applied.

5.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Income                                     Net
(Loss)       Operating        Net         Income
From The       Income         Income       (Loss)
Partnership      (Loss)        (Loss)      Per Share
----------    ----------    ----------    ----------
(In Thousands, Except Per Share Amounts)
1996
1st Quarter        $     (865)   $     (894)   $     (894)   $     (.06)
2nd Quarter               559           500           500           .03
3rd Quarter             1,011           934         1,460a          .10a
4th Quarter            (1,051)       (1,106)         (990)         (.07)
----------    ----------    ----------
$     (346)   $     (566)   $       76           .01
==========    ==========    ==========
1995
1st Quarter        $   (2,131)   $   (2,841)   $   (2,840)   $     (.20)
2nd Quarter              (127)         (911)         (888)         (.06)
3rd Quarter            (1,019)       (1,065)       (1,205)         (.08)
4th Quarter             2,706b        2,450b        5,086b,c        .36
----------    ----------    ----------
$     (571)   $   (2,367)   $      153           .01
==========    ==========    ==========
a. Includes a $0.5 million tax benefit ($0.04 per share).

b. Includes a $2.6 million gain ($0.18 per share) from the
Partnership's bankruptcy settlement with a customer.

c. Includes a $2.7 million tax benefit ($0.19 per share).

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF FM PROPERTIES INC.:

We have audited the accompanying balance sheets of FM Properties Inc.
(a Delaware Corporation) as of December 31, 1996 and 1995 (as
restated, see Note 1), and the related statements of operations and
cash flow for each of the three years in the period ended December 31,
1996.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of FM
Properties Inc. as of December 31, 1996 and 1995 and the results of
its operations and its cash flow for each of the three years in the
period ended December 31, 1996 in conformity with generally accepted
accounting principles.

Arthur Andersen LLP

New Orleans, Louisiana,

January 21, 1997

FM PROPERTIES OPERATING CO.
BALANCE SHEETS
December 31,
-----------------------
1996          1995
----------    ----------

(In Thousands)
ASSETS
Current assets:
Cash and cash equivalents            $    2,108    $    2,282
Accounts receivable and other             4,133         4,318
----------    ----------
Total current assets                    6,241         6,600
Real estate and facilities, net         118,029       180,040
Other assets                              5,922         5,165
----------    ----------
Total assets                         $  130,192    $  191,805
==========    ==========

LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable and accrued
liabilities                         $    5,754    $    8,100
Amounts due to FMPO                       4,371         1,505
----------    ----------
Total current liabilities              10,125         9,605
Long-term debt                           58,325       121,294
Other liabilities                         5,574         4,392
Partners' capital                        56,168        56,514
----------    ----------
Total liabilities and partners'
capital                             $  130,192    $  191,805
==========    ==========

FM PROPERTIES OPERATING CO.
STATEMENTS OF OPERATIONS
Years Ended December 31,
--------------------------------------
1996          1995          1994
----------    ----------    ----------
(In Thousands)

Revenues                             $   79,177    $   48,170    $   40,435
Costs and expenses:
Cost of sales                            73,347        48,099        42,947
Write-down of investment in real
estate assets                                -             -       115,000
General and administrative expenses       2,296         2,379         2,099
----------    ----------    ----------
Total costs and expenses               75,643        50,478       160,046
----------    ----------    ----------
Operating income (loss)                   3,534        (2,308)     (119,611)
Interest expense, net                    (3,896)       (1,061)         (628)
Other income, net                            16         2,798         1,260
----------    ----------    ----------
Net loss                             $     (346)   $     (571)   $ (118,979)
==========    ==========    ==========

The accompanying notes are an integral part of these financial statements.

FM PROPERTIES OPERATING CO.
STATEMENTS OF CASH FLOW
Years Ended December 31,
-------------------------------------
1996          1995          1994
----------    ----------    ----------
(In Thousands)
Cash flow from operating activities:
Net loss                             $     (346)   $     (571)   $ (118,979)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization           1,484         2,472         2,254
Cost of real estate sales              66,466        41,756        25,308
Write-down of investment in real
estate assets                              -             -       115,000
(Increase) decrease in working capital:
Accounts receivable and other          (568)        1,298        (9,689)
Accounts payable and accrued
liabilities                          1,702         2,281        (2,101)
Other                                       -           244             -
----------    ----------    ----------
Net cash provided by operating
activities                              68,738        47,480        11,793
----------    ----------    ----------

Cash flow from investing activities:
Real estate and facilities               (5,943)      (25,509)      (54,765)
Proceeds from sale of oil and gas
properties                                   -             -        95,600
Natural gas contract settlement
proceeds paid to working and
royalty interests                            -        (9,733)      (11,816)
----------    ----------    ----------
Net cash provided by (used in)
investing activities                    (5,943)      (35,242)       29,019
----------    ----------    ----------

Cash flow from financing activities:
Proceeds from debt                        1,000        16,000        25,000
Repayment of debt                       (63,969)      (27,156)      (67,095)
----------    ----------    ----------
Net cash used in financing
activities                             (62,969)      (11,156)      (42,095)
----------    ----------    ----------
Net increase (decrease) in cash
and cash equivalents                      (174)        1,082        (1,283)
Cash and cash equivalents at
beginning of year                        2,282         1,200         2,483
----------    ----------    ----------
Cash and cash equivalents at
end of year                         $    2,108    $    2,282    $    1,200
==========    ==========    ==========

Interest paid                        $   10,481    $    9,768    $   11,189
==========    ==========    ==========

The accompanying notes are an integral part of these financial statements.

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents.  Highly liquid investments purchased with a
maturity of three months or less are considered cash equivalents.

Financial Instruments.  The carrying amounts of the Partnership's
trade and notes receivable, other current assets, accounts payable and
long-term borrowings reported in the balance sheet approximate fair
value.

2.  LONG-TERM DEBT  
During 1996, the Partnership amended its credit agreements
and extended all debt maturities until February 1998.  The
amendment also lowered the borrowing availability under the
Partnership's revolving bank credit agreement to $10 million and
reduced the interest rates on its debt agreements.  In addition, the
debt guarantee of Freeport-McMoRan Copper & Gold Inc. (FCX) was
eliminated and all debt is now guaranteed by FTX.  The following table
sets forth the outstanding balances under its credit facilities as of
December 31, 1995 and 1996.

December 31,
------------------------
1996          1995
----------    ----------
(In Thousands)
Revolving bank credit facility,
average rate 7.1% in 1996 and
7.3% in 1995                        $        -    $   24,000
Bank loan, average rate 6.9% in
1996 and 12% in 1995                    31,000        68,000

Circle C bank loan, average rate
6.8% in 1996 and 7.3% in 1995           27,325        29,294
----------    ----------
$   58,325    $  121,294
==========    ==========
The Partnership's Bank loan agreement requires that 50% of the
net proceeds of any asset sale for which the Partnership receives in
excess of $100,000 be applied to the Bank loan.  The Partnership's
credit facility contains covenants restricting asset sales, mergers
and distributions by the Partnership, the creation of liens and
certain other matters.  However, certain restrictions under the
revolving credit facility were amended in 1996 to give the Partnership
the flexibility to establish certain separate debt facilities.

FTX has liens on the Partnership's real estate assets and as the
Managing General Partner of the Partnership, has the right to make
distributions in its sole discretion, except that, to the extent net
cash flow is available, FTX is required to make distributions to FMPO
to cover taxes and administrative expenses.  As long as any debt of
the Partnership is owed to or guaranteed by FTX, the net cash flow of
the Partnership will be applied to repay such debt and no
distributions will be made, other than those described above.

Capitalized interest totaled $3.1 million in 1996, $11.7 million
in 1995 and $12.3 million in 1994.

3. INVESTMENT IN REAL ESTATE
Real estate assets include acreage, development, 
construction and carrying costs, and other related costs
through the development stage.  Capitalized costs are assigned to
individual components of a project, as practicable, whereas interest
and other common costs are allocated based on the relative fair value
of individual land parcels.  Carrying costs are capitalized on
properties currently under active development.  Revenues are
recognized when the risks and rewards of ownership are transferred to
the buyer and the consideration received can be reasonably determined.

In 1995, the Financial Accounting Standards Board issued
Statement No. 121 (SFAS 121) which requires a reduction of the
carrying amount of long-lived assets to fair value when events
indicate that the carrying amount may not be recoverable.  Measurement
of the impairment loss is based on the fair value of the asset.
Generally, the Partnership determines fair value using valuation
techniques such as the expected future sales proceeds from properties.
The Partnership adopted SFAS 121 effective January 1, 1995, and since
that time no impairment losses have been recognized.

December 31,
------------------------
1996          1995
----------    ----------
(In Thousands)
Land held for development or sale:
Austin, Texas area, net of
accumulated depreciation of
$76 for 1996 and $67 for 1995       $   85,059    $   96,910
Other areas of Texas                     31,270        57,360
Operating properties, net of
accumulated depreciation of
$647 for 1996 and $9,202 for 1995        1,700        25,770
----------    ----------
$  118,029    $  180,040
==========    ==========

The Partnership's investment in real estate includes
approximately 4,800 acres of land located in Austin, Dallas, Houston
and San Antonio.  Most significant among these are the Barton Creek
Community, located near Austin, Texas, which includes approximately
3,300 acres of primarily undeveloped land adjacent to the Barton Creek
Resort, and the approximately 1,000 acres of undeveloped commercial
and multi-family property, which is located within the Circle C
development in Austin, Texas.  Development of the Partnership's Austin
area properties had been delayed for several years, principally
because of disagreements between FMPO and the City of Austin (the
City) over ordinances governing development activities in the Barton
Creek and Circle C areas.  In 1995, the U.S. District Court ruled in
favor of FMPO, declaring that the restrictive 1992 water quality
ordinance enacted by public initiative was void and that the
Partnership was entitled to develop its project based on ordinances
that were in effect at the time of its initial applications.  The
Austin City Council appealed this decision and during 1996, the State
Court of Appeals overturned the favorable District Court ruling which
invalidated the "SOS" ordinance in Austin; however, the appeals court
upheld the lower court's favorable ruling with respect to the
interpretation of certain grandfathered rights for previously platted
land.  A significant portion of the Barton Creek and Circle C
properties was previously platted and is expected to benefit from
these grandfathered rights.  An application for Writ of Error was
filed with the Texas Supreme Court in January 1997.  An unfavorable
final judgment is not expected to adversely affect any of the
Partnership's property holdings because of these grandfathered rights
and because the Partnership's property was removed from the
jurisdiction of the city pursuant to the water quality protection zone
at Barton Creek and the Southwest Travis County Water District (the
"District") at Circle C, both of which were authorized by certain
Texas state legislation enacted in 1995.

In October 1996, the City filed a petition for declaratory
judgment asserting that the legislation that created the District is
unconstitutional.  The District has indicated that it intends to
defend itself against the City's claim.  Approximately 1,000 acres
owned by Circle C are included in the District.  None of the
Partnership's other properties are in the District.

The real estate interests of the Partnership in Dallas, Houston
and San Antonio, Texas are managed by professional real estate
developers.  Under the terms of these agreements, the operating
expenses and development costs, net of revenues, are funded by the
Partnership.  The developers are entitled to a management fee and a 25
percent interest in the net profits, after recovery by the Partnership
of its investments and a stated return, resulting from the sale of the
managed properties.

In September 1995, Circle C sold its single-family residential
real estate properties and related amenities for $15.8 million.
During 1996, FMPO agreed to sell the remaining assets of Circle C for
$34.0 million.  The Partnership received a $1.0 million non-refundable
cash deposit, with the balance of the purchase price due in January
1997.  However, the investor group was unable to complete the sale and
the agreement expired.  The Partnership has no further obligation to
the investor group and is proceeding with developing and marketing the
Circle C commercial and multi-family properties.

During February 1997, FMPO filed a petition for declaratory
judgment  against Phoenix Holdings, Ltd. in order to secure its
ownership of certain Municipal Utility District receivables that
pertain to existing infrastructure which serves the Circle C
development.  A favorable outcome would result in significant refunds
of prior capital expenditures o the Partnership over the next several
years.

The Barton Creek Resort, which included a conference center, a
147-room hotel and related facilities and three golf courses, was sold
during 1996 for $25.0 million.  The Partnership realized no gain or
loss on the transaction and proceeds were used to reduce debt.

Concurrent with certain yearend 1994 debt negotiations, the
Partnership analyzed the carrying amount in its financial statements
of its investment in real estate assets, using generally accepted
accounting principles, and recorded a $115.0 million pretax, noncash
write-down.  The actual amounts that will be realized depend on future
market conditions and may be more or less than the amounts recorded in
the Partnership's financial statements.

4.  COMMITMENTS AND CONTINGENCIES
The Partnership has made, and will continue to make,
expenditures at its operations for protection of the
environment.  Increasing emphasis on environmental matters can be
expected to result in additional costs, which will be charged against
the Partnership's operations in future periods.  Present and future
environmental laws and regulations applicable to the Partnership's
operations may require substantial capital expenditures, could
adversely affect the development of its real estate interests or may
affect its operations in other ways that cannot be accurately
predicted at this time.

In connection with the sale of one of its oil and gas properties
in 1993, the Partnership indemnified the purchaser for any future
abandonment costs in excess of net revenues received by the purchaser.
The Partnership has accrued $3.0 million relating to this contingent
liability which it believes to be adequate.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE PARTNERSHIP COMMITTEE OF FM PROPERTIES OPERATING CO.:

We have audited the accompanying balance sheets of FM Properties 
Operating Co.(a Delaware general partnership) as of December 31,
1996 and 1995, and the related statements of operations and
cash flow for each of the three years in the period ended December 31,
1996.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of FM
Properties Operating Co. as of December 31, 1996 and 1995 and the results
of its operations and its cash flow for each of the three years in the
period ended December 31, 1996 in conformity with generally accepted
accounting principles.

Arthur Andersen LLP

New Orleans, Louisiana,
January 21, 1997

Item 9.  Changes in and  Disagreements  with  Accountants  on  Accounting and
Financial Disclosure.

Not applicable.

PART III

Item 10.  Directors and Executive Officers of the Registrant.

The information set forth under the caption "Information About Nominees
and  Directors" of the Proxy Statement submitted to the stockholders  of  the
registrant  in  connection  with its 1997 annual meeting to be held on May 8,
1997 is incorporated herein by reference.

Item 11.  Executive Compensation.

The information set forth  under  the  captions "Director Compensation"
and "Executive Officer Compensation" of the Proxy  Statement submitted to the
stockholders of the registrant in connection with its  1997 annual meeting to
be held on May 8, 1997 is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

The information set forth under the captions "Common Stock Ownership of
Certain  Beneficial  Owners"  and  "Common Stock Ownership of  Directors  and
Executive Officer" of the Proxy Statement  submitted  to  the stockholders of
the registrant in connection with its 1997 annual meeting to  be  held on May
8, 1997 is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions.

The  information set forth under the caption "Certain Transactions"  of
the Proxy Statement  submitted  to  the  stockholders  of  the  registrant in
connection  with  its  1997  annual  meeting  to  be  held on May 8, 1997  is
incorporated herein by reference.

PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)(1)   Financial  Statements.   Reference is made  to  the  Financial
Statements beginning on page 13 hereof.

(a)(2)  Financial Statement Schedules.                            Page
Schedule III Real Estate and Accumulated Depreciation    F-1

Other schedules have not been  included because
they  are not required, not applicable  or  the
information    required   has   been   included
elsewhere herein.

(a)(3)  Exhibits.  Reference  is made to the Exhibit Index beginning on
page E-1 hereof.

(b)  Reports on Form 8-K.  The  Company  filed  one  Report on Form 8-K
during  the  fourth quarter of 1996, which was dated December  24,  1996  and
reported one matter under Item 5.

SIGNATURES

Pursuant  to  the requirements of Section 13 of the Securities Exchange
Act of 1934, the registrant  has  duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 26, 1997.

FM PROPERTIES INC.

By: /s/ Richard C. Adkerson

Richard C. Adkerson
Chairman of the Board and
Chief Executive Officer

Pursuant to the requirements of the Securities  Exchange  Act  of 1934,
this  report has been signed below by the following persons on behalf of  the
registrant and in the capacities indicated, on March 26, 1997.

/s/ Richard C. Adkerson          Chairman of the Board, Chief
Richard C. Adkerson            Executive Officer (principal
executive officer) and Director
*                   
President, Chief Operating Officer
W. H. Armstrong, III           and Chief Financial Officer
(principal financial officer)
*                     
Controller (principal accounting
William J. Blackwell                   officer)
*                   
Director
James C. Leslie

*                             Director     
Michael D. Madden

*By:  /s/ Richard C. Adkerson
Richard C. Adkerson
Attorney-in-Fact

FM Properties Inc.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 1996

(In Thousands)

SCHEDULE III

Cost Capitalized
Initial Cost            Subsequent to Acquisitions
-------------------        ---------------------------
Buildings                  Buildings   
and                         and
Land     Improvements      Land     Improvements
---------   ----------      --------   ------------

Developed Lots
Hunter's Glen,
Plano, TX     $    145       $    -         $    240   $  -

Camino Real,
San Antonio,
TX                 311            -              702      -

Bent Tree
Marsh, Dallas,
TX                 770            -            1,699      -

Preston Springs,
Plano, TX           54             -              10      -

Willow Bend, Plano,
TX               2,076             -            1,257     -

Copper Lakes,
Houston, TX        662            -             1,466     -

Barton Creek
(North), Austin,
TX                 145            -              246      -
Undeveloped Acreage

Hunter's Glen,
Plano, TX          168            -               14      -

Camino Real, San
Antonio, TX        968            -              257      -

Willow Bend, Plano,
TX               4,725            -            3,865      -

Copper Lakes,
Houston, TX       2,869           -            1,914      -

Bent Tree Addison,
Dallas, TX         364            -              -        -

Bent Tree Apt.
/Retail, Dallas,
TX               2,845            -              96       -

Tree Farm, Plano,
TX               2,967            -               3       -

Keller Springs,
Dallas, TX         823            -              -        -

Barton Creek
(North), Austin
, TX             12,068            -           6,022       -

Barton Creek
(South), Austin,
TX              20,898            -           14,915      -

Lantana, Austin,
TX               3,934            -            1,429      -

Longhorn
Properties,
Austin, TX      15,793            -            9,611      -

Operating
Properties

Barton Creek
Utilities,
Austin ,TX       -              2,421            -         -

----------       ---------       ---------   --------
$ 72,585          $ 2,421         $ 43,746      -
==========        =========       ========== =========

FM Properties Inc.
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1996
(In Thousands)

SCHEDULE III

Gross Amounts At
December 31, 1996
------------------------                        
Buildings and         Accumulated    Year
Land     Improvements  Total   Depreciation  Acquired
---------  ----------    ------  ------------ ---------

Developed Lots
Hunter's
Glen, Plano,
TX             $ 385         $ -        $ 385     $   -         1990

Camino
Real, San
Antonio,
TX            1,013            -         1,013        -         1990

Bent Tree
Marsh,
Dallas,
TX            2,469            -          2,469       -         1991

Preston
Springs,
Plano,
TX               64            -              64      -          1991

Willow
Bend,
Plano, TX      3,333           -           3,333       -         1991

Copper
Lakes,
Houston,
TX              2,128           -           2,128      -         1991

Barton
Creek
(North),
Austin,
TX               391            -             391      -        1988

Undeveloped
Acreage

Hunter's
Glen,
Plano,
TX                182            -              182      -         1990

Camino Real,
San Antonio  
TX              1,225            -            1,225      -         1990

Willow Bend,
Plano, TX       8,590            -            8,590      -         1991

Copper Lakes,
Houston,
TX              4,783            -            4,783      -         1991

Bent Tree
Addison,
Dallas,
TX                364            -              364       -        1991

Bent Tree
Apt /Retail,
Dallas,
TX              2,941            -            2,941       -        1990

Tree Farm,
Plano, TX       2,970             -           2,970       -        1991

Keller
Springs,
Dallas,
TX                823            -              823        -       1991

Barton Creek
(North),
Austin, TX       18,090          -            18,090       -       1988

Barton Creek
(South), Austin,
TX               35,813          -             35,813      -       1988

Lantana,
Austin,
TX                5,363          -              5,363       -      1994

Longhorn
Properties,
Austin, TX       25,404           -            25,404       -      1992

Operating
Properties

Barton
Creek
Utilities,
Austin, TX       -              2,421           2,421      723     1988
----------       ----------      ----------   -----       
$    116,331        $   2,421       $ 118,752   $ 723
=========       ==========     ==========  ========

FM Properties Inc.
Notes to Schedule III

(In Thousands)

(1)  Reconciliation of Real Estate Properties:

The changes in real estate assets for the years ended
December 31, 1996 and 1995 are as follows:

1996           1995
----------     ----------         

Balance, beginning of year      $ 189,309      $ 205,610
Acquisitions                         -              -
Improvements                        5,939         19,749
Cost of real estate sold          (76,496)       (36,050)
----------     ----------
Balance, end of year             $ 118,752      $ 189,309
==========     ==========

The aggregate net book value for federal income tax purposes
as of December 31, 1996 was $126,759.

(2)  Reconciliation of Accumulated Depreciation:

The changes in accumulated depreciation for the years
ended December 31, 1996 and 1995 are as follows:

1996           1995
--------       ----------    

Balance, beginning of year          $ 9,269            $ 7,157

Depreciation expense                  1,484              2,472
Real estate sold                    (10,030)             (360)
----------          ----------
Balance, end of year                 $  723             $ 9,269
==========          ==========

Depreciation of the Partnership's buildings and
improvements reflected in the statements of operations is
calculated over estimated lives of 30 years.

(3)  Freeport-McMoRan Inc., as managing general partner of
the Partnership and as the sole guarantor of all of the
Partnership's debt, has liens on all of the Partnership's
real estate assets.

(4)  Concurrent with certain yearend 1994 debt negotiations,
the Partnership analyzed the carrying amount of its real
estate assets, using generally accepted accounting
principals, and recorded a $115 million pretax, non-cash
write-down.  The actual amounts that will be realized depend
on future market conditions and may be more or less than the
amounts recorded in the Partnership's financial statements.

FM PROPERTIES INC.

EXHIBIT INDEX

Exhibit
Number

2.1         Distribution Agreement dated as of June 10, 1992
among FTX, the Company and the Partnership.
Incorporated by reference to Exhibit 2.1 to the
Annual Report on Form 10-K of the Company for the
fiscal year ended December 31, 1992 (the "1992 Form
10-K").

3.1         Amended and Restated Certificate of Incorporation of
the Company.  Incorporated by reference to Exhibit
3.1 to the 1992 Form 10-K.

3.2         By-laws of the Company, as amended.  Incorporated by
reference to Exhibit 3.2 to the 1992 Form 10-K.

4.1         The Company's Certificate of Designations of Series A
Participating Cumulative Preferred Stock.
Incorporated by reference to Exhibit 4.1 to the 1992
Form 10-K.

4.2         Rights Agreement dated as of May 28, 1992 between the
Company and Mellon Securities Trust Company, as
Rights Agent.  Incorporated by reference to Exhibit
4.2 to the 1992 Form 10-K.

4.3         Amended and Restated Credit Agreement dated as of
December 20, 1996 (the "Credit Agreement") among FTX,
the Partnership, certain banks, and The Chase
Manhattan Bank, as Administrative Agent, FTX
Collateral Agent and Documentation Agent.

4.4         Second Amended and Restated Note Agreement dated as
of June 30, 1995, among FTX, FCX, the Partnership,
Chemical Bank, and Hibernia National Bank,
individually and as agent.  Incorporated by reference
to Exhibit 4.4 to the Quarterly Report on Form 10-Q
of FTX for the quarter ended September 30, 1995.

4.5         First Amendment to Second Amended and Restated Note
Agreement dated as of December 31, 1995, among FTX,
FCX, the Partnership, Chemical Bank and Hibernia
National Bank, individually and as agent.
Incorporated by reference to Exhibit 10.18 to the
Annual Report on Form 10-K of FCX for the fiscal year
ended December 31, 1995.

4.6         Second Amendment to Second Amended and Restated Note
Agreement dated as of December 20, 1996, among FTX,
the Partnership, The Chase Manhattan Bank and
Hibernia National Bank, individually and as agent.

4.7         Credit Agreement dated as of December 20, 1996,
between FTX and the Partnership.

4.8         Amended and Restated Credit Agreement dated as of
December 20, 1996 between Circle C Land Corp.
("Circle C") and Texas Commerce Bank National
Association ("TCB").

10.1        Amended and Restated Agreement of General Partnership
of the Partnership, dated June 11, 1992, among the
Company, FTX and FMOP Sub Inc. Incorporated by
reference to Exhibit 10.1 to the 1992 Form 10-K.

10.2        Amendment No. 1 to Amended and Restated Agreement of
General Partnership of the Partnership dated December
21, 1993, among the Company, FTX and FM Properties
Senior Holding Inc.  Incorporated by reference to
Exhibit 10.2 to the Annual Report on Form 10-K of the
Company for the fiscal year ended December 31, 1993
(the "1993 Form 10-K").

10.3        Amended and Restated Services Agreement, dated as of
January 1, 1997 between FMS and the Company.

10.4        Joint Venture Agreement between Freeport-McMoRan
Resource Partners, Limited Partnership and the
Partnership, dated June 11, 1992.  Incorporated by
reference to Exhibit 10.3 to the 1992 Form 10-K.

10.5        Guaranty Agreement effective as of February 6, 1992
and related loan obligations in connection with the
purchase of real property in Texas to be assumed by
the Partnership.  Incorporated by reference to
Exhibit 10.8 to the Form 10 as filed with the
Commission on March 25, 1992 (the "Form 10").

10.6        Assignment dated June 11, 1992 of the Precept
Properties Agreement by and among FTX, (successor by
merger to FMI Credit Corporation, as successor by
merger to Longhorn Development Company), the
Partnership and Precept Properties, Inc. Incorporated
by reference to Exhibit 10.9 to the 1992 Form 10-K.

Executive Compensation Plans and Arrangements (Exhibits 10.7 and
10.8)

10.7        The Company's Performance Incentive Awards Program,
as amended.  Incorporated by reference to Exhibit
10.21 to the Annual Report on Form 10-K of the
Company for the fiscal year ended December 31, 1994
(the "1994 Form 10-K").

10.8        The Company's Stock Option Plan, as amended.

21.1        List of Subsidiaries.  Incorporated by reference to
Exhibit 21.1 to the Annual Report on Form 10-K of the
Company for the fiscal year ended December 31, 1995.

23.1        Consent of Arthur Andersen LLP dated March 24, 1997.

24.1        Certified Resolution of the Board of Directors of
FMPO authorizing this report to be signed on behalf
of any officer or director pursuant to a Power of
Attorney.

24.2        Powers of Attorney pursuant to which this report has
been signed on behalf of certain officers and
directors of the Company.

Exhibit 4.3

AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 20, 1996, 
among FM PROPERTIES OPERATING CO., a Delaware general partnership 
(the "Partnership" or the "Borrower"), FREEPORT-McMoRan INC., a
Delaware corporation ("FTX" or the "Guarantor"), the undersigned banks
(collectively, the "Banks") and THE CHASE MANHATTAN BANK (successor by 
merger to Chemical Bank and The Chase Manhattan Bank (National Association)), 
a New York banking corporation ("Chase"), as administrative agent for the 
Banks (in such capacity, the "Administrative Agent"), as FTX Collateral
Agent (as herein defined) and as Documentation Agent for the Banks (in such
capacity, the "Documentation Agent"; the Administrative Agent, the FTX 
Collateral Agent and the Documentation Agent being, collectively, the 
"Agents").

A.  FTX has a 0.2% general partnership interest in
and serves as managing general partner of the Partnership,
and the Company (as herein defined) directly and indirectly
has the remaining 99.8% general partnership interest in the
Partnership.

B.  FTX and the Partnership have requested the
Banks to extend credit, subject to the terms and conditions
of this Agreement, including a guaranty by FTX of such
extensions of credit to the Partnership, in order to enable
the Partnership to borrow on a revolving basis, at any time
and from time to time prior to the Maturity Date (as herein
defined), an aggregate principal amount at any time
outstanding not in excess of $10,000,000.  The proceeds of
such borrowings are to be used to refinance certain existing
borrowings and for general partnership purposes, subject to
certain limitations provided herein.  The Banks are willing
to extend such credit to the Partnership on the terms and
subject to the conditions herein set forth.

C.  FTX is party to the FTX Credit Agreement (as
herein defined).  Certain terms and provisions used or set
forth in the FTX Credit Agreement are incorporated by
reference herein, as specified below, and wherever so
incorporated shall be deemed to be a part hereof as though
fully set forth herein.  Wherever any provisions of the FTX
Credit Agreement are incorporated by reference herein, such
provisions shall be deemed to be so incorporated with the
same effect as though fully set forth herein, it being
understood that any reference in such provisions to "this
Agreement" shall be deemed to be a reference to this
Agreement, as appropriate.

Accordingly, FTX, the Partnership, the Banks and
the Agents agree as follows:

ARTICLE I.

Definitions

SECTION 1.11834  Definitions.  As used in this
Agreement, the following terms have the meanings indicated
(any term defined in this Article I or elsewhere in this
Agreement in the singular and used in this Agreement in the
plural shall include the plural, and vice versa):

"Administrative Questionnaire" means an
Administrative Questionnaire in the form of Exhibit C
hereto.

"Administrative Services Agreement" means the
Administrative Services Agreement dated as of June 11, 1992,
between FTX and the Company, in the form provided prior to
the Closing Date by FTX to the Banks, as amended and in
effect from time to time.

"Affiliate" means, when used with respect to a
specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or
is Controlled by or is under common Control with the Person
specified.

"Alternate Base Rate" means, for any day, a rate
per annum (rounded upwards, if not already a whole multiple
of 1/100 of 1%, to the next higher 1/100 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day,
(b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect for such day
plus 1/2 of 1%.  For purposes hereof, the term "Prime Rate"
means the rate of interest per annum publicly announced from
time to time by Chase as its prime rate in effect at its
principal office in the City of New York; each change in the
Prime Rate shall be effective on the date such change is
publicly announced as being effective.  "Base CD Rate" means
the sum of (x) the product of (i) the Three-Month Secondary
CD Rate and (ii) Statutory Reserves and (y) the Assessment
Rate.  "Three-Month Secondary CD Rate" means, for any day,
the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such
day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published
in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-
month certificates of deposit of major money center banks in
New York City received at approximately 10:00 a.m., New York
City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing
selected by it.  "Federal Funds Effective Rate" means, for
any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for the day of such transactions received
by the Administrative Agent from three Federal funds brokers
of recognized standing selected by it.  If for any reason
the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error)
that it is unable to ascertain the Base CD Rate or the
Federal Funds Effective Rate or both for any reason,
including the inability or failure of the Administrative
Agent to obtain sufficient quotations in accordance with the
terms hereof, the Alternate Base Rate shall be determined
without regard to clause (b) or (c), or both, of the first
sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist.
Any change in the Alternate Base Rate due to a change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal
Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate,
respectively.

"Applicable LIBO Rate" means, on a per annum basis
in respect of any LIBO Rate Loan, for each day during the
Interest Period for such Loan, the sum of (i) the LIBO Rate
as determined by the Administrative Agent plus (ii) the
Applicable Margin.

"Applicable Margin" means, with respect to any
Loan, the applicable percentage set forth on Schedule I
hereto.

"Applicable Percentage" of any Bank means the
percentage set opposite such Bank's name on Schedule II
hereto, as modified from time to time as provided hereby.

"Applicable Reference Rate" means, on a per annum
basis in respect of any Reference Rate Loan, for any day,
the sum of the Alternate Base Rate plus the Applicable
Margin.

"Assessment Rate" means, with respect to each day
during an Interest Period, the annual rate (rounded upwards,
if not already a whole multiple of 1/100 of l%, to the next
highest whole multiple of 1/100 of 1%) most recently
estimated by the Administrative Agent as the then current
net annual assessment rate that will be employed in
determining amounts payable by Chase to the Federal Deposit
Insurance Corporation or any successor ("FDIC") for the
FDIC's insuring time deposits made in Dollars at offices of
Chase in the United States.

"Bank" means each bank signatory hereto and its
successors and permitted assigns under Section 9.3.

"Board" means the Board of Governors of the
Federal Reserve System of the United States.

"Borrowing" means a group of Loans of a single
type made by the Banks on a single date and as to which a
single Interest Period is in effect.

"Borrowing Date" means, with respect to any Loan,
the date on which such Loan is disbursed.

"Burke Parties" means, collectively, Burke Oil Co.
(formerly Pel-Tex Oil Company, Inc.), Chenier Oil Company,
Inc., Burke and Pel-Tex Oil Company, Inc., doing business as
Burmont Company, Earl P. Burke, Jr. and Fay Stouder Burke,
as assignors of the Pel-Tex Agreements to the Pel-Tex
Lenders.

"Business Day" means any day other than a
Saturday, Sunday or a day on which banks in New York City
are authorized or required by law to close; provided,
however, that when used in connection with a LIBO Rate Loan,
the term "Business Day" shall also exclude any day on which
banks are not open for dealings in Dollar deposits in the
London interbank market.

"Capitalized Lease Obligation" means the
obligation of any Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
real and/or personal property which obligation is, or in
accordance with GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting
Standards Board) is required to be, classified and accounted
for as a capital lease on a balance sheet of such Person
under GAAP, and for purposes of this Agreement the amount of
such obligation shall be the capitalized amount thereof
determined in accordance with GAAP.

A "Change in Control" shall be deemed to have
occurred if FTX shall for any reason cease to be the sole
managing general partner of the Partnership or the functions
of FTX as the managing general partner of the Partnership
shall generally be carried out for any reason by any person
other than FTX; provided that no Change in Control shall be
deemed to have occurred if any subsidiary of FTX designated
by FTX to discharge the duties of FTX as the managing
general partner of the Partnership shall carry out the func-
tions of FTX as managing general partner of the Partnership.

"Circle C Property" means the assets of the TCB
Borrower referred to as the "Property" in the Option
Agreement dated as of February 6, 1992, between the TCB
Borrower and David B. Armbrust, as Trustee.

"Circle C Entity" means any entity which purchases
the Circle C Property pursuant to the Option Agreement dated
as of February 6, 1992, between the TCB Borrower and David
B. Armbrust, as Trustee.

"City of Austin Receivable" means all obligations
of the City of Austin, Texas to the Partnership, whether now
existing or hereafter created, incurred in connection with
the infrastructure development work being conducted on the
property of the Partnership located on the Lantana property
in Travis County, Texas.

"Closing Date" means June 30, 1995.

"Code" means the Internal Revenue Code of 1986, as
amended from time to time.

"Commitment" means, with respect to each Bank, the
Commitment of such Bank hereunder to make revolving loans as
set forth on Schedule II hereto, or in the Commitment
Transfer Supplement pursuant to which such Bank assumed its
Commitment, as the same may be permanently terminated or
reduced from time to time pursuant to Section 2.7 and
pursuant to assignments by such Bank pursuant to
Section 9.3.  The Commitment of each Bank shall
automatically and permanently terminate on the Maturity
Date.

"Commitment Fee" has the meaning assigned to such
term in Section 2.6(a).

"Commitment Termination Date" has the meaning
assigned to such term in Section 2.6(a).

"Commitment Transfer Supplement" means a
Commitment Transfer Supplement entered into by a Bank and an
assignee, and accepted by the Administrative Agent, in the
form of Exhibit D hereto or such other form as shall be
approved by the Administrative Agent.

"Company" means FM Properties Inc., a Delaware
corporation, which holds directly and indirectly a 99.8%
general partnership interest in the Partnership.

"Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings
correlative thereto.

"Default" means any event or condition which upon
the giving of notice or lapse of time or both would become
an Event of Default.

"Distribution Agreement" means the Distribution
Agreement dated as of June 10, 1992, among FTX, the Company
and the Partnership, in the form provided prior to the
Closing Date by FTX to the Banks, as amended and in effect
from time to time.

"Dollars" or "$" means United States Dollars.

"Domestic Office" means, for any Bank, the
Domestic Office set forth for such Bank on the signature
pages hereof, unless such Bank shall designate a different
Domestic Office by notice in writing to the Administrative
Agent and the Borrower.

"environment" means ambient air, surface water and
groundwater (including potable water, navigable water and
wetlands), the land surface or subsurface strata or as
otherwise defined in any Environmental Law.

"Environmental Claim" means any written notice of
violation, claim, demand, order, directive, cost recovery
action or other cause of action by, or on behalf of, any
Governmental Authority or any Person for damages, injunctive
or equitable relief, personal injury (including sickness,
disease or death), Remedial Action costs, tangible or
intangible property damage, natural resource damages,
nuisance, pollution, any adverse effect on the environment
caused by any Hazardous Material, or for fines, penalties or
restrictions, resulting from or based upon:  (a) the
existence, or the continuation of the existence, of a
Release (including sudden or non-sudden, accidental or non-
accidental Releases); (b) exposure to any Hazardous
Material; (c) the presence, use, handling, transportation,
storage, treatment or disposal of any Hazardous Material; or
(d) the violation of any Environmental Law or Environmental
Permit.

"Environmental Law" means any and all applicable
treaties, laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any
Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural
resources, the management, Release or threatened Release of
any Hazardous Material or to health and safety matters,
including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986,
42 U.S.C. Sections 9601 et seq. (collectively "CERCLA"), the Solid
Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Amendments
of 1984, 42 U.S.C. Sections 6901 et seq., the Federal Water
Pollution Control Act, as amended by the Clean Water Act of
1977, 33 U.S.C. Sections 1251 et seq., the Clean Air Act of 1970,
as amended, 42 U.S.C. Sections 7401 et seq., the Toxic Substances
Control Act of 1976, 15 U.S.C. Sections 2601 et seq., the
Occupational Safety and Health Act of 1970, as amended,
29 U.S.C. Sections 651 et seq., the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 et
seq., the Safe Drinking Water Act of 1974, as amended,
42 U.S.C. Sections 300(f) et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Sections 1801 et seq., and any
similar or implementing state or local law, and all
amendments or regulations promulgated thereunder.

"Environmental Permit" means any permit, approval,
authorization, certificate, license, variance, filing or
permission required by or from any Governmental Authority
pursuant to any Environmental Law.

"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.

"ERISA Affiliate" means any trade or business
(whether or not incorporated), that together with the
Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated
as a single employer under Section 414 of the Code.

"ERISA Event" means (i) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued
thereunder, with respect to a Plan; (ii) the adoption of any
amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code; (iii)
the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code),
whether or not waived; (iv) the incurrence of any liability
under Title IV of ERISA with respect to any Plan or
Multiemployer Plan, other than any liability for
contributions not yet due or payment of premiums not yet
due; (v) the receipt by the Borrower or any ERISA Affiliate
from the PBGC of any notice relating to the intention of the
PBGC to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (vi) the receipt by the Borrower or
any ERISA Affiliate of any notice concerning the imposition
of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; and
(vii) any other similar event or condition with respect to a
Plan or Multiemployer Plan that could reasonably result in
liability of the Borrower.

"Event of Default" means any Event of Default
defined in Article VI.

"Existing FM Credit Agreement" has the meaning
assigned such term in Section 5.1(c).

"FCX" means Freeport-McMoRan Copper & Gold Inc., a
Delaware corporation.

"FCX Credit Agreement" means the $200,000,000
Credit Agreement dated as of June 30, 1995, among FCX, FI,
certain banks, Chemical Bank, as Administrative Agent and
FCX Collateral Agent, The Chase Manhattan Bank (National
Association), as Documentary Agent, and First Trust of New
York, National Association, as FI Trustee, as such agreement
may be amended or restated and in effect from time to time.

"FCX Guaranty" means the FCX Guaranty Agreement
dated as of July 17, 1995, by FCX of the Loans, the Pel-Tex
Debt and the loans under the TCB Credit Agreement,
substantially in the form of Exhibit L hereto, as such
agreement may be amended and in effect from time to time.

"FCX Intercreditor Agreement" means the Inter-
creditor Agreement in the form of Exhibit H to the FCX
Credit Agreement, as such Agreement may be amended and in
effect from time to time.

"Financial Officer" of any entity means the prin-
cipal financial officer, principal accounting officer, trea-
surer, assistant treasurer or controller of such entity;
provided that the Financial Officers of FTX, as managing
general partner of the Partnership, shall be deemed to be
Financial Officers of the Partnership.

"FI" means P.T. Freeport Indonesia Company, a
limited liability company organized under the laws of
Indonesia and domesticated in Delaware.

"Florida Joint Venture Agreement" means the Joint
Venture Agreement dated as of June 11, 1992, between IMC-
Agrico and the Partnership, in the form provided prior to
the Closing Date by FTX to the Banks, as amended and in
effect from time to time.

"FM Florida Properties Co." means FM Florida Prop-
erties Co., a Delaware general partnership between the Part-
nership and IMC-Agrico, formed pursuant to the Florida Joint
Venture Agreement.

"FM Intercreditor Agreement" means the
Intercreditor Agreement among FTX, the Administrative Agent
and the Pel-Tex Agent in the form of Exhibit I hereto, as
such Agreement may be amended and in effect from time to
time.

"FMPO Deed of Trust" means the Deed of Trust
granted by the Partnership in favor of FTX in order to
secure the Partnership's obligations under the Reimbursement
Agreement.

"FRP" means Freeport-McMoRan Resource Partners,
Limited Partnership, a Delaware limited partnership.

"FTX Collateral Agent" means Chase in its capacity
as FTX Collateral Agent for the Lenders (as defined in the
FTX Intercreditor Agreement) under the FTX Security
Agreement.

"FTX Credit Agreement" means the Credit Agreement
dated as of June 30, 1995, among FTX, FRP, certain banks and
Chase, as Administrative Agent, FTX Collateral Agent and
Documentary Agent, as such agreement may be amended or
restated and in effect from time to time.

"FTX/FMPO Credit Agreement" means the Credit
Agreement dated as of the Funding Date, between FTX and the
Partnership, in the form of Exhibit H hereto, as such
agreement may be amended as permitted hereby and in effect
from time to time.

"FTX Guaranty" means the FTX Guaranty Agreement
dated as of July 17, 1995, providing for the guarantee by
FTX of the Loans, the Pel-Tex Debt and the loans under the
TCB Credit Agreement, substantially in the form of Exhibit K
hereto, as such agreement may be amended and in effect from
time to time.

"FTX Intercreditor Agreement" means the
Intercreditor Agreement entered into as of June 11, 1992, as
amended and restated in its entirety as of June 1, 1993, and
as of the Funding Date in the form attached to the FTX
Credit Agreement as Exhibit G, among the Administrative
Agent on behalf of the Banks, the FTX Agent on behalf of the
FTX Lenders, the Pel-Tex Agent on behalf of the Pel-Tex
Lenders (each as defined therein), TCB and Chase, as FTX
Collateral Agent, as such agreement may be further amended
or restated and in effect from time to time.

"FTX Loan" has the meaning assigned such term in
the last clause of Section 4.2(g).

"FTX Security Agreement" means the security
agreement in the form of Exhibit F to the FTX Credit
Agreement, executed by FTX and delivered to the FTX
Collateral Agent, as such agreement may be amended and in
effect from time to time.

"Funding Date" means July 17, 1995.

"GAAP" has the meaning assigned to such term in
Section 1.2.

"Governmental Authority" means any Federal, state,
local or foreign court or governmental agency, authority,
instrumentality or regulatory body.

"Guarantee" means, with respect to any Person, any
obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing
any Indebtedness or obligation of any other Person in any
manner, whether directly or indirectly, and including,
without limitation, any agreement or obligation (i) to pay
dividends or other distributions upon the stock of such
other Person, or any obligation of such other Person, direct
or indirect, (ii) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or
obligation or to purchase (or advance or supply funds for
the purchase of) any security for the payment of such
Indebtedness, obligation, dividend or distribution, (iii) to
purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or
obligation or the holder of such stock of the payment of
such Indebtedness, obligation, dividend or distribution,
including, without limitation, any take-or-pay contract or
agreement to buy a minimum amount or quantity of production
or to provide an operating subsidy which, in each case, is
utilized for a third party financing, or (iv) to maintain
working capital, equity capital or any other financial
statement condition of the primary obligor, so as to enable
the primary obligor to pay such Indebtedness, obligation,
dividend or distribution; provided, however, that the term
Guarantee shall not include any endorsement for collection
or deposit in the ordinary course of business.

"Guaranties" shall mean the FCX Guaranty and the
FTX Guaranty.

"Hazardous Materials" means all explosive or
radioactive substances or wastes, hazardous or toxic
substances or wastes, pollutants, solid, liquid or gaseous
wastes, including petroleum or petroleum distillates,
asbestos or asbestos-containing materials, polychlorinated
biphenyls ("PCBs") or PCB-containing materials or equipment,
radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any
Environmental Law.

"Hedge Agreement" means any interest rate,
currency or commodity swap, cap, floor or collar agreement
or similar hedging arrangement providing for the transfer or
mitigation of interest rate, commodity price or currency
value or exchange rate risks, either generally or under
specific contingencies.

"IMC-Agrico" means the general partnership formed
pursuant to the IMC-Agrico Partnership Agreement.

"IMC-Agrico Partnership Agreement" means the
Amended and Restated Partnership Agreement dated as of
July 1, 1993, by and among Agrico LP, a Delaware limited
partnership, IMC-Agrico GP Company, a Delaware corporation,
and IMC-Agrico MP Inc., a Delaware corporation, as amended
and in effect from time to time as permitted by
Section 5.2(r) of the FTX Credit Agreement as incorporated
herein by reference.

"Indebtedness" of any Person means, without
duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all
obligations of such Person for the unearned balance of any
payment received under any contract outstanding for 180
days, (d) all obligations of such Person under conditional
sale or other title retention agreements relating to
property or assets purchased by such Person, (e) all
obligations of such Person issued or assumed as the deferred
purchase price of property or services (excluding trade
accounts payable and accrued obligations incurred in the
ordinary course of business so long as the same are not
180 days overdue or, if overdue, are being contested in good
faith and by appropriate proceedings), (f) all Indebtedness
of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property owned or acquired by
such Person, whether or not the obligations secured thereby
have been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capitalized Lease
Obligations of such Person, (i) all recourse obligations of
such Person with respect to sales of accounts receivable
which would be shown under GAAP on the balance sheet of such
Person as a liability, (j) all obligations of such Person as
an account party (including reimbursement obligations to the
issuer of a letter of credit) in respect of bankers'
acceptances and letters of credit Guaranteeing Indebtedness
and (k) all non-contingent obligations of such Person as an
account party (including reimbursement obligations to the
issuer of a letter of credit) in respect of letters of
credit other than those referred to in clause (j) above.
The Indebtedness of any Person shall include the
Indebtedness of any partnership in which such Person is a
general partner but shall exclude obligations under leases
which are characterized as Operating Leases.

"Intercreditor Documents" means the FM
Intercreditor Agreement and the FTX Intercreditor Agreement.

"Interest Payment Date" means (i) as to any
Reference Rate Loan, the next succeeding March 31, June 30,
September 30 or December 31 (subject to Section 2.16), or if
earlier, the Maturity Date, and (ii) as to any LIBO Rate
Loan, the last day of the Interest Period applicable to such
Loan (and, in the case of any Interest Period of more than
three months' duration, the date that would be the last day
of such Interest Period if such Interest Period were of
three months' duration) and the date of any continuation or
conversion of such Loan as or into a Loan of the same or a
different type.

"Interest Period" means (i) as to any LIBO Rate
Loan, the period commencing on the date of such LIBO Rate
Loan or on the last day of the immediately preceding
Interest Period applicable to such Loan, as the case may be,
and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day)
in the calendar month that is 1, 2, 3 or 6 months
thereafter, as the Borrower may elect, and (ii) as to any
Reference Rate Loan, the period commencing on the date of
such Reference Rate Loan or on the last day of the
immediately preceding Interest Period applicable to such
Loan, as the case may be, and ending on the earliest of
(x) the next succeeding March 31, June 30, September 30 or
December 31, (y) the Maturity Date and (z) the date such
Loan is prepaid or converted as permitted hereby; provided,
however, that (1) if any Interest Period would end on a day
that shall not be a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless, with
respect to LIBO Rate Loans only, such next succeeding
Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding
Business Day, (2) no Interest Period with respect to any
Loan shall end later than the Maturity Date and (3) interest
shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest
Period.

"Key Assets" means the properties and assets of
the Borrower shown on Schedule III hereto.

"LIBO Rate" means, with respect to any LIBO Rate
Loan for any Interest Period, an interest rate per annum
(rounded upwards, if not already a whole multiple of 1/100
of 1%, to the next higher 1/100 of 1%) equal to the
arithmetic average of the respective rates per annum at
which Dollar deposits approximately equal in principal
amount to Chase's portions of such LIBO Rate Loan and for a
maturity equal to the applicable Interest Period are offered
in immediately available funds to the principal London
offices of Chase in the London Interbank Market at
approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.

"LIBO Rate Loan" means any Loan for which interest
is determined, in accordance with the provisions hereof, at
the Applicable LIBO Rate.

"LIBOR Office" means, for any Bank, the LIBOR
Office set forth for such Bank on the signature pages hereof
or as otherwise notified in writing to the Administrative
Agent and the Borrower, unless such Bank shall designate a
different LIBOR Office by notice in writing to the
Administrative Agent and the Borrower.

"Lien" means with respect to any asset, (a) a
mortgage, deed of trust, lien, pledge, encumbrance, charge
or security interest in or on such asset, (b) the interest
of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement
relating to such asset, (c) in the case of securities, any
purchase option, call or similar right of a third party with
respect to such securities and (d) other encumbrances of any
kind, including, without limitation, production payment
obligations.

"Loans" means the revolving loans made by the
Banks to the Borrower pursuant to Section 2.1.  Each Loan
shall be either a LIBO Rate Loan or a Reference Rate Loan.

"Loan Documents" means this Agreement, the
Promissory Notes, the FTX Guaranty, the  Intercreditor
Agreements, the FTX Security Agreement and all other
agreements, certificates and instruments now or hereafter
entered into in connection with any of the foregoing, in
each case as amended and modified from time to time.

"Margin Stock" has the meaning assigned to such
term in Regulation U.

"Material Adverse Effect" means (a) a materially
adverse effect on the business, assets, operations,
prospects or condition, financial or otherwise, of the
Guarantor or the Borrower and the Subsidiaries taken as a
whole, (b) material impairment of the ability of the
Guarantor or the Borrower or any of the Subsidiaries to
perform any of its obligations under any Loan Document to
which it is or will be a party or (c) material impairment of
the rights of or benefits available to the Banks under any
Loan Document.

"Material Agreements" means the Distribution
Agreement, the Partnership Agreement, the Administrative
Services Agreement, the Florida Joint Venture Agreement, the
Reimbursement Agreement and the FTX/FMPO Credit Agreement.

"Material Asset" means any single asset of the
Partnership for which, upon the sale thereof, the
Partnership receives in excess of $100,000 in Net Proceeds.

"Maturity Date" means February 28, 1998, or, if
earlier, the date of termination of the Commitments pursuant
to the terms hereof.

"MUD Proceeds" has the meaning assigned to such
term in Section 4.2(g)(vi).

"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower
or any ERISA Affiliate is making or accruing an obligation
to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make
contributions.

"Net Proceeds" shall mean in connection with any
permitted asset sale, the proceeds thereof (including any
condemnation award and any payment or settlement of a
casualty insurance claim not used to restore the related
property) in the form of cash or cash equivalents (including
any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only
as and when received), net of the following, without
duplication: (i) customary and reasonable attorneys' fees,
accountants' fees, investment banking fees, brokerage
commissions, all closing costs, and other customary fees and
expenses actually incurred in connection therewith as
transaction costs, and bona fide reserves and deposits, and
(ii) any taxes paid or reasonably estimated to be payable
solely in respect of such permitted asset sale as a result
thereof by the owner of such asset (after taking into
account any available tax credits or deductions).

"1995 FM Form 10-K" means the Annual Report on
Form 10-K of the Company for the year ended December 31,
1995.

"1995 FTX Form 10-K" means the Annual Report on
Form 10-K of FTX for the year ended December 31, 1995.

"Operating Lease" means any lease other than a
lease giving rise to a Capitalized Lease Obligation.

"Partnership Agreement" means the Amended and
Restated Agreement of General Partnership dated as of June
11, 1992, among FTX, the Company and FMOP Sub Inc., in the
form provided prior to the Closing Date by FTX to the Banks,
as amended and in effect from time to time.

"Partnership Obligations" means the principal and
interest on each Loan and all other amounts payable by the
Borrower hereunder and under the other Loan Documents,
including fees, indemnities and reimbursement of costs and
expenses.

"PBGC" means the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.

"Pel-Tex Agent" means Hibernia National Bank, as
Agent for the Pel-Tex Banks.

"Pel-Tex Agreements" means the Note Agreement and
related documents dated as of December 31, 1985, as amended
and restated and in effect from time to time, between the
Partnership (as ultimate successor to FMP Operating Company)
and the Pel-Tex Banks (as successor to the Burke Parties).

"Pel-Tex Bank Agreement" means the Credit Agree-
ment dated as of December 31, 1985, as amended and in effect
from time to time, among the Burke Parties, the Pel-Tex
Banks and the Pel-Tex Agent.

"Pel-Tex Banks" means, collectively, the banks
which were parties to the Pel-Tex Bank Agreement and, in
connection with satisfaction on the Burke Parties of the
Pel-Tex Bank Agreement, became the successors to the Burke
Parties under the Pel-Tex Agreements (and the successors and
assigns of such banks).

"Pel-Tex Debt" means the Indebtedness permitted by
Section 4.2(g)(i).

"Pel-Tex Lenders" means, collectively, the Pel-Tex
Banks and the Pel-Tex Agent.

"Pel-Tex Obligations" means, without duplication,
all amounts owing by, and all other obligations (including,
without limitation, in respect of fees, indemnities and
reimbursement of costs or expenses), whether direct or
contingent, now or hereafter existing, due or to become due,
monetary or otherwise, of the Partnership to the Pel-Tex
Lenders in connection with the Pel-Tex Agreements.

"Permitted Investments" means:

(a) direct obligations of, or obligations the
principal of and interest on which are unconditionally
guaranteed by, the United States of America, in each
case maturing within 90 days from the date of acquisi-
tion thereof;

(b) investments in commercial paper maturing
within 90 days from the date of acquisition thereof and
having, at such date of acquisition, an A-1 credit
rating from Standard & Poor's Corporation or a P-1
credit rating from Moody's Investors Service, Inc.;

(c) investments in certificates of deposit,
banker's acceptances and time deposits (onshore or
offshore) maturing within 90 days from the date of
acquisition thereof issued or guaranteed by or placed
with, and money market deposit accounts issued or
offered by, any commercial bank, foreign or domestic,
having a short-term deposit rating issued by Moody's
Investor Service, Inc. of P-1;

(d) investments in readily marketable money market
funds having assets in excess of $1,000,000,000, which
assets have an average life of less than one year; and

(e) other investment instruments approved in writ-
ing by the Required Banks.

"Permitted Swap" means any Hedge Agreement between
the Partnership or any Subsidiary and any Bank or its
Affiliates that shall not require the payment of any up-
front fee or other up-front amount or any advance payment
(including such a payment in lieu of periodic payments of
amounts accrued during any period).

"Person" means any natural person, corporation,
partnership, joint venture, trust, incorporated or
unincorporated association, joint stock company, government
(or an agency or political subdivision thereof) or other
entity of any kind.

"Plan" means any employee pension benefit plan
(other than a Multiemployer Plan) which is subject to the
provisions of Title IV of ERISA or Section 412 of the Code
and in respect of which the Borrower or any ERISA Affiliate
is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.

"Promissory Notes" means the promissory notes of
the Borrower referred to in Section 2.4.

"Property" has the meaning assigned such term in
Section 3.1(k).

"Reimbursement Agreement" means the Reimbursement
Agreement between the Partnership and FTX in the form of
Exhibit J hereto, as such agreement may be amended as
permitted hereby and in effect from time to time.

"Reference Rate Loan" means any Loan for which
interest is determined, in accordance with the provisions
hereof, at the Applicable Reference Rate.

"Register" has the meaning assigned such term in
Section 9.3(d).

"Regulation D" means Regulation D of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.

"Regulation G" means Regulation G of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.

"Regulation U" means Regulation U of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.

"Regulation X" means Regulation X of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.

"Release" means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, disposing, depositing,
dispersing, emanating or migrating of any Hazardous Material
in, into, onto or through the environment.

"Remedial Action" means (a) "remedial action" as
such term is defined in CERCLA, 42 U.S.C. Section 9601(24),
and (b) all other actions required by any Governmental
Authority or voluntarily undertaken to:  (i) cleanup,
remove, treat, abate or in any other way address any
Hazardous Material in the environment; (ii) prevent the
Release or threat of Release, or minimize the further
Release, of any Hazardous Material so it does not migrate or
endanger or threaten to endanger public health, welfare or
the environment; or (iii) perform studies and investigations
in connection with, or as a precondition to, (i) or (ii)
above.

"Required Banks" means, subject to Section 9.7(b),
at any time Banks having Commitments representing at least
66-2/3% of the aggregate Commitments hereunder or, if the
Commitments have been terminated, Banks having outstanding
Loans representing at least 66-2/3% of the aggregate
principal amount of the outstanding Loans.

"Responsible Officer" of any entity means any
executive officer or Financial Officer of such entity and
any other officer or similar official thereof responsible
for the administration of the obligations of such entity in
respect of this Agreement; provided that the Responsible
Officers of FTX, as managing general partner of the
Partnership, shall be deemed to be Responsible Officers of
the Partnership.

"Restatement Agreement" means the Amendment
Agreement dated as of the date hereof, among the Borrower,
the Banks and the Agents.

"Restatement Closing Date" means the date upon
which the Restatement Agreement becomes effective in
accordance with its terms.

"Restricted Subsidiary" has the meaning assigned
to such term in the FTX Credit Agreement.

"Restructuring" means the transactions between FTX
and FCX (on the one hand) and RTZ, RTZ Indonesia and RTZ
America (on the other hand) pursuant to the Stock Purchase
Agreement and the distribution on a generally tax free basis
(subject to exceptions approved by the Administrative Agent
and the Documentation Agent) by FTX to its shareholders of
the shares of FCX, thereby leaving FTX as a holding company
for FRP and leaving FCX as the publicly held holding company
for FI, together with arrangements required by or
effectuated in connection with such distribution with
respect to existing contractual agreements and indebtedness
of FTX, FRP, FCX and FI, all on terms substantially the same
as those set forth in Schedule XI to the FTX Credit
Agreement or otherwise satisfactory to the Required Banks
(including all tax, accounting, corporate and partnership
matters).

"RTZ" means the RTZ Corporation PLC, a company
organized under the laws of England.

"RTZ America" means RTZ America, Inc., a Delaware
corporation and a wholly owned subsidiary of RTZ.

"RTZ Indonesia" means RTZ Indonesia Limited, a
company organized under the laws of England and a wholly
owned subsidiary of RTZ.

"SEC" means the Securities and Exchange
Commission.

"Specified Entities" means FTX, the Company, the
Restricted Subsidiaries of FTX, the Partnership and the
Subsidiaries.

"Statutory Reserves" means a fraction (expressed
as a decimal), the numerator of which is the number one and
the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including,
without limitation, any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by
the Board and any other banking authority, domestic or
foreign, to which the Administrative Agent or any Bank
(including any branch, Affiliate, or other funding office
making or holding a Loan) is subject (a) with respect to the
Base CD Rate (as such term is used in the definition of
"Alternate Base Rate"), for new negotiable nonpersonal time
deposits in Dollars of over $100,000 with maturities
approximately equal to the applicable Interest Period, and
(b) with respect to the LIBO Rate, for Eurocurrency
Liabilities (as defined in Regulation D).  Such reserve
percentages shall include, without limitation, those imposed
under Regulation D.  Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change
in any reserve percentage.

"Stock Purchase Agreement" means the Agreement
dated as of May 2, 1995, by and between FTX, FCX, RTZ, RTZ
Indonesia and RTZ America, as amended from time to time as
permitted by the FTX Credit Agreement.

"Subordination Terms" means the form of subordina-
tion terms set forth as Exhibit E hereto.

"subsidiary" means, with respect to any Person,
any corporation at least a majority of whose securities
having ordinary voting power for the election of directors
(other than securities having such power only by reason of
the happening of a contingency) are at the time owned by
such Person and/or one or more other subsidiaries of such
Person and any partnership (other than joint ventures for
which the intention under the applicable agreements, includ-
ing operating agreements, if any, is that such joint ven-
tures be partnerships solely for purposes of the Code) in
which such person or a subsidiary of such person is a
general partner.

"Subsidiary" means any subsidiary of the
Partnership; provided, however, that Circle C Land Corp. and
any Circle C Entity shall not be "Subsidiaries" for purposes
of this Agreement unless the Partnership is liable, directly
or indirectly, for the obligations under the TCB Credit
Agreement (except for any liability of the Partnership
pursuant to the Reimbursement Agreement).

"TCB" means Texas Commerce Bank National Associa-
tion, a national banking association (and its successors and
assigns).

"TCB Borrower" means the borrower under the TCB
Credit Agreement.

"TCB Borrower Properties" means the Mortgaged
Property described in (and as defined in) the TCB Deed of
Trust.

"TCB Collateral" means all of the TCB Borrower's
properties or assets, now owned or hereafter acquired,
including, without limitation, the TCB Borrower Properties.

"TCB Credit Agreement" means the Credit Agreement
dated as of February 6, 1992, as amended to the date hereof
and as further amended and in effect from time to time,
between the TCB Borrower and TCB.

"TCB Deed of Trust" means the Deed of Trust (with
security agreement and financing statement) recorded in
Volume 11620, Page 1213 of the real property records of
Travis County, Texas, and in the official public records of
Hays County, Texas.

"Threshold Amount" means, with respect to FTX
and/or its Restricted Subsidiaries, $10,000,000, and, with
respect to the Partnership or any Subsidiary, $5,000,000.

"Total Commitment" means the sum of all the then
effective Commitments.

"Transfer Effective Date" has the meaning assigned
to such term in each Commitment Transfer Supplement.

"Transferee" means any Participant or Purchasing
Bank, as such terms are defined in Section 9.3.

"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 2.11834  Accounting Terms.  Except as
otherwise herein specifically provided, each accounting term
used herein shall have the meaning given it under United
States generally accepted accounting principles in effect
from time to time (with such changes thereto as are approved
or concurred in from time to time by the Partnership's or
FTX's independent public accountants, as applicable) applied
on a basis consistent with those used in preparing the
financial statements referred to in Section 5.1(a) of the
FTX Credit Agreement ("GAAP"); provided, however, that each
reference in Section 4.2, or in the definition of any term
used in Section 4.2, to GAAP shall mean generally accepted
accounting principles as in effect on the Closing Date and
as applied by FTX in preparing the financial statements
referred to in Section 3.1(e).  In the event any change in
GAAP materially affects any provision of this Agreement, the
Banks and the Borrower agree that they shall negotiate in
good faith in order to amend the affected provisions in such
a way as will restore the parties to their respective
positions prior to such change, and until such amendment
becomes effective the Borrower's compliance with such
provisions shall be determined on the basis of GAAP as in
effect immediately before such change in GAAP became
effective.

SECTION 3.11834  Section, Article, Exhibit and
Schedule References, etc.  Unless otherwise stated, Section,
Article, Exhibit and Schedule references made herein are to
Sections, Articles, Exhibits or Schedules, as the case may
be, of this Agreement.  Whenever the context may require,
any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words "include", "includes"
and "including" shall be deemed to be followed by the phrase
"without limitation".  Except as otherwise expressly
provided herein, any reference in this Agreement to any Loan
Document shall mean such document as amended, restated,
supplemented or otherwise modified from time to time.

SECTION 4.11834  Incorporated Agreements and
Definitions.  Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to such
terms in the FTX Credit Agreement, and the definitions of
such terms, and of any other terms included in such
definitions are hereby incorporated by reference into this
Agreement (but only for the purpose of ascertaining the
meanings of such incorporated definitions).  For purposes of
such incorporation by reference, the FTX Credit Agreement
shall automatically mean such agreement in the form modified
or amended from time to time, without the necessity of any
further action or approval pursuant to this Agreement.  If
the FTX Credit Agreement shall be terminated, for purposes
of this Agreement, the provisions of the terminated
agreement incorporated herein shall be deemed to be those as
in effect immediately prior to such termination.

ARTICLE II.

The Loans

SECTION 1.11834  Revolving Credit Facility.  Upon
the terms and subject to the conditions and relying upon the
representations and warranties herein set forth, each Bank,
severally and not jointly, agrees to make Loans to the
Borrower, at any time and from time to time on or after the
Funding Date, and until the earlier of the Maturity Date and
the termination of the Commitment of such Bank in accordance
with the terms hereof, in an aggregate principal amount not
to exceed such Bank's Applicable Percentage of the then
effective unused Total Commitment on the Borrowing Date for
such Loan.  Within the foregoing limits, the Borrower may
borrow, repay and reborrow, prior to the Maturity Date,
Loans subject to the terms, provisions and limitations set
forth herein.

SECTION 2.11834  Loans.  (1) The Loans made by the
Banks to the Borrower on any one date shall be in an
aggregate principal amount which is (1) an integral multiple
of $1,000,000 or (2) equal to the remaining available
balance of the applicable Commitments.  The Loans by each
Bank to the Borrower made on and after the Funding Date
shall be made against an appropriate Promissory Note,
payable to the order of such Bank in the amount of its
Commitment, executed by the Borrower and delivered to such
Bank on the Closing Date, as referred to in Section 2.4.

(2)  Each Loan shall be either a Reference Rate
Loan or a LIBO Rate Loan as the Borrower may request
pursuant to Section 2.3.  Subject to the provisions of
Sections 2.3 and 2.10, Loans of more than one type may be
outstanding at the same time.

(3)  Each Bank shall make its portion, as
determined under Section 2.14, of each Loan hereunder on the
proposed date thereof by paying the amount required to the
Administrative Agent in New York, New York in immediately
available funds not later than 2:00 p.m., New York City
time, and the Administrative Agent shall by 3:00 p.m.,
New York City time, credit the amounts so received to the
general deposit account of the Borrower with the
Administrative Agent or, if Loans shall not be made on such
date because any condition precedent to a borrowing herein
specified is not met, return the amounts so received to the
respective Banks.  Unless the Administrative Agent shall
have received notice from a Bank prior to the date of any
Loan that such Bank will not make available to the
Administrative Agent such Bank's portion of such Loan, the
Administrative Agent may assume that such Bank has made such
portion available to the Administrative Agent on the date of
such Loan in accordance with this paragraph (c) and the
Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding
amount.  If the Administrative Agent shall have so made
funds available, then to the extent that such Bank shall not
have made such portion available to the Administrative
Agent, such Bank and the Borrower severally agree to repay
without duplication to the Administrative Agent forthwith on
demand such corresponding amount together with interest
thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is
repaid to the Administrative Agent at an interest rate equal
to (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such
borrowing and (ii) in the case of such Bank, a rate
determined by the Administrative Agent to represent its cost
of overnight or short-term funds (which determination shall
be conclusive absent manifest error).  If such Bank shall
repay to the Administrative Agent such corresponding amount,
such amount shall constitute such Bank's Loan for purposes
of this Agreement.

SECTION 3.3  Notice of Loans. (1) In order to
request a Loan, the Borrower shall give the Administrative
Agent irrevocable telephonic (promptly confirmed in
writing), written, telecopy or telex notice in the form of
Exhibit B hereto with respect to each Loan (1) in the case
of a LIBO Rate Loan, not later than 10:30 a.m., New York
City time, three Business Days before a proposed borrowing,
and  (2) in the case of a Reference Rate Loan, not later
than 10:30 a.m., New York City time, on the date of a
proposed borrowing.  Such notice shall be irrevocable
(except that in the case of a LIBO Rate Loan, the Borrower
may, subject to Section 2.13, revoke such notice by giving
written or telex notice thereof to the Administrative Agent
not later than 10:30 a.m., New York City time, two Business
Days before such proposed borrowing) and shall in each case
refer to this Agreement and specify (1) whether the Loan
then being requested is to be a Reference Rate Loan or LIBO
Rate Loan, (2) the date of such Loan (which shall be a
Business Day) and amount thereof, and (3) if such Loan is to
be a LIBO Rate Loan, the Interest Period or Interest Periods
(which shall not end after the Maturity Date) with respect
thereto.  If no election as to the type of Loan is specified
in any such notice by the Borrower, such Loan shall be a
Reference Rate Loan.  If no Interest Period with respect to
any LIBO Rate Loan is specified in any such notice by the
Borrower, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration.  The
Administrative Agent shall promptly advise the other Banks
of any notice given by the Borrower pursuant to this
Section 2.3(a) and of each Bank's portion of the requested
Loan.

(2) The Borrower may continue or convert all or
any part of any Loan as or into a Loan of the same or a
different type in accordance with Section 2.10 and subject
to the limitations set forth herein.  If the Borrower shall
not have delivered a borrowing notice in accordance with
this Section 2.3 prior to the end of the Interest Period
then in effect for any Loan of the Borrower requesting that
such Loan be converted or continued as permitted hereby,
then the Borrower shall (unless the Borrower has notified
the Administrative Agent, not less than three Business Days
prior to the end of such Interest Period, that such Loan is
to be repaid at the end of such Interest Period) be deemed
to have delivered a borrowing notice pursuant to Section 2.3
requesting that such Loan be converted into or continued as
a Reference Rate Loan of equivalent amount.

(3) Notwithstanding any provision to the contrary
in this Agreement, the Borrower shall not in any borrowing
notice under this Section 2.3 request any LIBO Rate Loan
which, if made, would result in more than 8 separate LIBO
Rate Loans of any Bank.  For purposes of the foregoing,
Loans having different Interest Periods, regardless of
whether they commence on the same date, shall be considered
separate Loans.

SECTION 4.3  Promissory Notes.  (1) The Loans made
by each Bank to the Borrower shall be evidenced by a
Promissory Note duly executed on behalf of the Borrower,
dated the Closing Date, in substantially the form attached
hereto as Exhibit A, payable to the order of such Bank in a
principal amount equal to its Commitment.  The outstanding
principal balance of each Loan, as evidenced by such
Promissory Note, shall be payable on the Maturity Date. Each
Promissory Note shall bear interest from the date of the
first borrowing hereunder on the outstanding principal
balance thereof, as provided in Section 2.5.

(2) Each Bank shall maintain in accordance with
its usual practice an account or accounts evidencing the
indebtedness to such Bank resulting from each Loan made by
such Bank from time to time, including the amounts of
principal and interest payable and paid to such Bank from
time to time under this Agreement.  Each Bank shall, and is
hereby authorized by the Borrower to, endorse on the
schedule attached to the Promissory Note delivered by the
Borrower to such Bank (or on a continuation of such schedule
attached to such Promissory Note and made a part thereof),
or otherwise record in such Bank's internal records, an
appropriate notation evidencing the date and amount of each
Loan from such Bank to the Borrower, as well as the date and
amount of each payment and prepayment with respect thereto;
provided, however, that the failure of any Bank to make such
a notation or any error in such a notation shall not affect
the obligation of the Borrower to repay the Loans made by
such Bank in accordance with the terms of this Agreement and
such Promissory Note.

(3) The Administrative Agent shall maintain
accounts for (i) the type of each Loan made and the Interest
Period applicable thereto, (ii) the amount of any principal
or interest due and payable or to become due and payable
from the Borrower to each Bank hereunder and (iii) the
amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Bank's share thereof.

(4) The entries made in the accounts maintained
pursuant to paragraphs (b) and (c) of this Section 2.4 shall
be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the
failure of any Bank or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner
affect the obligations of the Borrower to repay the Loans in
accordance with their terms.

SECTION 5.4  Interest on Loans.  (1) Subject to
the provisions of Section 2.8, each Reference Rate Loan
shall bear interest at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be, when determined by
reference to the Prime Rate, and over a year of 360 days at
all other times), equal to the Applicable Reference Rate.

(2) Subject to the provisions of Section 2.8, each
Loan which is a LIBO Rate Loan shall bear interest at a rate
per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the
Applicable LIBO Rate for the Interest Period in effect for
such Loan.

(3) Interest on each Loan shall be payable on each
applicable Interest Payment Date.  The Applicable Reference
Rate and the Applicable LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be
conclusive absent manifest error.  The Administrative Agent
shall promptly advise the Borrower and each Bank of such
determination.

SECTION  6.3  Fees.  (1) The Borrower shall pay
each Bank, through the Administrative Agent, on the last
Business Day of each March, June, September and December,
and on the date on which the Commitment of such Lender shall
be terminated as provided herein (the "Commitment
Termination Date"), in immediately available funds, a
commitment fee (a "Commitment Fee") from and including the
Closing Date through and including the Commitment
Termination Date on the average daily amount of such Bank's
Applicable Percentage of the unused Total Commitment during
the quarter (or shorter period commencing with the earlier
of June 30, 1995, and the Funding Date or ending with the
Commitment Termination Date) ending on such date equal to
the applicable Commitment Fee percentage set forth in
Schedule I hereto.

(2) All Commitment Fees under this Section 2.6
shall be computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be.
The Commitment Fees due to each Bank shall cease to accrue
on the earlier of the Maturity Date and the termination of
the Commitment of such Bank pursuant to Section 2.7.

(3) The Borrower agrees to pay to the
Administrative Agent, for its own account, on the Closing
Date and on each anniversary thereof, an administration fee
as agreed between the Borrower and the Administrative Agent.

(4) All such fees shall be paid on the dates due,
in immediately available funds, to the Administrative Agent
for distribution, if and as appropriate, among the Banks.
Once paid, all such fees shall be fully earned under any and
all circumstances.

SECTION  7.4 Maturity and Reduction of
Commitments.  (1) Upon at least five days' prior written,
telecopied or telex notice to the Administrative Agent, the
Borrower may without penalty at any time in whole
permanently terminate, or from time to time permanently
reduce, the Total Commitment, ratably among the Banks in
accordance with the amounts of their respective Commitments;
provided, however, that each partial reduction of the
Commitment Amount shall be in a minimum principal amount of
$1,000,000 and an integral multiple of $1,000,000; provided
further that the Total Commitment may not be reduced to an
amount which is less than the aggregate principal amount of
all Loans outstanding after such reduction.

(2) The Total Commitment shall be automatically
and permanently reduced by an amount equal to 50% of the
proceeds of any equity issuance (other than pursuant to
employee option plans and similar arrangements) by the
Borrower and the Subsidiaries to any Person other than the
Borrower, FTX and the Subsidiaries.  The Commitment
reductions required by this Section 2.7(b) shall be
effective as of the date of closing or effectiveness of any
transaction subject hereto.

(3) On the Maturity Date, the Commitments shall
automatically terminate and any outstanding Loans shall be
due and payable in full.

SECTION 8.3  Interest on Overdue Amounts;
Alternative Rate of Interest.  (1) If the Borrower shall
default in the payment of the principal of or interest on
any Loan or any other amount becoming due hereunder or under
any other Loan Document, by acceleration or otherwise, the
Borrower shall on demand from time to time pay interest, to
the extent permitted by law, on such defaulted amount up to
the date of actual payment (after as well as before
judgment):

(1) in the case of the payment of principal of or
interest on a LIBO Rate Loan, at a rate 2% above the
rate which would otherwise be payable under
Section 2.5(b) until the last date of the Interest
Period then in effect with respect to such Loan and
thereafter as provided in clause (ii) below; and

(2) in the case of the payment of principal of or
interest on a Reference Rate Loan or any other amount
payable hereunder (other than principal of or interest
on any LIBO Rate Loan to the extent referred to in
clause (i) above), at a rate 2% above the Applicable
Reference Rate.

(2) In the event, and on each occasion, that on
the day two Business Days prior to the commencement of any
Interest Period for a LIBO Rate Loan the Administrative
Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower absent manifest
error) that (i) Dollar deposits in the requested principal
amount of such LIBO Rate Loan are not generally available in
the London Interbank Market, (ii) the rates at which Dollar
deposits are being offered will not adequately and fairly
reflect the cost to any Bank of making or maintaining such
LIBO Rate Loan during such Interest Period or (iii)
reasonable means do not exist for ascertaining the
Applicable LIBO Rate, the Administrative Agent shall as soon
as practicable thereafter give written, telecopied or telex
notice of such determination to the Borrower and the other
Banks, and any request by the Borrower for the making of a
LIBO Rate Loan pursuant to Section 2.3 or 2.10 shall, until
the Administrative Agent shall have advised the Borrower and
the Banks that the circumstances giving rise to such notice
no longer exist, be deemed to be a request for a Reference
Rate Loan; provided, however, that if the Administrative
Agent makes the determination specified in (ii) above, at
the option of the Borrower such request shall be deemed to
be a request for a Reference Rate Loan only from such Bank
referred to in (ii) above; provided further, however, that
such option shall not be available to the Borrower if the
Administrative Agent makes the determination specified in
(ii) above with respect to three or more Banks.  Each
determination of the Administrative Agent hereunder shall be
conclusive absent manifest error.

SECTION 9.2  Prepayment of Loans.  (1) The
Borrower shall have the right at any time and from time to
time to prepay any of the Loans, in whole or in part,
subject to the requirements of Section 2.13 but otherwise
without premium or penalty, upon prior written or telex
notice to the Administrative Agent by 10:30 a.m., New York
City time, on the date of such prepayment; provided,
however, that each such partial prepayment shall be in a
minimum amount of $1,000,000 and an integral multiple of
$1,000,000.

(2)  In the event of any termination of the
Commitments, the Borrower shall repay or prepay all its
outstanding Loans on the date of such termination.  On the
date of any partial reduction of the Commitments pursuant to
Section 2.7, including as required by Section 2.7(b), the
Borrower shall pay or prepay so much of the Loans as shall
be necessary in order that the aggregate principal amount of
the Loans (after giving effect to any other prepayment of
Loans on such date) outstanding will not exceed the Total
Commitment immediately following such reduction.

(3)  All prepayments under this Section 2.9 shall
be subject to Section 2.13.  Each notice of prepayment
delivered pursuant to paragraph (a) above shall specify the
prepayment date and the principal amount of each Loan (or
portion thereof) to be prepaid, shall be irrevocable and
shall commit the Borrower upon giving such notice to prepay
such Loan by the amount stated therein on the date stated
therein.  All prepayments shall be applied first to
Reference Rate Loans and then to LIBO Rate Loans and shall
be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment. Any amounts prepaid
may be reborrowed to the extent permitted by the terms of
this Agreement.

SECTION 2.10.  Continuation and Conversion of
Loans.  The Borrower shall have the right, subject to the
provisions of Section 2.8, (i) on three Business Days' prior
irrevocable notice by the Borrower to the Administrative
Agent, to continue or convert any type of Loans as or into
LIBO Rate Loans, or (ii) with irrevocable notice by the
Borrower to the Administrative Agent by 10:30 a.m. on the
date of such proposed continuation or conversion, to
continue or convert any type of Loans as or into Reference
Rate Loans, in each case subject to the following further
conditions:

(a) each continuation or conversion shall be made
pro rata as to each type of Loan to be continued or
converted among the Banks in accordance with the
respective amounts of their Commitments and the notice
given to the Administrative Agent by the Borrower shall
specify the aggregate principal amount of Loans to be
continued or converted;

(b) in the case of a continuation or conversion of
less than all Loans, the Loans continued or converted
shall be in a minimum aggregate principal amount of
$3,000,000 and an integral multiple of $1,000,000;

(c) accrued interest on each Loan (or portion
thereof) being continued or converted shall be paid by
the Borrower at the time of continuation or conversion;

(d) the Interest Period with respect to any Loan
made in respect of a continuation or conversion thereof
shall commence on the date of the continuation or
conversion;

(e) any portion of a Loan maturing or required to
be prepaid in less than one month may not be continued
as or converted into a LIBO Rate Loan;

(f) a LIBO Rate Loan may be continued or converted
on the last day of the applicable Interest Period and,
subject to Section 2.13, on any other day;

(g) no Loan (or portion thereof) may be continued
as or converted into a LIBO Rate Loan if, after such
continuation or conversion, an aggregate of more than 8
separate LIBO Rate Loans of any Bank would result,
determined as set forth in Section 2.3(c);

(h) no Loan shall be continued or converted if
such Loan by any Bank would be greater than the amount
by which its Commitment exceeds the amount of its other
Loans at the time outstanding or if such Loan would not
comply with the other provisions of this Agreement; and

(i) any portion of a LIBO Rate Loan which cannot
be converted into or continued as a LIBO Rate Loan by
reason of clause (e) or (g) above shall be
automatically converted at the end of the Interest
Period in effect for such Loan into a Reference Rate
Loan.

The Administrative Agent shall communicate the information
contained in each irrevocable notice delivered by the
Borrower pursuant to this Section 2.10 to the other Banks
promptly after its receipt of the same.

The Interest Period applicable to any LIBO Rate
Loan resulting from a continuation or conversion shall be
specified by the Borrower in the irrevocable notice of
continuation or conversion delivered pursuant to this
Section 2.10; provided, however, that if no such Interest
Period for a LIBO Rate Loan shall be specified, the Borrower
shall be deemed to have selected an Interest Period of one
month's duration.

For purposes of this Section 2.10, notice received
by the Administrative Agent from the Borrower after
10:30 a.m., New York time, on a Business Day shall be deemed
to be received on the immediately succeeding Business Day.

SECTION 2.11.  Reserve Requirements; Change in
Circumstances.  (a)  The Borrower shall pay to each Bank on
the last day of each Interest Period for any LIBO Rate Loan
so long as such Bank may be required to maintain reserves
against Eurocurrency Liabilities as defined in Regulation D
of the Board (or so long as such Bank may be required to
maintain reserves against any other category of liabilities
which includes deposits by reference to which the interest
rate on any LIBO Rate Loan is determined as provided in this
Agreement or against any category of extensions of credit or
other assets of such Bank which includes any LIBO Rate Loan)
an additional amount (determined by such Bank and notified
to the Borrower), equal to the product of the following for
each affected LIBO Rate Loan for each day during such
Interest Period:

(i) the principal amount of such affected LIBO
Rate Loan outstanding on such day; and

(ii) the remainder of (x) the product of Statutory
Reserves on such date times the Applicable LIBO Rate on
such day minus (y) the Applicable LIBO Rate on such
day; and

(iii) 1/360.

Each Bank shall separately bill the Borrower directly for
all amounts claimed pursuant to this Section 2.11(a).

(b)  Notwithstanding any other provision herein,
if after the Closing Date any change in condition or
applicable law or regulation or in the interpretation or
administration thereof (whether or not having the force of
law and including, without limitation, Regulation D of the
Board) by any Governmental Authority charged with the
administration or interpretation thereof shall occur which
shall:

(i) subject any Bank (which shall for the purpose
of this Section include any assignee or lending office
of any Bank) to any tax of any kind whatsoever with
respect to its LIBO Rate Loans or other fees or amounts
payable hereunder or change the basis of taxation of
any of the foregoing (other than taxes (including Non-
Excluded Taxes) described in Section 2.17 and other
than any franchise tax or tax or other similar
governmental charges, fees or assessments based on the
overall net income of such Bank by the U.S. Federal
government or by any jurisdiction in which such Bank
maintains an office, unless the presence of such office
is solely attributable to the enforcement of any rights
hereunder or under the FTX Security Agreement with
respect to an Event of Default);

(ii) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets
of, deposits with or for the account of or credit
extended by any Bank;

(iii) impose on any such Bank or the London
Interbank Market any other condition affecting this
Agreement or LIBO Rate Loans made by such Bank; or

(iv) impose upon any Bank any other condition with
respect to any amount paid or to be paid by any Bank
with respect to its LIBO Rate Loans or this Agreement;

and the result of any of the foregoing shall be to increase
the cost to any Bank of making or maintaining its LIBO Rate
Loans or Commitment hereunder, or to reduce the amount of
any sum (whether of principal, interest or otherwise)
received or receivable by such Bank or to require such Bank
to make any payment, in respect of any such Loan, in each
case by or in an amount which such Bank in its sole judgment
shall deem material, then the Borrower shall pay to such
Bank on demand such an amount or amounts as will compensate
the Bank for such additional cost, reduction or payment.

(c)  If any Bank shall have determined that the
applicability of any law, rule, regulation, agreement or
guideline adopted after the Closing Date regarding capital
adequacy, or any change after the Closing Date in any such
law, rule, regulation, agreement or guideline (whether such
law, rule, regulation, agreement or guideline has been
adopted) or in the interpretation or administration of any
of the foregoing by any Governmental Authority charged with
the interpretation or administration thereof, or compliance
by any Bank (or any lending office of such Bank) or any
Bank's holding company with any request or directive
regarding capital adequacy (whether or not having the force
of law) of any such Governmental Authority made or issued
after the Closing Date, has or would have the effect of
reducing the rate of return on such Bank's capital or on the
capital of such Bank's holding company, if any, as a
consequence of this Agreement or the Loans made pursuant
hereto to a level below that which such Bank or such Bank's
holding company could have achieved but for such
applicability, adoption, change or compliance (taking into
consideration such Bank's policies and the policies of such
Bank's holding company with respect to capital adequacy) by
an amount deemed by such Bank to be material, then from time
to time the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank or such
Bank's holding company for any such reduction suffered.

(d)  If and on each occasion that a Bank makes a
demand for compensation pursuant to paragraph (a), (b) or
(c) above, or under Section 2.17 (it being understood that a
Bank may be reimbursed for any specific amount under only
one such paragraph or Section) the Borrower may, upon at
least three Business Days' prior irrevocable written or
telex notice to each of such Bank and the Administrative
Agent, in whole permanently replace the Commitment of such
Bank; provided that such notice must be given not later than
the 90th day following the date of a demand for compensation
made by such Bank; and provided that the Borrower shall
replace such Commitment with the Commitment of a commercial
bank satisfactory to the Administrative Agent.  Such notice
from the Borrower shall specify an effective date for the
termination of such Bank's Commitment which date shall not
be later than the 180th day after the date such notice is
given.  On the effective date of any termination of such
Bank's Commitment pursuant to this clause (d), the Borrower
shall pay to the Administrative Agent for the account of
such Bank (A) any Commitment Fees on the amount of such
Bank's Commitment so terminated accrued to the date of such
termination, (B) the principal amount of any outstanding
Loans held by such Bank plus accrued interest on such
principal amount to the date of such termination and (C) the
amount or amounts requested by such Bank pursuant to
clause (a), (b) or (c) above or Section 2.17, as applicable.
The Borrower will remain liable to such terminated Bank for
any loss or expense that such Bank may sustain or incur as a
consequence of such Bank's making any LIBO Rate Loan or any
part thereof or the accrual of any interest on any such Loan
in accordance with the provisions of this Section 2.11(d) as
set forth in Section 2.13.  Upon the effective date of
termination of any Bank's Commitment pursuant to this
Section 2.11(d) such Bank shall cease to be a "Bank"
hereunder; provided that no such termination of any such
Bank's Commitment shall affect (i) any liability or
obligation of the Borrower or any other Bank to such
terminated Bank which accrued on or prior to the date of
such termination or (ii) such terminated Bank's rights
hereunder in respect of any such liability or obligation.

(e)  A certificate of a Bank (or Transferee)
setting forth such amount or amounts as shall be necessary
to compensate such Bank (or Transferee) as specified in
paragraph (a), (b) or (c) (and in the case of paragraph (c),
such Bank's holding company) above or Section 2.17, as the
case may be, shall be delivered as soon as practicable to
the Borrower, and in any event within 90 days of the change
giving rise to such amount or amounts, and shall be
conclusive absent manifest error.  The Borrower shall pay
each Bank the amount shown as due on any such certificate
within 15 days after its receipt of the same.  In preparing
such a certificate, each Bank may employ such assumptions
and allocations of costs and expenses as it shall in good
faith deem reasonable.  The failure of any Bank (or
Transferee) to give the required 90 day notice shall excuse
the Borrower from its obligations to pay additional amounts
pursuant to such Sections incurred for the period that is 90
days or more prior to the date such notice was required to
be given.

(f)  Failure on the part of any Bank to demand
compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital
within the 90 days required pursuant to Section 2.11(e)
shall not constitute a waiver of such Bank's rights to
demand compensation for any increased costs or reduction in
amounts received or receivable or reduction in return on
capital for any period after the date that is 90 days prior
to the date of the delivery of demand for compensation.  The
protection of this Section 2.11 shall be available to each
Bank regardless of any possible contention of invalidity or
inapplicability of the law, regulation or condition which
shall have occurred or been imposed. The Borrower shall not
be required to make any additional payment to any Bank
pursuant to Section 2.11(a) or (b) in respect of any such
cost, reduction or payment that could be avoided by such
Bank in the exercise of reasonable diligence, including a
change in the lending office of such Bank if possible
without material cost to such Bank.  Each Bank agrees that
it will promptly notify the Borrower and the Administrative
Agent of any event of which the responsible account officer
shall have knowledge which would entitle such Bank to any
additional payment pursuant to this Section 2.11.  The
Borrower agrees to furnish promptly to the Administrative
Agent official receipts evidencing any payment of any tax.

SECTION 2.12.  Change in Legality.  (a)  Notwith-
standing anything to the contrary herein contained, if after
the Closing Date any change in any law or regulation or in
the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof
shall make it unlawful for any Bank to make or maintain any
LIBO Rate Loan or to give effect to its obligations as
contemplated hereby with respect to any LIBO Rate Loan,
then, by written notice to the Borrower and to the
Administrative Agent, such Bank may:

(i) declare that LIBO Rate Loans will not
thereafter (for the duration of such unlawfulness or
impracticality) be made by such Bank hereunder,
whereupon the Borrower shall be prohibited from
requesting LIBO Rate Loans from such Bank hereunder
unless such declaration is subsequently withdrawn; and

(ii) require that all outstanding LIBO Rate Loans
made by it be converted to Reference Rate Loans, in
which event (A) all such LIBO Rate Loans shall be
automatically converted to Reference Rate Loans as of
the end of the applicable Interest Period, unless an
earlier conversion date is legally required, (B) all
payments and prepayments of principal which would
otherwise have been applied to repay the converted LIBO
Rate Loans shall instead be applied to repay the
Reference Rate Loans resulting from the conversion of
such LIBO Rate Loans and (C) the Reference Rate Loans
resulting from the conversion of such LIBO Rate Loans
shall be prepayable only at the times the converted
LIBO Rate Loans would have been prepayable,
notwithstanding the provisions of Section 2.9.

(b)  Before giving any notice to the Borrower and
the Administrative Agent pursuant to this Section 2.12, such
Bank shall designate a different LIBOR Office if such
designation will avoid the need for giving such notice and
will not in the judgment of such Bank, be otherwise
disadvantageous to such Bank.  For purposes of
Section 2.12(a), a notice to the Borrower by any Bank shall
be effective on the date of receipt by the Borrower.

SECTION 2.13.  Indemnity.  The Borrower shall
indemnify each Bank against any funding, redeployment or
similar loss or expense which such Bank may sustain or incur
as a consequence of (a) any event, other than a default by
such Bank in the performance of its obligations hereunder,
which results in (i) such Bank receiving or being deemed to
receive any amount on account of the principal of any LIBO
Rate Loan prior to the end of the Interest Period in effect
therefor (any of the events referred to in this clause (i)
being called a "Breakage Event") or (ii) any Loan to be made
by such Bank not being made after notice of such Loan shall
have been given by the Borrower hereunder or (b) any default
in the making of any payment or prepayment of any amount
required to be made hereunder.  In the case of any Breakage
Event, such loss shall include an amount equal to the
excess, as reasonably determined by such Bank, of (i) its
cost of obtaining funds for the Loan which is the subject of
such Breakage Event for the period from the date of such
Breakage Event to the last day of the Interest Period in
effect (or which would have been in effect) for such Loan
over (ii) the amount of interest (as reasonably determined
by such Bank) that would be realized by such Bank in
reemploying the funds so paid, prepaid or converted or not
borrowed, continued or converted by making a LIBO Rate Loan
in such principal amount and with a maturity comparable to
such period.  A certificate of any Bank setting forth any
amount or amounts which such Bank is entitled to receive
pursuant to this Section shall be delivered to the Borrower
and shall be conclusive absent manifest error.

SECTION 2.14.  Pro Rata Treatment.  Except as
permitted under any of Sections 2.8(b), 2.11, 2.12, 2.13 or
2.17, each borrowing under each type of Loan, each payment
or prepayment of principal of the Loans, each payment of
interest on the Loans, each other reduction of the principal
or interest outstanding under the Loans, however achieved,
including by setoff by any Person, each payment of the
Commitment Fees, each reduction of the Commitments and each
conversion or continuation of Loans shall be allocated pro
rata among the Banks in the proportions that their
respective Commitments bear to the Total Commitment (or, if
such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their
outstanding Loans).  Each Bank agrees that in computing such
Bank's portion of any borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each
Bank's percentage of such borrowing to the next higher or
lower whole Dollar amount.

SECTION 2.15.  Sharing of Setoffs.  Each Bank
agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim against the Borrower
or pursuant to a secured claim under Section 506 of Title 11
of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by
such Bank under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means obtain
payment (voluntary or involuntary) in respect of any Loan
held by it as a result of which the unpaid principal portion
of the Loans held by it shall be proportionately less than
the unpaid principal portion of the Loans held by any other
Bank (other than as permitted under any of Sections 2.8(b),
2.11, 2.12, 2.13 or 2.17), it shall be deemed to have
simultaneously purchased from such other Bank at face value,
and shall promptly pay to such other Bank the purchase price
for, a participation in the Loans held by such other Bank,
so that the aggregate unpaid principal amount of the Loans
and participation in Loans held by each Bank shall be in the
same proportion to the aggregate unpaid principal amount of
all Loans of the Borrower then outstanding as the principal
amount of the Loans held by it prior to such exercise of
banker's lien, setoff or counterclaim was to the principal
amount of all Loans of the Borrower outstanding prior to
such exercise of banker's lien, setoff or counterclaim or
other event; provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this
Section 2.15 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment
restored without interest.  To the fullest extent permitted
by applicable law, the Borrower expressly consents to the
foregoing arrangements and agrees that any Bank holding a
participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the
Borrower hereunder to such Bank as fully as if such Bank had
made a Loan directly to the Borrower in the amount of such
participation.

SECTION 2.16.  Payments.  (a)  Except as otherwise
provided in this Agreement, all payments and prepayments to
be made by the Borrower to the Banks hereunder, whether on
account of Commitment Fees, payment of principal or interest
on the Promissory Notes or other amounts at any time owing
hereunder or under any other Loan Document, shall be made to
the Administrative Agent at its office at 270 Park Avenue,
New York, New York, for the account of the several Banks in
immediately available funds.  All such payments shall be
made to the Administrative Agent as aforesaid not later than
10:30 a.m., New York City time, on the date due; and funds
received after that hour shall be deemed to have been
received by the Administrative Agent on the following
Business Day.

(b)  As promptly as possible, but no later than
2:00 p.m., New York City time, on the date of each
borrowing, each Bank participating in the Loans made on such
date shall pay to the Administrative Agent such Bank's
Applicable Percentage of such Loan plus, if such payment is
received by the Administrative Agent after 2:00 p.m., New
York City time, on the date of such borrowing, interest at a
rate per annum equal to the rate in effect on such day,
quoted by the Administrative Agent at its office at 270 Park
Avenue, New York, New York, for the overnight "sale" to such
Bank of Federal funds.  At the time of, and by virtue of,
such payment, such Bank shall be deemed to have made its
Loan in the amount of such payment.  The Administrative
Agent agrees to pay any moneys, including such interest, so
paid to it by the lending Banks promptly, but no later than
3:00 p.m., New York City time, on the date of such
borrowing, to the Borrower in immediately available funds.

(c)  If any payment of principal, interest,
Commitment Fee or any other amount payable to the Banks
hereunder or under any Promissory Note shall fall due on a
day that is not a Business Day, then (except in the case of
payments of principal of or interest on LIBO Rate Loans, in
which case such payment shall be made on the next preceding
Business Day if the next succeeding Business Day would fall
in the next calendar month) such due date shall be extended
to the next succeeding Business Day, and interest shall be
payable on principal in respect of such extension.

(d)  Unless the Administrative Agent shall have
been notified by the Borrower prior to the date on which any
payment or prepayment is due hereunder (which notice shall
be effective upon receipt) that the Borrower does not intend
to make such payment or prepayment, the Administrative Agent
may assume that the Borrower has made such payment or
prepayment when due and the Administrative Agent may in
reliance upon such assumption (but shall not be required to)
make available to each Bank on such date an amount equal to
the portion of such assumed payment or prepayment such Bank
is entitled to hereunder, and, if the Borrower has not in
fact made such payment or prepayment to the Administrative
Agent, such Bank shall, on demand, repay to the
Administrative Agent the amount made available to such Bank,
together with interest thereon in respect of each day during
the period commencing on the date such amount was made
available to such Bank and ending on (but excluding) the
date such Bank repays such amount to the Administrative
Agent, at a rate per annum equal to the rate, determined by
the Administrative Agent to represent its cost of overnight
or short-term funds (which determination shall be conclusive
absent manifest error).

(e)  All payments of the principal of or interest
on the Loans or any other amounts to be paid to any Bank or
the Administrative Agent under this Agreement or any of the
other Loan Documents shall be made in Dollars, without
reduction by reason of any currency exchange expense.

SECTION 2.17.  U.S. Taxes.  (a)  Any and all
payments by the Borrower hereunder shall be made, in
accordance with Section 2.16, free and clear of and without
deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all
liabilities with respect thereto imposed by the United
States or any political subdivision thereof, excluding
taxes imposed on the net income of the Administrative Agent
or any Bank (or Transferee) and franchise taxes of the
Administrative Agent or any Bank (or Transferee), as
applicable, as a result of a connection between the
jurisdiction imposing such taxes and the Administrative
Agent or such Bank (or Transferee), as applicable, other
than a connection arising solely from the Administrative
Agent or such Bank (or Transferee), as applicable, having
executed, delivered, performed its obligations or received a
payment under, or enforced, this Agreement (all such
nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to
as "Non-Excluded Taxes").  If the Borrower shall be required
by law to deduct any Non-Excluded Taxes from or in respect
of any sum payable hereunder to the Banks (or any
Transferee) or the Administrative Agent, (i) the sum payable
shall be increased by the amount necessary so that after
making all required deductions (including deductions
applicable to additional sums payable under this
Section 2.17) such Bank (or Transferee) or the
Administrative Agent (as the case may be) shall receive an
amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law;
provided, however, that no Transferee of any Bank shall be
entitled to receive any greater payment under this
Section 2.17 than such Bank would have been entitled to
receive with respect to the rights assigned, participated or
otherwise transferred unless such assignment, participation
or transfer shall have been made at a time when the
circumstances giving rise to such greater payment did not
exist.

(b)  In addition, the Borrower agrees to bear and
to pay to the relevant Governmental Authority in accordance
with applicable law any current or future stamp or
documentary taxes or any other similar excise taxes, charges
or similar levies that arise from any payment made hereunder
or from the execution, delivery, registration or enforcement
of, or otherwise with respect to, this Agreement or any
other Loan Document and any property taxes that arise from
the enforcement of this Agreement or any other Loan Document
("Other Taxes").

(c)  The Borrower will indemnify each Bank (or
Transferee) and each Agent for the full amount of Non-
Excluded Taxes and Other Taxes (including Non-Excluded Taxes
or Other Taxes imposed on amounts payable under this
Section 2.17) paid by such Bank (or Transferee) or such
Agent, as the case may be, and any liability (including
penalties, interest and expenses (including reasonable
attorney's fees and expenses)) arising therefrom or with
respect thereto.  A certificate as to the amount of such
payment or liability prepared by a Bank or Agent, or the
Administrative Agent on behalf of such Bank or Agent, absent
manifest error, shall be final, conclusive and binding for
all purposes.  Such indemnification shall be made within
30 days after the date the Bank (or Transferee) or the
Agent, as the case may be, makes written demand therefor.

(d)  Within 30 days after the date of any payment
of Non-Excluded Taxes or Other Taxes by the Borrower to the
relevant Governmental Authority, the Borrower will furnish
to the Administrative Agent, at its address referred to on
the signature page, the original or a certified copy of a
receipt issued by such Governmental Authority evidencing
payment thereof.

(e)  At the time it becomes a party to this
Agreement or a Transferee, each Bank (or Transferee) that is
organized under the laws of a jurisdiction outside the
United States shall (in the case of a Transferee, subject to
the immediately succeeding sentence) deliver to the Borrower
either a valid and currently effective Internal Revenue
Service Form 1001 or Form 4224 or, in the case of a Bank (or
Transferee) claiming exemption from U.S. Federal withholding
tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any
subsequent version thereof or successors thereto, (and if
such Bank (or Transferee) delivers a Form W-8, a certificate
representing that such Bank (or Transferee) is not a bank
for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not
a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)),
properly completed and duly executed by such Bank (or
Transferee) establishing that such payment is (i) not
subject to United States Federal withholding tax under the
Code because such payment is effectively connected with the
conduct by such Bank (or Transferee) of a trade or business
in the United States or (ii) totally exempt from (or in case
of a Transferee, entitled to a reduced rate of) United
States Federal withholding tax.  Notwithstanding any other
provision of this Section 2.17(e), no Transferee shall be
required to deliver any form pursuant to this
Section 2.17(e) that such Transferee is not legally able to
deliver.  In addition, each Bank (or Transferee) shall
deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered, but only, in
such case, to the extent such Bank (or Transferee) is
legally able to do so.

(f)  Notwithstanding anything to the contrary
contained in this Section 2.17, the Borrower shall not be
required to pay any additional amounts to any Bank (or
Transferee) in respect of United States Federal withholding
tax pursuant to paragraph (a) above if the obligation to pay
such additional amounts would not have arisen but for a
failure by such Bank (or Transferee) to comply with the
provisions of paragraph (e) above.

(g)  Any Bank (or Transferee) claiming any
additional amounts payable pursuant to this Section 2.17
shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document
requested by the Borrower or to change the jurisdiction of
its applicable lending office if the making of such a filing
or change would avoid the need for or reduce the amount of
any such additional amounts which may thereafter accrue and
would not, in the sole determination of such Bank, be
otherwise disadvantageous to such Bank (or Transferee).

(h)  Without prejudice to the survival of any
other agreement contained herein, the agreements and
obligations contained in this Section 2.17 shall survive the
payment in full of the principal of and interest on all
Loans made hereunder.

(i)  Nothing contained in this Section 2.17 shall
require any Bank (or Transferee) or the Administrative Agent
to make available any of its income tax returns (or any
other information that it deems to be confidential or
proprietary).

SECTION 2.18.  FTX or Restricted Subsidiary as
Limited Partner.  Notwithstanding anything to the contrary
contained in this Agreement or any Promissory Note, with
respect to any direct liabilities of the Borrower to the
Banks under this Agreement, its Promissory Notes or the
other Loan Documents, FTX and any Restricted Subsidiary
solely in its capacity as a partner of the Borrower shall be
deemed to be limited, rather than general, partners of the
Borrower.  Subject to the foregoing, the Partnership
Obligations shall be fully recourse to the Borrower and all
its assets and properties.  Nothing in this Section 2.18
shall be deemed in any way to derogate from or affect FTX's
own direct obligations under this Agreement (including
Section 7.1), the FTX Guaranty or the other Loan Documents.

ARTICLE III

Representations and Warranties

SECTION 3.1.  Representations and Warranties of
the Partnership.  As of the Funding Date, and each other
date upon which such representations and warranties are
required to be made or deemed made pursuant to Section
5.2(a), the Partnership represents and warrants to each of
the Banks as follows:

(a)  Organization, Powers.  The Partnership is
duly organized, validly existing and in good standing
under the laws of the State of Delaware, has the requi-
site power and authority to own its property and assets
and to carry on its business as now conducted and is
qualified to do business in every jurisdiction where
such qualification is required, except where the fail-
ure so to qualify would not have a material adverse
effect on the condition, financial or otherwise, of the
Partnership.  The Partnership has the power to execute,
deliver and perform its obligations under this Agree-
ment and any other Loan Documents executed and
delivered or to be executed and delivered by the Part-
nership at any time, to borrow hereunder, to execute
and deliver the Promissory Notes to be delivered by it
and to countersign and accept the terms of the FM
Intercreditor Agreement.

(b)  Authorization.  The execution, delivery and
performance of this Agreement, any other Loan Documents
executed and delivered or to be executed and delivered
by the Partnership at any time, the Borrowings
hereunder, the execution and delivery of the Promissory
Notes to be delivered by it and the countersignature
and the acceptance of the terms of the FM Intercreditor
Agreement (i) have been duly authorized by all
requisite partnership and, if required, partner action
on the part of the Partnership and all requisite corpo-
rate, and, if required, shareholder, action on the part
of FTX and the Company and (ii) will not (A) violate
(x) any provision of law, statute, rule or regulation
or the constitutive documents (including, without
limitation, the Partnership Agreement (as it may be
amended and in effect from time to time)) or
regulations of the Partnership, FTX or the Company,
(y) any order of any court, or any rule, regulation or
order of any other agency of government binding upon
the Partnership, FTX or the Company or any of their
assets or (z) any provisions of any indenture,
agreement or other instrument to which the Partnership,
FTX or the Company is a party, or by which the
Partnership, FTX or the Company or any of their
properties or assets are or may be bound, (B) be in
conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a
default under any indenture, agreement or other
instrument referred to in (ii)(A)(z) above or
(C) result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any
property or assets of the Partnership, FTX or the
Company, except for the FMPO Deed of Trust and the FTX
Security Agreement.

(c)  Governmental Approval.  No registration with
or consent or approval of, or other action by, any
Federal, state or other governmental agency, authority
or regulatory body is or will be required in connection
with the execution, delivery and performance of this
Agreement or any other Loan Document, the execution and
delivery of the Promissory Notes or the Borrowings
hereunder, except (i) such as have been made and
obtained and are in full force and effect and (ii) such
security filings and recordation as may be required in
connection with the grant of any Lien contemplated by
the FMPO Deed of Trust.

(d)  Enforceability.  Each of this Agreement and
the other Loan Documents executed and delivered by the
Partnership constitutes (or, as to any Loan Document
contemplated hereby to be executed and delivered by the
Partnership at any future date, will constitute) a
legal, valid and binding obligation of the Partnership,
in each case enforceable in accordance with its terms
(subject, as to the enforcement of remedies against the
Partnership, to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting
creditors' rights against the Partnership generally in
connection with the bankruptcy, reorganization or
insolvency of the Partnership or a moratorium or
similar event relating to the Partnership).

(e)  Financial Statements.  FTX has heretofore
furnished to each of the Banks consolidated balance
sheets and statements of operations and changes in
retained earnings and cash flow of the Company as of
and for the fiscal years ended December 31, 1994 and
1995, all audited and certified by Arthur Andersen LLP,
independent public accountants, and included in the
1995 FM Form 10-K, and unaudited consolidated balance
sheets and statements of operations and cash flow of
the Company as of and for the fiscal quarter ended
September 30, 1996, included in the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1996.  In addition, the Partnership has heretofore
furnished to each of the Banks unaudited consolidated
balance sheets and statements of operations and cash
flow for the Partnership as of and for the fiscal years
ended December 31, 1994 and 1995, and for the fiscal
quarter ended September 30, 1996, all certified by the
Treasurer or another authorized Financial Officer of
the Partnership.  All such balance sheets and
statements of operations and cash flow present fairly
the financial condition and results of operations of
the Company, the Partnership and their subsidiaries, as
of the dates and for the periods indicated.  The
financial statements referred to in this Section 3.1(e)
and the notes thereto disclose all material
liabilities, direct or contingent, of the Company, the
Partnership and their subsidiaries, as of the dates
thereof and which are required to be shown on financial
statements prepared in accordance with GAAP.  The
financial statements referred to in this Section 3.1(e)
have been prepared in accordance with GAAP.  There has
been no material adverse change since December 31,
1995, in the businesses, assets, operations, prospects
or condition, financial or otherwise, of (i) the
Company, (ii) the Partnership, (iii) the Company and
its subsidiaries taken as a whole or (iv) the
Partnership and the Subsidiaries taken as a whole.

(f)  Litigation; Compliance with Laws, etc.
(i)  Except as disclosed in Schedule VI hereto or in
the 1995 FM Form 10-K and any subsequent reports filed
as of 20 days prior to the date hereof with the SEC on
Form 10-Q or Form 8-K which have been delivered to the
Banks, there are no actions, suits or proceedings at
law or in equity or by or before any governmental
instrumentality or other agency or regulatory authority
now pending or, to the knowledge of the Partnership,
threatened against or affecting the Partnership or any
Subsidiary or the businesses, assets or rights of the
Partnership or any Subsidiary (i) which involve this
Agreement, any other Loan Document or any of the
transactions contemplated hereby or thereby or (ii) as
to which there is a reasonable possibility of an
adverse determination and which, if adversely
determined, could, individually or in the aggregate,
materially impair the ability of the Partnership to
conduct its business substantially as described in the
1995 FM Form 10-K, or materially and adversely affect
the business, assets, operations, prospects or
condition, financial or otherwise, of the Partnership,
or impair the validity or enforceability of, or the
ability of the Partnership to perform its obligations
under, this Agreement or any other Loan Document.

(ii)  Neither the Partnership nor any Subsidiary
is in violation of any law, or in default with respect
to any judgment, writ, injunction, decree, rule or
regulation of any court or governmental agency or
instrumentality, where such violation or default could
have a Material Adverse Effect on the business, assets,
operations or condition, financial or otherwise, of the
Partnership.  Without limitation of the foregoing, the
Partnership and each Subsidiary has complied with all
Environmental Laws where any such noncompliance could
have a Material Adverse Effect on the business, assets,
operations or condition, financial or otherwise, of the
Partnership.  Neither the Partnership nor any
Subsidiary has received notice of any material failure
so to comply.  The Partnership's and the Subsidiaries'
plants do not handle any Hazardous Materials in
violation of any Environmental Law where any such
violation could have a Material Adverse Effect on the
business, assets, operations or condition, financial or
otherwise, of the Partnership.  The Partnership and FTX
are aware of no events, conditions or circumstances
involving contaminants or employee health or safety
that could reasonably be expected to result in material
liability on the part of the Partnership or any
Subsidiary.

(g)  Title, etc.  The Partnership has good and
defensible title to its material properties, assets and
revenues (exclusive of oil, gas and other mineral
properties on which no development or production
activities following discovery of commercially
exploitable reserves are being conducted), free and
clear of all Liens except such as are permitted by
Section 4.2(d) and except for covenants, restrictions,
rights, easements and minor irregularities in title
which do not individually or in the aggregate interfere
with the occupation, use and enjoyment by the
Partnership or the respective Subsidiary of such
properties and assets in the normal course of business
as presently conducted or materially impair the value
thereof for use in such business.

(h)  Federal Reserve Regulations; Use of Proceeds.
(i)  Neither the Partnership nor any Subsidiary is
engaged principally, or as one of its important activi-
ties, in the business of extending credit for the pur-
pose of purchasing or carrying Margin Stock.

(ii)  No part of the proceeds of the Loans will be
used, whether directly or indirectly, and whether imme-
diately, incidentally or ultimately, for any purpose
which entails a violation of, or which is inconsistent
with, the provisions of the Regulations of the Board,
including, without limitation, Regulations G, U or X
thereof.

(iii)  The Partnership will use the proceeds of
all Loans made to it to finance general partnership
purposes of the Partnership and the Subsidiaries.

(i)  Taxes.  The Partnership and the Subsidiaries
have filed or caused to be filed all Federal, state and
local tax and information returns which are required to
be filed by them, and have paid or caused to be paid
all taxes shown to be due and payable on such returns
or on any assessments received by any of them, other
than any taxes or assessments the validity of which the
Partnership or any Subsidiary is contesting in good
faith by appropriate proceedings, and with respect to
which the Partnership or such Subsidiary shall, to the
extent required by GAAP, have set aside on its books
adequate reserves.

(j)  Employee Benefit Plans.  Each of the Borrower
and its ERISA Affiliates is in compliance in all
material respects with the applicable provisions of
ERISA and the Code and the regulations and published
interpretations thereunder.  No ERISA Event has
occurred or is reasonably expected to occur that, when
taken together with all other such ERISA Events, could
materially and adversely affect the financial condition
and operations of the Borrower and the ERISA
Affiliates, taken as a whole.  The present value of all
benefit liabilities under each Plan, determined on a
plan termination basis (based on those assumptions used
for financial disclosure purposes in accordance with
Statement of Financial Accounting Standards No. 87 of
the Financial Accounting Standards Board ("SFAS 87")
did not, as of the last annual valuation date
applicable thereto, exceed by more than $5,000,000 the
value of the assets of such Plan, and the present value
of all benefit liabilities of all underfunded Plans,
determined on a plan termination basis (based on those
assumptions used for financial disclosure purposes in
accordance with SFAS 87) did not, as of the last annual
valuation dates applicable thereto, exceed by more than
$5,000,000 the value of the assets of all such
underfunded Plans.

(k)  Environmental Matters.  (1) The properties
owned or operated by the Borrower and the Subsidiaries
(the "Properties") and all operations of the Borrower
and the Subsidiaries are in compliance, and in the last
three years have been in compliance, with all
Environmental Laws and all necessary Environmental
Permits have been obtained and are in effect, except to
the extent that such non-compliance or failure to
obtain any necessary permits, in the aggregate, could
not reasonably be expected to result in a Material
Adverse Effect;

(2) there have been no Releases or threatened
Releases at, from, under or proximate to the Properties
or otherwise in connection with the operations of the
Borrower or the Subsidiaries, which Releases or
threatened Releases, in the aggregate, could reasonably
be expected to result in a Material Adverse Effect;

(3) neither the Borrower nor any of the
Subsidiaries has received any notice of an
Environmental Claim in connection with the Properties
or the operations of the Borrower or the Subsidiaries
or with regard to any Person whose liabilities for
environmental matters the Borrower or the Subsidiaries
has retained or assumed, in whole or in part,
contractually, by operation of law or otherwise, which,
in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, nor do the
Borrower or the Subsidiaries have reason to believe
that any such notice will be received or is being
threatened;

(4) Hazardous Materials have not been transported
from the Properties, nor have Hazardous Materials been
generated, treated, stored or disposed of at, on or
under any of the Properties in a manner that could give
rise to liability under any Environmental Law, nor have
the Borrower or the Subsidiaries retained or assumed
any liability, contractually, by operation of law or
otherwise, with respect to the generation, treatment,
storage or disposal of Hazardous Materials, which
transportation, generation, treatment, storage or
disposal, or retained or assumed liabilities, in the
aggregate, could reasonably be expected to result in a
Material Adverse Effect; and

(5)  The Partnership and the Subsidiaries do not
have any ownership or control rights in respect of the
properties listed on Schedule IV which results in any
environmental or reclamation liability for the
Partnership and the Subsidiaries relating to such
properties.

(l)  Investment Company Act.  Neither the Partner-
ship nor any Subsidiary is an "investment company" as
defined in, or subject to regulation under, the Invest-
ment Company Act of 1940.

(m)  Public Utility Holding Company Act.  Neither
the Partnership nor any Subsidiary is a "holding
company", or a "subsidiary company" of a "holding com-
pany", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of
1935, as amended.

(n)  Subsidiaries.  Schedule V constitutes a
complete and correct list as of the Closing Date or the
date of any update thereof required by Section
4.1(a)(5) of all the Subsidiaries with at least
$1,000,000 in total assets, indicating the jurisdiction
of incorporation or organization of each such Subsidi-
ary and the percentage of voting shares or units owned
on such date directly or indirectly by the Partnership
in each such Subsidiary.  The Partnership owns as of
such date, free and clear of all Liens (other than
those expressly permitted by this Agreement), the per-
centage of voting shares or units outstanding of the
Subsidiaries shown on Schedule V, and all such shares
or units are validly issued and fully paid.

(o)  Solvency.  (i)  The fair salable value of the
assets of the Partnership and the Subsidiaries will
exceed the amount that will be required to be paid on
or in respect of the Indebtedness and other obligations
of the Partnership and the Subsidiaries as they become
absolute and mature.

(ii)  The Partnership and the Subsidiaries will
not have unreasonably small capital to carry out their
businesses as conducted or as proposed to be conducted.

(iii)  The Partnership, on a consolidated basis,
does not intend to, and does not believe that it will,
incur Indebtedness and other obligations beyond its
ability to pay such Indebtedness and obligations as
they mature (taking into account the timing and amounts
of cash to be received by it and the amounts to be
payable on or in respect of such Indebtedness and obli-
gations).

(p)  No Material Misstatements.  No information,
report (including any exhibit, schedule or other
attachment thereto or other document delivered in
connection therewith), financial statement, exhibit or
schedule prepared or furnished by the Borrower or the
Subsidiaries to the Administrative Agent or any Bank in
connection with this Agreement or any of the other Loan
Documents or included therein contained or contains any
material misstatement of fact or omitted or omits to
state any material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading.

SECTION 3.2.  Representations and Warranties of
FTX.  As of the Funding Date, and each other date upon which
such representations and warranties are required to be made
or deemed made pursuant to Section 5.2(a), FTX represents
and warrants to each of the Banks as follows:

(a)  Organization, Powers.  FTX is duly organized,
validly existing and in good standing under the laws of
the State of Delaware, has the requisite power and
authority to own its property and assets and to carry
on its business as now conducted and is qualified to do
business in every jurisdiction where such qualification
is required, except where the failure so to qualify
would not have a material adverse effect on the
condition, financial or otherwise, of FTX.  FTX has the
power to execute, deliver and perform its obligations
under this Agreement, the FM Intercreditor Agreement,
the FTX Guaranty, the FTX Security Agreement and any
other Loan Document executed and delivered or to be
executed and delivered by it at any time, to guarantee
the Loans pursuant to the FTX Guaranty and to
countersign and accept the terms of the FTX
Intercreditor Agreement.

(b)  Authorization.  The execution, delivery and
performance of this Agreement (including, without limi-
tation, performance of obligations set forth in Sec-
tion 7.1), the FM Intercreditor Agreement, the FTX
Guaranty, the FTX Security Agreement and any other Loan
Documents executed and delivered or to be executed and
delivered by FTX at any time, the guarantee of the
Loans pursuant to the FTX Guaranty and the
countersignature and acceptance of the terms of the FTX
Intercreditor Agreement (i) have been duly authorized
by all requisite corporate and, if required,
shareholder, action on the part of FTX and (ii) will
not (A) violate (x) any provision of law, statute, rule
or regulation or the certificate or articles of incor-
poration or other constitutive documents or the By-laws
or regulations of FTX, (y) any order of any court, or
any rule, regulation or order of any other agency of
government binding upon FTX or (z) any provisions of
any indenture, agreement or other instrument to which
FTX is a party, or by which FTX or any of its proper-
ties or assets are or may be bound, (B) be in conflict
with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under
any indenture, agreement or other instrument referred
to in (ii)(A)(z) above or (C) result in the creation or
imposition of any lien, charge or encumbrance of any
nature whatsoever upon any property or assets of FTX,
except pursuant to the FTX Security Agreement.

(c)  Governmental Approval.  No registration with
or consent or approval of, or other action by, any
Federal, state or other governmental agency, authority
or regulatory body is or will be required in connection
with the execution, delivery and performance of this
Agreement or any other Loan Document, or the guarantee
of the Loans pursuant to the FTX Guaranty except
(i) such as have been made and obtained and are in full
force and effect and (ii) such security filings and
recordation as may be required in connection with the
grant of any Lien under the FTX Security Agreement.

(d)  Enforceability.  Each of this Agreement and
the other Loan Documents executed and delivered by FTX
constitutes (or, as to any Loan Document contemplated
hereby to be executed and delivered by FTX at any
future date, will constitute) a legal, valid and
binding obligation of FTX, in each case enforceable in
accordance with its terms (subject, as to the
enforcement of remedies against FTX, to applicable
bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting creditors' rights against FTX
generally in connection with the bankruptcy,
reorganization or insolvency of FTX or a moratorium or
similar event relating to FTX).

(e)  Litigation; Compliance with Laws; etc.
(i)  Except as disclosed in the 1995 FTX Form 10-K and
any subsequent reports filed as of 20 days prior to the
date hereof with the SEC on Form 10-Q or Form 8-K which
have been delivered to the Banks, there are no actions,
suits or proceedings at law or in equity or by or
before any governmental instrumentality or other agency
or regulatory authority now pending or, to the knowl-
edge of FTX, threatened against or affecting FTX or any
of its subsidiaries or the businesses, assets or rights
of FTX or any of its subsidiaries (i) which involve
this Agreement or any other Loan Document or any of the
transactions contemplated hereby or thereby or (ii) as
to which there is a reasonable possibility of an
adverse determination and which, if adversely deter-
mined, could, individually or in the aggregate, materi-
ally impair the ability of FTX or FRP to conduct its
business substantially as now conducted, or materially
and adversely affect the businesses, assets, opera-
tions, prospects or condition, financial or otherwise,
of FTX or FRP, or impair the validity or enforceability
of, or the ability of FTX to perform its obligations
under, this Agreement or any other Loan Document.

(f)  Representations Incorporated By Reference
from the FTX Credit Agreement.  Section 3.1 of the FTX
Credit Agreement (other than paragraphs (a), (b), (c),
(d), (f)(i), (h)(ii) and (iii) and (p) thereof) is
hereby incorporated by reference herein with the same
force and effect as though fully set forth herein in
its entirety and shall be deemed made each time the
representations in this Section 3.2 are made or deemed
made.

(g)  Florida Environmental Liability.  The
Partnership and the Subsidiaries do not have any
ownership or control rights in respect of the
properties listed on Schedule IV which results in any
environmental or reclamation liability for the
Partnership and the Subsidiaries relating to such
properties.

(h)  No Material Misstatements.  No information,
report (including any exhibit, schedule or other
attachment thereto or other document delivered in
connection therewith), financial statement, exhibit or
schedule prepared or furnished by FTX or its
subsidiaries to the Administrative Agent or any Bank in
connection with this Agreement or any of the other Loan
Documents or included therein or any information
provided to Cravath, Swaine & Moore in connection with
the preparation of the environmental due diligence
summary memorandum referred to in paragraph (m) of
Article IV of the FTX Credit Agreement contained or
contains any material misstatement of fact or omitted
or omits to state any material fact necessary to make
the statements therein, in the light of the
circumstances under which they were made, not
misleading.

ARTICLE IV

Covenants

SECTION 4.1.  Affirmative Covenants of the Part-
nership.  Commencing as of the Funding Date and so long
thereafter as any Bank shall have any Commitment hereunder
or the principal of or interest on any Loan shall be unpaid,
unless the Required Banks shall have otherwise consented in
writing:

(a)  Financial Statements, etc.  The Partnership
shall furnish each Bank:

(1) within 95 days after the end of each
fiscal year of the Company, a consolidated balance
sheet of the Company and its subsidiaries (includ-
ing the Partnership) as at the close of such fis-
cal year and consolidated statements of operations
and of cash flow of the Company and its subsidiar-
ies for such year, with the opinion thereon of
Arthur Andersen LLP or other independent public
accountants of national standing selected by the
Company;

(2) within 50 days after the end of each of
the first three quarters of each fiscal year of
the Company, a consolidated balance sheet of the
Company and its subsidiaries as at the end of such
quarter and consolidated statements of operations
of the Company and its subsidiaries for such quar-
ter and consolidated statements of operations and
of cash flow of the Company for the period from
the beginning of the fiscal year to the end of
such quarter, certified by the Treasurer or other
authorized financial or accounting officer of FTX;

(3) within 95 days after the end of each
fiscal year of the Partnership, a consolidated
unaudited balance sheet of the Partnership and the
Subsidiaries as at the close of such fiscal year
and consolidated unaudited statements of
operations and of cash flow of the Partnership and
the Subsidiaries for such year, certified by the
Treasurer or other authorized financial or
accounting officer of FTX;

(4) within 50 days after the end of each of
the first three quarters of each fiscal year of
the Partnership, a consolidated balance sheet of
the Partnership and the Subsidiaries as at the end
of such quarter and consolidated statements of
operations of the Partnership and the Subsidiaries
for such quarter and consolidated statements of
operations and of cash flows of the Partnership
and the Subsidiaries for the period from the
beginning of the fiscal year to the end of such
quarter, certified by the Treasurer or other
authorized financial or accounting officer of FTX;

(5) at the time of the provision of the
financial statements referred to in clauses (1)
through (4) above, an update of Schedule V to
correct, add or delete any required information;

(6) promptly after their becoming available,
(a) copies of all financial statements, reports
and proxy statements which the Company shall have
sent to its shareholders generally, (b) copies of
all registration statements (excluding
registration statements relating to employee
benefit plans) and regular and periodic reports,
if any, which the Company shall have filed with
the SEC or with any national securities exchange
and (c) if requested by any Bank, copies of each
annual report filed with any governmental agency
pursuant to ERISA with respect to each Plan of the
Partnership or any of the Subsidiaries;

(7) within 95 days after the end of each
fiscal year of the Partnership, a certificate by a
Financial Officer of the Partnership, to the
effect that no Event of Default or Default has
occurred and is continuing, or if an Event of
Default or Default has occurred and is continuing,
specifying the nature and extent thereof and the
corrective action (if any) proposed to be taken
with respect thereto;

(8) promptly upon the occurrence of any ERISA
Event, Event of Default, Default or the
commencement of any proceeding regarding the Com-
pany, the Partnership or any Subsidiary under any
Federal or state bankruptcy law, notice thereof,
describing the same in reasonable detail;

(9) promptly upon the occurrence of any
development that, in the judgment of the Partner-
ship, has resulted in, or could reasonably be
anticipated to result in, a material adverse
effect on the business, assets, operations or
financial condition of the Partnership or its
ability to comply with its obligations under the
Loan Documents, notice thereof, describing the
same in reasonable detail;

(10) within 30 days after the end of each
quarter of each fiscal year of the Partnership, a
list of all Material Assets sold by the
Partnership during such preceding quarter;

(11) 30 days prior to the commencement of
each fiscal year of the Partnership, an operating
budget of the Partnership for such fiscal year;

(12) fifteen days prior to the grant of any
permitted Liens in favor of FTX, copies of all
agreements, documents or instruments pertaining
thereto;

(13) promptly after the execution thereof and
subject to Section 4.2(b) and Section 4.4(b), a
copy, certified by a Responsible Officer, of each
amendment, supplement, change or waiver to any
Material Agreement (including, without limitation,
to the Partnership Agreement); and

(14) from time to time, such further informa-
tion regarding the business, affairs and financial
condition of the Company, the Partnership or any
Subsidiary as any Bank may reasonably request.

(b)  Obligations, Taxes and Claims.  The Partner-
ship shall, and shall cause each Subsidiary to, pay its
Indebtedness and other obligations promptly and in
accordance with their terms and pay and discharge all
taxes, assessments and governmental charges or levies
imposed upon it, upon its income or profits or upon any
property belonging to it, prior to the date on which
material penalties attach thereto; provided that nei-
ther the Partnership nor any Subsidiary shall be
required to pay any such tax, assessment, charge or
levy, the payment of which is being contested in good
faith by proper proceedings and with respect to which
the Partnership or such Subsidiary shall have, to the
extent required by GAAP, set aside on its books ade-
quate reserves.

(c)  Maintenance of Existence; Conduct of Busi-
ness.  The Partnership shall preserve and maintain its
independent legal existence as a partnership; preserve
and maintain all its rights, privileges and franchises
necessary or desirable in the normal conduct of its
business; segregate its individual assets and business
functions from those of FTX, its subsidiaries, the
Company and its other subsidiaries, if any (which shall
not prohibit FTX from acting as managing general part-
ner of the Partnership), including, without limitation,
segregating its bank and investment accounts from those
of FTX, its subsidiaries, the Company or its other
subsidiaries, if any; maintain and preserve all
property material to the conduct of its business and
keep such property in good repair, working order and
condition and from time to time make, or cause to be
made, all needful and proper repairs, renewals,
additions, improvements and replacements thereto
necessary in order that the business carried on in
connection therewith may be properly conducted at all
times.

(d)  Compliance with Applicable Laws.  The Part-
nership shall, and shall cause each Subsidiary to,
comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental
authority, a breach of which would materially and
adversely affect the consolidated financial condition
or business of the Partnership and the Subsidiaries,
except where contested in good faith and by proper
proceedings and with respect to which the Partnership
shall have, to the extent required by GAAP, set aside
on its books adequate reserves.

(e)  Litigation.  The Partnership shall promptly
give to each Bank notice in writing of all litigation
and all proceedings before any governmental or regula-
tory agencies or arbitration authorities affecting the
Partnership or any Subsidiary, except those which do
not relate to the Loan Documents and which, if
adversely determined, would not have a Material Adverse
Effect.

(f)  ERISA.  The Borrower shall, and shall cause
each of the ERISA Affiliates to, comply in all material
respects with the applicable provisions of ERISA and
the Code and furnish to the Administrative Agent as
soon as possible, and in any event within 30 days after
any Responsible Officer of the Borrower or any ERISA
Affiliate knows or has reason to know that, any ERISA
Event has occurred that alone or together with any
other ERISA Event could reasonably be expected to
result in liability of the Borrower in an aggregate
amount exceeding $25,000,000 or requires payment
exceeding $10,000,000 in any year, a statement of a
Financial Officer of the Borrower setting forth details
as to such ERISA Event and the action that the Borrower
proposes to take with respect thereto.

(g)  Insurance.  The Partnership and each Subsidi-
ary shall (i) keep its insurable properties adequately
insured at all times; (ii) maintain such other insur-
ance, to such extent and against such risks, including
fire, flood and other risks insured against by extended
coverage, as is customary with persons in the same or
similar businesses; (iii) maintain in full force and
effect public liability insurance against claims for
personal injury or death or property damage occurring
upon, in, about or in connection with the use of any
properties owned, occupied or controlled by it in such
amount as it shall reasonably deem necessary; and
(iv) maintain such other insurance as may be required
by law.

(h)  Access to Premises and Records.  The Partner-
ship and each Subsidiary shall maintain financial
records in accordance with GAAP, and, at all reasonable
times and as often as any Bank may reasonably request,
permit representatives of any Bank to have access to
its financial records and its premises and to the
records and premises of any of its subsidiaries, if
any, and to make such excerpts from such records as
such representatives deem necessary and to discuss its
affairs, finances and accounts with its officers, if
any, and the officers of FTX, as managing general part-
ner, and the Partnership's independent certified public
accountants or other parties preparing consolidated or
consolidating statements for the Partnership or on its
behalf.

(i)  Compliance with Environmental Laws.  The
Borrower shall comply, and cause the Subsidiaries and
all lessees and other Persons occupying the Properties
to comply, in all material respects with all
Environmental Laws and Environmental Permits applicable
to its operations and Properties; obtain and renew all
material Environmental Permits necessary for its
operations and Properties; and conduct any Remedial
Action in accordance with Environmental Laws; provided,
however, that neither the Borrower nor any of the
Subsidiaries shall be required to undertake any Remedial
Action to the extent that its obligation to do so is being
contested in good faith and by proper proceedings and
appropriate reserves are being maintained with respect to
such circumstances.

(j)  Preparation of Environmental Reports.  If a
default caused by reason of a breach of Section 3.1(k)
or 4.1(i) shall have occurred and be continuing, at the
request of the Required Banks through the
Administrative Agent, the Borrower shall provide to the
Banks within 45 days after such request, at the expense
of the Borrower, an environmental site assessment
report for the Properties (which are the subject of
such default) prepared by an environmental consulting
firm acceptable to the Administrative Agent, indicating
the presence or absence of Hazardous Materials and the
estimated cost of any compliance or Remedial Action in
connection with such Properties.

(k)  Reduction of Balance Under Pel-Tex
Agreements.  On the last Business Day of each calendar
month, commencing January 31, 1997, the Partnership
shall repay the principal amount outstanding under the
Pel-Tex Agreements in an amount such that the total
amount of all such payments made by the Partnership
pursuant to this Section 4.1(k) from the Restatement
Closing Date through the 20th day of each such calendar
month is equal to at least 50% of the aggregate Net
Proceeds of all sales of Material Assets which have
occurred since the Restatement Closing Date, rounded
down to the nearest multiple of $100,000, it being
understood that any amounts not paid as a result of
such rounding down shall be carried over into the
calculation of the next month's payment pursuant to
this Section 4.1(k).  The reductions required by this
Section 4.1(k) shall be effective as of the date of
closing or effectiveness of any sales transaction
subject hereto; provided that with respect to any non-
cash Net Proceeds, such reductions shall be effective
as of the date of receipt of cash proceeds thereof.

SECTION 4.2.  Negative Covenants of the Partner-
ship.  Commencing as of the Funding Date and so long
thereafter as any Bank shall have any Commitment hereunder
or the principal of or interest on any Loan shall be unpaid,
without the prior written consent of the Required Banks:

(a)  Conflicting Agreements.  The Partnership
shall not, and shall not permit any Subsidiary to,
enter into any agreement containing any provision which
(i) would be violated or breached by the performance of
its obligations under any Loan Document or under any
instrument or document delivered or to be delivered by
it hereunder or thereunder or in connection herewith or
therewith or (ii) would prohibit or restrict the pay-
ments of dividends or other distributions by any
Subsidiary.

(b)  Material Agreements.  The Partnership shall
not amend, supplement, change, terminate or waive any
material provision of any Material Agreement unless the
Banks shall have received 30 days' notice of such
amendment, supplement, change, termination or waiver
and the Required Banks shall not have objected thereto
on the ground that it would, in their judgment,
adversely affect the rights or interests of the Banks;
provided that, if the Partnership shall not have given
such 30 days' notice, the Partnership shall not amend,
supplement, change, terminate or waive any material
provision of any Material Agreement unless the Required
Banks shall have given their written consent thereto.

(c)  Mergers and Consolidations.  The Partnership
shall not, and shall not permit any Subsidiary to,
merge into or consolidate with any other Person or
permit any other Person to merge into or consolidate
with it, except that if at the time thereof and immedi-
ately after giving effect thereto no Event of Default
or Default shall have occurred and be continuing
(i) any wholly owned Subsidiary may liquidate into the
Partnership in a transaction in which the Partnership
is the surviving entity, (ii) any wholly owned Subsidi-
ary may merge into or consolidate with any other wholly
owned Subsidiary in a transaction in which the surviv-
ing entity is a wholly owned Subsidiary and no Person
other than the Partnership or a wholly owned Subsidiary
receives any consideration and (iii) any Subsidiary may
merge into or consolidate with any other Person in a
transaction in which the surviving Person is a Subsidi-
ary of which the Partnership owns a percentage of the
equity, directly or indirectly, at least equal to the
percentage of the equity that it owned in the merging
or consolidating Subsidiary immediately prior to such
merger or consolidation and in which no Person other
than the Partnership receives any consideration.

(d)  Liens.  The Partnership shall not, nor shall
it permit any Subsidiary to, create, incur, permit or
suffer to exist any Lien upon any of their respective
properties or assets (including, without limitation,
stock or other securities of, or ownership interest in,
any Person, including any Subsidiary) now owned or
hereafter acquired or on any income or revenues or
rights  in respect of any thereof, except:

(i) materialmen's, suppliers', tax and other
similar Liens arising in the ordinary course of
the Partnership's or such Subsidiary's business
securing obligations which are not overdue or are
being contested in good faith by appropriate pro-
ceedings and as to which adequate reserves have
been set aside on its books to the extent required
by GAAP; Liens arising in connection with workers'
compensation, unemployment insurance and progress
payments under government contracts; and other
Liens incident to the ordinary conduct of the
Partnership's or such Subsidiary's business or the
ordinary operation of property or assets and not
incurred in connection with the obtaining of any
Indebtedness and which do not in the aggregate
materially detract from the value of their assets
or materially impair the use thereof in the
operation of their businesses;

(ii) zoning restrictions, easements, rights-
of-way, restrictions on use of real property and
other similar encumbrances incurred in the ordi-
nary course of business which, in the aggregate,
are not substantial in amount and do not
materially detract from the value of the property
subject thereto or interfere with the ordinary
conduct of the business of the Partnership or any
Subsidiary;

(iii) Liens of lessors of property (in such
capacity) leased by the Partnership, which Liens
are limited to the property leased thereunder;

(iv) Liens on property of the Partnership in
favor of FTX securing the obligations of the
Partnership under the FTX/FMPO Credit Agreement
and the Reimbursement Agreement on the real estate
assets of the Partnership (excluding the TCB
Collateral) that are subject to, and granted in
accordance with and on the terms of, the FM
Intercreditor Agreement;

(v) Liens in favor of FTX on the TCB Borrower
Properties securing the FTX Guaranty;

(vi) Liens in favor of TCB on the TCB
Collateral securing the obligations of the TCB
Borrower under the TCB Credit Agreement;

(vii) Liens securing Indebtedness permitted
by Section 4.2(g)(iv); provided, that each such
Lien is limited to the specific property of the
Partnership being developed with the proceeds of
such permitted Indebtedness and/or any
development, purchase or other agreements relating
thereto; and

(viii) Liens encumbering the City of Austin
Receivable, any agreements related thereto and any
security therefor, securing Indebtedness permitted
by Section 4.2(g)(v).

(e)  Investments, Loans, Advances and Acquisi-
tions.  The Partnership shall not, and shall not permit
any Subsidiary to, (i) purchase, lease or otherwise
acquire (in one transaction or a series of transac-
tions) all or any substantial part of the assets of,
(ii) purchase, hold or acquire any capital stock, evi-
dences of indebtedness or other securities of,
(iii) make or permit to exist any loans or advances to
or (iv) make or permit to exist any investment or any
other interest in, any other Person, or contribute
assets to any joint ventures with parties which are not
the Borrower or a Subsidiary, except:

(A) investments by the Partnership existing
on the Closing Date in the capital stock of the
Subsidiaries;

(B) loans by the Partnership to the TCB
Borrower or the Circle C Entity not in excess of
the interest expense payable by such entity on the
TCB Credit Agreement;

(C) (i) advances by the Partnership to the
TCB Borrower, the Circle C Entity or any other
Subsidiary in the amount of such Subsidiary's
reasonable operating expenses (including
development costs for the Circle C Property);
provided that such advances shall be made only
upon or after the incurrence of such expenses and
only to the extent utilized to pay such expenses
within thirty days of the date of any such
advance; and (ii) investments in joint ventures
and development arrangements, not in excess of an
aggregate amount of $10,000,000 for all such
advances and investments made pursuant to this
clause (C);

(D) Permitted Investments;

(E) promissory notes payable to the
Partnership representing the purchase price of
assets sold by the Partnership to the extent such
promissory notes are secured by the assets sold;
provided that such asset sales are made to third
party purchasers pursuant to arm's-length
transactions; and

(F) the loan by the Partnership to Circle C
Land Corp. of the MUD Proceeds, on the terms and
conditions previously approved by the Required
Banks.

(f)  Distributions.  The Partnership shall not,
and shall not permit any Subsidiary to, (i) pay,
directly or indirectly, or make any distribution (by
reduction of Partnership equity (including any option,
warrant or other right to acquire any Partnership
equity), capital or otherwise) or any dividend, whether
in cash, property, securities or a combination thereof,
with respect to any Partnership equity (including any
option, warrant or other right to acquire any Partner-
ship equity), (ii) directly or indirectly make any
redemption, repurchase or repayment of Partnership
equity (including any option, warrant or other right to
acquire any Partnership equity), (iii) purchase, redeem
or acquire any capital stock of the Company (or any
option, warrant or other right to acquire any such
capital stock) or (iv) make any payment, redemption,
repurchase or other acquisition or retirement for value
of any Indebtedness of the Company (which shall not
include any Indebtedness of the Partnership or of any
Subsidiary); provided, however, that (i) any Subsidiary
may declare and pay dividends or make other
distributions to the Partnership and (ii) the
Partnership may make such distributions from time to
time to the extent (but only to the extent) required to
enable the Company to pay (A) all reasonable out-of-
pocket expenses arising under the Administrative
Services Agreement (as it may be amended as permitted
hereby and in effect from time to time) which have
become due at or prior to the time of such
distribution, (B) the Company's actual current combined
Federal, state and local cash tax liability (including
estimated payments required by applicable law) arising
from or attributed to the Company's Partnership equity
interest, but only to the extent such distributions are
in fact utilized to pay such taxes within 30 days of
the date of any distribution, and (C) all other
reasonable and necessary general and administrative
cash expenses, not in excess of $2,000,000 per 12-month
period, relating to the management of the Company's
Partnership equity interest.

(g)  Indebtedness.  Neither the Partnership nor
any Subsidiary shall incur, create, assume or permit to
exist any Indebtedness of any of them except:

(i) Subject to Section 4.1(k), Indebtedness
of the Partnership not to exceed $34,000,000 in
aggregate principal amount outstanding on the date
hereof incurred pursuant to the Pel-Tex Agreements
as extended, renewed and/or replaced through the
Restatement Closing Date, but not any further
extensions, renewals or replacements of such
Indebtedness; provided that no payments on the
principal amount of such Indebtedness may be made,
directly or indirectly, from the proceeds of the
Loans;

(ii) Indebtedness owed by the Partnership to
FTX for loans made under the FTX/FMPO Credit
Agreement so long as no Default or Event of
Default has occurred and is continuing; provided
that all such loans other than the FTX Loan (as
defined below) (x) may be incurred only as
subordinated upon the Subordination Terms to the
Senior Debt (as defined in the Subordination
Terms) for the benefit of the holders of such
Senior Debt (which Subordination Terms shall be
contained in or attached to any promissory notes
executed in connection with such loans and to
which FTX shall evidence its agreement by
countersigning such promissory notes) subject to
and in accordance with the FM Intercreditor
Agreement and (y) may not permit payments of
principal or interest, prior to the Maturity Date
and the payment of all principal of and interest
on the Loans and all fees and other expenses or
amounts owed hereunder and termination of the
Commitments;

(iii) Indebtedness evidenced by the
Promissory Notes;

(iv) Secured Indebtedness of the Partnership
with an outstanding aggregate principal amount not
at any time in excess of $5,000,000, provided that
there is a developer's commitment relating to such
Indebtedness satisfactory to the Administrative
Agent, and unsecured Indebtedness of the
Partnership incurred in the ordinary course of
business not for borrowed money, in each case not
otherwise permitted by the foregoing clauses of
this Section 4.2(g), and including letters of
credit in favor of municipalities, used to
facilitate the construction of infrastructure
(such as utilities) for the properties owned by
the Partnership;

(v) Indebtedness of the Partnership (not in
excess of $4,500,000 in the aggregate) secured by
the pledge of the City of Austin Receivable; and

(vi) Indebtedness of the Partnership in
connection with its borrowing of approximately
$4,000,000 of Circle C Municipal Utility District
bond proceeds pursuant to the terms of that
certain Purchase and Sale Agreement between
Circle C Land Corp. and Phoenix Holdings Ltd. (the
"MUD Proceeds"), on the terms and conditions
previously approved by the Required Banks.

The Partnership may borrow up to $10,000,000 in
aggregate principal amount (the "FTX Loan") from time
to time under clause (iii) above on an unsubordinated
basis and may repay any or all of such amount borrowed,
from proceeds of Loans or otherwise.

(h)  Sale and Lease-Back Transactions.  The Part-
nership shall not, and shall not permit any Subsidiary
to, enter into any arrangement, directly or indirectly,
with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its busi-
ness, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other pro-
perty which it intends to use for substantially the
same purpose or purposes as the property being sold or
transferred.

(i)  Transactions with Affiliates.  The Partner-
ship shall not, and shall not permit any Subsidiary to,
sell or transfer any property or assets to, purchase or
acquire any property or assets from, perform any ser-
vices for or otherwise engage in any other transactions
with, any Affiliate of the Partnership, except that as
long as no Default or Event of Default shall have
occurred and be continuing, the Partnership or any
Subsidiary may engage in any of the foregoing transac-
tions in the ordinary course of business on an arm's-
length and fair value basis; provided that the forego-
ing shall not prohibit (i) the joint venture between
the Partnership and IMC-Agrico providing for the joint
development of certain Florida real estate pursuant to,
and on the terms of, the Florida Joint Venture
Agreement (as it may be amended as permitted hereby and
in effect from time to time), (ii) FTX from making
permitted advances to the Partnership pursuant to the
FTX/FMPO Credit Agreement (as it may be amended as
permitted hereby and in effect from time to time),
(iii) FTX from acting as the managing general partner
of the Partnership or (iv) any other transactions
expressly permitted by this Agreement, including
pursuant to Sections 4.2(e) or 4.5 or the
Administrative Services Agreement.

(j)  Fiscal Year.  The Partnership shall not
change its fiscal year to end on any date other than
December 31.

(k)  Business of Partnership and Subsidiaries.
The Partnership shall not, and shall not permit any
Subsidiary to, engage at any time in any business or
business activity other than as described in the 1995
FM Form 10-K and business activities reasonably
incidental thereto.

(l)  Federal Reserve Regulations; Use of Proceeds.
The Partnership will not (i) use the proceeds of any
Loan in any manner that would result in a violation of,
or be inconsistent with, the provisions of
Regulations G, U or X of the Board, (ii) take any
action at any time that would cause the representation
and warranty contained in Section 3.1(h) at any time to
be other than true and correct, (iii) use any part of
the proceeds of any Loan, directly or indirectly,
immediately, incidentally or ultimately, to purchase or
carry Margin Stock or to refund indebtedness originally
incurred for such purpose or (iv) directly or
indirectly use the proceeds of any Borrowing (x) to
repay principal on any Indebtedness (subordinate or
otherwise) other than the FTX Loan or the Pel-Tex Debt
so long as no Default or Event of Default has occurred
or is continuing or would result therefrom or (y) to
purchase any investments or properties except to the
extent permitted by Section 4.2(e).

(m)  Certain Debt Agreements.  The Partnership
shall not, without the prior written consent thereto of
the Required Banks, amend, supplement or change in any
material manner (including any earlier maturity date or
amortization schedule) any of the terms or provisions
of any agreement, note or other instrument governing or
evidencing any of the Indebtedness referred to in
paragraphs (i) or (ii) of Section 4.2(g) or, with
respect to the Indebtedness referred to in paragraph
(ii) of such Section, any of the terms and provisions
(including without limitation the Subordination Terms)
required by such paragraph or the FM Intercreditor
Agreement.

(n)  Swaps.  Neither the Partnership nor any Sub-
sidiary shall enter into, or be obligated in respect
of, any Hedge Agreement; provided that the Partnership
may enter into any Permitted Swap so long as the
aggregate notional amounts under all such Permitted
Swaps shall not at any time be in excess of the amount
of the related Indebtedness (that bears interest at a
floating rate) permitted under Section 4.2(g) and
outstanding at such time; and provided further that no
Permitted Swap shall be secured unless all the Banks
consent thereto.

(o)  Assets of Subsidiaries.  The Partnership
shall not transfer any Key Assets to the Subsidiaries
or to any entity which owns the Circle C Property and
is liable for the obligations under the TCB Credit
Agreement, or permit the Subsidiaries or any entity
which owns the Circle C Property and is liable for the
obligations under the TCB Credit Agreement,
collectively, to own or hold any assets at any time
other than (i) those assets owned by the Subsidiaries
and any entity which owns the Circle C Property and is
liable for the obligations under the TCB Credit
Agreement, on the Closing Date and (ii) provided that
such investments and transactions involve assets other
than Key Assets, investments permitted by
Sections 4.2(e)(C) or (D) and transactions permitted by
Section 4.5.

SECTION 4.3.  Affirmative Covenants of FTX.  So
long as any Bank shall have any Commitment hereunder or the
principal of or interest on any Loan shall be unpaid, unless
the Required Banks shall otherwise consent in writing:

(a)  Affirmative Covenants Incorporated by Refer-
ence from the FTX Credit Agreement.  FTX will at all
times be in full compliance with Section 5.1 of the FTX
Credit Agreement, which is hereby incorporated by
reference herein with the same force and effect as
though fully set forth herein in its entirety; provided
that the references therein to "Default", "Event of
Default", "Bank" and "Agents" or "Agent" are replaced
herein with references to Default, Event of Default,
Bank and the Agents or Agent hereunder, respectively.

(b)  Partnership's Covenants and FTX.  FTX, in its
capacity as managing general partner of the Partner-
ship, shall cause the Partnership to perform and to
comply with its covenants set forth in Sections 4.1 and
4.2 and to otherwise act in accordance with this Agree-
ment.  FTX shall at all times be a general partner of
the Partnership and the sole managing general partner
of the Partnership and shall at all times generally
carry out the functions of the managing general partner
of the Partnership; provided that the foregoing shall
not prevent FTX from delegating to any of its subsidi-
aries FTX's duties as the managing general partner of
the Partnership.

SECTION 4.4.  Negative Covenants of FTX.  So long
as any Bank shall have any Commitment hereunder or the prin-
cipal of or interest on any Loan shall be unpaid, without
the prior written consent of the Required Banks:

(a)  Negative Covenants Incorporated by Reference
from the FTX Credit Agreement.  FTX will not at any
time fail to be in full compliance with Section 5.2 of
the FTX Credit Agreement, which is hereby incorporated
by reference herein with the same force and effect as
though fully set forth herein in its entirety; provided
that the references therein to "this Agreement", "this
Agreement, the Pledge Agreement or the Security
Agreement", "Default", "Event of Default", "Banks",
"Required Banks" and "Agents" or "Agent" are replaced
herein with references to this Agreement, this Agree-
ment or any other Loan Document, Default, Event of
Default, Banks, Required Banks and Agents or Agent
hereunder, respectively.

(b)  Material Agreements.  FTX shall not amend,
supplement, change, terminate or waive any material
provision of any Material Agreement unless the Banks
shall have received 30 days' notice of such amendment,
supplement, change, termination or waiver and the
Required Banks shall not have objected thereto on the
ground that it would, in their judgment, adversely
affect the rights or interests of the Banks; provided
that if FTX shall not have given such 30 days' notice,
FTX shall not amend, supplement, change, terminate or
waive any material provision of any Material Agreement
unless the Required Banks shall have given their
written consent thereto.

SECTION 4.5.  Covenants Regarding the TCB Borrower.
The following covenants shall be applicable to the
Partnership so long as any Bank shall have any Commitment
hereunder or the principal of or interest on any Loan shall
be unpaid, unless the Required Banks shall otherwise consent
in writing:

(a)  Transfers and Investments.  As of the
Restatement Closing Date, Circle C Land Corp. is the
TCB Borrower and is a wholly-owned subsidiary of the
Company.  Notwithstanding any other provision of this
Agreement, including, without limitation, Sections
4.2(c), (e), (g), (i) and (o): (i) the Partnership may
engage in any transaction, including, without
limitation, a stock purchase, asset purchase, merger or
consolidation, pursuant to which the Partnership
becomes the owner of all or any portion of the TCB
Borrower and/or the Circle C Property and (ii) the
Partnership may enter into any transaction, including,
without limitation, a stock purchase, asset purchase,
merger or consolidation, pursuant to which the TCB
Borrower and/or the Circle C Property becomes owned by
an entity which is either wholly or partly owned by the
Partnership; provided, in each case, that (x) at the
time of any such transaction and after giving effect
thereto no Default or Event of Default shall have
occurred and be continuing, (y) the Administrative
Agent receives five (5) days' prior written notice of
such transaction describing the terms of such
transaction and (z) such transaction does not result in
the Partnership becoming liable, directly or
indirectly, for the obligations under the TCB Credit
Agreement.

ARTICLE V

Conditions of Credit

SECTION 5.1.  Conditions Precedent to Initial
Borrowing.  On the Funding Date, and as conditions precedent
to the initial Borrowing by the Borrower to occur on such
date, each of the following conditions shall have been
satisfied:

(a)  Each Bank shall have received the following:

(i) a copy of the Certificates of Incorpora-
tion of FTX and FCX as in effect on the Closing
Date and each amendment, if any, subsequent
thereto, certified as of a recent date by the
Secretary of State of the State of Delaware as
being a true and correct copy of such documents on
file in his office;

(ii) the signed Certificate of the Secretary
of State of the State of Delaware, in regular
form, dated as of a recent date, listing the Cer-
tificate of Incorporation of FTX and FCX as in
effect on such recent date and each subsequent
amendment thereto on file in his office and
stating that such documents are the only charter
documents of FTX and FCX on file in his office and
that FTX and FCX are duly incorporated and in good
standing in the State of Delaware, have filed all
franchise tax returns and have paid all franchise
taxes required by law to be filed and paid by FTX
and FCX to the date of his Certificate;

(iii) the signed Certificate of the Secretary
or an Assistant Secretary of FTX, dated the Clos-
ing Date and certifying, among other things, (A) a
true and correct copy of resolutions adopted by
the Board of Directors of FTX authorizing the
making and performance of this Agreement and the
other Loan Documents (including the FTX Guaranty)
executed and delivered or to be executed and
delivered, as applicable, by FTX, and the
countersignature and acceptance by FTX of the FTX
Intercreditor Agreement, (B) that such resolutions
have not been modified, rescinded or amended and
are in full force and effect, (C) a true and
correct copy of the By-laws of FTX as in effect on
the Closing Date and at all times since a date
prior to the date of the resolutions described in
(A) above, (D) that the Certificate of
Incorporation of FTX has not been amended since
the date of the last amendment shown on the cer-
tificate referred to in (ii) above, and (E) the
incumbency and specimen signatures of each officer
of FTX executing the foregoing documents and any
other documents delivered to the Banks in connec-
tion herewith on behalf of FTX; and a certificate
of another officer of FTX as to the incumbency and
signature of such Secretary or Assistant
Secretary;

(iv) the signed Certificate of the Secretary
or an Assistant Secretary of FCX, dated the Clos-
ing Date and certifying, among other things, (A) a
true and correct copy of resolutions adopted by
the Board of Directors of FCX authorizing the
making and performance of this Agreement and the
other Loan Documents (including the FCX Guaranty)
executed and delivered or to be executed and
delivered, as applicable, by FCX, and the
countersignature and acceptance by FCX of the FCX
Intercreditor Agreement, (B) that such resolutions
have not been modified, rescinded or amended and
are in full force and effect, (C) a true and
correct copy of the By-laws of FCX as in effect on
the Closing Date and at all times since a date
prior to the date of the resolutions described in
(A) above, (D) that the Certificate of
Incorporation of FCX has not been amended since
the date of the last amendment shown on the cer-
tificate referred to in (ii) above, and (E) the
incumbency and specimen signatures of each officer
of FCX executing the foregoing documents and any
other documents delivered to the Banks in connec-
tion herewith on behalf of FCX; and a certificate
of another officer of FCX as to the incumbency and
signature of such Secretary or Assistant
Secretary;

(v) the signed Certificate of (A) the Chair-
man of the Board, the President or any executive
or senior vice president and (B) the Chief Finan-
cial Officer, the Controller or the Treasurer of
FTX, dated the Closing Date and certifying that
(1) the representations and warranties of FTX
contained herein are true and correct as of the
Closing Date and (2) that there exists no Default
or Event of Default relating to FTX or the
Partnership; and

(vi) the signed Certificate of (A) the Chair-
man of the Board, the President or any executive
or senior vice president and (B) the Chief Finan-
cial Officer, the Controller or the Treasurer of
FCX, dated the Closing Date and certifying that
(1) the representations and warranties of FCX
contained herein are true and correct as of the
Closing Date and (2) that there exists no Default
or Event of Default relating to FCX.

(b)  The Administrative Agent shall have received
all fees and other amounts due and payable to the
Agents or the Banks on or prior to the Closing Date.

(c)  All outstanding loans under the Credit
Agreement dated as of June 11, 1992, among the
Partnership, FTX, the banks named therein and Chemical
Bank, as agent and as collateral agent (the "Existing
FM Credit Agreement") shall have been repaid in full
and the Existing FM Credit Agreement and the
commitments of the banks party thereto shall have been
terminated.

(d)  The Administrative Agent shall have received
fully executed copies of the Guaranties and the
Material Agreements, all of which shall be in full
force and effect.

(e)  Each Bank shall have received the signed
certificate of (i) the Chairman of the Board, the
President or any executive or senior vice president and
(ii) the Chief Financial Officer, the Controller or the
Treasurer of both FTX and the Partnership (or, if there
shall be no such officers of the Partnership appointed,
of FTX as managing general partner of the Partnership),
dated the Funding Date and confirming compliance with
the conditions precedent in this Section.

(f)  Each Bank shall have received the favorable
written opinions of (i) the General Counsel of FTX and
FCX and (ii) Davis Polk & Wardwell, each dated the
Funding Date, addressed to the Banks, substantially in
the forms of Exhibits F and G, respectively, covering
such matters related to the transactions contemplated
hereby as the Administrative Agent may request and
otherwise satisfactory to Cravath, Swaine & Moore,
counsel for the Agents.  FTX and the Partnership
recognize that the Banks are relying on such opinions
in extending credit pursuant to this Agreement, and FTX
and the Partnership hereby direct such counsel to
deliver such opinions to the Banks.

(g)  Each Bank shall have received (i) a
certificate of the Secretary or an Assistant Secretary
of the Partnership (or, if there shall be no such
officer appointed, of FTX as managing general partner
of the Partnership), dated the Funding Date and
certifying (A) that attached thereto are true and
complete copies of the Partnership Agreement and all
other constitutive documents, if any, of the
Partnership as in effect on the date of such
certificate and at all times since the resolution of
the Partnership described in item (B) below, (B) that
attached thereto is a true and complete copy of a
resolution or similar authorization adopted by FTX, as
managing general partner of the Partnership,
authorizing the execution, delivery and performance of
this Agreement and the other Loan Documents executed
and delivered or to be executed and delivered, as
applicable, by the Partnership, the countersignature
and acceptance by the Partnership of the FM
Intercreditor Agreement and the Borrowings hereunder by
the Partnership, and that such resolution or
authorization has not been modified, rescinded or
amended and is in full force and effect and (C) as to
the incumbency and specimen signature of each officer
executing on behalf of the Partnership the foregoing
documents and any other document delivered or to be
delivered in connection herewith or therewith; (ii) a
certificate of another officer of the Partnership (or,
if there shall be no such officer appointed, of FTX as
managing general partner of the Partnership) as to the
incumbency and signature of such Secretary or Assistant
Secretary; and (iii) such other instruments and
documents as any Bank or Cravath, Swaine & Moore,
counsel for the Agents, may reasonably request.

(h)  Each Bank shall have received a Promissory
Note, each duly executed by the Partnership, payable to
such Bank's order and otherwise complying with the
provisions of Section 2.4.

(i)  The FM Intercreditor Agreement, the FCX
Intercreditor Agreement and the FTX Intercreditor
Agreement shall each have been executed and delivered
by all parties thereto other than the Administrative
Agent and, in the case of the FM Intercreditor
Agreement, the FM Collateral Agent, and countersigned
and delivered by FTX, FCX or the Partnership, as
applicable, and the Agents and each Bank shall have
received a copy of such Intercreditor Documents.

(j)  There shall be no proceeding for the
dissolution or liquidation of the Partnership or any
proceeding to rescind the Partnership Agreement or the
existence of the Partnership which is pending or, to
the knowledge of FTX or the Partnership, threatened
against or affecting the Partnership.

(k)  All legal matters incident to this Agreement,
the other Loan Documents and the Borrowings hereunder
shall be satisfactory to Cravath, Swaine & Moore,
counsel for the Agents.

By its execution and delivery of this Agreement, and unless
prior to the Funding Date it shall have provided written
notice to the Administrative Agent and FTX indicating
otherwise, each Bank has evidenced its satisfaction with
each matter set forth in this Section requiring satisfaction
on its part.

SECTION 5.2.  Conditions Precedent to Each
Borrowing.  Each Borrowing shall be subject to the following
conditions precedent:

(a) the representations and warranties on the part
of the Partnership contained in Section 3.1 and on the
part of FTX contained in Section 3.2 shall be true and
correct in all material respects at and as of the date
of such Borrowing as though made on and as of such
date;

(b) the Administrative Agent shall have received a
notice of such Borrowing as required by Section 2.3;
and

(c) no Event of Default or Default shall have
occurred and be continuing on the date of such
Borrowing or would result from such Borrowing.

SECTION 5.3.  Representations and Warranties with
Respect to Borrowings.  Each Borrowing shall be deemed a
representation and warranty by FTX and the Partnership,
jointly and severally, that the conditions precedent to each
such Borrowing, unless otherwise waived in accordance
herewith, shall have been satisfied as of the date of such
Borrowing.

ARTICLE VI

Events of Default

SECTION 6.1.  Events of Default.  If any of the
following acts or occurrences (an "Event of Default") shall
occur and be continuing:

(a) default for three or more days in the payment
when due (whether at the due date thereof, at a date
fixed for prepayment thereof, by acceleration thereof
or otherwise) of any principal of any Promissory Note;

(b) default for three or more days in the payment
when due of any interest on any Promissory Note or of
any other amount payable under this Agreement or any
other Loan Document;

(c) any representation or warranty made or deemed
made in or in connection with this Agreement, any other
Loan Document or in any certificate, report, financial
statement, letter or other writing or instrument
furnished or delivered to the Agents or any Bank
pursuant hereto or thereto shall prove to have been
incorrect in any material respect when made, effective
or reaffirmed and repeated, as the case may be;

(d) default in the due observance or performance
of any covenant, condition or agreement in
Section 4.1(a)(8), the first clause of Section 4.1(c),
Section 4.1(k), Section 4.2 (other than paragraph (j)
thereof), Section 4.4 (other than Section 5.2(k) of the
FTX Credit Agreement, as such Section is incorporated
by reference under Section 4.4(a)) or Section 4.3(b) as
it relates to any of the foregoing;

(e) default by FTX in the due observance or
performance of any covenant, condition or agreement
incorporated in Section 4.3(a) which shall remain
unremedied for 30 days after written notice thereof
shall have been given to the Borrower by any Bank;

(f) default by FTX or the Partnership in the due
observance or performance of any other covenant,
condition or agreement contained in any Loan Document
which shall remain unremedied for 10 days after written
notice thereof shall have been given to the Borrower by
any Bank;

(g) any Specified Entity shall (i) voluntarily
commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal
or state bankruptcy, insolvency, liquidation or similar
law, (ii) consent to the institution of, or fail to
contravene in a timely and appropriate manner, any
proceeding or the filing of any petition described in
clause (h) below, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian,
sequestrator or similar official for such Specified
Entity or for a substantial part of its property or
assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its
debts as they become due or (vii) take any action for
the purpose of effecting any of the foregoing;

(h) an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of
competent jurisdiction seeking (i) relief in respect of
any Specified Entity, or of a substantial part of the
property or assets of any Specified Entity, under
Title 11 of the United States Code, as now constituted
or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law,
(ii) the appointment of a receiver, trustee, custodian,
sequestrator or similar official for any Specified
Entity or for a substantial part of the property or
assets of any Specified Entity or (iii) the winding up
or liquidation of any Specified Entity; and such
proceeding or petition shall continue undismissed for
60 days, or an order or decree approving or ordering
any of the foregoing shall continue unstayed and in
effect for 30 days;

(i) default shall be made with respect to (x)
Hedge Agreements of any Specified Entity or (y) any
Indebtedness of any Specified Entity if the effect of
any such default shall be to accelerate, or to permit
the holder or obligee of any such obligations or
Indebtedness (or any trustee on behalf of such holder
or obligee) to accelerate (with or without notice or
lapse of time or both), the maturity of such
Indebtedness or the payment of any net termination
value in respect of Hedge Agreements, as applicable, in
an aggregate amount in excess of the Threshold Amount;
or any payment, regardless of amount, of (A) net
termination value on any such obligation in respect of
Hedge Agreements and/or (B) any Indebtedness of any
Specified Entity in an aggregate principal amount (or
in the case of a Hedge Agreement, net termination
value) in excess of the Threshold Amount, shall not be
paid when due, whether at maturity, by acceleration or
otherwise (after giving effect to any period of grace
specified in the instrument evidencing or governing
such Indebtedness or other obligation);

(j) an ERISA Event shall have occurred with
respect to any Plan or Multi employer Plan that, when
taken together with all other ERISA Events, reasonably
could be expected to result in liability of FTX or the
Borrower and/or any Restricted Subsidiary of FTX and/or
the Borrower's ERISA Affiliates in an aggregate amount
exceeding the Threshold Amount or requires payments
exceeding the Threshold Amount in any year;

(k) any security interest purported to be created
by the FTX Security Agreement shall cease to be, or
shall be asserted by the Borrower, FTX or any of their
Affiliates not to be, a valid, perfected, first
priority security interest in the securities, assets or
properties covered thereby, except to the extent that
any such loss of perfection or priority results from
the failure of the FTX Collateral Agent to maintain
possession of any certificates representing securities
pledged under the FTX Security Agreement to the extent
that such pledged securities are certificated
securities;

(l) a final judgment for the payment of money
shall be rendered by a court or other tribunal against
any Specified Entity in excess of the Threshold Amount
and shall remain undischarged for a period of
45 consecutive days during which execution of such
judgment shall not have been stayed effectively; or any
action shall be legally taken by a judgment creditor to
levy upon assets or properties of any Specified Entity
to enforce any such judgment;

(m) the Partnership Agreement (as it may be
amended and in effect from time to time) (or any
successor agreement pursuant to which FTX is appointed
and authorized to act as the managing general partner
of the Partnership) shall cease to be, or shall be
asserted by FTX not to be, in full force and effect and
enforceable in all material respects in accordance with
its terms;

(n) the FTX Guaranty or any Loan Document shall
cease to be, or shall be asserted by FTX, FCX or the
Partnership or any of their Affiliates not to be, in
full force and effect and enforceable in all material
respects in accordance with its terms; or

(o) there shall have occurred a Change in Control;

then, and in any such event (other than an event with
respect to FTX, FRP or the Partnership described in
paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, the Administrative
Agent may, and at the request of the Required Banks shall,
by written or telecopy notice to the Borrower, take one or
more of the following actions at the same or different
times:  (i) declare the Commitments to be terminated,
whereupon they shall forthwith terminate; (ii) declare all
sums then owing by the Borrower under the Promissory Notes
or otherwise owing hereunder to be forthwith due and
payable, whereupon all such sums shall become and be
immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein,
in any other Loan Document or in any Intercreditor Document
to the contrary notwithstanding or (iii) exercise (or cause
the FTX Collateral Agent to exercise) any or all the
remedies then available under the FTX Security Agreement;
and upon the occurrence of any event with respect to FTX,
FRP or the Partnership described in paragraph (g) or (h) of
this Section, all sums then owing by the Borrower under the
Promissory Notes or otherwise owing hereunder shall, without
any declaration or other action by any Bank or the Agents
hereunder, be immediately due and payable and all
Commitments hereunder shall be immediately terminated
without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived by the Borrower,
anything contained herein, in any other Loan Document or in
any other Intercreditor Document to the contrary
notwithstanding and the Administrative Agent may, and at the
request of the Required Banks shall, exercise any or all of
the remedies then available under the FTX Security
Agreement. Promptly following the making of any such
declaration, the Administrative Agent shall give notice
thereof to the Borrower but failure to do so shall not
impair, under any circumstances, the effect of such
declaration.

ARTICLE VII

FTX Undertaking

Section 7.1.  FTX Undertaking.  In addition to and
not in derogation from its obligations under the FTX
Guaranty, FTX hereby agrees that it shall be jointly and
severally liable with the Borrower for each of the
Partnership Obligations. FTX agrees that it shall pay on
demand any such Partnership Obligation for which it is
liable pursuant to this Section 7.1 which has remained
unpaid by the Borrower for five Business Days after such
amount is due or demanded from the Borrower; provided that
if an event referred to in Section 6.1(g) or (h) has
occurred with respect to the Borrower, such amounts shall be
payable on demand by FTX without the necessity of any demand
on the Borrower.  The obligations of FTX under this
Section 7.1 shall be deemed to be a guarantee of payment and
not of collection.  Upon payment by FTX of any sums to a
Bank or an Agent as provided above in this Section 7.1, all
rights of FTX against the Partnership arising as a result
thereof by way of right of subrogation or otherwise shall in
all respects be subordinated and junior in right of payment
to the prior payment in full of all the Partnership
Obligations to the Banks and the Agents and shall not be
exercised by FTX prior to payment in full of all Partnership
Obligations and termination of the Commitments.  If any
amount shall be paid to FTX on account of any amount paid by
FTX pursuant to this guarantee or otherwise at any time when
all the Partnership Obligations shall not be paid in full,
such amount shall be held in trust by FTX for the benefit of
the Agent and the Banks and shall forthwith be paid to the
Administrative Agent to be credited and applied to the
Partnership Obligations, whether matured or unmatured.  At
such time as all Partnership Obligations owing to such Bank
have been paid in full and its Commitment terminated, each
Bank shall, in a reasonable manner, assign (subject to the
continued effectiveness and the reinstatement provided for
above) the amount of the Partnership Obligations owed to it
and paid by FTX pursuant to this Section 7.1 to FTX, such
assignment to be pro tanto to the extent to which the
Partnership Obligations in question were discharged by FTX,
or make such other disposition thereof as FTX shall
reasonably direct (all without any representation or
warranty by, or any recourse to, such Bank).

ARTICLE VIII

The Agents

SECTION 8.1.  The Agents.  (a)  For convenience of
administration and to expedite the transactions contemplated
by this Agreement, Chase is hereby appointed as
Administrative Agent and FTX Collateral Agent for the Banks
under this Agreement and the FTX Security Agreement and as
Documentation Agent for the Banks under this Agreement.
None of the Agents shall have any duties or responsibilities
with respect hereto except those expressly set forth herein.
Each Bank, and each subsequent holder of any Promissory Note
by its acceptance thereof, hereby irrevocably appoints and
expressly authorizes the Agents, without hereby limiting any
implied authority, to take such action as the Agents may
deem appropriate on its behalf and to exercise such powers
under this Agreement as are specifically delegated to such
Person by the terms hereof, together with such powers as are
reasonably incidental thereto.  The Administrative Agent is
hereby expressly authorized by the Banks, without hereby
limiting any implied authority, (a) to receive on behalf of
the Banks all payments of principal of and interest on the
Loans and all other amounts due to the Banks hereunder, and
promptly to distribute to each Bank its proper share of each
payment so received; (b) to give notice on behalf of each of
the Banks to the Borrower of any Event of Default specified
in this Agreement of which the Administrative Agent has
actual knowledge acquired in connection with its agency
hereunder; and (c) to distribute to each Bank copies of all
notices, financial statements and other materials delivered
by the Borrower pursuant to this Agreement as received by
the Administrative Agent.  Without limiting the generality
of the foregoing, the FTX Collateral Agent is hereby
expressly authorized to execute any and all documents
(including releases) with respect to the collateral for the
Loans and the rights of the secured parties with respect
thereto, as contemplated by and in accordance with the
provisions of this Agreement and the FTX Security Agreement.
Each of the Agents may exercise any of its duties hereunder
by or through their respective agents, officers or
employees.  In addition, each Bank hereby irrevocably
authorizes and directs the Administrative Agent and the FTX
Collateral Agent to enter, on behalf of each of them, into
the respective Intercreditor Agreement and the FTX Security
Agreement as contemplated pursuant to this Agreement.

(b)  None of the Agents or any of their respective
directors, officers, agents or employees shall be liable as
such for any action taken or omitted to be taken by any of
them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document
delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance
or observance by the Borrower or any other party of any of
the terms, conditions, covenants or agreements contained in
any Loan Document.  The Agents shall not be responsible to
the Banks or the holders of the Promissory Notes for the due
execution, genuineness, validity, enforceability or
effectiveness of this Agreement, the Promissory Notes or any
other Loan Documents or other instruments or agreements.
The Administrative Agent may deem and treat the payee of any
Promissory Note as the owner thereof for all purposes hereof
until it shall have received from the payee of such
Promissory Note notice, given as provided herein, of the
transfer thereof in compliance with Section 9.3.  The Agents
shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written
instructions signed by the Required Banks and, except as
otherwise specifically provided herein, such instructions
and any action or inaction pursuant thereto shall be binding
on all the Banks and each subsequent holder of any
Promissory Note.  Each Agent shall, in the absence of
knowledge to the contrary, be entitled to rely on any
instrument or document believed by it in good faith to be
genuine and correct and to have been signed or sent by the
proper Person or Persons.  None of the Agents nor any of
their respective directors, officers, employees or agents
shall have any responsibility to the Borrower or any other
party on account of the failure of or delay in performance
or breach by any Bank of any of its obligations hereunder or
to any Bank on account of the failure of or delay in
performance or breach by any other Bank or the Borrower or
any other party of any of their respective obligations
hereunder or under any other Loan Document or in connection
herewith or therewith.  Each of the Agents may execute any
and all duties hereunder by or through agents or employees
and shall be entitled to rely upon the advice of legal
counsel selected by it with respect to all matters arising
hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice
of such counsel.  The Banks hereby acknowledge that none of
the Agents shall be under any duty to take any discretionary
action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in
writing to do so by the Required Banks.

(c)  To the extent that any Agent shall not be
reimbursed by the Borrower for any costs, liabilities or
expenses incurred in such capacity, each Bank agrees (i) to
reimburse the Agents, on demand (in the amount of its
Applicable Percentage hereunder) for any expenses incurred
for the benefit of the Banks by the Agents, including
counsel fees and compensation of agents and employees paid
for services rendered on behalf of the Banks and (ii) to
indemnify and hold harmless each Agent and any of its
directors, officers, employees or agents, on demand, in the
amount of such Applicable Percentage, from and against any
and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against it in its
capacity as Agent or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or
any action taken or omitted by it or any of them under this
Agreement or any other Loan Document; provided, however,
that no Bank shall be liable to an Agent for any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or wilful misconduct of
such Agent or of its directors, officers, employees or
agents.

(d)  With respect to the Loans made by it
hereunder and the Promissory Notes issued to it, each Agent
in its individual capacity and not as Agent shall have the
same rights and powers as any other Bank and may exercise
the same as though it were not an Agent, and the Agents and
their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower
or any Subsidiary or other Affiliate thereof as if it were
not an Agent.

(e)  Subject to the appointment and acceptance of
a successor Agent as provided below, any Agent may resign at
any time by giving written notice thereof to the Banks and
the Borrower.  Upon any such resignation, the Required Banks
shall have the right to appoint, and the Borrower shall have
the right to approve (such approval not to be unreasonably
withheld or delayed) a successor Administrative Agent, FTX
Collateral Agent or Documentation Agent, as the case may be.
If no successor Administrative Agent, FTX Collateral Agent
or Documentation Agent, as the case may be, shall have been
so appointed and approved and shall have accepted such
appointment, within 30 days after the retiring Agent's
giving of notice of resignation, then the retiring Person
may, on behalf of the Banks, appoint a successor
Administrative Agent, FTX Collateral Agent or Documentation
Agent, as the case may be, which shall be a Bank with an
office in New York, New York, having a combined capital and
surplus of at least $500,000,000 or an Affiliate of any such
Bank.  Upon the acceptance of any appointment as
Administrative Agent, FTX Collateral Agent or Documentation
Agent hereunder by a successor Administrative Agent, FTX
Collateral Agent or Documentation Agent, as the case may be,
such successor Administrative Agent, FTX Collateral Agent or
Documentation Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder.  After
any such retiring Agent's resignation hereunder as
Administrative Agent, FTX Collateral Agent or Documentation
Agent, as applicable, the provisions of this Article VIII
and Section 9.4 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was acting as
the Administrative Agent, FTX Collateral Agent or
Documentation Agent, as applicable.

(f) The Administrative Agent and the Documentation
Agent shall be responsible for supervising the preparation,
execution and delivery of this Agreement and the other
agreements and instruments contemplated hereby, any
amendment or modification thereto and the closing of the
transactions contemplated hereby and thereby.  In addition,
the Administrative Agent shall assist the FTX Collateral
Agent in the performance of its duties as may be reasonably
requested by the FTX Collateral Agent from time to time.

(g)  The obligations of the Administrative Agent,
the FTX Collateral Agent and the Documentation Agent shall
be separate and several and none of them shall be
responsible or liable for the acts or omissions of the
other, except, to the extent that a Bank serves in more than
one agent capacity, such Bank shall be responsible for the
acts and omissions relating to each such agency function.

(h)  Without the prior written consent of the
Required Banks, the Administrative Agent and the FTX
Collateral Agent will not consent to any modification,
supplement or waiver of any Intercreditor Agreement or,
except to the extent required by an Intercreditor Agreement,
the FTX Security Agreement.

(i)  Each Bank acknowledges that it has,
independently and without reliance upon the Agents or any
other Bank and based on such documents and information as it
has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Bank also
acknowledges that it will, independently and without
reliance upon the Agents or any other Bank and based on such
documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement or any
other Loan Document, any related agreement or any document
furnished hereunder or thereunder.

ARTICLE IX

Miscellaneous

SECTION 9.1.  Notices.  Notices and other
communications provided for herein shall be in writing and
shall be delivered by hand or overnight or same day courier
service or mailed or sent by telex, telecopy, graphic
scanning or other telegraphic communications equipment of
the sending party to the appropriate party's address set
forth on the signature pages hereof; provided that notices
by or to the Borrower may be given by or to FTX as its
general partner.  All notices and other communications given
to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the
date of receipt if hand delivered or delivered by any
telecopy, telegraphic or telex communications equipment or
three days after being sent by registered or certified mail,
postage prepaid, return receipt requested, in each case
addressed to such party as provided in this Section 9.1 or
in accordance with the latest unrevoked direction from such
party.

SECTION 9.2.  Survival of Agreement.  All
covenants, agreements, representations and warranties made
by the Borrower or the Guarantor herein and in the
certificates or other instruments prepared or delivered in
connection with this Agreement or any other Loan Document
shall be considered to have been relied upon by the Banks
and the Agents and shall survive the making by the Banks of
the Loans and the execution and delivery to the Banks of the
Promissory Notes evidencing such Loans regardless of any
investigation made by the Banks or on their behalf, and
shall continue in full force and effect as long as the
principal of or any accrued interest on any Promissory Note,
any Commitment Fee or any other fee or amount payable under
the Loan Documents is outstanding and unpaid and so long as
the Commitments have not been terminated.

SECTION 9.3.  Successors and Assigns;
Participation; Purchasing Banks.  (a)  This Agreement shall
be binding upon and inure to the benefit of the Borrower,
FTX, the Banks, the Agents, all future holders of the
Promissory Notes, and their respective successors and
assigns, except that neither the Borrower nor FTX may
assign, delegate or transfer any of its rights or
obligations under this Agreement without the prior written
consent of each Bank.  Any Bank may at any time pledge or
assign all or any portion of its rights under this Agreement
and the Promissory Notes issued to it to a Federal Reserve
Bank to secure extensions of credit by such Federal Reserve
Bank to such Bank; provided that no such pledge or
assignment shall release a Bank from any of its obligations
hereunder or substitute any such Federal Reserve Bank for
such Bank as a party hereto.

(b)  Any Bank may, in accordance with applicable
law, at any time sell to one or more banks or other entities
("Participants") participating interests in all or a portion
of any Loan owing to such Bank, any Promissory Note held by
such Bank, any Commitment of such Bank or any other interest
of such Bank hereunder.  In the event of any such sale by a
Bank of participating interests to a Participant, such
Bank's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Bank shall
remain solely responsible for the performance thereof, such
Bank shall remain the holder of any such Promissory Note for
all purposes under this Agreement and the Borrower and the
Agents shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations
under this Agreement.  The Borrower agrees that if amounts
outstanding under this Agreement and the Promissory Notes
are due and unpaid, or shall have been declared due or shall
have become due and payable upon the occurrence of an Event
of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in
amounts owing under this Agreement and any Promissory Note
to the same extent as if the amount of its participating
interest were owing directly to it as a Bank under this
Agreement or any Promissory Note; provided that such right
of setoff shall be subject to the obligation of such
Participant to share with the Banks, and the Banks agree to
share with such Participant, as provided in Section 2.15.
The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.11, 2.12, 2.13, 2.15,
2.17 and 9.5 with respect to its participation in the
Commitments and the Loans outstanding from time to time as
if it were a Bank; provided that no Participant shall be
entitled to receive any greater payment pursuant to such
Sections than the transferor Bank would have been entitled
to receive in respect of the amount of the participation
transferred by such transferor Bank to such Participant
unless such participation shall have been made at a time
when the circumstances giving rise to such greater payment
did not exist; and provided that the voting rights of any
Participant would be limited to amendments, modifications or
waivers decreasing any fees payable hereunder or the amount
of principal of or the rate at which interest is payable on
the Loans, extending any scheduled principal payment date or
date fixed for the payment of interest on the Loans,
changing or extending the Commitments or release of all or
substantially all the collateral for the Loans.

(c)  Any Bank may, in accordance with applicable
law and subject to Section 9.3(h), at any time assign by
novation all or any part of its rights and obligations under
this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it and the Promissory
Notes held by it) (I) to any Bank or any Affiliate thereof,
without the Borrower's consent, or (II) to one or more
additional banks or financial institutions (any such entity
referred to in clause (I) or (II) being a "Purchasing Bank")
with the consent of the Administrative Agent and the
Borrower, such consent not to be unreasonably withheld (it
being understood that the Borrower may withhold its consent
to a Purchasing Bank (i) which is not a commercial bank or
savings and loan institution or (ii) which would, as of the
effective date of such assignment, be entitled to claim
compensation under Section 2.11 which the transferor Bank
would not be entitled to claim as of such date), pursuant to
a Commitment Transfer Supplement in the form of Exhibit D,
executed by such Purchasing Bank and such transferor Bank
(and, in the case of a Purchasing Bank that is not then a
Bank or an Affiliate thereof, by the Borrower and the
Administrative Agent), and delivered for its recording in
the Register to the Administrative Agent, together with the
Promissory Notes subject to such assignment, the
registration and processing fee required by Section 9.3(e)
and an Administrative Questionnaire for the Purchasing Bank
if it is not already a Bank.  Assignments shall be by
novation.  Upon such execution, delivery and recording (and,
if required, consent of the Borrower and the Administrative
Agent), from and after the Transfer Effective Date
determined pursuant to such Commitment Transfer Supplement
(which shall be at least five days after the execution and
delivery thereof), (x) the Purchasing Bank thereunder shall
(if not already a party hereto) be a party hereto and have
the rights and obligations of a Bank hereunder with a
Commitment as set forth in such Commitment Transfer
Supplement, and (y) the transferor Bank thereunder shall, to
the extent assigned by such Commitment Transfer Supplement,
be released from its obligations under this Agreement (and,
in the case of a Commitment Transfer Supplement covering all
or the remaining portion of a transferor Bank's rights and
obligations under this Agreement, such transferor Bank shall
cease to be a party hereto).  Such Commitment Transfer
Supplement shall be deemed to amend this Agreement
(including Schedule II hereto) to the extent, and only to
the extent, necessary to reflect the addition of such
Purchasing Bank (if not already a party hereto) and the
resulting adjustment of Applicable Percentages arising from
the purchase by such Purchasing Bank of all or a portion of
the rights and obligations of such transferor Bank under
this Agreement and the Promissory Notes.  On or prior to the
Transfer Effective Date determined pursuant to such
Commitment Transfer Supplement, the Borrower, at its own
expense, shall execute and deliver to the Administrative
Agent in exchange for the surrendered Promissory Note a new
Promissory Note to the order of such Purchasing Bank in an
amount equal to the Commitment assumed by it pursuant to
such Commitment Transfer Supplement and, if the transferor
Bank has retained a Commitment hereunder, a new Promissory
Note to the order of the transferor Bank in an amount equal
to the Commitment retained by it hereunder.  Such new
Promissory Notes shall be dated the Closing Date and shall
otherwise be in the form of the Promissory Notes replaced
thereby.  The Promissory Notes surrendered by the transferor
Bank shall be returned by the Administrative Agent to the
Borrower marked "canceled".

(d)  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at
one of its offices in the City of New York a copy of each
Commitment Transfer Supplement delivered to it and a
register (the "Register") for the recordation of the names
and addresses of the Banks and the Commitment of, and
principal amount of the Loans owing to, each Bank from time
to time.  The entries in the Register shall be conclusive,
in the absence of manifest error, and the parties hereto may
treat each Person whose name is recorded in the Register as
the owner of the Loan recorded therein for all purposes of
this Agreement.  The Register shall be available for
inspection by the parties hereto at any reasonable time and
from time to time upon reasonable prior notice.

(e)  Upon its receipt of a Commitment Transfer
Supplement executed by a transferor Bank and a Purchasing
Bank (and, in the case of a Purchasing Bank that is not then
a Bank or an Affiliate thereof, by the Borrower and the
Administrative Agent) together with payment to the
Administrative Agent of a registration and processing fee of
$3,500, the Administrative Agent shall (i) promptly accept
such Commitment Transfer Supplement and (ii) on the Transfer
Effective Date determined pursuant thereto record the
information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and
the Borrower.

(f)  Subject to Section 9.15, the Borrower and the
Guarantor authorize each Bank to disclose to any Participant
or Purchasing Bank (each, a "Transferee") and any
prospective Transferee any and all financial and other
information in such Bank's possession concerning the
Guarantor, the Borrower and their Affiliates which has been
delivered to such Bank by or on behalf of the Borrower
pursuant to this Agreement or which has been delivered to
such Bank by or on behalf of the Borrower in connection with
such Bank's credit evaluation of the Borrower, the Guarantor
and their Affiliates prior to becoming a party to this
Agreement.

(g)  If, pursuant to this Section 9.3, any
interest in this Agreement or any Promissory Note is
transferred to any Transferee which is organized under the
laws of any jurisdiction other than the United States or any
State thereof, the transferor Bank (x) shall immediately
notify the Administrative Agent of such transfer, describing
the terms thereof and indicating the identity and country of
residence of each Transferee.  Such transferor Bank or
Transferee shall indemnify and hold harmless the Borrower
and the Administrative Agent from and against any tax,
interest, penalty or other expense that the Borrower and the
Administrative Agent may incur as a consequence of any
failure to withhold applicable United States taxes because
of any transfer or participation arrangement that is not
fully disclosed to them as required hereunder.

(h)  By executing and delivering a Commitment
Transfer Supplement, the transferor Bank thereunder and the
Purchasing Bank thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as
follows:  (i) such transferor Bank warrants that it is the
legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim and that its
Commitment, and the outstanding balance of its Loans, in
each case without giving effect to assignments thereof which
have not become effective, are as set forth in such
Commitment Transfer Supplement, (ii) except as set forth in
(i) above, such transferor Bank makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value
of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto, or the
financial condition of the Borrower or any Subsidiary or the
performance or observance by the Guarantor, the Borrower or
any Subsidiary of any of its obligations under this
Agreement, any other Loan Document or any other instrument
or document furnished pursuant hereto; (iii) such Purchasing
Bank represents and warrants that it is legally authorized
to enter into such Commitment Transfer Supplement; (iv) such
Purchasing Bank confirms that it has received a copy of this
Agreement, together with copies of the most recent financial
statements, if any, delivered pursuant to Section 5.1 and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into such Commitment Transfer Supplement; (v) such
Purchasing Bank will independently and without reliance upon
the Agents, such transferor Bank or any other Bank and based
on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this
Agreement; (vi) such Purchasing Bank appoints and authorizes
the Agents to take such action as agent on its behalf and to
exercise such respective powers under this Agreement and the
other Loan Documents as are delegated to the Agents by the
terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such Purchasing Bank agrees
that it will perform in accordance with their terms all the
obligations which by the terms of this Agreement are
required to be performed by it as a Bank.

SECTION 9.4.  Expenses of the Banks; Indemnity.
(a)  The Borrower and FTX, jointly and severally, agree to
pay all out-of-pocket expenses reasonably incurred by the
Agents in connection with the preparation and administration
of this Agreement, the Promissory Notes and the other Loan
Documents or with any amendments, modifications or waivers
of the provisions hereof or thereof (whether or not the
transactions hereby contemplated shall be consummated) or
reasonably incurred by the Agents or any Bank in connection
with the enforcement or protection of their rights in
connection with this Agreement and the other Loan Documents
or with the Loans made or the Promissory Notes issued
hereunder (whether through negotiations, legal proceedings
or otherwise), including, but not limited to, the reasonable
fees and disbursements of Cravath, Swaine & Moore, special
counsel for the Agents, and, in connection with such
enforcement or protection, the reasonable fees and
disbursements of other counsel for any Bank.  The Borrower
and FTX, jointly and severally, further agree that they
shall indemnify the Banks and the Agents from and hold them
harmless against any documentary taxes, assessments or
charges made by any Governmental Authority by reason of the
execution and delivery of or in connection with the
performance of this Agreement, any of the Promissory Notes
or any of the other Loan Documents.  Further, the Borrower
and FTX, jointly and severally, agree to pay, and to
protect, indemnify and save harmless each Bank, each Agent
and each of their respective officers, directors,
shareholders, employees, agents and servants from and
against, any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgments,
demands, damages, costs or expenses (including, without
limitation, attorneys' fees and expenses) in connection with
any investigative, administrative or judicial proceeding,
whether or not such Bank or Agent shall be designated a
party thereto of any nature arising from or relating to (i)
the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the
transactions contemplated hereby and thereby (including the
Restructuring) or (ii) the use of the proceeds of the Loans;
and the Borrower also agrees to pay, and to protect,
indemnify and save harmless each Bank, each Agent and each
of their respective officers, directors, shareholders,
employees, agents and servants from and against, any and all
losses, liabilities (including liabilities for penalties),
actions, suits, judgments, demands, damages, costs or
expenses (including, without limitation, attorneys' fees and
expenses in connection with any investigative,
administrative or judicial proceeding, whether or not such
Bank or Agent shall be designated a party thereto) of any
nature arising from or relating to any actual or alleged
presence or Release of Hazardous Materials on any property
owned or operated by the Borrower or any of the
Subsidiaries, or any Environmental Claim related in any way
to the Borrower or the Subsidiaries or arising from or in
connection with the environmental due diligence summary
memorandum referred to in paragraph (m) of Article IV of the
FTX Credit Agreement; provided that any such indemnity
referred to in this sentence shall not, as to any
indemnified Person, be available to the extent that such
losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and
non-appealable judgment to have resulted from the gross
negligence or wilful misconduct of such indemnified Person.
If any action, suit or proceeding arising from any of the
foregoing is brought against any Bank, Agent or other Person
indemnified or intended to be indemnified pursuant to this
Section 9.4, the Borrower and FTX, jointly and severally, to
the extent and in the manner directed by such indemnified
party, will resist and defend such action, suit or
proceeding or cause the same to be resisted and defended by
counsel designated by the Borrower (which counsel shall be
satisfactory to such Bank, Agent or other Person indemnified
or intended to be indemnified).  If the Borrower or FTX
shall fail to do any act or thing which it has covenanted to
do hereunder or any representation or warranty on the part
of the Borrower or FTX contained in this Agreement shall be
breached, any Bank or Agent may (but shall not be obligated
to) do the same or cause it to be done or remedy any such
breach, and may expend its funds for such purpose.  Any and
all amounts so expended by any Bank or Agent shall be
repayable to it by the Borrower and FTX, jointly and
severally, immediately upon such Bank's or such Agent's
demand therefor.

(b)  The provisions of this Section 9.4 shall
remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby or
thereby, the repayment of any of the Loans or any Promissory
Notes, the invalidity or unenforceability of any term or
provision of this Agreement, any other Loan Document or any
Promissory Note, or any investigation made by or on behalf
of any Bank or any Agent.  All amounts due under this
Section 9.4 shall be payable on written demand therefor.

SECTION 9.5.  Right of Setoff.  If an Event of
Default shall have occurred and be continuing and the Loans
shall have been accelerated or any Bank shall have requested
the Administrative Agent to declare the Loans immediately
due and payable pursuant to Article VI, then each Bank is
hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand,
provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the
credit or the account of the Borrower against any of and all
the obligations of the Borrower now or hereafter existing
under this Agreement and the Promissory Notes held by such
Bank, irrespective of whether or not such Bank shall have
made any demand under this Agreement or such Promissory
Notes and although such obligations may be unmatured.  Each
Bank agrees promptly to notify the Borrower after any such
setoff and application made by such Bank, but the failure to
give such notice shall not affect the validity of such
setoff and application.  The rights of each Bank under this
Section 9.5 are in addition to other rights and remedies
(including, without limitation, other rights of setoff)
which such Bank may have.

SECTION 9.6.  APPLICABLE LAW.  THIS AGREEMENT AND
THE PROMISSORY NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 9.7.  Waivers; Amendments.  (a)  No
failure or delay of any Bank or Agent in exercising any
power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further
exercise thereof or the exercise of any other right or
power.  The rights and remedies of the Banks and the Agents
hereunder and under the other documents and agreements
entered into in connection herewith are cumulative and not
exclusive of any rights or remedies which they would
otherwise have.  No waiver of any provision of this
Agreement, any other Loan Document or any Promissory Note or
any other such document or agreement or consent to any
departure by the Borrower therefrom shall in any event be
effective unless the same shall be authorized as provided in
paragraph (b) below, and then such waiver or consent shall
be effective only in the specific instance and for the
purpose for which given.  No notice or demand on the
Borrower in any case shall entitle the Borrower to any other
or further notice or demand in similar or other
circumstances.  Each holder of any of the Promissory Notes
shall be bound by any amendment, modification, waiver or
consent authorized as provided herein, whether or not such
Promissory Note shall have been marked to indicate such
amendment, modification, waiver or consent.

(b)  Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the
Borrower and the Required Banks; provided, however, that no
such agreement shall (i) change the principal amount of, or
extend or advance the maturity of or any date for the
payment (other than pursuant to Section 2.7(b), which may be
amended by the Required Banks) of any principal of or
interest on, any Promissory Note (including, without
limitation, any such payment pursuant to Section 2.7(c) or
paragraph (a) or (b) of Section 2.9), or waive or excuse any
such payment or any part thereof, or change the rate of
interest on any Promissory Note, without the written consent
of each holder affected thereby, (ii) change or extend the
Commitment of any Bank without the written consent of such
Bank, or change any fees to be paid to any Bank or Agent
hereunder without the written consent of such Bank or the
Agent, as applicable, (iii) amend or modify the provisions
of this Section 9.7, Sections 2.8 through 2.15 or
Section 9.4 or the definition of "Required Banks", without
the written consent of each Bank or (iv) release the
collateral granted as security under the FTX Security
Agreement (except as expressly required hereby or thereby),
without the written consent of each Bank; and provided
further that no such agreement shall amend, modify or
otherwise affect the rights or duties of an Agent hereunder
without the written consent of such Agent.  Each Bank and
holder of any Promissory Note shall be bound by any
modification or amendment authorized by this Section 9.7
regardless of whether its Promissory Notes shall be marked
to make reference thereto, and any consent by any Bank or
holder of a Promissory Note pursuant to this Section shall
bind any Person subsequently acquiring a Promissory Note
from it, whether or not such Promissory Note shall be so
marked.

SECTION 9.8.  Severability.  In the event any one
or more of the provisions contained in this Agreement or in
the Promissory Notes should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein
or therein shall not in any way be affected or impaired
thereby.  The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.

SECTION 9.9.  Counterparts.  This Agreement may be
executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract, and shall become
effective when copies hereof which, when taken together,
bear the signatures of each of the parties hereto shall be
delivered or mailed to the Administrative Agent and the
Borrower.

SECTION 9.10.  Headings.  Article and Section
headings and the Table of Contents used herein are for
convenience of reference only and are not to affect the
construction of, or to be taken into consideration in
interpreting, this Agreement.

SECTION 9.11.  Entire Agreement.  This Agreement,
the other Loan Documents, the fee letters between the Agents
and the Borrower and the Exhibits and Schedules hereto
contain the entire agreement among the parties hereto with
respect to the Loans and the related transactions.  Any
previous agreement among the parties with respect to the
subject matter hereof is superseded by this Agreement, such
fee letters and the other Loan Documents.  Nothing in this
Agreement or in the other Loan Documents, expressed or
implied, is intended to confer upon any party other than the
parties hereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the
other Loan Documents.

SECTION 9.12.  WAIVER OF JURY TRIAL, ETC.
(A)  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.  EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.12.

(b)  Except as prohibited by law, each party
hereto hereby waives any right it may have to claim or
recover in any litigation referred to in paragraph (a) of
this Section 9.12 any special, indirect, exemplary, punitive
or consequential damages or any damages other than, or in
addition to, actual damages.

(c)  Each party hereto (i) certifies that no
representative, agent or attorney of any Bank has
represented, expressly or otherwise, that such Bank would
not, in the event of litigation, seek to enforce the
foregoing waivers and (ii) acknowledges that it has been
induced to enter into this Agreement or any other document,
as applicable, by, among other things, the mutual waivers
and certifications herein.

SECTION 9.13.  Interest Rate Limitation.
Notwithstanding anything herein or in the Promissory Notes
to the contrary, if at any time the interest rate applicable
to any Loan, together with all fees, charges and other
amounts which are treated as interest on such Loan under
applicable law (collectively the "Charges"), as provided for
herein or in any other document executed in connection
herewith, or otherwise contracted for, charged, received,
taken or reserved by any Bank, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted
for, charged, taken, received or reserved by such Bank in
accordance with applicable law, the rate of interest in
respect of such Loan hereunder or payable under the
Promissory Note held by such Bank, together with all Charges
payable to such Bank, shall be limited to the Maximum Rate
and, to the extent lawful, the interest and Charges that
would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section 9.13
shall be cumulated and the interest and Charges payable to
such Bank in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until
such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall
have been received by such Bank.

SECTION 9.14.  JURISDICTION; CONSENT TO SERVICE OF
PROCESS.  (A)  THE BORROWER AND FTX EACH HEREBY IRREVOCABLY
AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW
YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO
THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  EACH OF
THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED
IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT
SHALL AFFECT ANY RIGHT THAT ANY BANK OR AGENT MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AGAINST
THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

(B)  THE BORROWER AND FTX EACH HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY
LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY NEW
YORK STATE OR FEDERAL COURT.  EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(C)  EACH PARTY TO THIS AGREEMENT IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 9.1.  NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

SECTION 9.15.  Confidentiality.  Each Bank agrees
(which agreement shall survive the termination of this
Agreement) that financial information, information from the
Borrower's and its Subsidiaries' books and records,
information concerning the Borrower's and its Subsidiaries'
trade secrets and patents and any other information received
from the Borrower and its Subsidiaries hereunder shall be
treated as confidential by such Bank, and each Bank agrees
to use its best efforts to ensure that such information is
not published, disclosed or otherwise divulged to anyone
other than employees or officers of such Bank and its
counsel and agents; provided that it is understood that the
foregoing shall not apply to:

(i) disclosure made with the prior written
authorization of the Borrower or FTX;

(ii) disclosure of information (other than that
received from the Borrower and its Subsidiaries or FTX
prior to or under this Agreement) already known by, or
in the possession of, such Bank without restrictions on
the disclosure thereof at the time such information is
supplied to such Bank by the Borrower or its
Subsidiaries or FTX hereunder;

(iii) disclosure of information which is required by
applicable law or to a governmental agency having
supervisory or regulatory authority over any party
hereto;

(iv) disclosure of information in connection with
any suit, action or proceeding in connection with the
enforcement of rights hereunder or in connection with
the transactions contemplated hereby or thereby;

(v) disclosure to any bank (or other financial
institution) which may acquire a participation or other
interest in the Loans or rights of any Bank hereunder;
provided that such bank (or other financial
institution) agrees to maintain any such information to
be received in accordance with the provisions of this
Section 9.15;

(vi) disclosure by any party hereto to any other
party hereto or their counsel or agents;

(vii) disclosure by any party hereto to any entity,
or to any subsidiary of such an entity, which owns,
directly or indirectly, more than 50% of the voting
stock of such party, or to any subsidiary of such an
entity; or

(viii) disclosure of information that prior to such
disclosure has become public knowledge through no
violation of this Agreement.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above
written.

FM PROPERTIES OPERATING CO.,

by FREEPORT-McMoRan INC.,
its Managing General Partner,

by
______________________________
Name:   R. Foster Duncan
Title:  Treasurer

1615 Poydras Street
New Orleans, Louisiana 70112
Attention:  R. Foster Duncan
Treasurer

Telephone:  504-582-4628
Telecopy:   504-582-4511

FREEPORT-McMoRan INC.,

by
______________________________
Name:   R. Foster Duncan
Title:  Treasurer

1615 Poydras Street
New Orleans, Louisiana 70112

Attention:   R. Foster Duncan
Treasurer

Telex:       8109515386
Telephone:   504-582-4628
Telecopy:    504-582-4511

THE CHASE MANHATTAN BANK,
(successor by merger to Chemical Bank and The Chase
Manhattan Bank (National Association)), individually and as
Administrative Agent, FTX Collateral Agent and Documentation
Agent

by
______________________________
Name:
Title:

DOMESTIC OFFICE AND LIBOR OFFICE:

One Chase Manhattan Plaza (5th Floor)
New York, NY 10081

Attention:  James H. Ramage
Vice President

Telephone:  212-552-7784
Telecopy:   212-552-5555

ADDRESS FOR NOTICES:

Agent Bank Services
140 East 45th Street
New York, NY  10017

Attention:  Hilma Gabbidon

Telex:      353006 ABSCNYK
Telephone:  212-622-0693
Telecopy:   212-622-0002

SCHEDULE I

Applicable Margin

LIBOR Rate Loans:                 1% per annum
Reference Rate Loans:             0% per annum

Commitment Fee Rates on average
daily unused Commitment:           3/8% per annum

SCHEDULE II

COMMITMENTS OF THE BANKS

Applicable
Bank               Percentage
Commitment

The Chase                    100%
$10,000,000.00
Manhattan Bank

TOTAL              100%
$10,000,000.00

SCHEDULE III

Key Assets

Residential acres, pods or        Bent Tree Office -- Addison, TX
bulk lot sales of 25 or more      17.66 acre office site
lots or Clubs                      Barton Creek Resort &
aggregating over $1 million
in gross sales proceeds

Keller Springs -- Addison, TX
10.74 acre commercial site

Hunter's Glen -- Plano, TX
8.95 acres retail land

Camino Real -- San Antonio,TX
22.7 acres multi-family land--
Vista del Norte 10AV
(Tract 2)

Bent Tree Addison --Addison, TX
50.1 acre tract suitable for
industrial

Bent Tree
Apartment/Retail -- Addison, TX
10.42 acre commercial site

Tree Farm -- Plano, TX
21.5 acre commercial site

Bent Tree Marsh -- Carrolton, TX
22.85 acre site suitable for
community retail center

SCHEDULE IV

FLORIDA PROPERTIES

FM Florida Properties Co.

SCHEDULE V

SUBSIDIARIES

FM Properties Senior Holding Inc.

Estates of Barton Creek Utilities, Inc.

Lakeside Utilities, Inc.

SCHEDULE VI

LITIGATION

1.   On October 28, 1996, the City of Austin filed suit in
Travis County District Court against the Southwest
Travis County Water District (the "District") alleging
that the legislation creating the District was
unconstitutional.  The City challenged the validity of
the legislation for three reasons:  (1) carving out the
District from the City's extraterritorial jurisdiction
violated the City's home-rule powers; (2) the District
has more power and authority than permitted for this
type of conservation reclamation district; and (3) the
legislation impairs existing City contract rights with
the Circle C MUDs.  The District, the Circle C MUDs,
the Circle C Fire District, Phoenix Holdings, Ltd. and
the Partnership are discussing strategies for
responding to this lawsuit.

Exhibit 4.6

SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED NOTE AGREEMENT

THIS  SECOND  AMENDMENT  TO SECOND AMENDED AND RESTATED
NOTE AGREEMENT (this "Amendment"),  dated as of December 20,
1996, among FM PROPERTIES OPERATING CO.,  a Delaware general
partnership  ("FM  Properties"),  FREEPORT-McMoRan  INC.,  a
Delaware  corporation ("FTX" or the  "Guarantor"),  HIBERNIA
NATIONAL BANK,  a  national banking association ("Hibernia")
and  THE  CHASE  MANHATTAN  BANK  (successor  by  merger  to
Chemical  Bank  and   The  Chase  Manhattan  Bank  (National
Association)),  a  New York  banking  corporation  ("Chase")
(Hibernia and Chase,  the  "Banks"),  and Hibernia, as Agent
for the Banks (the "Agent").

RECITALS

A.   The parties hereto, together with FREEPORT-McMoRan
COPPER  &  GOLD INC., a Delaware corporation  ("FCX"),  have
executed a Second Amended and Restated Note Agreement, dated
as of June 30,  1995  (as  amended,  the  "Note  Agreement")
relating  to  a $68,000,000 term loan from the Banks  to  FM
Properties maturing on June 30, 1997.

B.   FM Properties  has requested (i) that the maturity
date of the Loan be extended  from June 30, 1997 to February
28, 1998, (ii) that the interest rate on the Loan be reduced
from LIBOR plus 1.375% to LIBOR  plus  1.00%, (iii) that the
mandatory prepayment requirements upon the  sale  of  the FM
Properties'  assets  be  modified,  and  (iv)  that  FCX  be
released  as a guarantor of a portion of the Obligations and
that  FTX  become   the   sole   guarantor  of  all  of  the
Obligations.    The   Banks  are  willing   to   accept   FM
Properties's request on the condition that (a) FM Properties
agree to pay 50% of net  proceeds  from the sale or sales of
the FM Properties' material assets as  mandatory prepayments
of  the  Obligations,  and  (b)  that  FM  Properties  agree
otherwise on the terms and conditions set forth below.

C.   All   capitalized  terms  used  herein   and   not
otherwise defined herein shall have the meanings ascribed to
them in the Note Agreement.

ARTICLE I.

AMENDMENTS TO THE NOTE AGREEMENT

1.   Section  1.1 (Defined Terms) of the Note Agreement
is hereby amended to add or amend the following definitions:

"Company"   shall   mean  FM  Properties  Inc.,  a
Delaware corporation, which,  as  of  the  date hereof,
holds  a  99.8%  general  partnership  interest  in  FM
Properties.

"FM  Properties  Credit Agreement" shall mean that
certain Amended and Restated  Credit Agreement among FM
Properties, FTX, Chase as administrative, documentation
and FTX Collateral Agent, and certain  banks,  dated as
of December 20, 1996, relating to a $10,000,000  credit
facility to FM Properties, as such credit agreement may
be amended from time to time.

*     *     *

"FTX  Credit  Agreement"  shall  mean that certain
Second Amended and Restated Credit Agreement among FTX,
FRP, The Chase Manhattan Bank, as Administrative Agent,
Documentation  Agent,  FTX  Collateral  Agent  and  FRP
Collateral   Agent  (as  all  such  terms  are  defined
therein), and  the  Banks  party  thereto,  dated as of
November  14,  1996,  as  such credit agreement may  be
amended from time to time.

"FTX Guaranty" shall mean  the  guarantee  of  the
Obligations by FTX pursuant to that certain FTX Amended
and  Restated Guaranty Agreement by FTX in favor of the
Agent and others, dated as of December 20, 1996.

*     *     *

"Intercreditor  Agreements" shall mean (i) the FTX
Intercreditor Agreement  dated  as of June 11, 1992, as
amended and restated in its entirety as of June 1, 1993
and as further amended and restated  in its entirety as
of  December  31,  1995,  and  as  further amended  and
restated in its entirety as of December 20, 1996, among
Chase on behalf of certain banks pursuant  to  the  FTX
Credit  Agreement,  Chase  on  behalf  of certain banks
pursuant  to  the  FM Properties Credit Agreement,  the
Agent, Texas Commerce  Bank,  and  Chase  as collateral
agent, as such agreement may be further amended  and in
effect  from  time  to time; and (ii) the FM Properties
Intercreditor Agreement  dated as of December 31, 1995,
as amended and restated in  its entirety as of December
20,  1996, among FM Properties,  FTX,  the  Agent,  and
Chase  on  behalf  of  certain banks pursuant to the FM
Properties Credit Agreement  and  Chase,  as collateral
agent, as such agreement may be amended and  in  effect
from time to time.

*     *     *

"Material  Asset"  means  any  single  asset of FM
Properties  for  which,  upon  the  sale  thereof,   FM
Properties  receives  in  excess  of  $100,000  in  Net
Proceeds.

*     *     *

"Termination  Date"  shall  mean February 28,
1998, or, if applicable, any earlier date on which
the  obligation  to  pay the Notes in  full  shall
mature pursuant to this Agreement.

2.   Section 3.2 (Optional  Prepayments)  of  the  Note
Agreement  is  hereby amended to delete the following clause
in the 16th and  17th  lines  thereof:   "but  only after 15
days' prior notice to the Agent of its intention to do so."

3.   Section  3.3(b) (Interest Rate and Payment  Dates)
of the Note Agreement is hereby amended to read as follows:

(b) For the  period  from  January 3, 1996 through
December 23, 1996, each Note shall bear interest at the
rate  of  LIBOR  plus  one  and three-eighths  (1.375%)
percent per annum.  For the period  from  December  24,
1996 through the Termination Date, each Note shall bear
interest  at the rate of LIBOR plus one (1.00%) percent
per annum.  Interest shall be payable in arrears on the
last day of each Reference Period.

4.   Section  3.6  (Mandatory  Prepayments) of the Note
Agreement is hereby amended to read as follows:

3.6   Mandatory  Prepayments.   On  the  last
Business  Day of each calendar  month,  commencing
January 31,  1997,  FM  Properties shall repay the
principal  amount  outstanding   hereunder  in  an
amount  such  that the total amount  of  all  such
payments made by  FM  Properties  pursuant to this
Section  3.6  from December 20, 1996  through  the
20th day of each  such  calendar month is equal to
at least 50% of the aggregate  Net Proceeds of all
sales of Material Assets which have occurred since
December  20, 1996, rounded down  to  the  nearest
multiple of $100,000, it being understood that any
amounts not paid as a result of such rounding down
shall be carried  over into the calculation of the
next month's payment pursuant to this Section 3.6;
provided that, with  respect  to  any non-cash Net
Proceeds, such determinations shall  be made as of
the date of receipt of cash proceeds thereof.   At
the  time  of  each  payment,  FM Properties shall
deliver documentation evidencing  the  sale of the
Material  Assets  and  the calculation of the  Net
Proceeds.

5.   Sections 4.3 (Required  Collateralization  (FCX));
5.1(c); 5.2(c); and 8.3 (Covenants Incorporated by Reference
from  the  FCX Credit Agreement) of the Note Agreement,  and
all references  in  the  Note  Agreement  to  FCX,  the  FCX
Guaranty,  FI,  FI  Credit  Agreement  and  the  FCX  Credit
Agreement are hereby deleted (except to the extent that such
terms are used in Section 6.1 of the Note Agreement relating
to  conditions  to  closing  the original transaction).  The
Banks hereby release FCX from  any  further liability to the
Banks arising pursuant to the FCX Guaranty,  and  agree that
on  such  date the FCX Guaranty shall have no further  force
and effect  as  it relates to the Obligations under the Note
Agreement.
6.   Section  11.5(b) (The Agent) of the Note Agreement
is hereby amended to read as follows:

(b)  FM  Properties   agrees  to  pay  Agent,  for
Hibernia's  account, a non-refundable  agent's  fee  of
$25,000 on January  3,  1997  and $25,000 on January 3,
1998;  provided,  however,  that  the  fee  payable  on
January 3, 1998 is payable for the  entire year, and if
FM  Properties  repays  the loan in full  at  any  time
during the year, the unearned  portion of the fee shall
be returned by the Agent.

7.   All references to Chemical  Bank  or  to The Chase
Manhattan  Bank  (National Association) are hereby  replaced
with The Chase Manhattan Bank.

8.   The  Notes  are  hereby  modified  to  extend  the
maturity dates thereof  to  February  28, 1998 and to reduce
the interest rate thereof to LIBOR plus  one (1.00%) percent
per annum effective December 24, 1996.

9.   Each  and  every  other  document,  agreement   or
instrument which was executed in connection with or pursuant
to  the  Note  Agreement  is  hereby modified to reflect the
extension of the maturity of the  Notes,  this  Amendment to
the  Note  Agreement  and  the modification to the documents
contained herein.

ARTICLE II.

CONDITIONS PRECEDENT

1.   Conditions   to  Effectiveness.    The   following
constitute conditions precedent to the effectiveness of this
Amendment:

(a)  Amendment.   The  Banks  shall  have received
this  Amendment,  executed  by  a Responsible
Officer of FM Properties and FTX.

(b)  Loan  Participation  Agreement.   The   Banks
shall have executed a Third Amendment to Loan
Participation Agreement.

(c)  FM   Properties   Partnership  and  Corporate
Proceedings.  The Banks shall have received a
certificate  of the  Secretary  or  Assistant
Secretary of FTX, as managing general partner
of FM Properties,  certifying (i) either that
there   have  been  no  amendments   to   the
partnership  agreement of FM Properties since
the effective  date  of the Note Agreement on
June  30,  1995  or  that  attached  to  such
certificate  is  a  certified  copy  of  such
partnership  agreement   and  all  amendments
thereto as of the date of  such  certificate,
and (ii) the incumbency of the officer(s)  of
FTX,  as  managing general partner, executing
this  Amendment  and  all  documents  related
hereto.

(c)  FTX Guaranty.   The Banks shall have received
the  amended  and  restated   FTX   Guaranty,
executed by a Responsible Officer of FTX.

(d)  FM  Properties Intercreditor Agreement.   The
Banks  shall  have  received  the amended and
restated    FM    Properties    Intercreditor
Agreement,  executed by Responsible  Officers
of  FM  Properties   and  the  other  parties
thereto.

(e)  FTX Intercreditor Agreement.  The Banks shall
have received the amended  and  restated  FTX
Intercreditor    Agreement,    executed    by
Responsible  Officers  of  FTX  and the other
parties thereto.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES AND COVENANTS

1.   FM Properties.  FM Properties hereby certifies  to
the  Agent and the Banks that all of the representations and
warranties  of FM Properties contained in the Note Agreement
remain true and correct as of December 20, 1996, and that no
Default  under  the  Note  Agreement  has  occurred  and  is
continuing as of December 20, 1996.

2.   FTX.   FTX  hereby  certifies  (i) that all of the
representations and warranties contained in the FTX Guaranty
Agreement and in the Note Agreement remain  true and correct
as  of December 20, 1996; (ii) that FTX hereby  consents  to
the execution  of  this  Amendment;  and  (iii) that the FTX
Guaranty   Agreement  remains  in  full  force  and   effect
following the date of this Amendment.

ARTICLE IV.

MISCELLANEOUS

1.   Savings Clause.  Except as specifically amended by
this Amendment, all of the other terms and conditions of the
Note Agreement shall remain in full force and effect.

2.   Counterparts.   This  Amendment may be executed by
one or more of the parties to this  Amendment  on any number
of separate counterparts and all of said counterparts  taken
together  shall  be  deemed  to  constitute one and the same
instrument.

3.   Governing Law.  This Amendment  shall  be governed
by,  and  construed and interpreted in accordance with,  the
law of the State of Louisiana.

IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to  be duly executed and delivered by their proper
and duly authorized  officers  as  of the day and year first
above written.

FM PROPERTIES OPERATING CO.

BY:  FREEPORT-McMoRan INC.,
Managing General Partner

By: ____________________________

R. Foster Duncan
Its Treasurer

FREEPORT-McMoRan INC.

By: ____________________________

R. Foster Duncan
Its Treasurer

HIBERNIA NATIONAL BANK, as Agent
and Bank

By: _____________________________

Steve Nance
Its Banking Officer

THE CHASE MANHATTAN BANK, as Bank

By: _____________________________

Its Vice President

Exhibit 4.7

FTX/FMPO

AMENDED AND RESTATED
CREDIT AGREEMENT

Originally Dated as of July 17, 1995

Amended and Restated as of December 20, 1996

between

FM Properties Operating Co.

and

Freeport-McMoRan Inc.

TABLE OF CONTENTS
Page

ARTICLE I      DEFINITIONS
SECTION 1.01.  Definitions.................................. 4

ARTICLE II     THE CREDITS
SECTION 2.01.  Loans........................................ 8
SECTION 2.02.  Funding of Loans............................. 9
SECTION 2.03.  Notes........................................ 9
SECTION 2.04.  Interest Rates............................... 9
SECTION 2.05.  Mandatory Prepayment......................... 10
SECTION 2.06.  Computation of Interest...................... 10

ARTICLE III    COVENANTS
SECTION 3.01.  Conduct of Business.......................... 11
SECTION 3.02.  Indebtedness................................. 11
SECTION 3.03.  Restricted Payments.......................... 11
SECTION 3.04.  Sales of Assets.............................. 11
SECTION 3.05.  Transactions with Affiliates................. 11

ARTICLE IV     MISCELLANEOUS
SECTION 4.01.  Other Agreements............................. 12
SECTION 4.02.  Notices...................................... 12
SECTION 4.03.  No Waivers................................... 13
SECTION 4.04.  Amendments and Waivers....................... 13
SECTION 4.05.  Successors and Assigns....................... 13
SECTION 4.06.  Specific Performance......................... 13
SECTION 4.07.  Governing Law................................ 13
SECTION 4.08.  Counterparts; Integration.................... 14

Exhibit A --  Note

AMENDED AND RESTATED
CREDIT AGREEMENT

AMENDMENT AND RESTATEMENT dated as of December ___,
1996 (this "Restatement"), to the FTX/FMPO Credit Agreement
dated as of July 17, 1995 (the "Existing Credit Agreement";
the Existing Credit Agreement, as amended and restated by
this Restatement, being "this Agreement"), between FM
Properties Operating Co., and Freeport-McMoRan Inc.

The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01.  Definitions.  The following terms, as
used herein, have the following meanings:

"Affiliate" means (i) any Person that directly, or
indirectly through one or more intermediaries, controls the
Borrower (a "Controlling Person") or (ii) any Person (other
than the Borrower or a Subsidiary of the Borrower) that is
controlled by or is under common control with a Controlling
Person.  As used herein, the term "control" means
possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities,
by contract, or otherwise.

"Asset Disposition" means, with respect to any
Person, any sale, transfer, conveyance, lease or other
disposition (including, without limitation, by way of
merger, consolidation, or sale-leaseback) by such Person or
any of its Subsidiaries to any Person (other than (i) to
such Person or a Subsidiary of such Person, (ii) in the
ordinary course of business, or (iii) of inventory) of any
assets of such Person or any of its Subsidiaries (including
any shares of capital stock of such Person's Subsidiaries).

"Borrower" means FM Properties Operating Co., a
Delaware partnership, and its successors.

"Business Day" means any day except a Saturday,
Sunday, or other day on which commercial banks in New York
City are authorized by law to close.

"Credit Agreement" means the Credit Agreement, dated
as of June 30, 1995, among the Borrower, FTX, The Chase
Manhattan Bank, as administrative agent and as documentation
agent, and the banks party thereto, as amended and/or
restated and in effect from time to time.

"FTX" means Freeport-McMoRan Inc., a Delaware
corporation, and its successors.

"Guarantee" means, with respect to any Person, any
obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing
any Indebtedness or obligation of any other Person (the
"primary obligor") in any manner, whether directly or
indirectly, and including, without limitation, any
obligation of such Person, direct or indirect, (i) to
purchase (or advance or supply funds for the purchase of)
any security for the payment of such Indebtedness or
obligation, (ii) to purchase property, securities, or
services for the purpose of assuring the owner of such
Indebtedness or obligation of the payment of such
Indebtedness or obligation, or (iii) to maintain working
capital, equity capital, or any other financial statement
condition of the primary obligor, so as to enable the
primary obligor to pay such Indebtedness or obligation;
provided, however, that the term "Guarantee" shall not
include any endorsement for collection or deposit in the
ordinary course of business.

"Indebtedness" of any Person means, without
duplication, (a) all obligations of such Person for borrowed
money or with respect to deposits or advances of any kind
(excluding deposits or advances in respect of the purchase
price of property or services to be delivered or performed
within 180 days of receipt of such deposit or advance, but
not excluding such deposits or advances in respect of which
such property or services have in fact not been delivered or
performed within such period), (b) all obligations of such
Person evidenced by bonds, debentures, notes, or similar
instruments, (c) all obligations of such Person under
conditional sale or other title retention agreements
relating to property or assets purchased by such Person (but
in no event including operating leases), (d) all obligations
of such Person issued or assumed as the deferred (for 180
days or more) purchase price of property or services, (e)
all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not
the obligations secured thereby have been assumed, (f) all
Guarantees by such Person of Indebtedness of others, (g) all
capitalized lease obligations of such Person, (h) the
undischarged balance of any production payment, and (i) all
obligations of such Person as an account party in respect of
letters of credit and bankers' acceptances (other than
performance letters of credit or letters of credit that
back-up payment obligations in respect of trade obligations
that do not constitute Indebtedness); provided that
Indebtedness shall not include trade accounts payable, not
incurred in respect of borrowed money or deferred
compensation, that are incurred in the ordinary course of
business and are not overdue or, if overdue, are being
contested in good faith by appropriate proceedings.  The
Indebtedness of the Borrower, any Subsidiary or any Person
shall include the Indebtedness of any partnership in which
the Borrower, such Subsidiary or such Person is a general
partner, respectively.

"Intercreditor Agreement" means the Intercreditor
Agreement among FTX, The Chase Manhattan Bank, as agent for
the FM Lenders, and Hibernia National Bank, as agent for the
Pel-Tex Banks, in the form of Exhibit I to the Credit
Agreement, as amended and/or restated and in effect from
time to time.

"Lien" means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge,
or security interest in or on such asset, (b) the interest
of a vendor or a lessor under any conditional sale
agreement, capital lease, or title retention agreement
relating to such asset, (c) in the case of securities, any
purchase option, call, or similar right of a third party
with respect to such securities, and (d) other encumbrances
of any kind, including, without limitation, production
payment obligations.

"Loan" has the meaning set forth in Section 2.01.

"Net Proceeds" means, with respect to any Asset
Disposition, (i) the gross fair market value of the
consideration or other amounts payable to or receivable by
the Borrower and any of its Subsidiaries from or in respect
of such Asset Disposition, less (ii) the amount, if any, of
all taxes (but including income taxes only to the extent the
Borrower reasonably estimates that such income taxes will be
paid on the date of the next income tax filing by the
partners of the Borrower) and reasonable and customary fees,
commissions, costs, and other expenses that are incurred in
connection with such Asset Disposition and are payable by
the Borrower or the Subsidiary of the Borrower affected by
such Asset Disposition, but only to the extent not already
deducted in arriving at the amount referred to in clause
(i).

"Note" means a promissory note of the Borrower,
substantially in the form of Exhibit A hereto, evidencing
the obligation of the Borrower to repay the Loans.

"Partnership Agreement" means the Amended and
Restated Agreement of General Partnership dated as of
June 11, 1992 among the Company, FTX and FMPO Sub Inc., as
amended and/or restated and in effect from time to time.

"Prime Rate" means the rate of interest per annum
announced by the Administrative Agent from time to time as
its prime rate in effect at its principal office in the City
of New York.

"Restricted Payment" means (i) any distributions to
any holder of partnership interests of the Borrower, (ii)
any payment on account of the purchase, redemption, or
acquisition of (A) any partnership interests of the Borrower
or shares of capital stock of the Company or (B) any option,
warrant, or other right to acquire partnership interests of
the Borrower or shares of capital stock of the Company,
(iii) any prepayment, redemption, repurchase, or other
acquisition or retirement for value prior to scheduled
maturity of (A) any Indebtedness of the Borrower ranked pari
passu or subordinate in right of payment to the Loans and
having a maturity date subsequent to the maturity of the
Loans or (B) any Indebtedness of the Company (which shall
not include any Indebtedness of the Borrower or any
Subsidiary of the Borrower) or (iv) any investment in, loan,
advance to, Guarantee on behalf of, directly or indirectly,
or other transfer of assets to (A) any Affiliate of the
Borrower or (B) any holder of 5% or more of any class of
capital stock of the Company (including any Affiliates
thereof).

"Senior Lenders" means, collectively, the Pel-Tex
Lenders, the Agents, and the Banks.

"Subordination Terms" means the form of
subordination terms set forth in Exhibit E to the Credit
Agreement, as amended and/or restated and in effect from
time to time.

"Subsidiary" means, with respect to any Person, any
corporation at least a majority of whose securities having
ordinary voting power for the election of directors (other
than securities having such power only by reason of the
happening of a contingency) are at the time owned by such
Person and/or one or more other Subsidiaries of such Person
and any partnership (other than joint ventures for which the
intention under the applicable agreements, including
operating agreements, if any, is that such joint ventures be
partnerships solely for purposes of the Code) in which such
Person or a Subsidiary of such Person is a general partner.

"Termination Date" means the earliest of (i)
February 28, 1998, (ii) the date of a Change in Control and
(iii) the date of any acceleration of the maturity or
repayment in full of the Senior Obligations, or, if any such
day is not a Business Day, the next succeeding Business Day.

Capitalized terms used but not defined herein shall
have the respective meanings set forth in the Credit
Agreement, the Intercreditor Agreement, or the Subordination
Terms.

ARTICLE II

THE CREDITS

SECTION 2.01.  Loans.  FTX agrees, on the terms and
conditions set forth in this Agreement, to make loans
("Loans") to the Borrower from time to time prior to the
Termination Date in such amounts, with such stated
maturities, or payable on demand, and with such interest
periods if, as, and when FTX determines in its sole
discretion, subject to the provisions of the Credit
Agreement.  These Loans (except the FTX Loan) are
subordinated to the Senior Debt in accordance with the
Subordination Terms, which are incorporated by reference
herein.  The Borrower agrees, on the terms and conditions
set forth in this Agreement, to borrow such Loans from FTX
if, as, and when FTX so determines, but shall have no right
to require FTX to make any such Loans.  The principal amount
of each Loan shall be due and payable as determined by FTX
at the time the Loan is made, and may be prepaid at any
time, subject in each case to the Credit Agreement and,
except as to the FTX Loan, the Subordination Terms.  The FTX
Loan ranks on a pari passu basis in right of payment with
all other Indebtedness of the Borrower, including the Senior
Debt.

SECTION 2.02.  Funding of Loans.  On the date of
each Loan, FTX shall make available such Loan, in federal or
other funds immediately available, to the Borrower at its
address specified pursuant to Section 4.02.

SECTION 2.03.  Notes.  (a)  The Loans shall be
evidenced by a single Note payable to the order of FTX in an
amount equal to the aggregate unpaid principal amount of
such Loans.  The Note shall be substantially in the form of
Exhibit A hereto and shall attach the Subordination Terms
(which Subordination Terms shall not, however, be applicable
to the FTX Loan).

(b)  FTX shall record the date, amount and maturity
of each Loan made by it and the date and amount of each
payment of principal made by the Borrower with respect
thereto, provided that the failure of FTX to make any such
recordation shall not affect the obligations of the Borrower
hereunder or under the Note.  FTX is hereby irrevocably
authorized by the Borrower to attach to and make a part of
its Note a continuation of any such schedule as and when
required.

SECTION 2.04.  Interest Rates.  Each Loan with a
stated maturity shall bear interest on the outstanding
principal amount thereof for each day from the date such
Loan is made until its stated maturity, at a rate per annum
to be agreed upon between FTX and the Borrower at the time
of the making of such Loan, payable, subject to the Credit
Agreement and, except as to the FTX Loan, the Subordination
Terms, quarterly in arrears on the 5th day of each March,
June, September, and December of each year (or at maturity
of such Loan, if earlier).  Each Loan payable on demand
shall bear interest, payable on demand, subject to the
Credit Agreement, and, except as to the FTX Loan,  the
Subordination Terms, on the outstanding principal amount
thereof for each day from the date such Loan is made until
paid in full at a rate per annum to be agreed upon between
FTX and the Borrower at the time of the making of such Loan,
compounded quarterly on the 5th day of each March, June,
September, and December of each year.  Any overdue principal
of or interest on any Loan (including any principal not paid
at its stated maturity or on demand and any interest not
timely paid, whether due to any provision of the Credit
Agreement, or the Subordination Terms, or otherwise) shall
bear interest, payable, subject to the Credit Agreement and,
except as to the FTX Loan,  the Subordination Terms, on
demand for each day until paid at 2% over the rate per annum
agreed upon between FTX and the Borrower as applicable to
such Loan at the time of the making of such Loan, compounded
quarterly on the 5th day of each March, June, September, and
December of each year.

SECTION 2.05.  Mandatory Prepayment.  On the
Termination Date, any Loans outstanding (together with
accrued interest thereon) shall be due and payable, subject
to the Credit Agreement and, except as to the FTX Loan, the
Subordination Terms.

SECTION 2.06.  Computation of Interest.  Interest
based on the Prime Rate shall be computed on the basis of a
year of 365 days (or 366 days in a leap year) and paid for
the actual number of days elapsed (including the first day
but excluding the last day).  All other interest shall be
computed as agreed upon by FTX and the Borrower at the time
of the making of each Loan.

ARTICLE III

COVENANTS

Subject to the last paragraph of this Article, the
Borrower agrees that, upon and after a Change in Control,
then, until all Loans and all other amounts payable
hereunder have been paid in full, unless FTX otherwise
agrees:

SECTION 3.01.  Conduct of Business.  The Borrower
will continue, and will cause each of its Subsidiaries to
continue, to engage in business of the same general type as
conducted by the Borrower and its Subsidiaries on such date,
and will preserve, renew, and keep in full force and effect,
and will cause each of its Subsidiaries to preserve, renew,
and keep in full force and effect their respective
partnership or corporate existence and their respective
rights, privileges, and franchises necessary or desirable in
its normal conduct of business as so conducted.  The
Borrower will not enter into any transactions out of the
normal course of its business, except as expressly permitted
by Sections 3.02 and 3.04.

SECTION 3.02.  Indebtedness.  The Borrower will not,
and shall not permit any of its Subsidiaries to, incur any
Indebtedness, except for (i) any Indebtedness the proceeds
of which are immediately applied to the payment of any
Senior Debt or any Loans; and (ii) any Loans; provided that
in the event that FTX shall fail to make any payment
required under its guarantees of the Senior Debt within five
Business Days after demand therefor, then the foregoing
covenants of this Section 3.02 shall not apply and the
Borrower or any of its Subsidiaries may incur any
Indebtedness that is non-recourse to FTX on such
non-recourse terms that are satisfactory to FTX, acting
reasonably (such non-recourse terms to be deemed
satisfactory if FTX shall not have informed the Borrower
within five Business Days of actual receipt thereof whether
such terms are satisfactory).

SECTION 3.03.  Restricted Payments.  Neither the
Borrower nor any of its Subsidiaries will declare or make
any Restricted Payment.

SECTION 3.04.  Sales of Assets.  The Borrower will
not make, and will not permit any of its Subsidiaries to
make, any Asset Disposition unless the Net Proceeds of such
Asset Disposition are applied to the payment of Senior Debt
or Loans immediately upon receipt thereof.

SECTION 3.05.  Transactions with Affiliates.  The
Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, pay any funds to or
for the account of, make any investment (whether by
acquisition of stock or indebtedness, by loan, advance,
transfer of property, Guarantee, or other agreement to pay,
purchase, or service, directly or indirectly, any
Indebtedness, or otherwise) in, lease, sell, transfer, or
otherwise dispose of any assets, tangible or intangible, to,
or participate in, or effect any transaction in connection
with any joint enterprise or other joint arrangement, or
engage in any other transaction with, any Affiliate.

Notwithstanding anything in this Agreement to the
contrary, so long as any Bank shall have any Commitment
under the Credit Agreement or any Senior Debt is
outstanding, nothing contained in this Agreement, including
Sections 3.01, 3.02, 3.03, 3.04, and 3.05, shall prohibit,
interfere with, or be deemed breached by any exercise of
rights or remedies by, or collection efforts of, the Senior
Lenders or any action taken by the Borrower with the
agreement of the Senior Lenders in connection therewith.

ARTICLE IV

MISCELLANEOUS

SECTION 4.01.  Other Agreements.  The parties
acknowledge and agree that this Agreement is subject to the
terms of the Credit Agreement, the Subordination Terms
(except that the Subordination Terms do not apply to the FTX
Loan), and the Intercreditor Agreement.

SECTION 4.02.  Notices.  All notices, requests, and
other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission,
or similar writing) and shall be given to such party at its
address, telecopier number, or telex number set forth on the
signature pages hereof.  Each such notice, request, or other
communication shall be effective, (i) if given by telex,
when such telex is transmitted to the telex number specified
in this Section and the appropriate answerback is received
or, (ii) if given by any other means, when delivered at the
address or received at the telecopier number specified in
this Section.

SECTION 4.03.  No Waivers.  No failure or delay by
the parties in exercising any right, power, or privilege
hereunder or under the Note shall operate as a waiver
thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege.  The
rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.

SECTION 4.04.  Amendments and Waivers.  Subject to
the Credit Agreement, any provision of this Agreement or the
Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the
Borrower and FTX and with the consent of the Required Banks
and the Pel-Tex Lenders.

SECTION 4.05.  Successors and Assigns.  The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors.  The parties may not assign or otherwise
transfer any of their rights under this Agreement.

SECTION 4.06.  Specific Performance.  The parties
hereto agree that FTX would be irreparably damaged if for
any reason the Borrower failed to perform its obligations
under Sections 3.01, 3.02, 3.03, 3.04, and 3.05 of this
Agreement and that FTX would not have an adequate remedy at
law for money damages in such event.  Accordingly, FTX shall
be entitled to specific performance and injunctive and other
equitable relief to enforce the performance of such
provisions of this Agreement by the Borrower.  This
provision is without prejudice to any other rights that FTX
may have against the Borrower for any failure to perform its
obligations under this Agreement.  Notwithstanding the
foregoing, the parties agree that FTX shall not be entitled
to and may not exercise any specific performance,
injunctive, or other equitable relief that would prohibit or
interfere with any exercise of rights or remedies by, or
collection efforts of, the Senior Lenders or any action
taken by the Borrower with the agreement of the Senior
Lenders in connection therewith.

SECTION 4.07.  Governing Law.  This Agreement and
each Note shall be governed by and construed in accordance
with the laws of the State of New York.

SECTION 4.08.  Counterparts; Integration.  This
Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same
instrument.  This Agreement constitutes the entire agreement
and understanding among the parties hereto and supersedes
any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof. There being
no Loans outstanding under the Credit and Guarantee
Agreement dated as of June 11, 1992 among the Borrower, FM
Properties Inc., and Freeport-McMoRan Inc., such agreement
is hereby terminated.

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.

FM PROPERTIES OPERATING CO.,

by FREEPORT-McMoRan INC.,
its Managing General Partner

By: ____________________________
Name:  R. Foster Duncan
Title: Treasurer

1615 Poydras Street
New Orleans, Louisiana  70112
Attention:  R. Foster Duncan
Treasurer

Telex:  8109515386
Telephone:  504-582-4628
Telecopy:   504-582-4511

FREEPORT-McMoRan INC.

By: ____________________________
Name:  R. Foster Duncan
Title: Treasurer

1615 Poydras Street
New Orleans, Louisiana  70112
Attention:  R. Foster Duncan
Treasurer

Telex:  8109515386
Telephone:  504-582-4628
Telecopy:   504-582-4511

EXHIBIT A

NOTE

New York, New York
July 17, 1995

For value received, FM Properties Operating Co., a
Delaware partnership (the "Partnership"), promises to pay to
the order of Freeport-McMoRan Inc. ("FTX") the unpaid
principal amount of each Loan made by FTX to the Borrower
pursuant to the FTX/FMPO Credit Agreement referred to below
on the dates provided for in the FTX/FMPO Credit Agreement.
The Partnership promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the
rate or rates provided for in the FTX/FMPO Credit Agreement,
subject to the FM Credit Agreement and, unless the Loan is
the FTX Loan, the Subordination Terms attached hereto.  All
such payments of principal and interest shall be made in
lawful money of the United States in Federal or other
immediately available funds at the office of FTX.

All Loans made by FTX, the respective maturities
thereof, and all repayments of the principal thereof shall
be recorded by FTX on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part
hereof; provided that the failure of FTX to make any such
recordation shall not affect the obligations of the Borrower
and FM Properties Inc. hereunder or under the FTX/FMPO
Credit Agreement.

This note is the Note referred to in the FTX/FMPO
Credit Agreement dated as of July 17, 1995, between the
Partnership and FTX (as amended and/or restated and in
effect from time to time, the "FTX/FMPO Credit Agreement").
This Note is secured by the Deed of Trust, Security
Agreement and Financing Statement, dated June 11, 1992, as
modified by the First Modification and Ratification of Deed
of Trust, Assignment, Security Agreement and Financing
Statement, dated July 17, 1995, and as further amended,
modified and/or restated and in effect from time to time.

Terms defined in the FTX/FMPO Credit Agreement are used
herein with the same meanings.  Reference is made to the
FTX/FMPO Credit Agreement for provisions for the prepayment
hereof.

FM PROPERTIES OPERATING CO.,

by FREEPORT-McMoRan INC.,
its Managing General Partner

By:____________________________
Name:  R. Foster Duncan
Title: Treasurer

ACKNOWLEDGED AND AGREED

FREEPORT-McMoRan INC.

By:  _____________________
Name:   R. Foster Duncan
Title:  Treasurer

LOANS AND PAYMENTS OF PRINCIPAL

_________________________________________________________________

Interest Amount
Amount  Rate     of       Maturity Notation
Date   of      (basis)  Principal Date   Made By
Loan             Repaid
_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

Exhibit 4.8

AMENDED AND RESTATED
CREDIT AGREEMENT

DATED AS OF DECEMBER 20, 1996

BY AND BETWEEN

CIRCLE C LAND CORP.

as the Borrower

AND

TEXAS COMMERCE BANK NATIONAL ASSOCIATION

as the Bank

TABLE OF CONTENTS

1.    CERTAIN DEFINITIONS.......................................2

2.    THE LOANS................................................ 12
2.1.  Term Loan.......................................... 12
2.2.  Revolving Credit Loans............................. 13

3.    LETTERS OF CREDIT........................................ 15
3.1.  Obligation to Issue................................ 15
3.2.  Conditions......................................... 15
3.3.  Issuance of Facility Letters of Credit............. 16
3.4.  Reimbursement Obligations; Duties of the Bank...... 16
3.5.  Payment of Reimbursement Obligations............... 17
3.6.  Exoneration........................................ 17
3.7.  Compensation for Facility Letters of Credit........ 18

4.    INTEREST RATE PROVISIONS................................. 19
4.1.  Interest Rate Determination........................ 19
4.2.  Additional Interest Rate Provisions................ 20

5.    PREPAYMENTS AND OTHER PAYMENTS........................... 22
5.1.  Required Prepayments............................... 22
5.2.  Optional Prepayments............................... 22
5.3.  Prepayment of Eurodollar Rate Loans................ 22
5.4.  Place of Payment or Prepayment..................... 23
5.5.  No Prepayment Premium or Penalty................... 23
5.6.  No Reborrowing..................................... 23
5.7.  Taxes.............................................. 23
5.8.  Reduction  or  Termination of the Revolving Loan
Commitment..................................................... 23

6.    COMMITMENT FEE AND OTHER FEES............................ 23
6.1.  Facility Fee....................................... 23
6.2.  Commitment Fee..................................... 23
6.3.  Facility Letter of Credit Fee...................... 24
6.4.  Fees Not Interest; Nonpayment...................... 24

7.    APPLICATION OF PROCEEDS.................................. 24

8.    REPRESENTATIONS AND WARRANTIES........................... 24
8.1.  Organization and Qualification..................... 24
8.2.  Financial Statements............................... 24
8.3.  Litigation......................................... 25
8.4.  Default............................................ 25
8.5.  Title to Assets.................................... 25
8.6.  Payment of Taxes................................... 25
8.7.  Conflicting or Adverse Agreements    or
Restrictions....................................... 25
8.8.  Authorization, Validity, Etc....................... 25
8.9.  Investment Company Act Not Applicable.............. 25
8.10. Public   Utility   Holding   Company   Act   Not
Applicable......................................... 25
8.11. Regulations G, T, U and X.......................... 26
8.12. ERISA.............................................. 26
8.13. No Financing of Corporate Takeovers................ 26
8.14. Franchises, Co-licenses, Etc....................... 26
8.15. Line of Business................................... 26
8.16. Environmental Matters.............................. 26

9.    CONDITIONS............................................... 27
9.1.  Representations True and No Defaults............... 27
9.2.  Discharge of Debt.................................. 27
9.3.  Governmental Approvals............................. 27
9.4.  Compliance With Law................................ 27
9.5.  Officer's Certificate and Other Documents.......... 27
9.6.  Conversion/Continuation Documents.................. 27
9.7.  Required Documents and Certificates................ 27

10.   AFFIRMATIVE COVENANTS.................................... 28
10.1. Financial Statements and Information............... 28
10.2. Lease Schedule..................................... 29
10.3. Books and Records.................................. 29
10.4. Insurance.......................................... 29
10.5. Maintenance of Property............................ 29
10.6. Inspection of Property and Records................. 29
10.7. Existence, Laws, Obligations....................... 29
10.8. Notice of Certain Matters.......................... 29
10.9. ERISA.............................................. 30
10.10. Compliance with Environmental Laws................ 30
10.11. Settlement Statements............................. 31
10.12. Payment Calculations.............................. 31

11.   NEGATIVE COVENANTS....................................... 31
11.1. Mortgages, Etc..................................... 31
11.2. Debt............................................... 32
11.3. Loans, Advances and Investments.................... 33
11.4. Merger, Consolidation, Etc......................... 33
11.5. Supply and Purchase Contracts...................... 33
11.6. Discount or Sale of Receivables.................... 34
11.7. Change in Accounting Method........................ 34
11.8. Sale of Inventory.................................. 34
11.9. Securities Credit Regulations...................... 34
11.10. Leases............................................ 34
11.11. Nature of Business; Management.................... 34
11.12. Transactions with Related Parties................. 34
11.13. Contingent Liabilities............................ 34
11.14. Hazardous Materials............................... 34
11.15. Subordinated Debt................................. 35
11.16. Phoenix Purchase Agreement........................ 35

12.   EVENTS OF DEFAULT; REMEDIES.............................. 35
12.1. Failure to Pay Principal........................... 35
12.2. Failure to Pay Interest............................ 35
12.3. Failure to Pay Commitment Fee or Other Amounts..... 36
12.4. Failure to Pay Other Debt.......................... 36
12.5. Misrepresentation or Breach of Warranty............ 36
12.6. Violation of Negative Covenants.................... 36
12.7. Violation of Other Covenants, Etc.................. 36
12.8. Bankruptcy and Other Matters....................... 36
12.9. Dissolution........................................ 37
12.10. Undischarged Judgment............................. 37
12.11. Security Documents................................ 37
12.12. Failure to Maintain Guaranty...................... 37
12.13. Environmental Matters............................. 37
12.14. Other Remedies.................................... 37
12.15. Remedies Cumulative............................... 38

13.   MISCELLANEOUS............................................ 38
13.1. Representation by the Bank......................... 38
13.2. Amendments, Waivers, Etc........................... 38
13.3. [intentionally omitted]............................ 38
13.4. Reimbursement of Expenses.......................... 38
13.5. Lien on Real and Personal Property................. 39
13.6. Notices............................................ 39
13.7. Governing Law...................................... 40
13.8. Survival  of  Representations,   Warranties  and
Covenants.......................................... 40
13.9. Counterparts....................................... 40
13.10. Separability...................................... 40
13.11. Descriptive Headings.............................. 41
13.12. Accounting Terms.................................. 41
13.13. Limitation of Liability........................... 41
13.14. Set-off........................................... 41
13.15. Sale or Assignment................................ 41
13.16. Interest.......................................... 41
13.17. Indemnification................................... 42
13.18. Payments Set Aside................................ 43
13.19. Loan Agreement Controls........................... 43
13.20. HLT Classification................................ 43
13.21. Capital Requirements and Yield Maintenance........ 43
13.22. FINAL AGREEMENT................................... 44

SCHEDULE 3.3      STANDBY LETTERS OF CREDIT

EXHIBIT "A"       TERM NOTE
EXHIBIT "B"       REVOLVING NOTE
EXHIBIT "C"       NOTICE OF BORROWING
EXHIBIT "D"       NOTICE OF RATE CONVERSION/CONTINUATION
EXHIBIT "E"       AMENDED AND RESTATED GUARANTY AGREEMENT
EXHIBIT "F"       FTX GUARANTY

AMENDED AND RESTATED
CREDIT AGREEMENT

THIS  AMENDED  AND RESTATED CREDIT AGREEMENT  (the
"Credit Agreement" or "this  Agreement") by and between CIRCLE
C LAND CORP., a corporation organized  under the laws of Texas
(hereinafter called the "Borrower"), and  TEXAS  COMMERCE BANK
NATIONAL   ASSOCIATION,   a   national   banking   association
(hereinafter called the "Bank"):

W IT N E S S E T H:

WHEREAS,  the  Borrower and the Bank entered  into
that certain Credit Agreement,  dated  as  of February 6, 1992
(the "Initial Agreement"); and

WHEREAS, the Initial Agreement was amended by that
certain  First  Amendment  to  Credit Agreement  dated  to  be
effective as of June 11, 1992, executed  by  the  Borrower and
the Bank (the "First Amendment"); and

WHEREAS, the Initial Agreement was amended by that
certain  Second  Amendment  to  Credit Agreement dated  to  be
effective as of November 16, 1992,  executed  by  Borrower and
the Bank (the "Second Amendment"); and

WHEREAS, the Initial Agreement was amended by that
certain  Third  Amendment  to  Credit  Agreement  dated to  be
effective as of May 5, 1993, executed by the Borrower  and the
Bank (the "Third Amendment"); and

WHEREAS, the Initial Agreement was amended by that
certain  Fourth  Amendment  to  Credit Agreement and Revolving
Note dated to be effective as of  September  1, 1993, executed
by the Borrower and the Bank (the "Fourth Amendment"); and

WHEREAS, the Initial Agreement was amended by that
certain  Fifth  Amendment  to  Credit  Agreement dated  to  be
effective as of February 2, 1994, executed by the Borrower and
the Bank (the "Fifth Amendment"); and

WHEREAS, the Initial Agreement was amended by that
certain  Sixth  Amendment  to  Credit Agreement  dated  to  be
effective as of July 17, 1995, executed  by  the  Borrower and
the Bank (the "Sixth Amendment"); and

WHEREAS, the Initial Agreement was amended by that
certain  Seventh  Amendment  to Credit Agreement dated  to  be
effective as of December 12, 1996,  executed  by  the Borrower
and the Bank (the "Seventh Amendment") (the Initial  Agreement
as  amended  by  the  First Amendment, Second Amendment, Third
Amendment, Fourth Amendment,  Fifth Amendment, Sixth Amendment
and Seventh Amendment, the "Amended Agreement"); and

WHEREAS,   the   Borrower    desires    additional
modifications to the Amended Agreement; and

WHEREAS,  the  Borrower  has  requested  that  the
Amended Agreement be amended and restated as provided  herein;
and

WHEREAS,  the Bank has agreed to amend and restate
the Amended Agreement as provided herein;

NOW, THEREFORE,  for  and  in consideration of Ten
and  No/100  Dollars  ($10.00)  and  other good  and  valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged by the Borrower, the Borrower and the Bank hereby
amend and restate the Amended Agreement and agree as follows:

1.    CERTAIN DEFINITIONS.  Capitalized terms used
in this Agreement and not otherwise defined  herein shall have
the meanings given to them as follows:

"Additional Costs" shall mean, with respect to any
Rate  Period  in  the  case of any Eurodollar Rate  Loan,  all
costs, losses or payments,  as  determined  by the Bank in its
sole  and  absolute discretion (which determination  shall  be
conclusive in the absence of manifest error), that the Bank or
its Domestic  Lending  Office or its Eurodollar Lending Office
does,  or would, if such  Eurodollar  Rate  Loan  were  funded
during such  Rate Period by the Domestic Lending Office or the
Eurodollar Lending  Office  of the Bank, incur, suffer or make
by reason of:

(a)   any  and  all   present   or   future  taxes
(including, without limitation, any interest equalization  tax
or  any similar tax on the acquisition of debt obligations, or
any stamp  or  registration  tax or duty or official or sealed
papers tax), levies, imposts or any other charge of any nature
whatsoever imposed by any taxing  authority  on or with regard
to  any  aspect  of  the  transactions  contemplated  by  this
Agreement, except such taxes as may be measured by the overall
net income of the Bank or its Domestic Lending  Office  or its
Eurodollar Lending Office and imposed by the jurisdiction,  or
any  political  subdivision  or  taxing  authority thereof, in
which  the  Bank's Domestic Lending Office or  its  Eurodollar
Lending Office is located; and

(b)   any  increase  in  the  cost  to the Bank of
agreeing  to  make  or  making,  funding  or  maintaining  any
Eurodollar  Rate  Loan  because  of  or  arising from  (i) the
introduction of, or any change (other than  any  change by way
of imposition or increase of reserve requirements, in the case
of  any Eurodollar Rate Loan, included in the Eurodollar  Rate
Reserve   Percentage)   in   or   in   the  interpretation  or
administration   of,  any  law  or  regulation   or   (ii) the
compliance with any  request  from  any  central bank or other
governmental  authority (whether or not having  the  force  of
law).

"Adjusted Excess Cash Flow" means Excess Cash Flow
calculated for  each Quarter-Annual Period, minus any interest
payments,   payments    of   regularly   scheduled   principal
installments and payments  required under Subsection 5.1(d) of
the Credit Agreement.

"Affiliate" shall  mean  any  Person  controlling,
controlled  by or under common control with any other  Person.
For  purposes   of   this   definition,  "control"  (including
"controlled by" and "under common  control  with")  means  the
possession,  directly or indirectly, of the power to direct or
cause the direction  of  the  management  and policies of such
Person, whether through the ownership of voting  securities or
otherwise.   If  any Person shall own, directly or indirectly,
beneficially and of record twenty percent (20%) or more of the
equity  (whether  outstanding   capital   stock,   partnership
interests  or otherwise) of another Person, such Person  shall
be deemed to be an Affiliate.

"Agreement"  shall  mean this Credit Agreement, as
the same may be amended, modified or supplemented from time to
time.

"Applicable Lending Office"  shall mean the Bank's
(a) Domestic Lending Office in the case of  a  Base  Rate Loan
and  (b) Eurodollar Lending Office in the case of a Eurodollar
Rate Loan.

"Base  Rate"  shall  mean, for any day, a rate per
annum (rounded upward to the nearest  1/16 of 1%) equal to the
greater of (a) the Prime Rate (computed  on  the  basis of the
actual number of days elapsed over a year of 365 or  366 days,
as  the case may be) and (b) the Federal Funds Rate in  effect
for such  day plus one-half of one percent (1/2%).  For purposes
of this Agreement, any change in the Base Rate due to a change
in the Federal  Funds Rate shall be effective on the effective
date of such change  in  the  Federal  Funds Rate.  If for any
reason  the  Bank  shall have determined (which  determination
shall be conclusive  and  binding, absent manifest error) that
it  is unable to ascertain the  Federal  Funds  Rate  for  any
reason,   including,  without  limitation,  the  inability  or
failure of  the Bank to obtain sufficient bids or publications
in accordance  with  the terms thereof, the Base Rate shall be
the Prime Rate until the  circumstances  giving  rise  to such
inability no longer exist.

"Base  Rate  Loan" shall mean any Loan which bears
interest at the Base Rate.

"Bill  of Sale"  shall  mean  the  Bill  of  Sale,
Assignment  and Assumption  Agreement,  dated  June 11,  1992,
executed by FREEPORT-McMoRan INC., a Delaware corporation, and
FM Properties.

"Borrowing  Date" shall mean a date upon which the
Borrower has requested a  Loan  is  to  be made in a Notice of
Borrowing delivered pursuant to Section .

"Borrower's Cash Reserve" shall  mean  on the last
day  of  each  Quarter-Annual  Period  during the term of  the
Loans, the amount in cash necessary to bring  the  total  cash
reserves held by Borrower to equal the amount of $300,000.

"Budget"   shall  mean  the  budget  described  in
Section .

"Business Day"  shall  mean a day when the Bank is
open for business, provided that, if  the  applicable Business
Day relates to any Eurodollar Rate Loan, it  shall  mean a day
when  the  Bank  is  open for business and banks are open  for
business in the Eurodollar  interbank  market  selected by the
Bank in determining the Eurodollar Rate and in New York City.

"Circle C Tract" shall mean the real  property and
the personal property relating to it as described in Section .

"Closing Date" shall mean February 6, 1992.

"Code"  shall  mean the Internal Revenue  Code  of
1986, as amended, as now or hereafter in effect, together with
all  regulations,  rulings  and   interpretations  thereof  or
thereunder issued by the Internal Revenue Service.

"Commitment"  shall  mean   the   Revolving   Loan
Commitment, the Term Loan Commitment, and the Letter of Credit
Commitment.

"Conversion/Continuation   Date"  shall  have  the
meaning set forth in Section (a)(ii).

"Current  Debt"  shall  mean  any  obligation  for
borrowed  money  (and  any  notes payable and drafts  accepted
representing extensions of credit  whether or not representing
obligations for borrowed money) payable  on demand or within a
period  of  one  year  from the date of the creation  thereof;
provided that (i) any obligation,  except  Debt represented by
the Notes, shall be treated as Funded Debt,  regardless of its
term, if such obligation is renewable, pursuant  to  the terms
thereof  or of a revolving credit or similar agreement,  to  a
date more than one year after the date of the creation of such
obligation and (ii) all Debt represented by the Notes shall be
treated as Current Debt.

"Debt"  shall mean Funded Debt or Current Debt, as
the  case  may  be,  including   the  Borrower's  indebtedness
represented by the Notes.

"Debtor   Laws"   shall   mean    all   applicable
liquidation,    conservatorship,    bankruptcy,    moratorium,
arrangement,  receivership,  insolvency,  reorganization,   or
similar  laws,  or  general  equitable principles from time to
time in effect affecting the rights of creditors generally.

"Default" shall mean  any  of the events specified
in  Section ,  whether  or  not there has been  satisfied  any
requirement in connection with  such  event  for the giving of
notice, or the lapse of time, or the happening  of any further
condition, event or act.

"Dollars"  and  "$" shall mean lawful currency  of
the United States of America.

"Domestic Lending  Office"  shall  mean the Bank's
office  located  at 717 Travis, Houston, Texas 77002  or  such
other office of the  Bank  as  the  Bank may from time to time
specify to the Borrower.

"Environmental    Law"    shall    mean    (a) the
Comprehensive   Environmental   Response,   Compensation   and
Liability Act of 1980 (as amended by the Superfund  Amendments
and Reauthorization Act of 1986, 42 U.S.C.A.  9601 et  seq.),
as  amended  from  time  to  time,  and  any and all rules and
regulations  issued  or  promulgated  thereunder   ("CERCLA");
(b) the Resource Conservation and Recovery Act (as amended  by
the  Hazardous  and Solid Waste Amendment of 1984, 42 U.S.C.A.
6901 et seq.), as amended from time to time, and any and all
rules  and  regulations   issued   or  promulgated  thereunder
("RCRA"); (c) the Clean Air Act, 42 U.S.C.A.   7401  et seq.,
as  amended  from  time  to  time,  and  any and all rules and
regulations  issued or promulgated thereunder;  (d) the  Clean
Water Act of 1977, 33 U.S.C.A.  1251 et seq., as amended from
time to time,  and any and all rules and regulations issued or
promulgated thereunder;  (e) the Toxic Substances Control Act,
15 U.S.C.A.  2601 et seq.,  as amended from time to time, and
any  and  all  rules  and regulations  issued  or  promulgated
thereunder; or (f) any  other  federal  or state law, statute,
rule, or emulation enacted in connection  with  or relating to
the  protection  or  regulation of the environment (including,
without  limitation,  those   laws,   statutes,   rules,   and
regulations  regulating  the  disposal,  removal,  production,
storing,  refining,  handling,  transferring,  processing,  or
transporting  of  Hazardous  Materials)  and  any  rules   and
regulations  issued  or  promulgated in connection with any of
the   foregoing   by   any   governmental    authority,    and
"Environmental Laws" shall mean each of the foregoing.

"ERISA"  shall mean the Employee Retirement Income
Security Act of 1974,  as  amended  from time to time, and all
rules, regulations, rulings and interpretations thereof issued
by  the Internal Revenue Service or the  Department  of  Labor
thereunder.

"Eurocurrency  Liabilities" shall have the meaning
assigned  to  that  term  in Regulation  D  of  the  Board  of
Governors of the Federal Reserve  System,  as  in  effect from
time to time.

"Eurodollar Lending Office" shall mean the  Bank's
office  located  at  717  Travis, Houston, Texas 77002 or such
other office of the Bank as  the  Bank  may  from time to time
specify to the Borrower.

"Eurodollar Rate" shall mean with  respect  to the
applicable  Rate  Period  in  effect  for each Eurodollar Rate
Loan,  the  sum  of (a) 1 percent (1%) plus  (b) the  quotient
obtained  by  dividing   (i) the   annual   rate  of  interest
determined by the Bank, at or before 10:00 a.m. (Houston time)
(or as soon thereafter as practicable), on the second Business
Day  prior  to the first day of such Rate Period,  to  be  the
annual rate of  interest  at  which  deposits  of  Dollars are
offered  to  the  Bank  by  prime banks in whatever Eurodollar
interbank market may be selected  by  the  Bank  in  its  sole
discretion, acting in good faith, at the time of determination
and  in  accordance  with  the  then existing practice in such
market for delivery on the first  day  of  such Rate Period in
immediately  available  funds and having a maturity  equal  to
such Rate Period in an amount equal (or as nearly equal as may
be) to the unpaid principal  amount  of  such  Eurodollar Rate
Loan  by (ii) a percentage equal to 100% minus the  Eurodollar
Rate  Reserve   Percentage   for   such   Rate  Period.   Each
determination  of  the  Eurodollar Rate made by  the  Bank  in
accordance with this paragraph  shall  be conclusive except in
the case of manifest error.

"Eurodollar Rate Loan" shall  mean  any Loan which
bears interest at the Eurodollar Rate.

"Eurodollar Rate Reserve Percentage"  of  the Bank
for  any  Rate Period for any Eurodollar Rate Loan shall  mean
the reserve  percentage applicable during such Rate Period (or
if more than one  such  percentage shall be so applicable, the
daily average of such percentages  for those days in such Rate
Period  during  which  any  such  percentage   shall   be   so
applicable)  under regulations issued from time to time by the
Board of Governors  of  the  Federal  Reserve  System  (or any
successor)  for  determining  the  maximum reserve requirement
(including, without limitation, any  emergency,  supplemental,
or other marginal reserve requirement) for member banks of the
Federal  Reserve System with deposits exceeding $1,000,000,000
with  respect  to  liabilities  or  assets  consisting  of  or
including Eurocurrency Liabilities having a term equal to such
Rate Period.

"Event  of  Default"  shall mean any of the events
specified in Section , provided that  there has been satisfied
any applicable requirement in connection  with  such event for
the  giving of notice, or the lapse of time, or the  happening
of any further condition, event or act.

"Excess  Cash Flow" shall mean, for any Period, an
amount equal to Gross Cash Receipts for such period, (i) minus
Operating  Expenses  for   such  Period  other  than  interest
payments  made on the secured  Debt  described  in  Subsection
11.2(f) of  the  Credit Agreement, (ii) plus (or minus) to the
extent not otherwise included in Gross Cash Receipts, the cash
effect  of  extraordinary   gains   (or  the  cash  effect  of
extraordinary  losses)  during such period,  (iii)  minus  any
payments  or  prepayments  of   the   Loans  or  Reimbursement
Obligations    made   hereunder,   other   than    prepayments
representing  Adjusted  Excess  Cash  Flow  made  pursuant  to
Subsection 5.1(a),  (iv)  minus  any payments made to the Bank
consisting of MUD Proceeds or consisting  of  proceeds  of the
Debt described in Section 11.2(g) of the Credit Agreement, (v)
minus  the  Borrower's  Cash  Reserve.   The term "Excess Cash
Flow"  when used in calculating payments to  be  made  on  the
loans  permitted   under  Subsection  11.2(f)  of  the  Credit
Agreement shall mean Excess Cash Flow calculated each Quarter-
Annual Period.  Notwithstanding  the  foregoing,  Excess  Cash
Flow  used  to  make  payments  on  the  loans permitted under
Subsection 11.2(f) of the Credit Agreement  shall  not consist
of any of the proceeds of the Revolving Credit Loans.

"Expiration  Date"  shall mean the last day  of  a
Rate Period.

"Facility  Fee"  shall   mean   the  facility  fee
specified in Section .

"Facility Letter(s) of Credit" shall  mean, in the
singular form, any Standby Letter of Credit issued by the Bank
for the account of the Borrower pursuant to Section   and,  in
the plural form, all such Standby Letters of Credit issued for
the account of the Borrower.

"Facility  Letter  of  Credit  Fee" shall have the
meaning set forth in Section .

"Facility  Letter  of  Credit  Obligations"  shall
mean, at any particular time, the sum of (a) the Reimbursement
Obligations, plus (b) the aggregate undrawn face amount of all
outstanding  Facility  Letters  of  Credit,  in each  case  as
determined by the Bank.

"Federal Funds Rate" shall mean, for any period, a
fluctuating interest rate per annum equal for  each day during
such period to the weighted average of the rates  on overnight
Federal fund transactions with members of the Federal  Reserve
System  arranged  by  Federal  funds brokers, as published for
such day (or, if such day is not  a  Business Day, of the next
preceding Business Day) by the Federal  Reserve  Bank  of  New
York,  or,  if such rate is not so published for any day which
is a Business  Day, the average of the quotations for such day
on such transactions  received  by the Bank from three Federal
funds brokers of recognized standing selected by it.

"FM Properties" shall mean FM Properties Operating
Co., a Delaware general partnership.

"FTX Guaranty" shall mean the Amended and Restated
FTX  Guaranty  Agreement  described  in  clause  (ii)  of  the
definition of the term Guaranty Agreements.

"FTX  Security  Agreement"   shall  mean  the  FTX
Security Agreement dated as of July 17, 1995 between FREEPORT-
McMoRan Inc. as pledgor and Chemical as collateral  agent  for
the  creditors  party  to the Second Amendment and Restatement
dated as of July 17, 1995  of  the FTX Intercreditor Agreement
among Chemical, as agent for the  FTX Lenders and as agent for
the FM Lenders and Hibernia National  Bank,  as  agent for the
Pel-Tex Lenders, and the Bank and as further amended from time
to time.

"Funded   Debt"   shall  mean  (a) any  obligation
payable  more than one year from  the  date  of  the  creation
thereof which  would,  in  accordance  with generally accepted
accounting  principles,  be  shown  on a balance  sheet  as  a
liability  and  (b) any  guaranty  or  any   other  contingent
liability   (direct  or  indirect)  in  connection  with   the
obligations,   stock  or  dividends  of  any  Person  and  any
obligation under  any  contract  which, in economic effect, is
the substantial equivalent of a guaranty.

"Governmental Authority"  shall mean any (domestic
or   foreign)  federal,  state,  county,  municipal,   parish,
provincial,   or   other   government,   or   any  department,
commission,   board,   court,   agency   (including,   without
limitation,  the EPA), or any other instrumentality of any  of
them  or any other  political  subdivision  thereof,  and  any
entity    exercising    executive,    legislative,   judicial,
regulatory, or administrative functions  of, or pertaining to,
government,  including,  without limitation,  any  arbitration
panel, any court, or any commission.

"Gross Cash Receipts" shall mean all cash receipts
of  any  kind  or character,  including  but  not  limited  to
proceeds of the Revolving Credit Loans and the loans permitted
under  Section  11.2(f)  of  the  Credit  Agreement,  receipts
relating to the sale  of  single-family and multi-family lots,
receipts from leases and the  sale of land for retail, office,
and  research and development use,  golf  course  income,  gas
refunds,  lot interest income, bond refunds and bond proceeds,
including the MUD Proceeds, or loan proceeds relating thereto.

"Guarantor"  shall  mean  FREEPORT-McMoRan INC., a
Delaware corporation.

"Guaranty Agreements" shall  mean  (i) the Amended
and  Restated Guaranty Agreement dated of even date  herewith,
for the  benefit  of  the  Bank,  executed by FREEPORT-McMoRan
INC., substantially in the form of  the  Amended  and Restated
Guaranty  Agreement  attached hereto as Exhibit "E",  covering
all obligations of the Borrower under the Loan Documents other
than principal and interest  on  the  Notes,  and  any and all
amendments,  modifications,  renewals  and extensions thereof;
and  (ii)  the  Amended  and Restated FTX Guaranty  Agreement,
dated as of December 20, 1996,  executed  by FREEPORT- McMoRan
INC.,  partially  guaranteeing  inter  alia  the   payment  of
principal and interest on the Notes, substantially in the form
of the FTX Guaranty Agreement attached as Exhibit "F", and any
and  all  amendments,  modifications,  renewals and extensions
thereof, which FTX Guaranty Agreement is  secured  by  the FTX
Security Agreement more particularly described therein.

"Hazardous    Materials"    shall   mean   (a) any
"hazardous  waste"  as  defined  by  RCRA; (b) any  "hazardous
substance"     as    defined    by    CERCLA;    (c) asbestos;
(d) polychlorinated  biphenyls; (e) any flammables, explosives
or radioactive materials;  (f) any  substance, the presence of
which on any of the Borrower's properties is prohibited by any
governmental  authority;  and (g) any other  substance  which,
pursuant to any Environmental  Laws, requires special handling
in its collection, use, storage, treatment or disposal.

"Highest Lawful Rate"  shall mean, with respect to
the Bank, the maximum nonusurious interest  rate, if any, that
at any time or from time to time may be contracted for, taken,
reserved, charged, or received with respect to the Notes or on
other  amounts,  if  any,  due  to the Bank pursuant  to  this
Agreement or any other Loan Document, under laws applicable to
the  Bank which are presently in effect,  or,  to  the  extent
allowed by law, under such applicable laws which may hereafter
be in  effect  and  which  allow  a higher maximum nonusurious
interest rate than applicable laws now allow.

"Indemnified Parties" shall  have  the meaning set
forth in Section .

"Interest Payment Date" shall mean (a) as  to  any
Base  Rate  Loan,  the  sixth  (6th)  day of each May, August,
November and February throughout the term  of  the  Base  Rate
Loan, beginning with May 6, 1992 (or if any such date is not a
Business Day, then the next preceding Business Day); (b) as to
any  Eurodollar  Rate  Loan,  the sixth (6th) day of each May,
August,  November  and February throughout  the  term  of  the
Eurodollar Rate Loan.

"L/C Maturity Date" shall mean February 28, 1998.

"L/C Termination  Date"  shall  mean  February 28,
1997.

"Liabilities"  shall  mean  all obligations  which
would,  in  accordance  with  generally  accepted   accounting
principles,  be  classified on a balance sheet as liabilities,
including, without  limitation,  (i) indebtedness  secured  by
Liens  against  property  of  the  Borrower whether or not the
Borrower is liable for the payment thereof  and  (ii) deferred
liabilities.

"Letter(s) of Credit" shall mean, in the  singular
form,  any  letter  of  credit  issued  by  any Person for the
account  of  the  Borrower and, in the plural form,  all  such
letters of credit issued  by any Person for the account of the
Borrower.

"Letter  of  Credit  Commitment"  shall  mean  the
Bank's commitment to issue Facility Letters of Credit up to an
aggregate amount of $85,573.00.

"Letter of Credit  Reimbursement  Agreement" shall
mean, with respect to a Facility Letter of Credit,  such  form
of  application  therefor  and form of reimbursement agreement
therefor  (whether in a single  or  several  documents,  taken
together) as  the  Bank  may  employ in the ordinary course of
business for its own account, whether  or  not  providing  for
collateral security, with such modifications thereto as may be
agreed  upon  by  the  Bank  and  the account party; provided,
however, in the event of any conflict between the terms of any
Letter of Credit Reimbursement Agreement  and  this Agreement,
the terms of this Agreement shall control.

"Lien"  shall  mean any claim, mortgage,  deed  of
trust,   pledge,   security   interest,   encumbrance,   lien,
mechanic's  or  materialmen's lien,  or  charge  of  any  kind
(including, without  limitation,  any agreement to give any of
the foregoing, any conditional sale  or  other title retention
agreement or any lease in the nature thereof).
"Loan"  or  "Loans" shall mean a  loan  or  loans,
respectively, from the Bank  to  the  Borrower made under this
Agreement.   "Term  Loan"  shall  mean  the  Loan  made  under
Section .  "Revolving Credit Loan" shall  mean  any  Loan made
under Section .

"Loan  Documents"  shall mean this Agreement,  the
Notes,   all   Security   Documents,  and   all   instruments,
certificates  and agreements  now  or  hereafter  executed  or
delivered to the Bank pursuant to any of the foregoing and the
transactions  connected   therewith,   and   all   amendments,
modifications,    renewals,    extensions,    increases    and
rearrangements   of,   and   substitutions  for,  any  of  the
foregoing.

"Material Adverse  Effect" shall mean any material
adverse  effect  on  (a) the  financial  condition,  business,
properties, assets, prospects or  operations  of the Borrower,
or  (b) the ability of the Borrower or any Person  to  perform
its respective  obligations  under this Agreement or any other
Loan Document to which it is a party on a timely basis.

"Maturity Date" shall  mean the Revolving Maturity
Date or the Term Maturity Date, as the case may be.

"MUD Proceeds" shall mean  all  proceeds  from the
sale of bonds issued by Circle C Municipal Utility District #3
or  Circle C  Municipal  Utility  District  #4 or by any other
CCMUD (as defined in the Phoenix Purchase Agreement)  prior to
the   closing   of  the  Phoenix  Purchase  and  allocable  to
reimbursement of eligible infrastructure.

"Non-Facility  Letter  of  Credit"  shall mean any
Letter of Credit which is not a Facility Letter of Credit.

"Note" or "Notes" shall mean a promissory  note or
promissory notes, respectively, of the Borrower, executed  and
delivered  under  this  Agreement.  "Term Note" shall mean the
promissory note of the Borrower  executed  and delivered under
Section .  "Revolving Note" shall mean the promissory  note of
the Borrower executed and delivered under Section 2.2.

"Notice  of  Borrowing"  shall  mean  a  Notice of
Revolving  Loan  Borrowing or a Notice of Term Loan Borrowing,
as the case may be,  or,  in  the case of a combination of the
two  as  reflected  in  Exhibit "C",   a  combined  Notice  of
Borrowing.  A Notice of Borrowing of whatever  type  shall  be
limited  to  three  different  combinations of interest rates,
types of Loans and Rate Periods.

"Notice  of Rate Change/Continuation"  shall  have
the meaning set forth in Section (a)(ii).

"Notice of  Revolving  Loan  Borrowing" shall have
the meaning set forth in Section (c).

"Notice  of Term Loan Borrowing"  shall  have  the
meaning set forth in Section (c).

"Officer's  Certificate"  shall mean a certificate
signed  in the name of the Borrower by either  its  President,
one of its  Vice  Presidents,  its Treasurer, its Secretary or
one of its Assistant Treasurers or Assistant Secretaries.

"Operating   Expenses"    shall    mean,   without
duplication,  for  any period, (i) the amount of any  interest
expense to the extent  paid  in  cash,  plus (ii) income taxes
paid   in   cash   in  such  period,  plus  (iii) development,
operating, holding, and marketing expenses of whatever kind or
character related to  the  development  of the Circle C Tract,
including   the   following  costs,  expenses,   and   expense
categories: construction  costs,  landscape, taxes, amenities,
management   fees,   legal   fees,   insurance,    accounting,
advertising,   closing  costs,  homeowners  fees,  and  M.U.D.
standby fees.

"Option  Agreement" shall mean that certain Option
Agreement dated effective  February 6,  1992,  entered into by
David B.  Armbrust, Trustee, and Borrower, pursuant  to  which
Borrower granted  David B.  Armbrust,  Trustee,  an  option to
purchase  the  Circle C Tract on the terms and conditions  set
forth therein, the ownership rights to such option having been
transferred by Bill  of  Sale  to  FM  Properties.  The Option
Agreement is currently held for the benefit  of  FM Properties
by Kenneth N. Jones, Trustee, as reflected in that  Notice  of
Change   of   Trustee,   dated  March 16,  1993,  recorded  in
Volume 11894,  Page 389,  Real   Property  Records  of  Travis
County, Texas

"Party" or "Parties" shall  mean  a  Person or all
Persons other than the Bank executing any Loan Document.

"Period" shall mean any Quarter-Annual Period.

"Person"  shall  mean  an individual, partnership,
joint venture, corporation, joint stock  company, bank, trust,
unincorporated  organization  and/or  a  government   or   any
department or agency thereof.  "Persons" shall mean the plural
of Person.

"Phoenix  Purchase"  shall  mean  the  purchase by
Phoenix Holdings, Ltd. of the commercial land described as the
"Land"   in  the  Phoenix  Purchase  Agreement  (the  "Phoenix
Purchase Land"),  and  consisting of a portion of the Circle C
Tract, pursuant to the terms  and  provisions  of  the Phoenix
Purchase Agreement.

"Phoenix   Purchase  Agreement"  shall  mean   the
Purchase and Sale Agreement  effective  as of May 31, 1996, by
and between Borrower and Phoenix Holdings,  Ltd.  and covering
the purchase by Phoenix Holdings, Ltd of the Phoenix  Purchase
Land,  as  amended  by (i) the First Addendum to Purchase  and
Sale Agreement effective  as  of  May 30, 1996, by and between
Borrower, Phoenix Holdings, Ltd. and  FM  Properties Inc.; and
(ii) the  Second  Addendum  to  Purchase  and  Sale  Agreement
effective September 10, 1996, by and between Phoenix Holdings,
Ltd. and Borrower.

"Plan" shall mean any plan subject to  Title IV of
ERISA and maintained for employees of the Borrower or  of  any
member  of  a "controlled group of corporations," as such term
is defined in  the Code, of which the Borrower is a member, or
any such plan to  which the Borrower is required to contribute
on behalf of its employees.

"Prime  Rate"  shall mean the prime rate announced
from time to time by the Bank,  and  thereafter entered in the
minutes  of  the  Bank's Senior Credit Origination  Committee.
Without notice to the  Borrower or any other Person, the Prime
Rate shall change automatically  from  time  to time as and in
the amount by which said Prime Rate shall fluctuate, with each
such change to be effective as of the date of  each  change in
such Prime Rate.  The Prime Rate is a reference rate and  does
not  necessarily  represent  the  lowest or best rate actually
charged  to any customer.  The Bank  may  make  commercial  or
other loans  at rates of interest at, above or below the Prime
Rate.

"Quarter-Annual Period" shall mean (i) each period
from January 1  of  any  calendar year through March 31 of the
same calendar year; (ii) each  period  from  April  1  of  any
calendar year through June 30 of the same calendar year; (iii)
each period from July 1 of any calendar year through September
30  of  the  same  calendar  year;  and  (iv) each period from
October 1 of any calendar year through December 31 of the same
calendar year.

"Rate Period" shall mean the period  of  time  for
which  the  Eurodollar  Rate  shall  be  in  effect  as to any
Eurodollar   Rate  Loan,  commencing  with  the  Date  or  the
Expiration Date  of  the immediately preceding Rate Period, as
the case may be, applicable  to  and  ending  on the effective
date of any rate change or rate continuation made  as provided
in  Section (a)  as the Borrower may specify in the Notice  of
Borrowing or the Notice  of Rate Change/Continuation, subject,
however, to the early termination  provisions  of  the  second
sentence  of Section (c) relating to any Eurodollar Rate Loan;
provided, however,  that any Rate Period which would otherwise
end on a day which is  not a Business Day shall be extended to
the next succeeding Business  Day  unless  such  Business  Day
falls  in  another  calendar  month,  in  which case such Rate
Period shall end on the next preceding Business Day.

"Release" shall mean a "release",  as such term is
defined in CERCLA.

"Reimbursement   Obligations"   shall   mean   the
reimbursement or repayment obligations of the Borrower to Bank
pursuant to this Agreement or the applicable Letter of  Credit
Reimbursement  Agreement  with respect to Facility Letters  of
Credit issued for the account of the Borrower.

"Reportable Event"  shall  have  the  meaning  set
forth in Section 

"Revolving Loan Commitment" shall have the meaning
set forth in Section (a).

"Revolving  Maturity Date" shall mean February 28,
1998.

"Revolving  Note"   shall  mean  the  Amended  and
Restated Revolving Note described  in  Section 2.2(b)  of  the
Credit Agreement.

"Revolving  Termination  Date" shall mean February
28, 1998.

"Second  Closing  Date" shall  mean  December  20,
1996.

"Securities Act" shall  have the meaning set forth
in Section .

"Security  Documents"  shall   mean  the  Guaranty
Agreements, as they may be amended or modified  from  time  to
time,  and  any  and  all  other  agreements,  deeds of trust,
mortgages,  chattel  mortgages, security agreements,  pledges,
guaranties,  assignments   of   production   or   proceeds  of
production,  assignments  of  income,  assignments of contract
rights,  assignments of partnership interest,  assignments  of
royalty interests,  assignments  of performance, completion or
surety  bonds, standby agreements,  subordination  agreements,
undertakings  and  other  instruments and financing statements
now or hereafter executed and  delivered  by any Person (other
than   solely   by   the   Bank   and/or  any  other  creditor
participating  in the Loans evidenced  by  the  Notes  or  any
collateral or security  therefor)  in  connection  with, or as
security  for  the  payment or performance of, the Notes,  any
indebtedness  renewed  or  extended  by  such  Notes  and  the
Borrower's obligations under this Agreement.

"Term  Loan Commitment" shall have the meaning set
forth in Section (a).

"Term Maturity Date" shall mean February 28, 1998.

"Term Note"  shall  mean  the Amended and Restated
Term Note described in Section 2.1(b) of the Credit Agreement.

"Type" shall mean, with respect  to  any Loan, any
Base Rate Loan or any Eurodollar Rate Loan.

"Unused L/C Facility" shall mean, at any time, the
amount,  if  any,  by  which  the  Letter of Credit Commitment
exceeds  the  aggregate  outstanding amount  of  all  Facility
Letter of Credit Obligations.

2.    THE LOANS.

2.1.  Term Loan.

(a)   Upon the  terms  and  conditions and relying
upon the representations and warranties herein  set forth, the
Bank agrees to make a Term Loan to the Borrower in  the amount
of $15,628,358.00 (the "Term Loan Commitment") on the  Closing
Date.

(b)   The  Borrower  shall execute and deliver  to
the Bank to evidence the Term Loan  made by the Bank under the
Term Loan Commitment, an Amended and Restated Term Note, which
shall  be  (i) dated  the  Second Closing  Date;  (ii) in  the
principal amount of the Term  Loan  Commitment;  and  (iii) in
substantially the form attached hereto as Exhibit "A" with the
blanks  appropriately  filled.  Borrower shall not be required
to make any principal installment  payments  on  the Term Loan
provided,  however, that the Borrower shall make the  required
prepayment  described  in  Subsection  5.1(d)  of  the  Credit
Agreement and  to  pay  in  full all outstanding principal and
interest on the Term Loan on the Term Maturity Date.  The Term
Note  shall  bear  interest  on the  unpaid  principal  amount
thereof from time to time outstanding  at  the  rate per annum
determined as specified in Sections ,  and , payable  on  each
Interest  Payment  Date  and  at maturity, commencing with the
first Interest Payment Date following  the  date  of  the Term
Note.   Any  amount  of  principal  which is not paid when due
(whether  at  stated maturity, by acceleration  or  otherwise)
shall bear interest  at  a  rate  which  shall be equal to the
lesser of (x) two percent (2%) above the Base  Rate or (y) the
Highest Lawful Rate.

(c)   The  borrowing  hereunder shall  be  in  the
amount of the Term Loan Commitment.   The  Term  Loan shall be
made upon prior written notice from the Borrower to  the  Bank
(the  "Notice  of  Term Loan Borrowing") delivered to the Bank
not later than 11:00  a.m.  (Houston  time)  (i) on  the third
Business  Day  prior  to  the  Closing Date, if such borrowing
consists  of Eurodollar Rate Loans  and  (ii) on  the  Closing
Date, if such  borrowing  consists  of  Base  Rate Loans.  The
Notice of Term Loan Borrowing shall be irrevocable  and  shall
specify  (i) the  rate  of  interest  that the Term Loan shall
bear;  (iii) with  respect  to any Eurodollar  Rate  Loan, the
initial Rate Period with respect  thereto  and  the Expiration
Date  of the initial Rate Period; and (iv) the demand  deposit
account  of  the  Borrower  at  the  Bank's Applicable Lending
Office  into which the proceeds of the  borrowing  are  to  be
deposited  or  instructions for wire transfer of such proceeds
of the borrowing  or  other  disposition  of  the borrowing in
accordance  with  a  Third  Party  Loan  Proceeds Disbursement
Authorization.   The  Borrower  may  designate   up  to  three
different combinations of interest rates and Rate  Periods  in
any  Notice  of  Borrowing.   The  Borrower  may give the Bank
telephonic  notice  by  the  required  time  of  any  proposed
borrowing under this Section ; provided, that such  telephonic
notice  shall be confirmed in writing by delivery to the  Bank
promptly  (but  in  no event later than the Closing Date) of a
Notice of Term Loan Borrowing.   The  Bank shall not incur any
liability to the Borrower in acting upon any telephonic notice
referred to above which the Bank believes  in  good  faith  to
have  been  given  by the Borrower, or for otherwise acting in
good faith under this Section .

(d)   Upon    fulfillment    of   the   applicable
conditions  set  forth in Section , on the Closing  Date,  the
Bank shall make the borrowing available to the Borrower at the
Bank's Applicable  Lending  Office  in  immediately  available
funds.   The  Bank  shall  pay or deliver the proceeds of  the
borrowing  to  or  upon  the order  of  the  Borrower  against
delivery to the Bank of the  Term  Note.   Any  deposit to the
Borrower's  demand  deposit  account by the Bank or  any  wire
transfer  of  the  proceeds of the  borrowing  pursuant  to  a
request (whether written  or  oral) believed by the Bank to be
an  authorized  request  by the Borrower  for  the  Term  Loan
hereunder shall be deemed  to  be  the Term Loan hereunder for
all purposes with the same effect as  if  the  Borrower had in
fact requested the Bank to make such Term Loan.

(e)   Any  payment (other than a prepayment)  made
on the Term Loan at such  time  as accrued but unpaid interest
on any of the Loans is outstanding  shall  be  applied  in the
following  order:   (i) to  accrued but unpaid interest on the
Term  Loan;  (ii) to  accrued  but   unpaid  interest  on  the
Revolving  Credit  Loans;  and (iii) to the  next  consecutive
installment(s) of principal on the Term Loan.

2.2.  Revolving Credit Loans.

(a)   Upon the terms  and  conditions  and relying
upon the representations and warranties herein set forth,  the
Bank  agrees to make Revolving Credit Loans to the Borrower on
any  one   or  more  Business  Days  prior  to  the  Revolving
Termination  Date,  up  to  an  aggregate  principal amount of
Revolving  Credit  Loans  not  exceeding  at  any   one   time
outstanding  $13,500,000.00 (such amount, as it may be reduced
from time to time  pursuant  to  Section 5.8  being the Bank's
"Revolving Loan Commitment").  Within such limits  and  during
such  period  and  subject to the terms and conditions of this
Agreement,  the  Borrower   may  borrow,  repay  and  reborrow
hereunder.

(b)   The Borrower  shall  execute  and deliver to
the  Bank to evidence the Revolving Credit Loans made  by  the
Bank under  the  Bank's  Revolving Loan Commitment, an Amended
and Restated Revolving Note, which shall be (i) dated the date
of the initial Revolving Credit  Loan  made hereunder; (ii) in
the  principal  amount of the Revolving Loan  Commitment;  and
(iii) in substantially the form attached hereto as Exhibit "B"
with  the  blanks  appropriately   filled.    The  outstanding
principal balance of the Revolving Note shall be payable on or
before the Revolving Maturity Date.  The Revolving  Note shall
bear interest on the unpaid principal amount thereof from time
to  time  outstanding  at  the  rate  per annum determined  as
specified  in  Sections ,   and  , payable  on  each  Interest
Payment  Date  and  at  maturity, commencing  with  the  first
Interest Payment Date following  the  date  of  the  Revolving
Note.   Any  amount  of  principal which is not paid when  due
(whether at stated maturity,  by  acceleration  or  otherwise)
shall  bear  interest  at  a rate which shall be equal to  the
lesser of (x) two percent (2%)  above the Base Rate or (y) the
Highest Lawful Rate.

(c)   The Borrower may  borrow under the Revolving
Loan  Commitment  up to but no more than  two  (2)  times  per
calendar month.  Each  borrowing hereunder shall be (i) in the
case of any Eurodollar Rate  Loan,  in  an aggregate amount of
not less than $100,000.00; or (ii) in the  case  of  any  Base
Rate Loan, in an aggregate amount of not less than $100,000.00
and,  at  the option of the Borrower, any borrowing under this
Section  may  be  comprised of up to two such Revolving Credit
Loans bearing different rates of interest.  Each Loan shall be
made upon prior written  notice  from the Borrower to the Bank
(the "Notice of Revolving Loan Borrowing")  delivered  to  the
Bank not later than 11:00 a.m. (Houston time) (i) on the third
Business  Day  prior  to the Borrowing Date, if such borrowing
consists of Eurodollar  Rate  Loans; and (ii) on the Borrowing
Date, if such borrowing consists  of  Base  Rate  Loans.  Each
Notice  of  Revolving Loan Borrowing shall be irrevocable  and
shall specify  (i) the amount of the proposed borrowing and of
each Revolving Credit Loan comprising a part thereof; (ii) the
Borrowing Date;  (iii) the  rate  of  interest  that each such
Revolving  Credit  Loan shall bear; (iv) with respect  to  any
Eurodollar Rate Loan, the  Rate  Period  with  respect to each
such  Revolving  Credit Loan and the Expiration Date  of  each
such Rate Period;  and  (v) the  demand deposit account of the
Borrower at the Bank's Domestic Lending  Office into which the
proceeds of the borrowing are to be deposited, or instructions
for wire transfer of such proceeds of the  borrowing, or other
disposition of the borrowing in accordance with  a Third Party
Loan  Proceeds  Disbursement Authorization.  The Borrower  may
give the Bank telephonic  notice  by  the required time of any
proposed borrowing under this Section ;  provided,  that  such
telephonic notice shall be confirmed in writing by delivery to
the  Bank  promptly  (but in no event later than the Borrowing
Date relating to any such  borrowing) of a Notice of Revolving
Loan Borrowing.  The Bank shall not incur any liability to the
Borrower  in acting upon any  telephonic  notice  referred  to
above which the Bank believes in good faith to have been given
by the Borrower,  or  for otherwise acting in good faith under
this Section.

(d)   Upon    fulfillment    of   the   applicable
conditions set forth in Section , on the Borrowing  Date,  the
Bank shall make the borrowing available to the Borrower at its
Applicable Lending Office in immediately available funds.  The
Bank  shall  pay  or  deliver  the  proceeds  of  the  initial
borrowing  to  or  upon  the  order  of  the  Borrower against
delivery  to the Bank of the Revolving Note.  Any  deposit  to
the Borrower's  demand deposit account by the Bank or any wire
transfer  of the proceeds  of  the  borrowing  pursuant  to  a
request (whether  written  or oral) believed by the Bank to be
an authorized request by the  Borrower  for a Revolving Credit
Loan hereunder shall be deemed to be a Revolving  Credit  Loan
hereunder  for  all  purposes  with  the same effect as if the
Borrower had in fact requested the Bank to make such Revolving
Credit Loan.

(e)   Any payment (other than  a  prepayment) made
on  the  Revolving  Credit  Loans at such time as accrued  but
unpaid interest on any of the  Loans  is  outstanding shall be
applied  in  the following order:  (i) to accrued  but  unpaid
interest on the  Revolving  Credit  Loans; (ii) to accrued but
unpaid interest on the Term Loan; and (iii) if such payment is
made on the Maturity Date, after application  to (i) and (ii),
then  to  the  outstanding principal balance on the  Revolving
Credit Loans.

3.    LETTERS OF CREDIT.

3.1.  Obligation  to  Issue.  Subject to the terms
and conditions of this Agreement, and  in  reliance  upon  the
representations  and  warranties  of  the  Borrower  set forth
herein  or  in  any  other  Loan  Document,  the  Bank  hereby
severally agrees to issue, from time to time during the period
commencing   on  the  Closing  Date  and  ending  on  the  L/C
Termination Date, for the account of the Borrower through such
of the Bank's  branches  as  it  and  the Borrower may jointly
agree, one or more Facility Letters of  Credit  in  accordance
with  this Section .  Notwithstanding the foregoing, the  Bank
shall have  no  obligation  to issue, and shall not issue, any
Facility Letter of Credit at any time if:

(a)   the  aggregate   undrawn   face   amount  of
Facility  Letters  of  Credit theretofore issued by the  Bank,
after giving effect to all  requested  but  unissued  Facility
Letters  of  Credit,  exceeds  any  limit  imposed  by  law or
regulation upon the Bank;

(b)   the  aggregate  principal amount of Facility
Letter of Credit Obligations with respect  to Facility Letters
of Credit issued by the Bank for the account  of  the Borrower
would exceed the Bank's Letter of Credit Commitment;

(c)   immediately  after  giving  effect  to   the
issuance  of  such  Facility  Letter  of Credit, the aggregate
Facility Letter of Credit Obligations would  exceed the Bank's
Letter of Credit Commitment; or

(d)   such  Facility  Letter  of  Credit   has  an
expiration  date  (i) more  than  one  year  after the date of
issuance; or (ii) after the L/C Maturity Date.

3.2.  Conditions.  The obligation  of  the Bank to
issue  any  Facility  Letter  of  Credit  is  subject  to  the
satisfaction  in  full  of the applicable conditions precedent
set forth in Section  and each of the following conditions:

(a)   the Borrower  shall  have  delivered  to the
Bank,  at  such  times  and  in  such  manner  as the Bank may
prescribe, a Letter of Credit application, a Letter  of Credit
Reimbursement   Agreement,   and   such  other  documents  and
materials as may be required pursuant to the terms thereof;

(b)   the terms of the proposed Facility Letter of
Credit shall not be inconsistent with any term or provision of
this  Agreement  and otherwise shall be  satisfactory  to  the
Bank;

(c)   the  Guaranty  Agreements  shall  be in full
force and effect; and

(d)   as of the date of issuance of such  Facility
Letter of Credit, no order, judgment, or decree of any  court,
arbitrator,  or  governmental  authority  shall purport by its
terms  to  enjoin  or  restrain  the  Bank  from issuing  such
Facility  Letter  of Credit, and no law, rule,  or  regulation
applicable to the Bank,  and  no request or directive (whether
or  not  having  the  force  of  law)  from  any  governmental
authority having jurisdiction over the Bank, shall prohibit or
request  the  Bank refrain from the  issuance  of  Letters  of
Credit generally  or  the  issuance of such Facility Letter of
Credit.

3.3.  Issuance  of  Facility  Letters  of  Credit.
(a) Except with respect to the  issuance  of  the  Letters  of
Credit  described  on Schedule  attached hereto on the Closing
Date, the Borrower shall  give  the  Bank  written  notice (or
telephonic  notice  confirmed  in writing by the Borrower  not
later than the requested issuance  date of the Facility Letter
of  Credit)  of  its request for the issuance  of  a  Facility
Letter of Credit no  later  than  11:00 a.m. four (4) Business
Days  prior  to the date such Facility  Letter  of  Credit  is
requested to be  issued.  Such notice shall be irrevocable and
shall specify, with  respect to such requested Facility Letter
of Credit, the face amount,  beneficiary,  effective  date  of
issuance,  expiry  date  (which effective date and expiry date
shall be a Business Day and,  with respect to the expiry date,
shall be no later than the Business  Day immediately preceding
the  Revolving Termination Date), and the  purpose  for  which
such Facility  Letter  of Credit is to be issued.  If the face
amount of the requested Facility Letter of Credit is less than
or equal to the Unused L/C Facility, as determined by the Bank
as of the close of business  on  the  date  of  its receipt of
written notice of the requested issuance, the Bank shall issue
such  Facility Letter of Credit on the date requested  by  the
Borrower,  unless on the requested issuance date, the Bank has
actual knowledge  that such conditions precedent have not been
met.  If the Bank receives  or  has actual knowledge, that the
conditions precedent to the issuance  of  a Facility Letter of
Credit  have  not  been  met,  then  the  Bank shall  have  no
obligation to issue, and shall not issue, any  Facility Letter
of  Credit until the Bank receives information to  the  effect
that  the condition(s) precedent have been met.  Any Letter of
Credit issued by the Bank in compliance with the provisions of
this Section   shall  be  a Facility Letter of Credit, and the
Standby  Letters of Credit described  on  Schedule   shall  be
Facility Letters of Credit.

(b)   The  Bank  shall  not  extend  or  amend any
Facility  Letter  of  Credit  unless  the requirements of this
Section  are met as though a new Facility Letter of Credit was
being requested and issued.

(c)   Upon the expiration of  any  Facility Letter
of Credit, the Borrower may re-use any portion of  the  Letter
of  Credit Commitment for the issuance of new Facility Letters
of Credit prior to the L/C Termination Date.

(d)   The   Bank   may   (but  has  no  obligation
hereunder to) issue Non-Facility Letters  of  Credit.  None of
the provisions of this Section  shall apply to  any  Letter of
Credit  designated  by  the  Bank as a Non-Facility Letter  of
Credit.

3.4.  Reimbursement  Obligations;  Duties  of  the
Bank.

(a)   Notwithstanding   any   provisions   to  the
contrary in any Letter of Credit Reimbursement Agreement:

(i)   the Borrower shall reimburse the Bank  for a
drawing  under  a Facility Letter of Credit issued by the Bank
no later than the  earlier  of  (A) the  time specified in the
related Letter of Credit Reimbursement Agreement;  or  (B) one
(1)  Business  Day  after  the  payment of such drawing by the
Bank; and

(ii)  the  Borrower's   Reimbursement  Obligations
with respect to a drawing under a Facility  Letter  of  Credit
shall bear interest from the date of such drawing to the  date
paid in full at the lesser of (A) the Highest Lawful Rate;  or
(B) the interest rate for past due Base Rate Loans.

(b)   No  action  taken  or omitted to be taken by
the  Bank  in connection with any Facility  Letter  of  Credit
shall (i) result  in  any liability on the part of the Bank to
the Borrower, unless the Bank's action or omission constitutes
willful misconduct or gross  negligence.   Prior to making any
payment  to  a beneficiary with respect to a drawing  under  a
Facility Letter  of Credit, the Bank shall be responsible only
to  confirm that documents  required  by  the  terms  of  such
Facility  Letter  of  Credit  to  be  delivered as a condition
precedent  to such drawing have been delivered  and  that  the
same appear  on  their  face  to conform with the requirements
thereof.   The  Bank may assume that  documents  appearing  on
their face to be  the  documents required to be delivered as a
condition precedent to a drawing do in fact comply.

3.5.  Payment  of  Reimbursement Obligations.  The
Borrower  agrees  to  pay  to  the  Bank  the  amount  of  all
Reimbursement Obligations, interest, and other amounts payable
to the Bank under or in connection with any Facility Letter of
Credit  immediately  when  due,  irrespective  of  any  claim,
set-off, defense, or other right which  the  Borrower may have
at any time against the Bank or any other Person.

3.6.  Exoneration.   As between the  Borrower  and
the  Bank, the Borrower assumes all  risks  of  the  acts  and
omissions  of,  or  misuse  of  the  Facility Letter of Credit
issued by the Bank by, the respective  beneficiaries  of  such
Facility   Letter   of  Credit.  In  furtherance  and  not  in
limitation of the foregoing,  subject to the provisions of the
Letter  of  Credit  applications,   the   Bank  shall  not  be
responsible for:

(a)   the  form, validity, sufficiency,  accuracy,
genuineness, or legal effect  of any document submitted by any
party in connection with the application for and issuance of a
Facility Letter of Credit, even  if it should in fact prove to
be in any or all respects invalid,  insufficient,  inaccurate,
fraudulent, or forged;

(b)   the   validity   or   sufficiency   of   any
instrument transferring or assigning or purporting to transfer
or  assign  a  Facility  Letter  of  Credit  or  the rights or
benefits thereunder or proceeds thereof, in whole  or in part,
which may prove to be invalid or ineffective for any reason;

(c)   failure  of  the  beneficiary  of a Facility
Letter  of  Credit to comply duly with conditions required  in
order to draw  upon  such  Facility Letter of Credit, provided
that the Bank complies with the provisions of Section ;

(d)   errors, omissions,  interruptions, or delays
in transmission or delivery of any messages,  by  mail, cable,
telegraph,  telex,  or  otherwise, whether or not they  be  in
cipher;

(e)   errors in interpretation of technical terms;

(f)   any loss  or  delay  in  the transmission or
otherwise of any document required in order  to make a drawing
under  any  Facility  Letter  of  Credit  or  of the  proceeds
thereof;

(g)   the misapplication by the beneficiary  of  a
Facility Letter of Credit; or

(h)   any  consequences arising from causes beyond
the control of the Bank,  including,  without  limitation, any
act or omission, whether rightful or wrongful, of  any present
or  future  de  jure  or  de  facto government or Governmental
Authority.  In furtherance and extension and not in limitation
of the specific provisions hereinabove  set  forth, any action
taken or omitted by the Bank under or in connection  with  the
Facility  Letters  of  Credit  or any related certificates, if
taken  or  omitted in good faith and  not  constituting  gross
negligence or willful misconduct, shall not put the Bank under
any  resulting  liability  to  the  Borrower  or  relieve  the
Borrower  of  any  of  its  obligations  hereunder to any such
Person.

3.7.  Compensation for Facility Letters of Credit.

(a)   Facility Letter of Credit Fee.  The Borrower
agrees to pay to the Bank quarterly, in the  case  of a Letter
of  Credit  issued  as a Facility Letter of Credit, a facility
letter of credit fee  (the  "Facility  Letter  of Credit Fee")
(i) as to Facility Letters of Credit which expire  on the last
day  of the quarter or later, in the amount of one-quarter  of
one percent  (1/4%)  of  the aggregate face amount of any such
Facility Letters of Credit; and (ii) as to Facility Letters of
Credit which expire prior  to  the last day of the quarter, in
the amount of one-quarter of one  percent  (1/4%)  of the face
amount of each such Facility Letter of Credit multiplied  by a
fraction,  the numerator of which is the actual number of days
in such quarter prior to expiration of such Facility Letter of
Credit and the  denominator  of  which is the actual number of
days  in the quarter; provided, however,  notwithstanding  the
foregoing,  as  to  each  Facility  Letter  of  Credit with an
outstanding  face  amount  less  than  an  amount  that  would
generate  at  least  a  $300.00  per annum Facility Letter  of
Credit Fee, a minimum Facility Letter  of  Credit  Fee  in the
amount  of  $300.00 shall be payable in advance on the day  of
the issuance  of  such  Facility  Letter  of  Credit,  and  no
additional  Facility Letter of Credit Fee on any such Facility
Letter of Credit  shall  be  required for the three subsequent
quarters.  The Borrower shall  also  pay  to  the  Bank in the
event of any extension or modification of a Facility Letter of
Credit  which  extends  the  expiration date or increases  the
maximum amount available for drawing  thereunder an additional
fee calculated and payable on the same basis as that set forth
in the first sentence of this Section   with  respect  to  any
such extension or additional amount.

(b)   Increased   Capital.    If   either  (i) the
introduction  of or any change in or in the interpretation  of
any law or regulation, or (ii) compliance by the Bank with any
guideline  or  request   from   any   central  bank  or  other
Governmental Authority (whether or not  having  the  force  of
law)  affects or would affect (by an amount deemed by the Bank
to  be material)  the  capital  required  or  expected  to  be
maintained  by  it  or any corporation controlling it, and the
Bank determines, on the  basis of reasonable allocations, that
the amount of such capital  is  increased by (an amount deemed
by the Bank to be material) or is based (to a degree deemed by
the Bank to be material) upon its  issuance or maintenance of,
or commitment to issue the Facility  Letters  of  Credit then,
upon demand by the Bank, the Borrower shall immediately pay to
the  Bank,  from  time  to  time  as  specified  by  the Bank,
additional amounts sufficient to compensate the Bank therefor.
A certificate as to such amounts submitted to the Borrower  by
the   Bank  shall,  in  the  absence  of  manifest  error,  be
conclusive and binding for all purposes.

4.    INTEREST RATE PROVISIONS.

4.1.  Interest Rate Determination.

(a)   Except  as  specified in Sections  and , the
Loans  shall  bear  interest on the  unpaid  principal  amount
thereof from time to  time  outstanding,  until maturity, at a
rate per annum (calculated based on a year  of 360 days in the
case of the Eurodollar Rate, and a year of 365 or 366 days, as
the case may be, in the case of the Base Rate) as follows:

(i)   The Loans shall bear interest  at  an annual
rate  equal  to  the  lesser of (A) the rate specified in  the
Notice of Borrowing or the Notice of Rate Change/Continuation,
as the case may be, with  respect  thereto  or (B) the Highest
Lawful  Rate,  from  the  first  day  to,  but  not including,
(y) with  respect  to  any  Base Rate Loan, the Maturity  Date
applicable thereto and (z) with respect to any Eurodollar Rate
Loan, the Expiration Date of  the  Rate  Period then in effect
with respect thereto.

(ii)   So long as no Default or  Event  of  Default
has  occurred  and  is continuing, the Borrower may (y) change
the interest rates to  apply  to  any  Loan  or  (z) elect  to
continue  all or any part of the outstanding principal balance
of any Eurodollar  Rate  Loan as a Loan of such Type by giving
the   Bank   a   written   notice   (the   "Notice   of   Rate
Change/Continuation") specifying  (A) the  date  on which such
Loan was made; (B) the interest rate then applicable  to  such
Loan;  (C) with  respect to any Eurodollar Rate Loan, the Rate
Period then applicable  to  each  such Loan; (D) the principal
amount  of such Loan to remain outstanding;  (E) the  rate  of
interest  and,  with  respect to any Eurodollar Rate Loan, the
Rate Period to become applicable to such Loan on the effective
date of the rate change  or  continuation;  (F) the  effective
date    of    the    rate    change   or   continuation   (the
"Conversion/Continuation Date")  (which shall be not less than
three (3) Business Days after the  date of such Notice of Rate
Change/Continuation); and (G) with respect  to  any Eurodollar
Rate Loan, the duration and Expiration Date of each  such Rate
Period.   In the case of the conversion of all or any part  of
any  Base Rate  Loan  into  a  Eurodollar  Rate  Loan  or  the
continuation  of  any  Eurodollar  Rate Loan as a Loan of such
Type, such Notice must be received by  the Bank at least three
(3)  full  Business  Days prior to the Conversion/Continuation
Date.  Each rate so specified  shall  become  effective on the
Conversion/Continuation  Date and remain in effect  until  the
expiration of the applicable  Rate  Period  specified  in such
Notice of Rate Change/Continuation.

(iii)   If  the  Borrower  shall fail to choose,  as
provided in clause (ii) above, the rate  of interest to become
effective with respect to any Eurodollar Rate  Loan  upon  the
Expiration  Date of the Rate Period with respect thereto, such
Loan shall bear  interest  at  the Base Rate on and after such
Expiration Date until the Borrower  shall  have  so  chosen  a
different rate.

(iv)   Nothing contained herein shall authorize the
Borrower (A) to convert  any Loan into or continue any Loan as
a Eurodollar Rate Loan unless  the Expiration Date of the Rate
Period for such Loan occurs on or  before  the  Maturity  Date
applicable  thereto  or (B) to continue or change the interest
rates applicable to any  Eurodollar  Rate  Loan  prior  to the
Expiration Date of the Rate Period with respect thereto.

(v)   Notwithstanding anything set forth herein to
the  contrary,  if  an  Event  of  Default has occurred and is
continuing, each outstanding Eurodollar  Rate  Loan shall bear
interest at the Base Rate on and after the Expiration  Date of
the Rate Period with respect thereto.

4.2.  Additional Interest Rate Provisions.

(a)   The  Notes  may be held by the Bank for  the
account  of  its Domestic Lending  Office  or  its  Eurodollar
Lending Office,  and  may be transferred from one to the other
from time to time as the Bank may determine.

(b)   If  the   Borrower  shall  have  chosen  the
Eurodollar Rate in a Notice of  Borrowing  or a Notice of Rate
Change/Continuation  and  prior  to  the  Borrowing   Date  or
Conversion/Continuation Date, as the case may be, the Bank  in
good   faith   determines   (which   determination   shall  be
conclusive)  that  (i) deposits  in  Dollars  in the principal
amount of such Eurodollar Rate Loan are not being  offered  to
the  Eurodollar  Lending  Office  of the Bank in the interbank
market  selected  by  the Bank in determining  the  applicable
Eurodollar Rate for the  Rate  Period  applicable  thereto  or
(ii) adequate   and   reasonable   means   do  not  exist  for
ascertaining  the  chosen Eurodollar Rate in respect  of  such
Eurodollar Rate Loan or (iii) the Eurodollar Rate for any Rate
Period  for such Eurodollar  Rate  Loan  will  not  adequately
reflect the  cost  to  the Bank of making such Eurodollar Rate
Loan for such Rate Period, then such Eurodollar Rate shall not
become  effective as to such  Eurodollar  Rate  Loan  on  such
Borrowing  Date  or  the  Conversion/Continuation Date, as the
case  may  be,  or  at any time  thereafter  until  such  time
thereafter as the Borrower  receives notice from the Bank that
the circumstances giving rise  to such determination no longer
apply  and  such Loan shall bear interest  at  the  lesser  of
(i) the Base Rate or (ii) the Highest Lawful Rate.

(c)   Anything  in  this Agreement to the contrary
notwithstanding,  if  at  any  time the  Bank  in  good  faith
determines (which determination  shall be conclusive) that the
introduction of or any change in any  applicable  law, rule or
regulation   or   any   change   in   the   interpretation  or
administration thereof by any governmental or other regulatory
authority  charged  with the interpretation or  administration
thereof shall make it unlawful for the Bank (or the Eurodollar
Lending Office of the Bank) to maintain or fund any Eurodollar
Rate Loan or to convert  any  Loan  into,  or  to continue any
Eurodollar  Rate  Loan as, a Eurodollar Rate Loan,  hereunder,
the Bank shall give  notice  thereof  to  the  Borrower.  With
respect  to any Eurodollar Rate Loan which is outstanding when
the Bank so  notifies the Borrower, upon such date as shall be
specified in such  notice,  the  Rate Period shall end and the
lesser of (i) the Base Rate or (ii) the  Highest  Lawful  Rate
shall  commence  to  apply  in  lieu of the Eurodollar Rate in
respect  of  such Eurodollar Rate Loan.   At  least  five  (5)
Business Days  after  such  specified date, the Borrower shall
pay  to  the  Bank (y) accrued and  unpaid  interest  on  such
Eurodollar Rate  Loan  at the Eurodollar Rate in effect at the
time of such notice to but  not  including such specified date
plus  (z) such  amount or amounts (to  the  extent  that  such
amount or amounts  would not be usurious under applicable law)
as may be necessary  to  compensate the Bank for any direct or
indirect costs and losses  incurred  by it (to the extent that
such amounts have not been included in the Additional Costs in
calculating  such  Eurodollar  Rate),  but  otherwise  without
penalty.  If notice has been given by the Bank pursuant to the
foregoing provisions of this Section , then,  unless and until
the  Bank notifies the Borrower that the circumstances  giving
rise to  such  notice  no  longer  apply, such Eurodollar Rate
shall not again apply to such Loan or  any  other Loan and the
obligation  of  the  Bank  to  convert  any Loan into,  or  to
continue any Eurodollar Rate Loan as, a Eurodollar  Rate  Loan
shall   be   suspended.   Any  such  claim  by  the  Bank  for
compensation under  clause (z) above shall be accompanied by a
certificate setting forth  the  computation  upon  which  such
claim  is  based, and such certificate shall be conclusive and
binding for all purposes, absent manifest error.

(d)   The   Borrower   will   indemnify  the  Bank
against, and reimburse the Bank on demand for,  any loss, cost
or  expense  incurred  or  sustained  by  the Bank (including,
without limitation, any loss or expense incurred  by reason of
the  liquidation  or  reemployment of deposits or other  funds
acquired by the Bank to  fund  or maintain any Eurodollar Rate
Loan) as a result of (i) any Additional  Costs incurred by the
Bank;  (ii) any  payment or repayment (whether  authorized  or
required hereunder  or  otherwise)  of all or a portion of any
Eurodollar Rate Loan on a day other than  the  last  day  of a
Rate  Period  for  such  Loan; (iii) any payment or prepayment
(whether required hereunder  or  otherwise)  of any Eurodollar
Rate Loan made after the delivery of a Notice  of Borrowing or
a Notice of Rate Change/Continuation, as the case  may be, but
before     the     applicable     Borrowing    Date    or    a
Conversion/Continuation Date, as the  case  may  be,  if  such
payment  or  prepayment  prevents  the proposed borrowing from
becoming fully effective; or (iv) after receipt by the Bank of
a Notice of Borrowing or a Notice of Rate Change/Continuation,
as the case may be, the failure of any Eurodollar Rate Loan to
be made or effected by the Bank due to any condition precedent
to a borrowing not being satisfied by  the  Borrower or due to
any other action or inaction of the Borrower.   The Bank shall
deliver  to the Borrower a statement reasonably setting  forth
the amount  and  manner  of  determining  such  loss,  cost or
expense,  which statement shall be conclusive and binding  for
all purposes, absent manifest error.

(e)   (i) If,  after  the  date of this Agreement,
the  Bank  shall  have  determined that the  adoption  of  any
applicable law, rule or regulation regarding capital adequacy,
or any change therein, or  any change in the interpretation or
administration thereof by any  governmental authority, central
bank or comparable agency charged  with  the interpretation or
administration  thereof, or compliance by the  Bank  with  any
request or directive  regarding  capital  adequacy (whether or
not  having  the force of law) of any such authority,  central
bank or comparable  agency,  has  or  would have the effect of
reducing  the  rate  of  return  on the Bank's  capital  as  a
consequence of its obligations hereunder to a level below that
which  the Bank could have achieved  but  for  such  adoption,
change or  compliance  (taking  into  consideration the Bank's
policies with respect to capital adequacy) by an amount deemed
by the Bank to be material, then the Borrower shall pay to the
Bank such additional amount or amounts  as will compensate the
Bank for such reduction.

(ii)  A certificate of the Bank setting forth such
amount or amounts as shall be necessary to compensate the Bank
as specified in subparagraph (i) above shall  be  delivered as
soon  as  practicable  to the Borrower and shall be conclusive
and binding, absent manifest  error.   The  Borrower shall pay
the  Bank  the  amount  shown  as due on any such  certificate
within  fifteen  (15)  days  after  the   Bank  delivers  such
certificate.   In  preparing such certificate,  the  Bank  may
employ such assumptions  and allocations of costs and expenses
as it shall in good faith  deem  reasonable  and  may  use any
reasonable averaging and attribution method.

5.    PREPAYMENTS AND OTHER PAYMENTS.

5.1.  Required Prepayments.

(a)   The  Borrower  agrees that, on each August 6
and February 6 during the term of  the  Loans,  commencing  on
August 6,  1993  and continuing until February 6, 1997, and on
each May 6, August  6,  November 6, and February 6, commencing
on May 6, 1997 and continuing  until  the  Revolving  Maturity
Date,  the  Borrower  shall  make mandatory prepayments in  an
amount equal to Adjusted Excess  Cash  Flow  to  the extent of
Adjusted  Excess  Cash  Flow  for  the  immediately  preceding
Quarter-Annual  Period, to be applied in the following  order:
(i) to the outstanding  principal  balance  of  the  Revolving
Credit   Loans;  and  (ii) the  balance,  to  the  outstanding
principal balance of the Term Loan.

(b)   The Borrower agrees that if at any time as a
result of  the  reduction  of  the  Revolving  Loan Commitment
pursuant  to  Section   the  aggregate  principal  amount   of
Revolving  Credit  Loans outstanding exceeds the amount of the
Revolving  Loan  Commitment   after   giving  effect  to  such
reduction, the Borrower shall make a prepayment  of  principal
in an amount at least equal to such excess.

(c)   The  Borrower agrees that if at any time  it
or  the  Bank determines that:   (i) the  aggregate  principal
amount of  Loans  outstanding  and  (ii) the  face  amount  of
Facility  Letters  of  Credit  issued  hereunder,  exceed  the
Commitment,  the Borrower shall make a prepayment of principal
of the Loans in  an amount at least equal to such excess.  The
prepayment  shall  be   applied   to  reduce  the  outstanding
principal amount of the Revolving Credit Loans.

(d)   In the event that  the  Borrower consummates
the sale of the Land described in and pursuant to the terms of
the Phoenix Purchase Agreement to Phoenix Holdings,  Ltd., the
Borrower  shall  pay  an  amount equal to the then outstanding
principal  balance  on the Loans  out  of  the  sale  proceeds
resulting  from  the  sale  of  such  Land  to  the  Bank  for
application to the Loans  in  such  manner  as  the Bank shall
determine.

5.2.  Optional  Prepayments.   The Borrower  shall
have the right at any time and from time to time to prepay any
of  the  Notes selected by it, in whole or in  part,  provided
that:

(a)   each  partial  prepayment  shall  be  in  an
aggregate  principal  amount of at least $100,000.00 and if to
be applied to the Term Note, shall be applied to the principal
installments thereof in the inverse order of their due dates;

(b)   the  Borrower  shall  give  the  Bank  prior
written notice of each prepayment proposed to be made pursuant
to this Section , specifying the principal amount of the Notes
to be prepaid, the prepayment  date  and  the  account  of the
Borrower  to  be  charged  if  such  prepayment  is  to  be so
effected.   Notice  of  such prepayment having been given, the
principal  amount  of  the Notes  specified  in  such  notice,
together with interest thereon  to  the  date  of  prepayment,
shall become due and payable on such prepayment date; and

5.3.  Prepayment   of   Eurodollar   Rate   Loans.
Anything  herein to the contrary notwithstanding, the Borrower
may not pay  or  prepay  any Eurodollar Rate Loan prior to the
end of the Rate Period applicable thereto, except upon payment
to the Bank of a breakage  fee  in an amount determined by the
Bank, in its sole discretion, based upon the costs incurred by
the Bank as a result of such payment or prepayment.

5.4.  Place  of  Payment   or   Prepayment.    All
payments   and   prepayments   made  in  accordance  with  the
provisions of this Agreement or  of the Notes or of the Letter
of Credit Reimbursement Agreements  in  respect  of commitment
fees or of principal or interest on the Notes shall be made to
the  Bank  at its Domestic Lending Office no later than  11:00
a.m. (Houston time), in immediately available funds.

5.5.  No  Prepayment  Premium  or  Penalty.   Each
prepayment  pursuant  to Section  or  shall be without premium
or penalty.

5.6.  No Reborrowing.   The Borrower shall have no
right   to   reborrow   any   amount   prepaid   pursuant   to
Sections 5.1(a), , and .

5.7.  Taxes.  All payments (whether  of principal,
interest, reimbursements or otherwise) under this Agreement or
on  the  Notes  or  in  respect  of  Facility Letter of Credit
Obligations shall be made by the Borrower  without  set-off or
counterclaim  and shall be made free and clear of and  without
deduction for any  present  or future tax, levy, impost or any
other  charge,  if  any,  of  any  nature  whatsoever  now  or
hereafter imposed by any taxing  authority.   If the making of
such payments is prohibited by law, unless such  a  tax, levy,
impost or other charge is deducted or withheld therefrom,  the
Borrower  shall  pay  to  the  Bank,  on the date of each such
payment, such additional amounts as may  be necessary in order
that the net amounts received by the Bank after such deduction
or withholding shall equal the amounts which  would  have been
received if such deduction or withholding were not required.

5.8.  Reduction  or  Termination  of the Revolving
Loan Commitment.  The Borrower may at any time or from time to
time  reduce  or  terminate  the Revolving Loan Commitment  by
giving  not  less  than five (5)  full  Business  Days'  prior
written notice to such  effect  to the Bank, provided that any
partial reduction shall be in the  amount  of $100,000.00 or a
multiple  thereof.   Any  reduction  in  the  Revolving   Loan
Commitment  shall  be  effective  on the date specified in the
Borrower's notice with respect to such  reduction.  After each
such reduction, the commitment fee shall  be  calculated  upon
the  Revolving  Loan  Commitment as so reduced.  The Revolving
Loan Commitment shall automatically terminate on the Revolving
Termination  Date or in  the  event  of  acceleration  of  the
maturity date  of  the  Revolving Note.  Each reduction of the
Revolving Loan Commitment hereunder shall be irrevocable.

6.    COMMITMENT FEE AND OTHER FEES.

6.1.  Facility Fee.  The Borrower agrees to pay to
the Bank a Facility Fee in  the  amount  of  one-half  of  one
percent  (1/2%)  of  the sum of the Term Loan Commitment and the
Revolving Credit Commitment,  such  Facility Fee to be payable
in full on the Closing Date.

6.2.  Commitment Fee.  The  Borrower agrees to pay
to the Bank a commitment fee computed on  a  daily  basis of a
year of 365 or 366 days, as the case may be, from the  date of
the  first  Revolving  Credit  Loan  to,  but  not  including,
December  20, 1996, at the rate of one-quarter of one  percent
(1/4%) per  annum  on  the  daily average unused amount of the
Revolving Loan Commitment, and  from  December 20, 1996 to but
not including, the Revolving Termination  Date, at the rate of
.375  percent  (.375%) per annum on the daily  average  unused
amount of the Revolving  Loan  Commitment, such commitment fee
to be payable quarterly in arrears  on  the sixth (6th) day of
each May, August, November and February,  commencing on May 6,
1992 and concluding on the Revolving Termination Date.

6.3.  Facility Letter of Credit Fee.  The Borrower
agrees to pay to the Bank a Facility Letter  of  Credit Fee as
set forth in Section .

6.4.  Fees  Not  Interest; Nonpayment.   The  fees
described  in  this  Agreement  represent   compensation   for
services  rendered  and to be rendered separate and apart from
the lending of money  or  the  provision  of credit and do not
constitute compensation for the use, detention, or forbearance
of money, and the obligation of the Borrower  to  pay each fee
described herein shall be in addition to, and not in  lieu of,
the  obligation  of  the  Borrower to pay interest, other fees
described in this Agreement,  and expenses otherwise described
in this Agreement.  Fees shall  be payable when due in Dollars
and  in  immediately available funds.   All  fees,  including,
without  limitation,   the   commitment  fee  referred  to  in
Section , shall be non-refundable,  and  shall, to the fullest
extent permitted by law, bear interest, if  not paid when due,
at  a  rate  per annum equal to the lesser of (a) two  percent
(2%) above the Base Rate or (b) the Highest Lawful Rate.

7.    APPLICATION   OF   PROCEEDS.   The  Borrower
agrees that (i) the proceeds of the Term Loan shall be used to
acquire  the  Circle C  Tract, and (ii) the  proceeds  of  the
Revolving Credit Loans shall be used to pay Operating Expenses
of the Borrower; provided  that  none  of  the proceeds of the
Revolving Credit Loans shall be utilized by  the  Borrower  to
make  (x) principal  and  interest  payments on the Term Loan;
(y) interest payments on the Revolving  Credit  Loans;  and/or
(z) payments of any kind on the subordinated Debt described in
Section 11.2(f) of the Credit Agreement.  Notwithstanding  any
provision  contained  in  the Credit Agreement, upon and after
December 12, 1996, the Revolving  Loan  capability may only be
utilized by the Borrower for the purpose  of borrowing, in the
event that the closing of the Phoenix Purchase fails to occur,
an amount equal to the amount of the MUD Proceeds  required to
be  deposited  into  the  registry  of  the court pursuant  to
Section  6(e) of the Phoenix Purchase Agreement  (as  long  as
capacity exists  under  the  Revolving Loan Commitment to that
extent).

8.    REPRESENTATIONS    AND    WARRANTIES.    The
Borrower represents and warrants that:

8.1.  Organization    and   Qualification.     The
Borrower   (a) is  a  corporation  duly   organized,   validly
existing, and  in good standing under the laws of its state of
incorporation;  (b) has   the   corporate  power  to  own  its
properties and to carry on its business  as now conducted; and
(c) is duly qualified as a foreign corporation  to do business
and  is  in  good  standing  in every jurisdiction where  such
qualification is necessary.

8.2.  Financial  Statements.    The  Borrower  has
furnished the Bank with an unaudited financial  report  of the
Borrower as of September 30, 1996, containing a balance sheet,
statements of income and stockholder's equity and a cash  flow
statement,  all  in  reasonable  detail  and  certified  by  a
financial  officer  of  the  Borrower to have been prepared in
accordance  with  generally  accepted   accounting  principles
consistently applied.

8.3.  Litigation.    There   is   no   action   or
proceeding  pending  or,  to  the  knowledge of the  Borrower,
threatened   against   the   Borrower   before    any   court,
administrative  agency  or  arbitrator  which  might  have   a
Material  Adverse  Effect.   There is no outstanding judgment,
order  or  decree affecting the  Borrower  before  or  by  any
administrative or Governmental Authority.

8.4.  Default.   The  Borrower  is  not in default
under  or  in  violation  of  the provisions of any instrument
evidencing any Debt or of any agreement  relating  thereto  or
any  judgment,  order, writ, injunction or decree of any court
or any order, regulation  or  demand  of any administrative or
governmental instrumentality which default  or violation might
have a Material Adverse Effect.

8.5.  Title to Assets.  The Borrower  has good and
marketable  title  to  its assets, subject to no Liens  except
those permitted in Section .

8.6.  Payment  of  Taxes.   The Borrower has filed
all tax returns required to be filed and  has  paid  all taxes
shown on said returns and all assessments which are due.   The
Borrower  is  not  aware  of  any pending investigation by any
taxing  authority  or  of  any  claims   by  any  governmental
authority for any unpaid taxes.

8.7.  Conflicting   or   Adverse   Agreements   or
Restrictions.  The Borrower is not a party to any  contract or
agreement  or  subject to any restriction which would  have  a
Material Adverse  Effect.   Neither the execution and delivery
of the Loan Documents nor the consummation of the transactions
contemplated thereby nor fulfillment  of  and  compliance with
the respective terms, conditions and provisions  thereof  will
conflict  with  or  result  in  a  breach of any of the terms,
conditions or provisions of, or constitute a default under, or
result  in  any violation of, or result  in  the  creation  or
imposition of  any  Lien  on  any of the property of any Party
pursuant to (a) the charter or  bylaws applicable to each such
Party; (b) any law or any regulation  of any administrative or
governmental instrumentality; (c) any order,  writ, injunction
or  decree  of  any  court;  or  (d) the terms, conditions  or
provisions of any agreement or instrument  to  which  any such
Party  is  a  party or by which it is bound or to which it  is
subject.

8.8.  Authorization,  Validity,  Etc.  The Parties
have  the  power and authority to make, execute,  deliver  and
carry out the Loan Documents and the transactions contemplated
therein and to perform their respective obligations thereunder
and all such  action has been duly authorized by all necessary
proceedings on  their part.  The Loan Documents have been duly
and  validly  executed and delivered by the Parties and
constitute valid and legally binding agreements of the Parties
enforceable in accordance  with their respective terms, except
as limited by Debtor Laws.

8.9.  Investment  Company Act Not Applicable.  The
Borrower  is  not  an  "investment   company",  or  a  company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.

8.10.  Public  Utility  Holding   Company  Act  Not
Applicable.   The  Borrower is not a "holding company",  or  a
"subsidiary company" of a "holding company", or an "affiliate"
of a "holding company",  or  an  affiliate  of  a  "subsidiary
company"  of  a  "holding company", or a "public utility",  as
such terms are defined  in  the Public Utility Holding Company
Act of 1935, as amended.

8.11.  Regulations  G,  T,  U  and  X.  None of the
proceeds  of  any  Loan  will  be  used  for  the  purpose  of
purchasing  or  carrying, directly or indirectly, any  "margin
stock" within the  meaning  of  Regulation U  of  the Board of
Governors  of the Federal Reserve System ("margin stock"),  or
to extend credit  to  others  for the purpose of purchasing or
carrying  any margin stock, or for  any  other  purpose  which
would constitute  this  transaction  a "purpose credit" within
the meaning of said Regulation U, as now  in  effect or as the
same may hereafter be in effect.  The Borrower  will  not take
or  permit  any  action  which  would  involve  the  Bank in a
violation   of   Regulation G,   Regulation T,   Regulation U,
Regulation X or any other regulation of the Board of Governors
of the Federal Reserve System or a violation of the Securities
Exchange  Act  of  1934,  in each case as now or hereafter  in
effect.

8.12.  ERISA.  The  Borrower  does not maintain and
is not required to contribute to any Plan.   The Borrower does
not currently contemplate that it will establish or contribute
to any Plan.

8.13.  No  Financing of Corporate Takeovers.   None
of the proceeds of any  Loan  will  be  used  to  acquire  any
security  in any transaction which is subject to Section 13 or
14 of the Securities Exchange Act of 1934, as amended.

8.14.  Franchises,  Co-licenses, Etc.  The Borrower
owns  or has obtained all the material  governmental  permits,
certificates   of   authority,  leases,  patents,  trademarks,
service  marks,  trade   names,   copyrights,  franchises  and
licenses, and rights with respect thereto, required, advisable
or necessary in connection with the conduct of its business as
presently conducted or as proposed to be conducted.

8.15.  Line  of  Business.    The   nature  of  the
Borrower's  line  of  business  is  real  estate  development,
marketing  and  sales  related  thereto, and the operation  of
clubs, swim centers and other facilities related thereto.

8.16.  Environmental Matters.   Except as disclosed
to the Bank in writing: (i) all facilities and  property owned
or leased by the Borrower have been and continue  to be, owned
or leased and operated by the Borrower in material  compliance
with  all  Environmental  Laws;  (ii) there  has not been  any
Release  of Hazardous Materials at, on or under  any  property
now or previously  owned  or  leased  by  the  Borrower (A) in
quantities  that  would be required to be reported  under  any
Environmental Law,  (B) that  required,  or  may reasonably be
expected   to  require,  the  Borrower  to  expend  funds   on
remediation   or   clean-up   activities   pursuant   to   any
Environmental  Law,  or  (C) that, singly or in the aggregate,
have,  or  may reasonably be  expected  to  have,  a  Material
Adverse Effect;  (iii) the  Borrower has been issued and is in
material compliance with all permits, certificates, approvals,
orders,   licenses  and  other  authorizations   relating   to
environmental   matters   necessary   for  its  business;  and
(iv) there are not and in the past there have been none of the
following on or in any of the assets of  the  Borrower  or any
property  now  or  previously  owned  or leased by it: (A) any
Hazardous Materials, (B) any generation, treatment, recycling,
storage  or  disposal  of  any  Hazardous  Materials,  (C) any
underground  storage  tanks  or surface impoundments,  (D) any
asbestos-containing  material,   or   (E) any  polychlorinated
biphenyls (PCBs).

9.    CONDITIONS.  The obligation  of  the Bank to
make  each Loan or to continue any Loan as, or to convert  any
Loan into,  a  Eurodollar  Rate Loan, or to issue any Facility
Letter of Credit, is subject to the following conditions:

9.1.  Representations   True   and   No  Defaults.
(a) The  representations and warranties contained in  Section 
shall  be true  and  correct  on  and  as  of  the  particular
Borrowing Date or the applicable Conversion/Continuation Date,
as the case  may  be,  as  though made on and as of such date;
(b) the  Borrower  shall  not  be   in   default  in  the  due
performance  of  any  covenant on its part contained  in  this
Agreement; (c) no material  adverse change shall have occurred
with  respect  to  the  business,   properties   or  condition
(financial  or  otherwise)  of the Borrower since the  Closing
Date;  and  (d) no  Event of Default  or  Default  shall  have
occurred and be continuing.

9.2.  Discharge of Debt.  On the Closing Date, the
Borrower  shall  have  delivered   to  the  Bank  satisfactory
evidence of the payment in full and  discharge  of all Debt in
excess of that permitted in Section .

9.3.  Governmental   Approvals.   Prior   to   the
Closing  Date, the Borrower shall have  obtained  all  orders,
approvals or consents of all public regulatory bodies required
for the making  and carrying out of this Agreement, the making
of the Loans pursuant  hereto and the issuance of the Notes to
evidence such Loans.

9.4.  Compliance   With  Law.   The  business  and
operations of the Borrower as conducted  at all times relevant
to  the  transactions  contemplated by this Agreement  to  and
including the close of business on the Closing Date shall have
been and shall be in compliance  with all applicable State and
Federal laws, regulations and orders  affecting  the  Borrower
and its business and operations.

9.5.  Officer's  Certificate  and Other Documents.
On  each Borrowing Date, the Bank shall have  received  (i) an
Officer's  Certificate  dated the particular Borrowing Date to
the effects set forth in  Sections ,   and  ; (ii) a Notice of
Revolving Loan Borrowing or a Notice of Term  Loan  Borrowing,
as   the   case  may  be,  in  the  form  attached  hereto  as
Exhibit "C";  and  (iii) such other documents and certificates
relating to the transactions  herein  contemplated as the Bank
may reasonably request.

9.6.  Conversion/Continuation  Documents.   On the
applicable  Conversion/Continuation  Date, the Bank shall have
received  (i) an Officer's Certificate  dated  the  applicable
Conversion/Continuation  Date  to  the  effects  set  forth in
Section (a)(ii); (ii) a Notice of Rate Change/Continuation  in
the  form attached hereto as Exhibit "D"; and (iii) such other
documents and certificates relating to the transactions herein
contemplated as the Bank may reasonably request.

9.7.  Required Documents and Certificates.  On the
Second   Closing  Date,  the  Bank  shall  have  received  the
following,   in   each  case  in  form,  scope  and  substance
satisfactory to the  Bank:  (i) the Notes duly executed by the
Borrower; (ii) an Officer's Certificate in the form acceptable
to the Bank of each Party  which is a business entity dated as
of the Second Closing Date to  which  are  attached  true  and
correct  copies of the Articles of Incorporation and Bylaws of
such Party and corporate resolutions duly adopted by the Board
of  Directors  of  each  Party  which  is  a  business  entity
authorizing   the   transactions   contemplated  by  the  Loan
Documents; (iii) a certificate from the Secretary of State and
other  appropriate  public  officials  as   to  the  continued
existence and good standing of each Party which  is a business
entity;   (iv) a   certificate  from  the  appropriate  public
official of each state in which each Party which is a business
entity is authorized  and  qualified  to do business as to the
due qualification and good standing of  each  Party which is a
business entity; (v) the Guaranty Agreements executed  by  the
appropriate  parties;  (vi)  legal opinions in form, substance
and scope satisfactory to the Bank from various counsel to the
Borrower and the Guarantor; (vii)  the  Amended  and  Restated
Intercreditor  and  Subordination  Agreement, executed by  the
Borrower,  the Guarantor, FM Properties,  and  the  Bank;  and
(viii) the FTX  Security  Agreement,  all  of  which  shall be
satisfactory to the Bank.

10.    AFFIRMATIVE    COVENANTS.     The   Borrower
covenants and agrees that, so long as the Borrower  may borrow
hereunder and until payment in full of the Notes, the Borrower
will:

10.1.  Financial    Statements   and   Information.
Deliver to the Bank in duplicate:

(a)   as  soon  as available,  and  in  any  event
within ninety (90) days after  the  end of each fiscal year of
the Borrower, a copy of the unaudited  financial report of the
Borrower as of the end of such fiscal year  and for the period
then ended, containing a balance sheet, statements  of  income
and  stockholders'  equity, and a cash flow statement, all  in
reasonable detail and  certified by a financial officer of the
Borrower, to have been prepared  in  accordance with generally
accepted accounting principles consistently applied, except as
may be explained in such certificate;  provided  that,  in the
event  that Borrower prepares an annual audited report of  the
Borrower  for  such  fiscal  year  containing a balance sheet,
statements of income and stockholders'  equity, Borrower shall
supply  such  annual audited report to the  Bank  as  soon  as
available.  The Borrower will obtain from such accountants and
deliver  to the  Bank  at  the  time  said  audited  financial
statements   are   delivered  the  written  statement  of  the
accountants that in  making  the examination necessary to said
certification they have obtained  no knowledge of any Event of
Default or Default, or if such accountants shall have obtained
knowledge of any such Event of Default  or Default, they shall
state  the  nature  and period of existence  thereof  in  such
statement; provided that  such accountants shall not be liable
directly  or indirectly to the  Bank  for  failure  to  obtain
knowledge of any such Event of Default or Default;

(b)   as  soon  as  available,  and  in  any event
within  forty-five  (45)  days after the end of each quarterly
accounting  period  in  each  fiscal   year  of  the  Borrower
(including the fourth quarter), an unaudited  financial report
of  the  Borrower  as at the end of such quarter and  for  the
period then ended, containing  a  balance sheet, statements of
income and stockholder's equity and a cash flow statement, all
in reasonable detail and certified  by  a financial officer of
the  Borrower  to  have  been  prepared  in  accordance   with
generally accepted accounting principles consistently applied,
except as may be explained in such certificate;

(c)   copies of all statements and reports sent to
stockholders  of the Borrower or filed with the Securities and
Exchange Commission;

(d)   copies    of   all   financial   and   other
information supplied by the Borrower to any Guarantor; and

(e)   such   additional    financial    or   other
information as the Bank may reasonably request.

Together  with  each delivery of financial statements required
by clauses (a) and (b) above, the Borrower will deliver to the
Bank an Officer's  Certificate  in  a form satisfactory to the
Bank stating that there exists no Event of Default or Default,
or,  if any such Event of Default or Default  exists,  stating
the nature  thereof,  the period of existence thereof and what
action the Borrower has taken or proposes to take with respect
thereto.  The Bank is authorized  to  deliver  a  copy  of any
financial  statement  delivered  to  it to any regulatory body
having jurisdiction over it.

10.2.  Lease  Schedule.   Deliver   to   the  Bank,
together  with  each  delivery  of  financial statements under
Section , a current, complete schedule  of  all  agreements to
rent or lease any property (personal, real or mixed)  to which
the  Borrower  is  a  party  lessee, showing the total amounts
payable under each such agreement,  the  amounts and due dates
of  payments  thereunder and containing a description  of  the
rented or leased  property, and all other information the Bank
may request, all in a form satisfactory to the Bank.

10.3.  Books and Records.  Maintain proper books of
record  and  account   in  accordance  with  sound  accounting
practices in which true, full and correct entries will be made
of all its dealings and business affairs.

10.4.  Insurance.     Maintain    insurance    with
financially sound, responsible and reputable companies in such
types  and  amounts  and  against  such  casualties, risks and
contingencies as is customarily carried by  owners  of similar
businesses  and  properties, and furnish to the Bank, together
with each delivery  of financial statements under Section , an
Officer's Certificate  containing  full  information as to the
insurance carried.

10.5.  Maintenance of Property.  Cause its property
to  be  maintained,  preserved,  protected and  kept  in  good
repair,  working  order and condition  so  that  the  business
carried on in connection  therewith  may be conducted properly
and efficiently.

10.6.  Inspection of Property  and Records.  Permit
any person designated by the Bank in writing,  at  the  Bank's
expense, to visit and inspect any of the properties, books and
financial records of the Borrower and discuss its affairs  and
finances with its principal officers, all at such times as the
Bank may reasonably request.

10.7.  Existence,  Laws, Obligations.  Maintain its
corporate existence, comply with all statutes and governmental
regulations  and  pay  all  taxes,  assessments,  governmental
charges,   claims  for  labor,  supplies,   rent   and   other
obligations  which  if  unpaid might become a Lien against the
property of the Borrower,  except  liabilities being contested
in good faith.

10.8.  Notice of Certain  Matters.  Notify the Bank
immediately upon acquiring knowledge of  the occurrence of any
of  the  following events: (a) the institution  or  threatened
institution   of  any  lawsuit  or  administrative  proceeding
affecting the Borrower;  (b) the  occurrence  of  any material
adverse   change   in   the   assets,  liabilities,  financial
condition, business or affairs  of  the  Borrower;  or (c) the
occurrence of any Event of Default or any Default.

10.9.  ERISA.   In  the  event  that  the  Borrower
establishes a Plan or Plans, at all times:

(a)   Maintain  and  keep in full force and effect
each Plan;

(b)   Make contributions  to each Plan in a timely
manner and in an amount sufficient to comply  with the minimum
funding standards requirements of ERISA;

(c)   Comply  with  all  applicable provisions  of
ERISA;

(d)   File all reports required  by  ERISA and the
Code to be filed with respect to each Plan;

(e)   Meet   all  requirements  with  respect   to
funding the Plans imposed by ERISA or the Code;

(f)   Insure that the value of the Plans' benefits
guaranteed under Title IV of ERISA on the date hereof does not
exceed  the  value of such Plans'  assets  allocable  to  such
benefits at any time during the term of the Loan;

(g)   Immediately  upon acquiring knowledge of any
"reportable event" or of any "prohibited transaction" (as such
terms are defined in the Code) in  connection  with  any Plan,
furnish the Bank with a statement executed by the president or
chief  financial  officer  of  the Borrower setting forth  the
details thereof and the action which  the Borrower proposes to
take with respect thereto and, when known, any action taken by
the Internal Revenue Service with respect thereto;

(h)   Notify the Bank promptly upon receipt by the
Borrower of any notice of the institution of any proceeding or
other action which may result in the termination  of  any Plan
and furnish to the Bank copies of such notice;

(i)   Acquire and maintain in amounts satisfactory
to   the   Bank  from  either  the  Pension  Benefit  Guaranty
Corporation  or  authorized  private insurers, when available,
the contingent employer liability  coverage insurance required
under ERISA;

(j)   Furnish the Bank with  copies  of the annual
report  for each Plan filed with the Internal Revenue  Service
not later than ten (10) days after such report has been filed;
and

(k)   Furnish  the Bank with copies of any request
for  waiver  of  the funding standards  or  extension  of  the
amortization periods required by Sections 303 and 304 of ERISA
or Section 412 of  the  Code  promptly  after  the  request is
submitted to the Secretary of the Treasury, the Department  of
Labor or the Internal Revenue Service, as the case may be.

10.10.  Compliance  with Environmental Laws.  At all
times:

(a)   use and operate  all  of  its facilities and
properties in material compliance with all Environmental Laws,
keep  all necessary permits, approvals, orders,  certificates,
licenses  and  other  authorizations relating to environmental
matters in effect and remain in material compliance therewith,
handle all Hazardous Materials in material compliance with all
applicable Environmental  Laws  and  dispose  of all Hazardous
Materials  generated by the Borrower or at any property  owned
or leased by  it  at facilities or with carriers that maintain
valid  permits, approvals,  certificates,  licenses  or  other
authorizations    for    such    disposal   under   applicable
Environmental Laws;

(b)   promptly notify  the Bank and provide copies
upon  receipt of all written claims,  complaints,  notices  or
inquiries  relating  to  the  condition  of the facilities and
properties   of   the   Borrower   or   its  compliance   with
Environmental Laws; and

(c)   provide such information  and certifications
which  the Bank may reasonably request from time  to  time  to
evidence compliance with this Section 10.10.

10.11.  Settlement Statements.  Deliver to the Bank,
within ten (10) days of any closing of the Phoenix Purchase, a
copy of  the  settlement  statement or other closing statement
executed by the Borrower and  the  purchaser  and  showing the
purchase  price  paid for the real property purchased  in  the
Phoenix Purchase.

10.12.  Payment  Calculations.   Deliver to the Bank
on  each January 15, April 15, July 15 and October  15  during
the terms  of the Loans, commencing on July 15, 1995, together
with  the  prepayment   on  the  Loans  required  pursuant  to
Subsection   5.1(a)  of  the   Credit   Agreement,   financial
information sufficient  to  show the Borrower's calculation of
Excess  Cash  Flow  and Adjusted  Excess  Cash  Flow  for  the
immediately preceding Quarter-Annual Period.

11.    NEGATIVE COVENANTS.  So long as the Borrower
may borrow hereunder  and  until payment in full of the Notes,
except with the written consent of the Bank:

11.1.  Mortgages,   Etc.   The  Borrower  will  not
create or permit to exist any Lien  (including the charge upon
assets purchased under a conditional sales agreement, purchase
money mortgage, security agreement or  other  title  retention
agreement)  upon  any  of  its  assets,  whether  now owned or
hereafter acquired, or assign or otherwise convey any right to
receive income, except:

(a)   Liens  for  taxes  not yet due or which  are
being contested in good faith by appropriate proceedings;

(b)   Other Liens incidental to the conduct of its
business  or  the  ownership  of  its assets  which  were  not
incurred  in connection with the borrowing  of  money  or  the
obtaining of  advances  or  credit,  and  which  do not in the
aggregate materially detract from the value of such  assets or
materially  impair  the  use thereof in the operation of  such
business; and

(c)   Liens held  by  Freeport-McMoRan Inc. and FM
Properties  on real and personal property  located  in  Travis
County, Texas,  and  Hays County, Texas identified to the Bank
by the Borrower as the  property  previously owned by Circle C
Development Joint Venture (the "Circle C Tract").

(d)   [intentionally omitted]

11.2.  Debt.  The Borrower will not incur or permit
to exist any Funded Debt or Current Debt, except:

(a)   Debt evidenced by  the  Notes  and  Facility
Letter of Credit Obligations;

(b)   Endorsements   in  the  ordinary  course  of
business  of  negotiable  instruments   in   the   course   of
collection;

(c)   Debt of the Borrower existing on the Closing
Date  (and  disclosed  to the Bank), which is secured by Liens
permitted by the provisions of Section ;

(d)   [intentionally omitted]

(e)   [intentionally omitted]

(f)   Secured  Debt  of  the  Borrower  owed to FM
Properties  as  evidenced by that certain Revolving Promissory
Note in the original principal amount of $10,000,000.00, dated
July 17, 1995 (which  principal  amount  may  be  increased to
$12,000,000.00),  subordinated to the Loans, the Reimbursement
Obligations, and the  existence  of  any  Commitment, accruing
interest at a rate acceptable to the Bank, and upon such terms
and  provisions as have been approved by the  Bank,  including
without  limitation,  provisions  to  the  effect  that (i) no
payment of principal or interest may be made upon such secured
Debt  in  the event that the Borrower is in default under  the
Credit Agreement;  (ii) no  prepayment or accelerated payments
of  principal  may  be  made on such  secured  Debt;  (iii) no
payment on such secured Debt  shall  be paid at final maturity
(whether  or  not  such final maturity is  established  by  an
instrument renewing  or  extending such Debt) until the Loans,
the  Reimbursement  Obligations  and  all  of  the  Borrower's
obligations under the  Credit Agreement have been paid in full
(whether or not such Loans, Reimbursement Obligations or other
obligations have been at  any time renewed and extended by the
Bank)  and  any Commitment terminated;  (iv) Revolving  Credit
Loan proceeds  shall  not  be  used  to  make  any  payment of
principal  or  interest  on  such  secured  Debt;  and (v) the
secured Debt shall amortize beginning September 30, 1995, with
payments  equal  to  the  lesser  of Excess Cash Flow (to  the
extent  available)  and  twelve  and one-half  percent  (12  1/2
percent) of the outstanding principal  balance of such secured
Debt being made on each January 15, April  15,  July  15,  and
October  15  during  the  term  of such secured Debt; (vi) the
maturity date of such secured Debt  shall be February 6, 1997;
and (vii) Borrower may make interest  or principal payments on
such secured Debt only to the extent that  Excess Cash Flow is
available to make such payment, and to the extent  that Excess
Cash  Flow  is  not  available  to  make a particular interest
and/or  principal  payment,  then such interest  or  principal
shall not be paid but shall be  added  to  the  next regularly
scheduled  interest  and/or  principal payment, as applicable,
and  such  inability  to  make  any  such  payment  shall  not
constitute  a  default  or event of  default  under  the  loan
documents relating to such  secured  Debt until the Loans, the
Reimbursement   Obligations,   and  all  of   the   Borrower's
obligations have been paid in full  under the Credit Agreement
and the Commitment terminated; and

(g)   Debt  of  the  Borrower   consisting   of  a
borrowing of the MUD Proceeds out of escrow or consisting of a
borrowing  from FM Properties in an amount equal to the amount
of MUD Proceeds borrowed by FM Properties.

11.3.  Loans,   Advances   and   Investments.   The
Borrower will not make or have outstanding any loan or advance
to,  or own or acquire any stock or securities  of  or  equity
interest in, any Person, except:

(a)   (i) readily  marketable securities issued or
fully guaranteed by the United States of America or commercial
paper rated "Prime 1" by Moody's  Investors  Service,  Inc. or
A-1 by Standard and Poor's Corporation with maturities of  not
more  than  one  hundred  eighty  (180)  days from the date of
issue;  (ii) certificates  of deposit or repurchase  contracts
with financial institutions  acceptable  to  the Bank on terms
satisfactory to the Bank, all of the foregoing  not  having  a
maturity  of  more than one (1) year from the date of issuance
thereof; and (iii) readily  marketable  securities received in
settlement of liabilities created in the  ordinary  course  of
business; and

(b)   travel  advances  in  the ordinary course of
business to officers and employees.

11.4.  Merger,   Consolidation,   Etc.    (a)   The
Borrower will not merge or consolidate  with  any other Person
or sell, lease, transfer or otherwise dispose of  (whether  in
one  transaction  or a series of transactions, or whether as a
result  of foreclosure  of  the  liens  described  in  Section
11.1(c) hereof  or  pursuant to the Option Agreement) all or a
substantial part of its  assets  or  acquire  (whether  in one
transaction  or a series of transactions) all or a substantial
part of the assets  of  any Person; provided, however that (i)
so  long  as  the Borrower complies  with  the  provisions  of
Subsection 5.1(d)  of  the  Credit Agreement, the Borrower may
sell all commercial properties  included in the Circle C Tract
in  Travis County, Texas owned by  the  Borrower,  to  Phoenix
Holdings,  Ltd.,  pursuant  to the Phoenix Purchase Agreement;
and (ii) the Borrower may transfer  all  commercial properties
owned  by  the  Borrower to, merge into, or consolidate  with,
(A) FM  Properties,   (B)  a  wholly-owned  subsidiary  of  FM
Properties, (C) a new entity  owned  in part by FM Properties,
Inc.  and  in  part  by FM Properties, or  (D)  a  new  entity
acceptable to the Bank  in  its  sole  discretion  (the  party
described  in  (A),  (B),  (C),  or (D) immediately foregoing,
except for a  party that purchases  stock in the Borrower, the
"Transactional Party"), so long as (X) the Transactional Party
(if other than FM Properties) owns no  assets  other than such
commercial   properties,  and  (Y)  the  Transactional   Party
(including  FM   Properties,   if   FM   Properties   is   the
Transactional Party) assumes payment of the Loans, the Letters
of  Credit Reimbursement Obligations and all other obligations
of the  Borrower under the Loan Documents, upon such terms and
conditions  as  are  acceptable to the Bank, including without
limitation, the execution  of  an  assumption agreement by the
Transactional Party in a form acceptable to the Bank, delivery
of legal opinions in form, substance and scope satisfactory to
the Bank from various counsel to the  Transactional  Party and
the  Guarantor, and delivery of an officer's certificate  with
such organizational  information  and representations relating
thereto   as  is  acceptable  to  the  Bank   and   evidencing
resolutions  or consents from the governing body of the entity
or other appropriate  Person;  and  (a) shares of stock of the
Borrower shall be owned exclusively by  one  or  more  of  the
following:   (i) the Guarantor; or (ii) any parent corporation
of, sister corporation  of,  or  subsidiary of, the Guarantor;
provided that shares of stock of the  Borrower may be owned by
other  Persons,  with the prior written consent  of  the  Bank
which the Bank shall not unreasonably withhold.

11.5.  Supply and Purchase Contracts.  The Borrower
will not enter into  or  be  a  party  to any contract for the
purchase  of  materials, supplies or other  property  if  such
contract requires that payment for such materials, supplies or
other property  shall  be  made  regardless  of whether or not
delivery is ever made or tendered of such materials,  supplies
and other property.

11.6.  Discount  or  Sale  of  Receivables.   The
Borrower  will  not  discount or sell with recourse, or sell
for less than the face  value  thereof,  any  of  its  notes
receivable,  receivables  under  leases  or  other  accounts
receivable.

11.7.  Change in Accounting Method.  The Borrower
will  not  make  any  change  in  the  method  of  computing
depreciation  for  either tax or book purposes or any  other
material  change in accounting  method  without  the  Bank's
prior written approval.

11.8.  Sale  of Inventory.  The Borrower will not
make  any  sale,  lease or other  disposition  of  inventory
except in a prudent  manner,  based upon the prevailing fair
market value of the inventory,  and  on  terms substantially
similar to those which would be involved in  a  third-party,
arms-length transaction.

11.9.  Securities   Credit   Regulations.     The
Borrower  will  not  take  or  permit any action which might
cause the Loans or the Facility Letter of Credit Obligations
or  this  Agreement  to violate Regulation G,  Regulation T,
Regulation U, Regulation X  or  any  other regulation of the
Board  of  Governors  of  the Federal Reserve  System  or  a
violation of the Securities  Exchange  Act  of 1934, in each
case as now or hereafter in effect.

11.10.  Leases.  The Borrower will  not be a party
to  any  lease  of  real property with a value in excess  of
$2,500,000.00, except  upon the prior written consent of the
Bank.

11.11.  Nature   of   Business;  Management.   The
Borrower will not change its line  of business or enter into
any  business  which  is substantially  different  from  the
business in which it is  presently  engaged  or  permit  any
material change in its management.

11.12.  Transactions  with  Related  Parties.  The
Borrower  will  not enter into any transaction or  agreement
with any officer,  director  or  holder  of  any outstanding
capital stock of the Borrower (or any Affiliate  of any such
Person)  or  any  Person  which  has  an  option to purchase
outstanding shares of the Borrower, unless  the same is upon
terms substantially similar to those obtainable  from wholly
unrelated  sources.   The Bank hereby consents to Borrower's
execution of the Option  Agreement;  provided,  however that
the  Borrower  shall not transfer the Circle C Tract  to  FM
Properties, pursuant  to  the  Option Agreement, without the
Bank's prior written consent which  may be given or withheld
at  the Bank's sole discretion, except  in  compliance  with
Section 11.4  of  the  Credit  Agreement.   The  Bank hereby
consents  to the Borrower's entering into a loan transaction
as borrower with FM Properties to the extent permitted under
Section 11.2(f) of the Credit Agreement.

11.13.  Contingent Liabilities.  The Borrower will
not guarantee  directly  or  indirectly  the  performance or
payment of, or purchase or agree to purchase, or  assume  or
contingently  agree  to  become  or be secondarily liable in
respect of, any obligation or liability  of any other Person
except as permitted by Section .

11.14.  Hazardous  Materials.  The  Borrower  will
not  (a) cause  or  permit  any Hazardous  Materials  to  be
placed, held, used, located,  or disposed of on, under or at
any of the Borrower's property  or  any  part thereof by any
Person  in a manner which could reasonably  be  expected  to
have a Material Adverse Effect; (b) cause or permit any part
of  any  of   the  Borrower's  property  to  be  used  as  a
manufacturing, storage or dump site for Hazardous Materials,
where such action  could  reasonably  be  expected to have a
Material Adverse Effect; or (c) cause or suffer any Liens to
be  recorded  against  any of the Borrower's property  as  a
consequence of, or in any  way  related  to,  the  presence,
remediation, or disposal of Hazardous Materials in or  about
any  of  the  Borrower's  property,  including any so-called
state, federal or local "superfund" lien  relating  to  such
matters.

11.15.  Subordinated Debt.  The Borrower shall not
make  any  payment  of  principal or interest on the secured
subordinated Debt permitted  under  Section 11.2(f)  of  the
Credit    Agreement,   except   as   permitted   under   the
subordination   provisions   contained   in  the  agreements
establishing or evidencing such secured Debt and approved by
the  Bank.   The  Borrower  shall  not amend or  modify  any
provisions  of  any instrument evidencing  the  subordinated
Debt described in  the  two preceding sentences, without the
prior written consent of the Bank.

11.16.  Phoenix  Purchase  Agreement.  The Phoenix
Purchase Agreement shall not be amended,  without  the prior
written  consent  of  the  Bank (which consent shall not  be
unreasonably withheld), to provide for a closing date of the
Phoenix Purchase that is later  than the Maturity Date or to
provide for consideration for the  Phoenix  Purchase the net
proceeds of which would be insufficient to repay  the  Loans
in full.

12.    EVENTS  OF  DEFAULT;  REMEDIES.  If any of
the following events shall occur, then the  Bank  may (i) by
notice  to the Borrower, declare the Commitment of the  Bank
and the obligation of the Bank to make Loans hereunder to be
terminated,  whereupon  the  same shall forthwith terminate,
and/or (ii) declare the Notes  and  all interest accrued and
unpaid  thereon,  and all other amounts  payable  under  the
Notes and this Agreement,  to  be forthwith due and payable,
whereupon the Notes, all such interest  and  all  such other
amounts,  shall  become  and  be  forthwith  due and payable
without presentment, demand, protest, or further  notice  of
any  kind (including, without limitation, notice of default,
notice  of intent to accelerate and notice of acceleration),
all of which  are  hereby  expressly waived by the Borrower;
provided, however, that with respect to any Event of Default
described in Section  hereof, (A) the Commitment of the Bank
and the obligation of the Bank to make Loans hereunder shall
automatically  be  terminated   and  (B) the  entire  unpaid
principal  amount  of the Notes, all  interest  accrued  and
unpaid thereon, and all such other amounts payable under the
Notes  and  this  Agreement,   shall   automatically  become
immediately  due  and payable, without presentment,  demand,
protest,  or any notice  of  any  kind  (including,  without
limitation,   notice   of   default,  notice  of  intent  to
accelerate and notice of acceleration),  all  of  which  are
hereby expressly waived by the Borrower.

12.1.  Failure  to  Pay  Principal.  The Borrower
does  not  pay, repay or prepay any principal  of  any  Note
within three (3) days after due; or

12.2.  Failure  to  Pay  Interest.   The Borrower
does not pay interest on any Note within five (5) days after
due; or

12.3.  Failure  to  Pay  Commitment Fee or  Other
Amounts.  The Borrower does not pay any  commitment fee, the
Facility  Letter  of Credit Fee, the Facility  Fee,  or  any
other obligation or  amount  payable under this Agreement or
the  Notes or any Letter of Credit  Reimbursement  Agreement
when due; or

12.4.  Failure  to  Pay Other Debt.  The Borrower
does not pay principal or interest  on  any  other Debt when
due,  except  with  respect to trade debt in an amount  less
than $100,000.00 as to  which  the Borrower has a good faith
dispute (the "Excepted Trade Debt"); provided, however, that
with  respect to trade debt in excess  of  $100,000.00,  the
Borrower  may,  with  the  prior written consent of the Bank
dispute in good faith such trade  debt  without such failure
to  pay  such  trade debt constituting an Event  of  Default
hereunder; or the  holder of such other Debt (other than the
Excepted Trade Debt) declares, or may declare, such Debt due
prior  to its stated  maturity  because  of  the  Borrower's
default thereunder; or

12.5.  Misrepresentation  or  Breach of Warranty.
Any representation or warranty made by the  Borrower  herein
or  otherwise  furnished to the Bank in connection with this
Agreement shall  be  incorrect,  false  or misleading in any
material respect when made; or

12.6.  Violation  of  Negative  Covenants.    The
Borrower  violates  any  covenant,  agreement  or  condition
contained in Section ; or

12.7.  Violation  of  Other Covenants, Etc.   The
Borrower violates any other covenant, agreement or condition
contained herein (other than the covenants,  agreements  and
conditions  set  forth  or  described in Sections , , ,  and
above)  and  such violation shall  not  have  been  remedied
within thirty  (30) days after the occurrence thereof except
that (i) with respect  to  Defaults under covenants relating
to environmental matters, such  a  Default  shall  not be an
Event  of  Default unless the Default is not susceptible  of
cure or unless  the  Borrower  ceases  diligently  to cure a
Default  which  is susceptible to being cured; and (ii) with
respect to Defaults  under  covenants relating to compliance
with governmental requirements relating to development, such
a Default shall not be an Event  of  Default unless Borrower
ceases diligently to cure such Default or such Default shall
not  have been remedied within ninety (90)  days  after  the
occurrence thereof; or

12.8.  Bankruptcy   and   Other   Matters.    The
Borrower   (i) makes   an  assignment  for  the  benefit  of
creditors; or (ii) admits  in  writing  its inability to pay
its  debts generally as they become due; or  (iii) generally
fails  to  pay its debts as they become due; or (iv) files a
petition or  answer  seeking for itself, or consenting to or
acquiescing    in,    any    reorganization,    arrangement,
composition,  readjustment,  liquidation,   dissolution,  or
similar  relief under any applicable Debtor Law  (including,
without  limitation,   the   Federal  Bankruptcy  Code);  or
(v) there  is appointed a receiver,  custodian,  liquidator,
fiscal agent,  or trustee of the Borrower or of the whole or
any substantial part of its assets; or (vi) any court enters
an order, judgment  or  decree  approving  a  petition filed
against  the  Borrower  seeking reorganization, arrangement,
composition,  readjustment,   liquidation,  dissolution,  or
similar relief under any Debtor  Law  and either such order,
decree or judgment so filed against it  is  not dismissed or
stayed (unless and until such stay is no longer  in  effect)
within  thirty  (30)  days  of entry thereof or an order for
relief is entered pursuant to any such law; or

12.9.  Dissolution.   Any order is entered in any
proceeding against the Borrower decreeing  the  dissolution,
liquidation,  winding-up  or  split-up of the Borrower,  and
such order remains in effect for thirty (30) days; or

12.10.  Undischarged Judgment.  Final judgment, or
judgments in the aggregate, for  the  payment  of  money  in
excess  of $20,000.00 shall be rendered against the Borrower
and the same  shall  remain  undischarged  for  a  period of
thirty  (30)  days  during  which  execution  shall  not  be
effectively stayed; or

12.11.  Security  Documents.   Any  Party violates
any  covenant,  agreement  or  condition  contained  in  the
Security  Documents  or  any  default  or event  of  default
otherwise occurs thereunder; or

12.12.  Failure   to   Maintain   Guaranty.    Any
Guaranty  Agreement by any Guarantor is or becomes,  or  the
Borrower or any Guarantor claims that any Guaranty Agreement
is unenforceable  or  ineffective, or any Guarantor defaults
under any such Guaranty Agreement; or

12.13.  Environmental  Matters.  The occurrence of
any of the following events which,  in  the  sole opinion of
the  Bank,  could result in liability to the Borrower  under
any Environmental  Law  or  the  creation  of  a Lien on any
property  of  the  Borrower  in  favor  of  any governmental
authority  or any other Person for any liability  under  any
Environmental Law or for damages arising from costs incurred
by such Person  in  response  to  a  Release  or  threatened
Release of Hazardous Materials into the environment: (i) the
Release of Hazardous Materials at, upon, under or within the
property  owned  or leased by the Borrower or any contiguous
property; (ii) the  receipt  by the Borrower of any summons,
claim, complaint, judgment, order  or similar notice that it
is not in compliance with or that any governmental authority
is investigating its compliance with  any Environmental Law;
(iii) the receipt by the Borrower of any  notice or claim to
the effect that it is or may be liable for  the  Release  or
threatened   Release   of   Hazardous   Materials  into  the
environment; or (iv) any governmental authority incurs costs
or  expenses  in  response to the Release of  any  Hazardous
Material which affects  in  any  way  the  properties of the
Borrower.

12.14.  Other  Remedies.   In  addition   to   and
cumulative  of any rights or remedies expressly provided for
in this Section , if any one or more Events of Default shall
have occurred,  the  Bank may proceed to protect and enforce
its rights hereunder by  any  appropriate  proceedings.  The
Bank may also proceed either by the specific  performance of
any covenant or agreement contained in this Agreement or the
other  Loan  Documents  or by enforcing the payment  of  the
Notes or by enforcing any  other  legal  or  equitable right
provided under this Agreement or the other Loan Documents or
otherwise existing under any law in favor of the  holder  of
the Notes.

12.15.  Remedies  Cumulative.  No remedy, right or
power conferred upon the Bank is intended to be exclusive of
any other remedy, right or power  given  hereunder or now or
hereafter existing at law, in equity, or otherwise,  and all
such remedies, rights and powers shall be cumulative.

13.    MISCELLANEOUS.

13.1.  Representation  by  the  Bank.   The  Bank
represents  that it is its present intention, as of the date
of its acquisition  of  the  Notes, to acquire the Notes for
its account or for the account  of  its  Affiliates, and not
with  a  view  to  the  distribution  or sale thereof,  and,
subject  to  any  applicable  laws, the disposition  of  the
Bank's property shall at all times  be  within  its control.
The Notes have not been registered under the Securities  Act
of  1933,  as amended (the "Securities Act"), and may not be
transferred,  sold  or otherwise disposed of except (a) in a
registered offering under  the  Securities Act; (b) pursuant
to  an  exemption from the registration  provisions  of  the
Securities Act; or (c) if the Securities Act shall not apply
to the Notes  or  the  transactions contemplated by the Loan
Documents.   Nothing  in  this  Section   shall  affect  the
characterization   of  the  Loans   and   the   transactions
contemplated hereunder as commercial lending transactions.

13.2.  Amendments, Waivers, Etc.  No amendment or
waiver of any provision of any Loan Document, nor consent to
any departure by the  Borrower therefrom, shall in any event
be effective unless the  same shall be writing and signed by
the Borrower and the Bank,  and  then such waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which given.   No  failure  or delay on
the  part  of  the  Bank  in  exercising  any power or right
hereunder shall operate as a waiver thereof,  nor  shall any
single  or  partial exercise of any such right or power,  or
any abandonment or discontinuance of steps to enforce such a
right or power,  preclude  any  other  or  further  exercise
thereof  or  the  exercise of any other right or power.   No
course of dealing between  the  Borrower  and the Bank shall
operate  as  a  waiver  of  any  right  of  the  Bank.    No
modification  or  waiver of any provision of this Agreement,
the Notes or any other  Loan  Document  nor  consent  to any
departure  by  the Borrower therefrom shall in any event  be
effective unless the same shall be in writing, and then such
waiver or consent  shall  be  effective only in the specific
instance and for the purpose for  which given.  No notice to
or  demand  on the Borrower in any case  shall  entitle  the
Borrower to any other or further notice or demand in similar
or other circumstances.

13.3.  [intentionally omitted]

13.4.  Reimbursement  of Expenses.  Any provision
hereof to the contrary notwithstanding,  and  whether or not
the  transactions  contemplated by this Agreement  shall  be
consummated, the Borrower  agrees  to reimburse the Bank for
its   reasonable  out-of-pocket  expenses,   including   the
reasonable  fees  and  expenses  of  counsel to the Bank, in
connection  with  such  transactions, or  any  of  them,  or
otherwise in connection with  this  Agreement  or  any other
Loan   Document,  including  the  negotiation,  preparation,
execution,  administration,  modification and enforcement of
this  Agreement or any other Loan  Document  and  all  fees,
including the reasonable fees and expenses of counsel to the
Bank, costs  and expenses of the Bank in connection with due
diligence, transportation,  computer, duplication, insurance
and consultants.  The Borrower  agrees  to  pay  any and all
stamp and other taxes which may be payable or determined  to
be  payable in connection with the execution and delivery of
this  Agreement  any Note or any other Loan Document, and to
save any holder of  any  Note  harmless  from  any  and  all
liabilities  with  respect to or resulting from any delay or
omission to pay any  such  taxes.   The  obligations  of the
Borrower  under  this Section  shall survive the termination
of this Agreement and/or the payment of the Notes.

13.5.  Lien  on  Real  and Personal Property.  At
the request of the Bank, the Borrower shall grant a lien and
security  interest  in and to all property,  both  real  and
personal, of whatever  kind or nature owned by the Borrower,
to the Bank and obtain subordination  of  any prior existing
lien or security interest encumbering all or  a  portion  of
such  property,  in  order that the Bank's lien and security
interest shall be first  and  prior  to  all other liens and
security interests.  The Borrower shall supply the Bank with
all  information,  instruments,  permits, plans,  contracts,
environmental assessments, and appraisals  relating  to such
property and otherwise assist the Bank in evaluating whether
it  will  take a lien or security interest on the Borrower's
property.   The  Borrower  shall  sign such deeds of trusts,
pledges,   security   agreements,   financing    statements,
certificates,  consents,  and  agreements  as  the Bank  may
require,  the  Borrower  shall  and  obtain  all third-party
signatures  reasonably required thereon, in connection  with
the granting  of  any  lien  or  security  interest  for the
benefit of the Bank.

13.6.  Notices.     All    notices    and   other
communications  provided  for  herein  shall  be  in writing
(including  telex,  facsimile,  or cable communication)  and
shall be mailed, telecopied, telexed,  cabled  or  delivered
addressed as follows:

(a)   If to the Borrower, to it at:

c/o Freeport McMoRan, Inc.
1615 Poydras Street
New Orleans, Louisiana  70112
Telephone No.: (504) 582-4144
Telecopy No.: (504) 582-4511
Attention: Mr. Robert R. Boyce

(b)   If to the Bank, to it at:

Texas Commerce Bank National Association
North Building, 6th Floor
Real Estate Group
707 Travis
Houston, Texas  77002
Telephone No.: (713) 216-5133
Telecopy No.: (713) 216-7713
Attention: Mr. Brian M. Kouns

or  to  such  other  address  as shall be designated by such
party  in a written notice to the  other  party.   All  such
notices  and  communications shall, when mailed, telecopied,
telexed,  transmitted,  or  cabled,  become  effective  when
deposited  in  the  mail,  confirmed  by  telex  answerback,
transmitted  by  the  telecopier,  or delivered to the cable
company, except that notices and communications  to the Bank
shall not be effective until actually received by the Bank.

13.7.  Governing Law.  UNLESS OTHERWISE SPECIFIED
THEREIN,  EACH  LOAN  DOCUMENT  SHALL  BE  GOVERNED  BY  AND
CONSTRUED  IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
AND THE UNITED  STATES  OF  AMERICA; provided, however, that
Chapter 15 of Subtitle 3, Title 79,  Revised  Civil Statutes
of  Texas,  1925,  as  amended (Articles 5069-15.01  through
5069-15.11, Vernon's Texas Civil Statutes, as amended) shall
not apply to this Agreement  and  the  Revolving Note issued
hereunder.

13.8.  Survival  of  Representations,  Warranties
and   Covenants.    All  representations,   warranties   and
covenants  contained  herein  or  made  in  writing  by  the
Borrower in connection  herewith shall survive the execution
and delivery of this Agreement  and the Notes, and will bind
and  inure to the benefit of the respective  successors  and
assigns  of the parties hereto, whether so expressed or not,
provided that  the  undertaking of the Bank to make Loans to
the Borrower shall not inure to the benefit of any successor
or assign of the Borrower.   No  investigation  at  any time
made  by  or on behalf of the Bank shall diminish the Bank's
right  to  rely  on  such  representations,  warranties  and
covenants  contained  herein  or  made  in  writing  by  the
Borrower.  All  statements  contained  in any certificate or
other written instrument delivered by the Borrower or by any
Person authorized by the Borrower under  or pursuant to this
Agreement   or   in   connection   with   the   transactions
contemplated  hereby  shall  constitute representations  and
warranties hereunder as of the time made by the Borrower.

13.9.  Counterparts.    This   Agreement  may  be
executed in several counterparts, and by the  parties hereto
on  separate  counterparts,  and each counterpart,  when  so
executed  and  delivered,  shall   constitute   an  original
instrument,   and   all  such  separate  counterparts  shall
constitute but one and the same instrument.

13.10.  Separability.     Should    any    clause,
sentence,   paragraph   or  Section  of  this  Agreement  be
judicially declared to be  invalid,  unenforceable  or void,
such  decision shall not have the effect of invalidating  or
voiding  the  remainder  of  this Agreement, and the parties
hereto agree that the part or  parts  of  this  Agreement so
held to be invalid, unenforceable or void will be  deemed to
have been stricken herefrom and the remainder will have  the
same  force  and  effectiveness as if such part or parts had
never been included  herein. Each covenant contained in this
Agreement shall be construed  (absent  an  express  contrary
provision   herein)  as  being  independent  of  each  other
covenant contained  herein,  and  compliance  with  any  one
covenant   shall   not  (absent  such  an  express  contrary
provision) be deemed  to  excuse compliance with one or more
other covenants.

13.11.  Descriptive    Headings.     The   section
headings   in   this   Agreement   have  been  inserted  for
convenience only and shall be given  no  substantive meaning
or  significance  whatsoever  in  construing the  terms  and
provisions of this Agreement.

13.12.  Accounting Terms.   All  accounting  terms
used   herein  which  are  not  expressly  defined  in  this
Agreement,  or  the  respective  meanings  of  which are not
otherwise  qualified,  shall  have  the  respective meanings
given   to  them  in  accordance  with  generally   accepted
accounting principles.

13.13.  Limitation  of Liability.  No claim may be
made by the Borrower or any other Person against the Bank or
the Affiliates, directors, officers,  employees,  attorneys,
or   agents   of   the   Bank  for  any  special,  indirect,
consequential, or punitive  damages  in respect of any claim
for  breach of contract arising out of  or  related  to  the
transactions  contemplated  by  this  Agreement, or any act,
omission, or event occurring in connection  herewith and the
Borrower hereby waives, releases, and agrees not to sue upon
any claim for any such damages, whether or not  accrued  and
whether or not known or suspected to exist in its favor.

13.14.  Set-off.   The  Borrower  hereby gives and
confirms  to  the  Bank  a  right of set-off of all  moneys,
securities  and  other property  of  the  Borrower  (whether
special, general or  limited)  and the proceeds thereof, now
or hereafter delivered to remain  with  or in transit in any
manner to the Bank, its correspondents or its agents from or
for the Borrower, whether for safekeeping,  custody, pledge,
transmission,   collection  or  otherwise  or  coming   into
possession of the  Bank in any way, and also, any balance of
any deposit accounts  and  credits of the Borrower with, and
any and all claims of security  for the payment of the Notes
and  of  all  other  liabilities  and   obligations  now  or
hereafter owed by the Borrower to the Bank,  contracted with
or  acquired  by  the  Bank,  whether  such liabilities  and
obligations   be   joint,  several,  absolute,   contingent,
secured, unsecured,  matured  or unmatured, and the Borrower
hereby authorizes the Bank at any  time  or  times,  without
prior   notice,  to  apply  such  money,  securities,  other
property, proceeds, balances, credits of claims, or any part
of the foregoing,  to such liabilities in such amounts as it
may  select,  whether   such   liabilities   be  contingent,
unmatured or otherwise, and whether any collateral  security
therefor  is  deemed  adequate or not.  The rights described
herein shall be in addition  to  any collateral security, if
any,  described in any separate agreement  executed  by  the
Borrower.

13.15.  Sale or Assignment.  The Bank reserves the
right,  in  its  sole  discretion,  without  notice  to  the
Borrower,  to  sell participations in all or any part of any
Loan,  the Notes,  the  Reimbursement  Obligations,  or  the
Commitment  evidenced  by  this  Agreement;  or the Bank may
assign one hundred percent (100%) of its interest  in all or
any part of any Loan, the Notes, or the Commitment evidenced
by this Agreement or the Reimbursement Obligations, (i) to a
successor  of  the  Bank  or in connection with a sale to  a
governmental   entity  or  quasi-governmental   entity;   or
(ii) with the prior  written  consent of the Borrower, which
consent shall not be unreasonably withheld.

13.16.  Interest.   All   agreements  between  the
Borrower  and  the Bank, whether now existing  or  hereafter
arising and whether  written  or  oral, are hereby expressly
limited  so  that  in  no contingency or  event  whatsoever,
whether  by reason of demand  being  made  on  any  Note  or
otherwise,  shall  the amount paid, or agreed to be paid, to
the Bank for the use, forbearance, or detention of the money
to be loaned under this  Agreement  or  otherwise or for the
payment  or  performance  of  any  covenant  or   obligation
contained  herein  or in any other Loan Document exceed  the
Highest Lawful Rate.   If,  as a result of any circumstances
whatsoever, fulfillment of any provision hereof or of any of
such documents, at the time performance  of  such  provision
shall  be  due,  shall  involve  transcending  the  limit of
validity  prescribed  by  applicable  usury  law, then, ipso
facto,  the obligation to be fulfilled shall be  reduced  to
the  limit   of   such  validity,  and  if,  from  any  such
circumstance,  the  Bank  shall  ever  receive  interest  or
anything which might be deemed interest under applicable law
which would exceed the  Highest  Lawful  Rate,  such  amount
which  would  be  excessive interest shall be applied to the
reduction of the principal  amount  owing  on account of the
Notes  or  the  amounts  owing on other obligations  of  the
Borrower to the Bank under  any Loan Document and not to the
payment of interest, or if such  excessive  interest exceeds
the  unpaid principal balance of the Notes and  the  amounts
owing on other obligations of the Borrower to the Bank under
any Loan  Document, as the case may be, such excess shall be
refunded to  the  Borrower.   All  sums paid or agreed to be
paid to the Bank for the use, forbearance,  or  detention of
the indebtedness of the Borrower to the Bank shall,  to  the
extent  permitted by applicable law, be amortized, prorated,
allocated,  and  spread  throughout  the  full  term of such
indebtedness until payment in full of the principal  thereof
(including  the  period of any renewal or extension thereof)
so that the interest  on  account of such indebtedness shall
not  exceed  the  Highest  Lawful   Rate.    The  terms  and
provisions  of  this  Section   shall control and  supersede
every other provision of all agreements between the Borrower
and the Bank.

13.17.  Indemnification.   The  Borrower agrees to
indemnify,  defend,  and  save  harmless  the Bank  and  its
officers, directors, employees, agents, and  attorneys,  and
each  of  them (the "Indemnified Parties"), from and against
all claims,  actions,  suits,  and  other legal proceedings,
damages, costs, interest, charges, taxes,  counsel fees, and
other  expenses  and penalties which any of the  Indemnified
Parties may sustain  or incur by reason of or arising out of
(i) the making of any  Loan  hereunder,  the  execution  and
delivery  of  this  Agreement,  the Notes and the other Loan
Documents   and   the  consummation  of   the   transactions
contemplated thereby  and  the exercise of any of the Bank's
rights under this Agreement,  the  Notes  and the other Loan
Documents  or  otherwise,  including,  without   limitation,
damages,   costs,  and  expenses  incurred  by  any  of  the
Indemnified   Parties   in   investigating,  preparing  for,
defending   against,   or  providing   evidence,   producing
documents, or taking any  other  action  in  respect  of any
commenced   or   threatened  litigation  under  any  federal
securities law or  any similar law of any jurisdiction or at
common  law  or  (ii) any  and  all  claims  or  proceedings
(whether brought by a private party, governmental authority,
or otherwise) for bodily injury, property damage, abatement,
remediation, environmental  damage,  or  impairment  or  any
other  injury  or  damage  resulting from or relating to the
Release of any Hazardous Materials  located  upon, migrating
into, from, or through or otherwise relating to any property
owned or leased by the Borrower (whether or not  the Release
of  such  Hazardous Materials was caused by the Borrower,  a
tenant, or  subtenant  of  the  Borrower,  a  prior owner, a
tenant, or subtenant of any prior owner or any  other  party
and whether or not the alleged liability is attributable  to
the   handling,   storage,  generation,  transportation,  or
disposal of any Hazardous  Materials or the mere presence of
any Hazardous Materials on such  property; provided that the
Borrower  shall  not  be liable to the  Indemnified  Parties
where the Release of such  Hazardous Materials occurs at any
time at which the Borrower ceases to own such property); and
provided further that no Indemnified Party shall be entitled
to the benefits of this Section  to the extent its own gross
negligence or willful misconduct  contributed  to  its loss;
and  provided  further  that  it  is  the  intention  of the
Borrower  to  indemnify  the Indemnified Parties against the
consequences of their own  negligence.   This  Agreement  is
intended  to  protect  and indemnify the Indemnified Parties
against  all risks hereby  assumed  by  the  Borrower.   The
obligations  of  the  Borrower  under  this  Section   shall
survive  any  the  repayment of the Notes, the discharge and
release  of any Person  under  any  Loan  Document  and  any
termination of this Agreement.

13.18.  Payments  Set  Aside.     To the extent that
the Borrower makes a payment or payments to  the Bank or the
Bank  exercises  its  right  of setoff, and such payment  or
payments or the proceeds of such  setoff or any part thereof
are subsequently invalidated, declared  to  be fraudulent or
preferential, set aside and/or required to be  repaid  to  a
trustee,  receiver  or any other Person under any Debtor Law
or equitable cause, then,  to  the  extent of such recovery,
the  obligation or part thereof originally  intended  to  be
satisfied,  and  all  rights and remedies therefor, shall be
revived and shall continue  in  full  force and effect as if
such payment had not been made or setoff had not occurred.

13.19.  Loan Agreement Controls.  If there are any
conflicts or inconsistencies among this Agreement and any of
the other Loan Documents, the provisions  of  this Agreement
shall prevail and control.

13.20.  HLT  Classification.   If  the Bank  or  a
Governmental  Authority  of the United States or  any  state
thereof with supervisory authority  over the Bank classifies
any Loan or Facility Letter of Credit  Obligation or similar
extension  of  credit  or  commitment  for same  under  this
Agreement  or  any Note as a "highly leveraged  transaction"
(or  successor regulatory  category)  under  regulations  or
guidelines  published and/or administered by bank regulatory
authorities of  the  United  States or any state thereof (an
"HLT Classification"), the Bank  shall  notify  the Borrower
that  the  HLT  Classification  was  made  by a Governmental
Authority  of  the United States or any state  thereof  with
supervisory authority  over  the  Bank.   If, as a result of
such  HLT  Classification  the Bank incurs additional  costs
(whether regarding taxation,  required  levels  of reserves,
deposits, insurance, or capital, including any allocation of
capital    requirements    or    conditions,    or   similar
requirements),  the Bank shall notify the Borrower  of  such
increased costs; and the Borrower shall, within fifteen (15)
days of such notice  by  the  Bank,  pay  to  the  Bank such
additional  amounts  as (in the Bank's sole judgment,  after
good faith and reasonable  computation)  will compensate the
Bank for such increase in costs.

13.21.  Capital Requirements and  Yield Maintenance.
If at any time after the date hereof, the Bank determines that
the adoption or modification of any applicable  law,  rule  or
regulation  regarding  taxation, the Bank's required levels of
reserves,  deposits,  insurance   or  capital  (including  any
allocation of capital requirements  or conditions), or similar
requirements, or any interpretation or  administration thereof
by  any  governmental  authority, central bank  or  comparable
agency  charged  with the  interpretation,  administration  or
compliance of the  Bank  with any of such requirements, has or
would  have  the  effect of (i) increasing  the  Bank's  costs
relating to the obligations hereunder, or (ii) reducing  the  
yield or rate of return of the Bank on the obligation hereunder,  
to a level below that which the Bank could have achieved but 
for  the  adoption or modification  of any such requirements, 
the Borrower  shall, within fifteen  (15) days of any request 
by the Bank, pay to the Bank such additional  amounts  as (in  
the  Bank's sole judgment, after good faith and reasonable 
computation)  will compensate  the Bank for such increase in 
costs or reduction in yield or rate  of  return of the Bank.  
No failure by the Bank immediately to demand payment of any 
additional amounts payable  hereunder  or under  Section shall  
constitute a waiver of the Bank's right to demand payment of 
such amounts at any subsequent time.   Nothing  herein contained 
shall be construed or so operate as to require  the  Borrower  
to pay any  interest,  fees,  costs  or  charges  greater than  
is permitted by applicable law.

13.22.  FINAL  AGREEMENT.   THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN  THE  PARTIES AND MAY
NOT  BE  CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT  ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF, the parties hereto, by their
respective officers thereunto duly authorized, have executed
this Agreement on  the  dates  set  forth  in the respective
acknowledgments to be effective as of December 20, 1996.

CIRCLE C LAND CORP., a Texas corporation

By:
William H. Armstrong, III, President

TEXAS COMMERCE BANK NATIONAL ASSOCIATION, 
a national banking association

By:
Brian M. Kouns, Vice President

AGREED AND CONSENTED TO AS OF THE EFFECTIVE  DATE  HEREOF BY
GUARANTOR,  WHOSE DULY AUTHORIZED OFFICER HAS SIGNED  BELOW,
WITH THE POWER AND AUTHORITY TO BIND THE GUARANTOR ON BEHALF
OF WHOM SUCH  OFFICER  SIGNS,  AND GUARANTOR HEREBY AFFIRMS,
ITS OBLIGATIONS UNDER THE GUARANTY AGREEMENTS:

Freeport-McMoRan Inc., a
Delaware corporation

By:
Name:
Title:

THE STATE OF TEXAS       

COUNTY OF TRAVIS         

BEFORE  ME, the undersigned  authority,  a  notary
public,  on  this  day   personally   appeared   William  H.
Armstrong,  III, President of Circle C Land Corp.,  a  Texas
corporation,  known  to  me  to  be the person whose name is
subscribed to the foregoing instrument  and  acknowledged to
me   that  he  executed  the  same  for  the  purposes   and
consideration  therein expressed and in the capacity therein
stated, on behalf of said corporation.

Given under my hand and seal of office on this the
____ day of December, 1996.

Notary Public In and For the State of Texas

Typed or Printed Name of Notary

Commission Expiration Date

THE STATE OF TEXAS             

COUNTY OF HARRIS               

BEFORE  ME,  the  undersigned  authority, a notary
public, on this day personally appeared Brian M. Kouns, Vice
President  of  Texas Commerce Bank National  Association,  a
national banking  association,  known to me to be the person
whose  name  is subscribed to the foregoing  instrument  and
acknowledged to  me  that  he  executed  the  same  for  the
purposes  and  consideration  therein  expressed  and in the
capacity therein stated, on behalf of said association.

Given under my hand and seal of office on this the
____ day of December, 1996.

Notary Public In and For the State of Texas

Typed or Printed Name of Notary

Commission Expiration Date

STATE OF LOUISIANA

PARISH OF ORLEANS

On  this  ____  day  of December, 1996, before  me
appeared _____________________ ____________________________,
to me personally known, who, being  by me duly sworn did say
that  he  is  the  _________  of  Freeport-McMoRan  Inc.,  a
Delaware  corporation, and that the  seal  affixed  to  said
instrument  is  the  corporate  seal of said corporation and
that said instrument was signed and sealed in behalf of said
corporation by authority of its board  of directors and said
____________________________ acknowledged said instrument to
be the free act and deed of said corporation.

Notary Public,  State of Louisiana

(Typed or Printed Name of Notary)

SCHEDULE
STANDBY LETTERS OF CREDIT

The following Standby Letter of Credit is the only Letter of
Credit  that  is still in effect on the Second Closing  Date
for the account of Circle C Land Corporation issued by Texas
Commerce Bank National Association:

Amount

Letter of Credit No. I-426230                     $ 85,573
Dated:    February 5, 1992
Maturity: February 6, 1997
Beneficiary: City of Austin
Form:     Subdivision

EXHIBIT "A"
AMENDED AND RESTATED TERM NOTE

$15,628,358.00                              December 20, 1996

FOR VALUE RECEIVED, the undersigned, CIRCLE C LAND
CORP., a corporation  organized under the laws of Texas (the
"Borrower"), HEREBY PROMISES  TO  PAY  to the order of TEXAS
COMMERCE  BANK  NATIONAL  ASSOCIATION,  a  national  banking
association  (the  "Bank"), on or before February  28,  1998
(the "Maturity Date"),  the principal sum of Fifteen Million
Six Hundred Twenty-Eight  Thousand Three Hundred Fifty-Eight
and No/100 Dollars ($15,628,358.00)  in  accordance with the
terms  and provisions of that certain Amended  and  Restated
Credit Agreement  dated  as  of  December  20,  1996  by and
between  the  Borrower and the Bank (the "Credit Agreement";
capitalized terms  used  herein  and  not  otherwise defined
herein shall have the meanings ascribed to such terms in the
Credit Agreement).

The outstanding principal balance  of this Amended
and Restated Term Note (this "Term Note") shall  be  due and
payable  on  the Maturity Date and as otherwise provided  in
the Credit Agreement.  The Borrower promises to pay interest
on the unpaid  principal  balance of this Term Note from the
date of the Loan evidenced  by  this  Term  Note  until  the
principal  balance  thereof  is paid in full. Interest shall
accrue on the outstanding principal  balance  of  this  Term
Note  from  and  including the date of the Loan evidenced by
this Term Note to but not including the Maturity Date at the
rate or rates, and  shall  be  due and payable on the dates,
set forth in the Credit Agreement.  Any amount not paid when
due with respect to principal (whether  at  stated maturity,
by acceleration or otherwise), costs or expenses, or, to the
extent  permitted  by applicable law, interest,  shall  bear
interest from the date  when  due  to and excluding the date
the same is paid in full, payable on  demand,  at  the  rate
provided for in Section 2.1(b) of the Credit Agreement.

Payments   of  principal  and  interest,  and  all
amounts due with respect  to  costs  and  expenses, shall be
made  in  lawful  money of the United States of  America  in
immediately available  funds,  without deduction, set-off or
counterclaim to the Bank not later  than 11:00 a.m. (Houston
time) on the dates on which such payments  shall  become due
pursuant to the terms and provisions set forth in the Credit
Agreement.

If  any  payment of principal or interest on  this
Term Note shall become  due on a Saturday, Sunday, or public
holiday on which the Bank  is  not  open  for business, such
payment  shall be made on the next succeeding  Business  Day
and such extension of time shall in such case be included in
computing interest in connection with such payment.

In  addition to all principal and accrued interest
on this Term Note,  the  Borrower  agrees  to  pay  (a)  all
reasonable  costs  and  expenses  incurred by all owners and
holders  of  this  Term Note in collecting  this  Term  Note
through any probate, reorganization, bankruptcy or any other
proceeding and (b) reasonable  attorneys'  fees  when and if
this  Term  Note  is placed in the hands of an attorney  for
collection after default.

All agreements  between the Borrower and the Bank,
whether  now  existing  or  hereafter  arising  and  whether
written or oral, are hereby expressly  limited so that in no
contingency or event whatsoever, whether by reason of demand
being made on this Term Note or otherwise,  shall the amount
paid,  or  agreed  to  be  paid,  to  the Bank for the  use,
forbearance, or detention of the money  to  be  loaned under
the  Credit  Agreement  and  evidenced by this Term Note  or
otherwise or for the payment or  performance of any covenant
or obligation contained in the Credit  Agreement,  this Term
Note or in any other Loan Document exceed the Highest Lawful
Rate.   If,  as  a  result  of any circumstances whatsoever,
fulfillment  of any provision  hereof  or  of  any  of  such
documents, at  the  time performance of such provision shall
be due, shall involve  transcending  the  limit  of validity
prescribed  by  applicable usury law, then, ipso facto,  the
obligation to be  fulfilled shall be reduced to the limit of
such validity, and  if, from any such circumstance, the Bank
shall  ever receive interest  or  anything  which  might  be
deemed interest  under applicable law which would exceed the
Highest Lawful Rate,  such  amount  which would be excessive
interest shall be applied to the reduction  of the principal
amount  owing  on account of this Term Note or  the  amounts
owing on other obligations of the Borrower to the Bank under
any Loan Document  and not to the payment of interest, or if
such excessive interest exceeds the unpaid principal balance
of this Term Note and the amounts owing on other obligations
of the Borrower to the  Bank under any Loan Document, as the
case may be, such excess  shall be refunded to the Borrower.
In determining whether or not  the  interest paid or payable
under any specific contingencies exceeds  the Highest Lawful
Rate, the Borrower and the Bank shall, to the maximum extent
permitted  under applicable law, (a) characterize  any  non-
principal payment  as an expense, fee or premium rather than
as  interest;  (b) exclude  voluntary  prepayments  and  the
effects thereof;  and  (c)  amortize,  prorate, allocate and
spread in equal parts during the period  of  the full stated
term of this Term Note, all interest at any time  contracted
for,  charged,  received or reserved in connection with  the
indebtedness evidenced by this Term Note.

This Term  Note  is  one of the Notes provided for
in,  and  is  entitled  to  the  benefits   of,  the  Credit
Agreement,  which  Credit  Agreement,  among  other  things,
contains provisions for acceleration of the maturity  hereof
upon the happening of certain stated events, for prepayments
on  account of principal hereof prior to the maturity hereof
upon  the  terms  and conditions and with the effect therein
specified, and provisions to the effect that no provision of
the Credit Agreement  or  this  Term  Note shall require the
payment or permit the collection of interest  in  excess  of
the  Highest  Lawful  Rate.  The obligations of the Borrower
hereunder are guaranteed by the Guaranty Agreements.

Except as otherwise  specifically  provided for in
the   Credit  Agreement,  the  Borrower  and  any  and   all
endorsers,  guarantors  and  sureties severally waive grace,
demand,  presentment  for payment,  notice  of  dishonor  or
default, protest, notice  of  protest,  notice  of intent to
accelerate,   notice   of  acceleration  and  diligence   in
collecting and bringing  of  suit  against any party hereto,
and agree to all renewals, extensions  or  partial  payments
hereon, with or without notice, before or after maturity.

THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN  ACCORDANCE  WITH,  THE  LAWS  OF  THE STATE OF TEXAS AND
APPLICABLE FEDERAL LAW.

This Term Note shall be deemed  to  be  a contract
under the law of the State of Texas.  The Borrower  and  the
Bank  further  agree  that,  insofar  as  the  provisions of
Article 1.04,  Subtitle 1,  Title 79,  of the Revised  Civil
Statutes  of Texas, 1925, as amended, are  relevant  to  the
determination  of  the maximum rate of interest permitted by
applicable law in respect  of  this Term Note, the indicated
rate  ceiling  computed  pursuant  to  Section (a)  of  such
Article shall apply to this Term Note.

This Term Note amends and  restates  that  certain
Term  Note  dated February 6, 1992 executed by Borrower  and
payable to the  order  of  Bank  in  the  original principal
amount of $32,000,000.00 (the "Initial Term  Note"),  and it
is  expressly  agreed to and understood by the Borrower that
this  Term  Note  (i)  is  given  in  substitution  for  and
restatement and modification  of, and not as payment of, the
Initial  Term  Note,  and (ii) is  in  no  way  intended  to
constitute a novation of the Initial Term Note.

THIS  TERM NOTE,  TOGETHER  WITH  THE  OTHER  LOAN
DOCUMENTS,  REPRESENTS   THE  FINAL  AGREEMENT  BETWEEN  THE
PARTIES AND MAY NOT BE CONTRADICTED  BY  EVIDENCE  OF PRIOR,
CONTEMPORANEOUS,   OR   SUBSEQUENT  ORAL  AGREEMENT  OF  THE
PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

IN WITNESS WHEREOF,  the  Borrower has caused this
Term  Note  to  be  executed and delivered  by  its  officer
thereunto duly authorized  effective  as  of  the date first
above written.

CIRCLE C LAND CORP., a Texas corporation

By:    _________________________
William H. Armstrong, III,
President

EXHIBIT "B"
AMENDED AND RESTATED REVOLVING NOTE

$13,500,000.00                               December 20, 1996

FOR VALUE RECEIVED, the undersigned, CIRCLE C LAND
CORP.,  a corporation organized under the laws of Texas (the
"Borrower"),  HEREBY  PROMISES  TO PAY to the order of TEXAS
COMMERCE  BANK  NATIONAL  ASSOCIATION,  a  national  banking
association (the "Bank"), on  or  before  February  28, 1998
(the "Maturity Date"), the principal sum of Thirteen Million
Five Hundred Thousand and 00/100 Dollars ($13,500,000.00) or
so  much as may be advanced from time to time, in accordance
with  the  terms  and provisions of that certain Amended and
Restated Credit Agreement  dated  as of December 20, 1996 by
and between the Borrower and the Bank,  as  the  same may be
amended, restated or supplemented and in effect from time to
time, the "Credit Agreement"; capitalized terms used  herein
and  not  otherwise  defined  herein shall have the meanings
ascribed to such terms in the Credit Agreement).

The outstanding principal  balance of this Amended
and Restated Revolving Note (this "Revolving Note") shall be
due  and  payable on the payment dates as  provided  in  the
Credit Agreement.   The Borrower promises to pay interest on
the unpaid principal balance of this Revolving Note from the
date  of  any  Loan  evidenced   by   this   Revolving  Note
(including,   without   limitation,   any   Loan  previously
evidenced by the Prior Notes, as hereinafter  defined) until
the  principal  balance  thereof is paid in full.   Interest
shall accrue on the outstanding  principal  balance  of this
Revolving  Note  from  and  including  the  date of any Loan
evidenced   by  this  Revolving  Note  (including,   without
limitation, any  Loan  previously  evidenced  by  the  Prior
Notes,  as  hereinafter  defined)  to  but not including the
Maturity Date at the rate or rates, and  shall  be  due  and
payable  on  the  dates,  set forth in the Credit Agreement.
Any  amount  not paid when due  with  respect  to  principal
(whether at stated  maturity, by acceleration or otherwise),
costs or expenses, or, to the extent permitted by applicable
law, interest, shall bear interest from the date when due to
and excluding the date  the same is paid in full, payable on
demand, at the rate provided  for  in  Section 2.2(b) of the
Credit Agreement.

Payments  of  principal  and  interest,   and  all
amounts  due  with  respect to costs and expenses, shall  be
made in lawful money  of  the  United  States  of America in
immediately available funds, without deduction,  set-off  or
counterclaim  to the Bank not later than 11:00 a.m. (Houston
time) on the dates  on  which such payments shall become due
pursuant to the terms and provisions set forth in the Credit
Agreement.

If any payment  of  principal  or interest on this
Revolving  Note shall become due on a Saturday,  Sunday,  or
public holiday  on  which the Bank is not open for business,
such payment shall be  made  on the next succeeding Business
Day  and  such  extension of time  shall  in  such  case  be
included  in computing  interest  in  connection  with  such
payment.
In  addition to all principal and accrued interest
on this Revolving  Note,  the Borrower agrees to pay (a) all
reasonable costs and expenses  incurred  by  all  owners and
holders  of this Revolving Note in collecting this Revolving
Note through  any probate, reorganization, bankruptcy or any
other proceeding and (b) reasonable attorneys' fees when and
if this Revolving Note is placed in the hands of an attorney
for collection after default.

All agreements  between the Borrower and the Bank,
whether  now  existing  or  hereafter  arising  and  whether
written or oral, are hereby expressly  limited so that in no
contingency or event whatsoever, whether by reason of demand
being  made on this Revolving Note or otherwise,  shall  the
amount paid,  or agreed to be paid, to the Bank for the use,
forbearance, or  detention  of  the money to be loaned under
the Credit Agreement and evidenced by this Revolving Note or
otherwise or for the payment or performance  of any covenant
or  obligation  contained  in  the  Credit  Agreement,  this
Revolving  Note  or  in any other Loan Document  exceed  the
Highest Lawful Rate.   If,  as a result of any circumstances
whatsoever, fulfillment of any provision hereof or of any of
such documents, at the time performance  of  such  provision
shall  be  due,  shall  involve  transcending  the  limit of
validity  prescribed  by  applicable  usury  law, then, ipso
facto,  the obligation to be fulfilled shall be  reduced  to
the  limit   of   such  validity,  and  if,  from  any  such
circumstance,  the  Bank  shall  ever  receive  interest  or
anything which might be deemed interest under applicable law
which would exceed the  Highest  Lawful  Rate,  such  amount
which  would  be  excessive interest shall be applied to the
reduction of the principal  amount  owing on account of this
Revolving Note or the amounts owing on  other obligations of
the Borrower to the Bank under any Loan Document  and not to
the  payment  of  interest,  or  if  such excessive interest
exceeds the unpaid principal balance of  this Revolving Note
and the amounts owing on other obligations  of  the Borrower
to  the Bank under any Loan Documents, as the case  may  be,
such   excess   shall   be  refunded  to  the  Borrower.  In
determining whether or not  the  interest  paid  or  payable
under  any specific contingencies exceeds the Highest Lawful
Rate, the Borrower and the Bank shall, to the maximum extent
permitted  under  applicable  law, (a) characterize any non-
principal payment as an expense,  fee or premium rather than
as  interest;  (b)  exclude voluntary  prepayments  and  the
effects thereof; and  (c)  amortize,  prorate,  allocate and
spread  in equal parts during the period of the full  stated
term of this  Revolving  Note,  all  interest  at  any  time
contracted  for, charged, received or reserved in connection
with the indebtedness evidenced by this Revolving Note.

This  Revolving  Note is one of the Notes provided
for  in,  and  is entitled to the  benefits  of  the  Credit
Agreement,  which  Credit  Agreement,  among  other  things,
contains provisions  for acceleration of the maturity hereof
upon the happening of certain stated events, for prepayments
on account of principal  hereof prior to the maturity hereof
upon the terms and conditions  and  with  the effect therein
specified, and provisions to the effect that no provision of
the  Credit Agreement or this Revolving Note  shall  require
the payment  or  permit the collection of interest in excess
of the Highest Lawful Rate.  The obligations of the Borrower
hereunder are guaranteed  by the Guaranty Agreements.  It is
contemplated that by reason  of  prepayments  or  repayments
hereon prior to the Maturity  Date,  there may be times when 
no indebtedness  is owing hereunder prior to such date, but 
notwithstanding such occurrences, this  Revolving  Note  shall  
remain  valid and shall  be in full force and effect as to Loans 
made pursuant to the Credit Agreement subsequent to each such 
occurrence.

Except  as  otherwise specifically provided for in
the  Credit  Agreement,  the   Borrower   and  any  and  all
endorsers,  guarantors and sureties severally  waive  grace,
demand, presentment  for  payment,  notice  of  dishonor  or
default,  protest,  notice  of  protest, notice of intent to
accelerate,  notice  of  acceleration   and   diligence   in
collecting  and  bringing  of suit against any party hereto,
and agree to all renewals, extensions  or  partial  payments
hereon, with or without notice, before or after maturity.

THIS  REVOLVING  NOTE  SHALL  BE  GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
AND APPLICABLE FEDERAL LAW.

This  Revolving  Note  shall  be deemed  to  be  a
contract under the law of the State of Texas.   The Borrower
and  the  Bank further agree that, insofar as the provisions
of Article 1.04,  Subtitle 1, Title 79, of the Revised Civil
Statutes of Texas,  1925,  as  amended,  are relevant to the
determination of the maximum rate of interest  permitted  by
applicable  law  in  respect  of  this  Revolving  Note, the
indicated  rate ceiling computed pursuant to Section (a)  of
such Article shall apply to this Revolving Note.

This  Revolving  Note  amends  and  restates  that
certain  Revolving  Note  dated  as  of  September 1,  1993,
executed  by  the  Borrower  and payable to the order of the
Bank  in  the face amount of $13,500,000.00  (the  "Previous
Note").  The Previous Note amended and restated that certain
Revolving Note dated as of February 6, 1992, executed by the
Borrower and  payable  to  the order of the Bank in the face
amount of $8,500,000.00 (the  "Initial  Note"),  and  it  is
expressly understood and agreed to by the Borrower that this
Revolving   Note   (i) is  given  in  substitution  for  and
restatement and modification  of, and not as payment of, the
Previous Note and the Initial Note (collectively, the "Prior
Notes"),  and (ii) is in no way  intended  to  constitute  a
novation of the Previous Note or the Initial Note.

THIS  REVOLVING NOTE, TOGETHER WITH THE OTHER LOAN
DOCUMENTS,  REPRESENTS   THE  FINAL  AGREEMENT  BETWEEN  THE
PARTIES AND MAY NOT BE CONTRADICTED  BY  EVIDENCE  OF PRIOR,
CONTEMPORANEOUS,   OR   SUBSEQUENT  ORAL  AGREEMENT  OF  THE
PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

IN WITNESS WHEREOF,  the  Borrower has caused this
Revolving Note to be executed and delivered  by  its officer
thereunto  duly  authorized  effective as of the date  first
above written.

CIRCLE C LAND CORP., a Texas corporation

By:     __________________________
William H. Armstrong,  III,
President

EXHIBIT "C"
NOTICE OF BORROWING

The undersigned hereby certifies  that  he  is the
Chief  Executive  Officer or the Chief Financial Officer  of
CIRCLE C LAND CORP.,  a corporation organized under the laws
of Texas (the "Borrower"), and that as such he is authorized
to  execute  this Notice  of  Borrowing  on  behalf  of  the
Borrower.   With  reference  to  that  certain  Amended  and
Restated Credit  Agreement dated as of December 20, 1996 (as
same  may  be  amended,  modified,  increased,  supplemented
and/or restated  from  time to time, the "Credit Agreement")
entered into by and between  the Borrower and TEXAS COMMERCE
BANK  NATIONAL ASSOCIATION, a national  banking  association
(the "Bank"),  the undersigned further certifies, represents
and warrants on  behalf  of  the  Borrower  that to his best
knowledge and belief after reasonable and due  investigation
and  review,  all of the following statements are  true  and
correct (each capitalized  term  used herein having the same
meaning given to it in the Credit Agreement unless otherwise
specified):

(a)  The Borrower requests  that  the Bank advance
to  the  Borrower  the aggregate sum of $___________  by  no
later than __________,  19__.   Immediately  following  such
Loans,  the  aggregate  outstanding balance of the Revolving
Credit Loans shall equal  $________.   The Borrower requests
that  the principal amount for the Bank of  the  Loans  bear
interest as follows:

(i)       The principal amount of the Revolving Credit Loan,
if any, which shall bear interest at the Base Rate requested
to be made by the Bank is $________.

(ii)      The principal amount of the Revolving Credit Loan,
if any, which shall bear interest at the Eurodollar Rate for
which the  initial  Rate Period shall be one month requested
to be made by the Bank is $ ________.

(iii)     The principal amount of the Revolving Credit Loan,
if any, which shall bear interest at the Eurodollar Rate for
which the initial Rate  Period shall be two months requested
to be made by the Bank is $ ________.

(iv)      The principal amount of the Revolving Credit Loan,
if any, which shall bear interest at the Eurodollar Rate for
which  the  initial  Rate  Period   shall  be  three  months
requested to be made by the Bank is $ ________.

(v)       The principal amount of the  Term  Loan,  if  any,
which  shall  bear interest at the Base Rate requested to be
made by the Bank is $ ________.

(vi)      The principal  amount  of  the  Term Loan, if any,
which shall bear interest at the Eurodollar  Rate  for which
the initial Rate Period shall be one month requested  to  be
made by the Bank is $ ________.

(vii)     The  principal  amount  of  the Term Loan, if any,
which shall bear interest at the Eurodollar  Rate  for which
the initial Rate Period shall be two months requested  to be
made by the Bank is $________.

(viii)    The  principal  amount  of  the Term Loan, if any,
which shall bear interest at the Eurodollar  Rate  for which
the  initial Rate Period shall be three months requested  to
be made by the Bank is $ ________.

(b)  As of the date hereof, and as a result of the
making  of  the requested Loans, there does not and will not
exist any Default or Event of Default.

(c)  The  representations and warranties contained
in Section  of the Credit  Agreement are true and correct in
all material respects as of  the  date  hereof  and shall be
true  and  correct  upon the making of the requested  Loans,
with the same force and  effect  as though made on and as of
the date hereof and thereof.

(d)  No change that would cause a material adverse
effect on the business, operations  or  condition (financial
or otherwise) of the Borrower has occurred since the date of
the most recent financial statements provided  to  the  Bank
dated as of ________, 19__.

(e)  The demand deposit account of the Borrower at
the Bank's Applicable Lending Office into which the proceeds
of   the   borrowing   are   to   be  deposited  is  Account
No. _______________ in the Borrower's  name.  Alternatively,
the funds are to be transferred by wire  in  accordance with
the following wire transfer instructions:

;

or delivered to _______________________________  in the form
of   a   cashier's  check  made  payable  to  the  order  of
_______________________________________.

(f)  The  Expiration  Date  of  each  Rate  Period
specified  in  (a) above  shall be the last day of such Rate
Period.

EXECUTED AND DELIVERED this ___ day of __________,
19___.

CIRCLE C LAND CORP.

By:

Name:

Title: Chief Executive
Officer/Chief Financial Officer

EXHIBIT "D"
NOTICE OF RATE CONVERSION/CONTINUATION

TO:TEXAS  COMMERCE  BANK  NATIONAL  ASSOCIATION,  a national
banking  association  (the  "Bank") pursuant to that certain
Amended   and  Restated  Credit  Agreement   dated   as   of
December ____,  1996  (as  same  may  be  amended, modified,
increased, supplemented and/or restated from  time  to time,
the "Credit Agreement"), entered into by and between  CIRCLE
C LAND CORP. (the "Borrower") and the Bank.

Pursuant  to Section (ii) of the Credit Agreement,
this  Notice  of  Rate  Change/Continuation  (the  "Notice")
represents the Borrower's election to [insert one or more of
the following]:

[1.Use if converting Eurodollar  Rate  Loans  to  Base  Rate
Loans.]

Convert  $_____________  in  aggregate  principal  amount of
Eurodollar  Rate  Loans  with  a  current Rate Period ending
on________, 19__, to Base Rate Loans  on____________,  19__.
[and]

[2.Use  if  converting  Base  Rate  Loans to Eurodollar Rate
Loans.]

Convert $_____________ in aggregate principal amount of Base
Rate  Loans  to Eurodollar Rate Loans on  _________________,
19__.  The initial  Rate  Period  for  such  Eurodollar Rate
Loans  is requested to be a [one] [two] [three]  (__)  month
period.

[3a.Use if continuing Eurodollar Rate Loans] or

[3b.Use  with number 1, if converting a portion of
Eurodollar Rate Loans  to Base Rate Loans and continuing the
balance as Eurodollar Rate Loans] or

[3c.Use with number 2  if  converting a portion of
Base   Rate   Loans  to  Eurodollar  Loans  and   continuing
Eurodollar Rate Loans]

Continue $_____________  in  aggregate  principal  amount of
Eurodollar  Rate Loans with a current Rate Period ending  on
___________________, 19____, as Eurodollar Rate Loans having
a Rate Period of [one] [two] [three] [six] months.

4.Borrower hereby  certifies  that  no  Default  or Event of
Default  has  occurred  and  is  continuing under the Credit
Agreement.

Unless   otherwise  defined   herein,   terms
defined in the Credit Agreement shall have the same meanings
in this Notice.

Dated:                        By:

Name:

Title:

EXHIBIT "E"

AMENDED AND RESTATED GUARANTY AGREEMENT

This AMENDED AND RESTATED GUARANTY AGREEMENT (this
"Guaranty") is made to be  effective as of December 20, 1996
by  FREEPORT-McMoRan  INC.,  a   Delaware  corporation  (the
"Guarantor"),  in  favor  of  TEXAS COMMERCE  BANK  NATIONAL
ASSOCIATION,  a  national  banking   association,   and  its
successors and assigns (the "Bank").

PRELIMINARY STATEMENT.  The Bank and Circle C Land
Corp.,  a  Texas  corporation (the "Borrower"), have entered
into that certain Credit  Agreement  dated as of February 6,
1992 (the "Agreement").  The Agreement  has  been amended by
(i)  that certain First Amendment to Credit Agreement  dated
to be  effective  as  of  June  11,  1992,  executed  by the
Borrower  and  the  Bank  (the "First Amendment"); (ii) that
certain Second Amendment to  Credit  Agreement  dated  to be
effective as of November 16, 1992, executed by Borrower  and
the  Bank (the "Second Amendment"); (iii) that certain Third
Amendment  to  Credit  Agreement dated to be effective as of
May 5, 1993, executed by  the  Borrower  and  the  Bank (the
"Third  Amendment");  (iv) that certain Fourth Amendment  to
Credit Agreement and Revolving Note dated to be effective as
of September 1, 1993, executed  by the Borrower and the Bank
(the "Fourth Amendment"); (v) that  certain  Fifth Amendment
to Credit Agreement dated to be effective as of  February 2,
1994,  executed  by  the  Borrower  and the Bank (the "Fifth
Amendment");  (vi) that certain Sixth  Amendment  to  Credit
Agreement  dated  to  be  effective  as  of  July 17,  1995,
executed  by   the   Borrower   and  the  Bank  (the  "Sixth
Amendment";  and  (vii) that certain  Seventh  Amendment  to
Credit Agreement dated  to  be  effective as of December 12,
1996, executed by the Borrower and  the  Bank  (the "Seventh
Amendment");   the   Agreement   as  amended  by  the  First
Amendment,   Second  Amendment,  Third   Amendment,   Fourth
Amendment, Fifth  Amendment,   Sixth  Amendment  and Seventh
Amendment,   the "Initial Credit Agreement").  Of even  date
herewith, the  Bank  and  Borrower  have  entered  into that
certain Amended and Restated Credit Agreement (such  Amended
and  Restated  Credit  Agreement,  as  it  may  hereafter be
amended  from  time to time, the "Credit Agreement"),  which
amends and restates the Initial Credit Agreement.

The Guarantor  entered  into that certain Guaranty
Agreement effective as of February  6, 1992, for the benefit
of the Bank, as amended by that certain  First  Amendment to
Guaranty  Agreements, dated to be effective as of  June  11,
1992 and executed  by  the  Guarantor  on  its behalf and as
successor  by  merger  to  Longhorn  Properties,    Inc.,  a
Delaware  corporation,  and the Bank (the Guaranty Agreement
as  amended,  the  "Prior Guaranty").   The  Prior  Guaranty
guaranteed  the Borrower's  obligations  under  the  Initial
Credit Agreement.

In  connection with the spin off of certain assets
of the Guarantor  to  Freeport-McMoRan Copper & Gold Inc., a
Delaware  corporation,  the   Guarantor  entered  into  that
certain Amended and Restated Guaranty Agreement effective as
of July 17, 1995, for the benefit  of  the Bank, (the "Prior
Restated  Guaranty")  which amended and restated  the  Prior
Guaranty.  The Prior Guaranty  was  amended  and restated to
limit  the Prior Guaranty (as amended and restated)  to  all
obligations   of  the  Borrower  other  than  principal  and
interest  on  the  Notes,  and  in  exchange  therefor,  the
Guarantor executed  the  FTX Guaranty Agreement, dated as of
July 17, 1995, and the FTX  Security  Agreement.   Such  FTX
Guaranty  Agreement  has  been  amended  and  restated as of
December 20, 1996, by that certain Amended and  Restated FTX
Guaranty   Agreement,   executed   by  Guarantor  (the  "FTX
Guaranty").   The  FTX  Guaranty  Agreement  guarantees  the
principal and interest on the Notes  which  are  secured  as
more  fully  described  therein.   This  Guaranty amends and
restates  the  Prior  Restated Guaranty, which  amended  and
restated the Prior Guaranty.   Guarantor  guarantees certain
of  the  Borrower's  obligations under the Credit  Agreement
under this Guaranty.

From the making  of  the  Loans by the Bank to the
Borrower pursuant to the terms and conditions  set  forth in
the  Credit Agreement, the Guarantor will derive substantial
benefit,  whether directly or indirectly, from the making of
this Guaranty.   It is a condition precedent to the transfer
of funds described  above  and the making of the Loans under
the Credit Agreement that the  Guarantor shall have executed
and delivered this Guaranty.

All terms used herein  and  not  otherwise defined
herein  shall  have  the  meanings assigned to them  in  the
Credit Agreement.

NOW, THEREFORE, in  consideration  of the premises
and  other  good  and valuable consideration, the  adequacy,
receipt and sufficiency  of  which  are hereby acknowledged,
the Guarantor hereby agrees as follows:

SECTION 1.    Guaranty.    The   Guarantor   hereby
unconditionally and irrevocably (a) guarantees  the punctual
payment   when   due,   whether   at   stated  maturity,  by
acceleration, by prepayment or otherwise, of all obligations
of the Borrower now or hereafter existing  under  the Credit
Agreement,  the  Notes,  the  Letter of Credit Reimbursement
Agreement,  and  all  other  Loan  Documents  to  which  the
Borrower  is  a  party, including, without  limitation,  the
Reimbursement  Obligations  and  the  fees  payable  by  the
Borrower pursuant to the terms of the Credit Agreement other
than the principal and interest on the Notes, and (b) agrees
to pay any and all  reasonable  expenses (including, without
limitation, reasonable counsel fees  and  expenses) incurred
by the Bank in enforcing any rights under this Guaranty (all
of  the  above,  other  than principal and interest  on  the
Notes,   being   hereinafter    collectively    called   the
"Obligations").

SECTION   2.   Guaranty  Absolute.   The  Guarantor
guarantees that the Obligations  will  be  paid  strictly in
accordance  with  the  terms  of  the Credit Agreement,  the
Notes, the Letter of Credit Reimbursement Agreement, and all
other Loan Documents, regardless of  any  law, regulation or
order  now  or  hereafter  in  effect  in  any  jurisdiction
affecting any of such terms or the rights of the  Bank  with
respect  thereto.  The liability of the Guarantor under this
Guaranty shall  be absolute and unconditional, to the extent
permitted by applicable law, irrespective of:

(a)  any  lack of validity or enforceability of or
defect or deficiency in the Credit Agreement, the Notes, the
Letter of Credit Reimbursement  Agreement,  or  any  of  the
other Loan Documents;

(b)  any  change  in  the  time,  manner, terms or
place of payment of, or in any other term of,  all or any of
the Obligations, or any other amendment or waiver  of or any
consent  to departure from the Credit Agreement, the  Notes,
the Letter  of Credit Reimbursement Agreement, or any of the
other Loan Documents;

(c)  any sale, exchange, release or non-perfection
of any Property  hereafter  standing  as  security  for  the
liabilities  hereby  guaranteed  or any liabilities incurred
directly or indirectly hereunder or  any set-off against any
of said liabilities, or any release or  amendment  or waiver
of or consent to departure from any other guaranty,  for all
or any of the Obligations;

(d)  any  change  in  the existence, structure  or
ownership  of  the  Guarantor  or  the   Borrower,   or  any
insolvency,  bankruptcy,  reorganization  or  other  similar
proceeding affecting the Borrower or its assets;

(e)  the existence of any claim, set-off or  other
rights which the Guarantor may have at any time against  the
Borrower, the holder or holders of the Notes or any Note, or
any  other Person, whether or not arising in connection with
this Guaranty,  the  Credit Agreement, the Notes, the Letter
of  Credit  Reimbursement   Agreement,  or  any  other  Loan
Document;

(f)  any other circumstance  which might otherwise
constitute a defense available to, or a  discharge  of,  the
Borrower  or  any  other Person (including any guarantor) in
respect of the Obligations,  other  than  payment in full by
the Borrower of the Obligations.

This  Guaranty  shall  continue  to  be  effective   or   be
reinstated,  as  the case may be, if at any time any payment
of  any  of  the  Obligations   is   annulled,   set  aside,
invalidated,  declared  to  be  fraudulent  or preferential,
rescinded or must otherwise be returned, refunded  or repaid
by  the  Bank  upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization  of the Borrower, or any other
guarantor, or upon or as a result  of  the  appointment of a
receiver,  intervenor  or  conservator  of,  or  trustee  or
similar officer for, the Borrower or any other guarantor  or
any  substantial part of the property of the Borrower or any
other  guarantor or otherwise, all as though such payment or
payments   had  not  been  made.   The  obligations  of  the
Guarantor under  this  Guaranty  shall  not  be  subject  to
reduction,  termination or other impairment by reason of any
setoff, recoupment, counterclaim or defense or for any other
reason.

SECTION   3.   Continuing  Guaranty.   This  is  a
continuing  Guaranty,  and  all  extensions  of  credit  and
financial accommodations heretofore,  concurrently  herewith
or  hereafter  made  by  the  Bank  to  the  Borrower  which
constitute  Obligations  or  are made in connection with the
Obligations and all indebtedness  of  the Borrower now owned
or   hereafter   acquired  by  the  Bank  which   constitute
Obligations or are  made  in connection with the Obligations
shall be conclusively presumed to have been made or acquired
in acceptance hereof.

SECTION 4. Notice.   The  Bank  agrees to give the
following  notices  to the Guarantor before payment  is  due
hereunder  by  the Guarantor:  (i) five  (5)  days'  written
notice for any Event  of Default set forth in Sections 12.1,
12.2, 12.3, and 12.4 of  the  Credit Agreement; (ii) fifteen
(15) days' written notice for an  Event of Default set forth
in Sections 12.5, 12.6, 12.7, 12.10, 12.11, 12.12, and 12.13
of the Credit Agreement; and (iii) no  notice  for any Event
of Default set forth in Sections 12.8 and 12.9 of the Credit
Agreement.   If  the Event of Default remains unremedied  on
the expiration of  the  applicable time period, the Bank may
at such time pursue the Guarantor  under  the  terms of this
Guaranty without further notice or demand.

SECTION  5. Waiver.  This is an absolute  Guaranty
of payment and not of  collection,  and the Guarantor hereby
waives  0.1  promptness,  diligence, notice  of  acceptance,
presentment,  demand,  protest,   notice   of   protest  and
dishonor,   notice  of  intent  to  accelerate,  notice   of
acceleration and any other notice with respect to any of the
Obligations and  this  Guaranty,  except  as  set  forth  in
Section   hereof;  and  0.1  any  requirement  that the Bank
exhaust any right or take any action against the Borrower or
any other Person or entity or that the Borrower or any other
Person or entity be joined in any action hereunder.   Should
the  Bank  seek  to enforce the obligations of the Guarantor
hereunder by action  in  any court, the Guarantor waives any
necessity,  substantive  or   procedural,  that  a  judgment
previously be rendered against  the  Borrower  or  any other
Person,  or  that any action be brought against the Borrower
or any other Person,  or  that  the  Borrower  or  any other
Person should be joined in such cause.  Such waiver shall be
without  prejudice  to  the  Bank  at  its option to proceed
against  the  Borrower  or  any  other  Person,  whether  by
separate action or by joinder.

SECTION 6. Several Obligations.   The  obligations
of the Guarantor hereunder are several from the Borrower  or
any  other  Person,  including  without limitation the other
guarantors  who  are  parties  to the  Guaranties,  and  are
primary obligations concerning which  the  Guarantor  is the
principal  obligor.  The Guarantor agrees that this Guaranty
shall not be  discharged  except  by complete performance of
the obligations of the Borrower or  any  other  Person under
the  Notes,  the  Credit  Agreement,  the  Letter  of Credit
Reimbursement  Agreement,  and  any  other Loan Document  to
which the Borrower or such Person is a party and by complete
performance of the obligations of the  Guarantor  hereunder.
The  obligations  of  the  Guarantor hereunder shall not  be
affected  in  any  way  by  any  receivership,   insolvency,
bankruptcy  or  other proceedings affecting the Borrower  or
any other Person  or  any of the Borrower's or such Person's
assets, or the release  or  discharge of the Borrower or any
other  Person  from  the  performance   of   any  obligation
contained in any promissory note or other instrument  issued
in  connection with, evidencing or securing any indebtedness
guaranteed  by  this instrument, whether occurring by reason
of law or any other  cause, whether similar or dissimilar to
the foregoing.

SECTION 7. Subrogation.   The  Guarantor  will not
have any right which it may acquire by way of subrogation or
similar rights under this Guaranty, by reason of any payment
made   hereunder   or   otherwise,  until  (i)  all  of  the
Obligations shall have been  paid  in  full,  and  (ii)  the
Bank's Commitment under the Credit Agreement shall have been
terminated.   If  any  amount shall be paid to the Guarantor
purportedly on account of any such subrogation rights at any
time when all the Obligations  shall  not  have been paid in
full  or  at  such time as the Bank's Commitment  under  the
Credit Agreement  is in effect, such amount shall be held in
trust for the benefit  of  the  Bank  and shall forthwith be
paid  to the Bank to be applied to the Obligations  in  such
order as the Bank shall select.

SECTION  8. Stay of Acceleration.  If acceleration
of  the  time for payment  of  any  amount  payable  by  the
Borrower under  the  Credit  Agreement, the Letter of Credit
Reimbursement Agreement, or the  Notes  is  stayed  upon the
insolvency,  bankruptcy  or  reorganization of the Borrower,
all such amounts otherwise subject to acceleration under the
terms  of  the Credit Agreement  or  the  Letter  of  Credit
Reimbursement  Agreement shall nonetheless be payable by the
Guarantor hereunder  forthwith  on  demand  by the holder or
holders of the Notes or the obligee of the Letter  of Credit
Reimbursement Agreement.

SECTION 9.  Representations  and Warranties.   The
Guarantor hereby represents and warrants as follows:

(a)  The  Guarantor  (i) is  a  corporation   duly
organized,  validly existing, and in good standing under the
laws of the jurisdiction  of  its incorporation; (ii) has the
corporate power to own its Properties  and  to  carry on its
business  as now conducted; and (iii) is duly qualified  as  a
foreign corporation  to  do business and is in good standing
in every jurisdiction where such qualification is necessary,
except when the failure to  so qualify would not or does not
have a Material Adverse Effect.

(b)  The Guarantor  is not in default with respect
to any indenture, loan or credit  agreement  or any lease or
other  agreement  or  instrument or subject to any  charter,
bylaw or other corporate  restriction  which  default  would
have  a  Material Adverse Effect.  Neither the execution and
delivery of  this  Guaranty  nor  the  consummation  of  the
transactions  contemplated  hereby  nor  fulfillment  of and
compliance   with   the  respective  terms,  conditions  and
provisions hereof or of any instruments required hereby will
conflict with or result  in  a  breach  of any of the terms,
conditions or provisions of, or constitute  a default under,
or result in any violation of, or result in the  creation or
imposition  of  any  Lien  on  any  of  the  Property of the
Guarantor  pursuant to (i) the charter or bylaws  applicable
to the Guarantor;  (ii) any  law  or  any  regulation  of any
administrative   or  governmental  instrumentality;  (iii) any
order, writ, injunction  or  decree of any court; or (iv) the
terms,  conditions  or  provisions   of   any  agreement  or
instrument to which the Guarantor is a party  or by which it
is bound or to which it is subject.

(c)  The  representations  and warranties  of  the
Guarantor contained in each Loan Document to which Guarantor
is a party are true and correct in all  material respects so
as to provide to the Bank and to permit them  to realize the
benefits intended to be provided by, and obtained from, each
such Loan Document.

(d)  The Guarantor has received, or will  receive,
direct or indirect benefit from the making of this Guaranty.

(e)  Except   as   disclosed  in  the  Guarantor's
audited financial statements as  of  December 31,  1995, and
the   Guarantor's   unaudited  financial  statements  as  of
September 30, 1996, there  is  no:  (a) action or proceeding
pending or, to the knowledge of  the  Guarantor,  threatened
against  the  Borrower  or  the  Guarantor before any court,
administrative  agency  or arbitrator  which  is  reasonably
expected  to have a Material  Adverse  Effect;  (a) judgment
outstanding  against  the Guarantor for the payment of money
which would have a Material  Adverse  Effect;  or  (a) other
outstanding judgment, order or decree affecting the Borrower
or   the  Guarantor  before  or  by  any  administrative  or
governmental  authority,  compliance with or satisfaction of
which may reasonably be expected  to have a Material Adverse
Effect.

(f)  The Guarantor is not  in  default under or in
violation of the provisions of any instrument evidencing any
Debt or of any agreement relating thereto  or  any judgment,
order, writ, injunction or decree of any court or any order,
regulation  or  demand of any administrative or governmental
instrumentality which  default  or  violation  might  have a
Material Adverse Effect.

(g)  The   Guarantor's   execution,  delivery  and
performance of this Guaranty and any  Loan Document to which
Guarantor  is  a  party  does  not  require the  consent  or
approval of any Governmental Authority  or any other Person.
The  consummation and the effectuation of  the  transactions
contemplated  under  this  Guaranty and any Loan Document to
which Guarantor is a party do  not  require  the  consent or
approval of any Governmental Authority or any other  Person,
except such consents and approvals as have been obtained.

(h)  This Guaranty is, and all other documents and
instruments  executed  in connection herewith when delivered
will  be,  legal,  valid  and  binding  obligations  of  the
Guarantor, enforceable against  the  Guarantor in accordance
with their respective terms, except as  such  enforceability
may  be  (a)  limited by the effect of any Debtor  Laws  and
(a) subject to  the  effect  of general principles of equity
(regardless of whether such enforceability  is considered in
a proceeding in equity or at law).

(i)  The  Guarantor  has the corporate  power  and
authority  to  make, execute, deliver  and  carry  out  this
Guaranty and the  transactions  contemplated  herein, and to
perform  its obligations hereunder and all such  action  has
been duly  authorized by all necessary corporate proceedings
on its part.   This  Guaranty  has  been  duly  and  validly
executed and delivered by the Guarantor.

(j)  The  Guarantor  is  not  in  violation of any
governmental requirement which violation (in  the event such
violation was asserted by any Person) would have  a Material
Adverse Effect.

(k)  The  Guarantor has good and marketable  title
to its assets.

(l)  The  Guarantor  has  filed  all  tax  returns
required to be filed  and  has  paid all taxes shown on said
returns  and  all  assessments which  are  due  and  payable
(except  such  as are  being  contested  in  good  faith  by
appropriate proceedings  for  which  adequate  reserves  for
their payment have been provided in a manner consistent with
the  generally  accepted  accounting  practices consistently
applied).   The  Guarantor  is  not  aware  of  any  pending
investigation  by any taxing authority or of any  claims  by
any governmental  authority for any unpaid taxes, except for
audits for tax years  1987  through  1989 and certain audits
conducted  in  various  states,  as  well as  other  matters
reflected in the Guarantor's financial statements.

(m)  The Guarantor is not an "investment company",
or a company "controlled" by an "investment company", within
the  meaning  of  the Investment Company  Act  of  1940,  as
amended.

(n)  The  Guarantor is not a "holding company", or
a  "subsidiary  company"  of  a  "holding  company",  or  an
"affiliate" of a  "holding  company",  or  an affiliate of a
"subsidiary company" of a "holding company",  as  such terms
are  defined  in  the Public Utility Holding Company Act  of
1935, as amended.

(o)  No Reportable  Event (as defined in Section 4043(b)
of ERISA) has occurred with respect  to any Plan.  Each Plan
complies  in  all  material  respects  with  all  applicable
provisions of ERISA, and the Guarantor has filed all reports
required by ERISA and the Code to be filed  with  respect to
each  Plan.   The  Guarantor  has  no knowledge of any event
which could result in a liability of  the  Guarantor  to the
Pension Benefit Guaranty Corporation.  The Guarantor has met
all  requirements  with respect to funding the Plans imposed
by ERISA or the Code.   Since the effective date of Title IV
of  ERISA,  there have not  been  any,  nor  are  there  now
existing any,  events  or  conditions  that would permit any
Plan to be terminated under circumstances  which would cause
the  lien  provided under Section 4068 of ERISA to attach  to  any
property of the Guarantor.  The value of the Plans' benefits
guaranteed under  Title IV  of ERISA on the date hereof does
not exceed the value of such Plans' assets allocable to such
benefits as of the date of this  Guaranty  and  shall not be
permitted to do so hereafter.

(p)  The  Guarantor  owns  or  has  obtained   all
governmental  permits,  certificates  of  authority, leases,
patents, trademarks, service marks, trade names, copyrights,
franchises  and  licenses, and rights with respect  thereto,
required or necessary  (or,  in  the  sole  and  independent
judgment of the Guarantor, prudent) in connection  with  the
conduct  of  its  business  as  presently  conducted  or  as
proposed  to  be  conducted, except for those the absence of
which would not have a Material Adverse Effect.

(q)  (i) All  facilities  and  property  owned  or
leased  by the Guarantor have been and continue to be, owned
or leased  and  operated by the Guarantor in compliance with
all   Environmental   Laws,   except   for   violations   of
Environmental   Laws,  which  violations  have  no  Material
Adverse Effect; (ii) there has not been (during the period of
the Guarantor's ownership or lease) any Release of Hazardous
Materials at, on  or  under  any  property  now  (or, to the
Guarantor's  knowledge, previously) owned or leased  by  the
Guarantor (A) that  required,  or may reasonably be expected
to require, the Guarantor to expend  funds on remediation or
clean-up activities pursuant to any Environmental Law except
for remediation or clean-up activities  that  would  not  be
reasonably  expected  to  have a Material Adverse Effect, or
(B) that otherwise, singly  or in the aggregate, has, or may
reasonably be expected to have,  a  Material Adverse Effect;
(iii) the Guarantor has been issued and  is in compliance with
all permits, certificates, approvals, orders,  licenses  and
other   authorizations  relating  to  environmental  matters
necessary  for  its business, the absence of which would not
have  a  Material  Adverse  Effect;  and  (iv) there  are  no
polychlorinated  biphenyls  (PCB's)  or  asbestos-containing
materials or surface  impoundments  in any of the facilities
now  (or,  to  the  knowledge of the Guarantor,  previously)
owned or leased by the  Guarantor in violation of applicable
Environmental Laws, except  for  violations of Environmental
Laws  which  violations  have  no Material  Adverse  Effect;
(v) Hazardous  Materials  have  not  been  generated,  used,
treated,  recycled, stored or disposed  of  in  any  of  the
facilities  or  on  any  of  the  property  now  (or, to the
knowledge  of the Guarantor, previously) owned or leased  by
the Guarantor  during  the time of the Guarantor's ownership
in violation of applicable  Environmental  Laws,  except for
violations  of  Environmental Laws which violations have  no
Material Adverse Effect; and (vi) no underground storage tank
located on the property  now  (or,  to  the knowledge of the
Guarantor, previously) owned or leased by  the Guarantor has
been  (and  to  the  extent  currently  owned or leased  is)
operated  in  violation  of  applicable Environmental  Laws,
except for violations of Environmental Laws which violations
have no Material Adverse Effect.

(r)   The business and  operations of the Guarantor
as  conducted  at  all times relevant  to  the  transactions
contemplated by this  Guaranty  shall have been and shall be
in compliance in all respects with  all applicable State and
Federal laws, regulations and orders affecting the Guarantor
and the business and operations of the Guarantor, except for
violations, regulations, and orders which  have  no Material
Adverse Effect.

(s)  Upon  giving  effect to (A) the execution  of
this Guaranty and (B) the consummation  of  the transactions
contemplated under this Guaranty, the following are true and
correct after reasonable investigation:

(i)  The fair saleable value of the assets of
the Guarantor exceeds the amount that will be required to be
paid  on  or  in  respect  of  the existing debts and  other
liabilities  (including,  without   limitation,  pending  or
overtly  threatened  litigation  in  amounts  in  excess  of
effective  insurance  coverage  and  all  other   contingent
liabilities) of the Guarantor, as they mature.

(ii)  The net assets of the Guarantor  do  not
constitute  unreasonably  small capital for the Guarantor to
carry out its business as now  conducted  and as proposed to
be conducted including the capital needs of  the  Guarantor,
taking  into account the particular capital requirements  of
the business  conducted  by  the  Guarantor,  and  projected
capital requirements and capital availability thereof.

(iii)  The  Guarantor does not intend to  incur
Debt beyond its ability to  pay  such  Debt  as  it  matures
(taking  into  account the timing and amounts of cash to  be
received by the  Guarantor, and of amounts to be payable, on
or in respect of, Debt of the Guarantor).

SECTION 10.   Covenant.  The Guarantor shall deliver
to the Bank in duplicate:

(a)  as soon as available, and in any event within
ninety (90) days after  the  end  of each fiscal year of the
Guarantor,  a copy of the audited financial  report  of  the
Guarantor as  of  the  end  of  such fiscal year and for the
period then ended, containing a balance sheet, statements of
income and stockholders' equity,  and a cash flow statement,
all  in  reasonable  detail  and certified  by  a  financial
officer  of  the  Guarantor,  to  have   been   prepared  in
accordance  with  generally  accepted  accounting principles
consistently  applied,  except as may be explained  in  such
certificate;

(b)  as soon as available, and in any event within
forty-five  (45)  days  after  the  end  of  each  quarterly
accounting  period in each  fiscal  year  of  the  Guarantor
(including  the  fourth  quarter),  an  unaudited  financial
report of the  Guarantor  as  at the end of such quarter and
for  the  period  then ended, containing  a  balance  sheet,
statements of income  and  stockholder's  equity  and a cash
flow statement, all in reasonable detail and certified  by a
financial officer of the Guarantor to have been prepared  in
accordance  with  generally  accepted  accounting principles
consistently  applied,  except as may be explained  in  such
certificate;

(c)  copies of  all statements and reports sent to
stockholders of the Guarantor  or  filed with the Securities
and Exchange Commission; and

(d)  such    additional   financial    or    other
information as the Bank may reasonably request.

SECTION 11.  Amendments,   Etc.   No  amendment  or
waiver of any provision of this Guaranty  nor consent to any
departure by the Guarantor therefrom shall  in  any event be
effective unless the same shall be in writing and  signed by
the  Bank and then such waiver or consent shall be effective
only in  the  specific instance and for the specific purpose
for which given.

SECTION 12. Notices, Etc.   All  notices and other
communications provided for hereunder shall  be  in  writing
(including    telegraphic,   telex,   facsimile   or   cable
communication)    and    mailed,    telegraphed,    telexed,
transmitted,  cabled  or delivered, if to the Guarantor,  at
its address:

1615 Poydras Street
New Orleans, Louisiana 70112
Attention: Robert R. Boyce
Telephone No.:  (504) 582-4144
Telecopy No.:  (504) 582-4511

with copies to:

Charles E. Holmes
1615 Poydras Street
New Orleans, Louisiana 70112
Telephone No.:  (504) 582-1982
Telecopy No.:  (504) 582-4139

and the Borrower as set  forth in Section 14.6 of the Credit
Agreement; if to the Bank,  at  the  address  for the Bank's
Domestic  Lending Office, as the case may be, set  forth  in
the Credit  Agreement,  or,  as to each party, at such other
address as shall be designated  by  such  party in a written
notice   to   the   other  party.   All  such  notices   and
communications shall  be  effective  three  (3)  days  after
deposit in the mail, postage pre-paid, or when delivered  to
the   telegraph  company,  confirmed  by  telex  answerback,
transmitted by telecopier or delivered to the cable company,
respectively.

SECTION 13. No Waiver; Remedies. No failure on the
part of  the  Bank  to exercise, and no delay in exercising,
any right hereunder shall  operate  as a waiver thereof; nor
shall any single or partial exercise  of any right hereunder
preclude  any  other  or  further exercise  thereof  or  the
exercise of any other right.   The  remedies herein provided
are cumulative and not exclusive of any remedies provided by
law.

SECTION 14. Right of Set-off.  Upon the occurrence
and during the continuance of any Event of Default, the Bank
is  hereby  authorized at any time and from  time  to  time,
without notice  to  the  Guarantor  (any  such  notice being
expressly  waived  by  the Guarantor) to the fullest  extent
permitted by law, to set  off and apply any and all deposits
(general or special, time or  demand,  provisional or final)
at any time held and other indebtedness at any time owing by
the  Bank  to  or  for  the  credit  or the account  of  the
Guarantor  against  any  and all of the obligations  of  the
Guarantor now or hereafter  existing  under  this  Guaranty,
irrespective of whether or not the Bank shall have made  any
demand under this Guaranty and although such obligations may
be  contingent  and unmatured.  The rights of the Bank under
this Section 14 are in addition to other rights and remedies
(including, without  limitation,  other  rights  of set-off)
which  the  Bank  may  have.  The right of set-off contained
herein shall not extend to funds of the Guarantor on account
at The Chase Manhattan Bank  (National  Association),  a New
York  banking  corporation,  located  at One Chase Manhattan
Plaza, New York, New York 10081.

SECTION  15.   Costs,  Expenses  and   Taxes.  The
Guarantor  agrees  to  pay,  and cause to be paid, on demand
(a) all costs and expenses of  the  Bank  in connection with
the    preparation,   execution,   delivery,   modification,
amendment, filing, and recording of this Guaranty and any of
the documents  or instruments evidencing the Obligations and
any other agreements  or  documents  delivered in connection
with any of the Obligations, including,  without limitation,
the  reasonable fees and out-of-pocket expenses  of  counsel
for the  Bank  with  respect  thereto  and  with  respect to
advising  the  Bank  as  to  its rights and responsibilities
under  this Guaranty; (a) all costs  and  expenses,  if  any
(including   reasonable   counsel  fees  and  expenses),  in
connection   with   the   enforcement    (whether    through
negotiations,   legal  proceedings  or  otherwise)  of  this
Guaranty; and (a) all  costs  and  expenses  of  the Bank in
connection   with   due   diligence,   transportation,   and
duplication   incurred  in  connection  with  or  reasonably
related to the  transactions  contemplated  hereunder.   The
Guarantor  agrees  to  pay interest on any expenses or other
sums due to the Bank hereunder that are not paid when due at
a  rate per annum equal to  the  Highest  Lawful  Rate.   In
addition,  the  Guarantor  shall  pay  any and all stamp and
other  taxes  payable  or  determined  to  be   payable   in
connection  with the execution and delivery of this Guaranty
and  any of the  documents  or  instruments  evidencing  the
Obligations,  and  agrees to save the Bank harmless from and
against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.  The
agreements of the Guarantor contained in this Section  shall
survive the payment  of all other amounts owing hereunder or
under any of the other Obligations.

SECTION  16. Indemnity.   To  the  fullest  extent
permitted  by  applicable   law,  the  Guarantor  agrees  to
indemnify,  protect  and save harmless  the  Bank  from  and
against any and all claims,  losses,  liabilities  costs and
expenses  of any kind or nature whatsoever, arising out  of,
or resulting  from  (a) this Guaranty, the Credit Agreement,
the   Notes,   the   Loan  Documents   (including,   without
limitation,  enforcement   of   this  Guaranty,  the  Credit
Agreement,  the  Notes,  the  Loan  Documents),   Borrower's
activities  in  connection  with  the  Guaranty,  the Credit
Agreement,  the  Note,  the  Loan  Documents,  or Borrower's
Property,   and   the  actions  of  any  employee,  officer,
director, agent, shareholder, invitee, licensee, contractor,
or manager of Borrower  or  the Bank in connection therewith
(collectively, the "Indemnified Liabilities"), to the extent
that the Indemnified Liabilities  arise  out of or by reason
of  claims  made by any Person, including the  Bank,  except
claims, losses  or  liabilities  resulting  from  the  gross
negligence  or willful misconduct of the Bank; provided that
it is the intention  of  the Guarantor to indemnify the Bank
and  parties  related  to the  Bank  hereinbefore  described
against the consequences of their own negligence.

SECTION  17. Separability.    Should  any  clause,
sentence, paragraph, subsection or Section  of this Guaranty
be judicially declared to be invalid, unenforceable or void,
such  decision  will not have the effect of invalidating  or
voiding the remainder  of  this  Guaranty,  and  the parties
hereto agree that the part or parts of this Guaranty so held
to be invalid, unenforceable or void will be deemed  to have
been stricken herefrom and the remainder will have the  same
force  and  effectiveness as if such part or parts had never
been included herein.

SECTION   18.  Captions.   The  captions  in  this
Guaranty have been inserted  for  convenience only and shall
be given no substantive meaning or  significance whatever in
construing the terms and provisions of this Guaranty.

SECTION 19. Continuing Guaranty; Transfer of Notes.
This Guaranty is a continuing guaranty  and shall 0.1 remain
in  full  force  and  effect until payment in  full  of  the
Obligations  and  all  other   amounts  payable  under  this
Guaranty; 0.1 be binding upon the  Guarantor, its successors
and  assigns;  and  0.1  inure  to  the benefit  of  and  be
enforceable  by  the  Bank  and  its respective  successors,
transferees and assigns.  Without limiting the generality of
the foregoing clause (c), the Bank  may  assign or otherwise
transfer  the Notes to any other Person in  accordance  with
the terms and  provisions set forth in the Credit Agreement,
and such other Person shall thereupon become vested with all
the rights and benefits  in  respect  thereof granted to the
Bank herein or otherwise.

SECTION  20. Confirmation  of Release.   Upon  the
expiration of all time periods during  which  payments  made
pursuant  to  this  Guaranty  could  be annulled, set aside,
invalidated, declared to be fraudulent  or  preferential  or
otherwise  returned, refunded or repaid by the Bank upon the
insolvency,    bankruptcy,   dissolution,   liquidation   or
reorganization of  the  Borrower,  and  at  such time as the
Obligations  have  been discharged in full, the  Bank  shall
confirm the discharge  of the Guarantor from its obligations
hereunder.

SECTION  21.  Limitation  by   Law.   All  rights,
remedies  and  powers  provided  in  this  Guaranty  may  be
exercised only to the extent that the exercise  thereof does
not  violate  any applicable provision of law, and  all  the
provisions of this  Guaranty  are  intended to be subject to
all applicable mandatory provisions  of  law  which  may  be
controlling  and  to  be  limited to the extent necessary so
that   they   will   not  render  this   Guaranty   invalid,
unenforceable, in whole  or  in  part, or not entitled to be
recorded, registered or filed under  the  provisions  of any
applicable law.

SECTION  22.   Survival   of  Representations  and
Warranties.  All representations and warranties contained in
this  Guaranty or made in writing by or  on  behalf  of  the
Guarantor   in   connection   herewith,  shall  survive  the
execution and delivery of this  Guaranty  and shall continue
after the repayment of the Notes and the termination  of the
Commitments.   Any  investigation  by  the  Bank  shall  not
diminish  in  any  respect whatsoever their right to rely on
such representations and warranties.

SECTION 23. GOVERNING  LAW;  TERMS.  THIS GUARANTY
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH, THE
LAWS  OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.   TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY
SUBMITS  TO  THE  NONEXCLUSIVE  JURISDICTION  OF  THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS AND
ANY  TEXAS  STATE COURT SITTING IN HARRIS COUNTY, TEXAS  FOR
THE PURPOSES  OF  ALL  LEGAL  PROCEEDINGS  ARISING OUT OF OR
RELATING  TO THIS GUARANTY OR THE TRANSACTIONS  CONTEMPLATED
HEREBY.

SECTION 24. Definitions. Certain capitalized terms
not otherwise  defined  herein  shall  have  the  respective
meanings   set  forth  in  the  Credit  Agreement.   Certain
capitalized  terms  not  otherwise  defined herein or in the
Credit  Agreement  shall  have the respective  meanings  set
forth below:

"Material Adverse  Effect" shall mean any material
adverse  effect  on (a) the financial  condition,  business,
properties,  assets,   prospects   or   operations   of  the
Guarantor,  or  (b) the  ability of the Guarantor to perform
its obligations under this Guaranty on a timely basis.

"Plan" shall mean  any plan subject to Title IV of
ERISA and maintained for employees  of  the  Guarantor or of
any member of a "controlled group of corporations,"  as such
term  is  defined  in the Code, of which the Guarantor is  a
member, or any such  plan to which the Guarantor is required
to contribute on behalf of its employees.

THIS  GUARANTY,   TOGETHER  WITH  THE  OTHER  LOAN
DOCUMENTS,  REPRESENTS  THE  FINAL   AGREEMENT  BETWEEN  THE
PARTIES AND MAY NOT BE CONTRADICTED BY  EVIDENCE  OF  PRIOR,
CONTEMPORANEOUS,   OR  SUBSEQUENT  ORAL  AGREEMENTS  OF  THE
PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

IN WITNESS  WHEREOF, the Guarantor has caused this
Guaranty  to  be duly executed  by  its  respective  officer
thereunto duly  authorized,  on  the  date  set forth in the
acknowledgment, to be effective as of the date  first  above
written.

FREEPORT-McMoRan INC., 
a Delaware corporation

By:

Name:

Title:

Address:
1615 Poydras Street
New Orleans, Louisiana 70112

STATE OF LOUISIANA

PARISH OF ORLEANS

On  this ____ day of December, 1996, before me appeared
___________________,  to  me personally known, who, being by
me duly sworn did say that  he  is  the _________________ of
FREEPORT-McMoRan INC., a Delaware corporation,  and that the
seal  affixed  to said instrument is the corporate  seal  of
said corporation  and  that  said  instrument was signed and
sealed in behalf of said corporation  by  authority  of  its
board    of    directors   and   said   ____________________
acknowledged said  instrument to be the free act and deed of
said corporation.

Notary Public, State of Louisiana

(Typed or Printed Name of Notary)

EXHIBIT "F"
FTX GUARANTY

Exhibit 10.3 

FMP

AMENDED AND RESTATED SERVICES AGREEMENT

THIS AMENDED AND RESTATED SERVICES AGREEMENT (this "Agreement") is
dated as of January 1, 1997, by and between FM Services Company, a Delaware
corporation ("FMS"), and FM Properties Inc., a Delaware corporation ("FMP").

WHEREAS, the parties entered into a Services Agreement dated as of January
1, 1996 (the"Original Agreement") pursuant to which FMS furnished FMP and 
its affiliates, as that term is defined in Rule 405 under the Securities Act 
of 1933 (collectively, the "FMP Group"), with Services,as defined below, to 
support and complement the services provided by the FMP Group's officers,
employees and other available resources;

WHEREAS, the parties desire to amend the Original Agreement to provide 
for a cost of living adjustment to the Annual Fee, as defined below, and to 
restate the Original Agreement as so amended.

NOW THEREFORE, in consideration of the covenants and agreements set forth 
herein, and other good and valuable consideration, the receipt and sufficiency 
of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.     Services.  During the term of this Agreement FMS shall 
furnish the following services (collectively, the "Services") to the FMP 
Group:  (a) accounting, treasury and financial, (b) tax, (c) insurance and 
risk management (including the purchase and maintenance on behalf of FMP of 
such insurance as FMP deems necessary or appropriate), (d) human resources 
(including employee benefit services), (e) management information and system 
support, (f) governmental relations, (g) community relations, (h) investor 
relations, (i) facilities management and security, (j) marketing, 
(k) business development, (l) executive support, (m) aviation, (n) contract 
administration and (o) such other services as may mutually be agreed upon by
the parties hereto.  Services shall be provided directly by FMS or, in the 
discretion of FMS, by affiliated or non-affiliated third parties.

Section 2.     Administration of Services.  FMS shall keep the 
appropriate officers and employees of FMP and other members of the FMP Group 
fully informed and shall cooperate with such officers and employees with 
respect to the performance of Services by FMS.  Each member of the FMP Group 
shall have complete and full access to all data, records, files, statements, 
invoices, billings and other information generated by or in the custody of 
FMS relating to Services provided to such entity.

Section 3.     Compensation and Reimbursement.  

(a)  As compensation for the performance of the Services, FMP shall pay 
to FMS an annual fee of $500,000, subject to the adjustment set forth in 
Section 10 hereof (the "Annual Fee"). The Annual Fee shall be payable in four
equal payments on or before the tenth (10th) day of each calendar quarter in 
each year during the term of this Agreement. 

(b)  FMP shall reimburse FMS for all costs of goods, services or other 
items purchased from third parties by FMS for the FMP Group, to the extent 
such costs are paid by FMS ("Third Party Charges").

Section 4.     Use of FMS Facilities.  FMS shall provide the FMP Group 
with a non-exclusive right to utilize its properties and facilities, subject 
to such limitations, if any, as may be imposed by leases and other agreements
and instruments governing the use of such properties and facilities.

Section 5.     Terms of Agreement; Termination.  (a) This Agreement shall
commence as of the date first above written and shall continue in effect 
until (i) the parties mutually agree in writing to terminate this Agreement 
or (ii) 90 days after receipt by FMS of written notice from FMP of its 
request to terminate this Agreement.

(b)  Upon termination of this Agreement, FMP shall be liable for a pro 
rata portion of the Annual Fee and all Third Party Charges incurred in 
accordance with Section 3 prior to termination.

Section 6.     Limitation of Liability.

(a)  FMS makes no representation or warranty whatsoever, express or 
implied, with respect to the Services.  In no event shall FMS be liable to 
FMP for (i) any loss, cost or expense resulting from any act or omission 
taken at the express direction of any member of the FMP Group or (ii) any 
special, indirect or consequential damages resulting from any error or 
omission in the performance of the Services or from the breach of this 
Agreement.

(b)  Neither FMS nor FMP shall be liable for any loss or damage or any 
nonperformance, partial or whole, under this Agreement, caused by any strike,
labor troubles, riot act of a public enemy, insurrection, act of God, or any 
law, rule or regulation promulgated by any governmental body or agency, or 
any demand or requisition of any governmental body or agency, or any other
cause beyond the control of the parties hereto.  

Section 7.     Confidentiality.  FMS will hold and will use its best 
efforts to cause its officers, directors, employees and other agents 
(collectively, its "Agents") to hold, in confidence, all confidential 
documents and information concerning the FMP Group furnished to such party in
connection with this Agreement, except to the extent that such information can 
be shown to have been (a) previously known by such party on a nonconfidential 
basis, (b) in the public domain through no fault of such party or (c) later 
lawfully acquired by such party on a nonconfidential basis from a source 
other than the FMP Group; provided that FMS may disclose such information in
connection with this Agreement to its Agents so long as such persons are 
informed by FMS of the confidential nature of such information and are directed
by FMS to keep such information confidential and not to use it for any 
purpose other than its intended use.  Notwithstanding the foregoing, FMS or 
its Agents may disclose such information if (i) compelled to disclose by 
judicial or administrative process or by other requirements of law or (ii) 
necessary to establish such party's position in any litigation or any 
arbitration or other proceeding based upon or in connection with the
subject matter of this Agreement.  Prior to any disclosure pursuant to the 
preceding sentence, FMS or its Agent(s) shall give reasonable prior notice to 
FMP of such intended disclosure, and if requested by FMP, FMS shall use all 
reasonable efforts to obtain a protective order or similar protection for 
such information and shall otherwise disclose only such information as is 
legally required.  If all or any part of the Services are terminated, FMS 
will, and will use its best efforts to cause its Agents to, destroy or 
deliver to FMP, upon request, all documents and other materials, and
all copies thereof, containing confidential information obtained from the FMP 
Group in connection with the Services so terminated.

Section 8.     Technology.  FMS hereby grants to FMP a royalty free, 
non-exclusive right and license to use (but not to sublicense outside of the 
FMP Group) any and all technology, whether or not patented, developed by or 
on behalf of FMS, relating to the business of FMP; provided that the license 
hereby granted shall not extend to (i) any technology developed for a person 
not affiliated with FMS, pursuant to an arrangement granting such person 
exclusive rights to such technology, or (ii) any technology developed after 
the termination of this Agreement.

Section 9.     Dispute Resolution.  FMP and FMS shall use all reasonable 
efforts to amicably resolve all disputes arising under this Agreement.  If 
despite such efforts any matter cannot be amicably resolved the matter shall 
be referred to the Presidents of FMP and FMS who shall promptly meet for the 
purpose of resolving such dispute.  If despite such efforts and meetings the
matter remains unresolved, then any affected party may refer the matter to 
arbitration for final resolution in accordance with the commercial rules of 
the American Arbitration Association.  Any matter submitted to arbitration 
shall be decided by a single arbitrator selected by mutual agreement
of the parties (or if the parties cannot agree then such arbitrator shall be 
selected by the appropriate official or designee of the American Arbitration 
Association).  Any such arbitration proceeding shall be held in New Orleans, 
Louisiana.  Each party shall bear its own costs and expenses, and the
arbitrator's fees and expenses and the costs and expenses of the proceeding 
itself shall be borne by the parties in such proportions as the arbitrator 
shall decide.  The decision of the arbitrator shall be final and 
non-appealable, and may be enforced in any court of competent jurisdiction.

Section 10.    Cost of Living Adjustment.    

(a)  Prior to the end of the first calendar quarter of each year during 
the term of this Agreement, beginning with the first calendar quarter of 
1997, the Annual Fee shall be adjusted to reflect any cost of living increase
(the "Cost of Living Adjustment"), as provided for in this Section 10. 

(b)  The Cost of Living Adjustment factor is: 

1  +  ( (Actual inflation   Base Year inflation) / Base Year inflation)  
where Actual inflation = CPI-U for the December preceding the year for 
which the Cost of Living Adjustment is being calculated; 
Base Year inflation = CPI-U for December 1995; and CPI-U = the Consumer 
Price Index, as published by the Bureau of Labor Statistics, U.S. 
Department of Labor, For All Urban Consumers, U.S.C. City Average, 
All Items, 1982-84=100.

(c)  The Annual Fee shall be multiplied by the Cost of Living Adjustment 
factor as determined above, if such factor is greater than one.  The Cost of 
Living Adjustment factor shall be determined as soon as practicable after the
end of each calendar year.

(d)  In the event the Bureau of Labor Statistics stops publishing the 
CPI-U or substantially changes its content and format, FMS will substitute 
another comparable index published at least annually by a mutually agreeable 
source.  If the Bureau of Labor Statistics merely redefines the base
year for the CPI-U from 1982-84 to another year, FMP and FMS will continue to
use the CPI-U, but will convert the Base Year to the new base year by using 
the appropriate conversion formula.

Section 11.    Miscellaneous.

(a)  The parties hereto are independent contractors.  Nothing in this 
Agreement is intended or shall be deemed to constitute a partnership, agency,
franchise or joint venture relationship between the parties.  Neither party 
shall incur any debts or make any commitments upon the other, except to the 
extent specifically provided herein.

(b)  This Agreement constitutes the entire agreement between the parties 
hereto with respect to the matters set forth in this Agreement.  This 
Agreement shall not be amended, modified or supplemented except by an 
instrument in writing executed by each of the parties hereto.  

(c)  All notices and other communications hereunder shall be in writing 
and shall be given by hand delivery, certified or registered mail, return 
receipt requested or telecopy transmission with confirmation of receipt to 
the address of each of the parties set forth opposite the signature of such
party on the signature page hereof.  All notices and communications shall be 
deemed given upon receipt thereof.  

(d)  This Agreement shall be governed by and construed in accordance with 
the internal laws of the State of Louisiana without the application of any 
conflicts of laws principles.

(e)  This Agreement shall inure to the benefit of and be binding upon the 
parties hereto and their respective successors and assigns.  This Agreement 
shall not be assignable by any party hereto without the prior written consent o
of the other party.  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the date first above written.  

Address for Notices:                   FM SERVICES COMPANY

1615 Poydras Street
New Orleans, LA  70112            By:  
Attention:  General Counsel            Michael J. Arnold
President

Address for Notices:                   FM PROPERTIES INC.

1615 Poydras Street
New Orleans, LA  70112            By:
Attention:  General Counsel            Richard C. Adkerson
Chairman of the Board and
Chief Executive Officer

Exh. 10.8

FM PROPERTIES INC.
STOCK OPTION PLAN

SECTION 1

Purpose.   The  purposes of the FM Properties Inc.
Stock Option Plan (the "Plan")  are to promote the interests
of FM Properties Inc. and its stockholders by (i) attracting
and retaining officers and executive and other key employees
or managers of the business of FM  Properties  Inc.  and its
subsidiaries;  (ii) motivating such individuals by means  of
performance-related   incentives   to  achieve  longer-range
performance goals; and (iii) enabling  such  individuals  to
participate in the long-term growth and financial success of
FM Properties Inc. and its subsidiaries.

SECTION 2

Definitions.   As  used in the Plan, the following
terms shall have the meanings set forth below:

"Award" shall mean any  Option, Stock Appreciation
Right, Limited Right or Other Stock-Based Award.

"Award   Agreement"   shall   mean   any   written
agreement,   contract   or  other  instrument  or   document
evidencing any Award, which  may,  but need not, be executed
or acknowledged by a Participant.

"Board" shall mean the Board  of  Directors  of FM
Properties Inc.

"Code"  shall  mean  the  Internal Revenue Code of
1986, as amended from time to time.

"Committee" shall mean a committee  of  the  Board
designated  by the Board to administer the Plan and composed
of not fewer than two directors, each of whom, to the extent
necessary to comply with Rule 16b-3 only, is a "non-employee
director" within  the  meaning  of  Rule 16b-3  and,  to the
extent  necessary to comply with Section 162(m) only, is  an
"outside  director"  under  Section 162(m).  Until otherwise
determined  by  the  Board,  the   Committee  shall  be  the
Corporate Personnel Committee of the Board.

"Company" shall mean FM Properties Inc.

"Designated    Beneficiary"   shall    mean    the
beneficiary  designated by  the  Participant,  in  a  manner
determined by the Committee, to receive the benefits due the
Participant under the Plan in the event of the Participant's
death.  In the  absence  of  an effective designation by the
Participant,   Designated   Beneficiary   shall   mean   the
Participant's estate.

"Eligible Individual"  shall  mean  (i) any person
providing  services  as  an officer or an executive  or  key
manager  of the Company or  a  Subsidiary,  whether  or  not
employed by such entity, (ii) any employee of the Company or
a Subsidiary, including any director who is also an employee
of the Company or a Subsidiary, and (iii) any person who has
agreed in  writing  to  become a person described in clauses
(i) or (ii) within not more  than 30 days following the date
of grant of such person's first Award under the Plan.

"Exchange Act" shall  mean the Securities Exchange
Act of 1934, as amended from time to time.

"FTX" shall mean Freeport-McMoRan Inc.

"Incentive  Stock Option"  shall  mean  an  option
granted under Section 6 of the Plan that is intended to meet
the requirements of Section 422 of the Code or any successor
provision thereto.

"Limited Right" shall mean any right granted under
Section 8 of the Plan.

"Nonqualified  Stock  Option" shall mean an option
granted under Section 6 of the Plan  that is not intended to
be an Incentive Stock Option.

"Offer"  shall  mean  any tender  offer,  exchange
offer or series of purchases or other  acquisitions,  or any
combination of those transactions, as a result of which  any
person,  or  any  two or more persons acting as a group, and
all  affiliates  of  such   person  or  persons,  shall  own
beneficially  more  than  40%  of   the  Shares  outstanding
(exclusive of Shares held in the Company's  treasury  or  by
the Company's Subsidiaries).

"Offer  Price"  shall  mean  the highest price per
Share paid in any Offer that is in effect at any time during
the period beginning on the ninetieth day  prior to the date
on  which  a  Limited Right is exercised and ending  on  and
including the date  of exercise of such Limited Right.   Any
securities or property that comprise all or a portion of the
consideration paid for  Shares  in the Offer shall be valued
in determining the Offer Price at  the  higher  of  (i)  the
valuation  placed  on  such  securities  or  property by the
person or persons making such Offer, or (ii) the  valuation,
if  any,  placed  on  such  securities  or  property  by the
Committee or the Board.

"Option" shall mean an Incentive Stock Option or a
Nonqualified Stock Option.

"Other Stock-Based Award" shall mean any right  or
award granted under Section 9 of the Plan.

"Participant"  shall  mean any Eligible Individual
granted an Award under the Plan.

"Partnership" shall mean  FM  Properties Operating
Co.

"Person"  shall mean any individual,  corporation,
partnership,  association,   joint-stock   company,   trust,
unincorporated   organization,   government   or   political
subdivision thereof or other entity.

"Rule 16b-3" shall mean Rule 16b-3 promulgated  by
the  SEC  under  the  Exchange Act, or any successor rule or
regulation thereto as in effect from time to time.

"SAR" shall mean any Stock Appreciation Right.

"SEC"  shall  mean  the  Securities  and  Exchange
Commission, including the  staff  thereof,  or any successor
thereto.

"Section 162(m)" shall mean Section  162(m) of the
Code and all regulations promulgated thereunder as in effect
from time to time.

"Shares"  shall  mean the shares of common  stock,
par value $.01 per share, of  the  Company,  and  such other
securities  of  the Company or a Subsidiary as the Committee
may from time to time designate.

"Stock  Appreciation  Right"  shall mean any right
granted under Section 7 of the Plan.

"Subsidiary"  shall mean the Partnership  and  any
corporation or other entity  in  which the Company possesses
directly  or  indirectly  equity interests  representing  at
least 50% of the total ordinary voting power or at least 50%
of the total value of all classes  of  equity  interests  of
such corporation or other entity.

SECTION 3

Administration.  The Plan shall be administered by
the  Committee.   Subject  to  the  terms  of  the  Plan and
applicable law, and in addition to other express powers  and
authorizations  conferred  on the Committee by the Plan, the
Committee  shall  have full power  and  authority  to:   (i)
designate Participants;  (ii) determine the type or types of
Awards  to  be  granted  to an  Eligible  Individual;  (iii)
determine the number of Shares  to  be  covered  by, or with
respect to which payments, rights or other matters are to be
calculated  in  connection with, Awards; (iv) determine  the
terms and conditions of any Award; (v) determine whether, to
what extent, and  under  what  circumstances  Awards  may be
settled  or  exercised  in  cash,  whole Shares, other whole
securities,  other  Awards,  other property  or  other  cash
amounts payable by the Company  upon the exercise of that or
other Awards, or canceled, forfeited  or  suspended  and the
method or methods by which Awards may be settled, exercised,
canceled, forfeited or suspended; (vi) determine whether, to
what  extent,  and  under  what  circumstances cash, Shares,
other securities, other Awards, other  property,  and  other
amounts  payable  by  the  Company  with respect to an Award
shall be deferred either automatically or at the election of
the holder thereof or of the Committee;  (vii) interpret and
administer the Plan and any instrument or agreement relating
to, or Award made under, the Plan; (viii)  establish, amend,
suspend or waive such rules and regulations and appoint such
agents   as  it  shall  deem  appropriate  for  the   proper
administration   of  the  Plan;  and  (ix)  make  any  other
determination and  take  any other action that the Committee
deems necessary or desirable  for  the administration of the
Plan.   Unless otherwise expressly provided in the Plan, all
designations,  determinations,  interpretations   and  other
decisions  under  or  with respect to the Plan or any  Award
shall be within the sole discretion of the Committee, may be
made at any time and shall  be final, conclusive and binding
upon all Persons, including the Company, any Subsidiary, any
Participant, any holder or beneficiary  of  any  Award,  any
stockholder of the Company and any Eligible Individual.

SECTION 4

Eligibility.  Any Eligible Individual who is not a
member  of  the Committee shall be eligible to be granted an
Award.

SECTION 5

(a)   Shares  Available  for  Awards.   Subject to
adjustment as provided in Section 5(b):

(i)   Calculation  of  Number of Shares Available.
The number of Shares with respect  to  which  Awards  may be
granted  under  the  Plan  shall  be 850,000.  If, after the
effective date of the Plan, an Award  granted under the Plan
expires or is exercised, forfeited, canceled  or  terminated
without  the delivery of Shares, then the Shares covered  by
such Award  or to which such Award relates, or the number of
Shares otherwise  counted  against  the  aggregate number of
Shares with respect to which Awards may be  granted,  to the
extent   of   any  such  expiration,  exercise,  forfeiture,
cancellation or  termination without the delivery of Shares,
shall again be, or  shall  become,  Shares  with  respect to
which  Awards may be granted.  Notwithstanding the foregoing
and subject  to  adjustment as provided in Section 5(b), the
aggregate number of  Shares  in respect of which  Awards may
be granted under the Plan to any  Eligible  Individual shall
not exceed 250,000 in any year.

(ii)  Substitute Awards.  Any Shares  delivered by
the  Company,  any  Shares with respect to which Awards  are
made by the Company, or any Shares with respect to which the
Company  becomes  obligated  to  make  Awards,  through  the
assumption of, or in  substitution  for,  outstanding awards
previously granted by an acquired company or  a company with
which the Company combines, shall not be counted against the
Shares available for Awards under the Plan.

(iii)  Sources of Shares Deliverable Under Awards.
Any  Shares  delivered  pursuant to an Award may consist  of
authorized  and  unissued  Shares  or  of  treasury  Shares,
including Shares held by the  Company  or  a  Subsidiary and
acquired  in  the open market or otherwise obtained  by  the
Company or a Subsidiary.

(b)  Adjustments.  In the event that the Committee
determines that  any dividend or other distribution (whether
in  the  form  of  cash,   Shares,   Partnership  interests,
Subsidiary securities, other securities  or other property),
recapitalization,   stock   split,   reverse  stock   split,
reorganization, merger, consolidation,  split-up,  spin-off,
combination,  repurchase  or  exchange  of  Shares  or other
securities  of  the  Company,  issuance of warrants or other
rights  to  purchase  Shares  or  other  securities  of  the
Company,  or other similar corporate  transaction  or  event
affects the  Shares such that an adjustment is determined by
the Committee  to  be  appropriate  to  prevent  dilution or
enlargement  of the benefits or potential benefits  intended
to be made available under the Plan, then the Committee may,
in its sole discretion  and  in  such  manner as it may deem
equitable, adjust any or all of (i) the  number  and type of
Shares  (or  other  securities or property) with respect  to
which Awards may be granted,  (ii)  the  number  and type of
Shares   (or   other  securities  or  property)  subject  to
outstanding Awards,  and  (iii)  the grant or exercise price
with  respect to any Award or, if deemed  appropriate,  make
provision for a cash payment to the holder of an outstanding
Award or,  if  deemed appropriate, adjust outstanding Awards
to provide the rights  contemplated  by Section 9(b) hereof;
provided,  in  each  case, that with respect  to  Awards  of
Incentive  Stock  Options   no   such  adjustment  shall  be
authorized to the extent that such authority would cause the
Plan  to  violate  Section 422(b)(1)  of  the  Code  or  any
successor provision  thereto; and provided further, that the
number of Shares subject  to any Award denominated in Shares
shall always be a whole number.

SECTION 6

(a)  Stock Options.   Subject to the provisions of
the  Plan,  the  Committee  shall  have  sole  and  complete
authority  to  determine the Eligible  Individuals  to  whom
Options shall be granted, the number of Shares to be covered
by each Option, the option price therefor and the conditions
and limitations  applicable  to  the exercise of the Option.
The Committee shall have the authority  to  grant  Incentive
Stock Options, Nonqualified Stock Options or both.   In  the
case of Incentive Stock Options, the terms and conditions of
such  grants  shall be subject to and comply with such rules
as may be required  by Section 422 of the Code, as from time
to time amended, and  any  implementing regulations.  Except
in  the  case  of  an Option granted  in  assumption  of  or
substitution for an  outstanding award of a company acquired
by  the Company or with  which  the  Company  combines,  the
exercise  price  of any Option granted under this Plan shall
not be less than 100%  of  the  fair  market  value  of  the
underlying Shares on the date of grant.

(b)   Exercise.   Each Option shall be exercisable
at such times and subject to  such  terms  and conditions as
the  Committee may, in its sole discretion, specify  in  the
applicable Award Agreement or thereafter, provided, however,
that in  no  event  may  any  Option  granted  hereunder  be
exercisable  after the expiration of 10 years after the date
of such grant.   The  Committee  may  impose such conditions
with respect to the exercise of Options,  including  without
limitation,  any  condition  relating to the application  of
Federal or state securities laws,  as  it may deem necessary
or advisable.

(c)   Payment.   No  Shares  shall   be  delivered
pursuant to any exercise of an Option until payment  in full
of  the  option  price  therefor is received by the Company.
Such payment may be made  in cash, or its equivalent, or, if
and to the extent permitted  by  the  Committee, by applying
cash  amounts payable by the Company upon  the  exercise  of
such Option  or  other  Awards  by  the holder thereof or by
exchanging whole Shares owned by such  holder (which are not
the subject of any pledge or other security interest), or by
a combination of the foregoing, provided  that  the combined
value of all cash, cash equivalents, cash amounts so payable
by the Company upon exercises of Awards and the fair  market
value  of  any such whole Shares so tendered to the Company,
valued (in accordance  with  procedures  established  by the
Committee) as of the effective date of such exercise, is  at
least equal to such option price.

SECTION 7

(a)   Stock  Appreciation Rights.   Subject to the
provisions of the Plan,  the  Committee  shall have sole and
complete authority to determine the Eligible  Individuals to
whom Stock Appreciation Rights shall be granted,  the number
of  Shares  to be covered by each Stock Appreciation  Right,
the grant price  thereof  and the conditions and limitations
applicable  to  the exercise  thereof.   Stock  Appreciation
Rights may be granted  in  tandem  with  another  Award,  in
addition  to another Award, or freestanding and unrelated to
any  other Award.   Stock  Appreciation  Rights  granted  in
tandem  with  or in addition to an Option or other Award may
be granted either  at  the  same time as the Option or other
Award or at a later time.  Stock  Appreciation  Rights shall
not  be  exercisable after the expiration of 10 years  after
the  date  of  grant.    Except  in  the  case  of  a  Stock
Appreciation  Right granted in assumption of or substitution
for an outstanding  award  of  a  company  acquired  by  the
Company  or with which the Company combines, the grant price
of any Stock  Appreciation  Right  granted  under  this Plan
shall not be less than 100% of the fair market value  of the
Shares covered by such Stock Appreciation Right on the  date
of  grant  or,  in  the  case  of a Stock Appreciation Right
granted in tandem with a then outstanding  Option  or  other
Award, on the date of grant of such related Option or Award.

(b)  A Stock Appreciation Right shall entitle  the
holder  thereof to receive an amount equal to the excess, if
any, of the  fair  market  value  of  a Share on the date of
exercise  of  the Stock Appreciation Right  over  the  grant
price.  Any Stock  Appreciation  Right  shall  be settled in
cash,  unless the Committee shall determine at the  time  of
grant of  a Stock Appreciation Right that it shall or may be
settled in cash, Shares or a combination of cash and Shares.

SECTION 8

(a)   Limited  Rights.   Subject to the provisions
of the Plan, the Committee  shall  have  sole  and  complete
authority  to  determine  the  Eligible  Individuals to whom
Limited Rights shall be granted, the number  of Shares to be
covered by each Limited Right, the grant price  thereof  and
the  conditions  and  limitations applicable to the exercise
thereof.  Limited Rights  may  be  granted  in  tandem  with
another Award, in addition to another Award, or freestanding
and  unrelated  to  any  Award.   Limited  Rights granted in
tandem with or in addition to an Award may be granted either
at the same time as the Award or at a later  time.   Limited
Rights shall not be exercisable after the expiration  of  10
years  after the date of grant and shall only be exercisable
during a  period  determined  at  the  time  of grant by the
Committee beginning not earlier than one day and  ending not
more than ninety days after the expiration date of an Offer.
Except  in the case of a Limited Right granted in assumption
of or substitution  for  an  outstanding  award of a company
acquired by the Company or with which the Company  combines,
the grant price of any Limited Right granted under this Plan
shall not be less than 100% of the fair market value  of the
Shares  covered  by  such Limited Right on the date of grant
or, in the case of a Limited  Right granted in tandem with a
then outstanding Option or other Award, on the date of grant
of such related Option or Award.

(b)   A Limited Right  shall  entitle  the  holder
thereof to receive an amount equal to the excess, if any, of
the Offer Price on the date of exercise of the Limited Right
over the grant price.  Any Limited Right shall be settled in
cash, unless the  Committee  shall  determine at the time of
grant of a Limited Right that it shall  or may be settled in
cash, Shares or a combination of cash and Shares.

SECTION 9

(a)  Other Stock-Based Awards.   The  Committee is
hereby authorized to grant to Eligible Individuals an "Other
Stock-Based  Award",  which  shall consist of an Award,  the
value of which is based in whole  or in part on the value of
Shares,  that  is not an instrument or  Award  specified  in
Sections 6 through 8 of this Plan.  Other Stock-Based Awards
may be awards of Shares or may be denominated or payable in,
valued in whole  or  in  part  by reference to, or otherwise
based   on   or  related  to,  Shares  (including,   without
limitation, securities  convertible  or exchangeable into or
exercisable  for  Shares),  as  deemed  by   the   Committee
consistent  with  the  purposes  of the Plan.  The Committee
shall determine the terms and conditions  of  any such Other
Stock-Based   Award.    Except  in  the  case  of  an  Other
Stock-Based  Award  granted   in   assumption   of   or   in
substitution  for an outstanding award of a company acquired
by the Company or with which the Company combines, the price
at which securities  may  be purchased pursuant to any Other
Stock-Based Award granted under this Plan, or the provision,
if any, of any such Award that  is analogous to the purchase
or exercise price, shall not be less  than  100% of the fair
market value of the securities to which such  Award  relates
on the date of grant.

(b)    Dividend  Equivalents.   In  the  sole  and
complete discretion of the Committee, an Award, whether made
as an Other Stock-Based  Award under this Section 9 or as an
Award granted pursuant to  Sections  6 through 8 hereof, may
provide  the  holder  thereof  with  dividends  or  dividend
equivalents, payable in cash, Shares, Partnership interests,
Subsidiary securities, other securities or other property on
a current or deferred basis.

SECTION 10

(a)  Amendments to the Plan.  The Board may amend,
suspend or terminate the Plan or any portion  thereof at any
time,  provided  that  no  amendment  shall be made  without
stockholder approval if such approval is necessary to comply
with  any  tax or regulatory requirement.    Notwithstanding
anything to the contrary contained herein, the Committee may
amend the Plan  in  such  manner as may be necessary for the
Plan to conform with local  rules  and  regulations  in  any
jurisdiction outside the United States.

(b)   Amendments  to  Awards.   The  Committee may
amend,  modify or terminate any outstanding Award  with  the
holder's consent at any time prior to payment or exercise in
any manner  not  inconsistent  with  the  terms of the Plan,
including  without  limitation, (i) to change  the  date  or
dates as of which an  Award  becomes exercisable, or (ii) to
cancel  an  Award  and  grant a new  Award  in  substitution
therefor under such different  terms  and  conditions  as it
determines  in  its  sole  and  complete  discretion  to  be
appropriate.

(c)   Adjustment  of Awards Upon the Occurrence of
Certain Unusual or Nonrecurring  Events.   The  Committee is
hereby  authorized  to  make  adjustments  in the terms  and
conditions  of,  and  the  criteria included in,  Awards  in
recognition  of unusual or nonrecurring  events  (including,
without limitation,  the  events  described  in Section 5(b)
hereof)  affecting the Company, or the financial  statements
of  the  Company   or  any  Subsidiary,  or  of  changes  in
applicable  laws,  regulations,  or  accounting  principles,
whenever the Committee  determines that such adjustments are
appropriate  to  prevent  dilution  or  enlargement  of  the
benefits or potential benefits intended to be made available
under the Plan.

(d)  Cancellation.   Any provision of this Plan or
any  Award  Agreement to the contrary  notwithstanding,  the
Committee may  cause  any  Award  granted  hereunder  to  be
canceled  in  consideration of a cash payment or alternative
Award made to the  holder  of  such  canceled Award equal in
value to such canceled Award.  The determinations  of  value
under  this  subparagraph  shall be made by the Committee in
its sole discretion.

SECTION 11

(a)  Delegation.  Subject to the terms of the Plan
and applicable law, the Committee  may  delegate  to  one or
more officers of the Company the authority, subject to  such
terms  and  limitations as the Committee shall determine, to
grant Awards  to,  or to cancel, modify or waive rights with
respect to, or to alter,  discontinue, suspend, or terminate
Awards held by, Eligible Individuals who are not officers or
directors of the Company for  purposes  of Section 16 of the
Exchange Act, or any successor section thereto,  or  who are
otherwise not subject to such Section.

(b)  Award Agreements.  Each Award hereunder shall
be evidenced by a writing delivered to the Participant  that
shall specify the terms and conditions thereof and any rules
applicable  thereto, including but not limited to the effect
on such Award  of the death, retirement or other termination
of employment of  the Participant and the effect thereon, if
any,  of  a  change  in   control  of  the  Company  or  any
Subsidiary.

(c)  Withholding.    A Participant may be required
to pay to the Company, and the Company  shall have the right
to  deduct  from all amounts paid to a Participant  (whether
under the Plan  or  otherwise), any taxes required by law to
be paid or withheld in  respect  of Awards hereunder to such
Participant.  The Committee may provide  for additional cash
payments to holders of Awards to defray or  offset  any  tax
arising  from the grant, vesting, exercise or payment of any
Award.

(d)  Transferability.  No Awards granted hereunder
may  be  transferred,   pledged,   assigned   or   otherwise
encumbered by a Participant except: (i) by will; (ii) by the
laws  of  descent  and  distribution;  (iii)  pursuant to  a
domestic  relations  order,  as  defined  in  the  Code,  if
permitted  by  the  Committee  and  so provided in the Award
Agreement or an amendment thereto; or  (iv)  as  to  Options
only,  if permitted by the Committee and so provided in  the
Award Agreement  or  an  amendment thereto, (a) to Immediate
Family  Members,  (b) to a partnership  in  which  Immediate
Family  Members,  or  entities  in  which  Immediate  Family
Members are the sole  owners,  members  or beneficiaries, as
appropriate,  are  the  only  partners,  (c)  to  a  limited
liability  company  in  which  Immediate Family Members,  or
entities  in which Immediate Family  Members  are  the  sole
owners, members  or  beneficiaries,  as appropriate, are the
only  members,  or (d) to a trust for the  sole  benefit  of
Immediate Family  Members.  "Immediate Family Members" shall
be defined as the spouse  and natural or adopted children or
grandchildren of the Participant  and their spouses.  To the
extent that an Incentive Stock Option  is  permitted  to  be
transferred during the lifetime of the Participant, it shall
be  treated  thereafter as a Nonqualified Stock Option.  Any
attempted assignment,  transfer,  pledge,  hypothecation  or
other  disposition  of  Awards,  or  levy  of  attachment or
similar  process  upon  Awards  not  specifically  permitted
herein,  shall  be  null  and void and without effect.   The
designation  of a Designated  Beneficiary  shall  not  be  a
violation of this Section 11(d).

(e)   Share  Certificates.   All  certificates for
Shares or other securities delivered under the Plan pursuant
to  any  Award or the exercise thereof shall be  subject  to
such stop  transfer  orders  and  other  restrictions as the
Committee may deem advisable under the Plan  or  the  rules,
regulations,  and  other  requirements of the SEC, any stock
exchange upon which such Shares or other securities are then
listed, and any applicable  federal  or  state laws, and the
Committee may cause a legend or legends to  be  put  on  any
such  certificates  to  make  appropriate  reference to such
restrictions.

(f)  No Limit on Other Compensation  Arrangements.
Nothing contained in the Plan shall prevent the Company from
adopting   or   continuing   in  effect  other  compensation
arrangements, which may, but need not, provide for the grant
of options, stock appreciation  rights  and  other  types of
Awards   provided  for  hereunder  (subject  to  stockholder
approval of  any  such arrangement if approval is required),
and such arrangements  may be either generally applicable or
applicable only in specific cases.

(g)  No Right  to  Employment.   The  grant  of an
Award  shall  not  be  construed as giving a Participant the
right to be engaged or employed by or retained in the employ
of FTX, the Company or any  Subsidiary.  FTX, the Company or
any Subsidiary may at any time  dismiss  a  Participant from
engagement  or  employment, free from any liability  or  any
claim under the Plan, unless otherwise expressly provided in
the Plan or in any Award Agreement or any agreement relating
to the engagement  or  employment of the Participant by FTX,
the  Company  or any Subsidiary.   No  Eligible  Individual,
Participant or  other  person  shall  have  any  claim to be
granted any Award, and there is no obligation for uniformity
of  treatment  of  Eligible  Individuals,  Participants   or
holders or beneficiaries of Awards.

(h)   Governing  Law.  The validity, construction,
and effect of the Plan, any  rules  and regulations relating
to the Plan and any Award Agreement shall  be  determined in
accordance with the laws of the State of Delaware.

(i)  Severability.  If any provision of  the  Plan
or  any  Award  is  or  becomes  or is deemed to be invalid,
illegal, or unenforceable in any jurisdiction  or  as to any
Person  or Award, or would disqualify the Plan or any  Award
under any  law  deemed  applicable  by  the  Committee, such
provision shall be construed or deemed amended to conform to
applicable  laws,  or  if it cannot be construed  or  deemed
amended  without, in the  determination  of  the  Committee,
materially  altering  the  intent  of the Plan or the Award,
such provision shall be stricken as  to  such  jurisdiction,
Person or Award and the remainder of the Plan and  any  such
Award shall remain in full force and effect.

(j)   No  Trust or Fund Created.  Neither the Plan
nor any Award shall create or be construed to create a trust
or separate fund of any  kind  or  a  fiduciary relationship
between the Company and a Participant or  any  other Person.
To  the  extent that any Person acquires a right to  receive
payments from  the  Company pursuant to an Award, such right
shall be no greater than  the right of any unsecured general
creditor of the Company.

(k)  No Fractional  Shares.   No fractional Shares
shall be issued or delivered pursuant to  the  Plan  or  any
Award, and the Committee shall determine whether cash, other
securities or other property shall be paid or transferred in
lieu  of  any  fractional  Shares or whether such fractional
Shares or any rights thereto  shall be canceled, terminated,
or otherwise eliminated.

(l)   Headings.   Headings   are   given   to  the
subsections   of   the  Plan  solely  as  a  convenience  to
facilitate reference.   Such headings shall not be deemed in
any  way  material  or  relevant   to  the  construction  or
interpretation of the Plan or any provision thereof.

SECTION 12

Effective Date of the Plan.   The  Plan  shall  be
effective  as  of  the  date  of  its approval by the Board,
provided  the Plan is approved by the  stockholders  of  the
Company at  the  first annual meeting of stockholders of the
Company occurring subsequent to such date.

SECTION 13

Term of the Plan.  No Award shall be granted under
the Plan after the  tenth  anniversary of the effective date
of the Plan; however, unless otherwise expressly provided in
the  Plan or in an applicable  Award  Agreement,  any  Award
theretofore  granted may, and the authority of the Committee
to amend, alter,  adjust, suspend, discontinue, or terminate
any such Award or to  waive  any  conditions or rights under
any such Award shall, extend beyond such date.

As amended effective February 20, 1997

Exhibit 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the
incorporated by reference of our reports included herein or
incorporated by reference in this Form 10-K, into FM Properties Inc.'s
previously filed Registration Statement on Form S-8 (File No. 33-
78798).

Arthur Andersen LLP

New Orleans, Louisiana

March 24, 1997

Exhibit 24.1

FM PROPERTIES INC.

SECRETARY'S CERTIFICATE

I, Michael C. Kilanowski, Jr., Secretary of FM Properties Inc. 
(the "Corporation"), a Delaware corporation, do hereby certify that the 
following resolution was duly adopted by the Board of Directors of the 
Corporation at a meeting held on February 10, 1993, and that such resolution 
has not been amended, modified or rescinded and is in full force and effect:

RESOLVED, that any report, registration statement or other form filed 
on behalf of this corporation pursuant to the Securities Exchange 
Act of 1934, or any amendment to such report, registration statement or
other form, may be signed on behalf of any director or officer of this
corporation pursuant to a power of attorney executed by such director 
or officer.

IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of 
the Company on this the 26th day of March , 1997.

(Seal)                                                           
Michael C. Kilanowski, Jr.
Secretary

Exhibit 24.2

POWER OF ATTORNEY

BE IT KNOWN:  That the undersigned, in his capacity or capacities as 
an officer and/or a member of the Board of Directors of FM Properties Inc., a
Delaware corporation (the "Company"), does hereby make, constitute and appoint 
WILLIAM H. ARMSTRONG, III and WILLIAM J. BLACKWELL, and each of them acting 
individually, his true and lawful attorney-in-fact with power to act without 
the others and with full power of substitution, to execute, deliver and file, 
for and on behalf of him, in his name and in his capacity or capacities as 
aforesaid, an Annual Report of the Company on Form 10-K for the year ended 
December 31, 1996, and any amendment or amendments thereto and any other 
document in support thereof or supplemental thereto, and the undersigned 
hereby grants to said attorneys, and each of them, full power and authority 
to do and perform each and every act and thing whatsoever that said attorney 
or attorneys may deem necessary or advisable to carry out fully the intent 
of the foregoing as the undersigned might or could do personally or in the 
capacity or capacities as aforesaid, hereby ratifying and confirming all acts 
and things which said attorney or attorneys may do or cause to be done by 
virtue of this Power of Attorney.

EXECUTED this 20 day of February, 1997.

Richard C. Adkerson
POWER OF ATTORNEY

BE IT KNOWN:  That the undersigned, in his capacity or capacities 
as an officer and/or a member of the Board of Directors of FM Properties Inc.
, a Delaware corporation (the "Company"), does hereby make, constitute and 
appoint RICHARD C. ADKERSON,  WILLIAM H. ARMSTRONG, III and WILLIAM J. 
BLACKWELL, and each of them acting individually, his true and lawful 
attorney-in-fact with power to act without the others and with full power of
substitution, to execute, deliver and file, for and on behalf of him, in 
his name and in his capacity or capacities as aforesaid, an Annual Report 
of the Company on Form 10-K for the year ended December 31, 1996, and any 
amendment or amendments thereto and any other document in support
thereof or supplemental thereto, and the undersigned hereby grants to said 
attorneys, and each of them, full power and authority to do and perform 
each and every act and thing whatsoever that said attorney or attorneys 
may deem necessary or advisable to carry out fully the intent of the 
foregoing as the undersigned might or could do personally or in the 
capacity or capacities as aforesaid, hereby ratifying and confirming all 
acts and things which said attorney or attorneys may do or cause to be
done by virtue of this Power of Attorney.

EXECUTED this 19 day of February, 1997.

James C. Leslie
POWER OF ATTORNEY

BE IT KNOWN:  That the undersigned, in his capacity or capacities 
as an officer and/or a member of the Board of Directors of FM Properties Inc.
, a Delaware corporation (the "Company"), does hereby make, constitute and 
appoint RICHARD C. ADKERSON and WILLIAM J. BLACKWELL,  and each of them 
acting individually, his true and lawful attorney-in-fact with power to 
act without the others and with full power of substitution, to execute, 
deliver and file, for and on behalf of him, in his name and in his 
capacity or capacities as aforesaid, an Annual Report of the Company on 
Form 10-K for the year ended December 31, 1996, and any amendment or
amendments thereto and any other document in support thereof or supplemental
thereto, and the undersigned hereby grants to said attorneys, and each of 
them, full power and authority to do and perform each and every act and 
thing whatsoever that said attorney or attorneys may deem necessary
or advisable to carry out fully the intent of the foregoing as the 
undersigned might or could do personally or in the capacity or capacities 
as aforesaid, hereby ratifying and confirming all acts and things which 
said attorney or attorneys may do or cause to be done by virtue of this 
Power of Attorney.

EXECUTED this 20 day of February, 1997.

William H. Armstrong, III
POWER OF ATTORNEY

BE IT KNOWN:  That the undersigned, in his capacity or capacities
as an officer and/or a member of the Board of Directors of FM Properties Inc.
, a Delaware corporation (the "Company"), does hereby make, constitute and 
appoint RICHARD C. ADKERSON and WILLIAM H. ARMSTRONG, III  and each of 
them acting individually, his true and lawful attorney-in-fact with power 
to act without the others and with full power of substitution, to execute,
deliver and file, for and on behalf of him, in his name and in his capacity 
or capacities as aforesaid, an Annual Report of the Company on Form 10-K 
for the year ended December 31, 1996, and any amendment or amendments 
thereto and any other document in support thereof or supplemental thereto, 
and the undersigned hereby grants to said attorneys, and each of them, full 
power and authority to do and perform each and every act and thing 
whatsoever that said attorney or attorneys may deem necessary or advisable 
to carry out fully the intent of the foregoing as the undersigned might 
or could do personally or in the capacity or capacities as aforesaid, 
hereby ratifying and confirming all acts and things which said attorney 
or attorneys may do or cause to be done by virtue of this Power of Attorney.

EXECUTED this 20 day of February, 1997.

William J. Blackwell
POWER OF ATTORNEY

BE IT KNOWN:  That the undersigned, in his capacity or capacities 
as an officer and/or a member of the Board of Directors of FM Properties Inc.
, a Delaware corporation (the "Company"), does hereby make, constitute and 
appoint RICHARD C. ADKERSON, WILLIAM H. ARMSTRONG, III and WILLIAM J. 
BLACKWELL, and each of them acting individually, his true and lawful 
attorney-in-fact with power to act without the others and with full power of
substitution, to execute, deliver and file, for and on behalf of him, in 
his name and in his capacity or capacities as aforesaid, an Annual Report 
of the Company on Form 10-K for the year ended December 31, 1996, and any 
amendment or amendments thereto and any other document in support thereof 
or supplemental thereto, and the undersigned hereby grants to said attorneys,
and each of them, full power and authority to do and perform each and every 
act and thing whatsoever that said attorney or attorneys may deem necessary 
or advisable to carry out fully the intent of the foregoing as the 
undersigned might or could do personally or in the capacity or capacities 
as aforesaid, hereby ratifying and confirming all acts and things which 
said attorney or attorneys may do or cause to be done by virtue of this 
Power of Attorney.

EXECUTED this 20 day of February, 1997.

Michael D. Madden

<ARTICLE> 5
<CIK> 0000885508
<NAME> FM PROPERTIES
<MULTIPLIER> 1,000

<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               DEC-31-1996
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