SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)
[x]         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
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.)

98 San Jacinto Blvd., Suite 220
Austin, Texas                                 78701
(Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code: (512) 478- 5788

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.___

The aggregate market value of the voting stock held by non-affiliates
of the registrant was approximately $92,880,000 on March 18, 1998.

On March 18, 1998, 14,288,270 shares of Common Stock, par value
$0.01 per share, of the registrant were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement to be submitted to the
registrant's stockholders in connection with its 1998 Annual Meeting
to be held on May 14, 1998, are incorporated by reference into Part
III of this Report.

TABLE OF CONTENTS

Page

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

Items 1.  Business............................................... 1
Overview............................................ 1
Company Strategies.................................. 1
Recent Developments................................. 2
Regulation and Environmental Matters................ 3
Employees........................................... 3
IGL Debt Guarantee.................................. 4 
Proposed Transaction with Olympus................... 4
Cautionary Statements............................... 5

Item 2.      Properties.......................................... 7

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

Item 4.      Submission of Matters to a Vote of Security
Holders Executive Officers of the Registrant........10

Part II............................................................11

Item 5.      Market for Registrant's Common Equity and Related
Stockholder Matters.................................11

Item 6.      Selected Financial Data.............................12

Items 7. and 7A. Management's Discussion and Analysis of
Financial Condition and Results of Operations
and Disclosures about Market Risks..............12

Item 8.       Financial Statements and Supplementary Data........16

Item 9.       Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure................30

Part III...........................................................31

Item 10.      Directors and Executive Officers of the Registrant.31

Item 11.      Executive Compensation.............................31

Item 12.      Security Ownership of Certain Beneficial Owners and
Management.........................................31

Item 13.      Certain Relationships and Related Transactions.....31

Part IV............................................................31

Item 14.      Exhibits, Financial Statement Schedules, and
Reports on Form 8-K................................31

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

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

Exhibits........................................................  E-1

PART I

Item 1.  Business

OVERVIEW

FM Properties Inc., a Delaware corporation ("FMPO" or the
"Company"), was organized in March 1992 and operates through FM
Properties Operating Co., a Delaware general partnership (the
"Partnership").  Until December 1997 FMPO owned a 99.8 percent
general partnership interest and Freeport-McMoRan Inc., which also
served as the Partnership's Managing General Partner ("FTX"), owned
a 0.2 percent general partnership. In December 1997 the Company
acquired all of FTX's interest in the Partnership (see "Recent
Developments" below).  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. The Partnership subsequently has
sold all of its oil and gas properties and currently is engaged in
the development and marketing of real estate in the Austin, Dallas,
Houston and San Antonio, Texas areas.

FMPO is engaged in the acquisition, development and sale of
commercial and residential real estate properties, all of which are
located in the state of Texas.  FMPO's principal real estate
holdings in the Austin, Texas area currently consist of
approximately 3,000 acres of undeveloped residential, multi-family
and commercial property within the Barton Creek development,
approximately 1,300 acres of undeveloped commercial and multi-family
property within the Circle C Ranch development in Austin, 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 Austin.

FMPO also owns or has interests in approximately 300 developed lots,
200 acres of undeveloped residential property and 75 acres of
undeveloped commercial and multi-family property located in Dallas,
Houston and San Antonio, Texas that are being actively marketed.
See Item 2. "Properties."  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 Phosphate Resource
Partners Limited Partnership, an affiliate of IMC Global Inc.
("IGL"), and IGL, the Company may also participate in the potential
future 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.

COMPANY STRATEGIES

Since the formation of the Company, the primary objective of
managing, developing and operating the Partnership's assets has been
the reduction of its indebtedness and the elimination the FTX debt
guarantee in order to establish the Company as an independent,
stand-alone entity.  During 1996 and 1997, the Partnership was able
to sell a substantial number of properties in the Austin area
because of several positive legislative and judicial developments.
As a result, the Partnership generated significantly higher
operating cash flows, which enabled it to reduce its debt by $63
million during 1996 and $21 million during 1997.  Outstanding debt
was $37.1 million at December 31, 1997.

In December 1997, the Company restructured its credit agreement
and purchased that portion of the Company's operating partnership
which it did not previously own.  These events enabled FMPO to
become an autonomous company, reduced restrictions on the Company's
business activities and allowed it to pursue its long standing
objective of establishing a long-term, self-supporting capital
structure for the Company.  In addition, in March 1998, FMPO signed
a letter of intent with Olympus Real Estate Corporation to form a
strategic alliance to develop certain of the Company's existing
properties and to jointly pursue new acquisition and development
activities throughout the United States.  These 

[Page]  1

transactions are discussed in more detail below under the headings, 
"Recent Developments" and "Proposed Transaction with Olympus".

FMPO is continuing to focus its efforts on reducing the
Company's debt and increasing its return on stockholder equity.  Key
factors in accomplishing these goals include:

*    FMPO intends to maintain its current sales momentum at Barton
Creek, and enhance the value of its Austin properties by developing
and building its own products for sale or investment.  These future
developments may be through joint ventures or wholly owned by the
Company.  To that end, it has set in motion a 1998 capital program
of over $25 million, which includes the first phase of an office
project at its Lantana Corporate Center, and several new
subdivisions surrounding a new Tom Fazio designed golf course being
constructed on its Barton Creek project.  The new capital
provided by the proposed Olympus transaction is intended to enable
the Company to concentrate on the development of its core assets in
Austin, limiting the need for future tract sales to subdevelopers 
and thereby increasing the Company's potential returns from these
core assets.

*    The Company believes that it has the right to receive in the
future up to $40 million in reimbursement of certain of its prior
utility development costs.  Substantial additional costs eligible
for reimbursement will be incurred in the future as development
continues.  During the past twelve months the initial bond issues
from two of the seven Barton Creek Municipal Utility Districts
("MUDs") have been issued, resulting in approximately $4 million
being received by the Company.  In addition, the Company is in
litigation to collect almost $25 million in Circle C MUD
reimbursements.  See Item 3, "Legal Proceedings," for more details
on that matter.

*    The Company is again facing significant challenges to the
development entitlements of its core properties in Austin, which are
more fully discussed under Item 3, "Legal Proceedings."  FMPO will
continue to vigorously defend its rights to the development
entitlements of all its properties, but it is anticipated that the
City of Austin's continuing aggressive attempts to restrict growth
in the area of FMPO's holdings may have a negative effect on the
level of the Company's near term development and sales activity.

*    FMPO will continue to evaluate new opportunities in its
existing markets, including Dallas, Houston and San Antonio, as well
as elsewhere, in an effort to diversify its holdings both
geographically and by type of product.

The transactions described under the heading "Recent
Developments" below have increased FMPO's autonomy over its
operations and short-term financial flexibility.  However,
significant cash inflows are required to fund FMPO's necessary
development capital expenditures and debt reduction requirements
under its new credit agreement. In addition, FMPO anticipates
continued challenges to its development entitlements from the City
of Austin (the "City") and special interest groups which may result
in delays and higher development costs requiring additional capital.
See Item 3, "Legal Proceedings." FMPO is pursuing various means of
raising capital, including equity and subordinated debt investments
and through joint ventures and recently entered into a letter of
intent for such purposes.  See "Recent Developments" and "Proposed
Transaction with Olympus" below.  The future performance of FMPO
continues to be dependent on its cash flows from real estate sales,
which will be significantly affected by future real estate values,
development costs, future interest rate levels and the ability of
the Company to continue to protect its land use and development
entitlements.  FMPO will be required to actively pursue all of its
alternatives in order to generate sufficient cash flow or obtain
sufficient funds to carry out its development programs and make
required interest and principal payments under the new credit
agreement.

RECENT DEVELOPMENTS 

On December 22, 1997, FTX merged into IGL (the "Merger").  In
connection with the Merger, FTX sold its 0.2 percent interest as
Managing General Partner of the Partnership to FMPO and a wholly-
owned subsidiary of FMPO for $100,000.  In addition, FMPO
restructured its bank credit agreement to extend its term to January
1, 2001, with staged reductions of credit available under the bank
credit agreement through the term, beginning with available credit
of $50 million through December 31, 1998, $35 million through
December 31, 1999, and $15 million through December 31, 2000.  On
January 1, 

[Page]  2

2001, availability under this credit agreement will be
eliminated.  The new credit agreement is guaranteed by IGL, which
became guarantor in place of FTX as a result of the Merger.  As a
result, while FMPO will continue to be required to comply with the
terms of the guarantee of its debt by IGL, it is no longer
restricted by FTX's rights as Managing General Partner of the
Partnership.  In recognition of the Company's increased autonomy and
its independence from FTX, FMPO has proposed to change the Company's
name to Stratus Properties Inc. which is subject to shareholder
approval.

Significant development capital expenditures remain for FMPO's
Austin-area properties prior to their eventual sale.   While bank
financing for further development of existing properties currently
is available, bank financing for undeveloped land purchases
generally is expensive and difficult to obtain.  These factors,
combined with the debt reduction requirements under the new credit
agreement, could impede FMPO's ability to develop its existing
properties and expand its business.  As a result, FMPO has pursued a
number of capital raising alternatives, including equity sales,
formation of joint ventures with third parties, various forms of
debt financing and other means.  In March, 1998 FMPO announced the
signing of a letter of intent to form a strategic alliance with
Olympus Real Estate Corporation, an affiliate of Hicks, Muse, Tate &
Furst Incorporated ("Olympus"), for the development of certain of
FMPO's existing properties as well as new acquisition opportunities
throughout the United States.  Under this alliance Olympus would
provide up to $70 million in financing to FMPO.  See "Proposed
Transaction with Olympus" below.  This transaction is subject to
completion of due diligence, negotiation of definitive agreements
and approval by FMPO's Board of Directors.  While FMPO believes
these efforts will successfully address the capital resource needs
discussed above, there can be no assurance that FMPO will generate
sufficient cash flow or obtain sufficient funds to make required
interest and principal payments under the new credit agreement.

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
delayed and will likely 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.  Emphasis on environmental matters will 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, a Delaware corporation currently owned 10
percent by FMPO (the "Services Company"), has provided executive,
accounting, legal, financial, tax, insurance, personnel and
management information and similar services pursuant to a services
agreement between the Company and the Services Company (the
"Services Agreement").  The Services Agreement is terminable by FMPO
at any time upon 90 days' notice.  Since July 1995, these services
have been provided for an annual fee of $500,000, subject to annual
cost of living increases beginning in the first quarter of 1997.
Effective January 1, 1998, the Services Agreement was modified to
provide that such services would be provided prospectively on a cost
reimbursement basis.

At December 31, 1997, the Company had a total of 8 employees,
who manage the Company's operations and supervise the functions of
Services Company personnel under the Services Agreement.

[Page]  3

IGL DEBT GUARANTEE

FMPO's acquisition of FTX's 0.2 percent general partner interest
in the Partnership and replacement of the FTX debt guarantee has
eliminated the rights previously held by FTX as Managing General Partner.
As financial guarantor of FMPO's new credit agreement, IGL receives
an annual fee equal to the difference between FMPO's cost of LIBOR-
funded borrowings before the assumption of the guarantee by IGL and
the rate on LIBOR-funded loans under the new agreement.  This fee was
60 basis points (0.6%) as of December 31, 1997. FMPO has granted liens
in favor of IGL on certain of its properties as security for the
guarantee.  These liens would be released for property sales, subject
to certain restrictions.  Additionally, under the guarantee terms FMPO
cannot amend or refinance the credit facility without IGL's consent.

PROPOSED TRANSACTION WITH OLYMPUS

On March 2, 1998 FMPO and Olympus entered into a letter of
intent to form a strategic alliance to develop certain of FMPO's
properties and to pursue new real estate acquisition and development
opportunities.  Under the terms of the letter of intent, Olympus
would make a $10 million investment in an FMPO mandatorily 
redeemable equity security, provide a $10  million convertible debt
financing facility to FMPO and make available up to $50 million of
capital for its share of direct investments in joint FMPO/Olympus
projects.  Olympus would also have the right to designate for
nomination 20 percent of FMPO's Board of Directors.

The $10 million mandatorily redeemable equity security would
have a par value of $5.84 per share, the average closing price of
FMPO common stock during the 30 trading days ending March 2, 1998.
FMPO would use the proceeds from the sale of these securities to
repay debt.  These securities would share any dividends or
distributions ratably with the FMPO common stock, which currently
pays no dividend, and would be redeemable (i) at the option of the
holder at any time after the third anniversary of the closing for an
amount per share approximating the economic benefit that would have
accrued had the shares been converted into common stock on a one-to-
one basis and sold (the "common stock equivalent value") or (ii) at
the option of FMPO after the fifth anniversary (but in no event
later than the sixth anniversary) for the greater of their common
stock equivalent value or their par value per share, plus accrued
and unpaid dividends, if any.  FMPO would have the option to satisfy
the redemption with shares of its common stock, subject to certain
limitations.

The $10 million convertible debt facility would be available to
FMPO in whole or in part for a period of six years after closing to
finance FMPO's equity investment in new FMPO/Olympus joint venture
opportunities in properties not currently owned by FMPO.  The
interest rate on this facility would be 12 percent per year, and at
Olympus's option, interest would be payable quarterly, or accrued
and added to principal.  Outstanding principal under the facility
would be convertible at any time into FMPO common stock at a
conversion price of $7.31, which is 125 percent of the average
closing price of FMPO common stock during the 30 trading days ending
March 2, 1998.  If not converted into common stock, the convertible
debt would be repaid on the sixth anniversary of the closing.  If
the combination of interest at 12 percent and the value of the
conversion right does not provide Olympus with at least a 15 percent
annual return on the convertible debt, FMPO would pay Olympus
additional interest upon retirement of the convertible debt in an
amount necessary to yield a 15 percent annual return.  The
convertible debt would be non-recourse to FMPO and would be secured
solely by FMPO's interest in FMPO/Olympus joint venture
opportunities financed with the proceeds of the convertible debt.

For a three-year period after the closing, Olympus would make
available up to $50 million for its share of capital for direct
investments in FMPO/Olympus joint acquisition and development
activities.  For the three-year period, FMPO would provide Olympus
with a right of first refusal to participate for no less than a 50
percent interest in all new acquisition and development projects on
properties not currently owned by FMPO, as well as development
opportunities on existing properties in which FMPO seeks third-party
equity participation. 

The transaction is expected to close in the second quarter of
1998 and is subject to the completion of due diligence, negotiation
of definitive agreements and approval of FMPO's Board of Directors.

[Page]  4

CAUTIONARY STATEMENTS

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,"
"Properties," "Market for Registrant's Common Equity and Related
Stockholder Matters," and "Management's Discussion and Analysis of
Financial Condition and Results of Operations and Disclosures about
Market Risks" 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

Substantial reductions in the Company's debt have been made since
its formation in 1992 and the Company's debt recently has been
restructured.  However, significant cash inflows are required in
order to fund FMPO's necessary development capital expenditures and
debt reduction requirements under the new credit agreement.  FMPO
has pursued a number of capital raising alternatives, including
equity sales, formation of joint ventures with third parties,
various forms of debt financing and other means.  The Company's
future performance continues to be dependent on future cash flows
from real estate sales, and there can be no assurance that FMPO will
generate sufficient cash flow or otherwise obtain sufficient funds
to make required interest and principal payments under the new
credit agreement.

Although all of the Company's outstanding bank debt subject to the
terms of the bank credit facility is currently guaranteed by IGL,
there is no commitment by IGL to guarantee any such debt after
December 2000, and there is no expectation 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 

[Page]  5

the potential customers' existing residences.

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 about development in the
areas where FMPO's properties are located 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 and certain special interest groups have long
opposed certain of the Company's plans in the Austin area and have 
also taken various other actions to partially or completely restrict
development in certain areas, including the Company's properties.
See Item 3, "Legal Proceedings." These actions are being actively
opposed by FMPO and other interested parties, and management does
not believe unfavorable rulings will have an adverse effect on the
overall value of the Company'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 under Item 3, "Legal Proceedings."

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 properties 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 properties, free of restrictions under the ESA related
to the maintenance of habitat for the Golden Cheek Warbler.
Additionally, in April 1997, the U.S. Department of Interior ("DOI")
listed the Barton Springs Salamander as an endangered species after
a federal court overturned a March 1997 decision by the DOI not to
list the Barton Springs Salamander based on a conservation agreement
between the State of Texas and federal agencies.  The listing of the
Barton Springs Salamander is not anticipated to affect the Company's
Barton Creek and Lantana properties for several reasons, including
the results of recent technical studies and the Company's U.S. Fish
and Wildlife Service 10(a) permit obtained in 1995.  The Company's
Circle C properties could, however, be affected, although the extent
of any impact cannot be determined at this time.  Special interest
groups have provided written notice of their intention to challenge
the Company's 10(a) permit and compliance with water quality
regulations.

The Company is making, and will continue to make, expenditures
with respect to its real estate development for the protection of the
environment.  Emphasis on environmental matters will 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.

[Page]  6

The performance of the Texas economy affects sales of FMPO's
properties and consequently has an impact on the income derived from
the Company's real estate activities and the underlying values of
property owned by FMPO.  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 2. Properties

The following table provides information on the Company's
holdings, including its existing inventory of finished lots and
acreage to be developed. The acreage to be developed in the future
is broken down into anticipated uses for single family lots,
multifamily units and commercial development based upon the
Company's understanding of the properties' existing entitlements.
However, there is no assurance that the undeveloped acreage will be
so developed due to the nature of the approval and development
process and market demand for a particular use.  See Item 3, "Legal
Proceedings," for more details.

Potential Development Acreage
-----------------------------------------------
Developed   Single
Lots      Family    Multifamily    Commercial   Total
----------  --------   -----------    ----------  ---------

Location
Austin
Barton Creek            5     1,549           249          673       2,471
Lantana                 -       154            36          323         513
Circle C                -         -           212        1,062       1,274

Dallas
Bent Tree              54         -            18            2          20
Willow Bend            79         -             -            -           -

Houston
Copper Lakes          142       169             -            -         169

San Antonio 
Camino Real            21        30            54            -          84
---     -----           ---        -----       ----- 
Total                   301     1,902           569        2,060       4,531
===     =====           ===        =====       =====

Item 3. Legal Proceedings

SOS Ordinance Litigation

Prior to 1995, development of the Company's Austin area
properties had been delayed because of disagreements with the City
of Austin (the "City") over various ordinances.  In 1995, a Texas
district court ruled in favor of FMPO, declaring that a restrictive
1992 water quality ordinance enacted by public initiative (the "SOS
Ordinance") was void and that the Company was entitled to develop
its Barton Creek and Circle C properties based on ordinances that
were in effect at the time of its initial development permit
applications.  The City appealed this decision, and in 1996 the
Texas Court of Appeals overturned the favorable district court
ruling that invalidated the SOS Ordinance, but upheld the district
court's favorable ruling regarding certain grandfathered rights for
previously platted land.  A significant portion of the Barton Creek
and Circle C properties was previously platted and met the
requirements to benefit from these grandfathered rights. An
application for Writ of Error was filed with the Texas Supreme Court
in January, 1997.  The Writ of Error was accepted by the Texas
Supreme Court and oral argument was heard on November 3, 1997. The
Texas Supreme Court has not yet issued its decision.  An unfavorable
final judgment could have an adverse effect on any portion of the
Company's property which cannot be 

[Page]  7

developed under grandfathered
entitlements (see "Legislative Developments," below) or which has
not been removed from the jurisdiction of the City pursuant to the
water quality protection zones at Barton Creek (the "Barton Creek
WQPZ") and at Circle C (the "Circle C WQPZ," see below).

Southwest Travis County Water District Litigation

The Company's property in the Circle C development, comprising
approximately 1,300 acres of undeveloped commercial and multi-family
property, is located in the Southwest Travis County Water District
(the "STCWD").  The STCWD is a conservation and reclamation district
created by the Texas Legislature in 1995 for the purpose of
conserving water resources and with authority to establish a water
pollution control and abatement program meeting state criteria.
Development within the STCWD is required to meet the STCWD's
criteria and is exempt from municipal regulation.  In October 1997,
a Texas district court rendered final judgment that the legislation
creating the STCWD was unconstitutional.  The STCWD has filed an
appeal, but no decision has yet been issued.  The Company does not
expect the validity of the STCWD will be upheld on appeal and has
implemented an alternative strategy of creating the Circle C WQPZ to
maximize development potential of 553 acres of its Circle C property
(see "Circle C WQPZ Litigation," below).  The Company's strategy
with respect to the balance of its Circle C property holdings 
(outside the Circle C WQPZ), approximately 700 acres, is to expedite
reimbursement of $25 million in previously incurred reimbursement
infrastructure costs from the City by not opposing the City's
annexation of the 700 acres (see "Annexation Litigation," below).

Annexation Litigation

On December 19, 1997, the City enacted an ordinance purporting
to annex all land lying within the STCWD.  Prior to the City's
enactment of its annexation ordinance, the Company created the
Circle C WQPZ (see below).  As a result, the Company's 553 acres
located within the Circle C WQPZ, which comprises all of the
Company's land in the Circle C project other than the land within
the Circle C municipal utility districts (the "MUDs"), was not
eligible for annexation.  Annexation subjects that portion of the
Company's property located within the MUDs (approximately 700
acres), which has been annexed by the City, to the City's zoning and
development regulations.  In connection with annexation, the City
has imposed an interim zoning classification on the approximately
700 acres permitting only one residential unit per acre, which
results in significantly less development yield than the Company
previously anticipated.  However, consistent with the Company's
strategy, annexation of the Company's property located within the
MUDs requires the City to assume all MUD debt and reimburse the
Company, simultaneously with the annexation, for a significant
portion of previously incurred costs of water, wastewater and
drainage infrastructure which could result in reimbursement of these
costs much earlier than the Company initially anticipated.  These
reimbursable costs are estimated to be approximately $25 million.
Because the City failed to pay these costs on December 19, 1997, the
Company filed suit against the City to compel reimbursement of these
amounts. The suit was promptly set for trial but subsequently stayed
pending resolution of suits brought by the MUDs and other third
parties challenging the validity of the City's purported annexation.
Certain of those underlying third-party challenges have now been
resolved and the Company has filed a motion to lift the stay to
permit trial to proceed.  The motion is scheduled for hearing on
April 16.  Although the Company expects to ultimately receive
payment from the City, the City may continue to resist payment.

Circle C WQPZ Litigation

The Company owns approximately 553 acres in the Circle C
development outside the boundaries of any MUD.  In order to permit
development of this property, the Company filed a water quality
protection zone covering its 553 acres (the "Circle C WQPZ"). Such
water quality protection zones ("WQPZ") permit development of
defined areas outside of municipalities if such development conforms
to state-approved water quality standards under plans approved by
the Texas Natural Resource Conservation Commission ("TNRCC").  The
law also restricts adjoining municipalities from attempting to
enforce land use or development ordinances inconsistent with the
requirements of the WQPZ or annexing any portion of the WQPZ prior
to the earlier of completion of 90 percent of infrastructure 
construction or 20 years after creation of the WQPZ.  The creation
of the Circle C WQPZ was intended to permit the Company to develop
its 553 acres in accordance with the water quality standards
required by the Circle C WQPZ rather than the requirements of the
City, and to confirm that effect the Company initiated a lawsuit in
Hays County in November 1997 seeking a declaratory judgment
confirming the validity of the Circle C WQPZ and the invalidity of
the City's attempt to annex land within the Circle C WQPZ.  The City
filed a motion to transfer venue from Hays County to Travis County
and, in addition, argued that the Hays County District Court had no
jurisdiction pending consideration of the Circle C WQPZ's water
quality plan by the TNRCC.  

[Page]  8

On December 18, 1997, the TNRCC approved
the Circle C WQPZ's water quality plan.  On January 12, 1998, the
Hays County District Court denied the City's motion to transfer
venue and all other requested relief.  The Company has filed a
motion for summary judgement in the Hays County litigation, which is
scheduled to be heard on March 30, subject to the Texas Supreme
Court's decision as to whether the City's interlocutory appeal of
the District Court's denial of the City's plea to the jurisdiction
abates the summary judgment hearing.   A favorable result in this
litigation, which the Company expects, would confirm that the City's
attempt to annex the Company's 553 acres in the Circle C WQPZ was
invalid and that development of the 553 acres is not subject to City
development regulations. An unfavorable ruling, which is not
expected, would mean that the Circle C WQPZ was invalid and that the
553 acres is annexed, and subject to the City zoning and other
regulatory authority, which could diminish the development potential
of this property in the same manner as the approximately 700 acres
discussed above (see "Annexation Litigation").

Legislative Developments

In the most recent legislative session of the Texas State
legislature, a bill to reorganize a state governmental agency
inadvertently repealed the provisions of law that established
grandfathered rights for land which was platted or in the permitting
process.  The Company, based on an opinion from counsel, has taken
the position that under Texas law, previously vested rights for the
Company's property holdings are not affected by the repeal of this
statute.  The City, however, does not recognize any grandfathered
entitlements arising under the repealed law and, in response to the
repeal, enacted an ordinance effective September 5, 1997,
establishing interim regulations on land development.  It is
anticipated that the City will enact a final ordinance and may
attempt to apply it to portions of the Company's Circle C and
Lantana properties.  Should the City take this position, the Company
anticipates asserting and defending its grandfathered entitlements.
In the event the City were to prevail, portions of the Company's
property would be subject to the City's current restrictive
ordinances and development potential would be significantly reduced.
During the last three sessions of the Texas legislature, legislation
has been enacted to provide landowners relief from overly-aggressive
attempts by municipalities to regulate land development in an effort
to prevent growth.  Much of that past legislation has been enacted 
to address abusive or unauthorized municipal land use regulations of
the type adopted by the City.  The Company anticipates that during
the next session of the Texas legislature, beginning in January
1999, the Texas legislature will once again review and address
inappropriate municipal land use regulation designed to prevent
growth and development.

Other Matters

During February 1997, FMPO filed a petition for declaratory
judgment against Phoenix Holdings, Ltd. in order to secure its
ownership of approximately $25 million of MUD reimbursements that
pertain to existing infrastructure that serves the Circle C development.
Phoenix filed a counter claim against Circle C in June 1997.  On
February 20, 1998, the District Court granted the Company's motion
for summary judgment on the primary case and subsequently, Phoenix
Holdings, Ltd. dismissed its counterclaims with prejudice, but
reserved the right to appeal the summary judgment of the primary
case.

On January 9, 1998, the City filed a lawsuit (the "Travis County
Suit") in Travis County District Court against 14 water quality
zones and their owners, including the Barton Creek WQPZ.  The City
challenges the constitutionality of the legislation authorizing the
creation of water quality zones.  This same issue is being litigated
in the lawsuit initiated by the Company discussed under Circle C
WQPZ Litigation, above.  The Attorney General of Texas has agreed to
intervene in both the Travis County Suit and the suit in the Circle
C WQPZ Litigation above, to defend the legislation. Although not
expected, a court decision that the legislation authorizing WQPZs is
invalid would diminish and delay development of portions of the
Barton Creek project and the Company's land located in the Circle C
WQPZ.

In April 1997, the U.S. Department of Interior ("DOI") listed
the Barton Springs Salamander as an endangered species after a
federal court overturned a March 1997 decision by the DOI not to
list the Barton Springs Salamander based on a conservation agreement
between the State of Texas and federal agencies.  The listing of the
Barton Springs Salamander is not anticipated to affect the Company's
Barton Creek and Lantana properties for several reasons, including
the results of recent technical studies and the Company's U.S. Fish
and Wildlife Service 10(a) permit obtained in 1995.  The Company's
Circle C properties could, however, be affected, although the extent
of any impact cannot be determined at this time.  Special interest
groups have provided written notice of their intention to challenge
the Company's 

[Page]  9

10(a) permit and compliance with water quality
regulations.  The Company believes these challenges are meritless
and will continue to protect its entitlements.

Austin's Continuing Efforts to Restrict and Redirect Growth

Although the Company expects a favorable result in the Circle C
litigation confirming the validity of the Circle C WQPZ (see above), 
the Company expects the City may continue to assert claims that it
has regulatory jurisdiction over development within the Circle C
WQPZ and that additional litigation may be necessary to preserve
development entitlements.  Recently, one of Austin's largest
employers, Motorola Inc., contracted to purchase approximately 167
acres of the Company's commercial land located in the Circle C WQPZ
for development of a campus facility bringing thousands of jobs to
the Circle C community. Even though not required, Motorola agreed to
develop its campus facility in strict accordance with the City's
regulations, including the SOS Ordinance.  Certain City
representatives  publically asserted zoning and development
authority over Motorola's selected site and indicated that Motorola
would not receive the City development and zoning approvals that the
City asserts are needed to develop the campus project even if all
ordinance requirements would be fully satisfied. After meetings with
City representatives and members of the SOS Alliance (a special
interest group), Motorola elected to terminate its contract with the
Company.  As a consequence, the Company lost a significant sale.
Austin recently elected a council strongly opposed to development in
the southwest sector of Austin and the Company anticipates that in
the future, the City will use similar tactics to those is used in
the Motorola incident to restrict growth in the southwest corridor.
For example, the City recently announced its "Smart Growth" program
designed to direct growth away from the southwest sector of the City
towards the "Desired Development Zone," an area located generally in
the northern and eastern sections of Austin.  Consistent with its
Smart Growth program, in March 1998, the City announced a proposed
bond sale to raise funds to acquire land in the southwest corridor,
which it refers to as the "Barton Creek Zone," for the purported
purpose of protecting the Edwards Aquifer.  The Circle C project is
within the Barton Creek Zone.  The Company anticipates that the City
will continue its efforts to impose development regulations limiting
development in an effort to reduce the value of land it has targeted
to acquire for the Barton Creek Zone.  As it has been compelled to
do during the last several years, the Company anticipates having to
continue to be involved in litigation to protect its entitlements
and maximize the developability and value of its properties.  The
Company anticipates that it will continue to successfully develop
and market its properties during the pendency of its disputes with
the City of Austin.

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 2, 1998, 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     51     Chairman of the Board and Chief Executive
Officer

W. H. Armstrong, III    33     President, Chief Operating Officer and
Chief Financial Officer

John G. Amato           54     General Counsel

Mr. Adkerson has served as Chairman of the Board of the Company
since March 1992 and Chief Executive Officer of the Company since
May 1996.  He also serves as President, Chief Operating Officer and
Chief Financial Officer of Freeport-McMoRan Copper & Gold Inc.
("FCX"), Vice Chairman of the Board of Freeport-McMoRan Sulphur Inc.
("FSC") and Co-Chairman of the Board and Chief Executive of McMoRan
Oil & Gas Co. ("MOXY").  He was Chairman of the Board, President and
Chief Executive 

[Page]  10

Officer of the Company from March 1992 to May 1993
and from August 1995 to May 1996, and Chairman of the Board from May
1993 to August 1995.  Mr. Adkerson served as Executive Vice
President of FCX from July 1995 to April 1997 and as Senior Vice
President of FCX from February 1994 to July 1995.  He served as Vice
Chairman of the Board of FTX from August 1995 until December 1997
and as Senior Vice President of FTX from May 1992 to August 1995.

Mr. Armstrong has been employed by FMPO since its inception in 1992.
He has served as the Company's President and Chief Operating Officer
since August 1996 and a Chief Financial Officer since May 1996.  He
served as Executive Vice President from August 1995 to August 1996.
Previously, Mr. Armstrong was a member of the Finance and Business
Development Group of FTX with responsibility for real estate
activities.

Mr. Amato has served as General Counsel of FMPO since August 1995.  
He is also General Counsel of MOXY and FSC.  Prior to August 1995, Mr.
Amato served as General Counsel of FTX and FCX.  Mr. Amato currently 
provides legal and business advisory services to 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 National Market
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.

1997                    1996
---------------------   ------------------
High         Low       High       Low
--------     --------   -------    -------

First Quarter            $3 15/16     $2 1/16    $2 7/8     $1 1/2
Second Quarter            3 15/16      2 5/16     2 5/8      2 1/16 
Third Quarter             5 7/16       2 13/16    3 1/16     2 1/8
Fourth Quarter            5 3/4        3 1/32     3 1/16     2 3/4

The Company has not in the past and does not anticipate in the
foreseeable future paying cash dividends on its common stock.  The
decision whether or not to pay dividends and in what amounts is
solely within the discretion of the Company's board of directors.
The Company's ability to pay dividends is restricted by the terms of
its credit agreement.

As of March 23, 1998 there were 10,112 record holders of the Company
common stock.

[Page]  11

Item 6.  Selected Financial Data

The following table sets forth selected historical financial data
for the Company for each of the five years in the period ended
December 31, 1997.  The historical financial information is derived
from the audited financial statements of the Company and is not
necessarily indicative of future results.  The following data should
be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations and Disclosures about
Market Risks" and the Company's historical financial statements and
notes thereto contained elsewhere in this Form 10-K.

1997(a)    1996     1995      1994(b)      1993
--------   ------- --------   ---------   --------
(In Thousands, Except Per Share Amounts)

Years Ended December 31:
Revenues                 $ 30,953   $   -   $     -    $   -       $   -
Loss from
Partnership                  -         (346)    (571)   (118,741)   (24,057)
Operating
income (loss)               3,907      (566)  (2,367)   (122,869)   (27,526)
Net income (loss)           7,006        76      153     (86,290)   (18,814)
Net income (loss)
per share                     .49       .01      .01       (6.04)     (1.32)
Average shares
outstanding                14,288    14,286   14,286      14,286     14,286

At December 31:
Real estate and
facilities, net           105,274       -       -           -          -
Investment in
the Partnership              -       56,055   56,401      56,972    193,415
Total assets              112,754    60,985   60,897      60,903    193,637
Stockholders'
equity                     66,607    59,599   59,523      59,370    145,660

___________

a.   Prior to 1997, reflects the Company's investment in the
Partnership under the equity basis of accounting.  See discussion 
under "Overview" in Items 7 and 7A below and Note 1 to the financial
statements.

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

Items 7. and 7A.  Management's Discussion and Analysis of Financial
Condition and Results of Operations and Disclosures about Market
Risks

OVERVIEW

FMPO's most significant assets include approximately 3,000 acres of
primarily undeveloped land in and around the Barton Creek Community
located near Austin, Texas (the "City"), and approximately 1,300
acres of undeveloped commercial and multi-family property in the
Circle C development located in Austin, Texas.  FMPO is also engaged
in the development and marketing of real estate in the Dallas,
Houston and San Antonio, Texas areas.

On December 22, 1997 Freeport-McMoRan Inc. ("FTX") merged into
IMC Global Inc. ("IGL") (the "Merger").  Prior to the Merger, FMPO
operated through its 99.8 percent general partnership interest in FM
Properties Operating Co., a Delaware general partnership (the
"Partnership").  The remaining 0.2 percent general partnership
interest was held by FTX, which also served as the Partnership's
Managing General Partner.  FMPO reflected its investment in the
Partnership on the equity basis of accounting because of certain
rights held by FTX as managing general partner regarding the
Partnership's operations as long as it guaranteed any of the
Partnership's debt.  In connection with the Merger, FTX sold its 0.2
percent general partnership interest to FMPO and a subsidiary of
FMPO for $100,000. FMPO also restructured and consolidated its
existing debt in December 1997, extending its maturity until January
1, 2001 and providing for staged reductions in available credit.
IGL became guarantor of this restructured debt in place of FTX.  See
"Capital Resources and Liquidity."  As a result of FTX's sale of its
interest, elimination of its rights as a partner and replacement of
the FTX guarantee with the IGL guarantee, FMPO's financial
statements reflect the Partnership's assets, liabilities and
operating results under consolidation accounting effective January
1, 1997.

[Page]  12

RESULTS OF OPERATIONS

As noted above, FMPO operates through the Partnership and, prior
to January 1, 1997, reflected the Partnership's results of operations
using the equity method of accounting.  Accordingly, the following
discussion and analysis addresses the results of operations and the
capital resources and liquidity of FMPO for 1997 and of the
Partnership for prior years, collectively referred to as "the
Company" hereafter. 

During 1997 and 1996 the Company 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
Company's Austin area properties had been delayed principally
because of disagreements with the City over ordinances governing
development activities in the Barton Creek and Circle C areas.
Summary operating results follow:

1997         1996       1995
-------      -------    -------
(In Thousands)

Revenues
Developed properties      $17,723      $44,016    $35,024
Undeveloped properties
and other                  13,230       35,161     13,146
-------      -------    -------
Total revenues             30,953       79,177     48,170
-------      -------    -------

Operating income (loss)     3,907a       3,534     (2,308)

Net income (loss)           7,006a,b      (346)      (571)c

a.   Includes a $3.1 million reimbursement of previously expensed
infrastructure costs.
b.   Includes a $4.5 million gain from sale of oil and gas property
interests.
c.   Includes a $2.6 million gain from a bankruptcy settlement with
a customer.

Revenues from developed properties for 1997 consisted
of $5.4 million from the sale  of 146 acres of residential
properties and $12.3 million from the sale of 198 single-
family homesites.  Revenues from undeveloped properties for
1997 represented the sale of  72 acres of commercial and
multi-family land. 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, which were
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.

General and administrative expenses were $2.8 million in 1997,
compared with $2.5 million in 1996 and $4.2 million in 1995.  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 (see Note 46 to the financial
statements), were taken, to a significant extent, in response to the
reduced permitting, engineering and administrative burdens resulting
from the favorable legislative and judicial developments during
1995.

In September 1997, the Company sold several working interests
and numerous overriding royalty interests in oil and gas properties
which have been held since its formation to McMoRan Oil & Gas Co.
("MOXY") and Phosphate Resource Partners Limited Partnership
("PLP"), formerly Freeport-McMoRan Resource Partners, Limited
Partnership, for $4.5 million cash, resulting in a gain of $4.5
million.  MOXY is, and PLP was prior to the Merger, an affiliate of 
FMPO because of FTX's former role as administrative managing general
partner of PLP and because of common management and a common
director shared with MOXY.  These interests, which had no cost basis
and included all of the Company's remaining oil and gas interests,
remained with the Company after the sale of substantially all of its
oil and gas properties in 1993.  The gain is reflected in Other
Income, and proceeds were used to reduce debt.  Other Income also
includes royalty income generated by these properties totaling $0.8
million, $1.4 million and $0.6 million for 1997 (prior to the sale),
1996 and 1995, respectively.

[Page]  13

Interest expense incurred during 1997 was lower than in 1996 as
a result of reduced debt levels. Interest expense in 1996 increased
from 1995 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 Company 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 cash deposit was recorded
as a reduction in the related carrying value of these properties.
The Company has no further obligation to the investor group and is
proceeding with developing and marketing the Circle C commercial and
multi-family properties.

The Company 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. As a result, and because of numerous other factors
inherent in the Company's business activities as described herein,
past operating results are not necessarily indicative of future
trends in profitability.

CAPITAL RESOURCES AND LIQUIDITY

The Company's increased sales activity and limited development
during 1997 and 1996 generated significantly higher operating cash
flows which enabled it to reduce its debt by a total of $21.2
million during 1997, to $37.1 million at December 31, 1997.
Additionally, in connection with the Merger, FMPO amended it's
existing credit agreements to consolidate these facilities, extend
the maturity to January 1, 2001 and allow for the sale of FTX's
ownership interest.  IGL agreed to guarantee the restructured credit
agreements in place of FTX for a fee (see Note 4 to the financial
statements).  The new credit agreement provides for a revolving
credit facility and a term loan with initial maximum available
balances of $35 million and $15 million, respectively.  The
aggregate available credit of $50 million is available through
December 31, 1998 and is reduced to $35 million thereafter through
December 31, 1999 and $15 million through December 31, 2000. This
facility bears interest at rates tied to the lending bank's prime
rate or LIBOR at FMPO's option. As a result of these events, FMPO's
autonomy over its operations and short-term financial flexibility
have substantially increased, a definitive timetable for the
complete elimination of the debt guarantee has been established, 
restrictions on the Company's business activities have been reduced,
and FMPO is better able to pursue its objective of establishing a
long-term, self-supporting capital structure.

The future performance of FMPO continues to be dependent on future
cash flows from real estate sales, which will be significantly
affected by future real estate values, regulatory issues,
development costs, the ability of the Company to continue to protect
its land use and development entitlements, and interest rate levels.
Significant development capital expenditures remain to be incurred
for FMPO's Austin-area properties prior to their eventual sale.
While bank financing for further development of existing properties
currently is available, bank financing for undeveloped land
purchases generally is expensive and difficult to obtain.  These
factors, combined with the debt reduction requirements under the new
credit agreement, could impede FMPO's ability to develop its
existing properties and expand its business.  As a result, FMPO has
pursued  a number of capital raising alternatives, including equity
sales, formation of joint ventures with third parties, various forms
of debt financing and other means and recently entered into a letter
of intent with Olympus for such purposes.  See "Proposed Transaction
with Olympus", above.  The proposed transaction with Olympus is
subject to due diligence, negotiation of definitive agreements and
approval by FMPO's Board of Directors.  While FMPO believes these
efforts will successfully address the capital resource needs
discussed above, there can be no assurance that FMPO will generate
sufficient cash flow or obtain sufficient funds to make required
interest and principal payments under the new credit agreement.

Net cash provided by operating activities totaled $29.5
million in 1997, $68.7 million in 1996 and $47.5 million in
1995.  The 1997 period included the $4.5 million gain on the
sale of oil and gas properties to MOXY and PLP and $3.1
million for the reimbursement of previously expensed
infrastructure costs, while the 1996 period included $25.0
million from the sale of the Barton Creek County Club and
Conference Resort and 1995 benefited from the sale of Circle
C's single-family residential real estate properties and
related amenities for  $15.8  million.   Net cash used in
investing activities totaled $9.5 million in 1997, $5.9
million in 1996 and $35.2 million in 1995, all of which
represent real estate capital 

[Page]  14

expenditures except for a $9.7
million final payment in 1995 to working and royalty
interest owners out of proceeds from a natural gas contract
settlement related to oil and gas properties previously
sold.  Increased 1997 expenditures resulted from increased
development requirements for the properties currently being
marketed and a $1.5 million acquisition of Austin-area land,
while the decrease in 1996 expenditures from 1995 resulted
from reduced development requirements brought about by the
positive legislative and judicial events that occurred
during 1995 and the Company's success in securing land use
and development entitlements, marketing and selling
undeveloped tracts to sub-developers.  Financing activities
consisted of a net reduction in borrowings totaling $21.2
million in 1997, $63.0 million in 1996 and $11.2 million in
1995.  As of December 31, 1997, $10.9 million of additional
borrowings were available under the restructured credit
facility. Capital expenditures for 1998 are expected to be
approximately  $28 million, subject to resolution of
regulatory issues impacting the Company's Austin-area
properties.  Such expenditures will be funded by working
capital and borrowings under the new credit agreement.

Refer to Item 3., "Legal Proceedings," for a discussion of various
litigation and regulatory matters affecting FMPO.

FMPO has assessed its year 2000 information systems cost issues
and believes its current plans for system upgrades will adequately
address these issues at no material cost.

DISCLOSURES ABOUT MARKET RISKS

FMPO's revenues are derived from the management, development and
sale of its real estate holdings. FMPO's net income can vary
significantly with fluctuations in the market prices of real estate
in these areas, which are influenced by numerous factors, including
interest rate levels.  Changes in interest rates affect FMPO's
interest expense on its debt.  At the present time FMPO does not
hedge its exposure to changes in interest rates.  Based on projected
1998 debt levels, a change of 100 basis points in applicable annual
interest rates would have an approximate $0.4 million impact on net
income.

ENVIRONMENTAL 

Increasing emphasis on environmental matters is likely to result
in additional costs, which will be charged against the Company's
operations in future periods when such costs can be estimated.
Present and future environmental laws and regulations applicable to
the Company'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 of financial condition and
results of operations contains certain forward-looking statements
regarding FMPO's financial position and liquidity, strategic plans,
future financing plans, development and capital expenditures and
other plans and objectives of the Company's management for future
operations and activities.  Important factors that might cause
future results to differ from these projections are described in
more detail under Item 1 of this Form 10-K.

____________________

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

[Page]  15

Item 8.  Financial Statements and Supplementary Data

REPORT OF MANAGEMENT

FM Properties Inc. (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             W. H. Armstrong, III 
Chairman of the Board           President, Chief Operating Officer
and Chief Executive Officer     and Chief Financial Officer

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, 1997 and
1996, and the related statements of operations, cash flow and
changes in stockholders' equity for each of the three years in the
period ended December 31, 1997.  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 opinioon, the financial statements referred to above
present fairly, in all material respects, the financial position of
FM Properties Inc. as of December 31, 1997 and 1996 and the results
of its operations and its cash flow for each of the three years in
the period ended December 31, 1997 in conformity with generally
accepted accounting principles.

Arthur Andersen LLP

San Antonio, Texas
January 20, 1998 (except for the matters discussed in Note 10, as to
which the date is March 10, 1998)

[Page]  16

FM PROPERTIES INC.
BALANCE SHEETS

December 31,
------------------------
1997          1996 
----------     ---------
(In Thousands)

ASSETS
Current assets:
Cash and cash equivalents                 $      873     $    -
Accounts receivable:
Property sales                                 1,265          -
Other, including income tax of $140,000
and $503,000, respectively                       316           559
Prepaid expenses                                 473          -
Amounts receivable from the Partnership            -         4,371
----------     ---------
Total current assets                         2,927         4,930
Real estate and facilities, net              105,274          -
Investment in the Partnership (Note 2)          -           56,055
Other assets                                   4,553          -
----------     ---------
Total assets                              $  112,754     $  60,985
==========     =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                          $    1,231     $    -
Accrued interest, property taxes and
other                                          1,789          -
----------     ---------
Total current liabilities                    3,020          -
Long-term debt                                37,118          -
Other liabilities                              6,009         1,386
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, 14,288,270 and
14,285,770 issued and outstanding,
respectively                                     143           143
Capital in excess of par value of
common stock                                 176,447       176,445
Accumulated deficit                         (109,983)     (116,989)
----------     ---------
Total liabilities and stockholders'
equity                                    $  112,754     $  60,985
==========     =========

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

[Page]  17

FM PROPERTIES INC.
STATEMENTS OF OPERATIONS 

Years Ended December 31,
-------------------------------------
1997          1996           1995
--------      --------       --------
(In Thousands, Except Per Share Amounts)

Revenues                      $ 30,953      $    -         $   -
Costs and expenses:

Cost of sales                   24,294           -             -
General and administrative
expenses                         2,752            220         1,796
--------      ---------      --------
Total costs and expenses      27,046            220         1,796
--------      ---------      --------  
Loss from the Partnership
(Note 2)                          -              (346)         (571) 
--------      ---------      --------
Operating Income (loss)          3,907           (566)       (2,367) 
Other Income (expense),net       5,375            166          (173)
Interest expense, net           (2,181)          -             -
--------      ----------     --------
Income (loss) before income
tax benefit and minority
interest                         7,101           (450)       (2,540)
Income tax benefit (expense)       (80)           526         2,693
Minority interest in net
income of Partnership              (15)          -             -
--------      ---------      --------
Net income                    $  7,006      $      76      $    153
========      =========      ========

Net income per share:
Without dilution             $0.49          $0.01         $0.01
=====          =====         =====
With dilution                $0.48          $0.01         $0.01
=====          =====         =====

Average shares outstanding      14,288         14,286        14,286
======         ======        ====== 

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

[Page]  18

FM PROPERTIES INC.
STATEMENTS OF CASH FLOW

Years Ended December 31,
----------------------------------
1997         1996        1995
---------     -------     --------
(In Thousands)

Cash flow from operating activities:
Net income                           $   7,006     $    76     $    153
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization            104         -           -
Cost of real estate sales             23,729         -           -
Minority interest's share of
Partnership net income                    15         -           -
Excess of equity in losses of
the Partnership over distributions
received                                 -           346          571
(Increase) decrease in working capital:
Accounts receivable and prepaid
expenses                             2,582      (2,624)      (1,780)
Accounts payable and accrued
liabilities                         (2,734)         12           16
Accrued income and other
taxes                                  -         2,190        1,215
Other                              (1,183)        -            -
----------     -------     --------
Net cash provided by operating
activities                              29,519         -            175
----------     -------     --------
Cash flow from investing activities:
Real estate and facilities              (9,547)        -            -
----------     -------     --------
Net cash used in investing
activities                              (9,547)        -            -
----------     -------     --------
Cash flow from financing activities:
Repayment of debt                      (21,207)        -           (175)
----------     -------     --------
Net cash used in financing 
activities                             (21,207)        -           (175)
----------     -------     --------
Net decrease in cash and cash
equivalents                             (1,235)        -            -
Cash and cash equivalents at
beginning of year                        2,108         -            -
----------     -------     --------
Cash and cash equivalents at
end of year                         $      873     $   -       $    -
==========     =======     ========

Interest paid                       $    3,351     $   -       $    -
==========     =======     ========

Income taxes paid                   $      220     $   -       $    -
==========     =======     ========

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

[Page]  19

FM PROPERITES INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands)

Capital            
in
Excess
Preferred   Common      of Par  Accumulated
Stock      Stock       Value    Deficit     Total
---------   -------    --------  ----------  -------

Balance at January
1, 1995                  $    -      $   143    $176,445  $(117,218)  $59,370
Net income                  -          -          -           153       153
---------   -------    --------  ---------   -------
Balance at December
31, 1995                      -          143     176,445   (117,065)   59,523
Net income                  -          -           -           76        76
---------   -------    --------  ---------   -------
Balance at December
31, 1996                      -          143     176,445   (116,989)   59,599
Stock options
exercised                     -          -             2        -           2
Net income               -          -           -        7,006     7,006
---------   -------    --------  ---------   -------
Balance at December
31, 1997                 $    -      $   143    $176,447  $(109,983)  $66,607
=========   =======    ========  =========   ======= 

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

[Page]  20

FM PROPERTIES INC.

NOTES TO FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting.  The real estate development and marketing
operations of FM Properties Inc. (FMPO or the Company) are conducted
in Austin and other urban areas of Texas through its investment in
FM Properties Operating Co., a Delaware general partnership (the
Partnership).  Prior to December 22, 1997, FMPO owned a 99.8 percent
general partnership interest in the Partnership and Freeport-McMoRan
Inc. (FTX), FMPO's former parent, owned the remaining 0.2 percent
general partnership interest and served as Managing General Partner.
FTX had certain rights regarding the Partnership's operations as
long as it guaranteed any of the Partnership's debt (Note 2).
Because of FTX's rights, FMPO reflected its investment in the
Partnership under the equity basis of accounting.

On December 22, 1997 FTX merged into IMC Global Inc. (IGL) (the
Merger). In connection with the Merger FTX sold its 0.2 percent
general partnership interest to FMPO and a subsidiary of FMPO for
$100,000.  FMPO also restructured and consolidated its existing debt
in December 1997, extending its maturity until January 1, 2001 and
providing for staged reductions in available credit. IGL became
guarantor of this restructured debt in place of FTX.  As a result of
FTX's sale of its interest and the replacement of the FTX guarantee
with the IGL guarantee, the accompanying financial statements and
related footnotes reflect the Partnership's financial position and
results of operations under consolidation accounting effective
January 1, 1997 and under the equity basis of accounting prior to
1997.

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 amounts
reported in these financial statements and accompanying notes.  The
more significant estimates include valuation allowances for deferred
tax assets, estimates of future cash flows from development and sale
of real estate properties, and useful lives for depreciation and
amortization.  Actual results could differ from those estimates.

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 property sales and
other receivables, other current assets, accounts payable and long-
term borrowings reported in the balance sheet approximate fair
value. 

Earnings Per Share.  In February 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards
(SFAS) 128, "Earnings Per Share," which simplifies the computation
of earnings per share (EPS).  FMPO adopted SFAS 128 in the fourth
quarter of 1997 and restated prior years' EPS data as required by
SFAS 128.

Net income per share without dilution was calculated by
dividing net income applicable to common stock by the weighted-
average number of common shares outstanding during the year.  Net
income per share of common stock with dilution was calculated by
dividing net income applicable to common stock by the weighted-
average number of common shares outstanding during the year plus
dilutive stock options, which represented approximately 229,000
shares in 1997, 104,000 shares in 1996 and 26,000 shares in 1995.

Options to purchase common stock that were outstanding during
the years presented but were not included in the computation of
diluted EPS because the options' exercise prices were greater than
the average market price of the common shares totaled 235,000
options at an average exercise price of $5.23 per share in 1997,
300,000 options at an average of $4.61 per share in 1996 and 225,000
options at an average of $5.25 per share in 1995.

Investment in Real Estate.  Real estate assets are stated at the
lower of cost or net realizable value and 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 

[Page]  21

recognized when the risks and rewards of ownership are
transferred to the buyer and the consideration received can be
reasonably determined.

SFAS 121, "Accounting for the Impairment of Long-Lived Assets,"
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.  Since the adoption of SFAS 121 effective
January 1, 1995, no impairment losses have been recognized.

2.  INVESTMENT IN THE PARTNERSHIP

FMPO has no significant operations or sources of funds other than
its interest in the Partnership. Therefore, the following financial
statements of the Partnership for the periods prior to 1997 should
be read in conjunction with FMPO's financial statements.

Balance Sheet 

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

ASSETS
Current assets:
Cash and cash equivalents                            $     2,108
Accounts receivable:
Property sales                                             2,067
Other                                                      1,922
Prepaid expenses                                             144
-----------
Total current assets                                     6,241
Real estate and facilities, net                          118,755
Other assets                                               5,196
-----------
Total assets                                         $   130,192
===========

LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable                                     $       335
Accrued interest, property taxes and other                 5,419
Amounts due to FMPO                                        4,371
-----------
Total current liabilities                               10,125
Long-term debt                                            58,325
Other liabilities                                          5,574
Partners' capital                                         56,168
-----------
Total liabilities and partners' capital              $   130,192
===========

Statements Of Operations

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

Revenues                                  $   79,177    $   48,170
Costs and expenses:
Cost of sales                                 73,347        48,099
General and administrative expenses            2,296         2,379
----------    ----------
Total costs and expenses                    75,643        50,478
----------    ---------- 
Operating income (loss)                        3,534        (2,308)
Interest expense, net                         (3,896)       (1,061)
Other income, net                                 16         2,798
----------    ----------
Net loss                                  $     (346)   $     (571)
==========    ==========

[Page]  22

Statements Of Cash Flow

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

Cash flow from operating activities:
Net loss                                  $     (346)   $     (571)
Adjustments to reconcile net loss to net
cash provided by operating
activities:
Depreciation and amortization                1,484         2,472
Cost of real estate sales                   66,466        41,756
(Increase) decrease in working capital:
Accounts receivable and prepaid
expenses                                    (568)        1,298
Accounts payable and accrued
liabilities                                1,702         2,281
Other                                          -             244
----------    ----------
Net cash provided by operating activities     68,738        47,480
----------    ----------

Cash flow from investing activities:
Real estate and facilities                    (5,943)      (25,509)
Natural gas contract settlement proceeds
paid to working and royalty interests            -          (9,733)
----------    ----------
Net cash used in investing activities         (5,943)      (35,242)
----------    ----------
Cash flow from financing activities:
Proceeds from debt                             1,000        16,000
Repayment of debt                            (63,969)      (27,156)
----------    ----------
Net cash used in financing activities        (62,969)      (11,156)
----------    ----------
Net increase (decrease) in cash and
cash equivalents                                (174)        1,082
Cash and cash equivalents at beginning
of year                                        2,282         1,200
----------    ----------
Cash and cash equivalents at end of year  $    2,108    $    2,282
==========    ==========

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

3.  REAL ESTATE

December 31,
------------------------
1997          1996
----------    ----------
(In Thousands)

Land held for development or sale:
Austin, Texas area, net of accumulated
depreciation of $46 for 1997 and $76
for 1996                                  $   85,098    $   85,785
Other areas of Texas                          20,176        31,270
Operating properties, net of accumulated
depreciation of $647 for
1996 (sold in 1997)                              -           1,700
----------    ----------
$  105,274    $  118,755
==========    ==========

The Company's investment in real estate includes approximately
4,500 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
3,000 acres of primarily undeveloped land adjacent to the Barton
Creek Resort, and the approximately 1,300 acres of undeveloped
commercial and multi-family property, which is located within the
Circle C development in Austin, Texas.   The  real estate
interests of the Company 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 Company.  The developers are
entitled to a management fee and a 25 percent interest in the net
profits, after recovery by the Company of its investments and a
stated return, resulting from the sale of the managed properties.
As of December 31, 1997 no amounts have been or are expected to be
paid in connection with these agreement provisions.

[Page]  23

In 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 and 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.  FMPO has no further obligation to the investor
group and is proceeding with developing and marketing the
Circle C commercial and multi-family properties.  The cash
deposit was recorded as a reduction in the related carrying
value of these properties.

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.

Various regulatory matters and litigation involving FMPO's
development of its Austin properties is summarized below.

SOS Ordinance Litigation - Prior to 1995, development of the
Company's Austin area properties had been delayed because of
disagreements with the City over various ordinances.  In 1995, a
Texas district court ruled in favor of FMPO, declaring that a
restrictive 1992 water quality ordinance enacted by public
initiative (the "SOS Ordinance") was void and that the Company was
entitled to develop its Barton Creek and Circle C properties based
on ordinances that were in effect at the time of its initial
development permit applications.  The City appealed this decision,
and in 1996 the Texas Court of Appeals overturned the favorable
district court ruling that invalidated the SOS Ordinance, but upheld
the district court's favorable ruling regarding certain
grandfathered rights for previously platted land.  A significant 
portion of the Barton Creek and Circle C properties was previously
platted and met the requirements to benefit from these grandfathered
rights. An application for Writ of Error was filed with the Texas
Supreme Court in January, 1997.  The Writ of Error was accepted by
the Texas Supreme Court and oral argument was heard on November 3,
1997. The Texas Supreme Court has not yet issued its decision.  An
unfavorable final judgment could have an adverse effect on any
portion of the Company's property which cannot be developed under
grandfathered entitlements (see "Legislative Developments," below)
or which has not been removed from the jurisdiction of the City
pursuant to the water quality protection zones at Barton Creek (the
"Barton Creek WQPZ") and at Circle C (the "Circle C WQPZ," see
below).

Southwest Travis County Water District Litigation -    The
Company's property in the Circle C development, comprising
approximately 1,300 acres of undeveloped commercial and multi-family
property, is located in the Southwest Travis County Water District
(the "STCWD").  The STCWD is a conservation and reclamation district
created by the Texas Legislature in 1995 for the purpose of
conserving water resources and with authority to establish a water
pollution control and abatement program meeting state criteria.
Development within the STCWD is required to meet the STCWD's
criteria and is exempt from municipal regulation.  In October 1997,
a Texas district court rendered final judgment that the legislation
creating the STCWD was unconstitutional.  The STCWD has filed an
appeal, but no decision has yet been issued.  The Company does not
expect the validity of the STCWD will be upheld on appeal and has
implemented an alternative strategy of creating the Circle C WQPZ to
maximize development potential of 553 acres of its Circle C property
(see "Circle C WQPZ Litigation," below).  The Company's strategy
with respect to the balance of its Circle C property holdings
(outside the Circle C WQPZ), approximately 700 acres, is to expedite
reimbursement of $25 million in previously incurred reimbursement
infrastructure costs from the City by not opposing the City's
annexation of the 700 acres (see "Annexation Litigation," below).

Annexation Litigation -  On December 19, 1997, the City enacted
an ordinance purporting to annex all land lying within the STCWD.
Prior to the City's enactment of its annexation ordinance, the
Company created the Circle C WQPZ (see below).  As a result, the
Company's 553 acres located within the Circle C WQPZ, which
comprises all of the Company's land in the Circle C project other
than the land within the Circle C municipal utility districts (the
"MUDs"), was not eligible for annexation.  Annexation subjects that
portion of the Company's property located within the MUDs
(approximately 700 acres), which has been annexed by the City, to
the City's zoning and development regulations.  In connection with
annexation, the City has imposed an interim zoning classification on
the approximately 700 acres permitting only one residential unit per
acre, which results in significantly less development yield than the
Company previously anticipated.  However, consistent with the
Company's strategy, annexation of the Company's property 

[Page]  24

located within the MUDs requires the City to assume all MUD debt and 
reimburse the Company, simultaneously with the annexation, for a
significant portion of previously incurred costs of water,
wastewater and drainage infrastructure which could result in
reimbursement of these costs much earlier than the Company initially
anticipated.  These reimbursable costs are estimated to be
approximately $25 million.  Because the City failed to pay these
costs on December 19, 1997, the Partnership filed suit against the
City to compel reimbursement of these amounts. The suit was promptly
set for trial but subsequently stayed pending resolution of suits
brought by the MUDs and other third parties challenging the validity
of the City's purported annexation.  Certain of those underlying
third-party challenges have now been resolved and the Company has
filed a motion to lift the stay to permit trial to proceed.  The
motion is scheduled for hearing on April 16.  Although the Company
expects to ultimately receive payment from the City, the City may
continue to resist payment.

Circle C WQPZ Litigation -The Company owns approximately 553
acres in the Circle C development outside the boundaries of any
municipal utility district.  In order to permit development of this
property, the Company filed a water quality protection zone covering
its 553 acres (the "Circle C WQPZ"). Such water quality protection
zones ("WQPZ") permit development of defined areas outside of
municipalities if such development conforms to state-approved water
quality standards under plans approved by the Texas Natural Resource
Conservation Commission ("TNRCC").  The law also restricts adjoining
municipalities from attempting to enforce land use or development
ordinances inconsistent with the requirements of the WQPZ or
annexing any portion of the WQPZ prior to the earlier of completion
of 90 percent of infrastructure construction or 20 years after
creation of the WQPZ.  The creation of the Circle C WQPZ was
intended to permit the Company to develop its 553 acres in
accordance with the water quality standards required by the Circle C
WQPZ rather than the requirements of the City, and to confirm that
effect the Company initiated a lawsuit in Hays County in November
1997, seeking a declaratory judgment confirming the validity of the
Circle C WQPZ and the invalidity of the City's attempt to annex land
within the Circle C WQPZ.  The City filed a motion to transfer venue
from Hays County to Travis County and, in addition, argued that the
Hays County District Court had no jurisdiction pending consideration
of the Circle C WQPZ's water quality plan by the TNRCC.  On December
18, 1997, the TNRCC approved the Circle C WQPZ's water quality plan.
On January 12, 1998, the Hays County District Court denied the
City's motion to transfer venue and all other requested relief.  The
Company has filed a motion for summary judgement in the Hays County
litigation, which is scheduled to be heard on March 30, subject to
the Texas Supreme Court's decision as to whether the City's
interlocutory appeal of the District Court's denial of the City's
plea to the jurisdiction abates the summary judgment hearing.   A
favorable result in this litigation, which the Company expects,
would confirm that the City's attempt to annex the Company's 553
acres in the Circle C WQPZ was invalid and that development of the
553 acres is not subject to City development regulations. An
unfavorable ruling, which is not expected, would mean that the 
Circle C WQPZ was invalid and that the 553 acres is annexed, and
subject to the City zoning and other regulatory authority, which
could diminish the development potential of this property in the
same manner as for the approximately 700 acres discussed above (see
"Annexation Litigation").

Legislative Developments -    In the most recent legislative
session of the Texas State legislature, a bill to reorganize a state
governmental agency inadvertently repealed the provisions of law
that established grandfathered rights for land which was platted or
in the permitting process.  The Company, based on an opinion from
counsel, has taken the position that under Texas law, previously
vested rights for the Company's property holdings are not affected
by the repeal of this statute.  The City, however, does not
recognize any grandfathered entitlements arising under the repealed
law and, in response to the repeal, enacted an ordinance effective
September 5, 1997, establishing interim regulations on land
development.  It is anticipated that the City will enact a final
ordinance and may attempt to apply it to portions of the Company's
Circle C and Lantana properties.  Should the City take this
position, the Company anticipates asserting and defending its
grandfathered entitlements. In the event the City were to prevail,
portions of the Company's property would be subject to the City's
current restrictive ordinances and development potential would be
significantly reduced.  During the last three sessions of the Texas
legislature, legislation has been enacted to provide landowners
relief from overly-aggressive attempts by municipalities to regulate
land development in an effort to prevent growth.  Much of that past
legislation has been enacted to address abusive or unauthorized
municipal land use regulations of the type adopted by the City.  The
Company anticipates that during the next session of the Texas
legislature, beginning in January 1999, the Texas legislature will
once again review and address inappropriate municipal land use
regulation designed to prevent growth and development.

[Page]  25

Other Matters - During February 1997, FMPO filed a petition for
declaratory judgment  against Phoenix Holdings, Ltd. in order to
secure its ownership of approximately $25 million of MUD
reimbursements that pertain to existing infrastructure that serves
the Circle C development.  Phoenix filed a counter claim against
Circle C in June 1997.

On January 9, 1998, the City filed a lawsuit (the "Travis County
Suit") in Travis County District Court against 14 water quality
zones and their owners, including the Barton Creek WQPZ.  The City
challenges the constitutionality of the legislation authorizing the
creation of water quality zones.  This same issue is being litigated
in the lawsuit initiated by the Company discussed under "Circle C
WQPZ Litigation," above.  The Attorney General of Texas has agreed
to intervene in both the Travis County Suit and the suit in "Circle
C WQPZ Litigation" above, to defend the legislation. Although not
expected, a court decision that the legislation authorizing WQPZs is
invalid would diminish and delay development of portions of the 
Barton Creek project and the Company's land located in the Circle C
WQPZ.

In April 1997, the U.S. Department of Interior ("DOI") listed
the Barton Springs Salamander as an endangered species after a
federal court overturned a March 1997 decision by the DOI not to
list the Barton Springs Salamander based on a conservation agreement
between the State of Texas and federal agencies.  The listing of the
Barton Springs Salamander is not anticipated to affect the Company's
Barton Creek and Lantana properties for several reasons, including
the results of recent technical studies and the Company's U.S. Fish
and Wildlife Service 10(a) permit obtained in 1995.  The Company's
Circle C properties could, however, be affected, although the extent
of any impact cannot be determined at this time.  Special interest
groups have provided written notice of their intention to challenge
the Company's 10(a) permit and compliance with water quality
regulations.  The Company believes these challenges are meritless
and will continue to protect its entitlements.

4.  LONG-TERM DEBT

December 31,
------------------------
1997          1996
----------    ----------
(In Thousands)

Bank credit facility, average rate 6.6%
in 1997 and 6.9% in 1996                  $   37,118    $     -
Bank loan, average rate 6.6% in 1997
and 6.9% in 1996                                -           31,000
Circle C bank loan, average rate 6.7%
in 1997 and 6.8% in 1996                        -           27,325
----------    ----------
$   37,118    $   58,325
==========    ==========

In December, 1997 FMPO finalized a restructured debt facility
with certain banks.  This restructured debt establishes a $50
million facility consisting of a $35.0 million revolving credit
facility and a $15.0 million term loan facility, with individual
borrowings bearing interest at rates based on either the prime rate
or LIBOR at FMPO's option.  The aggregate committed loan amount will
reduce to $35.0 million on January 1, 1999, to $15.0 million on
January 1, 2000 and will be eliminated on January 1, 2001.
Additionally, the restructured credit facility contains covenants
restricting dividends or other distributions, mergers, the creation
of liens or certain additional debt and certain other matters.  IGL
has guaranteed amounts borrowed under the restructured facility.  As
consideration for IGL's guarantee, FMPO agreed to pay IGL an annual
fee, payable quarterly, equal to the difference between FMPO's cost
of LIBOR-funded borrowings before the assumption of the guarantee by
IGL and the rate on LIBOR-funded loans under the new agreement.
This fee was 60 basis points (0.6%) as of December 31, 1997.  FMPO  
has granted liens in favor of IGL on certain of its properties as
security for the guarantee.  These liens are to be released for
property sales, subject to certain restrictions.  Additionally,
under the guarantee terms FMPO cannot amend or refinance the credit
facility without IGL's consent.

Capitalized interest totaled $1.4 million in 1997, $3.1 million
in 1996 and $11.7 million in 1995.

5.  INCOME TAXES

Income taxes are recorded pursuant to SFAS 109 "Accounting for
Income Taxes".  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:

[Page]  26

December 31,
------------------------
1997          1996
----------    ----------
(In Thousands)

Deferred tax asset:
Net operating losses (expire 2001-2012) $   12,509    $    7,259
Real estate and facilities, net             (7,511)        1,067
Alternative minimum tax credits and
depletion allowance (no expiration)            800           718
Other future deduction carryforwards
(expire 1999-2002)                             319           241
Valuation allowance                         (6,117)       (9,285)
----------    ----------
$     -       $     -
==========    ==========

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 (charged) to income
follow:

1997      1996          1995
------    -------       -------
(In Thousands)

Current income tax benefit
(expense)
Federal                       $  -      $   526       $ 2,693
State                            (80)       -             -
------    -------       -------
(80)       526         2,693
Deferred federal income taxes      -          -            -
------    -------       -------
Income tax benefit (expense)    $  (80)   $   526       $ 2,693
======    =======       =======

Reconciliations of the differences between the income tax
(charges) benefits computed at the federal statutory tax rate and
the income tax (expense) benefit recorded follow: 

1997             1996            1995
----------------  -------------- --------------
Amount   Percent  Amount Percent Amount Percent
-------  -------  ------ ------- ------- ------
(Dollars In Thousands)

Income tax benefit (expense)
computed at the federal
statutory income tax rate      $(2,485)    (35)%  $ 158   35%    $  889   35%
Increase (decrease) attributable
to:
Change in valuation
allowance                      3,168      45     (169) (37)     1,209   48
State taxes and
other                           (763)    (11)     537  119        595   23
-------     ---    -----  ---     ------  ---
Income tax benefit
(expense)                      $   (80)     (1)%  $ 526  117%    $2,693  106%
=======     ===    =====  ===     ======  ===

6.  TRANSACTIONS WITH AFFILIATES

Management Services. Certain management and administrative services
have been provided to FMPO by FTX during 1995 and by FM Services
Company (Services Company), currently ten percent owned by FMPO,
since January 1996.  These services were provided for a total  cost
of $1.7 million in 1995 and for a fixed annual fee of $0.5 million
since July 1995, subject only to annual cost of living increases
beginning in the 1997 first quarter.  Effective January 1, 1998,
Services Company and FMPO implemented a new management services
agreement for these same services to be provided on a cost
reimbursement basis.  FMPO believes the cost of these services does
not (and in the future will not) differ significantly from those
which would be incurred if the related employees were employed
directly by FMPO.

Sale of Oil & Gas Interests.  In September 1997, the Company sold
several working interests and numerous overriding royalty interests
in oil and gas properties which have been held since its formation
to McMoRan Oil & Gas Co. (MOXY) and Phosphate Resource Partners
Limited Partnership (PLP), formerly Freeport-McMoRan Resource
Partners, Limited Partnership, for $4.5 million cash, resulting in a
gain of $4.5 million.  MOXY is and PLP was, prior to the Merger, an
affiliate of FMPO because of FTX's former role as administrative
managing general partner of PLP and because of  common management
and a common director shared with MOXY.  These interests, which had
no cost basis, remained with the Company after the sale of
substantially all of its oil and gas properties in 1993.  The gain
is reflected in Other Income, and proceeds were used to reduce debt.
Other income also includes royalty income 

[Page]  27

generated by these 
properties totaling $0.8 million, $1.4 million and $0.6 million for
1997 (prior to the sale), 1996 and 1995, respectively.

7.  EMPLOYEE BENEFITS

Stock Options.  FMPO's Stock Option Plan  and Stock Option Plan for
Non-Employee Directors (the Plans) provide for the issuance of up to
a total of 1.3 million 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:

1997                1996                 1995
---------------------  --------------------  ---------------
Average                Average            Average     
Number of    Option    Number of    Option   Number of Option
Options     Price      Options     Price     Options  Price
---------- ----------  ----------  --------  -------- ------

Beginning of
year            790,000     $2.77     535,000      $3.23   425,000  $3.60
Granted         280,000      3.55     305,000       1.79   110,000   1.81
Exercised        (2,500)     1.50        -           -        -       -
Expired/
Forfeited       (17,500)     2.64     (50,000)      1.81      -       -
---------               -------              -------   
End of
year          1,050,000      2.98     790,000       2.77   535,000   3.23
=========               =======              =======   

At December 31, 1997, 247,500 shares were available for new
grants under the Plans.  Summary information of fixed stock options
outstanding at December 31, 1997 follows:

Options Outstanding            Options Exercisable
--------------------------------- -------------------
Weighted                        Weighted
Average    Average              Average
Range of           Number     Remaining    Option    Number    Option
Exercise Prices  of Options      Life      Price   of Options   Price
- ---------------  ----------  -----------  -------- ---------- --------

$1.50 to $1.81     280,000     8.0 years     $1.57     85,000   $1.63
$2.63 to $3.50     335,000     9.2 years      3.32     18,750    2.69
$4.81 to $5.25     235,000     1.0 years      5.23    225,000    5.25
-------                            -------
850,000                            328,750
=======                            =======

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. 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, FMPO's net income
would have decreased by $252,000 ($0.02 per share) in 1997, $104,000
($0.01 per share) in 1996 and remained essentially unchanged in
1995.  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 $2.76 per option
in 1997, $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 6.7 percent in 1997 and 6.4 percent in 1996 and 1995, expected
lives of 10 years and expected volatility of 62 percent in 1997 and
70 percent in 1996 and 1995. The pro forma effects on net income for
1997, 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.

8. COMMITMENTS AND CONTINGENCIES

The Company 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 Company's operations in
future periods.  Present and future environmental laws and
regulations applicable to the Company'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 Company indemnified the purchaser for any
future abandonment costs in excess of net revenues received by the
purchaser.  

[Page]  28

The Company has accrued $3.0 million relating to this
contingent liability, included in Other Liabilities, which it
believes to be adequate.

9. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Net Income
(Loss)Per Share
Operating      Net      ------------------
Income       Income    Without    With
Revenues a    (Loss)      (Loss)    Dilution  Dilution
----------   --------     --------  --------  --------
(In Thousands, Except Per Share Amounts)

1997
1st Quarter    $ 15,070    $ 2,491     $  1,972   $   .14   $  .14
2nd Quarter       5,191      1,756b       1,744       .12b     .12b
3rd Quarter       4,037       (637)       3,455c      .24c     .24c
4th Quarter       6,655        297         (165)     (.01)    (.01) 
--------    -------     --------    
$ 30,953    $ 3,907     $  7,006       .49      .48
========    =======     ========     

1996
1st Quarter    $   (865)   $  (894)    $   (894)  $  (.06)  $ (.06)
2nd Quarter         559        500          500       .03      .03
3rd Quarter       1,011        934        1,460d      .10d     .10d
4th Quarter      (1,051)    (1,106)        (990)     (.07)    (.07)
--------    -------     --------
$   (346)   $  (566)    $     76       .01      .01
========    =======     ========

a.   Amounts shown for 1996 are for Income (Loss) from Partnership,
as reflected using the equity basis of accounting (Note 1).
b.   Includes a $3.1 million ($0.22 per share) reimbursement of
previously expensed infrastructure costs.
c.   Includes a $4.5 million ($0.31 per share) gain from sale of oil
and gas property interests.
d.   Includes a $0.5 million tax benefit ($0.04 per share).

10. SUBSEQUENT EVENTS

On March 2, 1998 FMPO and Olympus Real Estate Corporation, an
affiliate of Hicks, Muse, Tate & Furst Incorporated ("Olympus"),
entered into a letter of intent to form a strategic alliance to
develop certain of FMPO's properties and to pursue new real estate
acquisition and development opportunities.  Under the terms of the
letter of intent, Olympus would make a $10 million investment in an
FMPO mandatorily redeemable equity security, provide a $10  million
convertible debt financing facility to FMPO and make available up to
$50 million of capital for its share of direct investments in joint
FMPO/Olympus projects.  Olympus would also have the right to
designate for nomination 20 percent of FMPO's Board of Directors.

The $10 million mandatorily redeemable equity security
would have a par value of $5.84 per share, the average
closing price of FMPO common stock during the 30 trading
days ending March 2, 1998.  FMPO would use the proceeds from
the sale of these securities to repay debt.  These
securities would share any dividends or distributions
ratably with the FMPO common stock, which currently pays no
dividend, and would be redeemable (i)at the option of the
holder at any time after the third anniversary of the
closing for an amount per share approximating the economic
benefit that would have accrued had the shares been
converted into common stock on a one-to-one basis and sold
(the "common stock equivalent value") or (ii)at the option
of FMPO after the fifth anniversary (but in no event later
than the sixth anniversary) for the greater of their common
stock equivalent value or their par value per share, plus
accrued and unpaid dividends, if any.  FMPO would have the
option to satisfy the redemption with shares of its common
stock, subject to certain limitations.

The $10 million convertible debt facility would be available to
FMPO in whole or in part for a period of six years after closing to
finance FMPO's equity investment in new FMPO/Olympus joint venture
opportunities in properties not currently owned by FMPO.  The
interest rate on this facility would be 12 percent per year, and at
Olympus's option, interest would be payable quarterly, or accrued
and added to principal.  Outstanding principal under the facility
would be convertible at any time into FMPO common stock at a
conversion price of $7.31, which is 125 percent of the average
closing price of FMPO common stock during the 30 trading days ending
March 2, 1998.  If not converted into common stock, the 

[Page]  29

convertible
debt would be repaid on the sixth anniversary of the closing.  If
the combination of interest at 12 percent and the value of the 
conversion right does not provide Olympus with at least a 15 percent
annual return on the convertible debt, FMPO would pay Olympus
additional interest upon retirement of the convertible debt in an
amount necessary to yield a 15 percent annual return.  The
convertible debt would be non-recourse to FMPO and would be secured
solely by FMPO's interest in FMPO/Olympus joint venture
opportunities financed with the proceeds of the convertible debt.

For a three-year period after the closing, Olympus would make
available up to $50 million for its share of capital for direct
investments in FMPO/Olympus joint acquisition and development
activities.  For the three-year period, FMPO would provide Olympus
with a right of first refusal to participate for no less than a 50
percent interest in all new acquisition and development projects on
properties not currently owned by FMPO, as well as development
opportunities on existing properties in which FMPO seeks third-party
equity participation.

The transaction is expected to close in the second quarter of
1998 and is subject to the completion of due diligence, negotiation
of definitive agreements and approval of FMPO's Board of Directors.

With respect to the litigation discussed under "Other Matters"
in Note 3, on February 20, 1998, the District Court granted the
Company's motion for summary judgment on the primary case and
subsequently, Phoenix Holdings, Ltd. dismissed its counterclaims
with prejudice, but reserved the right to appeal the summary
judgment of the primary case.

Although the Company expects a favorable result in the Circle C
litigation confirming the validity of the Circle C WQPZ (see above),
the Company expects the City may continue to assert claims that it
has regulatory jurisdiction over development within the Circle C
WQPZ and that additional litigation may be necessary to preserve
development entitlements.  Recently, one of Austin's largest
employers, Motorola Inc., contracted to purchase approximately 167
acres of the Company's commercial land located in the Circle C WQPZ
for development of a campus facility bringing thousands of jobs to
the Circle C community. Even though not required, Motorola agreed to
develop its campus facility in strict accordance with the City's
regulations, including the SOS Ordinance.  Certain City
representatives  publically asserted zoning and development
authority over Motorola's selected site and indicated that Motorola
would not receive the City development and zoning approvals the City
asserts are needed to develop the campus project even if all
ordinance requirements would be fully satisfied. After meetings with
City representatives and members of the SOS Alliance (a special
interest group), Motorola elected to terminate its contract with the
Company.  As a consequence, the Company lost a significant sale.
Austin recently elected a council strongly opposed to development in
the southwest sector of Austin and the Company anticipates that in
the future, the City will use similar tactics to those is used in
the Motorola incident to restrict growth in the southwest corridor.
For example, the city recently announced its "Smart Growth" program 
designed to direct growth away from the southwest sector of the city
towards the "Desired Development Zone," an area located generally in
the northern and eastern sections of Austin.  Consistent with its
Smart Growth program, in March 1998, the City announced a proposed
bond sale to raise funds to acquire land in the southwest corridor,
which it refers to as the "Barton Creek Zone," for the purported
purpose of protecting the Edwards Aquifer.  The Circle C project is
within the Barton Creek Zone.  The Company anticipates that the City
will continue its efforts to impose development regulations limiting
development in an effort to reduce the value of land it has targeted
to acquire for the Barton Creek Zone.  As it has been compelled to
do during the last several years, the Company anticipates having to
continue to be involved in litigation to protect its entitlements
and maximize the developability and value of its properties.  The
Company anticipates that it will continue to successfully develop
and market its properties during the pendency of its disputes with
the City of Austin.

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

Not applicable.

[Page]  30

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 1998 annual
meeting to be held on May 14, 1998, 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 1998 annual meeting to be held on May 14, 1998, 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 1998
annual meeting to be held on May 14, 1998, 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 1998 annual meeting to be held on
May 14, 1998, 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 16 hereof.

(a)(2) Financial Statement Schedules.  Reference is made to the
Index to Financial Statements

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

(b)      Reports on Form 8-K.  None.

[Page]  31

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 30, 1998.

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 30,
1998.

/s/ Richard C. Adkerson     
-----------------------     Chairman of the Board, Chief Executive
Richard C. Adkerson         Officer (principal executive officer) 
and Director

*
--------------------
W. H. Armstrong, III        President, Chief Operating Officer and
Chief Financial Officer (principal 
financial officer) 

*                  
------------------
C. Donald Whitmire          Vice President and Controller 
(pricipal accounting officer)
*
------------------
James C. Leslie             Director

*
------------------
Michael D. Madden           Director

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

[Page]  S-1

FM PROPERTIES INC.
EXHIBIT INDEX

2.1       Distribution Agreement dated  as of June
10, 1992 among Freeport-McMoRan Inc. ("FTX"), the Company and FM 
Properties Operating Co. (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       Amendment No. 1 to Rights Agreement dated as of April 21,
1997 between the Company and the Rights Agent.  Incorporated by
reference to Exhibit 4 to the Company's Current Report on Form 8-K
dated April 21, 1997.

4.4       Amended, Restated and Consolidated Credit Agreement dated
as of December 15, 1997 among the Partnership, Circle C Land Corp., 
certain banks, and The Chase Manhattan Bank, as Administrative Agent
and Document Agent.

10.1      Second Amended and Restated Agreement of General Partnership 
of FM Properties Operating Co. dated as of December 15, 1997 between 
the Company and FMPO L.L.C.

10.2      Amended and Restated Services Agreement, dated as of 
December 23, 1997 between FM Services Company and the Company.

10.3      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.

10.4      Development and Management Agreement dated and effective
as of June 1, 1991 by and between Longhorn Development Company and
Precept Properties, Inc. (the "Precept Properties Agreement").
Incorporated by reference to Exhibit 10.8 to the 1992 Form 10-K.

10.5      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.

[Page]  E-1

10.6      FMPO Guarantee Agreement dated as of December 15, 1997 by the
Company.

10.7      Amended and Restated IGL Guarantee Agreement dated as of
December 22, 1997 by IMC Global Inc.

Executive Compensation Plans and Arrangements (Exhibits 10.8 through
10.10)

10.8      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.

10.9      FMPO Stock Option Plan, as amended.

10.10     FMPO Stock Option Plan for Non-Employee Directors, as
amended.

21.1      List of Subsidiaries.

23.1      Consent of Arthur Andersen LLP.

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.

27.1      Financial Data Schedule.

27.2      Restated Financial Data Schedule. 

[Page]  E-2

FM PROPERTIES INC.
INDEX TO FINANCIAL STATEMENTS

The financial statements in the schedule listed below should be read
in conjunction with the financial statements of FMPO contained elsewhere
in Annual Report on Form 10-K.

Page
Report of Independent Public Accountants                    F-1
Schedule III-Real Estate and Accumulated Depreciation       F-2

Schedules other than the one listed above have been omitted
since they are either not required, not applicable or the required
information is included in the financial statements or notes
thereto.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors
of FM Properties Inc.:

We have audited, in accordance with generally accepted auditing
standards, the financial statements as of December 31, 1997 and 1996
and for each of the three years in the period ended December 31,
1997 included elsewhere in FM Properties Inc.'s Annual Report on
Form 10-K, and have issued our report thereon dated January 20,
1998. Our audits were made for the purpose of forming an opinion on
the basic financial statements taken as a whole.  The accoompanying
schedule is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial
statements.  This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements
and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the
basic financial statements taken as a whole.

Arthur Andersen LLP

San Antonio, Texas
January 20, 1998

[Page]  F-1

FM Properties Inc.
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1997
(In Thousands)

SCHEDULE III 

Cost
Capitalized
Subsequent to     Gross Amounts     
Initial Cost      Acquisitons    December 31, 1997
-------------------- -------------   -------------------
Building and                       Building and
Land    Improvements    Land         Land  Improvements  
-------- ------------ -----------    ------ ------------  

Developed Lots
Camino Real,
San Antonio, TX   $   235      $ -       $   561       $    796     $ - 
Bent Tree Marsh,
Dallas, TX            482        -         1,070          1,552       -   
Preston Springs, 
Plano, TX               7        -           -                7       -  
Willow Bend,
Plano, TX           3,946        -         4,499          8,445       -  
Copper Lakes,
Houston, TX           883        -         1,828          2,711       - 
Barton Creek
(North),
Austin, TX            716        -            22            738       - 
Undeveloped Acreage
Hunter's Glen,
Plano, TX             168        -            14            182       -    
Camino Real,
San Antonio, TX       968        -           257          1,225       -
Copper Lakes,
Houston, TX         2,225        -         1,795          4,020       -
Bent Tree Addison,
Dallas, TX            364        -           -              364       - 
Bent Tree Apt.
/Retail,Dallas,
TX                    872        -             1            873       - 
Barton Creek
(North),
Austin,
TX                  9,010        -        12,871         21,881       -
Barton Creek
(South),
Austin,
TX                 20,688        -        11,137         31,825       -  
Lantana,
Austin, TX          3,934        -         1,618          5,552       -  
Longhorn Properties,
Austin,
TX                 15,793        -         9,049         24,842       - 
Operating Properties
Barton Creek
Utilities,
Austin ,TX                      307         -             -          307 
-------      ----     -------       --------      ----
$60,291      $307     $44,722       $105,013      $307 
=======      ====     =======       ========      ==== 

SCHEDULE III, continued

Number 
of Lots
and Acres
------------
Accumulated     Year
Total            Lots            Acres  Depreciation  Acquired
--------   ----   -----  ------------  --------

Developed Lots                                                                                                  
Camino Real, San Antonio, TX    $    796                21                   -                $ -      1990
Bent Tree Marsh, Dallas, TX                1,552                54                      -                   -           1991    
Preston Springs, Plano, TX                      7                   1                -             -         1991       
Willow Bend, Plano, TX                         8,445               78                       -               -      1991
Copper Lakes, Houston, TX                   2,711                 142                -              -           1991
Barton Creek (North), Austin, TX        738      5            -             -           1997
Undeveloped Acreage                                                                                             
Hunter's Glen, Plano, TX                               182                  -           2                                       1990    
Camino Real, San Antonio, TX              1,225             -               84                                  1990    
Copper Lakes, Houston, TX                    4,020                  -              169                                  1991    
Bent Tree Addison, Dallas, TX              364              -                8                     -            1991    
Bent Tree Apt./Retail, Dallas, TX       873      -                  10                     -            1990    
Barton Creek (North), 
Austin, TX                                 21,881                   -           721                                     1988    
Barton Creek (South), 
Austin, TX                              31,825              -           1,750             -             1988    
Lantana, Austin, TX                               5,552         -       513             -       1994    
Longhorn Properties, 
Austin, TX                              24,842              -           1,274                      -      1992  
Operating Properties                                                                                    
Barton Creek Utilities, 
Austin ,TX                              307             -         -                     46           1997       
--------    ---   -----           ---
$105,320    301            4,531                    $46            
========    ===   =====           ===

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, 1997 and 1996 are as follows:

1997          1996
----------    ----------

Balance, beginning of year                $  119,478    $  189,309
Acquisitions                                 1,802          -
Improvements and other                      10,116         6,665
Cost of real estate sold                   (26,076)      (76,496) 
----------    ----------
Balance, end of year                      $  105,320    $  119,478
==========    ==========

The aggregate net book value for federal income tax purposes as of
December 31, 1997 was $124,919,000.
(2)  Reconciliation of Accumulated Depreciation:
The changes in accumulated depreciation for the years ended
December 31, 1997 and 1996 are as follows:

1997         1996
----------    ----------

Balance, beginning of year                $      723    $    9,269
Depreciation expense                              98         1,484
Real estate sold                                (775)      (10,030)
----------    ----------
Balance, end of year                      $       46    $      723
==========    ==========

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

(3)  Concurrent with certain year-end 1994 debt negotiations, the
Partnership analyzed the carrying amount of its real estate assets,
using generally accepted accounting principles, and recorded a $115
million pre-tax, 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.

[Page]  F-3 

AMENDED, RESTATED AND CONSOLIDATED
CREDIT AGREEMENT dated as of December 15,
1997, among FM PROPERTIES OPERATING CO., a
Delaware general partnership ("FMPOC"),
CIRCLE C LAND CORP., a Texas corporation
("Circle C", and together with FMPOC, the
"Borrowers"); FM PROPERTIES INC., a Delaware
corporation, as a Restricted Entity (as
defined herein) ("FMPO"); the undersigned
financial institutions (collectively, the
"Lenders"), and THE CHASE MANHATTAN BANK, a
New York banking corporation ("Chase"), as
administrative agent for the Lenders (in such
capacity, the "Administrative Agent") and as
documentary agent for the Lenders (in such
capacity, the "Documentary Agent"; the
Administrative Agent and Documentary Agent
being, collectively, the "Agents").

Freeport-McMoRan Inc., a Delaware corporation
("FTX"), intends to consummate a merger, whereby FTX shall
be merged with and into IMC Global Inc., a Delaware
corporation ("IGL"), by the end of 1997 (the "Merger"), and
as a condition thereof FTX has, with the consent of the
Lenders, transferred to FMPO, and FMPO has assumed, FTX's
interest as managing general partner of FMPOC.

In connection therewith, the Borrowers desire to
amend and restate the terms and provisions of the following
agreements entered into by FMPOC and Circle C and shall
consolidate such terms and provisions into this Agreement: 
(i) the Amended and Restated Credit Agreement dated as of
December 20, 1996, among FMPOC, FTX, the banks party thereto
and Chase (the "FMPOC Revolving Facility"); (ii) the Second
Amended and Restated Note Agreement, as amended, dated as of
June 30, 1995, among FMPOC, FTX, Hibernia National Bank
("Hibernia") and Chase (the "FMPOC Term Loan Facility"); and
(iii) the Amended and Restated Credit Agreement dated as of
December 20, 1996, between Circle C and Texas Commerce Bank
National Association ("TCB") (the "Circle C Loan Facility",
and together with the FMPOC Revolving Facility and FMPOC
Term Loan Facility, the "Credits").

Upon its effectiveness, this Agreement shall
govern both the indebtedness which shall remain outstanding
as of the Effective Date under the Credits, as well as
subsequent Borrowings thereunder, in an aggregate amount
equal to $50,000,000, (i) $21,796,246 of which represents
the FMPOC Revolving Facility and the FMPOC Term Loan
Facility, each of which shall be amended and restated to be
one revolving credit facility (the "New FMPOC Revolving
Tranche") under this Agreement in such aggregate amount,
which shall also include as part thereof a new letter of
credit facility under this Agreement in an amount of up to
$7,500,000 established by FMPOC with Chase (the "FMPOC L/C
Facility"), and (ii) $28,203,754 of which represents the
Circle C Loan Facility, which shall be amended and restated
to be a revolving credit facility (the "New Circle C
Revolving Tranche") in the amount of $13,203,754, which
shall also include as part thereof a new letter of credit
facility under this Agreement in an amount of up to
$7,500,000 established by Circle C with Chase (the "Circle C
L/C Facility") and a term loan in the amount of $15,000,000
(the "New Circle C Term Tranche", and together with the New
FMPOC Revolving Tranche and New Circle C Revolving Tranche,
the "Tranches"); provided, that, in no event, shall the sum
of the aggregate amount of Letters of Credit (as defined
below) outstanding at any time under the Circle C L/C
Facility and the FMPOC L/C Facility exceed $7,500,000.

It is the intent of the parties to this Agreement
that this Agreement (i) shall evidence the Borrowers' Debt
(as defined below) under the Credits, (ii) has been entered
into in substitution for, and not in payment of, the
obligations of the Borrowers under the Credits and (iii) is
in no way intended to constitute a novation of any of the
Borrowers' Debt which was evidenced by any of the Credits.

The Lenders are willing to amend and restate the
above-referenced agreements upon the terms and subject to
the conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises
and of the mutual covenants herein contained, the parties
hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01.  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 Fee" has the meaning specified in
Section 2.06(c).

"Administrative Questionnaire" means an
Administrative Questionnaire in the form of Exhibit A.

"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.

"Aggregate Circle C Revolving Credit Exposure"
means the aggregate amount of the Lenders' Circle C
Revolving Credit Exposures.

"Aggregate FMPOC Revolving Credit Exposure" means
the aggregate amount of the Lenders' FMPOC Revolving Credit
Exposures.

"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 l%) 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
LIBO Rate Loan or Reference Rate Loan, the applicable
percentage set forth on Schedule I.

"Applicable Percentage" of any Lender means the
percentage set opposite such Lender's name on Schedule II in
respect of any of the Tranches, 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 (i) the Alternate Base Rate plus (ii) the
Applicable Margin.

"Assessment Rate" means, with respect to each day
during an Interest Period, the annual assessment 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%) in
effect on such day that is payable by a member of the Bank
Insurance Fund classified as "well-capitalized" and within
supervisory subgroup "B" (or a comparable successor risk
classification) within the meaning of 12 C.F.R. Part 327 (or
any successor provision) to the Federal Deposit Insurance
Corporation for insurance by such Corporation of time
deposits made in dollars at the offices of such member in
the United States; provided that if, as a result of any
change in any law, rule or regulation, it is no longer
possible to determine the Assessment Rate as aforesaid, then
the Assessment Rate shall be such annual rate as shall be
determined by the Administrative Agent to be representative
of the cost of such insurance to the Lenders.

"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 and a single Tranche made by the relevant Lenders 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.

"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.

"CERCLA" means, collectively, 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. SS 9601 et seq.

A "Change in Control" shall be deemed to have
occurred if (a) any Person or group (within the meaning of
Rule 13d-5 of the SEC as in effect on the Effective Date)
shall own directly or indirectly, beneficially or of record,
shares representing 30% or more of the aggregate ordinary
voting power represented by the issued and outstanding
capital stock of FMPO; or (b) a majority of the seats (other
than vacant seats) on the Board of Directors of FMPO shall
at any time be occupied by Persons who were not (i) members
of the Board of Directors of FMPO on the Effective Date or
(ii) appointed as, or nominated for election as, directors
by a majority of the directors who are (x) referred to in
clause (i) and (y) other directors who are appointed or
nominated in accordance with this clause (ii); provided,
however, that neither the Merger nor the transfer of the
general partnership interest in FMPOC from FTX to FMPO shall
constitute a Change in Control under this Agreement.

"Circle C L/C Commitment" means the commitment of
an Issuing Bank to issue Circle C Letters of Credit pursuant
to Section 2.18.

"Circle C L/C Exposure" means, at any time, the
sum of (a) the aggregate undrawn amount of all outstanding
Circle C Letters of Credit at such time plus (b) the
aggregate principal amount of all L/C Disbursements made
pursuant to Circle C Letters of Credit that have not yet
been reimbursed at such time.  The Circle C L/C Exposure of
any Circle C Revolving Credit Lender at any time means its
Applicable Percentage of the aggregate Circle C L/C Exposure
at such time.

"Circle C L/C Participation Fee" has the meaning
assigned to such term in Section 2.06(d).

"Circle C Letter of Credit" means any letter of
credit issued under the applicable Circle C L/C Commitment
for the account of Circle C, the Restricted Entities or any
of their respective Affiliates pursuant to Section 2.18 and
the letters of credit listed on Schedule VI, which for
purposes hereof, shall be deemed to be Circle C Letters of
Credit issued hereunder.

"Circle C Loan Facility" has the meaning assigned
to such term in the preamble to this agreement.

"Circle C Term Lender" means each Lender set forth
on Schedule II as making a Loan to Circle C under the New
Circle C Term Tranche.

"Circle C Revolving Credit Commitment" means, with
respect to each Lender, the commitment of such Lender
hereunder to make revolving loans to Circle C as set forth
on Schedule II, or in the Commitment Transfer Supplement
pursuant to which such Lender assumed its Circle C Revolving
Credit Commitment, as the same may be permanently terminated
or reduced from time to time pursuant to Section 2.07 and
pursuant to assignments by such Lender pursuant to
Section 10.03.  The Circle C Revolving Credit Commitment of
each Lender shall automatically and permanently terminate on
the Circle C Revolving Commitment Maturity Date.

"Circle C Revolving Credit Exposure" means, with
respect to any Lender under the New Circle C Revolving
Tranche at any time, the aggregate principal amount at such
time of all outstanding Revolving Loans made to Circle C
under the New Circle C Revolving Tranche by such Lender,
plus the aggregate amount at such time of such Lender's
Circle C L/C Exposure.

"Circle C Revolving Commitment Maturity Date"
means January 1, 2001, or, if earlier, the date of
termination of the Circle C Revolving Credit Commitments
pursuant to the terms hereof.

"Circle C Revolving Credit Lender" means a Lender
with a Circle C Revolving Credit Commitment.

"Closing Date" means the date upon which this
Agreement is executed and delivered by all parties hereto.

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

"Commitment" means, with respect to any Lender,
such Lender's Revolving Credit Commitments and Term Loan
Commitment.

"Commitment Fee" has the meaning assigned to such
term in Section 2.06(a).

"Commitment Termination Date" has the meaning
assigned to such term in Section 2.06(a).

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

"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.

"Credit Event" means the making of a Loan.

"Debt" 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 Debt of
others secured by (or for which the holder of such Debt 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 Debt 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 Debt and (k) all
noncontingent 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 Debt of any
Person shall include the Debt of any partnership in which
such Person is a general partner but shall exclude
obligations under leases which are characterized as
Operating Leases.

"Debt Basket" has the meaning assigned to such
term in Section 5.03(c).

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

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

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

"Effective Date" means the date on which the
conditions specified in Article IV are satisfied (or waived
in accordance with Section 10.07).

"environment" shall mean 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 threat or
existence, or the continuation of the existence, of a
Release (including sudden or non-sudden, accidental or
nonaccidental 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 CERCLA, the Solid Waste Disposal Act, as amended
by the Resource Conservation and Recovery Act of 1976 and
Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. SS
6901 et seq., the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1977, 33 U.S.C. 1251 et
seq., the Clean Air Act of 1970, as amended 42 U.S.C. 7401
et seq., the Toxic Substances Control Act of 1976, 15 U.S.C.
SS 2601 et seq., the Occupational Safety and Health Act of
1970, as amended, 29 U.S.C. SS 651 et seq., the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
SS 11001 et seq., the Safe Drinking Water Act of 1974, as
amended, 42 U.S.C. SS 300(f) et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. SS 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.

"Equity Payment" means, directly or indirectly, 
any dividend or distribution on, or purchase, redemption or
other payment in respect of, the capital stock of a Borrower
or Restricted Entity, whether in cash, property or a
combination thereof.

"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 a Borrower
or Restricted Entity, 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 a Borrower or any ERISA Affiliate
thereof 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 a Borrower or any ERISA Affiliate thereof 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 a Borrower or 
Restricted Entity.

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

"Federal Funds Effective Rate" has the meaning
assigned to such term that is contained in the definition of
the term "Alternate Bate Rate" in this Section 1.01.

"Fees" means the Commitment Fees, the
Administrative Fee, the L/C Participation Fees and the
Issuing Bank Fees.

"Financial Officer" of any corporation means the
principal financial officer, principal accounting officer,
treasurer, assistant treasurer or controller of such
corporation.

"FMPO Guarantee Agreement" means the FMPO
Guarantee Agreement dated as of December [  ], 1997, by FMPO
for the benefit of the Lenders.

"FMPOC L/C Commitment" means the commitment of an
Issuing Bank to issue FMPOC Letters of Credit pursuant to
Section 2.18.

"FMPOC L/C Exposure" means, at any time, the sum
of (a) the aggregate undrawn amount of all outstanding FMPOC
Letters of Credit at such time plus (b) the aggregate
principal amount of all L/C Disbursements made pursuant to
FMPOC Letters of Credit that have not yet been reimbursed at
such time.  The FMPOC L/C Exposure of any FMPOC Revolving
Credit Lender at any time means its Applicable Percentage of
the aggregate FMPOC L/C Exposure at such time.

"FMPOC L/C Participation Fee" has the meaning
assigned to such term in Section 2.06(d).

"FMPOC Letter of Credit" means any letter of
credit issued under the applicable FMPOC L/C Commitment for
the account of FMPOC, the Restricted Entities or any of
their respective Affiliates pursuant to Section 2.18 and the
letters of credit listed on Schedule VI, which for purposes
hereof, shall be deemed to be FMPOC Letters of Credit issued
hereunder.

"FMPOC Revolving Credit Commitment" means, with
respect to each Lender, the commitment of such Lender
hereunder to make revolving loans to FMPOC as set forth on
Schedule II, or in the Commitment Transfer Supplement
pursuant to which such Lender assumed its FMPOC Revolving
Credit Commitment, as the same may be permanently terminated
or reduced from time to time pursuant to Section 2.07 and
pursuant to assignments by such Lender pursuant to
Section 10.03.  The FMPOC Revolving Credit Commitment of
each Lender shall automatically and permanently terminate on
the FMPOC Revolving Commitment Maturity Date.

"FMPOC Revolving Commitment Maturity Date" means
January 1, 2001, or, if earlier, the date of termination of
the FMPOC Revolving Credit Commitments pursuant to the terms
hereof.

"FMPOC Revolving Credit Exposure" means, with
respect to any Lender under the New FMPOC Revolving Tranche
at any time, the aggregate principal amount at such time of
all outstanding Revolving Loans made to FMPOC under the New
FMPOC Revolving Tranche by such Lender, plus the aggregate
amount at such time of such Lender's FMPOC L/C Exposure.

"FMPOC Revolving Credit Lender" means a Lender
with an FMPOC Revolving Credit Commitment.

"FMPOC Revolving Facility" has the meaning
assigned to such term in the preamble to this Agreement.

"FMPOC Term Loan Facility" has the meaning
assigned to such term in the preamble to this Agreement.

"FTX" has the meaning specified in the preamble to
this Agreement.

"FTX Guarantee Agreement" means the Amended,
Restated and Consolidated FTX Guarantee Agreement dated as
of December [  ], 1997, by FTX for the benefit of the
Lenders.

"GAAP" has the meaning assigned to such term in
Section 1.02.

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

"Governmental Rule" means any statute, law,
treaty, rule, code, ordinance, regulation, permit,
certificate or order of any Governmental Authority or any
judgment, decree, injunction, writ, order or like action of
any court, arbitrator or other judicial or quasi judicial
tribunal.

"Guarantee" means, with respect to any Person, any
obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing
any Debt 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 Debt or obligation or to
purchase (or advance or supply funds for the purchase of)
any security for the payment of such Debt, obligation,
dividend or distribution, (iii) to purchase or lease
property, securities or services for the purpose of assuring
the owner of such Debt or obligation or the holder of such
stock of the payment of such Debt, 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 Debt, 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.

"Guarantee Agreements" means (i) the FMPO
Guarantee Agreement; and (ii) the FTX Guarantee Agreement,
or, upon (x) the consummation of the Merger and the
assumption by IGL, as successor by merger to FTX, of all
FTX's rights and obligations as a Guarantor hereunder and
under the FTX Guarantee Agreement and (y) compliance with
the conditions set forth in the IGL Guarantee Agreement, the
IGL Guarantee Agreement, which shall then amend and restate
the FTX Guarantee Agreement in its entirety.

"Guarantors" means FTX and FMPO, together with all
successors in interest thereto.

"Hazardous Materials" means all explosive or
radioactive materials, substances or wastes, hazardous or
toxic materials, 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.

"IGL" has the meaning assigned to such term in the
preamble to this Agreement.

"IGL Credit Facility" means the credit agreement
dated as of December 15, 1997, among IGL, the financial
institutions from time to time parties thereto, Morgan
Guaranty Trust Company of New York, as administrative agent,
Royal Bank of Canada, as documentation agent, and The Chase
Manhattan Bank and Nationsbank, N.A., as co-syndication
agents, as the same may be amended, modified, renewed or
extended from time to time and including any bank credit
facility which refinances or replaces the IGL Credit
Facility then in effect and which serves as IGL's primary
bank credit facility. 

"IGL Guarantee Agreement" means the Amended and
Restated IGL Guarantee Agreement to be entered into by IGL
for the benefit of the Lenders upon the consummation of the
Merger, the form of which is attached to the FTX Guarantee
Agreement as Exhibit A thereto.

"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 any 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 one, two, three or six months
thereafter, as the relevant 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.

"Investment Basket" has the meaning assigned to
such term in Section 5.03(b).

"Issuing Bank" means, as the context may require,
(a) The Chase Manhattan Bank (or its Affiliates), with
respect to Letters of Credit issued by it, (b) Texas
Commerce Bank (or its Affiliates) with respect to Letters of
Credit issued by it, (c) any other Lender that may become an
Issuing Bank pursuant to Section 2.18(i) or (k), with
respect to Letters of Credit issued by such Lender, or (d)
collectively, any of the foregoing.

"Issuing Bank Fees" has the meaning specified in
Section 2.06(d).

"L/C Disbursement" means a payment or disbursement
made by an Issuing Bank pursuant to a Letter of Credit.

"L/C Exposure" means the sum of the FMPOC L/C
Exposure and the Circle C L/C Exposure.

"L/C Participation Fees" has the meaning assigned
to such term in Section 2.06(d).

"Lender" means each financial institution
signatory hereto and its successors and permitted assigns
under Section 10.03.

"Letter of Credit" means an FMPOC Letter of Credit
or a Circle C Letter of Credit, as applicable.

"LIBO Rate" means, with respect to any LIBO Rate
Loan for any Interest Period, the rate appearing on
Page 3750 of the Telerate Service (or on any successor or
substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such
Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest
rates applicable to Dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period.  In the event that such
rate is not available at such time for any reason, then the
"LIBO Rate" with respect to such LIBO Rate Loan for such
Interest Period shall be the rate at which Dollar deposits
of $5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal London office of the
Administrative Agent in immediately available funds 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 Lender, the LIBOR
Office set forth for such Lender on the signature pages
hereof or as otherwise notified in writing to the
Administrative Agent and the Borrowers, unless such Lender
shall designate a different LIBOR Office by notice in
writing to the Administrative Agent and the Borrowers.

"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 and the Term
Loan.

"Loan Documents" means this Agreement, the
Guarantee Agreements, any promissory note issued pursuant to
Section 2.04(e) and all other agreements, certificates and
instruments now or hereafter entered into in connection
therewith or in furtherance thereof, in each case as amended
and modified from time to time.

"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 a
Borrower and its Restricted Entities taken as a whole, or a
Guarantor (other than IGL), (b) material impairment of the
ability of a Borrower and its Restricted Entities or a
Guarantor (other than IGL) 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 Lenders under any Loan Document. 

"Merger" has the meaning assigned to such term in
the preamble to this Agreement.

"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which a Borrower
or Restricted Entity, or any ERISA Affiliate thereof, 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.

"New Circle C Revolving Tranche" has the meaning
assigned to such term in the preamble to this Agreement.

"New Circle C Term Tranche" has the meaning
assigned to such term in the preamble to this Agreement.

"New FMPOC Revolving Tranche" has the meaning
assigned to such term in the preamble to this Agreement.

"Non-Excluded Taxes" has the meaning assigned to
such term in Section 2.17(a).

"Nonrestricted Subsidiary" means (i) any of the
Subsidiaries listed on Schedule III hereto as a
Nonrestricted Subsidiary, (ii) any Subsidiary of any
Nonrestricted Subsidiary, (iii) any surviving Person (other
than any Borrower or Restricted Entity) into which any of
such Persons referred to in clause (i) or (ii) is merged or
consolidated, subject to Section 5.02(c), and (iv) any
Subsidiary organized after the Closing Date for the purpose
of acquiring the stock or other ownership interests or
assets of another Person or for start-up ventures or
development programs or activities and designated as a
Nonrestricted Subsidiary by such Borrower as of the time of
its organization.  By written notice to the Administrative
Agent, a Borrower or Restricted Entity may (x) declare any
Nonrestricted Subsidiary to be a Restricted Entity and such
former Nonrestricted Subsidiary shall thereafter be deemed
to be a Restricted Entity for all purposes of this Agreement
or (y) at any time other than when a Default or Event of
Default has occurred and is continuing or would exist after
giving effect to such declaration, in any fiscal year,
declare one or more Restricted Entities, the interest of
such Borrower or Restricted Entity in all of which has an
equity value or loan investment of less than $500,000 in the
aggregate, to be a Nonrestricted Subsidiary and any such
former Restricted Entity shall thereafter be deemed to be a
Nonrestricted Subsidiary for all purposes of this Agreement.

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

"Other Taxes" has the meaning assigned to such
term in Section 2.17(b).

"Participants" has the meaning assigned such term
in Section 10.03(b).

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

"Permitted Investments" means customary portfolio
cash management investments made pursuant to prudent cash
management practices.

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

"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 a Borrower or Restricted Entity, or
any ERISA Affiliate thereof, 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.

"Properties" means the properties owned, leased or
operated by a Borrower or Restricted Entity, or any
Subsidiary thereof.

"Purchasing Lender" has the meaning assigned to
such term in Section 10.03(c).

"Real Estate Business" means the ownership,
operation, development or acquisition of, or other like
involvement in, real estate and improvements thereon. 

"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 to such term
in Section 10.03(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. S 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 Lenders" means at any time, subject to
Section 10.07(b), Lenders having Loans, L/C Exposure and
unused Commitments representing more than 66_% of all Loans
outstanding, L/C Exposure and unused Commitments at such
time.

"Responsible Officer" of any corporation means any
executive officer or Financial Officer of such corporation
and any other officer or similar official thereof
responsible for the administration of the obligations of
such corporation in respect of this Agreement.

"Restricted Entities" means FMPO and any
Subsidiary that is not a Nonrestricted Subsidiary.

"Restricted Subsidiaries" means the Restricted
Entities other than FMPO. 

"Revolving Credit Borrowing" means a Borrowing
comprised of Revolving Loans.

"Revolving Credit Commitment" means, with respect
to any Lender, its FMPOC Revolving Credit Commitment and
Circle C Revolving Credit Commitment, as applicable.

"Revolving Credit Lender" means any FMPOC
Revolving Credit Lender or Circle C Revolving Credit Lender.

"Revolving Loan" means any revolving loan made
pursuant to Section 2.01.

"SEC" means the Securities and Exchange Commission
or any Governmental Authority succeeding to any or all of
the functions of the SEC.

"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 Lender
(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 funding
(currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board).  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.

"Subsidiary" means, with respect to any Person, a
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.

"Term Loan" means the term loan made pursuant to
Section 2.01.

"Term Loan Commitment" means, with respect to each
Lender, the commitment of such Lender to make the Term Loan
to Circle C set forth on Schedule II, or in the Commitment
Transfer Supplement pursuant to which such Lender assumed
its Term Loan Commitment, as the same may be permanently
terminated or reduced from time to time pursuant to
Section 2.07 and pursuant to assignments by such Lender
pursuant to Section 10.03.  The Term Loan Commitment of each
Lender shall automatically and permanently terminate on the
Term Loan Maturity Date.

"Term Loan Maturity Date" means January 1, 2001.

"Third Party" has the meaning assigned to such
term in Section 5.02(g).

"Tranches" has the meaning specified in the
preamble to this Agreement.

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

"Transferee" means any Participant or Purchasing
Lender.

"Type", when used in respect of any Loan or
Borrowing, shall refer to the Rate by reference to which
interest on such Loan or on the Loans comprising such
Borrowing is determined.  For purposes hereof, the term
"Rate" means the Applicable LIBO Rate or the Applicable
Reference Rate, as applicable.

"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 1.02.  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 relevant Borrower's
independent public accountants, as applicable) applied on a
basis consistent with those used in preparing the financial
statements referred to in Section 5.01(a) ("GAAP");
provided, however, that each reference in Section 5.02, or
in the definition of any term used in Section 5.02, to GAAP
shall mean generally accepted accounting principles as in
effect on the Effective Date and as applied by the Borrowers
in preparing the financial statements referred to in
Section 3.01(e).  In the event any change in GAAP materially
affects any provision of this Agreement, the Lenders and the
Borrowers 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
Borrowers' compliance with such provisions shall be
determined on the basis of GAAP as in effect immediately
before such change in GAAP became effective.

SECTION 1.03.  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.

ARTICLE II

The Loans

SECTION 2.01.  Commitments.  Subject to the terms
and conditions and relying upon the representations and
warranties herein set forth, (a) each Circle C Term Lender
agrees, severally and not jointly, to make a Term Loan to
Circle C on the Effective Date in a principal amount not to
exceed its Term Loan Commitment, (b) each Circle C Revolving
Credit Lender agrees, severally and not jointly, to make
Revolving Loans to Circle C, at any time and from time to
time on or after the date hereof, and until the earlier of
the Circle C Revolving Commitment Maturity Date and the
termination of the Circle C Revolving Credit Commitment of
such Lender in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding that will
not result in such Lender's Circle C Revolving Credit
Exposure exceeding such Lender's Circle C Revolving Credit
Commitment and (c) each FMPOC Revolving Credit Lender
agrees, severally and not jointly, to make Revolving Loans
to FMPOC, at any time and from time to time on or after the
date hereof, and until the earlier of the FMPOC Revolving
Commitment Maturity Date and the termination of the FMPOC
Revolving Credit Commitment of such Lender in accordance
with the terms hereof, in an aggregate principal amount at
any time outstanding that will not result in such Lender's
FMPOC Revolving Credit Exposure exceeding such Lender's
FMPOC Revolving Credit Commitment; provided, however, that,
notwithstanding the foregoing, the sum of the FMPOC L/C
Exposure and the Circle C L/C Exposure shall not exceed
$7,500,000, in the aggregate, at any time.  A Lender's
aggregate Commitments hereunder shall be made ratably among
the Tranches based on the aggregate amount of all the
Lenders' Commitments under each such Tranche on the
Effective Date.  Within the limits set forth in clauses (b)
and (c) of the second preceding sentence and subject to the
conditions and limitations set forth herein, the Borrowers
may borrow, pay or repay and reborrow Revolving Loans, as
applicable.  Amounts paid or prepaid in respect of the Term
Loan may not be reborrowed.

SECTION 2.02.  Loans.  (a)  Each Loan shall be
made as part of a Borrowing consisting of Loans to the
relevant Borrower made by the Lenders ratably in accordance
with their respective Term Loan Commitments or Revolving
Credit Commitments, as the case may be; provided, however,
that the failure of any Lender to make a Loan shall not in
itself relieve any other Lender of its obligation to lend
hereunder (it being understood, however, that no Lender
shall be made responsible for the failure of any other
Lender to make any Loan required to be made by such other
Lender).  Except for Loans deemed to be made pursuant to
Section 2.02(e), the Loans comprising any Borrowing shall be
in an aggregate principal amount which is (i) an integral
multiple of $1,000,000 or (ii) equal to the remaining
available balance of the applicable Commitments.

(b)  Each Loan shall be either a Reference Rate
Loan or a LIBO Rate Loan as the relevant Borrower may
request pursuant to Section 2.03.  Subject to the provisions
of Sections 2.03 and 2.09, Loans of more than one Type may
be outstanding at the same time.

(c)  Each Lender 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 by wire transfer
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 relevant
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 Lenders.  Unless the
Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender
will not make available to the Administrative Agent such
Lender's portion of such Borrowing, the Administrative Agent
may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in
accordance with this paragraph (c) and the Administrative
Agent may, in reliance upon such assumption, make available
to the relevant Borrower on such date a corresponding
amount.  If the Administrative Agent shall have so made
funds available, then to the extent that such Lender shall
not have made such portion available to the Administrative
Agent, such Lender and such 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 such Borrower until the date such amount
is repaid to the Administrative Agent at an interest rate
equal to (i) in the case of such Borrower, the interest rate
applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, 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 Lender shall
repay to the Administrative Agent such corresponding amount,
such amount shall constitute such Lender's Loan for purposes
of this Agreement.

(d)  Notwithstanding any other provision of this
Agreement, no Borrower shall be entitled to request any
Revolving Credit Borrowing or Term Loan if the Interest
Period requested with respect thereto would end after the
Circle C Revolving Commitment Maturity Date, the FMPOC
Revolving Commitment Maturity Date or the Term Loan Maturity
Date, as applicable.

(e)  If an Issuing Bank makes an L/C Disbursement
in respect of a Letter of Credit and shall not have received
from the applicable Borrower the payment required to be made
by such Borrower pursuant to Section 2.18(e) within the time
specified in such Section, such Issuing Bank will promptly
notify the Administrative Agent of the L/C Disbursement and
the Administrative Agent will promptly notify each Revolving
Credit Lender of such L/C Disbursement and its Applicable
Percentage thereof.  Each Revolving Credit Lender shall pay
by wire transfer in immediately available funds to the
Administrative Agent not later than 3:00 p.m., New York City
time, on such date (or, if such Revolving Credit Lender
shall have received such notice later than 1:00 p.m.,
New York City time, on any day, not later than 10:00 a.m.,
New York City time, on the immediately following Business
Day), an amount equal to such Lender's Applicable Percentage
of such L/C Disbursement (it being understood that such
amount shall be deemed to constitute a Reference Rate Loan
of such Lender to such Borrower and such payment shall be
deemed to have reduced the FMPOC L/C Exposure or Circle C
L/C Exposure, as applicable, by the amount of such payment),
and the Administrative Agent will promptly pay to such
Issuing Bank any amounts received by it from the Revolving
Credit Lenders.  The Administrative Agent will promptly pay
to such Issuing Bank any amounts received by it from such
Borrower pursuant to Section 2.18(e) prior to the time any
Revolving Credit Lender makes any payment pursuant to this
Section 2.02(e); any such amounts received by the
Administrative Agent thereafter will be promptly remitted by
the Administrative Agent to the Revolving Credit Lenders
that shall have made such payments and to such Issuing Bank,
as their interests may appear.  If any Revolving Credit
Lender shall not have made its Applicable Percentage of such
L/C Disbursement available to the Administrative Agent as
provided above, such Lender and such Borrower, severally and
not jointly, agree to pay interest on such amount, for each
day from and including the date such amount is required to
be paid in accordance with this paragraph to but excluding
the date such amount is paid, to the Administrative Agent at
(i) in the case of such Borrower, a rate per annum equal to
the interest rate applicable for Reference Rate Loans and
(ii) in the case of such Lender, for the first such day, the
Federal Funds Effective Rate, and for each day thereafter,
the Alternate Base Rate.

(f)  Notwithstanding any provision to the contrary
in this Agreement, a Borrower shall not request any LIBO
Rate Loan which, if made, would result in more than 10
separate LIBO Rate Loans of any Lender to such Borrower
under a single Tranche.  For purposes of the foregoing,
Loans having different Interest Periods, regardless of
whether they commence on the same date, shall be considered
part of separate Borrowings.

SECTION 2.03.  Notice of Loans.  (a)  A Borrower
shall request a Borrowing (other than a deemed Borrowing
pursuant to Section 2.02(e), as to which this Section 2.03
shall not apply) by giving the Administrative Agent
telephonic (promptly confirmed in writing), written,
telecopy or telex notice in the form of Exhibit C with
respect to each Loan (i) 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 (ii) 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, such 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 such 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 such Borrower,
then such Borrower shall be deemed to have selected an
Interest Period of one month's duration.

(b)  A Borrower may continue or convert all or any
part of any of its Loans as or into a Loan or Loans of the
same or a different Type in accordance with Section 2.10 and
subject to the limitations set forth herein.  If such
Borrower shall not have delivered a Borrowing notice in
accordance with this Section 2.03 prior to the end of the
Interest Period then in effect for any Loan requesting that
such Loan be converted or continued as permitted hereby,
then such Borrower shall (unless such 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 this
Section 2.03 requesting that such Loan be converted into or
continued as a Reference Rate Loan of equivalent amount.

SECTION 2.04.  Repayment of Loans; Evidence of
Debt.  (a)  Each of the Borrowers hereby unconditionally
agrees to pay to the Administrative Agent for the account of
each applicable Lender (i) in the case of Circle C, the then
unpaid principal amount of each Term Loan in accordance with
the terms of this Agreement and (ii) the then unpaid
principal amount of each Revolving Loan to such Borrower in
accordance with the terms of this Agreement.

(b)  Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the
indebtedness of each Borrower to such Lender resulting from
each Loan made by such Lender from time to time, including
the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement.

(c)  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 each Borrower to the relevant Lenders hereunder and
(iii) the amount of any sum received by the Administrative
Agent hereunder from each Borrower and each Lender's share
thereof.

(d)  The entries made in the accounts maintained
pursuant to paragraphs (b) and (c) of this Section 2.04
shall be prima facie evidence of the existence and amounts
of the obligations therein recorded; provided, however, that
the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any
manner affect the obligations of the Borrowers to repay the
Loans in accordance with the terms of this Agreement.

(e)  Any Lender may request that any Loans made by
it be evidenced by a promissory note.  In such event, the
relevant Borrower shall prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the
Administrative Agent.  Thereafter, the Loans of each
Borrower evidenced by such promissory note and interest
thereon shall at all times (including after assignment
pursuant to Section 10.03) be represented by one or more
promissory notes of such Borrower in such form payable to
the order of the payee named therein (of if such promissory
note is a registered note, to such payee and its registered
assigns).

SECTION 2.05.  Interest on Loans.  (a)  Subject to
the provisions of Section 2.08, 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.

(b)  Subject to the provisions of Section 2.08,
each 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; provided,
however, upon the date of the consummation of the Merger,
the Applicable LIBO Rate for all LIBO Rate Loans hereunder
(including any LIBO Rate Loans outstanding as of such date)
shall be calculated by reference to the spread over the
London Interbank Offered Rate (as defined in the IGL Credit
Facility) payable (or to be payable) by IGL for the
applicable loans made thereunder as provided in Schedule I;
provided that the Administrative Agent shall promptly notify
the Borrowers, upon receipt of notification from IGL, of any
change in the spread to be used in calculating the
Applicable LIBO Rate and any such change shall not take
effect in respect of this Agreement until the Borrowers are
notified by the Administrative Agent of such change.

(c)  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 each relevant
Borrower and Lender of such determination.

SECTION 2.06.  Fees.  (a)  The relevant Borrower
shall pay each Lender, through the Administrative Agent, on
the last Business Day of each March, June, September and
December, and on the date on which the portion of the
Commitment of such Lender applicable to the Borrowings of
each such Borrower shall be terminated as provided herein
(the "Commitment Termination Date"), in immediately
available funds, a commitment fee (a "Commitment Fee") equal
to the Commitment Fee Percentage set forth in Schedule I on
the average daily unused amount (treating L/C Exposure as
usage of the New FMPOC Revolving Tranche or the New Circle C
Revolving Tranche, as applicable) of the Commitments of such
Lender, in each case during the quarter ending on such date
(or shorter period commencing with the earlier of the
Closing Date and the Effective Date or ending with the
Commitment Termination Date); provided that, upon the
consummation of the Merger, the Administrative Agent shall
promptly notify the Borrowers, upon receipt of notification
from IGL, of any change in the facility fee percentage under
the IGL Credit Facility to be used in calculating the
Commitment Fee Percentage hereunder and any such change
shall not take effect in respect of this Agreement until the
Borrowers are notified by the Administrative Agent of such
change.

(b)  All Commitment Fees under this Section 2.06
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 Lender shall cease to accrue
on the earlier of the Maturity Date and the termination of
the Commitment of such Lender pursuant to Section 2.07.

(c)  The Borrowers agree, on a joint and several
basis, to pay to the Administrative Agent, for its own
account, on the Effective Date and on each anniversary
thereof, an annual administration fee (the "Administrative
Fee") as agreed between the Borrowers and the Administrative
Agent in the fee letter dated the date hereof, between
Chase, FMPOC and Circle C.

(d)  FMPOC agrees to pay (i) each FMPOC Revolving
Credit Lender, through the Administrative Agent, a fee (an
"FMPOC L/C Participation Fee") calculated on such FMPOC
Revolving Credit Lender's Applicable Percentage of the
average daily aggregate FMPOC L/C Exposure (excluding the
portion thereof attributable to the applicable unreimbursed
L/C Disbursements) at the L/C Participation Fee Percentage
set forth in Schedule I during the period from and including
the earlier of the Closing Date and the Effective Date to
but excluding the later of the FMPOC Revolving Commitment
Maturity Date or the date on which all FMPOC Letters of
Credit have been canceled or have expired) and (ii) in
connection with the issuance, amendment or transfer of any
FMPOC Letter of Credit or any related L/C Disbursement, such
Issuing Bank's customary documentary and processing charges
(collectively, the "Issuing Bank Fees"); provided that the
Administrative Agent shall promptly notify the Borrowers,
upon receipt of notification from IGL, of any change in the
letter of credit fee under the IGL Credit Facility to be
used in calculating the L/C Participation Fee Percentage
hereunder and any such change shall not take effect in
respect of this Agreement until the Borrowers are notified
by the Administrative Agent of such change.  Circle C agrees
to pay (i) each Circle C Revolving Credit Lender, through
the Administrative Agent, a fee (a "Circle C L/C
Participation Fee" and, together with the FMPOC L/C
Participation Fees, the "L/C Participation Fees") calculated
on such Circle C Revolving Credit Lender's Applicable
Percentage of the average daily aggregate Circle C L/C
Exposure (excluding the portion thereof attributable to the
applicable unreimbursed L/C Disbursements) at the L/C
Participation Fee Percentage set forth in Schedule I during
the period from and including the earlier of the Closing
Date and the Effective Date to but excluding the later of
the Circle C Revolving Commitment Maturity Date or the date
on which all Circle C Letters of Credit have been canceled
or have expired) and (ii) in connection with the issuance,
amendment or transfer of any Circle C Letter of Credit or
any related L/C Disbursement, the Issuing Bank Fees.  L/C
Participation Fees accrued through and including the last
day of March, June, September and December of each year
shall be payable on the third Business Day following such
last day, commencing on the earlier of the Closing Date and
Effective Date; provided that all such fees shall be payable
on the FMPOC Revolving Commitment Maturity Date or the
Circle C Revolving Commitment Maturity Date, as applicable,
and any such fees occurring after such date shall be payable
on demand.  Any other fees payable to an Issuing Bank
pursuant to this paragraph shall be payable within 10 days
after demand.  All L/C Participation Fees and Issuing Bank
Fees shall be computed on the basis of the actual number of
days elapsed in a year of 360 days.

(e)  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 Lenders
except that the Issuing Bank Fees shall be paid directly to
the applicable Issuing Bank.  Once paid, all such Fees shall
be fully earned and non-refundable under any and all
circumstances.

SECTION 2.07.  Maturity and Reduction of
Commitments.  (a)  The Term Loan Commitments shall
automatically terminate at 5:00 p.m., New York City time, on
the Effective Date.  The FMPOC Revolving Credit Commitment
and the FMPOC L/C Commitment shall automatically terminate
on the FMPOC Revolving Commitment Maturity Date.  The
Circle C Revolving Credit Commitment and the Circle C L/C
Commitment shall automatically terminate on the Circle C
Revolving Commitment Maturity Date.  Notwithstanding the
foregoing, all the Commitments shall automatically terminate
at 5:00 p.m., New York City time, on January 31, 1998, if
the conditions precedent set forth in Article IV shall not
have occurred by such time.

(b)  Upon at least five days' prior written,
telecopied or telex notice to the Administrative Agent (a
copy of which notice shall be promptly delivered by the
Administrative Agent to each Guarantor), a Borrower may
without penalty at any time in whole permanently terminate,
or from time to time permanently reduce, the Term Loan
Commitment (in the case of Circle C) or its Revolving Credit
Commitments, in each case ratably among the Lenders in
accordance with the amounts of their respective Commitments
in respect of the related Tranche; provided, however, that
each partial reduction of the Commitments (other than a
reduction pursuant to Section 2.07(c)) shall be in a minimum
principal amount of $1,000,000 and an integral multiple of
$1,000,000; provided further, that the Commitments under any
of the Tranches may not be reduced to an amount which is
less than the aggregate principal amount of all Loans under
such Tranche outstanding after such reduction.  Such
Borrower shall pay to the Administrative Agent for the
account of the Lenders, on the date of each termination or
reduction, the Commitment Fees on the amount of the
Commitments so terminated or reduced accrued to but
excluding the date of such termination or reduction.

(c)  (i)  On the dates set forth below or, if any
such date is not a Business Day, on the next succeeding
Business Day, the aggregate amount of the FMPOC Revolving
Credit Commitments, Circle C Revolving Credit Commitments
and the outstanding Term Loan shall be automatically and
permanently reduced, ratably among the Lenders in accordance
with the amounts of their respective FMPOC Revolving Credit
Commitments and Circle C Revolving Credit Commitments and
their respective Applicable Percentage of the Term Loan
outstanding at such time, to the aggregate amount set forth
below opposite such date (subject to Section 2.07(b)):

Date                          Amount

January 1, 1999               $35,000,000
January 1, 2000                15,000,000
January 1, 2001                -0-

(ii)  On or before the 15th Business Day preceding
each of the dates set forth above in this paragraph (c)(i),
the Borrowers shall notify the Administrative Agent as to
the amount by which the amount of the FMPOC Revolving Credit
Commitments, the Circle C Revolving Credit Commitments and
the outstanding Term Loan shall be reduced pursuant to this
Section 2.07(c).

(iii)  To the extent that, after giving effect to
the aforementioned reduction, the Aggregate FMPOC Revolving
Credit Exposure exceeds the aggregate FMPOC Revolving Credit
Commitments, FMPOC shall, on the date of such reduction,
repay Revolving Credit Borrowings and/or L/C Disbursements
under the New FMPOC Revolving Tranche to the Administrative
Agent or terminate Letters of Credit issued by FMPOC under
the New FMPOC Revolving Tranche, as the case may be, in an
aggregate amount sufficient to eliminate such excess, for
the benefit of the FMPOC Revolving Credit Lenders, together
with accrued and unpaid interest on the principal amount to
be repaid to but excluding the date of such payment.

(iv)  To the extent that, after giving effect to
the aforementioned reduction, the Aggregate Circle C
Revolving Credit Exposure exceeds the aggregate Circle C
Revolving Credit Commitments, Circle C shall, on the date of
such reduction, repay Revolving Credit Borrowings and/or L/C
Disbursements under the New Circle C Revolving Tranche to
the Administrative Agent or terminate Letters of Credit
issued by Circle C under the New Circle C Revolving Tranche,
as the case may be, in an amount sufficient to eliminate
such excess, for the benefit of the Circle C Revolving
Credit Lenders, together with accrued and unpaid interest on
the principal amount to be repaid to but excluding the date
of such repayment.

(v)  To the extent that the Term Loan shall be
reduced as part of the aforementioned reduction, Circle C
shall, on the date of such reduction, repay the Term Loan in
an amount equal to the principal amount by which the Term
Loan is reduced pursuant to paragraph (c)(i) above, for the
account of the Circle C Term Lenders, together with the
accrued and unpaid interest on the principal amount to be
repaid to but excluding the date of such repayment.

SECTION 2.08.  Interest on Overdue Amounts;
Alternative Rate of Interest.  (a)  If a 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, such
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):

(i) in the case of the payment of principal of or
interest on a LIBO Rate Loan, at a rate 2% per annum
above the rate which would otherwise be payable under
Section 2.05(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

(ii) 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% per annum above the
Applicable Reference Rate.

(b)  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 Borrowers 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 Lender 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 Borrowers and the other
Lenders, and any request by a Borrower for the making of a
LIBO Rate Loan pursuant to Section 2.03 or 2.10 shall, until
the Administrative Agent shall have advised such Borrower
and the Lenders 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 such Borrower such request
shall be deemed to be a request for a Reference Rate Loan
only from such Lender referred to in (ii) above; provided
further, however, that such option shall not be available to
such Borrower if the Administrative Agent makes the
determination specified in (ii) above with respect to three
or more Lenders.  Each determination of the Administrative
Agent hereunder shall be conclusive absent manifest error.

SECTION 2.09.  Prepayment of Loans.  (a)  Each
Borrower shall have the right at any time and from time to
time to prepay any of its Borrowings, 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 (a copy of which notice shall be promptly
delivered by the Administrative Agent to each Guarantor), 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.

(b)  In the event of any termination of the entire
Commitment under a Tranche, the relevant Borrower shall
repay or prepay all its outstanding Loans under such Tranche
on the date of such termination.  On the date of any partial
reduction of the Commitments in respect of any Tranche
pursuant to Section 2.07, the relevant Borrower shall pay or
prepay so much of its Loans in respect of such Tranche 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 with respect
to such Tranche will not exceed the Commitments under such
Tranche immediately following such reduction.

(c)  All prepayments under this Section 2.09 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 relevant Borrower 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.  Each Borrower shall have the right, subject to the
provisions of Section 2.08, (i) on three Business Days'
prior irrevocable notice by such 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 such 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
on a pro rata basis as to each Type of Loan of such Borrower
to be continued or converted among the Lenders in accordance
with the respective amounts of their respective Commitments
and the notice given to the Administrative Agent by such
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 the Loans of a Tranche, the Loans continued or
converted under such Tranche shall be in a minimum aggregate
principal amount of $1,000,000 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 such
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 10
separate LIBO Rate Loans of any Lender would result under a
single Tranche, determined as set forth in Section 2.02(f);

(h) no Loan shall be continued or converted if
such Loan by any Lender would be greater than the amount by
which its Commitment under the related Tranche exceeds the
amount of its other Loans under such Tranche 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 any
Borrower pursuant to this Section 2.10 to the other Lenders
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 relevant 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, such
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 a Borrower after
10:30 a.m., New York City 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)  Each Borrower shall pay to each Lender
on the last day of each Interest Period for any LIBO Rate
Loan to such Borrower so long as such Lender may be required
to maintain reserves against eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of
the Board) (or so long as such Lender 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 Lender which includes any LIBO Rate
Loan) an additional amount (determined by such Lender and
notified to such 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;

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

(b)  Notwithstanding any other provision herein,
if after the Effective 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 Lender or Issuing Bank (which
shall for the purpose of this Section include any
assignee or lending office of any Lender or Issuing
Bank) to any tax of any kind whatsoever with respect to
its LIBO Rate Loans or other fees or amounts payable
hereunder, as applicable, 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 Lender or
Issuing Bank by the U.S. Federal government or by any
jurisdiction in which such Lender or Issuing Bank
maintains an office, unless the presence of such office
is solely attributable to the enforcement of any rights
hereunder 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 Lender or Issuing Bank;

(iii) impose on any such Lender, such Issuing Bank
or the London interbank market any other condition
affecting this Agreement or LIBO Rate Loans made by
such Lender or Letters of Credit issued by such Issuing
Bank; or

(iv) impose upon any Lender or Issuing Bank any
other condition with respect to any amount paid or to
be paid by any Lender or Issuing Bank with respect to
its LIBO Rate Loans or Letters of Credit issued
hereunder, respectively, or this Agreement;

and the result of any of the foregoing shall be to increase
the cost to such Lender or Issuing Bank of (x) making or
maintaining any LIBO Rate Loan or (y) issuing or maintaining
any Letter of Credit, respectively, or purchasing or
maintaining a participation therein or to reduce the amount
of any sum received or receivable by such Lender or Issuing
Bank hereunder (whether of principal, interest or otherwise)
or to require such Lender or Issuing Bank to make any
payment in respect of any such Loan or Letter of Credit, as
applicable, in each case by or in an amount which such
Lender or Issuing Bank, in its sole judgment, shall deem
material, then the relevant Borrower shall pay to such
Lender or Issuing Bank, as the case may be, on demand such
an amount or amounts as will compensate such Lender or
Issuing Bank, as the case may be, for such additional costs,
reductions or payments.

(c)  If any Lender or Issuing Bank shall have
determined that the applicability of any law, rule,
regulation, agreement or guideline adopted after the
Effective Date regarding capital adequacy, or any change
after the Effective 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 Lender or
Issuing Bank (or any lending office thereof) or any Lender's
or Issuing 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 Effective Date, has or would have the
effect of reducing the rate of return on such Lender's or
Issuing Bank's capital or on the capital of such Lender's or
Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made or participations in
Letters of Credit purchased by such Lender pursuant hereto
or the Letters of Credit issued by such Issuing Bank
pursuant hereto to a level below that which such Lender or
Issuing Bank or such Lender's or Issuing Bank's holding
company could have achieved but for such applicability,
adoption, change or compliance (taking into consideration
such Lender's or Issuing Bank's policies and the policies of
such Lender's or Issuing Bank's holding company with respect
to capital adequacy) by an amount deemed by such Lender or
Issuing Bank to be material, then from time to time the
relevant Borrower shall pay to such Lender or Issuing Bank,
as the case may be, such additional amount or amounts as
will compensate such Lender or Issuing Bank or such Lender's
or Issuing Bank's holding company for any such reduction
suffered.

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

(e)  A certificate of a Lender or Issuing Bank (or
Transferee) setting forth such amount or amounts as shall be
necessary to compensate such Lender or Issuing Bank (or
Transferee) as specified in paragraph (a), (b) or (c) (and
in the case of paragraph (c), such Lender's or Issuing
Bank's holding company, as applicable) above or
Section 2.17, as the case may be, shall be delivered as soon
as practicable to the relevant 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
relevant Borrower shall pay each Lender or Issuing 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 Lender may employ such assumptions and
allocations of costs and expenses as it shall in good faith
deem reasonable.  The failure of any Lender or Issuing Bank
(or Transferee) to give the required 90-day notice shall
excuse the relevant 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 Lender or Issuing
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
Lender's or Issuing Bank's right 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 Lender or Issuing
Bank regardless of any possible contention of invalidity or
inapplicability of the law, regulation or condition which
shall have occurred or been imposed.  The Borrowers shall
not be required to make any additional payment to any Lender
or Issuing Bank pursuant to Section 2.11(a) or (b) in
respect of any such cost, reduction or payment that could be
avoided by such Lender or Issuing Bank in the exercise of
reasonable diligence, including a change in the lending
office of such Lender or Issuing Bank if possible without
material cost to such Lender.  Each of the Lenders and
Issuing Banks agrees that it will promptly notify the
relevant Borrower and the Administrative Agent of any event
of which the responsible account officer shall have
knowledge which would entitle such Lender or Issuing Bank,
as applicable, to any additional payment pursuant to this
Section 2.11.  The Borrowers agree to furnish promptly to
the Administrative Agent official receipts evidencing any
payment of any tax.

SECTION 2.12.  Change in Legality.
(a)  Notwithstanding anything to the contrary herein
contained, if after the Effective 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 Lender
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 Borrowers and
to the Administrative Agent, such Lender may:

(i) declare that LIBO Rate Loans will not
thereafter (for the duration of such unlawfulness or
impracticality) be made by such Lender hereunder,
whereupon the Borrowers shall be prohibited from
requesting LIBO Rate Loans from such Lender 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 2.09.

(b)  Before giving any notice to the Borrowers and
the Administrative Agent pursuant to this Section 2.12, such
Lender 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 Lender, be otherwise
disadvantageous to such Lender.  For purposes of
Section 2.12(a), a notice to the Borrowers by any Lender
shall be effective on the date of receipt by the Borrowers.

SECTION 2.13.  Indemnity.  Each Borrower shall
indemnify each Lender against any funding, redeployment or
similar loss or expense which such Lender may sustain or
incur with respect to such Borrower as a consequence of (a)
any event, other than a default by such Lender in the
performance of its obligations hereunder, which results in
(i) such Lender 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 such Borrower
to be made by such Lender not being made after notice of
such Loan shall have been given by such 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
Lender, 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 Lender) that would be realized
by such Lender 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
Lender setting forth any amount or amounts which such Lender
is entitled to receive pursuant to this Section shall be
delivered to the relevant Borrower and shall be conclusive
absent manifest error.

SECTION 2.14.  Pro Rata Treatment.  Except as
permitted under any of Section 2.08(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 Fees and
other amounts accrued for the accounts of the Lenders, each
reduction of the Commitments and each conversion or
continuation of Loans shall be allocated pro rata among the
Lenders in the proportions that their respective Commitments
bear to the aggregate Commitments under the relevant Tranche
(or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal
amounts of their outstanding Loans).  Each Lender agrees
that in computing such Lender's portion of any Borrowing to
be made hereunder, the Administrative Agent may, in its
discretion, round each Lender's Applicable Percentage of
such Borrowing to the next higher or lower whole Dollar
amount.

SECTION 2.15.  Sharing of Setoffs.  Each Lender
agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim against a 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
Lender 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 or
L/C Disbursement of such Borrower held by it as a result of
which the unpaid principal portion of the Loans or L/C
Disbursement of such Borrower held by it shall be
proportionately less than the unpaid principal portion of
the Loans and participations in L/C Disbursements of such
Borrower held by any other Lender (other than as permitted
under any of Section 2.08(b), 2.11, 2.12, 2.13 or 2.17), it
shall be deemed to have simultaneously purchased from such
other Lender at face value, and shall promptly pay to such
other Lender the purchase price for, a participation in the
Loans and L/C Exposure, as the case may be, of such Borrower
held by such other Lender, so that the aggregate unpaid
principal amount of the Loans and L/C Exposure of such
Borrower and participation in Loans and L/C Exposure of such
Borrower held by each Lender shall be in the same proportion
to the aggregate unpaid principal amount of all Loans and
L/C Exposure of such Borrower then outstanding as the
principal amount of the Loans and L/C Exposure of such
Borrower held by it prior to such exercise of banker's lien,
setoff or counterclaim was to the principal amount of all
Loans and L/C Exposure of such 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, each of the Borrowers expressly consents
to the foregoing arrangements and agrees that any Lender
holding a participation in a Loan of such Borrower 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 such Borrower hereunder to such
Lender as fully as if such Lender had made a Loan directly
to such 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 Borrowers to the Lenders hereunder, whether
on account of Fees, payment of principal or interest on any
Loan or any L/C Disbursement 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
Lenders in immediately available funds.  All such payments
(other than Issuing Bank Fees, which shall be paid directly
to the applicable Issuing Bank) 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 Lender participating in the Loans made on
such date shall pay to the Administrative Agent such
Lender's Applicable Percentage of each such Borrowing 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 Lender of Federal funds.  At the
time of, and by virtue of, such payment, such Lender 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
Lenders promptly, but no later than 3:00 p.m., New York City
time, on the date of such Borrowing, to the relevant
Borrower in immediately available funds.

(c)  If any payment of principal, interest or Fees
or any L/C Disbursement or any other amount payable to the
Lenders hereunder on any Loan or L/C Exposure, as
applicable, 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 a Borrower prior to the date on which any
payment or prepayment is due hereunder (which notice shall
be effective upon receipt) that such Borrower does not
intend to make such payment or prepayment, the
Administrative Agent may assume that such 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 Lender or Issuing Bank,
as applicable, on such date an amount equal to the portion
of such assumed payment or prepayment such Lender or Issuing
Bank, as applicable, is entitled to hereunder, and, if such
Borrower has not in fact made such payment or prepayment to
the Administrative Agent, such Lender or Issuing Bank, as
applicable, shall, on demand, repay to the Administrative
Agent the amount made available to such Lender or Issuing
Bank, as applicable, together with interest thereon in
respect of each day during the period commencing on the date
such amount was made available to such Lender or Issuing
Bank, as applicable, and ending on (but excluding) the date
such Lender or Issuing Bank, as applicable, 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 Lender,
any Issuing 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 Borrowers 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 an Agent or any Lender (or
Transferee) and franchise taxes of an Agent or any Lender
(or Transferee), as applicable, as a result of a connection
between the jurisdiction imposing such taxes and such Agent
or such Lender (or Transferee), as applicable, other than a
connection arising solely from such Agent or such Lender (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 a Borrower shall be required by law to deduct
any Non-Excluded Taxes from or in respect of any sum payable
hereunder to the Lenders (or any Transferee) or an 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 Lender (or Transferee) or an
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) such Borrower shall make such deductions and
(iii) such 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 Lender shall be entitled
to receive any greater payment under this Section 2.17 than
such Lender 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, each 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 relevant Borrower will indemnify each
Lender (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 Lender (or Transferee) or such
Agent, as the case may be, in respect of a Loan to such
Borrower 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 Lender or Agent, or the Administrative Agent
on behalf of such Lender 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 such Lender (or Transferee) or such 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 a Borrower to the
relevant Governmental Authority, such 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 Lender (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
Borrowers either a valid and currently effective Internal
Revenue Service Form 1001 or Form 4224 or, in the case of a
Lender (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 Lender (or Transferee) delivers a Form
W-8, a certificate representing that such Lender (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 any of the
Borrowers and is not a controlled foreign corporation
related to any of the Borrowers (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly
executed by such Lender (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 Lender (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 Lender (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 Lender (or Transferee) is legally able to do so.

(f)  Notwithstanding anything to the contrary
contained in this Section 2.17, the Borrowers shall not be
required to pay any additional amounts to any Lender (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 Lender (or Transferee) to comply with the
provisions of paragraph (e) above.

(g)  Any Lender (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 any of the Borrowers 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 Lender, be otherwise disadvantageous to such Lender
(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 Lender (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.  Letters of Credit.  (a)  General. 
A Borrower may request the issuance of Letters of Credit, in
a form reasonably acceptable to the Administrative Agent and
the applicable Issuing Bank, appropriately completed, for
the account of such Borrower, any Restricted Entity or, upon
the written approval of the Administrative Agent, any of its
Affiliates, at any time and from time to time while the
applicable Revolving Credit Commitments remain in effect,
provided that such Borrower shall be a co-applicant with
respect to each Letter of Credit issued for the account of
any such Restricted Entity or Affiliate.  Upon the receipt
of such a request and, subject to the satisfaction of the
following terms and conditions of this Section 2.18, the
applicable Issuing Bank shall issue the requested Letter of
Credit.  This Section shall not be construed to impose an
obligation upon an Issuing Bank to issue any Letter of
Credit that is inconsistent with the terms and conditions of
this Agreement.

(b)  Notice of Issuance, Amendment, Renewal,
Extension; Certain Conditions.  In order to request the
issuance of a Letter of Credit (or to amend, renew or extend
an existing Letter of Credit), a Borrower shall hand deliver
or telecopy to the applicable Issuing Bank and the
Administrative Agent (reasonably in advance of the requested
date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or
extended, the date of issuance, amendment, renewal or
extension, the date on which such Letter of Credit is to
expire (which shall comply with paragraph (c) below), the
amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be
necessary to prepare such Letter of Credit.  A Letter of
Credit shall be issued, amended, renewed or extended only
if, and upon issuance, amendment, renewal or extension of
each Letter of Credit the relevant Borrower shall be deemed
to represent and warrant that, after giving effect to such
issuance, amendment, renewal or extension (A) in the case of
an FMPOC Letter of Credit, the FMPOC L/C Exposure shall not
exceed $7,500,000 and the Aggregate FMPOC Revolving Credit
Exposure shall not exceed the aggregate FMPOC Revolving
Credit Commitments at such time, (B) in the case of a
Circle C Letter of Credit, the Circle C L/C Exposure shall
not exceed $7,500,000 and the Aggregate Circle C Revolving
Credit Exposure shall not exceed the aggregate Circle C
Revolving Credit Commitments at such time and (C) in the
case of any Letter of Credit, the sum of the FMPOC L/C
Exposure and the Circle C L/C Exposure shall not exceed
$7,500,000.

(c)  Expiration Date.  Each Letter of Credit shall
expire at the close of business on the earlier of the date
one year after the date of the issuance of such Letter of
Credit and the date that is five Business Days prior to the
FMPOC Revolving Commitment Maturity Date or the Circle C
Revolving Credit Maturity Date, as applicable, unless such
Letter of Credit expires by its terms on an earlier date. 
Each Letter of Credit may, upon the request of the relevant
Borrower, include a provision whereby such Letter of Credit
shall be renewed automatically for additional consecutive
periods of 12 months or less (but not beyond the date that
is five Business Days prior to the FMPOC Revolving
Commitment Maturity Date or the Circle C Revolving Credit
Maturity Date, as applicable) unless the applicable Issuing
Bank notifies the beneficiary thereof at least 30 days prior
to the then applicable expiry date that such Letter of
Credit will not be renewed.

(d)  Participations.  By the issuance of a Letter
of Credit and without any further action on the part of the
applicable Issuing Bank or the Lenders, the Issuing Bank in
respect of such Letter of Credit hereby grants to each
Lender, and each such Lender hereby acquires from such
Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate
amount available to be drawn under such Letter of Credit,
effective upon the issuance of such Letter of Credit.  In
consideration and in furtherance of the foregoing, each such
Lender hereby absolutely and unconditionally agrees to pay
to the Administrative Agent, for the account of such Issuing
Bank, such Lender's Applicable Percentage of each L/C
Disbursement made by such Issuing Bank and not reimbursed by
the relevant Borrower (or, if applicable, another party
pursuant to its obligations under any other Loan Document)
forthwith on the date due as provided in Section 2.02(e). 
Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including
the occurrence and continuance of a Default or an Event of
Default, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

(e)  Reimbursement.  Subject to Section 2.18(h),
if the Issuing Bank in respect of a Letter of Credit shall
make any L/C Disbursement in respect of such Letter of
Credit, the relevant Borrower shall pay to the
Administrative Agent an amount equal to such L/C
Disbursement not later than 3:00 p.m., New York City time,
on the day on which such Borrower shall have received notice
from such Issuing Bank that payment of such draft will be
made, or, if such Borrower shall have received such notice
later than 11:00 a.m., New York City time, on any Business
Day, FMPOC shall make such payment not later than 11:00
a.m., New York City time, on the immediately following
Business Day.

(f)  Obligations Absolute.  Each Borrower's
obligations to reimburse L/C Disbursements as provided in
paragraph (e) above shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all
circumstances whatsoever (until such time as an amount equal
to all such L/C Disbursements, and any interest accrued
thereon, shall have been paid to the applicable Issuing
Banks pursuant to paragraph (e) above), and irrespective of:

(i)  any lack of validity or enforceability of any
Letter of Credit or any Loan Document, or any term or
provision therein;

(ii)  any amendment or waiver of or any consent to
departure from all or any of the provisions of any
Letter of Credit or any Loan Document;

(iii)  the existence of any claim, setoff, defense
or other right that the relevant Borrower, any other
party guaranteeing, or otherwise obligated with, such
Borrower, any Subsidiary or other Affiliate thereof or
any other Person may at any time have against the
beneficiary under any Letter of Credit, the relevant
Issuing Bank, the Administrative Agent or any Lender or
any other Person, whether in connection with this
Agreement, any other Loan Document or any other related
or unrelated agreement or transaction;

(iv)  any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;

(v)  payment by the relevant Issuing Bank under a
Letter of Credit against presentation of a draft or
other document that does not comply with the terms of
such Letter of Credit; and

(vi)  any other act or omission to act or delay of
any kind of the relevant Issuing Bank, the Lenders, the
Administrative Agent or any other Person or any other
event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or
equitable discharge of the relevant Borrower's
obligations hereunder.

Without limiting the generality of the foregoing,
it is expressly understood and agreed that the absolute and
unconditional obligation of each Borrower hereunder to
reimburse L/C Disbursements will not be excused by the gross
negligence or wilful misconduct of the relevant Issuing
Bank.  However, the foregoing shall not be construed to
excuse the relevant Issuing Bank from liability to either
Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby
waived by each Borrower to the extent permitted by
applicable law) suffered by such Borrower that are caused by
such Issuing Bank's gross negligence or wilful misconduct in
performance of its obligations hereunder; it is understood
that an Issuing Bank may accept documents that appear on
their face to be in order, without responsibility for
further investigation, regardless of any notice or
information to the contrary and, in making any payment under
any Letter of Credit (i) an Issuing Bank's exclusive
reliance on the documents presented to it under such Letter
of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented
under such Letter of Credit, whether or not the amount due
to the beneficiary thereunder equals the amount of such
draft and whether or not any document presented pursuant to
such Letter of Credit proves to be insufficient in any
respect, if such document on its face appears to be in
order, and whether or not any other statement or any other
document presented pursuant to such Letter of Credit proves
to be forged or invalid or any statement therein proves to
be inaccurate or untrue in any respect whatsoever and (ii)
any noncompliance in any immaterial respect of the documents
presented under such Letter of Credit with the terms thereof
shall, in each case, be deemed not to constitute wilful
misconduct or gross negligence of the Issuing Bank.

(g)  Disbursement Procedures.  An Issuing Bank
shall, promptly following its receipt thereof, examine all
documents purporting to represent a demand for payment under
a Letter of Credit issued by it.  Such Issuing Bank shall as
promptly as possible give telephonic notification, confirmed
by telecopy, to the Administrative Agent and the relevant
Borrower of such demand for payment and whether the Issuing
Bank has made or will make an L/C Disbursement thereunder;
provided, however, that any failure to give or delay in
giving such notice shall not relieve such Borrower of its
obligation to reimburse such Issuing Bank and the relevant
Lenders with respect to any such L/C Disbursement pursuant
to Section 2.18(e).  The Administrative Agent shall promptly
give notice thereof to each Lender with a participation in
such Letter of Credit.

(h)  Interim Interest.  If the Issuing Bank in
respect of a Letter of Credit shall make any L/C
Disbursements in respect of a Letter of Credit, then, unless
the relevant Borrower shall reimburse such L/C Disbursement
in full on such date, the unpaid amount thereof shall bear
interest for the account of such Issuing Bank, for each day
from and including the date of such L/C Disbursement, to but
excluding the earlier of the date of payment by such
Borrower or the date on which interest shall commence to
accrue thereon as provided in Section 2.02(e), at the rate
per annum that would apply to such amount if such amount
were a Reference Rate Loan.

(i)  Resignation or Removal of an Issuing Bank. 
An Issuing Bank may resign at any time by giving 180 days'
prior written notice to the Administrative Agent, the
Lenders and the Borrowers, and may be removed at any time by
the Borrowers by notice to such Issuing Bank, the
Administrative Agent and the Lenders.  Subject to the next
succeeding paragraph, upon the acceptance of any appointment
as an Issuing Bank hereunder by a Lender that shall agree to
serve as a successor Issuing Bank, such successor shall
succeed to and become vested with all the interests, rights
and obligations of the retiring Issuing Bank (other than
with respect to outstanding Letters of Credit previously
issued by it) and the retiring Issuing Bank shall be
discharged from its obligations to issue additional Letters
of Credit hereunder.  At the time such removal or
resignation shall become effective, the relevant Borrower
shall pay all accrued and unpaid fees pursuant to Section
2.06(d).  The acceptance of any appointment as an Issuing
Bank hereunder by a successor Lender shall be evidenced by
an agreement entered into by such successor, in a form
satisfactory to the Borrowers and the Administrative Agent,
and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this
Agreement and the other Loan Documents (other than with
respect to outstanding Letters of Credit previously issued
by it) and (ii) references herein and in the other Loan
Documents to the term "Issuing Bank" shall be deemed to
refer to such successor or to any previous Issuing Bank, or
to such successor and all previous Issuing Banks, as the
context shall require.  After the resignation or removal of
an Issuing Bank hereunder, the retiring Issuing Bank shall
remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this
Agreement and the other Loan Documents with respect to
Letters of Credit issued by it prior to such resignation or
removal, but shall not be required to issue additional
Letters of Credit.

(j)  Cash Collateralization.  If any Event of
Default shall occur and be continuing, the relevant Borrower
shall, on the Business Day it receives notice thereof from
the Administrative Agent or the Required Lenders (or if the
maturity of the Loans has been accelerated, Lenders under
(i) the New FMPOC Revolving Tranche holding participations
in outstanding FMPOC Letters of Credit representing greater
than 50% of the aggregate undrawn amount of all outstanding
FMPOC Letters of Credit or (ii) the New Circle C Revolving
Tranche holding participations in outstanding Circle C
Letters of Credit representing greater than 50% of the
aggregate undrawn amount of all outstanding Circle C Letters
of Credit, as applicable) demanding the deposit of cash
collateral pursuant to this paragraph, such Borrower shall
deposit in an account with the Administrative Agent, for the
benefit of the Lenders, an amount in cash equal to the FMPOC
L/C Exposure or the Circle C L/C Exposure, as applicable, as
of such date plus any accrued and unpaid interest thereon
and fees related thereto; provided that the obligation to
deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due
and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to
a Borrower, Restricted Entity or Guarantor described in
clause (i) or (j) of Article VII.  Each such deposit shall
be held by the Administrative Agent as collateral for the
payment and performance of the obligations of the Borrowers
under this Agreement.  The Administrative Agent shall have
exclusive dominion and control, including the exclusive
right of withdrawal, over such account.  Other than any
interest earned on the investment of such deposits in
Permitted Investments, which investments shall be made in
the sole discretion of the Administrative Agent and at the
Borrowers' risk and expense, such deposits shall not bear
interest (it being understood that the Administrative Agent
shall have no obligation to invest such amounts in any
investments other than overnight Permitted Investments). 
Interest or profits, if any, on such investments shall
accumulate in such account.  Moneys in such account shall
automatically be applied by the Administrative Agent to
reimburse the applicable Issuing Banks for L/C Disbursements
for which they have not been reimbursed, and, to the extent
not so applied, shall be held for the satisfaction of the
reimbursement obligations of the relevant Borrower for the
L/C Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Lenders
with L/C Exposure representing greater than 50% of the total
L/C Exposure), be applied to satisfy other obligations of
the Borrowers under the Loan Documents.  If a Borrower is
required to provide an amount of cash collateral hereunder
as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be
returned to such Borrower within three Business Days after
all Events of Default have been cured or waived.

(k)  Additional Issuing Banks.  The Borrowers may,
at any time and from time to time with the consent of the
Administrative Agent (which consent shall not be
unreasonably withheld) and such Lender, designate one or
more additional Lenders to act as an Issuing Bank under the
terms of this Agreement.  Any Lender designated as an
issuing bank pursuant to this paragraph (k) shall be deemed
(in addition to being a Lender) to be an Issuing Bank with
respect to Letters of Credit issued or to be issued by such
Lender, and all references herein and in the other Loan
Documents to the term "Issuing Bank" shall, with respect to
such Letters of Credit, be deemed to refer to such Lender in
its capacity as Issuing Bank, as the context shall require.

ARTICLE III

Representations and Warranties

SECTION 3.01.  Representations and Warranties.  As
of the Effective Date and each other date upon which such
representations and warranties are required to be made or
deemed made pursuant to Section 6.01(i), each of the
Borrowers and FMPO, as a Restricted Entity, represents and
warrants to each Lender, Issuing Bank and Agent as follows
with respect to itself and, as applicable, its Subsidiaries:

(a)  Organization; Powers.  Such Borrower or FMPO,
as applicable, (i) is duly organized, validly existing and
in good standing under the laws of the state of its
organization, (ii) has the requisite power and authority to
own its property and assets and to carry on its business as
now conducted and as proposed to be conducted, and (iii) 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 its
condition, financial or otherwise.  Such Borrower or FMPO,
as applicable, has the corporate or other equivalent power
to execute, deliver and perform its obligations under this
Agreement and the other Loan Documents to which it is or is
to be a party and, in the case of the Borrowers, to borrow
and to obtain Letters of Credit hereunder.  Such Borrower or
FMPO, as applicable, has all requisite corporate or other
equivalent power, and has all material governmental
licenses, authorizations, consents and approvals necessary
to own its own assets and carry on its business as now being
or as proposed to be conducted.

(b)  Authorization.  The execution, delivery and
performance of this Agreement (including, without
limitation, performance of the obligations set forth in
Section 5.01(l)) and the other Loan Documents to which such
Borrower or FMPO, as applicable, is or is to be a party and
the Borrowings hereunder by such Borrower and the Letters of
Credit to be issued hereunder to such Borrower (i) have been
duly authorized by all requisite corporate or partnership,
as applicable, and, if required, stockholder or partner, as
applicable, action on the part of such Borrower or FMPO, as
applicable, and (ii) will not (A) violate (x) any
Governmental Rule or such Borrower's or FMPO's Certificate
of Incorporation and By-laws or Agreement of General
Partnership, as applicable, or (y) any provisions of any
indenture, agreement or other instrument to which such
Borrower or FMPO, as applicable, is a party, or by which
such Borrower or FMPO, as applicable, or any of its
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)(y) 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 such Borrower or FMPO, as
applicable.

(c)  Governmental Approvals.  No registration with
or consent or approval of, or other action by, any
Governmental Authority is or will be required in connection
with the execution, delivery and performance by such
Borrower or FMPO, as applicable, of this Agreement or any
other Loan Document to which it is, or is to be, a party or
the Borrowings hereunder by such Borrower and the Letters of
Credit to be issued hereunder to such Borrower except such
as have been made or obtained and are in full force and
effect.  Other than routine authorizations, permissions or
consents which are of a minor nature and which are
customarily granted in due course after application or the
denial of which would not materially adversely affect the
business, financial condition or operations of such Borrower
or FMPO, as applicable, such Borrower or FMPO, has all
franchises, licenses, certificates, authorizations,
approvals or consents from all national, state and local
governmental and regulatory authorities required to carry on
its business as now conducted and as proposed to be
conducted.

(d)  Enforceability.  This Agreement and each of
the other Loan Documents to which it is a party constitutes
a legal, valid and binding obligation of such Borrower or
FMPO, as applicable, enforceable in accordance with their
respective terms (subject, as to the enforcement of remedies
against such Borrower or FMPO, as applicable, to applicable
bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting creditors' rights against such
Borrower or FMPO, as applicable, generally in connection
with the bankruptcy, reorganization or insolvency of such
Borrower or FMPO, as applicable, or a moratorium or similar
event relating to such Borrower or FMPO, as applicable).

(e)  Financial Statements.  FMPOC or FMPO, as
applicable, has heretofore furnished to each of the Lenders
an audited consolidated balance sheet and statement of
operations and changes in retained earnings and cash flow as
of and for the fiscal year ended December 31, 1996, and an
unaudited consolidated balance sheet and statement of
operations and cash flow as of and for the fiscal quarter
ended September 30, 1997.  All such balance sheets and
statements of operations and cash flow present fairly the
financial condition and results of operations of FMPOC or
FMPO, as applicable, and their respective Subsidiaries as of
the dates and for the periods indicated.  Such financial
statements and the notes thereto disclose all material
liabilities, direct or contingent, of FMPOC or FMPO, as
applicable, and their respective Subsidiaries as of the
dates thereof which are required to be disclosed in the
footnotes to financial statements prepared in accordance
with GAAP.  The financial statements referred to in this
Section 3.01(e) have been prepared in accordance with GAAP.
There has been no material adverse change since
September 30, 1997, in the businesses, assets, operations,
prospects or condition, financial or otherwise, of such
Borrower or FMPO, as applicable, and their respective
Subsidiaries taken as a whole.

(f)  Litigation; Compliance with Laws; etc.
(i)  Except as disclosed in the FMPO Annual Report on
Form 10-K for the fiscal year ended December 31, 1996, and
any subsequent filings made by FMPO pursuant to the periodic
reporting requirements of the SEC, there are no actions,
suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of
such Borrower or FMPO, as applicable, threatened against or
affecting such Borrower or FMPO, as applicable, or any of
their respective Subsidiaries or the businesses, assets or
rights of such Borrower or FMPO, as applicable, or any of
their respective Subsidiaries (x) which involve this
Agreement or any of the other Loan Documents or any of the
transactions contemplated hereby or thereby or (y) 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 such Borrower or FMPO, as applicable, to conduct
its business substantially as now conducted, or materially
and adversely affect the businesses, assets, operations,
prospects or condition, financial or otherwise, of such
Borrower or FMPO, as applicable, or impair the validity or
enforceability of, or the ability of such Borrower or FMPO,
as applicable, to perform its obligations under, this
Agreement or any of the other Loan Documents to which it is
a party.

(ii)  Neither such Borrower or FMPO, as
applicable, nor any of their respective Subsidiaries is in
violation of any Governmental Rule, or in default with
respect to any judgment, writ, injunction, decree, rule or
regulation of any Governmental Authority, where such
violation or default could result in a Material Adverse
Effect.  Without limitation of the foregoing, such Borrower
and FMPO, and each of their respective Subsidiaries have
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 such Borrower or FMPO or their respective
Subsidiaries.  Neither such Borrower or FMPO nor any of
their respective Subsidiaries has received notice of any
material failure so to comply.  Such Borrower's and FMPO's,
and their respective 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 such Borrower or FMPO.  Such
Borrower and FMPO 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 such Borrower, FMPO or any
of their respective Subsidiaries.

(g)  Title, etc.  Such Borrower or FMPO, as
applicable, and their respective Subsidiaries have good and
valid title to their respective material properties, assets
and revenues (exclusive of oil, gas and other mineral
properties on which no development or production activities
are being conducted and commercially exploitable reserves
have not been discovered), in the case of such Borrower and
the Restricted Entities, free and clear of all Liens except
such Liens as are permitted by Section 5.02(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 such Borrower or Restricted Entity 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 such Borrower or FMPO, as applicable, nor any
of their respective Subsidiaries is engaged principally, or
as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying
Margin Stock.

(ii)  No part of the proceeds of the Loans or any
Letter of Credit will be used, whether directly or
indirectly, and whether immediately, 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)  Such Borrower will use the proceeds of all
Loans made to it and request the issuance of Letters of
Credit for the funding of capital expenditures, working
capital and general corporate purposes.

(i)  Taxes.  Such Borrower or FMPO, as applicable,
and their respective Subsidiaries have filed or caused to be
filed all material Federal, state, local and foreign tax
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 such Borrower or FMPO, as applicable, or
any Subsidiary thereof is contesting in good faith by
appropriate proceedings, and with respect to which such
Borrower or FMPO, as applicable, or any Subsidiary thereof
shall, to the extent required by GAAP, have set aside on its
books adequate reserves.

(j)  Employee Benefit Plans.  Each of such
Borrower or FMPO, as applicable, and their respective 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 such Borrower or FMPO, as
applicable, and their respective 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)  Investment Company Act.  Neither such
Borrower or FMPO, as applicable, nor any of their respective
Subsidiaries is an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of
1940, as amended from time to time.

(1)  Public Utility Holding Company Act.  Neither
such Borrower or FMPO, as applicable, nor any of their
respective Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", 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 from
time to time.

(m)  Subsidiaries.  Schedule III constitutes a
complete and correct list, as of the Effective Date or the
date of any update thereof required by Section 5.01(a)(5),
of all Restricted Entities of the Borrowers with at least
$1,000,000 in total assets, indicating the jurisdiction of
incorporation or organization of each corporation or
partnership and the percentage of shares or units owned on
such date directly or indirectly by the Borrowers in each. 
Each entity shown as a parent company owns on such date,
free and clear of all Liens, the percentage of voting shares
or partnership interests outstanding of its Restricted
Entities shown on Schedule III, and all such shares or
partnership interests are validly issued and fully paid.

(n)  Environmental Matters.  (1)  The Properties
of such Borrower or FMPO, as applicable, and their
respective Subsidiaries and all operations of such Borrower
or FMPO, as applicable, and their respective 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,
and are not the subject of any pending or threatened
challenge by any Governmental Authority or Person, except to
the extent that such noncompliance, challenge 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 its Properties or
otherwise in connection with the operations of such Borrower
or FMPO, as applicable, or their respective Subsidiaries,
which Releases or threatened Releases, in the aggregate,
could reasonably be expected to result in a Material Adverse
Effect.

(3)  Neither such Borrower or FMPO, as applicable,
nor any of their respective Subsidiaries has received any
notice of an Environmental Claim in connection with its
Properties or the operations of such Borrower or FMPO, as
applicable, or their respective Subsidiaries or with regard
to any Person whose liabilities for environmental matters
such Borrower or FMPO, as applicable, or their respective
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 does such Borrower or FMPO, as
applicable, or their respective 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 of such Borrower or FMPO, as applicable,
or their respective Subsidiaries, nor have Hazardous
Materials been generated, treated, stored or disposed of at,
on or under any of such Properties in a manner that could
give rise to liability under any Environmental Law, nor has
such Borrower or FMPO, as applicable, nor any of their
respective 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.

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

(ii) Such Borrower and its Subsidiaries will not
have unreasonably small capital to carry out their
businesses as conducted or as proposed to be conducted.

(iii) Such Borrower, on a consolidated basis, does
not intend to, and does not believe that it will, incur Debt
and other obligations beyond its ability to pay such Debt
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 Debt and
obligations).

(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 such Borrower or FMPO, as
applicable, to the Administrative Agent or any Lender or
Issuing 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, taken as a whole in the light of the
circumstances under which they were made, not misleading.

ARTICLE IV

Conditions to Initial Credit Event

Subject to satisfaction of the conditions to each
Credit Event required by Section 6.01, the Borrowers may not
borrow Loans hereunder until the first date upon which the
following conditions have been satisfied:

(a)  The Administrative Agent (or its counsel)
shall have received from each party hereto and to the FTX
Guarantee Agreement and the FMPO Guarantee Agreement either
(i) a counterpart of this Agreement or such Guarantee
Agreements, as applicable, signed on behalf of such party or
(ii) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed
signature of this Agreement or such Guarantee Agreements, as
applicable) that such party has signed a counterpart to this
Agreement or such Guarantee Agreements, as applicable.

(b)  The Administrative Agent shall have received,
on behalf of itself and the Lenders, a favorable written
opinion (addressed to the Administrative Agent and the
Lenders and dated the Effective Date) of each of (i) the
General Counsel of the Borrowers, substantially to the
effect set forth in Exhibit D, (ii) Jones, Walker,
Poitevent, Carrere & Denegre, L.L.P., counsel for the
Borrowers, FTX and FMPO, substantially to the effect set
forth in Exhibit E, (iii) Texas counsel for Circle C,
ssubstantially to the effect set forth in Exhibit F, and
(iv) Neww York counsel, substantially to the effect set forth
in Exhibit G, and, in the case of each such opinion required
by this paragraph, covering such other matters relating to
the Loan Documents and the transactions contemplated thereby
as the Administrative Agent shall reasonably request, and
the Borrowers hereby instruct such counsel to deliver such
opinions.
(c)  All legal matters incident to this Agreement,
the Guarantee Agreements, the Borrowings and extensions of
credit hereunder or the other Loan Documents shall be
satisfactory to the Lenders, the Issuing Banks and to
Cravath, Swaine & Moore, special counsel for the Agents.
(d)  The Administrative Agent shall have received
(i) a copy of the Certificate of Incorporation, including
all amendments thereto, of each of Circle C and the
Guarantors, certified as of a recent date by the Secretary
of State of the state of its organization, and a certificate
from such Secretary of State as to the good standing of each
of Circle C and the Guarantors as of a recent date and the
filing of all franchise tax returns and the payment of all
franchise taxes rrequired by law to be filed and paid by each
of Circle C and the Guarantors to the date of such
certificate; (ii) a certificate of the Secretary or
Assistant Secretary of each of Circle C and the Guarantors
dated the Effective Date and certifying (A) that attached
thereto is a true and complete copy of the By-laws of
Circle C or such Guarantor, as applicable, as in effect on
the Effective Date and at all times since a date prior to
the date of the resolutions described in clause (B) below,
(B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of
Circle C or such Guarantor, as applicable, authorizing the
execution, delivery and performance of the Loan Documents to
which Circle C or such Guarantor, as applicable (and, in the
case of FMPO, also in its capacity as a Restricted Entity),
is a party and, in the case of Circle C, the Borrowings
hereunder and the Letters of Credit issued hereunder, and
that such resolutions have not been modified, rescinded or
amended and are in full force and effect, (C) that the
Certificate of Incorporation and By-laws of Circle C or such
Guarantor, as applicable, have not been amended since the
date of the last amendment thereto shown on the certificate
of good standing furnished pursuant to clause (i) above or
the date of the certificate furnished pursuant to clause
(ii) above, as applicable, and (D) as to the incumbency and
specimen signature of each officer executing any Loan
Document or any other document delivered in connection
herewith on behalf of  Circle C or such Guarantor, as
applicable (and, in the case of FMPO, also in its capacity
as a Restricted Entity); (iii) a certificate of another
officer of each of Circle C and the Guarantors (and, in the
case of FMPO, also in its capacity as a Restricted Entity)
as to the incumbency and specimen signature of the
applicable Secretary or Assistant Secretary executing the
certificate pursuant to clause (ii) above; (iv) a
certificate of the Secretary or an Assistant Secretary of
FMPOC (or, if there shall be no such officer appointed, of
FMPO as managing general partner of FMPOC), dated the
Effective Date and certifying (A) that attached thereto are
true and complete copies of the Agreement of General
Partnership and all other constitutive documents, if any, of
FMPOC as in effect on the date of such certificate and at 
all times since the resolution of FMPOC described in
item (B) below, (B) that attached thereto is a true and
complete copy of a resolution or similar authorization
adopted by FMPO, as managing general partner of FMPOC,
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
FMPOC and the Borrowings hereunder by FMPOC and the Letters
of Credit issued hereunder on behalf of FMPOC, 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 FMPOC the foregoing documents and any other
document delivered or to be delivered in connection herewith
or therewith; (v) a certificate of another officer of FMPOC
(or, if there shall be no such officer appointed, of FMPO as
managing general partner of FMPOC) as to the incumbency and
signature of such Secretary or Assistant Secretary; and
(vi) such other documents as the Lenders or Cravath, Swaine
& Moore, special counsel for the Agents, may reasonably
request.

(e)  The Administrative Agent shall have received
a certificate from each of the Borrowers and the Guarantors
dated the Effective Date and signed by a Financial Officer
of each such Borrower or Guarantor, as applicable,
confirming compliance with the conditions precedent set
forth in paragraphs (i) and (iii) of Section 6.01.

(f)  The Administrative Agent shall have received
all fees and other amounts due and payable on or prior to
the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrowers or the
Guarantors hereunder or under any other Loan Document.
(g)  After giving effect to the transactions
contemplated hereby, the Borrowers and the Restricted
Entities shall have outstanding no Debt or preferred stock
other than (i) the Loans and other extensions of credit
under this Agreement and (ii) the Debt permitted under
Section 5.02(e); provided, however, that such Debt that
shall remain outstanding after the Effective Date pursuant
to the terms of Section 5.02(e) shall be satisfactory in all
respects to the Lenders (including, but not limited to,
terms and conditions relating to the interest rates, fees,
amortization, maturity, subordination, covenants, events of
default and remedies).

(h)  The Lenders and the Issuing Banks shall be
satisfied that the consummation of the transactions
contemplated by this Agreement will not (i) violate any
applicable law, statute, rule or regulation (including, but
not limited to, ERISA, margin regulations and Environmental
Laws) or (ii) conflict with, or result in a default or event
of default under (x) any indenture relating to any existing
indebtedness of any of the Borrowers, Restricted Entities or
Guarantors that is not being repaid, repurchased or redeemed
in full on or prior to the Effective Date in connection with
the Merger or (y) any other material agreement of a
Borrower, Restricted Entity or Guarantor, and the
Administrative Agent shall have received one or more legal
opinions to such effect satisfactory to the Administrative
Agent, from counsel to the Borrowers and the Guarantors
satisfactory to the Administrative Agent.

(i)  The Borrowers, Restricted Entities and
Guarantors shall have in place insurance with reputable
insurance companies or associations (or, to the extent
consistent with prudent business practice, through its own
program of self-insurance) in such amounts and covering such
risks as is usually carried by companies in similar
businesses and owning similar Properties in the same general
areas in which such Borrower, Restricted Entity or Guarantor
operates.

(j)  The Lenders and the Issuing Banks shall have
received a copy, in a form satisfactory to the
Administrative Agent, of the IGL Credit Facility.

ARTICLE V

Covenants

SECTION 5.01.  Affirmative Covenants of the
Borrowers and FMPO.  Each of the Borrowers and FMPO
covenants and agrees with each Lender and Issuing Bank and
Agent that, from and after the Effective Date and so long as
this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and
interest on each Loan, all Fees and all other expenses or
amounts payable under any Loan Document shall have been paid
in full and all Letters of Credit have been canceled or have
expired and all amounts drawn thereunder have been
reimbursed in full, unless the Required Lenders otherwise
provide prior written consent:

(a)  Financial Statements, etc.  With respect to
the Borrowers and FMPO, each such Person, as applicable,
shall furnish each Lender and Issuing Bank:

(1) within 95 days after the end of each fiscal
year of FMPO, a consolidated balance sheet of FMPO and
its Subsidiaries as at the close of such fiscal year
and consolidated statements of operation and changes in
retained earnings and cash flow of FMPO and its
Subsidiaries for such year, with the opinion thereon of
Arthur Andersen LLP or other independent public
accountants of national standing selected by FMPO to
the effect that such consolidated financial statements
fairly present FMPO's financial condition and results
of operations on a consolidated basis in accordance
with GAAP consistently applied, except as disclosed in
such auditor's report;

(2) within 50 days after the end of each of the
first three quarters of each of FMPO's fiscal years, a
consolidated balance sheet of FMPO and FMPO's
Subsidiaries as at the end of such quarter and
consolidated statements of income of FMPO and FMPO's
Subsidiaries, for such quarter and for the period from
the beginning of the fiscal year to the end of such
quarter, certified by one of FMPO's Financial Officers
as fairly presenting FMPO's financial condition and
results of operations on a consolidated basis in
accordance with GAAP consistently applied, subject to
normal year-end audit adjustments;

(3) promptly after their becoming available,
(i) copies of all financial statements, reports and
proxy statements which it shall have sent to its
stockholders or unitholders, as applicable, generally,
(ii) copies of all registration statements (excluding
registration statements relating to employee benefit
plans) and regular and periodic reports, if any, which
it shall have filed with the SEC or any national
securities exchange and (iii) if requested by any
Lender or Issuing Bank, copies of each annual report
filed with any Governmental Authority pursuant to ERISA
with respect to each Plan of it or any of its
Subsidiaries;

(4) promptly upon the occurrence of any Default or
Event of Default, the occurrence of any default under
any other Loan Document, the commencement of any
proceeding regarding it or any of its Subsidiaries
under any Federal or state bankruptcy law, any other
development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect,
notice thereof, describing the same in reasonable
detail (copies of which notice shall be promptly
delivered by the Administrative Agent to each
Guarantor);

(5) promptly upon the occurrence of any
development that, in the judgment of either Borrower or
FMPO, 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 Borrowers or their respective ability to comply
with their respective obligations under the Loan
Documents, notice thereof, describing the same in
reasonable detail;

(6) 30 days prior to the commencement of each
fiscal year of FMPO, a consolidated operating budget of
FMPO (including the operating budgets of the Borrowers)
for such fiscal year;

(7) at the time of provision of the financial
statements referred to in clauses (1) and (2) above, an
update of Schedule III to correct, add or delete any
required information; and

(8) from time to time, such further information
regarding the business, affairs and financial condition
of it or any Subsidiary thereof as any Lender may
reasonably request.

At the time a Borrower or FMPO furnishes financial
statements pursuant to the foregoing clauses (1) and (2), it
also will furnish each Lender and Issuing Bank a certificate
signed by its Treasurer or any other authorized Financial
Officer certifying that no Default or Event of Default has
occurred, or if such a Default or Event of Default has
occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect
thereto.

(b)  Obligations, Taxes and Claims.  Such Borrower
or FMPO, as applicable, shall, and shall cause each of its
Subsidiaries to, pay its material obligations promptly and
pay and discharge promptly when due all taxes, assessments
and governmental charges or levies imposed upon it or upon
its income or profits, or upon any property belonging to it,
prior to the date on which material penalties attach
thereto, as well as all lawful claims for labor, materials
and supplies or otherwise that, with respect to any of the
foregoing, if unpaid, could reasonably be expected to give
rise to a Lien upon such properties or any part thereof
which is not permitted by Section 5.02(d); provided that
neither such Borrower or FMPO nor any Subsidiary thereof
shall be required to pay or discharge any such obligation,
tax, assessment, charge, levy or claim, the payment of which
is being contested in good faith by proper proceedings and
with respect to which such Borrower or FMPO, or such
Subsidiary thereof, shall have, to the extent required by
GAAP, set aside on its books adequate reserves and such
contest operates to suspend collection of the contested
obligation, tax, assessment or charge and enforcement of
such Lien and, in the case of a mortgaged property, there is
no risk of forfeiture of such property.

(c)  Maintenance of Existence; Conduct of
Business.  Such Borrower shall, and shall cause its
Restricted Subsidiaries to, or FMPO shall, as applicable,
preserve and maintain its corporate existence and all its
rights, privileges and franchises necessary or desirable in
the normal conduct of its business; provided that nothing
herein shall prevent any transaction permitted by
Section 5.02(c).

(d)  Compliance with Applicable Laws.  Such
Borrower or FMPO, as applicable, shall, and shall cause each
of its Subsidiaries 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 its consolidated financial condition or
business, except where contested in good faith and by proper
proceedings and with respect to which such Borrower or FMPO,
or such Subsidiary thereof, shall have, to the extent
required by GAAP, set aside on its books adequate reserves.

(e)  Litigation.  Such Borrower shall, and shall
cause its Restricted Subsidiaries to, or FMPO shall, as
applicable, promptly give to each Lender and Issuing Bank
notice in writing of all litigation and all proceedings
before any Governmental Authority or arbitration authorities
affecting it or any Subsidiary thereof, except those which,
if adversely determined, do not relate to the Loan Documents
and which would not have a Material Adverse Effect on its
business, assets, operations or financial condition or its
ability to comply with its obligations under the Loan
Documents.

(f)  ERISA.  Such Borrower shall, and shall cause
each of its ERISA Affiliates to, or FMPO shall, and shall
cause each of its ERISA Affiliates to, as applicable, 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 it or any ERISA Affiliate thereof
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 it in
an aggregate amount exceeding $25,000,000 or requires
payment exceeding $10,000,000 in any year, a statement of a
Financial Officer thereof setting forth details as to such
ERISA Event and the action that it proposes to take with
respect thereto.

(g)  Compliance with Environmental Laws.  Such
Borrower shall, and shall cause its Restricted Subsidiaries
and all lessees and other Persons occupying its Properties
to, or FMPO shall, and shall cause all lessees and other
Persons occupying its Properties to, as applicable, 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 such Borrower nor the
Restricted Entities 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 in accordance with GAAP.

(h)  Preparation of Environmental Reports.  If a
default caused by reason of a breach of Section 3.01(n) or
5.01(g) shall have occurred and be continuing, at the
request of the Required Lenders through the Administrative
Agent, such Borrower or FMPO, as applicable, shall provide
to the Lenders within 45 days after such request, at the
expense of such Borrower or FMPO, as applicable, 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.

(i)  Insurance.  Such Borrower shall, and shall
cause its Restricted Subsidiaries to, or FMPO shall, as
applicable, (i) keep its insurable Properties adequately
insured at all times; (ii) maintain such other insurance, to
such extent and against such risks, including fire, flood
and other risks insured against by extended coverage, as is
customary with companies 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.

(j)  Access to Premises and Records.  Such
Borrower or FMPO, as applicable, shall, and shall cause each
of its Subsidiaries to, maintain financial records in
accordance with GAAP, and, at all reasonable times and as
often as any Lender or Issuing Bank may reasonably request,
permit representatives of any Lender to have access to its
financial records and its premises and to the records and
premises of any of its Subsidiaries and to make such
excerpts from and copies of such records as such
representatives deem necessary and to discuss its affairs,
finances and accounts with its officers and its independent
certified public accountants or other parties preparing
consolidated or consolidating statements for it or on its
behalf.

(k)  Maintenance of Property.  Such Borrower
shall, and shall cause each of its Restricted Subsidiaries
to, or FMPO shall, as applicable, keep and maintain all
property material to the conduct of its business, taken as a
whole, in good working order and condition, ordinary wear
and tear excepted.

(l)  Further Assurances.  Such Borrower shall, and
shall cause the Restricted Subsidiaries to, and FMPO shall
execute any and all further documents, financing statements,
agreements and instruments, and take all further actions,
which may be required under applicable law, or which the
Required Lenders, the Administrative Agent or the
Documentary Agent may reasonably request, in order to
effectuate the transactions contemplated by this Agreement
and the other Loan Documents.

SECTION 5.02.  Negative Covenants of the Borrowers
and FMPO.  Each of the Borrowers and FMPO covenants and
agrees with each Lender, Issuing Bank and Agent that, from
and after the Effective Date and so long as this Agreement
shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any
Loan Document have been paid in full, and all Letters of
Credit have been canceled or have expired and all amounts
drawn thereunder have been reimbursed in full, without the
prior written consent of the Required Lenders:

(a)  Conflicting Agreements.  Such Borrower shall
not, and shall cause its Restricted Subsidiaries not to, or
FMPO shall not, as applicable, enter into any agreement with
any Person 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 payment of dividends or other
distributions by such Borrower or any of its Restricted
Subsidiaries, as applicable.

(b)  Hedge Transactions.  Such Borrower shall, and
shall cause its Restricted Subsidiaries to, or FMPO shall,
as applicable, enter into or become obligated with respect
to Hedge Agreements only in the ordinary course of business
to hedge or protect against actual or reasonably anticipated
exposures and not for speculation.

(c)  Consolidation or Merger; Disposition of
Assets and Capital Stock.  Such Borrower shall not, and
shall cause its Restricted Subsidiaries not to, or FMPO
shall not, as applicable, merge, acquire or consolidate with
any other Person or permit any other Person to merge into or
consolidate with it, unless (i) either Borrower or any
Restricted Entity shall be the continuing entity, or the
successor entity (if other than either Borrower or any
Restricted Entity) formed by or resulting from such merger,
acquisition or consolidation is organized under the laws of
any jurisdiction in the United States and assumes such
Person's obligations under this Agreement and
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
provided, however, that notwithstanding the above or any
other provision of this Agreement to the contrary, FMPO may
sell, transfer or otherwise dispose of, or give options to
purchase, all the stock and/or assets of Circle C, provided
that contemporaneously with any such sale, transfer or other
disposition, each of the Circle C Revolving Credit
Commitments and the Term Loan Commitment are terminated and
the principal of and interest on each of the Revolving Loans
made to Circle C and the Term Loan, and all Fees and other
expenses or amounts payable relating to such Revolving Loans
and the Term Loan, have been paid in full by Circle C and
all Circle C Letters of Credit have been canceled, have
expired or have otherwise been cash collateralized in full
and all L/C Disbursements under a Circle C Letter of Credit,
together with any interest accrued thereon, have been repaid
in full by Circle C pursuant hereto; and provided further
that FMPO shall not, under any circumstances during the term
of this Agreement, sell, transfer or dispose of all or
substantially all of the partnership interests or assets of
FMPOC.  Upon any sale, transfer or other disposition of the
stock and/or assets of Circle C, Circle C shall be fully
released from all of its rights and obligations hereunder
(other than any obligations arising under Section 2.17,
10.02 or 10.04) and under any other Loan Documents.

(d)  Liens.  Such Borrower shall not, and shall
cause its Restricted Subsidiaries not to, or FMPO shall not,
as applicable, create, incur, assume or suffer to exist any
Lien upon any of its Properties or assets (including stock
or other securities of any Person, including any Subsidiary)
that is pari passu with or senior to the Liens granted to
the Guarantors under the Guarantee Agreements, except for:

(i) materialmen's, suppliers', tax and other
similar Liens arising in the ordinary course of the
business of such Borrower, such Restricted Subsidiary
or FMPO, securing obligations which are not overdue or
are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been
set aside on such Person's books to the extent required
by GAAP;

(ii) Liens arising in connection with worker's
compensation, unemployment insurance and progress
payments under government contracts;

(iii) other Liens incident to the ordinary conduct
of the business of such Borrower, such Restricted
Subsidiary or FMPO or the ordinary operation of such
Person's properties or assets and not incurred in
connection with the obtaining of any Debt and which do
not in the aggregate materially detract from the value
of such Person's assets or materially impair the use
thereof in the operation of such Person's business;

(iv) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar
encumbrances incurred in the ordinary 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 such Borrower, such
Restricted Subsidiary or FMPO;

(v) Liens of lessors of property (in such
capacity) leased by such Borrower, such Restricted
Subsidiary or FMPO which Liens are limited to the
property leased thereunder;

(vi) Liens existing on the Effective Date and set
forth on Schedule IV;

(vii) Liens upon such Borrower's, such Restricted
Entity's or FMPO's interest in any investment included
in the Investment Basket pursuant to Section 5.03(b) or
securing Debt included in the Debt Basket pursuant to
Section 5.03(c);

(viii) Liens upon cash securing any payment
obligations or contingent reimbursement obligations of
such Borrower, such Restricted Subsidiary or FMPO to
the extent that such obligations are permitted under
this Agreement; and

(ix) any extension, renewal or replacement of any
of the foregoing.

(e)  Debt.  Such Borrower shall not, and shall
cause its Restricted Subsidiaries not to, or FMPO shall not,
as applicable, incur, create, assume or permit to exist any
Debt except for:

(i) unsecured Debt (x) between the Borrowers,
(y) between any Restricted Entities and (z) between any
Borrower and any Restricted Entity;

(ii) Debt included in the Debt Basket pursuant to
Section 5.03(c);

(iii) in addition to the other Debt permitted by
this Section 5.02(e), Debt (including the aggregate
Loans outstanding under the Tranches) not in excess of
the aggregate amounts set forth in Section 2.07(c)(i)
as of the dates set forth therein;

(iv) Debt secured by Liens permitted under
Section 5.02(d)(vi), which Debt is set forth on
Schedule IV;

(v) the reimbursement obligations of such Borrower
or Restricted Entity to the Guarantors; and

(vi) the Loans.

(f)  Fiscal Year.  Such Borrower or FMPO, as
applicable, shall not change its fiscal year to end on any
date other than December 31.

(g)  Investments in Nonrestricted Subsidiaries and
Persons Not Subsidiaries.  Such Borrower shall not, and
shall cause its Restricted Subsidiaries not to, or FMPO
shall not, as applicable, (i) purchase, hold or acquire any
capital stock, evidences of Debt or other securities of,
(ii) make or permit to exist any loans or advances to or
(iii) make or permit to exist any investment or any other
interest in, any Person other than a Borrower or a
Restricted Entity (each such party, a "Third Party") except
for:

(A) investments, loans, advances, holdings and
contributions existing on the Effective Date;

(B) Permitted Investments;

(C) investments of cash or other assets included
in the Investment Basket pursuant to Section 5.03(b);

(D) promissory notes payable to a Borrower or
Restricted Entity representing the purchase price of assets
sold by such Borrower or Restricted Entity to the extent
such promissory notes are secured by the assets sold;
provided that such asset sales are made to Third Parties
pursuant to arm's-length transactions; and

(E) any transactions otherwise permitted under
Section 5.02(e).

(h)  Federal Reserve Regulations.  Such Borrower
shall not, and shall cause its Restricted Subsidiaries not
to, or FMPO shall not, as applicable, 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.  Such Borrower shall not, and shall cause its
Restricted Subsidiaries not to, or FMPO shall not, as
applicable, take any action at any time that would (A)
result in a violation of the substitution and withdrawal
requirements of said Regulations, in the event the same
should become applicable to this Agreement or any Loan or
(B) cause the representation and warranty contained in
Section 3.01(h) at any time to be other than true and
correct.

(i)  Equity Payments.  Such Borrower shall not,
and shall cause its Restricted Subsidiaries not to, or FMPO
shall not, as applicable, make an Equity Payment; provided,
however, that such Borrower or Restricted Entity may make an
Equity Payment to any other Borrower or Restricted Entity.

(j)  Scope of Borrower's Business.  Such Borrower
shall not, and shall cause its Restricted Subsidiaries not
to, or FMPO shall not, as applicable, engage in any material
manner in any business activities other than the Real Estate
Business.

(k)  Asset Sales.  Except in connection with a
transaction permitted under Section 5.02(c), such Borrower
shall not, and shall cause its Restricted Subsidiaries not
to, or FMPO shall not, as applicable, sell, lease, assign,
transfer or otherwise dispose of, or give options to
purchase, all or substantially all of the properties and
assets of the Borrowers and the Restricted Entities, taken
as a whole, to any Person in a single transaction or a
series of related transactions, unless, contemporaneously
with such sale, all the Commitments have been terminated and
the principal of and interest on each Loan, all fees and
other expenses or amounts payable under such Loan Documents
have been paid in full and all Letters of Credit have been
canceled or have expired and all amounts drawn thereunder
have been reimbursed in full.

SECTION 5.03.  Permitted Transactions.  (a)  Each
of the Borrowers and Restricted Entities may invest in Third
Parties and incur Debt in connection with such investments
on the terms set forth in this Section 5.03.  Any Borrower
may invest in any other Borrower or in any Restricted Entity
and incur Debt in connection with such investments without
limitation or restriction.  Any Restricted Entity may invest
in any Borrower or in any other Restricted Entity without
limitation or restriction.  Nonrestricted Subsidiaries and
other Affiliates of the Borrowers may invest in any Persons
and incur Debt in connection with such investments without
limitation or restriction.

(b)  Permitted Third Party Investments.  Each of
the Borrowers and Restricted Entities may make investments
of cash and other assets (valued at the book value disclosed
in the most recent Annual Report on Form 10-K filed by FMPO
with the SEC prior to the date of such investment) in Third
Parties; provided, however, that (i) such Third Party is
involved primarily in the Real Estate Business and (ii) the
aggregate amount of all such outstanding investments by all
the Borrowers and Restricted Entities pursuant to this
paragraph (b) at any time, when taken as a whole, shall not
exceed $10,000,000 (the "Investment Basket").

(c)  Permitted Third Party Debt.  Each of the
Borrowers and the Restricted Entities may incur, create,
assume or permit to exist any Debt (including Guarantees of
Debt of any Third Party and Capitalized Lease Obligations)
in connection with any investments in Third Parties
permitted by paragraph (b) above; provided, however, that
the aggregate amount of all such outstanding Debt incurred
by all the Borrowers and Restricted Entities pursuant to
this paragraph (c) at any time, when taken as a whole, shall
not exceed $10,000,000 (the "Debt Basket").

ARTICLE VI

Conditions to Credit Events

SECTION 6.01.  Conditions Precedent to Each Credit
Event.  Each Credit Event shall be subject to the following
conditions precedent:

(i) the representations and warranties on the part
of the relevant Borrower, FMPO, as a Restricted Entity,
and the Guarantors contained in the Loan Documents
shall be true and correct in all material respects at
and as of the date of such Credit Event as though made
on and as of such date;

(ii) the Administrative Agent shall have received a
notice of such Borrowing as required by Section 2.03;

(iii) no Event of Default shall have occurred and
be continuing on the date of such Credit Event or would
result after giving effect to such Credit Event;

(iv) the Loans to be made by the Lenders on such
date, and the use of the proceeds thereof and the
security arrangements contemplated hereby shall not
result in a violation of Regulations G, U or X, as in
effect on the date of such Borrowing.  If required by
Regulation U as a result of such use of proceeds, such
Borrower shall have delivered to the Lenders a
statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in Regulation U;

(v) there shall have been no amendments to the
Certificate of Incorporation, By-laws or Agreement of
General Partnership, as applicable, of the Borrowers or
Guarantors since the date of the Certificates furnished
by the Borrowers and Guarantors on the Effective Date,
other than amendments, if any, copies of which have
been furnished to the Administrative Agent; and

(vi) there shall be no proceeding for the
dissolution or liquidation of any of the Borrowers or
Guarantors or any proceeding to revoke the Certificate
of Incorporation or Agreement of General Partnership,
as applicable, of such Borrower or Guarantor or its
corporate existence, which is pending or, to the
knowledge of the Borrowers or Guarantors, threatened
against or affecting it.

SECTION 6.02.  Representations and Warranties with
Respect to Credit Events.  Each Credit Event shall be deemed
a representation and warranty by the relevant Borrower that
the conditions precedent to such Credit Event, unless
otherwise waived in accordance herewith, shall have been
satisfied.

ARTICLE VII

Events of Default

SECTION 7.01.  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 of any principal of any Loan;

(b) default for five or more days in the payment
when due of any interest on any Loan, or of any other
amount payable under the Loan Documents;

(c) any representation or warranty made or deemed
made in or in connection with any Loan Document or in
any certificate, letter or other writing or instrument
furnished or delivered to the Lenders or the Agents
pursuant to any Loan Document shall prove to have been
incorrect in any material respect when made or effec-
tive or reaffirmed and repeated, as the case may be;

(d) default by a Borrower or FMPO in the due
observance or performance of any covenant, condition or
agreement in Section 5.01(a)(4) (with respect to
notices of Defaults or Events of Default) or in
Section 5.01(c) or (l), other than the covenant to
preserve and maintain all of such Borrower's or FMPO's,
as applicable, rights, privileges and franchises
desirable in the normal conduct of its business;

(e) default by a Borrower or FMPO in the due
observance or performance of any covenant, condition or
agreement in Section 5.02 (other than Section 5.02(f));

(f) default by a Borrower or any Restricted Entity
in the due observance or performance of any other
covenant, condition or agreement in the Loan Documents
which shall remain unremedied for 30 days after written
notice thereof shall have been given to such Borrower
or Restricted Entity, as applicable, by the
Administrative Agent or any Lender;

(g) upon the consummation of the Merger and the
assumption by IGL, as successor by merger to FTX, of
all FTX's rights and obligations as a Guarantor
hereunder and under the FTX Guarantee Agreement, the
execution of the IGL Guarantee Agreement and the
satisfaction of the conditions precedent set forth in
the IGL Credit Agreement, default by IGL in the due
observance or performance of any covenant, condition or
agreement in the IGL Guarantee Agreement;

(h) either a Borrower, Restricted Entity or
Guarantor 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 (i) below, (iii) apply
for or consent to the appointment of a receiver,
trustee, custodian, sequestrator or similar official
for such Borrower, Restricted Entity or Guarantor 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;

(i) 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
a Borrower, Restricted Entity or Guarantor, or of a
substantial part of the property or assets of a
Borrower, Restricted Entity or Guarantor, 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 a Borrower,
Restricted Entity or Guarantor or for a substantial
part of the property of such Borrower, Restricted
Entity or Guarantor or (iii) the winding-up or
liquidation of a Borrower, Restricted Entity or
Guarantor; 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;

(j) default shall be made with respect to
(i) Hedge Agreements or (ii) any Debt of a Borrower or
a Restricted Entity if the effect of any such default
shall be to permit the holder or obligee of any such
obligations or Debt (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
Debt and/or the payment of any net termination value in
respect of Hedge Agreements, as applicable, in an
aggregate amount in excess of $5,000,000; or any
payment, regardless of amount, of (A) net termination
value on any such obligation in respect of Hedge
Agreements and/or (B) any Debt of a Borrower or
Restricted Entity, as applicable, in an aggregate
principal amount (or in the case of a Hedge Agreement,
net termination value) in excess of $5,000,000, 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 Debt or other obligation);

(k) upon the consummation of the Merger and the
assumption by IGL, as successor by merger to FTX, of
all FTX's rights and obligations as a Guarantor
hereunder and under the FTX Guarantee Agreement, the
execution of the IGL Guarantee Agreement and the
satisfaction of the conditions precedent set forth in
the IGL Guarantee Agreement, default shall be made with
respect to any Debt of IGL if the effect of any such
default shall be to accelerate the maturity of such
Debt in an aggregate principal amount in excess of
$100,000,000;

(l) an ERISA Event shall have occurred with
respect to any Plan or Multiemployer Plan that, when
taken together with all other ERISA Events, reasonably
could be expected to result in liability of a Borrower
or Restricted Entity and any ERISA Affiliate thereof in
an aggregate amount exceeding $5,000,000 or requires
payments exceeding $5,000,000 in any year;

(m) one or more judgments for the payment of money
in an aggregate amount in excess of $5,000,000 shall be
rendered by a court or other tribunal against a
Borrower or Restricted Entity and shall remain
undischarged for a period of 45 consecutive days during
which execution of such judgment shall not have been
effectively stayed; or any action shall be legally
taken by a judgment creditor to levy upon assets or
Properties of such Borrower or Restricted Entity to
enforce any such judgment; or

(n) there shall have occurred a Change in Control;
then, and in any such event (other than an event with
respect to a Borrower, Restricted Entity or Guarantor
described in clause (h) or (i) above), and at any time
thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required
Lenders shall, by written, telecopied, telex or telegraphic
notice to the Borrowers, Restricted Entities and Guarantors,
take one or more of the following actions at the same or
different times:  (i) declare the Commitments under the
Tranches to be terminated, whereupon such Commitments shall
forthwith terminate or (ii) declare the Loans and all other
sums then owing by the Borrowers under the Loan Documents to
be forthwith due and payable, whereupon all the principal of
the Loans so declared to be due and payable, together with
accrued interest thereon and any unpaid accrued Fees and all
other liabilities of the Borrowers accrued hereunder and
under any other Loan Document, 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 Borrowers, anything contained herein
to the contrary notwithstanding; provided, however, that
upon the occurrence of any event described in clause (h) or
(i) of this Section 7.01 as to which a Borrower or Guarantor
is the entity involved, the Commitments will forthwith
terminate and all sums then owing by the Borrowers to the
Lenders on the Loans or otherwise hereunder shall, without
any declaration or other action by any Lender, Issuing
Lender or Agent hereunder, be immediately due and payable
and the Commitments under the Tranches shall be immediately
terminated without presentment, demand, protest or other
notice of any kind, all of which are expressly waived by the
Borrowers, anything contained herein or in any other Loan
Document to the contrary notwithstanding; and provided
further that upon the consummation of the Merger and the
assumption by IGL, as successor by merger to FTX, of all
FTX's rights and obligations as a Guarantor hereunder and
under the FTX Guarantee Agreement, the execution of the IGL
Guarantee Agreement and the satisfaction of the conditions
precedent set forth in the IGL Guarantee Agreement, the IGL
Guarantee Agreement shall be deemed to amend and restate the
FTX Guarantee Agreement in its entirety and, with respect to
any Events of Default applicable to IGL hereunder, the
amendment or waiver of the same event of default or the
related cure rights or periods by the lenders under the IGL
Credit Facility shall be deemed to constitute on amendment
or waiver of the corresponding Event of Default or cure
right or period hereunder.  Promptly following the making of
any such declaration described above, the Administrative
Agent shall give prompt notice thereof to the Borrowers and
Guarantors but failure to do so shall not impair the effect
of such declaration.  Upon the occurrence of any Event of
Default, any security interests of the Guarantors in respect
of the Properties or assets of the Borrowers shall be
subordinated to the interests of the Lenders hereunder and
in the other Loan Documents.

ARTICLE VIII

Guarantees

All the rights and obligations of each of the
Guarantors in connection with the transactions contemplated
by this Agreement shall be set forth in the applicable
Guarantee Agreement, as shall be in effect from time to
time.

ARTICLE IX

The Agents

(a)  For convenience of administration and to
expedite the transactions contemplated by this Agreement,
Chase is hereby appointed as Administrative Agent and
Documentary Agent for the Lenders under this Agreement. 
Neither of the Agents shall have any duties or
responsibilities with respect hereto except those expressly
set forth herein or in the other Loan Documents.  Each
Lender and Issuing Bank and its successors and permitted
assigns 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 Lenders and Issuing Banks,
without hereby limiting any implied authority, (a) to
receive on behalf of the Lenders and Issuing Banks all
payments of principal of and interest on the Loans and all
other amounts due to the Lenders and Issuing Banks
hereunder, and promptly to distribute to each Lender and
Issuing Bank its proper share of each payment so received;
(b) to give notice on behalf of the Lenders and Issuing
Banks to the Borrowers of any Event of Default specified in
this Agreement of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder
or as directed by the Required Lenders; and (c) to
distribute to each Lender and Issuing Bank copies of all
notices, financial statements and other materials delivered
by the Borrowers pursuant to this Agreement as received by
the Administrative Agent.

(b)  Neither 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 Borrowers 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 Lenders or the Issuing Banks for the due execution,
genuineness, validity, enforceability or effectiveness of
this Agreement or any other Loan Documents or other
instruments or agreements.  The Agents shall in all cases be
fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required
Lenders and, except as otherwise specifically provided
herein, such instructions and any action or inaction
pursuant thereto shall be binding on each Lender and its
successors or permitted assigns.  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.  Neither of the Agents nor any
of their respective directors, officers, employees or agents
shall have any responsibility to the Borrowers or any other
party on account of the failure of or delay in performance
or breach by any Lender or Issuing Bank of any of its
obligations hereunder or to any Lender or Issuing Bank on
account of the failure of or delay in performance or breach
by any other Lender or Issuing Bank or the Borrowers 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.  Each of the Lenders and Issuing 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 Lenders.

(c)  To the extent that any Agent shall not be
reimbursed by the Borrowers for any costs, liabilities or
expenses incurred in such capacity, each Lender agrees (i)
to reimburse the Agents, on demand (in the amount of its
Applicable Percentage hereunder) of any expenses incurred
for the benefit of the Lenders by the Agents, including
counsel fees and compensation of agents and employees paid
for services rendered on behalf of the Lenders 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 Lender 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 or the Letters of Credit issued by it hereunder,
each Agent, in its individual capacity and not as Agent,
shall have the same rights and powers as any other Lender or
Issuing Bank, as applicable, 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 Borrowers
or any of their respective Subsidiaries 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 Lenders,
the Issuing Banks and the Borrowers.  Upon any such
resignation, the Required Lenders shall have the right to
appoint, and the Borrowers shall have the right to approve
(such approval not to be unreasonably withheld or delayed) a
successor Administrative Agent or Documentary Agent, as the
case may be.  If no successor Administrative Agent or
Documentary 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 Lenders and the Issuing Banks, appoint
a successor Administrative Agent or Documentary Agent, as
the case may be, which shall be a Lender 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 Lender. 
Upon the acceptance of any appointment as Administrative
Agent or Documentary Agent hereunder by a successor
Administrative Agent or Documentary Agent, as the case may
be, such successor Administrative Agent or Documentary 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 from and after such date be
discharged from its duties and obligations hereunder.  After
any such retiring Agent's resignation hereunder as
Administrative Agent or Documentary Agent, as applicable,
the provisions of this Article IX and Section 10.04 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 or Documentary Agent, as applicable.

(f)  The Administrative Agent and the Documentary
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. 

(g)  The obligations of the Administrative Agent
and the Documentary Agent shall be separate and several and
neither of them shall be responsible or liable for the acts
or omissions of the other, except, to the extent that any
such Agent serves in more than one agent capacity, such
Agent shall be responsible for the acts and omissions
relating to each such agency function.

(h)  Each Lender and Issuing Bank acknowledges
that it has, independently and without reliance upon the
Agents or any other Lender or Issuing Banks 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 Lender and Issuing Bank also acknowledges
that it will, independently and without reliance upon the
Agents or any other Lender or Issuing Banks 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 X

Miscellaneous

SECTION 10.01.  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 below:

(a) if to FMPOC, to it at:

1615 Poydras Street
New Orleans, LA 70112

Attention of:  John G. Amato
Telecopy No.:  (504) 582-1603;

(b) if to Circle C, to it at:

1615 Poydras Street
New Orleans, LA 70112

Attention of:  John G. Amato
Telecopy No.:  (504) 582-1603;

(c) if to FMPO, to it at:

1615 Poydras Street
New Orleans, LA 70112

Attention of:  John G. Amato
Telecopy No.:  (504) 582-1603;

(d) if to IGL, to it at:

2100 Sanders Road
Northbrook, IL 60062

Attention of:  Eric Martinez, Assistant 
Treasurer
Telecopy No.:  (847) 205-4930;

with a copy to:

Sidley & Austin
One First National Plaza
Chicago, IL 60603

Attention of:  Sara E. Bartlett
Telecopy No.:  (312) 853-7036

(e) if to the Administrative Agent or the
Documentary Agent to:

The Chase Manhattan Bank
Loan and Agency Services Group
One Chase Manhattan Plaza
8th Floor
New York, NY 10081

Attention of:  Laura Rebecca
Telecopy No.:  (212) 552-7490;

with a copy to:

The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017

Attention of:  James Ramage
Telecopy No.:  (212) 270-4724; and

(f) if to any Lender, to it at its address (or
telecopy number) set forth in its Administrative
Questionnaire.

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 10.01 or in accordance
with the latest unrevoked direction from such party.

SECTION 10.02.  Survival of Agreement.  All
covenants, agreements, representations and warranties made
by the Borrowers and FMPO, as a Restricted Entity, herein
and by each of the Guarantors in the applicable Guarantee
Agreement 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 Lenders, the Issuing Banks and the Agents
and shall survive the making by the Lenders of the Loans or
the issuing of Letters of Credit by the Issuing Banks
regardless of any investigation made by the Lenders or
Issuing Banks, as applicable, or on their behalf, and shall
continue in full force and effect as long as the principal
of or any accrued interest on any Loan, L/C Disbursement,
Fee or other fee or amount payable under the Loan Documents
(other than contingent indemnification obligations) is
outstanding and unpaid and so long as the Commitments and
the outstanding Letters of Credit issued hereunder have not
been terminated or have not expired.

SECTION 10.03.  Successors and Assigns;
Participation; Purchasing Lenders.  (a)  This Agreement
shall be binding upon and inure to the benefit of the
Borrowers, the Lenders, the Issuing Banks, the Agents and
their respective successors and assigns, except that neither
of the Borrowers may assign, delegate or transfer any of its
rights or obligations under this Agreement without the prior
written consent of each Lender and the other Borrower,
except in connection with the Merger.  Any Lender may at any
time pledge or assign all or any portion of its rights under
this Agreement to a Federal Reserve Bank to secure
extensions of credit by such Federal Reserve Bank to such
Lender; provided that no such pledge or assignment shall
release a Lender from any of its obligations hereunder or
substitute any such Federal Reserve Bank for such Lender as
a party hereto.

(b)  Any Lender 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 Lender, any Commitment of such
Lender or any other interest of such Lender hereunder;
provided, however, that any such participating interest
shall include a pro rata portion of each Tranche.  In the
event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under
this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely
responsible for the performance thereof and the Borrowers,
the Issuing Banks and the Agents shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement.  The
Borrowers agree that if amounts outstanding under this
Agreement 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 to the same
extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement;
provided that such right of setoff shall be subject to the
obligation of such Participant to share with the Lenders,
and the Lenders agree to share with such Participant, as
provided in Section 2.14.  The Borrowers also agree that
each Participant shall be entitled to the benefits of
Sections 2.10, 2.11, 2.12, 2.14, 2.16 and 10.05 with respect
to its participation in the Commitments and the Loans
outstanding from time to time as if it were a Lender;
provided that no Participant shall be entitled to receive
any greater payment pursuant to such Sections than the
transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by
such transferor Lender 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 or
changing or extending the Commitments.

(c)  Any Lender may, in accordance with applicable
law and subject to Section 10.03(h), at any time assign 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 its participation in
Letters of Credit) (I) to any Lender or any Affiliate
thereof, without the Borrowers' 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
Lender") with the consent of the Administrative Agent, the
Borrowers and the Guarantors (and in the case of an
assignment of all or a portion of a Revolving Credit
Commitment or any Lender's obligations in respect of the L/C
Exposure, the Issuing Banks), such consent not to be
unreasonably withheld (it being understood that the
Borrowers and Issuing Banks may withhold their respective
consents to a Purchasing Lender (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 Lender would not be entitled to claim as of such
date), pursuant to a Commitment Transfer Supplement in the
form of Exhibit B, executed by such Purchasing Lender and
such transferor Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an Affiliate thereof, by
the Borrowers and the Administrative Agent), and delivered
for its recording in the Register to the Administrative
Agent, together with the registration and processing fee
required by Section 10.03(e) and an Administrative
Questionnaire for the Purchasing Lender if it is not already
a Lender.  A proportionate interest in the Loans and
Commitments of each Tranche must be assigned.  Upon such
execution, delivery and recording (and, if required, consent
of the Borrowers 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 Lender thereunder shall (if not already a party
hereto) be a party hereto and have the rights and
obligations of a Lender hereunder with a Commitment as set
forth in such Commitment Transfer Supplement, and (y) the
transferor Lender 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 Lender's rights and obligations
under this Agreement, such transferor Lender 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 Lender (if not
already a party hereto) and the resulting adjustment of
Applicable Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement.

(d)  The Administrative Agent, acting solely for
this purpose as an agent of the Borrowers, 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 Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from
time to time and the names and addresses of the Issuing
Banks and the L/C Exposure of, and L/C Disbursements made
thereby owing to, each Issuing Bank.  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 a Lender or Issuing
Bank, as applicable, 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 Lender and a Purchasing
Lender (and, in the case of a Purchasing Lender that is not
then a Lender or an Affiliate thereof, by the Borrowers 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 Lenders,
the Issuing Banks and the Borrowers.

(f)  Subject to Section 10.15, the Borrowers
authorize each Lender and Issuing Bank to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and
any prospective Transferee any and all financial and other
information in such Lender's or Issuing Bank's, as
applicable, possession concerning the Borrowers and their
respective affiliates which has been delivered to such
Lender or Issuing Bank, as applicable, by or on behalf of
the Borrowers pursuant to this Agreement or which has been
delivered to such Lender or Issuing Bank, as applicable, by
or on behalf of the Borrowers in connection with such
Lender's or Issuing Bank's, as applicable, credit evaluation
of the Borrowers and their respective Affiliates prior to
becoming a party to this Agreement.

(g)  If, pursuant to this Section 10.03, any
interest in this Agreement 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
Lender 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 Lender or Transferee shall indemnify and
hold harmless the Borrowers and the Administrative Agent
from and against any tax, interest, penalty or other expense
that the Borrowers and the Administrative Agent may incur as
a consequence of any failure to withhold United States taxes
applicable 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 Lender thereunder and
the Purchasing Lender thereunder shall be deemed to confirm
to and agree with each other and the other parties hereto as
follows:  (i) such transferor Lender 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 Lender 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, the Guarantee Agreements, any other Loan
Document or any other instrument or document furnished
pursuant hereto, or the financial condition of the
Borrowers, the Guarantors or any of their respective
Subsidiaries or the performance or observance by the
Borrowers, the Guarantors or any of their respective
Subsidiaries of any of their respective obligations under
this Agreement, the Guarantee Agreements, any other Loan
Document or any other instrument or document furnished
pursuant hereto; (iii) such Purchasing Lender represents and
warrants that it is legally authorized to enter into such
Commitment Transfer Supplement; (iv) such Purchasing Lender
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 5.01, the
Guarantee Agreements 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 Lender will
independently and without reliance upon the Agents, such
transferor Lender or any other Lender 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 Lender 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 Lender 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 Lender.

SECTION 10.04.  Expenses of the Lenders;
Indemnity. (a)  The Borrowers agree, on a joint and several
basis, to pay all reasonable out-of-pocket expenses
reasonably incurred by the Agents in connection with the
consolidation of the Credits and the preparation, execution,
delivery and administration of this Agreement 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 Lender or
Issuing 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
hereunder or the Letters of Credit issued hereunder, as
applicable (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 Lender.  The
Borrowers further agree that they shall indemnify, on a
joint and several basis, the Lenders, the Issuing 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 or any of the other Loan Documents.  Further, the
Borrowers agree to pay, and to protect, indemnify and save
harmless, on a joint and several basis, each Lender, each
Issuing Bank, each Agent and each of their respective
officers, directors, stockholders, 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, reasonable fees, disbursements and other
charges of counsel) in connection with any investigative,
administrative or judicial proceeding, whether or not such
Lender, Issuing 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
Merger) or (ii) the use of the proceeds of the Loans or the
issuance of Letters of Credit; and the Borrowers also agree
to pay, and to protect, indemnify and save harmless, on a
joint and several basis, each Lender, each Issuing Bank,
each Agent and each of their respective officers, directors,
stockholders, 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, reasonable fees, disbursements and other charges
of counsel in connection with any investigative,
administrative or judicial proceeding, whether or not such
Lender, Issuing Bank or Agent shall be designated a party
thereto) of any nature arising from or relating to any
actual or alleged presence or Release or threatened Release
of Hazardous Materials on any of the Properties, or any
Environmental Claim related in any way to the Borrowers or
their respective Subsidiaries; 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, liabilities, actions, suits, judgments, demands,
costs or expenses are determined by a court of competent
jurisdiction by final and nonappealable 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
Lender, Issuing Bank, Agent or other Person indemnified or
intended to be indemnified pursuant to this Section 10.04,
the Borrowers, to the extent and in the manner directed by
such indemnified party, shall resist and defend such action,
suit or proceeding or cause the same to be resisted and
defended by counsel designated by the Borrowers (which
counsel shall be satisfactory to such Lender, Issuing Bank,
Agent or other Person indemnified or intended to be
indemnified).  If the Borrowers 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 Borrowers
contained in this Agreement shall be breached, any Lender,
Issuing 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 Lender, Issuing Bank or Agent
shall be repayable to it by the Borrowers immediately upon
such Lender's or such Agent's demand therefor.

(b)  The provisions of this Section 10.04 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 L/C
Disbursements, the termination or expiration of the Letters
of Credit issued hereunder, the invalidity or
unenforceability of any term or provision of this Agreement
or any other Loan Document, or any investigation made by or
on behalf of any Lender, Issuing Bank or any Agent.  All
amounts due under this Section 10.04 shall be payable on
written demand therefor.

SECTION 10.05.  Right of Setoff.  If an Event of
Default shall have occurred and be continuing and the Loans
shall have been accelerated or any Lender shall have
requested the Administrative Agent to declare the Loans
immediately due and payable pursuant to Article VII, then
each Lender and Issuing 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
Lender or Issuing Bank to or for the credit or the account
of the Borrowers against any of and all the obligations of
the Borrowers now or hereafter existing under this
Agreement, irrespective of whether or not such Lender or
Issuing Bank shall have made any demand under this Agreement
and although such obligations may be unmatured.  Each Lender
and Issuing Bank agrees promptly to notify the Borrowers and
the Guarantors after any such setoff and application made by
such Lender, but the failure to give such notice shall not
affect the validity of such setoff and application.  The
rights of each Lender and Issuing Bank under this Section
10.05 are in addition to other rights and remedies
(including, without limitation, other rights of setoff)
which such Lender may have.

SECTION 10.06. APPLICABLE LAW.  THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.

SECTION 10.07.  Waivers; Amendments.  (a)  No
failure or delay of any Lender, Issuing Bank or Agent in
exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the
exercise of any other right or power.  The rights and
remedies of the Lenders, the Issuing Banks and the Agents
hereunder and under the other documents and agreements
entered into in connection herewith are cumulative and not
exclusive of any rights or remedies which they would
otherwise have.  No waiver of any provision of this
Agreement, any other Loan Document or any other such
document or agreement or consent to any departure by the
Borrowers 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; provided, however, that upon the consummation of the
Merger and the assumption by IGL, as successor by merger to
FTX, of all FTX's rights and obligations as a Guarantor
hereunder and under the FTX Guarantee Agreement, the
execution of the IGL Guarantee Agreement and the
satisfaction of the conditions precedent set forth in the
IGL Credit Agreement, the IGL Guarantee Agreement shall be
deemed to amend and restate the FTX Guarantee Agreement in
its entirety without the requirement of any waiver or
consent pursuant hereto.  No notice or demand on the
Borrowers in any case shall entitle the Borrowers to any
other or further notice or demand in similar or other
circumstances.

(b)  This Agreement (including any provision
hereof) may not be waived, amended or modified except
pursuant to an agreement or agreements in writing entered
into by the Borrowers and the Required Lenders (and a copy
of any such waiver, amendment or modification shall be
promptly delivered by the Administrative Agent to each
Guarantor); 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 2.07(c), which may be amended by the Required
Lenders) of any principal of or interest on, any Loan
(including, without limitation, any such payment pursuant to
Section 2.07(a) or paragraph (a) or (b) of Section 2.09) or
any date for reimbursement of an L/C Disbursement, or waive
or excuse any such payment or any part thereof, or change
the rate of interest on any Loan or L/C Disbursement,
without the written consent of each holder affected thereby
and each Guarantor, which consent shall not be unreasonably
withheld (it being agreed and understood that it shall be
deemed reasonable to withhold such consent if a Guarantor,
in its sole discretion exercised in good faith, deems its
rights or interests in any property or assets of FMPO or
either Borrower will be materially and adversely affected),
(ii) change or extend the Commitment of any Lender without
the written consent of such Lender, or change any fees to be
paid to any Lender, Issuing Bank or Agent hereunder without
the written consent of such Lender, Issuing Bank or Agent,
as applicable, or (iii) amend or modify the provisions of
this Section 10.07, Sections 2.07 through 2.15 or
Section 10.04 or the definition of "Required Lenders",
without the written consent of each Lender; 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; and provided
further that, notwithstanding any of the foregoing, upon the
consummation of the Merger and the assumption by IGL, as
successor by merger to FTX, of all FTX's rights and
obligations as a Guarantor hereunder and under the FTX
Guarantee Agreement, the execution of the IGL Guarantee
Agreement and the satisfaction of the conditions precedent
set forth in the IGL Guarantee Agreement, the IGL Guarantee
Agreement shall be deemed to amend and restate the FTX
Guarantee Agreement in its entirety and any of the Events of
Default related to IGL, as a Guarantor, set forth in Section
7.01 shall be deemed to be amended or waived in the manner
prescribed by Section 7.01.

SECTION 10.08.  Severability.  In the event any
one or more of the provisions contained in this Agreement
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 10.09.  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
Borrowers.

SECTION 10.10.  Headings.  Article and Section
headings and the table of contents included 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 10.11.  Entire Agreement.  This Agreement,
the other Loan Documents 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 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 10.12.  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 10.12.

(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 10.12 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 Lender has
represented, expressly or otherwise, that such Lender 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 10.13.  Interest Rate Limitation. 
Notwithstanding anything herein to the contrary, if at any
time the interest rate applicable to any Loan or L/C
Disbursement, together with all fees, charges and other
amounts which are treated as interest on such Loan or L/C
Disbursement, as applicable, 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 Lender or Issuing Bank, as applicable, shall
exceed the maximum lawful rate (the "Maximum Rate") which
may be contracted for, charged, taken, received or reserved
by such Lender or Issuing Bank, as applicable, in accordance
with applicable law, the rate of interest in respect of such
Loan or L/C Disbursement, as applicable, hereunder, together
with all Charges payable to such Lender or Issuing Bank, as
applicable, 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 or L/C Disbursement, as
applicable, but were not payable as a result of the
operation of this Section 10.13 shall be cumulated and the
interest and Charges payable to such Lender or Issuing Bank,
as applicable, in respect of other Loans or L/C
Disbursement, as applicable, 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 Lender or Issuing Bank, as
applicable.

SECTION 10.14.  JURISDICTION; CONSENT TO SERVICE
OF PROCESS.  (A)  EACH BORROWER 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 LENDER OR AGENT MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

(B)  EACH BORROWER 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 10.01. 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 10.15.  Confidentiality.  Each Lender and
Issuing Bank agrees (which agreement shall survive the
termination of this Agreement) that financial information,
information from the Borrowers', FMPO's and their respective
Subsidiaries' books and records, information concerning the
Borrowers', FMPO's and their respective Subsidiaries' trade
secrets and patents and any other information received from
the Borrowers and their respective Subsidiaries hereunder
shall be treated as confidential by such Lender or Issuing
Bank, as applicable, and each Lender and Issuing Bank agrees
to use their respective best efforts to ensure that such
information is not published, disclosed or otherwise
divulged to anyone other than employees or officers of such
Lender or Issuing Bank, as applicable, 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 relevant Borrower or FMPO, as
applicable;

(ii) disclosure of information (other than that
received from the relevant Borrower, FMPO and their
respective Subsidiaries prior to or under this
Agreement) already known by, or in the possession of,
such Lender or Issuing Bank, as applicable, without
restrictions on the disclosure thereof at the time such
information is supplied to such Lender or Issuing Bank,
as applicable, by the relevant Borrower, FMPO or their
respective Subsidiaries 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 under the other Loan
Documents 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 L/C Disbursements or rights of
any Lender or Issuing 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 10.15;

(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.

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 FM PROPERTIES INC., as a
general partner,

by/s/ Robert R. Boyce                
------------------- 
Name: Robert R. Boyce 
Title: Treasurer

by FMPO L.L.C., as a general
partner,

by FM PROPERTIES INC., as sole
member thereof,

by /s/ Robert R. Boyce            
-------------------
Name: Robert R.Boyce
Title: Treasurer

CIRCLE L LAND CORP.,

by/s/ William H. Armstrong III    
----------------------------
Name: William H. Armstrong III 
Title: President

FM PROPERTIES INC.,

by/s/ Robert R. Boyce             
-------------------
Name: Robert R. Boyce
Title:President  

THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent and
Documentary Agent,

by/s/ James H. Ramage               
-------------------
Name:  James H.Ramage
Title: Vice President

TEXAS COMMERCE BANK NATIONAL
ASSOCIATION,

by/s/ Kent Kaiser                   
---------------
Name: Kent Kaiser
Title: Sr. Vice President

SCHEDULE I

APPLICABLE MARGIN FOR LOANS
COMMITMENT FEE PERCENTAGE
L/C PARTICIPATION FEES PERCENTAGE

(a)  Prior to the Merger, (i) the Applicable
Margin for each Loan, as requested by the applicable
Borrower, shall be as follows:

Rate                    Applicable Margin

LIBO Rate Loans:                  1% per annum

Reference Rate Loans:             0% per annum; and

(ii) the Commitment Fee Percentage shall be a rate
per annum equal to 0.375%.

(b)  Upon the consummation of the Merger and the
assumption by IGL, as successor by merger to FTX, of all
FTX's rights and obligations as a Guarantor hereunder and
under the FTX Guarantee Agreement, (i) the Applicable Margin
for LIBO Rate Loans shall be the sum of (A) the spread over
the London Interbank Offered Rate (as defined in the IGL
Credit Facility) payable (or to be payable) by IGL for
applicable loans made thereunder (such applicable spreads to
be calculated pursuant to the IGL Credit Facility with
reference to the pricing schedule contained in the IGL
Credit Facility, which is set forth below in its current
form as of the date hereof), (B) 0.125% per annum and (C)
the facility fee percentage payable (or to be payable) by
IGL under the IGL Credit Facility, (ii) the Applicable
Margin for Reference Rate Loans shall be 0% per annum and
(iii) the Commitment Fee Percentage shall be the sum of (x)
the facility fee percentage payable (or to be payable) by
IGL under the IGL Facility and (y) 0.125% per annum.

(c)  The L/C Participation Fees Percentage shall
be the letter of credit fee payable (or to be payable) by
IGL under the IGL Credit Facility in respect of the
aggregate amount then available for drawing under all
outstanding letters of credit issued thereunder.

(d)  The following is a copy of the Pricing
Schedule attached to the IGL Credit Facility and in effect
as of the date hereof (capitalized terms used below are
defined in the IGL Credit Facility).

Pricing Schedule

The "Euro-Dollar Margin" and the "Facility Fee
Rate" for any day are the respective percentages set
forth below in the applicable row under the column
corresponding to the Status that exists on such day;
provided that Level II Status shall be deemed to exist
on any day prior to the Conversion Date:

LEVEL  LEVEL     LEVEL    LEVEL    LEVEL V
I    II        III      IV

Facility Fee     .07%    .085%     .11%      .15%     .25%
Rate

Euro-Dollar      .155%    .19%     .215%    .275%    .425%
Margin

For purposes of this Schedule, the following terms
have the following meanings, subject to the last
paragraph of this Schedule:

"Conversion Date" means the earliest to occur of
(i) September 30, 1998, (ii) the date (if any) on which
the Debt of the Company and its Consolidated
Subsidiaries determined on a consolidated basis
("Consolidated Debt") exceeds 45% of the sum of
Consolidated Debt and Consolidated Net Worth and
(iii) the date (if any) on which the Company is rated
BBB- or lower by S&P or Baa3 or lower by Moody's.

"Level I Status" exists at any date if, at such
date, the Company is rated A- or higher by S&P or A3 or
higher by Moody's.

"Level II Status" exists at any date if, at such
date, (i) the Company is rated BBB+ or higher by S&P or
Baa1 or higher by Moody's and (ii) Level I Status does
not exist.

"Level III Status" exists at any date if, at such
date, (i) the Company is rated BBB or higher by S&P or
Baa2 or higher by Moody's and (ii) neither Level I
Status nor Level II Status exists.

"Level IV Status" exists at any date if, at such
date, (i) the Company is rated BBB- by S&P or Baa3 by
Moody's and (ii) neither Level I Status, Level II
Status nor Level III Status exists.

"Level V Status" exists at any date if, at such
date, no other Status exists.

"Status" refers to the determination of which of
Level I Status, Level II Status, Level III Status,
Level IV Status or Level V Status exists at any date.

The credit ratings to be utilized for purposes of
this Schedule are those assigned to the senior
unsecured long-term debt securities of the Company
without third-party credit enhancement, whether or not
any such debt securities are actually outstanding, and
any rating assigned to any other debt securities are
actually outstanding, and any rating assigned to any
debt security of the Company shall be disregarded.  The
rating in effect at any date is that in effect at the
close of business on such date.  If the Company is
split-rated and the ratings differential is one notch,
the higher of the two ratings will apply (e.g., A-/Baa1
results in Level I Status and BBB+/Baa2 results in
Level II Status).  If the Company is split-rated and
the ratings differential is more than one notch, the
average of the two ratings (or the higher of two
intermediate ratings) shall be used (e.g., A-/Baa3
results in Level II Status and BBB+/Baa3 results in
Level III Status).  If at any date, the Company's long-
term debt is rated by neither S&P nor Moody's, then
Level V shall apply.

SCHEDULE II

LENDER COMMITMENTS

New FMPOC      New Circle C   New Circle 
Revolving       Revolving       C Term   Applicable
Lender        Tranche         Tranche        Tranche  Percentage
----------    -------------   -------------   ---------- ----------

The Chase
Manhattan                                                   
Bank          $9,372,385.78   $5,677,614.22   $6,450,000    43%

Texas
Commerce
Bank                                                         
National      12,423,860.22    7,526,139.78    8,550,000    57%
Association       

SCHEDULE III

SUBSIDIARIES

Nonrestricted Subsidiaries of FMPO:

Estates of Barton Creek Utilities Inc.

Longhorn Properties Inc.

Barton Creek Realty Inc.

Barton Creek Properties

Austin 290 Properties Inc.

LW Properties Inc.

Texas B.D. Inc.

Longhorn Land Company

Longhorn Development Company

Delaware Business Development Inc.

Nonrestricted Subsidiaries of FMPOC:

FM Florida Properties Co.

Vailwood Properties L.P.

SCHEDULE IV

EXISTING DEBT AND LIENS

None.

SCHEDULE V
EXISTING LETTERS OF CREDIT

FMPOC Letters of Credit

Letter of Credit (No. PG633546) issued by Chase in a
principal amount of $339,912.11.

Letter of Credit (No. p-385776) issued by Chase in a
principal amount of $610,607.00.

Letter of Credit (No. I-467309) issued by Texas
Commerce Bank National Association ("TCB") in a
principal amount of $909,609.00

Circle C Letter of Credit

Letter of Credit (No. I-426230) issued by TCB in a
principal amount of $85,573.00.

[NYCORP2:449124]

Exhibit 10.1

SECOND AMENDED AND RESTATED

AGREEMENT OF GENERAL PARTNERSHIP

of

FM PROPERTIES OPERATING CO.

December 15, 1997

TABLE OF CONTENTS

Page

ARTICLE I   Definitions
1.1   Definitions...............................................1

ARTICLE II   Organizational Matters
2.1  Formation and Continuation.................................2

2.2  Name.......................................................2

2.3  Purpose....................................................2

2.4  Principal Place of Business; Agent for Service of Process..2

2.5  Term.......................................................3

2.6  Title to Partnership Property..............................3

2.7  Certificates...............................................3

ARTICLE III  Capital   Accounts    and
Capital Contributions
3.1  Capital Contributions......................................3

3.2  Capital Accounts...........................................3

3.3  Interest...................................................3

3.4  No Withdrawal..............................................3

3.5  Loans from Partners........................................3

3.6  Transferred Capital Accounts...............................3

ARTICLE IV   Allocations           and
Distributions
4.1  Allocations................................................3

4.2  Distributions..............................................4

ARTICLE V   Management   of   the    
Partnership
5.1  Authority of the Partners..................................4

5.2  Right to Rely on Partners..................................4

5.3  Compensation and Reimbursement of Partners.................4

5.4  Transactions with Affiliates; Conflicts of Interest........4

5.5  Other Business Activities..................................5

ARTICLE VI   Books,           Records,
Accounting and Reports
6.1. Records, Accounting and Reports............................5

6.2. Fiscal Year................................................5

ARTICLE  VII  Dissolution           and
Liquidation
7.1  Dissolution................................................6

7.2  Winding Up.................................................6

7.3  Distributions in Kind......................................7

7.4  Rights of Partners.........................................7

ARTICLE VIII  Miscellaneous
8.1  Survival of Agreements.....................................8

8.2  Amendments; No Waivers.....................................8

8.3  Expenses...................................................8

8.4  Successors and Assigns.....................................8

8.5  Headings...................................................8

8.6  GOVERNING LAW;  ENTIRE  AGREEMENT..........................8

8.7  Counterparts; Effectiveness................................9

8.8  Severability...............................................9

8.9  Further Assurances.........................................9

SECOND AMENDED AND RESTATED

AGREEMENT OF GENERAL PARTNERSHIP

of

FM PROPERTIES OPERATING CO.

THIS SECOND AMENDED AND RESTATED AGREEMENT OF GENERAL  PART-
NERSHIP dated  as  of  December 15,  1997  (the  "Agreement")  is
entered into  by  and  between FM  Properties  Inc.,  a  Delaware
corporation  ("FMPO"),  and  FMPO  L.L.C.,  a  Delaware   limited
liability company ("LLC").

W I T N E S S E T H:

WHEREAS, FM Properties Operating Co. (the "Partnership") was
formed under the  terms of the  Agreement of General  Partnership
dated as  of  May 20,  1992,  as  amended, and  pursuant  to  the
provisions of the Delaware Uniform Partnership Law; and

WHEREAS, upon the execution hereof LLC will be admitted as a
general partner of the Partnership; and

WHEREAS, LLC owns a .01 percent general partnership interest
in  the  Partnership  and  FMPO  owns  a  99.99  percent  general
partnership interest in the Partnership; and

WHEREAS,  the  parties   hereto  desire   to  continue   the
Partnership and to  amend and restate  the original agreement  of
general partnership, as amended, in its entirety;

NOW, THEREFORE, the parties hereto hereby agree as follows:

ARTICLE I

Definitions

1.1   Definitions.  The following terms as used herein  have
the meanings set forth below.

"Affiliate" means, with  respect to any  Person, any  Person
that directly or  indirectly controls,  is controlled  by, or  is
under  common  control  with  such  Person.    As  used  in  this
definition, the term "controls" means the possession, directly or
indirectly, of the power to direct or cause the direction of  the
management and policies of a Person, whether through ownership of
voting securities, by contract or otherwise.

"Capital Account"  means with  respect  to any  Partner  the
capital account maintained for  such Partner pursuant to  Section
3.2.

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

"Indemnified  Person"  means  each  Partner,  each  of   its
Affiliates, and  each of  their respective  officers,  directors,
employees, agents, stockholders or Representatives.

"Partner" means LLC and FMPO and their respective successors
and permitted assigns.

"Partnership" means  the  partnership  established  by  this
Agreement.

"Partnership Interest" means  the interest of  a Partner  in
the Partnership.

"Percentage Interest" means (i) as  to LLC, .01 percent  and
(ii) as to FMPO, 99.99 percent.

"Person" means an individual, a corporation, a  partnership,
a limited  liability company,  a trust,  or any  other entity  or
organization, including a government or political subdivision  or
agency or instrumentality thereof.

"Real Estate Interests" means all interests in real property
held directly or indirectly by the Partnership at any time.

"Uniform Act" means the Delaware Uniform Partnership Law,  6
Del. Code S 1501 et sec., as amended from time to time.

ARTICLE II

Organizational Matters

2.1  Formation and Continuation.  The rights, powers, duties
and liabilities  of  the  Partners  and  the  administration  and
termination  of  the  Partnership  shall  be  governed  by   this
Agreement and the Uniform Act.   The business of the  Partnership
shall be continued without  liquidation of Partnership affairs.  
All assets  of  the Partnership  immediately  prior to  the  date
hereof shall  hereafter  continue  to  be  the  property  of  the
Partnership and all  liabilities of  the Partnership  immediately
prior to the  date hereof shall  continue as  liabilities of  the
Partnership hereafter.

2.2  Name.   The  name  of  the  Partnership  shall  be  "FM
Properties Operating Co."  or such other  name as  a Partner  may
from time to time designate.

2.3  Purpose.  The purpose  and business of the  Partnership
shall be any lawful purpose.

2.4  Principal Place  of  Business;  Agent  for  Service  of 
Process.  (a)  The principal place of business of the Partnership
shall be 1615  Poydras Street, New  Orleans, Louisiana 70112,  or
such other place as a Partner  may from time to time determine.  
The Partnership  may  maintain offices  at  such other  place  or
places as a Partner may deem advisable.

(b)  The registered office of  the Partnership in the  state
of  Delaware  shall  be  1209  Orange  Street  in  the  City   of
Wilmington, County of  New Castle and  its agent  for service  of
process on the Partnership at such registered office shall be The
Corporation Trust Company.

2.5  Term.   The  Partnership shall  continue  in  existence
until its  termination  in  accordance  with  the  provisions  of
Article VII.

2.6  Title to  Partnership Property.   All  property of  the
Partnership, whether real  or personal,  tangible or  intangible,
shall be deemed to be owned by the Partnership as an entity,  and
no  Partner,  individually,  shall  have  any  direct   ownership
interest in such property.

2.7   Certificates.   A Partner shall  file and publish  all
such certificates, notices, or other documents as may be required
for the formation and operation of a partnership in Delaware  and
any other jurisdiction in which the  Partnership may elect to  do
business.

ARTICLE III

Capital Accounts and Capital Contributions

3.1   Capital Contributions.   The Partners have made  their
initial  capital  contributions  to  the  Partnership.     Unless
otherwise provided in this Agreement, the Partners may, but shall
not be  obligated to,  make additional  capital contributions  in
such manner and at such time as may be approved by the Partners.

3.2   Capital Accounts.  A separate Capital Account shall be
established and maintained in respect of each Partner.

3.3  Interest.  No interest shall be paid by the Partnership
on capital  contributions or  on  balances in  Partners'  Capital
Accounts.

3.4  No Withdrawal.   A  Partner shall  not be  entitled  to
withdraw any  part of  its capital  contribution or  its  Capital
Account or  to receive  any  distribution from  the  Partnership,
except as provided in Section 4.2 and Article VII.

3.5  Loans from  Partners .    Loans  by  a  Partner  to  the
Partnership may bear interest and shall not be considered capital
contributions.

3.6  Transferred Capital Accounts.   In the  event that  any
Partnership  Interest  or  portion  thereof  is  transferred   in
accordance with the terms of this Agreement, the transferee shall
succeed to the Capital Account of  the transferee Partner to  the
extent  such   Capital  Account   relates  to   the   transferred
Partnership Interest or portion thereof.

ARTICLE IV

Allocations and Distributions

4.1  Allocations.   Except  as otherwise  provided  in  this
Agreement, for purposes of  maintaining the Capital Accounts  and
in determining the rights of the Partners among themselves,  each
item of  income,  gain,  loss, deduction,  and  credit  shall  be
allocated as a part of the net income or net loss for the year to
the Partners  in  accordance  with  their  respective  Percentage
Interests, and net losses for any taxable year shall be allocated
to the Partners in  accordance with their respective  Partnership
Interests.

4.2  Distributions.  (a)   From time to  time, and not  less
often than quarterly, the Partners shall review the Partnership's
accounts to determine whether distributions are appropriate.   At
any time the  Partners may make  such distributions  as they  may
determine in their discretion,  without being limited to  current
or accumulated income or gains.   Such distributions may be  made
from Partnership revenues,  capital contributions or  Partnership
borrowings.   The  Partners  may  distribute  to  Partners  other
Partnership property.    All  such distributions  shall  be  made
concurrently  to  all  Partners   and  in  accordance  with   the
Percentage Interests of the Partners.

(b)   The Partners acknowledge  and agree that the  Partners
shall use reasonable efforts, in accordance with prudent business
practices, to take such actions  as may be necessary,  including,
without  limitation,  selling  Partnership  assets  in  order  to
generate sufficient  cash flow  to enable  the Partners  to  make
distributions to the Partners as contemplated by Section 4.2(a).

(c)  Any amounts paid pursuant  to Section 5.3(b) shall  not
be deemed to be distributions for purposes of this Agreement.

ARTICLE V

Management of the  Partnership

5.1  Authority of the Partners.   The Partners shall  manage
the business of the Partnership and shall have all of the rights,
powers and authority which may  be possessed by general  partners
under the Uniform Act.

5.2  Right to Rely on Partners.  Any Person dealing with the
Partnership may rely upon the signature of either LLC or FMPO  as
to its  authority  to  make any  undertaking  on  behalf  of  the
Partnership and shall not be required  to determine any facts  or
circumstances bearing upon the existence of such authority.

5.3  Compensation and  Reimbursement  of  Partners.    (a)  
Except as  otherwise provided  in  this Agreement,  the  Partners
shall not be compensated for their services rendered on behalf of
the Partnership or otherwise in their capacity as a Partner.

(b)  The Partners shall be reimbursed promptly upon  request
for all  costs and  expenses  incurred by  it  on behalf  of  the
Partnership  and  such  amounts  of  general  and  administrative
expenses and  other indirect  costs  as the  Partners  reasonably
determine are allocable to the Partnership.

5.4  Transactions with Affiliates;  Conflicts of Interest.  
(a)  In addition to the transactions specifically contemplated by
this Agreement,  the Partnership  may purchase  property,  obtain
services,  or  borrow  funds  from,  or  sell  property,  provide
services or lend money to, or  otherwise deal with, the  Partners
or any of their respective Affiliates.  Each Partner acknowledges
and agrees that such purchase or sale of property, performance or
receipt of  services, borrowing  or lending  of funds,  or  other
dealings, may  give rise  to conflicts  of interest  between  the
Partnership, on the one hand, and a Partner or its Affiliates, on
the other hand.

(b)  Without limiting the generality of the foregoing,  each
Partner acknowledges and agrees that:

(i)   a Partner or any Affiliate may, but shall not  be
obligated to, make loans to the Partnership;

(ii) a Partner, acting  in its capacity  as such,  will
have the  right  to  cause  the  Partnership  to  take  such
actions, including  the  sale of  assets  or the  making  of
capital  expenditures,  as  are  necessary  to  enable   the
Partnership to pay when due all  amounts of interest on  and
principal of the obligations described in clause (i) of this
Section 5.4(b);

(iii)     a Partner will  have the right  to engage  in
the real estate development business anywhere in the  world;
and

(iv) a Partner  will have  the right  to compromise  or
settle any action or claim in respect of which a Partner may
obtain  indemnification  from  the  Partnership  under  this
Agreement, or otherwise.

(c)  Any  transaction   between  the   Partnership  or   any
Affiliate of the Partnership, on the  one hand, and a Partner  or
any Affiliate of  a Partner, on  the other hand,  shall be on  an
arm's-length basis.

5.5  Other Business Activities.   Either Partner may  engage
in or possess any  interest in any other  business of any  nature
independently or with others,  including businesses that  compete
with the Partnership, and neither  the Partnership nor the  other
Partner shall  have any  right or  obligation by  virtue of  this
Agreement in or to such other business or in or to any income  or
profits derived therefrom.

ARTICLE VI

Books, Records, Accounting and Reports

6.1. Records, Accounting and  Reports.   The Partners  shall
keep or cause to be kept books with respect to the  Partnership's
business, which books shall  be kept at  the principal office  of
the  Partnership.    The  books  of  the  Partnership  shall   be
maintained for financial  reporting purposes  in accordance  with
generally accepted accounting  principles consistently applied.  
For the term of  the Partnership and for  a period of five  years
thereafter (or for such longer period an may be required by law),
the Partners shall maintain and preserve all books of account and
other relevant documents.

6.2. Fiscal Year.  The fiscal year of the Partnership  shall
be the calendar year.

ARTICLE  VII

Dissolution and Liquidation

7.1    Dissolution.  The  Partnership  shall  dissolve   and
commence winding up and liquidation upon:

(a)  the unanimous election to  dissolve the Partnership  by
the Partners;

(b)  the sale of all or substantially  all of the assets  of
the Partnership;

(c)  with respect to either Partner, (i) the commencement of
a voluntary  case  or  other  proceeding  by  a  Partner  seeking
liquidation, reorganization or other relief with respect to  such
Partner or its  debts under any  bankruptcy, insolvency or  other
similar law now or hereafter in effect or seeking the appointment
of a trustee,  receiver, liquidator, custodian  or other  similar
official of such Partner or any substantial part of its property,
or the consent  to any such  relief or to  the appointment of  or
taking possession by any such official in an involuntary case  or
other proceeding commenced against such Partner, or the making by
such  Partner  of  a  general  assignment  for  the  benefit   of
creditors, or the failure  generally by such  Partner to pay  its
debts as they become due, or the taking of action by such Partner
to authorize any of the foregoing or (ii) the commencement of any
involuntary case or other proceeding against such Partner seeking
liquidation, reorganization or other relief with respect to  such
Partner or its  debts under any  bankruptcy, insolvency or  other
similar law now or hereafter in effect or seeking the appointment
of a trustee,  receiver, liquidator, custodian  or other  similar
official of such Partner or any substantial part of its property,
which  involuntary  case   or  other   proceeding  shall   remain
undismissed or unstayed  for a period  of 60 days,  or (iii)  the
entry of  an order  for relief  against  such Partner  under  the
Federal bankruptcy laws as now or hereafter in effect;

(d)  dissolution being required by  operation of law  (other
than by judicial decree and other  than by the withdrawal of  the
last Partner where there is no remaining or surviving Partner);

(e)  the entry of a decree of judicial dissolution  pursuant
to Section 1532 of the Uniform Act; or

(f)  the withdrawal of  the last Partner  where there is  no
remaining or surviving Partner.

Without the unanimous consent of the Partners, each  Partner
agrees not  to voluntarily  withdraw as  a  Partner and  if  such
Partner withdraws in violation of this Agreement, the Partnership
may recover damages for breach of this Agreement.

7.2  Winding Up.  (a)   Upon dissolution of the  Partnership
the Partnership shall continue solely for purposes of winding  up
its affairs in  an orderly  manner, liquidating  its assets,  and
satisfying the  claims  of its  creditors  and Partners,  and  no
Partner shall take any action inconsistent with, or not necessary
to or  appropriate  for,  the winding  up  of  the  Partnership's
business and affairs;  provided that all  covenants contained  in
this Agreement  and obligations  provided for  in this  Agreement
shall continue to be fully binding  upon the Partners until  such
time as the property of the Partnership or proceeds from the sale
thereof has been distributed pursuant to this Section 7.2 and the
Partnership  has  been  terminated.    FMPO  shall  act  as   the
liquidator of the Partnership.   FMPO shall liquidate the  assets
of the Partnership, and apply and distribute the proceeds of such
liquidation in the following order of priority, unless  otherwise
required by mandatory provisions of applicable law:

(i)  to  creditors  of  the  Partnership,  other   than
Partners who are creditors, to the extent permitted by  law,
in satisfaction of liabilities  of the Partnership  (whether
by payment or the making of reasonable provision for payment
thereof)  other  than   liabilities  for  which   reasonable
provision for payment has been made;

(ii) pro rata to the Partners  in payment of any  loans
made by them to the Partnership;

(iii)     to the Partners, in proportion to and to  the
extent of the positive balances in their respective  Capital
Accounts; and

(iv) to  the   Partners   in  accordance   with   their
respective Percentage Interests.

(b)   FMPO acknowledges and agrees  that LLC shall have  the
right to  acquire property  of the  Partnership pursuant  to  any
dissolution and liquidation of the Partnership.

7.3  Distributions in Kind.  Notwithstanding the  provisions
of Sections 7.1 and  7.2 regarding the method  and timing of  the
liquidation of the assets of the Partnership, but subject to  the
order of priorities set forth therein,  if on dissolution of  the
Partnership FMPO determines that an immediate sale of part or all
of the Partnership's assets would  be impractical or would  cause
undue loss to the Partners, FMPO may, in its absolute discretion,
defer for a reasonable time the liquidation of any assets  except
those necessary to satisfy liabilities of the Partnership  (other
than those  to Partners)  and may,  in its  absolute  discretion,
distribute to the Partners, in lieu of cash, as tenants in common
and in accordance with the provisions of Sections 7.2(a)(iii) and
7.2(a)(iv), undivided  interests in  such Partnership  assets  as
FMPO deems not  suitable for liquidation.   Any distributions  in
kind  shall  be  subject  to  such  conditions  relating  to  the
disposition and management thereof  as FMPO deems reasonable  and
equitable  and  to  any  joint  operating  agreements  or   other
agreements governing  the operation  of such  properties at  such
time. FMPO shall determine the fair market value of any  property
distributed in kind using such reasonable method of valuation  as
it may adopt.

7.4  Rights  of  Partners.    The  Partners  shall  not   be
personally liable for the return of the capital contributions, or
any portion thereof, it being expressly understood that any  such
return shall be made solely from  Partnership assets.  Except  as
otherwise provided in this Agreement,  no Partner shall have  the
right to  demand or  receive property  other than  cash from  the
Partnership.  Each Partner, to the extent permitted by applicable
law, hereby waives  its rights  to partition  of the  Partnership
assets and,  to that  end agrees  that  it will  not seek  or  be
entitled to partition any such assets whether by way of  physical
partition, judicial sale or otherwise.

ARTICLE VIII

Miscellaneous

8.1   Survival  of  Agreements.   The  agreements  contained
herein and in any certificate or other writing delivered pursuant
hereto shall not survive the termination of this Agreement except
as otherwise provided for herein.

8.2  Amendments; No Waivers.   (a)   Any  provision of  this
Agreement may  be  amended  or  waived  if,  and  only  if,  such
amendment or waiver is in writing  and signed, in the case of  an
amendment, by each of the Partners or in the case of a waiver, by
the Partner against whom the waiver is to be effective.

(b)  No failure  or delay  by any  party in  exercising  any
right, power or  privilege hereunder  shall operate  an 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.

8.3   Expenses.   Except as  otherwise contemplated  herein,
all costs and expenses incurred in connection with this Agreement
shall be paid by the Partner incurring such cost or expense,  and
this obligation shall survive the termination of this Agreement.

8.4  Successors  and  Assigns.    The  provisions  of   this
Agreement shall be binding upon and  inure to the benefit of  the
Partners and their respective successors and permitted assigns.  
This Agreement  is  for the  sole  benefit of  the  Partners  and
nothing herein expressed or implied shall give or be construed to
give any Person or entity, other than the Partners, any legal  or
equitable rights hereunder.

8.5  Headings.  Headings are for ease of reference only  and
shall not form a part of this Agreement.

8.6  GOVERNING LAW;  ENTIRE  AGREEMENT.  (a)  THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW  OF
THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE PRINCIPLES  OF
CONFLICTS OF LAWS THEREOF.  THIS AGREEMENT CONSTITUTES THE ENTIRE
AGREEMENT OF  THE PARTNERS  WITH RESPECT  TO THE  SUBJECT  MATTER
HEREOF AND SUPERSEDES ALL PRIOR AGREEMENTS WITH RESPECT THERETO.

(b)   Each of the  Partners hereby irrevocably appoints  The
Corporation Trust Company, at its office in Wilmington, Delaware,
its lawful agent and attorney  to accept and acknowledge  service
of any  and  all  process  against it  in  any  action,  suit  or
proceeding arising  in connection  with this  Agreement and  upon
whom such process may be served, with the same affect as if  such
party were  a resident  of the  State of  Delaware and  had  been
lawfully served with such process in such jurisdiction.  Further,
each Partner  hereby  irrevocably  submits  to  the  nonexclusive
jurisdiction of the United States District Court for the District
of Delaware or  any court of  the State of  Delaware in any  such
action, suit  or proceeding,  and agrees  that any  such  action,
suit, or proceeding may be brought in such court (and waives  any
objection to venue therein), provided, however, that such consent
to jurisdiction is  solely for the  purpose referred  to in  this
Section 8.6(b) and shall not be deemed to be a general submission
to the jurisdiction of  said Courts or in  the State of  Delaware
other than for such purpose.

(c)  The choice of law and forum provisions of this  Section
8.6 have been negotiated  in  good faith  and agreed upon by  the
parties hereto  and are  reasonable especially  considering  that
this Agreement is subject to and conforms with the Uniform Act.  
All Partners,  by their  execution of  this Agreement,  expressly
agree, to the fullest extent permitted  by law, not to  challenge
the choice of law or forum  provisions contained in this  Section
8.6.

8.7   Counterparts; Effectiveness.   This  Agreement may  be
signed in any number of counterparts,  each of which shall be  an
original.   This  Agreement  shall  become  effective  when  each
Partner shall have received a  counterpart hereof signed by  each
other Partner.

8.8   Severability.  If any  provision of this Agreement  or
the application thereof  to any Person  or circumstance shall  be
invalid or unenforceable  to any  extent, the  remainder of  this
Agreement and the application of such provisions to other Persons
or circumstances  shall  not be  affected  thereby and  shall  be
enforced to the greatest extent permitted by law.

8.9   Further  Assurances.   The Partners  will execute  and
deliver  such further  instruments and do  such further acts  and
things as may be required to carry out the intent and purpose  of
this Agreement.

IN WITNESS WHEREOF, this Agreement has been duly executed by
FMPO and LLC on this ____ day of December, 1997.

Sworn to before me this            FMPO L.L.C.
15th day of December, 1997.
By:  FM  Properties  Inc.,  as
Manager

Notary Public                      By: /s/ Dean T. Falgoust
---------------------
Name:     Dean T. Falgoust
Title:    Vice President
Sworn to before me this            FM Properties Inc.
15th day of December, 1997.

Notary Public                      By: /s/ Dean T. Falgoust
---------------------- 
Name:    Dean T. Falgoust
Title:   Vice President

Exhibit 10.2

AMENDED AND RESTATED
SERVICES AGREEMENT

THIS  AMENDED   AND   RESTATED  SERVICES   AGREEMENT   (this
"Agreement"), dated as  of December 23,  1997 by  and between  FM
Services  Company,  a  Delaware   corporation  ("FMS"),  and   FM
Properties Inc., a Delaware corporation ("FMPO").

WHEREAS, FMS  and FMPO  entered  into a  Services  Agreement
dated as of January  1, 1996 (the  "Original Agreement") for  the
provision of certain services by FMS for FMPO; and

WHEREAS, FMS  and  FMPO  desire to  amend  and  restate  the
Original Agreement and for  FMS to continue  to furnish FMPO  and
its affiliates, as  that term is  defined in Rule  405 under  the
Securities Act  of 1933  (collectively, the  "FMPO Group"),  with
Services,  as  defined  below,  to  support  and  complement  the
services provided by its officers, employees and other  available
resources.

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 FMPO  Group:   (a) accounting,  treasury  and
financial, (b) tax, (c) insurance and risk management  (including
the purchase and maintenance on behalf of FMPO of such  insurance
as FMPO  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) business  development, (k)  executive support,  (l)
aviation, (m) contract administration and (n) 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 FMPO and other  members
of the FMPO Group  fully informed and  shall cooperate with  such
officers  and  employees  with  respect  to  the  performance  of
Services by  FMS.   Each  member of  the  FMPO 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. 

(a)  As compensation for  the performance  of the  Services,
FMPO shall reimburse, or cause another  member of the FMPO  Group
to reimburse, FMS for:

(i)  All expenses of the Services incurred by FMS  that
are  readily  identifiable  to  the  FMPO  Group,  including
personnel  related  costs   (which  shall   be  based   upon
department  head  allocations),  facilities  related   costs
(based upon personnel cost  allocations) and aviation  costs
("Direct Charges");

(ii) All  costs  of  goods,  services  or  other  items
purchased from third parties by FMS  for the FMPO Group,  to
the  extent  such  costs  are  paid  by  FMS  ("Third  Party
Charges"); and

(iii)     The portion of all other expenses incurred by
FMS in connection  with providing the  Services to the  FMPO
Group and similar services to Freeport-McMoRan Copper & Gold
Inc. ("FCX"),  Freeport-McMoRan  Sulphur  Inc.  ("FSC")  and
McMoRan  Oil  &  Gas  Co.  ("MOXY")  and  their   respective
affiliates as  directed  from  time to  time  by  the  joint
written instructions of FMPO, FCX, FSC and MOXY pursuant  to
the Stockholder Agreement of even date herewith among  FMPO,
FCX, FSC and MOXY ("Allocated Charges").

(b)  FMS shall invoice FMPO  by the last  day of each  month
for all Direct Charges, Third Party Charges and Allocated Charges
incurred for the immediately preceding month.  All invoices shall
provide  FMPO  with  an  account  of  all  such  charges  and  an
accounting for all Advances, as defined below, during such month.
All amounts  shown on  each invoice  shall  be due  and  payable
within five (5) days of the date of the invoice.  In the event of
a dispute as to the propriety of any invoiced amount, FMPO  shall
pay, or  cause the  payment of,  all undisputed  amounts on  each
invoice, but shall be entitled to withhold payment of any  amount
in dispute and  shall promptly  notify FMS  of the  basis of  the
dispute.

(c)  FMPO shall advance, or cause the advancement of,  funds
to FMS  for Direct  Charges, Third  Party Charges  and  Allocated
Charges from  time to  time during  the  term of  this  Agreement
(which may be as often as daily) as requested by FMS, such  funds
to serve as an  advance of the amounts  to be invoiced  hereunder
(the "Advances").

Section 4.     Use of FMS Facilities.  FMS shall provide the
FMPO 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,  (ii) 90 days after  receipt
by FMS of written  notice from FMPO of  its request to  terminate
this Agreement,  or (iii)  a Change  in Control.   A  "Change  in
Control" shall be deemed to have occurred if any Person or  group
(within the meaning of Rule 13d-5 of the SEC as in effect on  the
date hereof) shall own directly or indirectly, beneficially or of
record, shares representing 50% or more of the aggregate ordinary
voting power represented  by the issued  and outstanding  capital
stock of FMPO.

(b)  Upon termination  of  this  Agreement,  FMPO  shall  be
liable for (i) Direct Charges, Third Party Charges and  Allocated
Charges  incurred  in   accordance  with  Section   3  prior   to
termination, (ii) its proportionate  share of all costs  incurred
by FMS or  which FMS  is obligated  to incur  in connection  with
providing  the  Services  after   termination,  because  of   the
anticipated long-term nature of this Agreement or otherwise,  and
(iii) all costs of such  termination, whether direct or  indirect
and including  costs  incurred  by FMS  in  connection  with  the
termination by FMS of obligations entered into in connection with
the Services.

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 FMPO  for (i) any  loss, cost or  expense
resulting from any act or omission taken at the express direction
of any member of the FMPO 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 FMPO  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  FMPO
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 FMPO 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  FMPO  of  such  intended  disclosure,  and  if
requested by FMPO, 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 FMPO, upon request, all documents and other
materials,  and  all  copies  thereof,  containing   confidential
information obtained from the FMPO  Group in connection with  the
Services so terminated.

Section 8.     Technology.   FMS  hereby grants  to  FMPO  a
royalty free, non-exclusive right and license to use (but not  to
sublicense outside of  the FMPO  Group) any  and all  technology,
whether or  not  patented, developed  by  or on  behalf  of  FMS,
relating to  the  business of  FMPO;  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.  FMPO  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  FMPO  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.    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 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: /s/ Michael J. Arnold         
Attention:  General Counsel                Michael J. Arnold
President

Address for Notices:               FM PROPERTIES INC.

1615 Poydras Street
New Orleans, LA  70112             By: /s/ Richard C. Adkerson        
Attention:  General Counsel                Richard C. Adkerson
Chairman of the Board and
Chief Executive Officer

Exhibit 10.6

EXECUTION COPY

FMPO GUARANTEE AGREEMENT dated as of
December 15, 1997 (this "Guarantee"), by FM
Properties Inc., a Delaware corporation
("FMPO"), for the benefit of the lender
party to the Consolidated Credit Agreement
(as defined below) from time to time (the
"Lenders").

WHEREAS, Freeport-McMoRan Inc., a Delaware
corporation ("FTX"), intends to consummate a merger, whereby
FTX shall be merged with and into IMC Global Inc., a
Delaware corporation ("IGL"), by the end of 1997 (the
"Merger"), and as a condition thereof FTX has, with th
consent of the Lenders, transferred to FMPO, and FMPO has
assumed, FTX's interest as managing general partner of FM
Properties Operating Co., a Delaware general partnership
("FMPOC").
WHEREAS, in connection therewith, (i) FMPOC, as
the borrower under the Amended and Restated Credit Agreement
dated as of December 20, 1996, among FMPOC, FTX, the banks
party thereto and The Chase Manhattan Bank ("Chase")(the
"FMPOC Revolving Facility"), and as the borrower under the
Second Amended and Restated Note Agreement, as amended,
dated as of June 30, 1995, among FMPOC, FTX, Hibernia
National Bank and Chase (the "FMPOC Term Loan Facility")
and (ii) Circle C Land Corp., a Texas corporation ("Circle
C"), as the borrower under the Amended and Restated Credit
Agreement dated as of December 20, 1996, between Circle C
and Texas Commerce Bank National Association (the "Circle 
Loan Facility", and together with the FMPOC Revolving
Facility and the FMPOC Term Loan Facility, the "Existing
Credits"), desire to amend and restate the terms and
provisions of the Existing Credits and consolidate such
terms and provisions into the Amended, Restated an
Consolidated Credit Agreement dated as of the date hereof,
among FMPOC, Circle C, FMPO, the financial institutions
listed on the signature pages thereof and Chase, as
administrative agent and documentary agent thereunder (as
amended or modified and in effect from time to time, the
"Consolidated Credit Agreement").

WHEREAS, it is the intent of the parties to the
Consolidated Credit Agreement that the Consolidated Credit
Agreement (i) shall evidence the Borrower's Debt under the
Existing Credits, (ii) has been entered into as an
amendment, restatement and consolidation of the obligations
of the Borrowers under the Existing Credits and (iii) is in
no way intended to constitute a novation of any of the
Borrower's Debt which was evidenced by any of the Existing
Credits.

WHEREAS, it is a condition to the execution of the
Consolidated Credit Agreement that FMPO execute this
Guarantee.

NOW THEREFORE, in consideration of the premises
and of the mutual covenants herein contained, FMPO hereby
agrees as follows:

ARTICLE I

GUARANTEE

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

"Borrowers" means FMPOC and Circle C.

"Consolidated Credit Agreement" has the meaning
assigned to such term in the preamble to this Guarantee.

Coverage Period" has the meaning assigned to such
term in Section 1.04.

"FTX Credit Agreement"  means the Credit Agreement
dated as of November 14, 1996, among FTX, Freeport-McMoRan
Resource Partners, Limited Partnership, a Delaware limited
partnership, the banks party thereto and Chase, as
administrative agent, collateral agent and documentary
agent.  The FTX Credit Agreement shall automatically mean
such agreement in the form modified or amended from time to
time, without the necessity of any further action or
approval pursuant to this Guarantee.

"Loan" means each Loan made under the Consolidated
Credit Agreement.

"Obligations" means the payment of principal an
interest on the Loans, the reimbursement in full of any
amounts drawn under a Letter of Credit, and the posting of
cash collateral in respect of Letters of Credit, and the
payment of all Fees, expenses and other amounts (including,
without limitation, indemnities) payable under the Loan
Documents.

(b)  Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to
such terms in the Consolidated Credit Agreement.

(c)  Unless otherwise stated, Section and Article
references made herein are to Sections and Articles, as the
case may be, of this Guarantee.  Except as otherwise
expressly provided herein, any reference in this Guarantee
to any Loan Document shall mean such document as amended,
restated, supplemented or otherwise modified from time to
time.

SECTION 1.02.  The Guarantee.  FMPO hereby
unconditionally and irrevocably guarantees as a primary
obligor and not merely as a surety the due and punctual
payment and performance when and as due (whether at stated
maturity, by notice of prepayment, upon acceleration or
otherwise) of the Obligations.  FMPO agrees that it shall
pay on demand any of the Obligations for which it is liable
pursuant to this Guarantee which has remained unpaid by the
relevant Borrower for five Business Days after such amount
is due or demanded from the relevant Borrower; provided that
if an event referred to in Section 7.01(h) or (i) of the
Consolidated Credit Agreement has occurred with respect to a
Borrower, such amounts shall be payable on demand by FMPO
without the necessity of any demand on such Borrower.  The
obligations of FMPO under this Guarantee shall be a
guarantee of payment and not of collection.  Upon payment by
FMPO of any sums to a Lender or an Agent as provided above
in this Guarantee, FMPO shall be subrogated to the rights of
such Lender or Agent, as applicable, against such Borrower
with respect to such payment; provided, that all rights of
FMPO against a Borrower arising as a result thereof by way
of right of subrogation or otherwise shall in all respect
be subordinated and junior in right of payment to the prior
payment in full of all the Obligations to the Lenders and
the Agents and shall not be exercised by FMPO prior to
payment in full of all Obligations and termination of the
Commitments.  If any amount shall be paid to FMPO on account
of any amount paid by FMPO pursuant to this Guarantee or
otherwise at any time when all the Obligations shall not be
paid in full, such amount shall be held in trust by FMPO for
the benefit of Agents and the Lenders and shall forthwith be
paid to the Administrative Agent to be credited and applied
to the Obligations, whether matured or unmatured.  At such
time as all Obligations owing to each Lender have been paid
in full and its Commitment terminated, each Lender shall, in
a reasonable manner, assign (subject to the continued
effectiveness and the reinstatement provided for above) the
amount of the Obligations owed to it and paid by FMPO
pursuant to this Guarantee to FMPO, such assignment to be
pro tanto to the extent to which the Obligations in question
were discharged by FMPO, or make such other disposition
thereof as FMPO shall reasonably direct (all without any
representation or warranty by, or any recourse to, such
Lender).

SECTION 1.03.  Guarantee Unconditional.  The
obligations of FMPO hereunder shall be unconditional and
absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise
affected by:

(i) any rescission, extension, renewal,
settlement, compromise, waiver or release in respect of
any obligation of either Borrower under the
Consolidated Credit Agreement, by operation of law or
otherwise;

(ii) any modification or amendment of or supplement
to the Consolidated Credit Agreement;

(iii) any guarantee or any release, impairment,
non-perfection or invalidity of any direct or indirect
security for any obligation of either Borrower under
the Consolidated Credit Agreement;

(iv) any change in the corporate existence,
structure or ownership of either Borrower, or any
insolvency, bankruptcy, reorganization or other similar
proceeding affecting either Borrower or their
respective assets, or any resulting release or
discharge of any obligation of either Borrower
contained in the Consolidated Credit Agreement;

(v) the existence of any claim, set-off or other
rights that FMPO may have at any time against either
Borrower, any Agent, any Lender or any other
corporation or person, whether in connection herewith
or any unrelated transactions; provided that, subject
to any subordination agreements relating to any such
claims, nothing herein shall prevent the assertion of
any such claim by separate suit or compulsory
counterclaim;

(vi) any invalidity or unenforceability relating to
or against either Borrower for any reason of the
Consolidated Credit Agreement, or any provision of
applicable law or regulation purporting to prohibit the
payment by either Borrower of the Obligations or any
other amount payable by either Borrower under the
Consolidated Credit Agreement;

(vii) any other act or omission to act or delay of
any kind by either Borrower, any beneficiary of this
Guarantee, or any other corporation or person, or any
other circumstance whatsoever, that might, but for the
provisions of this paragraph, constitute a legal or
equitable discharge of or defense to FMPO's obligations
hereunder or to the Obligations;

(viii) any failure of any beneficiary of this
Guarantee to assert any claim or demand or to enforce
any right or remedy against either Borrower under the
provisions of the Consolidated Credit Agreement, any
other security document, any intercreditor document or
any other loan document; or

(ix) any failure of any beneficiary of this
Guarantee to exercise any right or remedy against any
other guarantor (including any subsidiary) of the
Obligations.

SECTION 1.04.  Discharge only upon Payment in
Full; Reinstatement in Certain Circumstances.  FMPO'
obligations hereunder shall remain in full force and effect
until the earlier of the date on which (x) the commitments
under the Consolidated Credit Agreement shall have
terminated and the Obligations shall have been indefeasibly
paid in full or (y) indefeasible payment has been made
hereunder.  If at any time any Obligation is rescinded or
must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of either Borrower or
otherwise, FMPO's obligations hereunder with respect to such
payment shall be reinstated as though such payment had been
due but not made at the time initially paid.

SECTION 1.05.  Waiver by FMPO.  Except to the
extent set forth in Section 1.02, FMPO irrevocably waives
acceptance hereof, presentment, demand, protest, notice of
intent to accelerate, notice of acceleration and any notice
not provided for herein or in the Consolidated Credit
Agreement, as well as any requirement that at any time any
action be taken by any beneficiary of this Guarantee,
corporation or person against either Borrower, any other
guarantor or any other entity or person.

SECTION 1.06. Stay of Acceleration.  If
acceleration of the time for payment of any Obligation or
any other amount payable by either Borrower under the
Consolidated Credit Agreement is stayed upon the insolvency,
or reorganization of either Borrower, all such amounts
otherwise subject to acceleration under the terms of the
Consolidated Credit Agreement shall nonetheless be payable
by FMPO hereunder as if no such stay was in effect.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

SECTION 2.01.  Representations and Warranties.  As
of the Effective Date and each other date upon which such
representations and warranties are required to be made or
deemed made pursuant to Section 6.01(i) of the Consolidated
Credit Agreement, and for so long as this Guarantee shall
remain in effect, FMPO shall be deemed to have made to each
Lender, Issuing Bank and Agent each of the representations
and warranties of FMPO, as a Restricted Entity, contained in
Section 3.01 of the Consolidated Credit Agreement, as may be
in effect from time to time, which representations and
warranties, along with the definitions of the terms utilized
therein and any related provisions, as the same may be
amended, restated or otherwise modified from time to time,
are hereby incorporated by reference herein and shall apply
with the same force and effect as though set forth herein in
their entirety.

ARTICLE III

COVENANTS

SECTION 3.01.  Affirmative Covenants of FMPO.  
From and after the Effective Date and so long as this
Guarantee shall remain in effect and until the Commitments
have been terminated and the principal of and interest on
each Loan, all Fees and all other expenses or amounts
payable under any Loan Document shall have been paid in full
and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in
full, unless the Required Lenders otherwise provide prior
written consent, FMPO shall at all times be in full
compliance with the covenants and agreements of FMPO, as a
Restricted Entity, contained in Section 5.01 of the
Consolidated Credit Agreement, as may be in effect from time
to time, which covenants and agreements, as the same may be
amended, restated or otherwise modified from time to time,
are hereby incorporated by reference herein and shall apply
with the same force and effect as though set forth herein in
their entirety.

SECTION 3.02.  Negative Covenants of FMPO.  From
and after the Effective Date and so long as this Agreement
shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any
Loan Document have been paid in full, and all Letters of
Credit have been canceled or have expired and all amounts
drawn thereunder have been reimbursed in full, without the
prior written consent of the Required Lenders, FMPO shall
not at any time fail to be in full compliance with the
covenants and agreements of FMPO, as a Restricted Entity,
contained in Section 5.02 of the Consolidated Credit
Agreement, as may be in effect from time to time, which
covenants and agreements, as the same may be amended,
restated or otherwise modified from time to time, are hereby
incorporated by reference herein and shall apply with the
same force and effect as though set forth herein in their
entirety.

ARTICLE IV

MISCELLANEOUS

SECTION 4.01.  Successors and Assigns.  Subject to
Section 1.04, this Guarantee shall be binding upon and inure
to the benefit of the Borrowers, the Lenders, the Issuing
Banks, the Agents and their respective successors and
assigns, except that FMPO may not assign, delegate or
transfer any of its rights or obligations hereunder or any
interest herein (and any such attempted assignment,
delegation or transfer shall be void).

SECTION 4.02.  Waivers; Amendments.  (a) No
failure or delay of any Lender, Issuing Bank or Agent in
exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the
exercise of any other right or power.  The rights and
remedies of the Lenders, the Issuing Banks and the Agents
hereunder and under the other documents and agreements
entered into in connection herewith are cumulative and not
exclusive of any rights or remedies which they would
otherwise have.  No waiver of any provision of this
Guarantee or consent to any departure by FMPO therefrom
shall in any event be effective unless the same shall be
authorized as provided in paragraph (b) below, and then such
waiver or consent shall be effective only in the specific
instance and for the purpose for which given.  No notice or
demand on FMPO in any case shall entitle FMPO to any other
or further notice or demand in similar or other
circumstances.

(b) This Agreement (including any provision
hereof) may not be waived, amended or modified except
pursuant to an agreement or agreements in writing entered
into between FMPO and the Administrative Agent, with the
prior written consent of the Required Lenders.

SECTION 4.03.  Survival of Guarantee.  All
covenants, agreements, representations and warranties made
by FMPO herein and in the certificates or other instruments
prepared or delivered in connection with this Guarantee or
any other Loan Document shall be considered to have been
relied upon by the Lenders, the Issuing Banks and the Agents
and shall survive the making by the Lenders of the Loans or
the issuing of Letters of Credit by the Issuing Banks
regardless of any investigation made by the Lenders or
Issuing Banks, as applicable, or by their respective
representatives or agents, and shall continue in full force
and effect as long as the principal of or any accrued
interest on any Loan, L/C Disbursement, Fee or other fee or
amount payable under the Loan Documents is outstanding an
unpaid and so long as the Commitments or any outstanding
Letters of Credit issued under the Consolidated Credit
Agreement have not been terminated or have not expired.

SECTION 4.04.  Governing Law; Submission to
Jurisdiction.  This Guarantee shall be governed by and
construed in accordance with the laws of the State of New
York.  FMPO hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern
District of New York and of any New York State court sitting
in New York City for purposes of all legal proceedings
arising out of or relating to this Guarantee.  FMPO
irrevocably waives, to the fullest extent permitted by law,
any objection that it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum.um.

SECTION 4.05.  Waiver of Jury Trial.  FMPO hereby
irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or relating to this
Guarantee.

SECTION 4.06.  Notices.  All notices, requests any
other communications shall be in writing (including
facsimile transmission or similar writing) and shall be
mailed or sent by the sending party to: (i) in the case of
FMPO, at its address set forth in Section 10.01 of the
Consolidated Credit Agreement or as otherwise notified to
the beneficiaries of this Guarantee or (ii) in the case of
any other party, at its address set forth in the Loan
Document
IN WITNESS WHEREOF, FMPO has caused this Guarantee
to be duly executed by its officer thereunto duly
authorized, as of the day and year first above written.

FM PROPERTIES INC.,

by /s/ Robert R. Boyce
-------------------            
Name:Robert R. Boyce
Title: Treasurer

Exhibit 10.7

EXECUTION COPY

AMENDED AND RESTATED IGL GUARANTEE AGREEMENT
dated as of December 22, 1997, by IMC Global Inc.,
a Delaware corporation ("IGL"), for the benefit of
the lenders party to the Consolidated Credit
Agreement (as defined below) from time to time
(the "Lenders"), amending and restating the

Amended, Restated and Consolidated FTX Guarantee
Agreement dated as of December 15, 1997, by
Freeport-McMoRan Inc., a Delaware corporation
("FTX") (the "FTX Guarantee Agreement"), which
amended, restated and consolidated (i) the Amended
and Restated FTX Guarantee Agreement dated as of
December 20, 1996, by FTX (the "FMPOC Guarantee
Agreement"), and (ii) the Amended and Restated
Guaranty Agreement dated as of December 20, 1996,
by FTX (the "Circle C Guarantee Agreement", and,

together with the FMPOC Guarantee Agreement, the
"Existing Guarantees"); the Existing Guarantees,
as amended, restated and consolidated by the FTX
Guarantee Agreement and as further amended and
restated by this Agreement, being this
"Guarantee").

WHEREAS, IGL has consummated a merger, whereby FTX
was merged with and into IGL on December 22, 1997 (the
"Merger"), and, pursuant to the Merger, IGL has succeeded to
all the rights and obligations of FTX under the FTX
Guarantee Agreement.

WHEREAS, the Existing Guarantees guaranteed the
obligations of (i) FM Properties Operating Co., a Delaware
general partnership ("FMPOC"), as the borrower under the
Amended and Restated Credit Agreement dated as of
December 20, 1996, among FMPOC, FTX, the banks party thereto
and The Chase Manhattan Bank ("Chase")(the "FMPOC Revolving
Facility"), and as the borrower under the Second Amended and
Restated Note Agreement, as amended, dated as of June 30,
1995, among FMPOC, FTX, Hibernia National Bank and Chase
(the "FMPOC Term Loan Facility"), and (ii) Circle C Land
Corp., a Texas corporation ("Circle C"), as the borrower
under the Amended and Restated Credit Agreement dated as of
December 20, 1996, between Circle C and Texas Commerce Bank
National Association (the "Circle C Loan Facility", and
together with the FMPOC Revolving Facility and the FMPOC
Term Loan Facility, the "Existing Credits").

WHEREAS, the Existing Credits have been amended
and restated and the terms and provisions thereof have been
consolidated into the Amended, Restated and Consolidated
Credit Agreement dated as of December 15, 1997, among FMPOC,
Circle C, FM Properties Inc., a Delaware corporation, the
financial institutions listed on the signature pages thereof
and Chase, as administrative agent and documentary agent
thereunder (as amended or modified and in effect from time
to time, the "Consolidated Credit Agreement").

WHEREAS, it is the intent of the parties to the
Consolidated Credit Agreement that the Consolidated Credit
Agreement (i) shall evidence the Borrower's Debt (as defined
in the Consolidated Credit Agreement) under the Existing
Credits, (ii) has been entered into as an amendment,
restatement and consolidation of the obligations of any of
the Borrowers under the Existing Credits and (iii) is in no
way intended to constitute a novation of any of the
Borrowers' Debt which was evidenced by any of the Existing
Credits.

WHEREAS, in connection with the consummation of
the Merger and the assumption by IGL, as successor by merger
to FTX, of all FTX's rights and obligations as a Guarantor
under the FTX Guarantee Agreement and the Consolidated
Credit Agreement, IGL wishes to enter into this Guarantee in
furtherance of the foregoing which Guarantee shall amend,
restate and evidence the FTX Guarantee Agreement and, upon
the satisfaction of the conditions precedent set forth in
Section 4.01, the FTX Guarantee Agreement, in its form
immediately prior to the effectiveness of this Guarantee,
shall be of no further force and effect.

NOW THEREFORE, in consideration of the premises
and of the mutual covenants herein contained, IGL agrees as
follows:

ARTICLE I

GUARANTEE

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

"Borrowers" means FMPOC and Circle C.

"Chase" has the meaning specified in the preamble
to this Guarantee.

"Consolidated Credit Agreement" has the meaning
assigned to such term in the preamble to this Guarantee.

"Coverage Period" has the meaning assigned to such
term in Section 1.04.

"Financial Covenants" shall mean any covenants or
agreements requiring the maintenance, achievement or
satisfaction of specified financial condition, financial
performance or financial ratios, including, without
limitation, covenants relating to net worth or similar
measures, interest or fixed charge coverage tests, leverage
tests, working capital tests and earnings or cash flow
tests.

"FTX Guarantee Agreement" has the meaning set
forth in the preamble to this Guarantee.

"IGL Credit Agreement"  means that certain Five-
Year Credit Agreement dated as of December 15, 1997, among
IGL, the financial institutions from time to time parties
thereto, Morgan Guaranty Trust Company of New York, as
administrative agent, Royal Bank of Canada, as documentation
agent, and Chase and NationsBank, N.A., as co-syndication
agents, as the same may be amended, modified, renewed or
extended from time to time and including any bank credit
facility which refinances or replaces the IGL Credit
Agreement then in effect and which serves as IGL's primary
bank credit facility.

"Loan" means each Loan made under the Consolidated
Credit Agreement at any time when no Default or Event of
Default shall have occurred and be continuing.

"Obligations" means the payment of principal and
interest on the Loans, the reimbursement in full of any
amounts drawn under a Letter of Credit, and the posting of
cash collateral in respect of Letters of Credit, and the
payment of all Fees, expenses and other amounts (including,
without limitation, indemnities) payable under the Loan
Documents; provided, however, that the amount of indemnities
of the Borrowers in respect of any environmental obligations
(excluding fees and expenses related thereto) covered by
this Guarantee shall not exceed an amount in excess of
$5,000,000.

(b)  Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to
such terms in the Consolidated Credit Agreement.

(c)  Unless otherwise stated, Section and Article
references made herein are to Sections and Articles, as the
case may be, of this Guarantee.  Except as otherwise
expressly provided herein, any reference in this Guarantee
to any Loan Document shall mean such document as amended,
restated, supplemented or otherwise modified from time to
time.

SECTION 1.02.  The Guarantee.  (a)  Subject to the
provisions of Section 1.04, IGL herby unconditionally and
irrevocably guarantees as a primary obligor and not merely
as a surety the due and punctual payment when and as due
(whether at stated maturity, by notice of prepayment, upon
acceleration or otherwise) of the Obligations.  IGL agrees
that it shall pay on demand any of the Obligations for which
it is liable pursuant to this Guarantee which has remained
unpaid by the relevant Borrower for five Business Days after
such amount is due or demanded from the relevant Borrower;
provided that if an event referred to in Section 7.01(h) or

(i) of the Consolidated Credit Agreement has occurred with
respect to a Borrower, such amounts shall be payable on
demand by IGL; provided further, that if an event referred
to in Section 7.01(h) or (i) of the Consolidated Credit
Agreement has occurred with respect to a Borrower, IGL shall
have the right to pay all such amounts to the Administrative
Agent without the necessity of any such demand.  The
obligations of IGL under this Guarantee shall be a guarantee
of payment and not of collection.  Upon payment by IGL of
any sums to a Lender or an Agent as provided above in this
Guarantee, IGL shall be subrogated to the rights of such
Lender or Agent, as applicable, against such Borrower with
respect to such payment; provided that all rights of IGL
against a Borrower 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 Obligations to the Lenders and
the Agents and shall not be exercised by IGL prior to
payment in full of all Obligations and termination of the
Commitments.  If any amount (other than any fees payable to
IGL in respect of its guarantee hereunder) shall be paid to
IGL on account of any amount paid by IGL pursuant to this
Guarantee or otherwise at any time when all the Obligations
shall not be paid in full and a Default or Event of Default
shall have occurred and be continuing, such amount shall be
held in trust by IGL for the benefit of the Agents and the
Lenders and shall forthwith be paid to the Administrative
Agent to be credited and applied to the Obligations, whether
matured or unmatured.  At such time as all Obligations owing
to each Lender have been paid in full and its Commitment
terminated, each Lender shall, in a reasonable manner,
assign (subject to the continued effectiveness and the
reinstatement provided for above) the amount of the
Obligations owed to it and paid by IGL pursuant to this
Guarantee to IGL, such assignment to be pro tanto to the
extent to which the Obligations in question were discharged
by IGL, or make such other disposition thereof as IGL shall
reasonably direct (all without any representation or
warranty by, or any recourse to, such Lender).

SECTION 1.03.  Guarantee Unconditional.  Subject
to the provisions of Section 1.04 and the Consolidated
Credit Agreement, the obligations of IGL hereunder shall be
unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released,
discharged or otherwise affected by:

(i) any rescission, extension, renewal,
settlement, compromise, waiver or release in respect of
any obligation of either Borrower under the
Consolidated Credit Agreement, by operation of law or
otherwise;

(ii) any modification or amendment of or supplement
to the Consolidated Credit Agreement; provided that any
such modification, amendment or supplement which
increases the obligations of IGL hereunder shall not be
effective as to IGL without its consent.

(iii) any guarantee or any release, impairment,
non-perfection or invalidity of any direct or indirect
security for any obligation of either Borrower under
the Consolidated Credit Agreement;

(iv) any change in the corporate existence,
structure or ownership of either Borrower, or any
insolvency, bankruptcy, reorganization or other similar
proceeding affecting either Borrower or their
respective assets, or any resulting release or
discharge of any obligation of either Borrower
contained in the Consolidated Credit Agreement;

(v) the existence of any claim, set-off or other
rights that IGL may have at any time against either
Borrower, any Agent, any Lender or any other
corporation or person, whether in connection herewith
or any unrelated transactions (including, without
limitation, any default in the payment by either
Borrower, or any other person of any fees payable to
IGL in respect of its guarantee hereunder); provided
that, subject to any subordination agreements relating
to any such claims, nothing herein shall prevent the
assertion of any such claim by separate suit or
compulsory counterclaim;

(vi) any invalidity or unenforceability relating to
or against either Borrower for any reason of the
Consolidated Credit Agreement, or any provision of
applicable law or regulation purporting to prohibit the
payment by either Borrower of the Obligations or any
other amount payable by either Borrower under the
Consolidated Credit Agreement;

(vii) any other act or omission to act or delay of
any kind by either Borrower, any beneficiary of this
Guarantee, or any other corporation or person, or any
other circumstance whatsoever, that might, but for the
provisions of this paragraph, constitute a legal or
equitable discharge of or defense to IGL's obligations
hereunder or to the Obligations;

(viii) any failure of any beneficiary of this
Guarantee to assert any claim or demand or to enforce
any right or remedy against either Borrower under the
provisions of the Consolidated Credit Agreement, any
other security document, any intercreditor document or
any other loan document; or

(ix) any failure of any beneficiary of this
Guarantee to exercise any right or remedy against any
other guarantor (including any subsidiary) of the
Obligations.

SECTION 1.04.  Reduction of Principal Amounts
Covered by Guarantee.  Pursuant to Section 2.07(c) of the
Consolidated Credit Agreement, the aggregate of the
Commitments under the Tranches shall be automatically and
permanently reduced, ratably among the Lenders in accordance
with the amounts of their respective Commitments under the
Tranches as set forth therein.  Subject to the provisions of
Section 1.05, the aggregate principal amount of the Loans,
and reimbursement obligations (including cash
collateralization obligations) in respect of Letters of
Credit (collectively, "Principal Obligations"), covered by
the guarantee obligations of IGL hereunder and in respect of
which demands for payment may be made under this Guarantee
shall, during each of the periods set forth below (each, a
"Coverage Period"), be limited to the maximum aggregate
amounts set forth below opposite such Coverage Period:

Aggregate
Coverage Period               Principal Amount

Through February 14,
1999

$50,000,000                     $35,000,00
From February 15,    
1999 through
February 14, 2000

From                            $15,000,00
February 15, 2000    
through January, 31
2001

After                           $0
January 31, 2001

Notwithstanding the foregoing, this
Guarantee (i) shall remain in full force and effect at all
times after a Coverage Period in an amount equal to the
amount set forth opposite such Coverage Period above with
respect to accrued and unpaid Principal Obligations in
respect of which demand for payment under this Guarantee was
duly made on IGL during such Coverage Period; provided that
the aggregate liability of IGL under this Guarantee in
respect of payment of Principal Obligations shall not in any
event exceed $50,000,000 and (ii) shall cover the full
amount of any interest accrued and unpaid on Principal
Obligations in respect of which a demand for payment is or
could (assuming such amount were due and unpaid) be made on
IGL under this Guarantee on or before January 31, 2001
(except as provided in Section 1.05).  In addition,
notwithstanding the foregoing, all Obligations of the
Borrowers for payment of amounts other than principal of and
interest on the Loans (including, without limitation, in
respect of indemnities, reimbursement of costs, yield
protection, redeployment costs, tax gross-ups and reasonable
expenses) shall be covered by IGL's guarantee hereunder
without limitation, except to the extent any such payment
obligation is attributable solely to a Principal Obligation,
or interest on a Principal Obligation which, pursuant to the
foregoing provisions, is not at the time covered by IGL's
guarantee hereunder.  During any Coverage Period, claims may
be made on IGL hereunder in respect of any and all Principal
Obligations not paid when due up to the full aggregate
amount of Principal Obligations set forth opposite such
Coverage Period in the table above, notwithstanding that
(i) the aggregate amount of Principal Obligations under the
Consolidated Credit Agreement may exceed the amount set
forth in such table or (ii) only a portion of the Principal
Obligations are at the time due and unpaid; provided,
however, that the aggregate liability of IGL under this
Guarantee in respect of Principal Obligations shall not in
any event exceed $50,000,000.

SECTION 1.05.  Discharge only upon
Payment in Full.  Subject to the provisions of Section 1.04,
IGL's obligations hereunder shall remain in full force and
effect until the earliest of the date on which (x) the
commitments under the Consolidated Credit Agreement shall
have terminated and the Obligations (other than contingent
indemnification obligations) shall have been paid in full,
(y) payment has been made hereunder or (z) Chase or its
Affiliates shall reduce their respective Commitments and/or
sell participations in outstanding Loans such that their
aggregate Commitments then outstanding under the
Consolidated Credit Agreement as of such date shall be less
than 25% of the total Commitments then outstanding as of
such date.  If at any time any Obligation is rescinded or
must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of either Borrower or
otherwise, IGL's obligations hereunder with respect to such
payment shall be reinstated as though such payment had been
due but not made at the time initially paid and if a demand
for payment under this Guarantee could have been made in
respect of such Obligation on such initial payment date or
on any date thereafter in accordance with the provisions of
Section 1.04 (assuming nonpayment of such Obligation when
due on such initial payment date) then demand for payment
may be made hereunder in respect of such Obligation
notwithstanding the provisions of Section 1.04.

SECTION 1.06.  Waiver by IGL.  Except to
the extent set forth in Section 1.02 and as provided in the
Consolidated Credit Agreement, IGL irrevocably waives
acceptance hereof, presentment, demand, protest, notice of
intent to accelerate, notice of acceleration and any notice
not provided for herein or in the Consolidated Credit
Agreement, as well as any requirement that at any time any
action be taken by any beneficiary of this Guarantee,
corporation or person against either Borrower, any other
guarantor or any other entity or person.

SECTION 1.07.  Stay of Acceleration.  If
acceleration of the time for payment of any Obligation or
any other amount payable by either Borrower under the
Consolidated Credit Agreement is stayed upon the insolvency,
bankruptcy or reorganization of either Borrower, all such
amounts otherwise subject to acceleration under the terms of
the Consolidated Credit Agreement shall nonetheless be
payable by IGL hereunder as if no such stay was in effect.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

SECTION 2.01.  Representations and
Warranties.  (a)  As of the date hereof and each other date
upon which such representations and warranties are required
to be made or deemed made pursuant to Section 6.01(i) of the
Consolidated Credit Agreement, and for so long as this
Guarantee shall remain in effect, IGL shall be deemed to
have made to each Lender, Issuing Bank and Agent each of the
representations and warranties of IGL contained in
Article IV of the IGL Credit Agreement, as may be in effect
from time to time, which representations and warranties,
along with the definitions of the terms utilized therein and
any related provisions, as the same may be amended,
restated, waived or otherwise modified from time to time,
are hereby incorporated by reference herein and shall apply
with the same force and effect as though set forth herein in
their entirety; provided, however, for purposes of IGL
making the representations and warranties required of it
under this Section 2.01, any references to the "Agreement"
in the representations and warranties contained in
Article IV of the IGL Credit Agreement shall be deemed to be
references to this Guarantee.

ARTICLE III

COVENANTS

SECTION 3.01.  Financial Covenants of
IGL.  (a)  IGL covenants and agrees that from and after the
date hereof and so long as this Guarantee shall remain in
effect with respect to it and until all of the Obligations
for which it is liable hereunder have been paid or
terminated, unless the Required Lenders otherwise provide
prior written consent, it will at all times comply with each
of the Financial Covenants in the IGL Credit Agreement, as
in effect from time to time (after giving effect to any
period of grace applicable to any such Financial Covenant
and specified in the IGL Credit Agreement), which Financial
Covenants, along with the definitions of the terms utilized
therein and any related provisions, are hereby incorporated
by reference herein and shall apply with the same force and
effect as though set forth herein in their entirety.

(b)  The financial covenants in effect
pursuant to paragraph (b) above shall be deemed to be
automatically amended, restated, waived or otherwise
modified, as applicable, as of the date that the equivalent
Financial Covenant in the IGL Credit Agreement shall
effectively be amended, restated, waived or otherwise
modified, as applicable, pursuant to the terms thereof.

SECTION 3.02.  Delivery Requirements. 
(a) IGL shall promptly deliver a copy of any amendment,
restatement, waiver or modification of the IGL Credit
Agreement to the Administrative Agent (provided that the
failure to deliver such amendment, restatement, waiver or
modification shall in no way affect any automatic
modification of an equivalent financial covenant hereunder
pursuant to Section 3.01(b)).  Whenever and on each occasion
that the IGL Credit Agreement is replaced by or refinanced
with a successor IGL Credit Agreement, IGL shall forthwith
deliver a complete and accurate copy of such successor IGL
Credit Agreement to the Administrative Agent (provided that
the failure to deliver such agreement shall in no way affect
any automatic modification of an equivalent financial
covenant hereunder pursuant to Section 3.01(b)).

(b)  IGL shall promptly deliver to the
Administrative Agent, at the time they become available,
(1) copies of all financial statements, reports and proxy
statements which it shall have sent to its stockholders
generally and (2) copies of all regular and periodic
reports, if any, which IGL shall file with the SEC or any
national securities exchange.

ARTICLE IV

MISCELLANEOUS

SECTION 4.01.  Conditions to
Effectiveness.  (a) It shall be a condition precedent to the
effectiveness of this Guarantee that:

(i) the Administrative Agent shall
have received a certificate from IGL
dated the date hereof and signed by a
Financial Officer of IGL, confirming that
(i) the representations and warranties on
the part of IGL contained in this
Guarantee shall be true and correct in
all material respects at and as of the
date hereof and (ii) no Event of Default
in respect of IGL shall have occurred and
be continuing on the date hereof or would
result after giving effect to this
Guarantee;

(ii) the Administrative Agent shall
have received on behalf of itself and the
Lenders, a favorable written opinion
(addressed to Administrative Agent
and the Lenders and dated the Effective
Date) of New York counsel in a form
satisfactory to the Administrative Agent
and its counsel;

(iii) all legal matters incident to
this Guarantee shall be satisfactory to
the Lenders, the Issuing Banks and to
Cravath, Swaine & Moore, special counsel
for the Agents;

(iv) the Administrative Agent shall
have received (w) a copy of the
Certificate of Incorporation, including
all amendments thereto, of IGL, certified
as of a recent date by the Secretary of
State of the state of Delaware, and a
certificate from such Secretary of State
as to the good standing of IGL as of a
recent date and the filing of all
franchise tax returns and the payment of
all franchise taxes required by law to be
filed and paid by IGL to the date of such
certificate; (x) a certificate of the
Secretary or Assistant Secretary of IGL
dated the date hereof and certifying (A)
that attached thereto is a true and
complete copy of the By-laws of IGL as in
effect on the date hereof and at all
times since a date prior to the date of
the resolutions described in clause (B)
below, (B) that attached thereto is a
true and complete copy of resolutions
duly adopted by the Board of Directors of
IGL authorizing the execution, delivery
and performance of this Guarantee, and
that such resolutions have not been
modified, rescinded or amended and are in
full force and effect, (C) that the
Certificate of Incorporation and By-laws
of IGL attached thereto have not been
amended since the date of the last
amendment thereto shown on the
certificate of good standing furnished
pursuant to clause (w) above or the date
of the certificate furnished pursuant to
clause (x) above, as applicable, and (D)
as to the incumbency and specimen
signature of each officer executing this
Guarantee or any other document delivered
in connection herewith on behalf of IGL;
and (y) a certificate of another officer
of IGL as to the incumbency and specimen
signature of the applicable Secretary or
Assistant Secretary executing the
certificate pursuant to clause (x) above.

(b)  Upon the satisfaction of the
conditions precedent set forth in Section 4.01(a) and the
execution of this Guarantee by a duly authorized officer of
IGL, this Guarantee shall amend and restate the FTX
Guarantee Agreement in its entirety and the FTX Guarantee
Agreement, in its form immediately prior to the
effectiveness of this Guarantee, shall be of no further
force and effect.

SECTION 4.02.  Successors and Assigns. 
Subject to Section 1.05, this Guarantee shall be binding
upon and inure to the benefit of the Borrowers, the Lenders,
the Issuing Banks, IGL, the Agents and their respective
successors and assigns, except that IGL may not assign,
delegate or transfer any of its rights or obligations
hereunder or any interest herein (and any such attempted
assignment, delegation or transfer shall be void).

SECTION 4.03.  Waivers; Amendments. 
(a) No failure or delay of any Lender, Issuing Bank or Agent
in exercising any power or right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise
of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the
exercise of any other right or power.  The rights and
remedies of the Lenders, the Issuing Banks and the Agents
hereunder and under the other documents and agreements
entered into in connection herewith are cumulative and not
exclusive of any rights or remedies which they would
otherwise have.  Except as provided in the Consolidated
Credit Agreement, no waiver of any provision of this
Guarantee or consent to any departure by IGL 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.  Except as
provided in the Consolidated Credit Agreement, no notice or
demand on IGL in any case shall entitle IGL to any other or
further notice or demand in similar or other circumstances.

(b) This Agreement (including any
provision hereof) may not be waived, amended or modified
except pursuant to an agreement or agreements in writing
entered into between IGL and the Administrative Agent, with
the prior written consent of the Required Lenders.

SECTION 4.04.  Survival of Guarantee. 
All covenants, agreements, representations and warranties
made by IGL herein shall be considered to have been relied
upon by the Lenders, the Issuing Banks and the Agents and
shall survive the making by the Lenders of the Loans, or the
issuing of Letters of Credit by the Issuing Banks regardless
of any investigation made by the Lenders or Issuing Banks,
as applicable, or on their respective representatives or
agents, and, subject to the provisions of Section 1.04,
shall continue in full force and effect only as long as the
principal of or any accrued interest on any Loan, L/C
Disbursement, Fee or other fee or amount payable (other than
contingent indemnification obligations) under the Loan
Documents is outstanding and unpaid and only so long as the
Commitments have not been terminated or have not expired
and, in no event (other than as provided in Section 1.05),
later than January 31, 2001.

SECTION 4.05.  Governing Law; Submission
to Jurisdiction.  This Guarantee shall be governed by and
construed in accordance with the laws of the State of New
York.  IGL hereby submits to the nonexclusive jurisdiccttion
of the United States District Court for the Southern
District of New York and of any New York State court sitting
in New York City for purposes of all legal proceedings
arising out of or relating to this Guarantee.  IGL
irrevocably waives, to the fullest extent permitted by law,
any objection that either such party may not or hereafter
have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an
inconvenient forum.

SECTION 4.06.  Waiver of Jury Trial.  IGL
hereby irrevocably waives any and all right to trial by jury
in any legal proceeding arising out of or relating to this
Guarantee.

SECTION 4.07.  Notices.  All notices,
requests and other communications shall be in writing
(including facsimile transmission or similar writing) and
shall be mailed or sent by the sending party to: (i) in the
case of IGL, at its address set forth in Section 10.01 of
the Consolidated Credit Agreement or as otherwise notified 
to the beneficiaries of this Guarantee or (ii) in the
case of any other party, at its address set forth in the
Loan Documents.

IN WITNESS WHEREOF, IGL has caused this
Guarantee to be duly executed by its officer thereunto duly
authorized, as of the day and year first above written.

IMC GLOBAL INC.,

by /s/ Lynn F. White

Name: Lynn F. White
Title: Senior Vice 
President and
Acting Chief 
Financial 
Officer

Name:
Title:

Exhibit 10.9

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)
if permitted  by  the Committee  and  so provided  in  the  Award
Agreement or  an amendment  thereto, Options  and Limited  Rights
granted in tandem therewith may be transferred or assigned (a) to
Immediate Family Members, (b) to a partnership in which Immediate
Family Members, or entities in which Immediate Family Members are
the owners,  members or  beneficiaries, as  appropriate, are  the
partners, (c) to a limited  liability company in which  Immediate
Family Members, or entities in which Immediate Family Members are
the owners,  members or  beneficiaries, as  appropriate, are  the
members, or (d) to  a trust for the  benefit of Immediate  Family
Members; provided,  however,  that  no more  than  a  de  minimus
beneficial interest in a  partnership, limited liability  company
or trust described in  (b), (c) or  (d) above may  be owned by  a
person who is not an Immediate Family Member or by an entity that
is not beneficially  owned solely by  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.

Exhibit 10.10

FM PROPERTIES INC.
1996 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

ARTICLE I

PURPOSE OF THE PLAN

The   purpose  of   the  1996   Stock  Option   Plan   for
Non-Employee Directors (the "Plan") is to align more closely  the
interests of  the non-employee  directors of  FM Properties  Inc.
(the "Company")  with  that  of  the  Company's  stockholders  by
providing for  the automatic  grant to  such directors  of  stock
options ("Options") to purchase Shares (as hereinafter  defined),
in accordance with the terms of the Plan.

ARTICLE II

DEFINITIONS

For the purposes  of this Plan, the following terms  shall
have the meanings indicated:

Board:  The Board of Directors of the Company.

Change in  Control :  A Change  in Control shall be  deemed
to have occurred  if either (a)  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 20% of the Common Stock
outstanding (exclusive of shares  held in the Company's  treasury
or by the  Company's Subsidiaries)  pursuant to  a tender  offer,
exchange offer or series of  purchases or other acquisitions,  or
any combination of those  transactions, or (b)  there shall be  a
change in the  composition of the  Board at any  time within  two
years  after   any   tender  offer,   exchange   offer,   merger,
consolidation, sale  of  assets  or contested  election,  or  any
combination of those transactions (a "Transaction"), so that  (i)
the persons who were directors of the Company immediately  before
the first such Transaction cease to constitute a majority of  the
Board of Directors of the corporation that shall thereafter be in
control of  the  companies  that were  parties  to  or  otherwise
involved in such Transaction, or (ii)  the number of persons  who
shall thereafter be directors of such corporation shall be  fewer
than two-thirds  of  the  number  of  directors  of  the  Company
immediately prior to such first Transaction.  A Change in Control
shall be deemed  to take  place upon the  first to  occur of  the
events specified in the foregoing clauses (a) and (b).

Code:  The Internal Revenue Code of 1986, as amended  from
time to time.

Committee:   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.

Election  Period :   The  period  beginning  on  the  third
business day following a date on  which the Company releases  for
publication its quarterly or  annual summary statements of  sales
and earnings, and  ending on the  twelfth business day  following
such date.

Eligible Director :  A  director of the Company who is  not
an officer or an  employee of the Company  or a Subsidiary or  an
officer or an employee  of an entity with  which the Company  has
contracted to receive management services.

Exchange Act :   The Securities  Exchange Act  of 1934,  as
amended from time to time.

Fair Market Value:  The average of the per Share high  and
low quoted sale prices on the  date in question (or, if there  is
no reported sale  on such  date, on  the last  preceding date  on
which any reported  sale occurred) on  the principal exchange  or
market on which such Shares are quoted.

Option   Cancellation  Gain:     With  respect   to   the
cancellation of an  Option pursuant to  Section 3  of Article  IV
hereof, the excess  of the  Fair Market  Value as  of the  Option
Cancellation Date  (as  that term  is  defined in  Section  3  of
Article IV hereof) of all the outstanding Shares covered by  such
Option, whether or not then exercisable, over the purchase  price
of such Shares under such Option.

Rule 16b-3:  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.

SEC:   The Securities and  Exchange Commission,  including
the staff thereof, or any successor thereto.

Section  162(m):   Section  162(m)  of the  Code  and  all
regulations promulgated  thereunder as  in  effect from  time  to
time.

Shares:   Shares  of common  stock,  par value  $0.01  per
share, of  the Company  (including any  attached Preferred  Stock
Purchase Rights).

Subsidiary:  Any  corporation of which stock  representing
at least 50% of the ordinary  voting power is owned, directly  or
indirectly, by the Company; and any other entity of which  equity
securities or interests representing at least 50% of the ordinary
voting power or 50% of the  total value of all classes of  equity
securities or interests  of such  entity are  owned, directly  or
indirectly, by the Company.

ARTICLE III

ADMINISTRATION OF THE PLAN

This Plan shall be  administered by the Board.  The  Board
will interpret this  Plan and may  from time to  time adopt  such
rules and regulations for carrying  out the terms and  provisions
of this Plan as it may  deem best; however, the Board shall  have
no discretion  with respect  to the  selection of  directors  who
receive Options, the timing of the  grant of Options, the  number
of Shares subject to any Options or the purchase price thereof.  
Notwithstanding the  foregoing,  the  Committee  shall  have  the
authority  to  make  all  determinations  with  respect  to   the
transferability  of  Options  in  accordance  with  Article  VIII
hereof.  All determinations by the  Board or the Committee  shall
be made by the affirmative vote  of a majority of its  respective
members, but any determination reduced to writing and signed by a
majority of its respective members shall be fully as effective as
if it had been made by a  majority vote at a meeting duly  called
and held.  Subject to any applicable provisions of the  Company's
By-Laws or of this Plan, all determinations by the Board and  the
Committee pursuant  to  the  provisions of  this  Plan,  and  all
related orders or  resolutions of  the Board  and the  Committee,
shall be final, conclusive and binding on all persons,  including
the  Company  and  its  stockholders,  employees,  directors  and
optionees.  In the event of any conflict or inconsistency between
determinations, orders,  resolutions,  or other  actions  of  the
Committee and the Board taken in  connection with this Plan,  the
action of the Board shall control. 

ARTICLE IV

STOCK SUBJECT TO THE PLAN

SECTION 1.   The  Shares to  be issued  or delivered  upon
exercise of Options shall be made available, at the discretion of
the Board, either from the authorized but unissued Shares of  the
Company or  from  Shares  reacquired by  the  Company,  including
Shares purchased by the Company in  the open market or  otherwise
obtained; provided, however, that the Company, at the  discretion
of the Board, may,  upon exercise of  Options granted under  this
Plan,  cause  a  Subsidiary  to  deliver  Shares  held  by   such
Subsidiary.

SECTION 2.   Subject  to the  provisions of  Section 3  of
this Article  IV, the  aggregate number  of  Shares that  may  be
purchased pursuant to Options shall not exceed 250,000.

SECTION 3.  In the  event of the payment of any  dividends
payable in  Shares,  or  in  the  event  of  any  subdivision  or
combination of  the Shares,  the number  of  Shares that  may  be
purchased under this Plan,  and the number  of Shares subject  to
each Option granted in accordance with Section 2 of Article  VII,
shall be increased or decreased proportionately, as the case  may
be, and  the  number  of Shares  deliverable  upon  the  exercise
thereafter of any Option theretofore granted (whether or not then
exercisable) shall be increased or decreased proportionately,  as
the case may be, without change in the aggregate purchase  price.
In the event the Company is merged or consolidated into or  with
another corporation in a transaction in which the Company is  not
the survivor,  or in  the event  that  substantially all  of  the
Company's assets are sold to  another entity not affiliated  with
the Company,  any  holder  of an  Option,  whether  or  not  then
exercisable, shall  be entitled  to receive  (unless the  Company
shall take  such  alternative  action  as  may  be  necessary  to
preserve the economic benefit of the Option for the optionee)  on
the  effective  date  of   any  such  transaction  (the   "Option
Cancellation Date"), in cancellation of such Option, an amount in
cash equal  to the  Option  Cancellation Gain  relating  thereto,
determined as of the Option Cancellation Date.

ARTICLE V

PURCHASE PRICE OF OPTIONED SHARES

The purchase  price per Share under  each Option shall  be
100% of the Fair Market Value of a Share at the time such  Option
is granted, but in no case shall such price be less than the  par
value of the Shares subject to such Option.

ARTICLE VI

ELIGIBILITY OF RECIPIENTS

Options  will  be granted  only  to  individuals  who  are
Eligible Directors at the time of such grant.

ARTICLE VII

GRANT OF OPTIONS

SECTION 1.   Each Option  shall constitute a  nonqualified
stock option that is not intended to qualify under Section 422 of
the Code.

SECTION 2.   On September 1, 1996, each Eligible  Director
as of such  date shall be  granted an Option  to purchase  20,000
Shares, and,  on  September  1  of  each  subsequent  year,  each
Eligible Director as of each such date shall be granted an Option
to purchase 5,000 Shares.   Each Option shall become  exercisable
in four  equal annual  installments on  each  of the  first  four
anniversaries of the date  of grant and may  be exercised by  the
holder thereof with  respect to  all or  any part  of the  Shares
comprising each installment as such holder may elect at any  time
after such installment becomes exercisable but no later than  the
termination date of such Option; provided that each Option  shall
become exercisable in full upon a Change in Control.

ARTICLE VIII

TRANSFERABILITY OF OPTIONS

No Options granted hereunder may be transferred,  pledged,
assigned or otherwise encumbered by an optionee except:

(a)  by will;

(b)  by the laws of descent and distribution; or

(c)  if permitted by the Committee and so provided in  the
Option  or an  amendment thereto,  (i) pursuant  to a  domestic
relations  order, as  defined in  the Code,  (ii) to  Immediate
Family  Members, (iii)  to  a partnership  in  which  Immediate
Family Members, or  entities in which Immediate Family  Members
are the owners,  members or beneficiaries, as appropriate,  are
the  partners, (iv)  to a  limited liability  company in  which
Immediate  Family  Members,  or  entities  in  which  Immediate
Family Members  are the  owners, members  or beneficiaries,  as
appropriate,  are  the members,  or  (v)  to a  trust  for  the
benefit of  Immediate Family Members;  provided, however,  that
no  more   than  a  de   minimus  beneficial   interest  in   a
partnership, limited  liability company or  trust described  in
(iii), (iv) or  (v) above may be owned by  a person who is  not
an  Immediate  Family  Member or  by  an  entity  that  is  not
beneficially  owned  solely  by  Immediate  Family  Members.   
"Immediate Family Members"  shall be defined as the spouse  and
natural or  adopted children or  grandchildren of the  optionee
and their spouses.

Any attempted  assignment,  transfer,  pledge,  hypothecation  or
other disposition of  Options, or levy  of attachment or  similar
process upon Options not specifically permitted herein, shall  be
null and void and without effect.

ARTICLE IX

EXERCISE OF OPTIONS

SECTION 1.   Each Option  shall terminate  10 years  after
the date on which it was granted.

SECTION  2.   Except in  cases provided  for in  Article X
hereof, each Option may be exercised  by the holder thereof  only
while the optionee to whom such Option was granted is an Eligible
Director.

SECTION 3.  Each  Option shall provide that the Option  or
any portion  thereof may  be exercised  only during  an  Election
Period.  Each Option shall provide, however, that in the event of
a Change in Control, the Election Period exercise requirement  is
waived.

SECTION 4.   A person  electing to exercise  an Option  or
any portion thereof then exercisable shall give written notice to
the Company of  such election and  of the number  of Shares  such
person has elected to purchase, and shall at the time of purchase
tender the full purchase price of such Shares, which tender shall
be made in cash  or cash equivalent (which  may be such  person's
personal check) or in Shares already owned by such person  (which
Shares shall be  valued for such  purpose on the  basis of  their
Fair Market Value on the date of exercise), or in any combination
thereof.  The Company shall have no obligation to deliver  Shares
pursuant to the  exercise of  any Option,  in whole  or in  part,
until such payment in full of  the purchase price of such  Shares
is  received   by   the  Company.      No  optionee,   or   legal
representative,  legatee,  distributee,   or  assignee  of   such
optionee shall  be or  be deemed  to be  a holder  of any  Shares
subject to such Option or entitled to any rights of a stockholder
of the Company in  respect of any Shares  covered by such  Option
distributable in connection therewith until such Shares have been
paid for  in full  and certificates  for  such Shares  have  been
issued or delivered by the Company.

SECTION  5.     Each  Option  shall  be  subject  to   the
requirement that if  at any time  the Board shall  be advised  by
counsel that the  listing, registration or  qualification of  the
Shares subject to  such Option  upon any  securities exchange  or
under any state or federal law, or the consent or approval of any
governmental regulatory  body, is  necessary  or desirable  as  a
condition of, or in connection with, the granting of such  Option
or the issue or  purchase of Shares  thereunder, such Option  may
not be  exercised  in  whole or  in  part  unless  such  listing,
registration, qualification, consent or approval shall have  been
effected or  obtained free  from  any conditions  not  reasonably
acceptable to such counsel for the Board.

SECTION  6.     The  Company  may  establish   appropriate
procedures to provide for payment  or withholding of such  income
or other taxes as may be required  by law to be paid or  withheld
in connection with the  exercise of Options,  and to ensure  that
the Company receives prompt  advice concerning the occurrence  of
any event that may create, or affect the timing or amount of, any
obligation to pay  or withhold any  such taxes or  that may  make
available to the  Company any  tax deduction  resulting from  the
occurrence of such event.

ARTICLE X

TERMINATION OF SERVICE
AS AN ELIGIBLE DIRECTOR

SECTION 1.  If and when  an optionee shall cease to be  an
Eligible Director for any reason  other than death or  retirement
from the Board,  all of  the Options  granted to  such optionee  
shall be terminated except  that any Option,  to the extent  then
exercisable, may be exercised by the holder thereof within  three
months after such optionee ceases to be an Eligible Director, but
not later than the termination date of the Option.

SECTION 2.  If and when  an optionee shall cease to be  an
Eligible Director by reason of the optionee's retirement from the
Board, all  of the  Options granted  to  such optionee  shall  be
terminated except that any Option, to the extent then exercisable
or exercisable within  one year thereafter,  may be exercised  by
the holder thereof within three years after such retirement,  but
not later than the termination date of the Option.

SECTION 3.   Should an  optionee die while  serving as  an
Eligible Director,  all the   Options  granted to  such  optionee
shall be  terminated,  except  that  any  Option  to  the  extent
exercisable by  the holder  thereof at  the time  of such  death,
together with the unmatured installment  (if any) of such  Option
which at that time is next  scheduled to become exercisable,  may
be exercised within one  year after the date  of such death,  but
not later than the termination date of the Option, by the  holder
thereof, the optionee's estate, or  the person designated in  the
optionee's last will and testament, as appropriate.

SECTION 4.  Should an optionee die after ceasing to be  an
Eligible Director, all  of the Options  granted to such  optionee
shall be  terminated,  except  that any  Option,  to  the  extent
exercisable by the holder thereof at the time of such death,  may
be exercised within one  year after the date  of such death,  but
not later than the termination date of the Option, by the  holder
thereof, the optionee's estate, or  the person designated in  the
optionee's last will and testament, as appropriate.

ARTICLE XI

AMENDMENTS TO PLAN AND OPTIONS

The Board may at any  time terminate or from time to  time
amend, modify or  suspend this Plan;  provided, however, that  no
such amendment  or  modification  without  the  approval  of  the
stockholders shall:

(a)  except pursuant to Section 3 of Article IV,  increase
the maximum  number (determined as  provided in  this Plan)  of
Shares  that  may be  purchased  pursuant  to  Options,  either
individually on an annual basis or in the aggregate; or

(b)   permit  the granting  of any  Option at  a  purchase
price other than  100% of the Fair  Market Value of the  Shares
at  the time  such Option  is  granted, subject  to  adjustment
pursuant to Section 3 of Article IV.

Exhibit 21.1

List of Subsidiaries of
FM PROPERTIES INC.

Name Under Which
Entity                  Organized    It Does Buisness
---------------------------       ---------    ----------------
FM Properties Operating Co.       Delaware     Same

Circle C Land Corp.               Texas       Same

Exhibit 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation
by reference of our reports included in this Form 10-K, into FM Properties
Inc.'s previously filed Registration Statements (File Nos. 33-78798 and
333-31059).

By:/s/ Arthur Andersen

Arthur Andersen LLP

New Orleans, Louisiana
March 27, 1998 

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 30th day of  March,
1998.

(Seal)                               /s/ Michael C. Kilanowski, Jr.  
------------------------------
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,  his true  and lawful  attorney-in-fact 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, 1997, and any amendment or amendments
thereto and any other document in support thereof or supplemental
thereto, and the undersigned hereby grants to said  attorney,full
power and authority  to do  and perform  each and  every act  and
thing  whatsoever  that  said  attorney  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  may do or  cause to  be done  by
virtue of this Power of Attorney.

EXECUTED this 12th day of February, 1998.

/s/ Richard C. Adkerson
-----------------------
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 WILLIAM  H.
ARMSTRONG, III and RICHARD C. ADKERSON,  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, 1997,
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 12th day of February, 1998.

/s/ James C. Leslie
-------------------
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,  WILLIAM
H. ARMSTRONG, III  and  RICHARD C.  ADKERSON,  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, 1997, 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 12th day of February, 1998.

/s/ Michael D. Madden
---------------------
Michael D. Madden

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 RICHARD C. ADKERSON, 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, 1997, 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 12th day of February, 1998.

/s/ C. Donald Whitmire     
----------------------
C. Donald Whitmire 

<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from
FM Properties Inc. financial statements at December 31, 1998 and for
the 12 months then ended, and is qualified in its entirety by reference
to such statements. The earnings per share (EPS) data shown below was prepared
in accordance with Statement of Financial Accounting Standard No.128,"Earnings
Per Share," and basic and diluted EPS have been entered in place of primary
and fully diluted, respectively.
</LEGEND>
<CIK> 0000885508
<NAME> FM PROPERTIES INC.
<MULTIPLIER> 1,000

<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-END>                               DEC-31-1997
<CASH>                                             873
<SECURITIES>                                         0
<RECEIVABLES>                                    1,265
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                 2,927
<PP                                         105,320
<DEPRECIATION>                                      46
<TOTAL-ASSETS>                                 112,754
<CURRENT-LIABILITIES>                            3,020
<BONDS>                                         37,118
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                           143
<OTHER-SE>                                      66,464
<TOTAL-LIABILITY-AND-EQUITY>                   112,754
<SALES>                                         30,953
<TOTAL-REVENUES>                                30,953
<CGS>                                           24,294
<TOTAL-COSTS>                                   24,294
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                               2,181
<INCOME-PRETAX>                                  7,101
<INCOME-TAX>                                        80
<INCOME-CONTINUING>                              7,006
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                     7,006
<EPS-PRIMARY>                                      .49
<EPS-DILUTED>                                      .48

<ARTICLE> 5
<LEGEND>
FM Properties adopted Statement of Financial Accounting Standards
No. 128, "Earnings Per Share," (SFAS 128) in the fourth quarter of 1997 and
restated prior years' earnings per share (EPS) data as required by SFAS
128.  Presented below are the restated EPS amounts for the years ended
December 31, 1996 and 1995, as well as, the 3-month periods ended March 31,
1997 and 1996, the 6-month period ended June 30, 1997.
</LEGEND>

<PERIOD-TYPE>         YEAR            YEAR            3-MOS           3-MOS          6-MOS
<FISCAL-YEAR-END>     DEC-31-1996     DEC-31-1995     DEC-31-1997     DEC-31-1996    DEC-31-1997
<PERIOD-END>          DEC-31-1996     DEC-31-1995     MAR-31-1997     MAR-31-1996    JUN-30-1997
<CASH>                          0               0               0               0              0 
<SECURITIES>                    0               0               0               0              0
<RECEIVABLES>                   0               0               0               0              0
<ALLOWANCES>                    0               0               0               0              0
<INVENTORY>                     0               0               0               0              0
<CURRENT-ASSETS>                0               0               0               0              0
<PP                          0               0               0               0              0
<DEPRECIATION>                  0               0               0               0              0
<TOTAL-ASSETS>                  0               0               0               0              0
<CURRENT-LIABILITIES>           0               0               0               0              0
<BONDS>                         0               0               0               0              0 
<PREFERRED-MANDATORY>           0               0               0               0              0
<PREFERRED>                     0               0               0               0              0
<COMMON>                        0               0               0               0              0
<OTHER-SE>                      0               0               0               0              0 
<TOTAL-LIABILITY-AND-EQUITY>    0               0               0               0              0
<SALES>                         0               0               0               0              0
<TOTAL-REVENUES>                0               0               0               0              0
<CGS>                           0               0               0               0              0
<TOTAL-COSTS>                   0               0               0               0              0
<OTHER-EXPENSES>                0               0               0               0              0
<LOSS-PROVISION>                0               0               0               0              0
<INTEREST-EXPENSE>              0               0               0               0              0
<INCOME-PRETAX>                 0               0               0               0              0
<INCOME-TAX>                    0               0               0               0              0
<INCOME-CONTINUING>             0               0               0               0              0
<DISCONTINUED>                  0               0               0               0              0
<EXTRAORDINARY>                 0               0               0               0              0
<CHANGES>                       0               0               0               0              0
<NET-INCOME>                    0               0               0               0              0
<EPS-PRIMARY>               (.01)           (.01)             .14           (.06)            .12
<EPS-DILUTED>               (.01)           (.01)             .14           (.06)            .12