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| AGREED AND ACCEPTED:                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Name of Investor:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| McMoRan Exploration Co.a Delaware corporation                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   By:     ____________________________                                                           Name:Title:    |   By: _____________________                                                               Print Name: _______________                                                               Title: ____________________                                                               Address: _________________                                                                Tax ID No.: _______________                                                               Settlement Contact Name: _____                                                               Telephone: ________________                                                               Email Address: ______________                                                                Wire instructions to wire funds to the Investor, in the event the Escrow Agent is required to return the funds of the Investor held in escrow.    Name in which electronic book-entry should be made (if different): DTC Account: _____________________DTC Internal Account: _______________                                                                 |

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|   |  Name of Custodial Agent: ______________________Address: ___________________________________                                                                Tax ID No.: _________________________________                                                               Settlement Contact Name: ______________________            Telephone: _________________________________Email Address: ______________________________ Wire instructions to wire funds to the Custodial Agent, in the event the Escrow Agent is required to return the funds of the Investor held in escrow.    Name in which electronic book-entry should be made (if different): DTC Account: ___________________________DTC Internal Account: _____________________                 |
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|   | 2.1 | Upon the terms and subject to the conditions hereinafter set forth, at the Closing (as defined in Section 3), the Company will sell to the Investor, and the Investor will purchase from the Company, the aggregate principal amount of Securities set forth on such Investor’s signature page hereto at the purchase price set forth on such signature page. |
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|   | 2.2 | The Company intends to enter into agreements with certain other investors (the “Other Investors”) and expects to complete sales of Securities to them.  Any agreements entered into with Other Investors will have terms no more favorable than the terms offered to the Investors in this Securities Purchase Agreement.  (The Investor and the Other Investors are hereinafter sometimes collectively referred to as the “Investors,” and this Agreement and the securities purchase agreements executed by the Other Investors are hereinafter sometimes collectively referred to as the “Securities PurchaseAgreements.”) |
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|   | 3.1 | The completion of the purchase and sale of the Securities (the “Closing”) shall occur, subject to the terms and conditions set forth in this Agreement, on the date of completion (the “Closing Date”) of the acquisition of oil and gas properties from Plains Exploration & Production Company (the “Acquisition”) and the Company raising capital in an aggregate amount (prior to fees or expenses) of $500 million from Freeport-McMoRan Copper & Gold Inc. (the “RequiredFinancing”), but in no event later than March 31, 2011 as set forth in Section 3.2 below.  Closing shall occur at the offices of the Company’s counsel.  At the Closing, (i) the Company shall cause the Trustee to deliver to the Investor the Securities to the DTC account specified by such Investor and (ii) the aggregate purchase price for the Securities shall be delivered by or on behalf of the Investor to the Company pursuant to the terms of the Escrow Agreement (as defined in Section 3.2 below). |
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|   | 3.2 | Payment by an Investor for the Securities shall be made by wire transfer of immediately available funds on or prior to September 22, 2010 to U.S. Bank National Association (the “Escrow Agent”) to the account specified below, to be placed in escrow pursuant to the terms of an Escrow Agreement between the Company and the Escrow Agent (the “Escrow Agreement”).  Any amounts held in escrow may only be invested in prime money market funds, US Government money market funds, or US Treasury money market funds with credit ratings of |
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|   | If the conditions to the Closing set forth in this Agreement and the Escrow Agreement have been satisfied, then on the Closing Date, the Escrow Agent shall (x) release from the Account (as defined in the Escrow Agreement) the aggregate purchase price for the Securities to be issued pursuant to the Securities Purchase Agreements to the Company, as payment for the Securities, and the Company shall issue to the Escrow Agent, for delivery to each Investor in the manner set forth in the Securities Purchase Agreements, the Securities purchased by such Investor and (y) upon such delivery, the Company shall pay to the Escrow Agent a commitment fee equal to 2% per annum (calculated on a 30/360 basis) on the aggregate purchase price held by the Escrow Agent from each Investor for the period from, and including, the date of payment of such purchase price by the Investor to, but excluding, the date of payment of such fee by the Company, less the amount of interest earned on the funds from such Investor held in the Account during such period, at which time the Escrow Agent shall promptly pay such fee and interest to such Investor. |
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|   | If (i) the Acquisition and the Required Financing are not consummated on or prior to March 31, 2011, (ii) the conditions to closing as set forth in this Agreement and the Escrow Agreement are not otherwise satisfied by March 31, 2011, or (iii) the Company provides notice that the Acquisition or Required Financing will not be consummated, then, in any such case: (A) the Escrow Agent will promptly return to each Investor the aggregate purchase price for the Securities, (B) the Offering shall be terminated without the issuance of the Securities and the Company shall promptly pay to the Escrow Agent a commitment fee equal to 4% per annum (calculated on a 30/360 basis) on the aggregate purchase price held by the Escrow Agent from each Investor for the period from, and including, the date of payment of such purchase price by the Investor to, but excluding, the date the Offering is terminated, less the amount of interest earned on the funds from such Investor held in the Account during such period, at which time the Escrow Agent shall promptly pay such fee and interest to such Investor. |
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|   | U.S. Bank National Association is acting only as an escrow agent in connection with the offering of Securities described herein, and has not endorsed, recommended or guaranteed the purchase, value or repayment of such Securities. |
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|   | 3.3 | The Company’s obligation to issue and sell the Securities to any Investor shall be subject to the following conditions, of which clause (b) may be waived by the Company: |
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|   | 3.4 | The Investor shall remit by wire transfer the amount of funds equal to the aggregate purchase price for the Securities being purchased by such Investor to the account designated in writing by the Company no later than September 20, 2010, pursuant to the terms of the Escrow Agreement relating to the offering of the Securities. |
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|   | 3.5 | Promptly after the execution of this Agreement by the Investor and the Company, the Investor shall direct the broker-dealer at which the account or accounts to be credited with the Securities are maintained, which broker-dealer shall be a DTC participant, to set up a Deposit/Withdrawal at Custodian (“DWAC”) instructing the Trustee to credit such account or accounts with the Securities by means of an electronic book-entry delivery.  Such DWAC shall indicate the settlement date for the deposit of the Securities, which date shall be provided to the Investor by the Placement Agent. Simultaneously with the delivery to the Company by the Escrow Agent of the funds held in escrow pursuant to Section 3.2 above, the Company shall direct the Trustee to credit the Investor’s account or accounts with the Securities pursuant to the information contained in the DWAC. |
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|   | 4.1 | The Company has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement. |
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|   | 4.2 | The Company has all requisite corporate power and authority to issue and sell the Securities.  The Securities have been duly authorized by the Company, and when duly executed, authenticated, issued and delivered as provided in the indenture related to the Securities (assuming due authentication of the Securities by the Trustee) and paid for as provided in this Agreement will constitute valid and binding obligations of the Company, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of |
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|   | 4.3 | The entry into and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of Company, (ii) conflict with, or constitute a default under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument to which the Company is party, or (iii) result in the violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Company, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Company to perform its obligations hereunder. |
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|   | 4.4 | The Company’s (i) annual report on Form 10-K for the fiscal year ended December 31, 2009 filed with the Securities and Exchange Commission (the “SEC”) on March 12, 2010, (ii) quarterly reports on Form 10-Q for the fiscal quarters ended March 31, 2010 and June 30, 2010 filed with the SEC on May 10, 2010 and August 9, 2010, respectively, (iii) proxy statement for the Company’s 2010 Annual Meeting of Stockholders filed with the SEC on March 25, 2010, (iv) current reports on Form 8-K filed or furnished with the SEC on March 17, 2010, April 19, 2010, May 4, 2010, June 10, 2010, July 1, 2010, July 8, 2010, July 19, 2010 and August 3, 2010 and all subsequent current reports that have been filed or furnished with the SEC, and any amendment or supplement thereto (collectively, the “Exchange Act Filings”) each as of its date and taken as a whole, as of the date of this Agreement and as of the Closing Date, did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. |
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|   | 4.5 | No securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the Securities are listed on any national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or quoted in a U.S. automated interdealer quotation system. |
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|   | 5.1 | (1)  The Investor is (a) a QIB as defined in Rule 144A under the Securities Act, (b) aware that the sale to it is being made in reliance on a private placement exemption from registration under the Securities Act and (c) acquiring the Securities for its own account or for the account of a QIB. |
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|   | (2)  The Investor understands and agrees on behalf of itself and on behalf of any investor account for which it is purchasing the Securities that (a) the Securities and the Common Stock issuable upon conversion of the Securities have not been registered with the SEC under the Securities Act or under the securities laws of any jurisdiction, are being offered pursuant to the exemption from registration under the Securities Act provided by Section 4(2) of the Securities Act, the Securities are being offered and sold only to QIBs (as defined in Rule 144A under the Securities Act) and holders may not resell or otherwise transfer any of the Securities or shares of the Common Stock issuable upon conversion thereof prior to the date that is the later of (i) the date that is one year after the last date of original issuance of the Securities or such shorter period of time as permitted by Rule 144 or any successor provision thereto or (ii) such later date, if any, as may be required by applicable law, except: (A) to the Company or one of its subsidiaries; (B) under a registration statement that has been declared effective under the Securities Act; (C) to a person the holder reasonably believes is a QIB that is purchasing for its own account or for the account of another QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, all in compliance with Rule 144A (if available); or (D) pursuant to the exemption from registration provided by Rule 144 (if available) or any other available exemption from the registration requirements of the Securities Act and (b) the Investor will, and each subsequent holder is required to, notify any subsequent purchaser of the Securities or Common Stock issuable upon conversion thereof of the resale restrictions referred to in (a) above and will provide the Company and the Company’s transfer agent such certificates and other information as they may reasonably require to confirm that the transfer by it complies with the foregoing restrictions, if applicable. |
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|   | (3) The Investor understands that the Securities and Common Stock issued upon conversion of the Securities will, unless sold pursuant to a registration statement that has been declared effective under the Securities Act or in compliance with Rule 144, bear a legend substantially to the following effect: |
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|   | THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. |
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|   | THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY OR ONE OF ITS SUBSIDIARIES, (II) UNDER A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (III) TO A PERSON THE SELLER |
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|   | (4)  The Investor: |
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|   | (5)  The Investor has received a copy of the Term Sheet and acknowledges that (a) it has conducted its own investigation of the Company and the terms of the Securities and, in conducting its examination, it has not relied on any Placement Agent or on any statements or other information provided by any Placement Agent concerning the Company or the terms of this offering, (b) it has had access to, and has had an adequate opportunity to review, all information the Company has filed with and furnished to the SEC, including the information set forth in the Exchange Act Filings and such financial and other information as it deems necessary to make its decision to purchase the Securities, and (c) it has been offered the opportunity to ask questions of the Company and received answers thereto, as it deemed necessary in connection with the decision to purchase the Securities. |
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|   | (6)  The Investor understands that the Company, each Placement Agent and others will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements and agrees that if any of the representations and acknowledgements deemed to have been made by it by its purchase of the |
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|   | 5.2 | The Investor acknowledges that the Placement Agent and their respective directors, officers, employees, representatives and controlling persons have no responsibility for making any independent investigation of the information contained in the Term Sheet or the Company’s Exchange Act Filings and make no representation or warranty to the Investor, express or implied, with respect to the Company or the Securities or the accuracy, completeness or adequacy of the Term Sheet, the Company’s Exchange Act Filings or any other publicly available information, nor shall any of the foregoing persons be liable for any loss or damages of any kind resulting from the use of the information contained therein or otherwise supplied to the Investor. |
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|   | 5.3 | The Investor acknowledges that the Company’s Common Stock is listed on The New York Stock Exchange and the Company is required to file reports containing certain business and financial information with the SEC pursuant to the reporting requirements of the Exchange Act, and that it is able to obtain copies of such reports. |
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|   | 5.4 | The Investor acknowledges that no action has been or will be taken in any jurisdiction outside the United States by the Company or the Placement Agent that would permit an offering of the Securities, or possession or distribution of offering materials in connection with the issuance of the Securities (including any filing of a registration statement), in any jurisdiction outside the United States where action for that purpose is required.  Each Investor outside the United States will comply with all applicable laws and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers Securities or has in its possession or distributes any offering material, in all cases at its own expense. |
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|   | 5.5 | The Investor has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and this Agreement constitutes a valid, binding and enforceable obligation of the Investor, except as the enforceability of the Agreement may be subject to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws relating to or affecting the rights of creditors generally. |
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|   | 5.6 | The entry into and performance of this Agreement by the Investor and the consummation by the Investor of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of Investor, (ii) conflict with, or constitute a default under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument to which the Investor is party, or (iii) result in the |
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|   | 5.7 | The Investor understands that nothing in the Term Sheet, this Agreement, information the Company has filed with and furnished to the SEC or any other materials presented to the Investor in connection with the purchase and sale of the Securities constitutes legal, tax or investment advice.  The Investor has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Securities and has made its own assessment and has satisfied itself concerning the relevant tax and other economic considerations relevant to its investment in the Securities. |
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|          5.8 | Each Investor in a Member State of the European Economic Area (the “EEA”) which has implemented Directive 2003/71/EC (the “Prospectus Directive”) (each a “Relevant Member State”) represents, warrants and agrees that the Investor: |
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|   | (a) | if to the Company, to: |
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|   | McMoRan Exploration Co. |
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|   | 1615 Poydras Street |
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|   | New Orleans, Louisiana  70112 |
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|   | Attention: General Counsel |
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|   | Telecopy No.: 504.585.3513 |
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|   | (b) | if to the Investor, at its address on the signature page hereto, or at such other address or addresses as may have been furnished to the Company in writing. |
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| Size: | $200 million |
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| Interest: | 4%.  Interest is payable semi-annually on [ ]and [ ], beginning on [  , 2011] |
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| Conversion: | The notes are convertible, at the option of the holder, at any time on or prior to maturity, into shares of MMR common stock at a conversion rate of 62.5 shares of MMR common stock, which is equal to an initial conversion price of $16.00 per share of MMR common stock per $1,000 principal amount of notes.  The conversion rate is subject to adjustment upon the occurrence of certain events. |
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| Ranking: | The notes are unsecured and unsubordinated and: |
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| ·   | rank on a parity in right of payment with all of MMR’s existing and future senior and unsecured debt; |
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| ·   | rank senior to any of MMR’s future subordinated debt; |
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| ·   | are effectively subordinated to any of MMR’s secured debt to the extent of the value of the assets securing such debt; and |
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| ·   | are effectively subordinated to all liabilities, if any, of MMR’s subsidiaries. |
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| Redemption: | Beginning on [     , 201x] (5 years after date of issuance), MMR may redeem the notes in whole or in part for cash at 100% of the principal amount plus any accrued and unpaid interest to but excluding the redemption date, provided that the closing price of MMR’s common stock has exceeded 130% of the conversion price for at least 20 trading days in any consecutive 30 trading day period. |
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| Change of Control: | Upon a change of control (as defined in the indenture governing the notes), each holder of the notes has the right to require MMR to repurchase some or all of its notes at a repurchase price equal to 100% of the aggregate principal amount of the notes plus accrued and unpaid interest, if any, to but excluding the date of purchase.  In addition, MMR will, under certain circumstances and in accordance with customary market practice, increase the conversion rate for a holder who elects to convert its notes in connection with certain specified make-whole changes of control. |
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| Anti-dilution |   |
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| Adjustments: | The formula for determining the conversion rate and the number of shares of common stock to be delivered upon conversion may be adjusted in the event of, among other things, (1) dividends or distributions of shares of common stock, (2) certain distributions of common stock rights or warrants to purchase common stock, (3) subdivisions or combinations of common stock, (4) certain distributions of capital stock, securities, cash or other assets, or spin-offs, (5) distributions of cash and (6) certain self-tender or exchange offers for common stock. |
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| Escrow: | The purchase price for the sale of the notes will be placed in escrow pending completion of the acquisition of oil and gas properties from Plains Exploration & Production Company (the “Acquisition”) and MMR’s raising additional capital in an amount of $500 million from Freeport-McMoRan Copper & Gold Inc. (the “Additional Financing”).  Any amounts held in escrow may be invested in certain specific investments as directed by MMR.  The release of the purchase price for the sale of the notes from the escrow account to MMR as payment for the notes, and issuance thereof, is conditioned upon the concurrent completion of the Acquisition and the Additional Financing. If (i) the Acquisition and Additional Financing are not consummated on or prior to March 31, 2011, or (ii) MMR provides notice that the Acquisition or Additional Financing will not be consummated, then, in any such case, the escrow agent will promptly return holders’ funds to them, with a commitment fee in an amount equal to 4% per annum in respect of the time period during which holders’ funds were held in escrow, which will be funded by a combination of MMR’s separate payment and interest earned on the funds while held and invested in escrow, and MMR will not issue the notes.  If the conditions to closing specified above are satisfied, then (x) the escrow agent will release holders’ funds to MMR concurrently |
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| Registration Rights: | MMR will enter into a registration rights agreement for the benefit of the holders of the notes, pursuant to which it will agree to file a shelf registration statement under the Securities Act of 1933, as amended (the “Securities Act”), relating to the resale of the notes and the shares of common stock issuable upon conversion thereof.  MMR will use its commercially reasonable efforts (i) to cause such shelf registration statement to become effective no later than 30 days after the date of original issuance of the notes, and (ii) to keep it effective until such date that all of the notes and the MMR common stock issuable upon conversion thereof cease to be outstanding or have either been (x) sold or otherwise transferred pursuant to an effective registration statement or (y) sold pursuant to Rule 144 under circumstances in which any legend borne by the notes or common stock relating to restrictions on transferability thereof is removed or such notes or common stock are eligible to be sold by the holders thereof (other than MMR’s affiliates) without restriction pursuant to the volume limitations of Rule 144 under the Securities Act or any successor rules thereto or otherwise. |
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| Transfer Restrictions: | The notes and the common stock issuable upon conversion of the notes have not been registered under the Securities Act or any state securities laws. The notes are being offered and sold only to qualified institutional buyers (as defined in Rule 144A under the Securities Act).  Holders may not resell or otherwise transfer any of the notes or the shares of MMR common stock issuable upon conversion thereof prior to the date that is the later of (i) the date that is one year after the last date of original issuance of the notes or such shorter period of time as permitted by Rule 144 or any successor provision thereto or (ii) such later date, if any, as may be required by applicable law, except: (a) to MMR or one of its subsidiaries; (b) under a registration statement that has been declared effective under the Securities Act; (c) to a person the holder reasonably believes is a qualified institutional buyer that is purchasing for its own account or for the account of another qualified institutional buyer and to whom notice is given that the |
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| Form: | The notes will be issued in book-entry form and represented by permanent global certificates deposited with, or on behalf of, The Depository Trust Company (“DTC”) and registered in the name of a nominee of DTC. Beneficial interests in any of the notes will be shown on, and transfers will be effected only through, records maintained by DTC or its nominee and any such interest may not be exchanged for certificated securities, except in limited circumstances. |
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