INDENTURE dated as of December [ ], 2002, among POLYTAMA INTERNATIONAL FINANCE
B.V., a private company with limited liability incorporated under the laws of
The Netherlands having its corporate seat in Rotterdam, The Netherlands (the
"ISSUER"), as issuer, P.T. POLYTAMA PROPINDO, an Indonesian corporation (the
"COMPANY"), as guarantor, and THE BANK OF NEW YORK, a New York banking
corporation (the "TRUSTEE"), as trustee.
Each party agrees as follows for the benefit of the other parties and
for the benefit (except as otherwise provided in this Indenture) of the Holders
of the Issuer's 6% Guaranteed Secured Exchangeable Notes Due 2012:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS
"Accounts Receivable" means any and all rights to payment for
Inventory sold or services performed in the ordinary course of business, whether
due or to become due, whether or not earned by performance, whether now in
existence or arising from time to time hereafter, including, without limitation,
rights evidenced by or in the form of an account, note, draft, letter of credit,
contract right, security agreement, or other evidence of Indebtedness or
security.
"Actionable Default" means (i) any Event of Default or (ii) any event
of default under and as defined in any agreement pursuant to which Additional
Indebtedness is Incurred; PROVIDED that only those events which give the Holders
or the holders of Additional Indebtedness, as the case may be, the right to
accelerate Indebtedness or result in the automatic acceleration of Indebtedness,
including after notice or passage of time or both, shall be an Actionable
Default.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; (ii) the Capital Stock of
a Person that becomes a Restricted Subsidiary as a result of the acquisition of
such Capital Stock by the Company or another Restricted Subsidiary or (iii)
Capital Stock constituting a minority interest in any Person that at such time
is a Restricted Subsidiary; PROVIDED, HOWEVER, that any such Restricted
Subsidiary described in clauses (ii) or (iii) above is primarily engaged in a
Related Business.
"Additional Indebtedness" means Indebtedness, including any guarantees
thereof, the holders of which become party to the Collateral Agency Agreement in
accordance with the terms of Section 4.12.
"Additional Indebtedness Agent" means any agent appointed by the
holders of Additional Indebtedness to represent such Persons in respect to the
Additional Indebtedness and the Collateral.
"Additional Indebtedness Collateral Account" has the meaning given in
Section 5.01 of the Collateral Agency Agreement.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.05, 4.07 and 4.09 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 5% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease (including, without
limitation, any Sale/Leaseback Transaction), transfer or other disposition (or
series of related sales, leases, transfers or dispositions) by the
Company or any Restricted Subsidiary, including any disposition by means of a
merger, consolidation or similar transaction or any Involuntary Loss (each
referred to for the purposes of this definition as a "disposition"), of (i) any
shares of Capital Stock of a Restricted Subsidiary (other than directors'
qualifying shares or shares required by applicable law to be held by a Person
other than the Company or a Restricted Subsidiary), (ii) all or substantially
all the assets of any division or line of business of the Company or any
Restricted Subsidiary or (iii) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or such
Restricted Subsidiary (other than, in the case of (i), (ii) and (iii) above, (y)
a disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly Owned Subsidiary and (z) for purposes of
Section 4.07 only, a disposition that constitutes a Restricted Payment permitted
by Section 4.05.
"Assigned Rights" means all rights including the proceeds, meaning all
right, title and interest in and to all amounts now or in the future payable to
the assignor under or in connection with any Contract, arising from contracts
and leases relating to the Plant, its operation and the manufacture therein of
polypropylene, including, without limitation, (a) the Himont License Agreement
between Himont Incorporated ("Himont") and P.T. Tirtamas Majutama ("PTTM") dated
April 21, 1993 and April 15, 1993 novated by a Novation Agreement dated July 7,
1994 among the Company, Himont and PTTM, (b) the Propylene Supply Agreement; and
(c) the Amended and Restated Polypropylene Offtake Agreement between BP Asia
Trading Pte. Ltd. and the Company dated June 2, 1997.
"Assignment of Rights" has the meaning given in the Collateral Agency
Agreement.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Notes, compounded annually) of the total obligations of the
lessee for rental payments during the remaining term of the lease included in
such Sale/Leaseback Transaction (including any period for which such lease has
been extended).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Board of Directors" means (i) in relation to the Company, the Board
of Directors of the Company and (ii) in relation to the Issuer, the board of
Managing Directors of the Issuer and, in each case, any committee thereof duly
authorized to act on behalf of such Board of Directors. Any determination to be
made, or approval to be given, by a Board of Directors shall be made by a
majority of the members having no personal stake in such determination or
approval.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Casualty Event" shall mean any destruction or damage by flood, fire,
explosion, wind, storm, earthquake or any other casualty.
"Change of Control" means the occurrence of any of the following
events: (i) the Permitted Holders cease to be the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act), directly
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or indirectly, of at least 51% in the aggregate of the total voting power of the
Voting Stock of the Company, whether as a result of issuance of securities of
the Company, any merger, consolidation, liquidation or dissolution of the
Company, any direct or indirect transfer of securities by the Company or
otherwise (for purposes of this clause (i) and clause (ii) below, the Permitted
Holders shall be deemed to beneficially own any Voting Stock of a corporation
(the "specified corporation") held by any other corporation (the "parent
corporation") so long as the Permitted Holders beneficially own (as so defined),
directly or indirectly, in the aggregate a majority of the voting power of the
Voting Stock of the parent corporation); (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of 66-2/3% of the directors
of the Company then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; or (iii) the merger or consolidation of
the Company with or into another Person or the merger of another Person with or
into the Company, or the sale of all or substantially all the assets of the
Company to another Person (other than a Person that is controlled by the
Permitted Holders), and, in the case of any such merger or consolidation, the
securities of the Company that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power of the Voting
Stock of the Company are changed into or exchanged for cash, securities or
property, unless pursuant to such transaction such securities are changed into
or exchanged for, in addition to any other consideration, securities of the
surviving corporation that represent immediately after such transaction, at
least a majority of the aggregate voting power of the Voting Stock of the
surviving corporation.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Collateral" means the Real Property Collateral, the Moveable Assets
Collateral, the Proceeds Collateral and the Assigned Rights.
"Collateral Accounts" means the accounts established pursuant to the
Collateral Agency Agreement for holding cash and cash equivalents for the
benefit of the Secured Creditors and includes the Notes Collateral Account (as
described in the Collateral Agency Agreement) and the Additional Indebtedness
Collateral Account (as described in the Collateral Agency Agreement).
"Collateral Agency Agreement" means the Collateral Agency Agreement
dated the date hereof among the Issuer, the Company, the Trustee on behalf of
the Noteholders, the Senior Notes Trustee and PT Bank Mandiri (Persero) as
Collateral Agent for the Trustee and the representative of the other Secured
Creditors with respect to the Collateral.
"Collateral Agent" means PT Bank Mandiri (Persero).
"Collateral Disposition" means any Asset Disposition with respect to
any Collateral; PROVIDED, HOWEVER, that a substitution of Moveable Assets
Collateral in compliance with Section 12.07 shall be excluded from the
definition of "Collateral Disposition."
"Commodity Agreement" means, with respect to any Person, any forward
contract, futures contract or option or other agreement, instrument or
arrangement or combination thereof entered into in the ordinary course of such
Person's business and designed to provide protection against fluctuations in the
price of any commodity used or produced in the business in which such Person is
engaged.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successors.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (ii) Consolidated Interest Expense for such four
fiscal quarters; PROVIDED, HOWEVER, that (1) if the Company or any Restricted
Subsidiary has Incurred any Indebtedness since the beginning of such period that
remains outstanding or if the transaction giving rise to the need to calculate
the Consolidated Coverage
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Ratio is an Incurrence of Indebtedness, or both, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving effect on a
pro forma basis to such Indebtedness as if such Indebtedness had been Incurred
on the first day of such period and the discharge of any other Indebtedness
repaid, repurchased, defeated or otherwise discharged with the proceeds of such
new Indebtedness as if such discharge had occurred on the first day of such
period, (2) if since the beginning of such period the Company or any Restricted
Subsidiary shall have made any Asset Disposition, the EBITDA for such period
shall be reduced by an amount equal to the EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset Disposition for
such period, or increased by an amount equal to the EBITDA (if negative),
directly attributable thereto for such period and Consolidated Interest Expense
for such period shall be reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeated or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries in connection
with such Asset Disposition for such period (or, if the Capital Stock of any
Restricted Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary to the
extent the Company and is continuing Restricted Subsidiaries are no longer
liable for such Indebtedness after such sale), (3) if since the beginning of
such period the Company or any Restricted Subsidiary (by merger or otherwise)
shall have made an Investment in any Restricted Subsidiary (or any person which
becomes a Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit of a business, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness) as if such Investment or acquisition
occurred on the first day of such period and (4) if since the beginning of such
period any Person (that subsequently became a Restricted Subsidiary or was
merged with or into the Company or any Restricted Subsidiary since the beginning
of such period) shall have made any Asset Disposition, any Investment or
acquisition of assets that would have required an adjustment pursuant to clause
(2) or (3) above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Disposition,
Investment or acquisition occurred on the first day of such period. For purposes
of this definition, whenever pro forma effect is to be given to an acquisition
of assets, the amount of income or earnings relating thereto in the amount of
Consolidated Interest Expense associated with any Indebtedness Incurred in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting Officer of the Company. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest of such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate Agreement has a remaining term in excess of
12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent Incurred by the Company or its Restricted Subsidiaries, (i) interest
expense attributable to capital leases and one-third of the rental expense
attributable to operating leases, (ii) amortization of debt discount and debt
issuance cost, (iii) capitalized interest, (iv) non cash interest expenses, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (vi) net costs associated with
Hedging Obligations (including amortization of fees), (vii) Preferred Stock
dividends in respect of all Preferred Stock held by Persons other than the
Company or a Wholly Owned Subsidiary, (viii) interest Incurred in connection
with Investments in discontinued operations, (ix) interest accruing on any
Indebtedness of any other Person to the extent such Indebtedness is guaranteed
by, or secured by the assets of, the Company or any Restricted Subsidiary and
(x) the cash contributions to any employee stock ownership plan or similar trust
to the extent such contributions are used by such plan or trust to pay interest
or fees to any Person (other than the Company) in connection with Indebtedness
Incurred by such plan or trust.
"Consolidated Net Income" means, for any period the net income of the
Company and its consolidated Subsidiaries; PROVIDED, HOWEVER, that there shall
not be included in such Consolidated Net Income: (i) any net income of any
Person if such Person is not a Restricted Subsidiary, except that (A) subject to
the exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution paid to a Restricted Subsidiary, to the limitations contained in
clause (iii) below) and (B) the Company's equity in a net loss of any such
Person for such period shall be included in determining such
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Consolidated Net Income; (ii) any net income (or loss) of any Person acquired by
the Company or a Subsidiary in a pooling of interests transaction for any period
prior to the date of such acquisition; (iii) any net income of any Restricted
Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except that (A)
subject to the exclusion contained in clause (iv) below, the Company's equity in
the net income of any such Restricted Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution paid to another
Restricted Subsidiary, to the limitation contained in this clause) and (B) the
Company's equity in a net loss of any such Restricted Subsidiary for such period
shall be included in determining such Consolidated Net Income; (iv) any gain
(but not loss) realized upon the sale or other disposition of any assets of the
Company or its consolidated Subsidiaries (including pursuant to any
sale-and-leaseback arrangement) which is not sold or otherwise disposed of in
the ordinary course of business and any gain (but not loss) realized upon the
sale or other disposition of any Capital Stock of any Person; (v) extraordinary
gains or losses; and (vi) the cumulative effect of a change in accounting
principles. Notwithstanding the foregoing, for the purposes of Section 4.05
only, there shall be excluded from Consolidated Net Income any dividends,
repayments of loans or advances or other transfers of assets from Unrestricted
Subsidiaries to the Company or a Restricted Subsidiary to the extent such
dividends, repayments or transfers increase the amount of Restricted Payments
permitted under Section 4.05(a)(3)(D).
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of the Company plus (ii)
paid-in capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement to which such
Person is a party or a beneficiary.
"Debt Service Reserve Account" means the securities account in which
the Issuer will deposit U.S. Government Obligations in an amount that will be
sufficient to provide payment in full when due of the first scheduled interest
and principal payment on the Senior Notes.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Definitive Securities" means Securities that are in the form of
Exhibit A attached hereto that do not include the information called for by
footnote 1 thereof.
"Depositary" means The Depository Trust Company, a New York
corporation, or any successor thereto or any replacement depository.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock or (iii) is redeemable at the option of the holder thereof,
in whole or in part, in each case on or prior to the first anniversary of the
Stated Maturity of the Notes; PROVIDED, HOWEVER, that any Capital Stock that
would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require such Person to repurchase or redeem such
Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of the Notes
shall not constitute Disqualified Stock if the "asset sale" or "change of
control" provisions applicable to such Capital Stock are not more favorable to
the holders of such Capital Stock than the provisions of Sections 4.07, 4.08
and 4.10.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
Consolidated Interest Expense plus the following to the extent deducted in
calculating such Consolidated Net Income: (a) all income tax
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expense of the Company, (b) depreciation expense, (c) amortization expense and
(d) non-cash losses or charges related to impairment of goodwill and other
intangible assets, in each case for such period. Notwithstanding the foregoing,
the provision for taxes based on the income or profits of, and the depreciation
and amortization of, a Subsidiary of the Company shall be added to Consolidated
Net Income to compute EBITDA only to the extent (and in the same proportion)
that the net income of such Subsidiary was included in calculating Consolidated
Net Income and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
Governmental, regulations applicable to such Subsidiary or its stockholders.
"Estimated Project Costs" means, with respect to a Qualified Project,
all costs and expenses reasonably estimated by the Company and set forth in a
written resolution for the Company's Board of Directors prior to the
commencement of such Qualified Project to be Incurred by the Company to acquire,
develop, design, construct, start up and finance such Qualified Project,
including the acquisition of the facility site, equipment and supplies, and
including interest during construction, sales and other taxes, financing fees
and reasonable advisory, legal and management fees and expenses.
"Excess Cash Flow" means, with respect to the Company for any fiscal
year, the EBITDA of the Company and its consolidated Subsidiaries for such
period plus any Excess Proceeds and Excess Collateral Proceeds; minus (1)
Consolidated Interest Expense of the Company and its consolidated Subsidiaries
that is paid during such period; minus (2) capital expenditures of the Company
and its consolidated Subsidiaries that are actually paid during such period;
minus (3) an amount of US$500,000 to be used as working capital of the Company
and its consolidated Subsidiaries; minus (4) consolidated income tax expense for
such period, minus; (5) scheduled or required principal payments on Indebtedness
permitted to be incurred pursuant to the New Senior Indenture and the
Exchangeable Notes Indenture; minus (6) the aggregate principal amount, premium
paid in connection with an optional redemption of the Notes made pursuant to
Section 5 of the Notes during the fiscal year preceding such Excess Cash Flow
Offer; and minus (7) the aggregate principal amount, premium, if any, paid by
the Company during the fiscal year preceding such Excess Cash Flow Offer in
connection with New Exchangeable Notes repurchased pursuant to a Change of
Control Offer as described in Section 4.10.
"Exchange Shares" means the shares of common stock of the Company into
which the Notes are exchangeable.
"Fair Market Value" per security at any date of determination (i)
prior to an initial public offering, means (A) in connection with a sale to a
party that is not an Affiliate of ours in an arm's-length transaction (a
"Non-Affiliate Sale"), the price per security at which such security is sold and
(B) in connection with any sale to an Affiliate of ours, (1) the last price per
security at which such security was sold in a Non-Affiliate Sale within the
one-year period preceding such date of determination or (2) if clause (1) is not
applicable, the fair market value of such security determined in good faith by
(a) a majority of the Board of Directors of the Company, including a majority of
directors who are not officers, employees, directors or Affiliates of the party
to whom the sale of securities giving rise to such determination is proposed to
be made or (b) a nationally recognized investment banking, appraisal or
valuation firm and (ii) after an Initial Public Offering, means the mean between
the high and low selling prices per share of the common stock of the Company on
the immediately preceding date (or, if the common stock of the Company was not
traded on that day, the next preceding day that the common stock of the Company
was traded) on the principal exchange or market system on which the common stock
of the Company is traded, as such prices are officially quoted on such exchange.
"Fiduciary Assignment of Accounts" has the meaning given in the
Collateral Agency Agreement.
"Fiduciary Transfer" has the meaning given in the Collateral Agency
Agreement.
"GAAP" means generally accepted accounting principles in the Republic
of Indonesia which are in effect on the date of determination.
"Global Security" means a Security that is in the form of Exhibit A
hereto that includes the information called for by footnote 1 thereof.
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"Governmental Authority" means any nation or government, any state or
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any Person and any obligation, direct or indirect, contingent or otherwise,
of such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such Person
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Indebtedness
or other obligation of the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part); PROVIDED, HOWEVER, that the term
"guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "guarantee" used as a verb has a
corresponding meaning. The term "guarantor" shall mean any Person guaranteeing
any obligation.
"Guarantee" means the irrevocable and unconditional guarantee of the
Notes by the Company pursuant to Article 10.
"Guaranteed Notes" mean's the Issuer's 11 1/4% Series B Guaranteed
Secured Noted due 2007, issued on the Issue Date.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means issue, assume, guarantee, incur or otherwise become
liable for; PROVIDED, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary. The term "Incurrence" when used
as a noun shall have a correlative meaning. The accretion of principal of a
non-interest bearing or other discount security shall not be deemed a separate
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable; (ii) all Capital
Lease Obligations of such Person and all Attributable Debt in respect of
Sale/Leaseback Transactions entered into by such Person; (iii) all obligations
of such Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such Person and all obligations of such Person
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business); (iv) all obligations of such Person
for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction (other than obligations with respect to
letters of credit securing obligations (other than obligations described in (i)
through (iii) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the tenth Business
Day following receipt by such Person of a demand for reimbursement following
payment on the letter of credit); (v) all obligations of such Person with
respect to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of such Person, the liquidation
preference with respect to any Preferred Stock (but excluding, in each case, any
accrued dividends); (vi) all obligations under agreements to maintain working
capital, equity capital or any other financial statement condition or liquidity
of any other Person; (vii) all obligations of the type referred to in clauses
(i) through (vi) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable, directly
or indirectly, as obligor, guarantor or otherwise, including by means of any
guarantee; (viii) all obligations of the type referred to in clauses (i) through
(vi) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the value of such property or
assets or the amount of the obligation so
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secured and (ix) to the extent not otherwise included in this definition,
Hedging Obligations and all indebtedness and other obligations under any
Commodity Agreements of such Person. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the mandatory provisions of the TIA, which are incorporated by
reference in this Indenture pursuant to Section 1.03 and are deemed to be a part
of and govern this instrument, and any such supplemental indenture,
respectively.
"Independent Appraiser" means an internationally recognized appraisal,
accounting, investment banking, or other firm, as appropriate, that (i) is in
fact independent in respect of the transaction in question; (ii) is an expert in
respect of the relevant valuation or appraisal activity; (iii) does not have any
direct financial interest or any material indirect financial interest in the
Company or any Subsidiary, the Trustee, the Collateral Agent or in any Affiliate
of any of them; and (iv) is not connected with the Company or a Subsidiary, the
Trustee, the Collateral Agent or any such Affiliate as a director, officer,
employee or Affiliate.
"Insurance Assignment" has the meaning given in the Collateral Agency
Agreement.
"Insurance Collateral Account" means the account established for the
benefit of the parties to the Collateral Agency Agreement to hold certain
insurance proceeds pending repair or replacement of the Collateral subject to an
Involuntary Loss.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement designed
to protect the Company or any Restricted Subsidiary against fluctuations in
interest rates.
"Inventory" means all stocks of products and goods produced, all
extractions, all raw materials, all work in progress, stocks of spare parts,
fuels, lubricants, and all stocks and all assets of similar kind now existing
and hereafter acquired.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary," the definition of "Restricted Payment" and Section
4.05, (i) "Investment" shall include the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net assets
of any Subsidiary of the Company at the time that such Subsidiary is designated
an Unrestricted Subsidiary; PROVIDED, HOWEVER, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent "Investment" in an Unrestricted Subsidiary equal to an
amount (if positive) equal to (x) the Company's "Investment" in such Subsidiary
at the time of such redesignation less (y) the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of such Subsidiary at the time of such redesignation; and (ii) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined
in good faith by the Board of Directors.
"Involuntary Loss" means a loss or disposition resulting from the
requisition by any Governmental entity of title to, seizure by any Governmental
entity of, or forfeiture to such Governmental entity of, any property or assets,
or any actual or constructive loss or an agreed or compromised loss, including
any Casualty Event.
"Issue Date" means the date on which the Notes are originally issued.
8
"Issuer" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Keepwell Commitment" means an agreement by any Person to maintain
working capital, equity capital or any other financial statement condition or
liquidity of any other Person.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Loan Facilities" means any facility utilized for working capital
purposes, not exceeding $50.0 million.
"Major Collateral Disposition" means any Asset Disposition, in one or
a series of related transactions, of Collateral with a book value of more than
25% of the aggregate book value of all Collateral, determined by reference to
the Company's most recent quarterly financial statements.
"Majority Shareholder" means either Tirtamas or Tuban Petro, whichever
owns the largest equity stake in the Company.
"Moveable Assets Collateral" means all moveable assets (other than
Inventory, goods in process and raw materials), whether now owned or hereafter
acquired, which form part of, or are used in connection with, the Plant.
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to such properties or assets or received in any other
noncash form) in each case net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses Incurred, and all Federal,
state, provincial, foreign (including Indonesian) and local taxes due and
payable at the time of such Asset Disposition or required to be accrued as a
liability under GAAP, as a consequence of such Asset Disposition, (ii) all
payments made on any Indebtedness which is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon or other
security agreement of any kind with respect to such assets, or which must by its
terms, or in order to obtain a necessary consent to such Asset Disposition, or
by applicable law be, repaid out of the proceeds from such Asset Disposition,
(iii) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset
Disposition and (iv) the deduction of appropriate amounts provided by the seller
as a reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and retained by
the Company or any Restricted Subsidiary after such Asset Disposition. In the
case of an Asset Disposition that is a disposition of Collateral, any amount of
insurance or other proceeds received in connection with an Involuntary Loss
(excluding payments received for loss of profits or excess costs in respect of
business interruption insurance) shall be included in the foregoing definition
of "Net Available Cash;" PROVIDED that, any such proceeds received by the
Company or any Restricted Subsidiary in connection with any assets sold or
transferred to any Restricted Subsidiary shall be excluded from the definition
of Net Available Cash for the purposes of Section 4.07.
"Net Cash Proceeds," with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Note Custodian" means The Bank of New York, as custodian of the Notes
in global form for the Depositary under a custody agreement or any similar
successor agreement.
9
"Notes" means the 6% Guaranteed Secured Exchangeable Notes due 2012
issued, authenticated and delivered under this Indenture, as amended or
supplemented from time to time pursuant to the terms of this Indenture.
"Notes Collateral Account" has the meaning given in Section 5.01 of
the Collateral Agency Agreement.
"Notice of Actionable Default" means a notice delivered to the
Collateral Agent stating that an Actionable Default has occurred, which
describes with reasonable particularity the nature of the Actionable Default,
and is delivered to the Collateral Agent by (i) the Trustee for the holders of
the Notes, acting pursuant to this Indenture, (ii) the Exchangeable Notes
Trustee, acting pursuant to the Exchange Notes Indenture, or (iii) the
Additional Indebtedness Agent, acting upon the instructions of the holders of a
majority of the Outstanding Additional Indebtedness Obligations (as defined in
the Collateral Agency Agreement). A Notice of Actionable Default shall be deemed
to have been given when the notice referred to in the preceding sentence has
actually been received by a Responsible Officer (as defined in the Collateral
Agency Agreement) of the Collateral Agent. A Notice of Actionable Default shall
be deemed to be outstanding at all times after such notice has been given until
the earlier of such time, if any, as (i) the Collateral Agent has been notified
by the Trustee or the Additional Indebtedness Agent, as the case may be, which
delivered such notice, that such notice has been rescinded or waived or (ii) the
Trustee and the Additional Indebtedness Agent, if any, have determined, in
accordance with Section 3.03 of the Collateral Agency Agreement, to rescind or
waive such notice.
"Officer" means the Chairman of the Board, the President, any Vice
President, any Managing Director, the Treasurer or the Secretary of the Company
or the Issuer, as applicable.
"Officer's Certificate" means (i) in relation to the Issuer, a
certificate signed by one officer and (ii) in relation to the Company, a
certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Permitted Holders" means each of Tirtamas, The British Petroleum
Company Plc, a corporation established under the laws of the United Kingdom or
any Wholly Owned Subsidiary of The British Petroleum Company Plc (each, a "BP
Company"), Nissho Iwai Corporation, a corporation established under the laws of
Japan ("NIC") and Tuban Petro.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) the Company or a Restricted Subsidiary or a Person
that will, upon the making of such Investment, become a Restricted Subsidiary;
PROVIDED, HOWEVER, that the primary business of such Restricted Subsidiary is a
Related Business; (ii) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Subsidiary;
PROVIDED, HOWEVER, that such Person's primary business is a Related Business;
(iii) Temporary Cash Investments; (iv) receivables owing to the Company or any
Restricted Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; PROVIDED,
HOWEVER, that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances; (v) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business;
(vi) loans or advances to employees made in the ordinary course of business
consistent with past practices of the Company or such Restricted Subsidiary;
PROVIDED that if any such loans or advances involve, in the aggregate, an amount
in excess of US$1.0 million, such loans or advances are set forth in writing and
have been approved by the Board of Directors of the Company; (vii) stock,
obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments; and (viii) any Person to the extent
such Investment represents the non-cash portion of the consideration received
for an Asset Disposition as permitted pursuant to Section 4.07.
"Permitted Liens" means (i) Liens created pursuant to the Pledge
Agreement, the Collateral Agency Agreement or Security Documents; (ii) Liens for
taxes, assessments or Governmental charges or claims that
10
either (a) are not yet delinquent by more than 30 days or (b) are being
contested in good faith by appropriate proceedings and as to which appropriate
reserves have been established or other provisions have been made in accordance
with GAAP; (iii) statutory and other Liens imposed by law and arising in the
ordinary course of business of landlords, carriers, warehousemen, mechanics,
suppliers, materialmen, employees, repairmen or laborers with respect to amounts
that, to the extent applicable: either (a) are not yet delinquent by more than
30 days or (b) are being contested in good faith by appropriate proceedings and
as to which, to the extent required, appropriate reserves have been established
or other provisions have been made in accordance with GAAP; (iv) easements,
servitude, rights-of-way, restrictions and other similar encumbrances with
respect to the Real Property Collateral which in the aggregate are not material
in amount and which do not materially detract from the value of the Plant or
interfere in any material way with the Company's use of the Plant for the
purposes for which such property is intended; (v) any Subsequent Liens; (vi)
Liens securing Additional Indebtedness created in accordance with Section 4.12;
(vii) Liens securing Indebtedness represented by the Senior Notes (and any
Guarantees thereof), including under the Security Documents relating thereto,
Incurred in accordance with Section 4.03; and (viii) Liens securing Indebtedness
represented by the Guaranteed Notes (and any Guarantees thereof), the Debt
Service Reserve Account and any defeasance trust, including under any security
documents relating thereto.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
Government or any agency or political subdivision thereof or any other entity.
"Pipeline" means the Company's propylene supply pipeline that runs
from the Plant to the adjacent refinery owned by Pertambangan Minyak Xxx Gas
Bumi Negara ("Pertamina").
"Plant" means all of the buildings, constructions, facilities and
appurtenances comprising or related to the Company's existing or future
polypropylene and other production facilities located on the Plant Site, and any
and all planned machinery, fixtures, fittings, equipment and improvements and
additions now existing or in the future affixed to or forming part of or
otherwise located on the Plant Site.
"Plant Site" means (a) a plot of land with an area of 79,860 square
meters, as described in HGB Certificate No. 1/Limbangan in the name of the
Company; (b) a plot of land with an area of 63,390 square meters, as described
in HGB Certificate No. 2/Limbangan in the name of the Company; and (c) a plot of
land with an area of 56,225 square meters, as described in HGB Certificate No.
3/Limbangan in the name of the Company, in each case, located in Desa Limbangan,
Kecamatan Juntinyuat, Kabupaten Indramayu, West Java, Indonesia.
"Pledge Agreement" means that certain Pledge Agreement between the
Issuer and the Trustee dated as of the Issue Date.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Principal" or "principal" of a Note means the principal of the Note
plus the premium, if any, payable on the Note which is due or overdue or is to
become due at the relevant time.
"Proceeds Collateral" means all right, title, interest and benefit,
including without limitation all proceeds, returns of premiums and other amounts
payable to or at the direction of the Company, under, in and to each Insurance
Policy in relation to the Plant.
"Propylene Supply Agreement" means either (i) the Amended and Restated
Propylene Supply Agreement between BP Chemicals and the Company, dated June 4,
1997 or (ii) any other long term agreement for the supply of propylene to the
Company, each as amended.
"Purchase Money Indebtedness" of any Person means all obligations of
such Person (i) consisting of the deferred purchase price of property,
conditional sale obligations, obligations under any title retention
11
agreement (but excluding accounts payable arising in the ordinary course of
business) and other purchase money obligations, in each case where the maturity
of such obligation does not exceed the anticipated useful life of the asset
being financed and (ii) incurred to finance the acquisition of such asset,
including additions and improvements.
"Qualified Project" means the acquisition or construction of assets
which expand, add to or improve (but not repair) the then existing assets at the
Plant Site.
"Real Property Collateral" means the Plant Site and all buildings
(including, but not limited to, any pipelines), plant, machinery, fixtures,
fittings, equipment, improvements and additions now or hereafter affixed to such
buildings, constructions and pipelines which, according to prevailing laws are
regarded as immoveable property together with all other items which permanently
constitute one unit within the Plant Site.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, decease or retire, or to issue
other Indebtedness in exchange for or the substantially concurrent replacement,
refinancing or repayment of, such Indebtedness. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with the Indenture including Indebtedness that
Refinances Refinancing Indebtedness; PROVIDED, HOWEVER, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; PROVIDED FURTHER,
however, that Refinancing Indebtedness shall not include (x) Indebtedness of a
Subsidiary that Refinances Indebtedness of the Company or (y) Indebtedness of
the Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
"Related Business" means any business related, ancillary or
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock or similar payment to the direct or indirect
holders of its Capital Stock (other than dividends or distributions payable
solely in its Capital Stock (other than Disqualified Stock)) other than
dividends or distributions payable solely to the Company or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation)), (ii) the purchase, redemption or other acquisition
or retirement for value of any Capital Stock of the Company held by any Person
or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary), including the exercise of any
option to exchange any Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock), (iii) the purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of acquisition) or (iv) the making of any
Investment in any Person (other than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary; PROVIDED, HOWEVER, that notwithstanding anything
to the contrary in the definition of "Unrestricted Subsidiary," the Issuer (or
any successor thereof as obligor under the Notes) shall always be a Restricted
Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person.
12
"SEC" means the Securities and Exchange Commission.
"Secured Creditors" means the holders of the Notes represented by the
Trustee, holders of the Senior Notes represented by the Senior Notes Trustee and
the holders of Additional Indebtedness represented by the Additional
Indebtedness Agent, as the same may from time to time be reflected as parties to
the Security Documents.
"Secured Indebtedness" means the Notes, the Guarantee, the Senior
Notes, the Senior Notes Guarantee, the Additional Indebtedness and any other
Indebtedness secured by a Lien on Collateral.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the Global
Security (as appointed by the Depositary), or any successor entity thereto and
shall initially be the Trustee.
"Security Deed" has the meaning given in the Collateral Agency
Agreement.
"Security Documents" means, collectively, the Security Deed, the
Fiduciary Transfer, the Fiduciary Assignment of Accounts, the Assignment of
Rights and the Insurance Assignment.
"Senior Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) Indebtedness of such Person, whether
outstanding on the Issue Date or thereafter Incurred and (ii) accrued and unpaid
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to such Person to the extent
post-filing interest is allowed in such proceeding) in respect of (A)
Indebtedness of such Person for money borrowed and (B) Indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are subordinate in right of payment to the Notes;
PROVIDED, HOWEVER, that Senior Indebtedness shall not include (1) any obligation
of such Person to any Subsidiary of such Person, (2) any liability for Federal,
state, local or other taxes owed or owing by such Person, (3) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business of such Person (including guarantees thereof or instruments evidencing
such liabilities), (4) any Indebtedness of such Person (and any accrued and
unpaid interest in respect thereof) which is subordinate or junior in any
respect to any other Indebtedness or other obligation of such Person or (5) that
portion of any Indebtedness which at the time of Incurrence is Incurred in
violation of the Indenture.
"Senior Notes" means the Issuer's 8% Guaranteed Secured Notes due
2017, issued the date hereof.
"Senior Indenture" means the Indenture among the Issuer, the Company
and The Bank of New York, a New York banking corporation, as trustee, governing
the Senior Notes, dated the date hereof.
"Senior Notes Guarantee" means the guarantee of the Senior Notes by
the Company pursuant to the Senior Indenture.
"Senior Notes Trustee" means the then acting trustee under the Senior
Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
13
"Subordinated Obligation" means any Indebtedness of the Issuer or the
Company (whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes or the Guarantee,
respectively, pursuant to a written agreement to that effect.
"Subsequent Lien" means any Lien that (a) covers any or all of the
land on which the Plant is located and any or all fixtures thereon that is
subsequent in time and junior in priority to any Lien thereon granted to the
Collateral Agent pursuant to the Security Deed; (b) secures Indebtedness of the
Issuer or the Company; and (c) does not, together with all such other then
existing Subsequent Liens, secure Indebtedness in an amount which exceeds the
aggregate principal amount of Secured Indebtedness, if any, which has been
repaid, redeemed or repurchased by the Issuer or the Company, as applicable,
simultaneously with or prior to the creation of such Subsequent Lien.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"Tangible Assets" means the net book value of property, plant and
equipment and other noncurrent and current assets held by the Company at the
date of determination, less any intangible assets.
"Temporary Cash Investments" means any of the following: (i) any
evidence of Indebtedness, maturing not more than one year after the date of
Investment by the Company, the Issuer or any other Restricted Subsidiary, Issued
by the United States of America or any instrumentality or agency thereof, or by
the Republic of Indonesia or any instrumentality or agency thereof, or by the
Asian Development Bank the World Bank or any other supranational organization
(collectively, "Government Entities") and guaranteed or otherwise backed,
directly or indirectly, fully as to principal, premium, if any, and interest, by
the Government Entity issuing such Indebtedness, (ii) investments in time
deposit accounts, certificates of deposit and money market deposits maturing
within 180 days of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States, and which
bank or trust company has capital, surplus and undivided profits aggregating in
excess of US$50.0 million (or the foreign currency equivalent thereof) and has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) or any money-market fund sponsored
by a registered broker dealer or mutual fund distributor, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above, (iv) investments in commercial
paper, maturing not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company) organized and in existence
under the laws of the United States of America or any foreign country recognized
by the United States of America with a rating at the time as of which any
investment therein is made of "P-1" (or higher) according to Xxxxx'x Investors
Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings
Group and (v) investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America or by any political
subdivision or taxing authority thereof, and rated at least "A" by Standard &
Poor's Ratings Group or "A" by Xxxxx'x Investors Service, Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"Tirtamas" means P.T. Tirtamas Majutama, a company incorporated under
the laws of the Republic of Indonesia.
"Trustee" mean the party named as such in this Indenture until a
successor replaces it and, thereafter, means successor.
"Trust Officer" means any trust officer or any other officer or
assistant officer of the Trustee assigned by the Trustee to administer its
corporate trust matters with respect to the Notes.
14
"Tuban Petro" means P.T. Tuban Petrochemical Industries, a company
incorporated under the laws of the Republic of Indonesia and owned 70% by the
Indonesian Bank Restructuring Agency ("IBRA") which has been established for the
settlement of Tirtmas' obligations to IBRA.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary) to be
an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries
owns any Capital Stock or Indebtedness of, or holds any Lien on any property of,
the Company or any other Subsidiary of the Company that is not a Subsidiary of
the Subsidiary to be so designated; PROVIDED, HOWEVER, that either (A) the
Subsidiary to be so designated has total assets of US$1,000 or less or (B) if
such Subsidiary has assets greater than US$1,000, such designation would be
permitted under Section 4.05. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that
immediately after giving effect to such designation (x) the Company could Incur
US$1.00 of additional Indebtedness under paragraph (a) of Section 4.03 and (y)
no Default shall have occurred and be continuing. Any such designation by the
Board of Directors shall be by the Company to the Trustee by promptly filing
with the Trustee a copy of the board resolution giving effect to such
designation and an Officer's Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the Issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares and shares held
by other Persons to the extent such shares are required by applicable law to be
held by a Person other than the Company or a Restricted Subsidiary) is owned by
the Company or one or more Wholly Owned Subsidiaries.
SECTION 1.02 OTHER DEFINITIONS.
Term Defined in Section
---- ------------------
"Additional Amounts"................................. 4.01(b)
"Affiliate Transaction".............................. 4.09
"Agent Members....................................... 2.01
"Agreement Currency"................................. 15.12
"Authorized Agent"................................... 15.11(b)
"Bankruptcy Law"..................................... 6.01
"covenant defeasance option"......................... 8.01(b)
"Custodian".......................................... 6.01
"Date of Exchange"................................... 14.02
"Defaulted Interest"................................. 2.11
"Distribution Date".................................. 14.05
"Event of Default"................................... 6.01
"Excess Cash Flow Redemption"........................ 3.07
"Excess Cash Flow Redemption Amount"................. 3.07
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Term Defined in Section
---- ------------------
"Excess Cash Flow Redemption Price................... 3.07
"Excess Collateral Process".......................... 4.08(c)
"Excess Proceeds".................................... 4.07(b)
"Exchange Price"..................................... 4.01(c)
"Governmental Taking"................................ 12.08
"Incorporated Provision"............................. 13.01
"Indemnity".......................................... 10.02
"Judgment Currency".................................. 15.12
"Keepwell"........................................... 4.15
"legal defeasance option"............................ 8.01(b)
"Legal Holiday"...................................... 15.09
"MCD Offer".......................................... 4.08(b)
"MCD Offer Amount"................................... 4.08(b)
"MCD Purchase Date".................................. 4.08(b)
"New Collateral Assets".............................. 4.08(c)
"PKLN Team".......................................... 4.20
"Paying Agent"....................................... 2.03
"Registrar".......................................... 2.03
"Release Notice"..................................... 12.05
"Restricted Payment"................................. 4.05
"Substitute Collateral".............................. 12.07
"Substitution Notice"................................ 12.07
"Successor Company".................................. 5.01
"Trigger Event"...................................... 14.05
"Trust Monies"....................................... 13.01
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
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SECTION 1.04 RULES OF CONSTRUCTION. Unless context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in
the plural include the singular;
(6) unsecured Indebtedness shall not be deemed be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any non-interest bearing or
other discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP and accretion of principal on such
security shall be deemed to be the Incurrence of Indebtedness; and
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE 2
THE SECURITIES
SECTION 2.01 FORM AND DATING. The Notes and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. Subject to
Section 2.06, the Notes shall be represented in global form. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Issuer shall furnish any such legend not contained in Exhibit A to
the Trustee in writing. Each Note shall be dated the date of its authentication.
The terms of the Notes set forth in Exhibit A are part of the terms of this
Indenture.
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Security, and the Depositary or its nominee, as the case may be, may be
treated by the Company, the Issuer, the Trustee and any agent of the Company,
the Issuer or the Trustee as the absolute owner of the Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Issuer, the Trustee or any agent of the Company, the Issuer or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices of such Depositary
governing the exercise of the rights of a holder of a beneficial interest in any
Global Security.
The Definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which such Notes may
then be listed, all as determined by the Officers of the Issuer executing such
Notes, as evidenced by their execution of such Notes in accordance with Section
2.02.
Any Definitive Security which is issued shall be printed in a manner
which satisfies the Royal Decree No. H7 of January 8, 1947 of the law of The
Netherlands, if such decree remains in effect on the date of printing.
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SECTION 2.02 EXECUTION AND AUTHENTICATION. One Officer of the Issuer
shall sign the Notes for the Issuer. The Company shall execute the Guarantee in
the manner set forth in Section 10.05. The signatures required by this paragraph
may be manual or facsimile signatures.
If an Officer of the Issuer whose signature is on a Note no longer
holds that office at the time the Trustee authenticates the Note, the Note shall
be valid nevertheless.
A Note shall not be valid until an authorized officer of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate and deliver Notes for original issue in
the aggregate principal amount of not more than $40,000,000, pursuant to a
written order of the Issuer signed by an Officer of the Issuer. The order shall
specify the amount of Notes to be authenticated and the date on which the
original issue of the Notes is to be authenticated. The aggregate principal
amount of Notes which may be outstanding any time may not exceed $72,250,000,
except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Issuer to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as any Registrar (as defined below), Paying Agent (as defined below) or
agent for service of notices demands.
SECTION 2.03 REGISTRAR AND PAYING AGENT. The Issuer shall maintain in
the City of
New York an office or agency where Notes may be presented for
registration of transfer or for exchange (the "REGISTRAR") and an office agency
where Notes may be presented for payment (the "PAYING AGENT") and the Issuer and
the Company shall maintain in the City of
New York an office or agency where
notices or demands to or upon the Issuer and the Company in respect of the Notes
and this Indenture may be served. If the Notes are issued in definitive form,
the Issuer shall also maintain a Paying Agent and Holders shall be entitled to
receive payment and transfer Notes through such Paying Agent. The Registrar
shall keep a register for the Notes and of their transfer and exchange. The
Issuer may have one or more co-registrars and one or more additional paying
agents, which may be located within or outside the City of
New York. The term
"Paying Agent" includes any additional paying agent and the term "Registrar"
includes any additional registrar.
Notwithstanding the foregoing, there shall be only one register for
the Notes.
The Issuer and the Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a party to this
Indenture, which shall incorporate the terms of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such agent. The Issuer
and the Company shall notify the Trustee of the name and address of any such
agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such and shall be entitled to appropriate compensation therefor
pursuant to Section 7.07. The Issuer may appoint any Person regularly providing
corporate trust services as Registrar, co-registrar or Paying Agent.
The Issuer initially appoints the Trustee at the address specified in
Section 15.02 as Registrar and Paying Agent.
The Company initially appoints the Depository Trust Company to act as
Depositary with respect to the Global Securities.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each due
date of the principal and interest on any Note, the Issuer shall deposit with
the Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Issuer shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust or the
benefit of the Noteholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Notes, shall notify the Trustee
of any default by
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the Issuer in making any such payment and shall at any time during the
continuance of any such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The
Issuer at any time may require a Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed by the Paying Agent. Upon payment
to the Trustee, the Paying Agent shall have no further liability for the money
delivered to the Trustee.
SECTION 2.05 NOTEHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Noteholders. If the Trustee is not the Registrar,
the Issuer shall furnish to the Trustee, in writing at least five Business Days
before each interest payment date for the Notes and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Noteholders.
SECTION 2.06 TRANSFER AND EXCHANGE
(a) Subject to Section 2.06(g), when a Note is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of the Registrar
are met. Subject to Section 2.06(f), when Notes are presented to the Registrar
or a co-registrar with a request to exchange them for an equal principal amount
of Definitive Securities of other authorized denominations, the Registrar shall
make the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Issuer shall execute and the
Trustee shall authenticate Notes and the Company shall execute the Guarantee
endorsed thereon at the Registrar's or co-registrar's request, subject to the
limitations set forth Section 2.06(f).
(b) Prior to the due presentation for registration of transfer of any
Note, the Issuer, the Company, the Trustee, the Paying Agent, the Registrar or a
co-registrar may deem and treat the Person in whose name such Note is registered
as the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Issuer, the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected
by notice to the contrary.
(c) All Notes issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Notes surrendered upon such transfer
or exchange.
(d) TRANSFER OF A DEFINITIVE SECURITY FOR A BENEFICIAL INTEREST IN A
GLOBAL SECURITY. A Definitive Security may not be exchanged for a beneficial
interest in Global Security except upon satisfaction of the requirements set
forth below. Upon receipt by the Trustee of a Definitive Security, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with written instructions from the Holder thereof
directing the Trustee to make, or to direct the Note Custodian to make, an
endorsement on the Global Security to reflect an increase in the aggregate
principal amount of Notes represented by the Global Securities, the Trustee
shall cancel such Definitive Security in accordance with Section 2.10 and cause,
or direct the Notes Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Notes
Custodian, the aggregate principal amount of Notes represented by the Global
Security to be increased accordingly. If no Global Securities are then
outstanding, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.02, the Trustee shall authenticate a new
Global Security in the appropriate principal amount.
(e) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer and
exchange of beneficial interests in Global Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with the
procedures of the Depositary therefor.
(f) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
DEFINITIVE SECURITY.
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(i) In the event that an Event of Default has occurred and is
continuing and the Trustee or other registrar has received a request from
the Depositary to issue Notes in definitive form in lieu of all or a
portion of the Global Securities (in which case the Company will deliver
Notes in definitive form within 30 days of such request), any Person having
a beneficial interest in a Global Security may upon request exchange such
beneficial interest for a Definitive Security. In any such event, upon
receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depositary, from the Depositary or its
nominee on behalf of any Person having a beneficial interest in a Global
Security, the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and procedures
existing between the Depositary and the Note Custodian, cause the aggregate
principal amount of the Global Security to be reduced accordingly and,
following such reduction, the Issuer shall execute and, upon receipt of an
authentication order in accordance with Section 2.02, the Trustee shall
authenticate and deliver to the transferee a Definitive Security in the
appropriate principal amount and the Company shall execute the Guarantee
endorsed thereon.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.06(f) and 2.06(h)
shall be registered in such names and in such authorized denominations as
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct Trustee. The Trustee shall
deliver such Definitive Securities to the Persons in whose names such Notes
are so registered.
(iii) If the Trustee has instituted or has been directed to
institute any judicial proceeding in a court to enforce the rights of the
Holders under the Notes, and the Trustee has been advised by counsel that
in connection with such proceeding it is necessary or appropriate for the
Trustee to obtain possession of the Notes, the Trustee may in its sole
discretion determine that the Notes represented by Global Securities shall
no longer be represented by such Global Securities. In such event, the
Issuer hereby agrees to execute and the Trustee will authenticate deliver,
in exchange for such Global Securities, individual Notes (and if the
Trustee has in its possession individual Notes previously executed the
Issuer, the Trustee will authenticate and deliver such Notes), in
authorized denominations, in an aggregate principal amount equal to the
principal amount of such Global Securities and registered in such name or
names as the Trustee deems appropriate.
(g) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (h) of this Section 2.06), a Global Security may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(h) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF DEPOSITARY.
If at any time:
(i) the Depositary for the Notes notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the Global
Securities and a successor Depositary for the Global Securities is not
appointed by the Issuer within 90 days after delivery of such notice; or
(ii) the Issuer, in its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Securities
under this Indenture,
then the Issuer shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02, authenticate and deliver
and the Company shall execute the Guarantee endorsed thereon Definitive
Securities in an aggregate principal amount equal to the principal amount of the
Global Securities in exchange for such Global Securities.
(i) LEGENDS. Each Note certificate evidencing Global Securities (and
all Notes issued in exchange therefor or substitution thereof), to the extent
required, shall bear such legends set forth in Exhibit A hereto.
20
(j) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SECURITIES. At such time
as all beneficial interests in Global Securities have been exchanged for
Definitive Securities, redeemed, repurchased or canceled, all Global Securities
shall be returned to or retained and canceled by the Trustee in accordance with
Section 2.10. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for a Definitive Security, redeemed,
repurchased or canceled, the principal amount of Notes represented by such
Global Security shall be reduced accordingly and an endorsement shall be made on
such Global Security, by the Trustee or the Note Custodian, at the direction of
the Trustee, to reflect such reduction.
(k) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Issuer shall execute and the Trustee shall (subject to Sections 2.06(f) and
(g)) authenticate Definitive Securities and Global Securities, and the
Company shall execute the Guarantee endorsed thereon, at the Registrar's
request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Registrar may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith.
(iii) The Registrar may require a Holder to furnish appropriate
endorsements and transfer documents.
(iv) The Registrar shall not be required to register the
transfer of or exchange of any Security called for redemption, and the
Registrar shall not be required to register the transfer of or exchange of
any Security for a period of 15 days before the mailing of a notice of
redemption and ending at the close of business on the day of such mailing.
(l) PAYMENT OF PRINCIPAL AND INTEREST. Payment of principal and
interest on any Global Security shall be made to the Depositary or its nominee
in accordance with the applicable procedures of the Depositary.
SECTION 2.07 REPLACEMENT NOTES. If a mutilated Note is surrendered to
the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall, at
the Issuer's expense, authenticate a replacement Note if the requirements of the
Trustee and the Issuer are met. If required by the Trustee or the Issuer, such
Holder shall furnish an indemnity bond sufficient in the judgment of the Issuer
and the Trustee to protect the Issuer, the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss which any of them may
suffer if a Note is replaced. The Issuer and the Trustee may charge the Holder
for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuer and
the Company and shall be entitled to the benefits of this Indenture.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
of mutilated, wrongfully taken, lost or destroyed Notes.
SECTION 2.08 OUTSTANDING NOTES. Notes outstanding at any time are all
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. A Note does not cease to be outstanding because the Issuer, the
Company or any Affiliate of the Issuer or the Company holds such Note.
If a Note is misplaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Issuer receive proof satisfactory to them
that the replaced Note is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, then on and
after that date the Notes (or portions thereof) cease to be outstanding and
interest on them ceases to accrue.
21
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction or consent or any amendment, modification
or other change to this Indenture or any other action requiring the consent of
the Noteholders, Notes owned by the Issuer or the Company or any Affiliate of
the Issuer or the Company shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent or any amendment, modification or other change to
this Indenture, only Notes which the Trustee actually knows are so owned shall
be so disregarded. Notes so owned which have been pledged in good faith shall
not be disregarded if the pledgee establishes to the satisfaction of the Trustee
the pledgee's right so to act with respect to the Notes that the pledgee is not
the Issuer, the Company or any Affiliate of the Issuer or the Company.
SECTION 2.09 TEMPORARY NOTES. Until Definitive Securities are ready
for delivery, the Issuer may prepare and the Trustee shall authenticate
temporary Notes with the Guarantee endorsed thereon. Temporary Notes shall be
substantially in the form of Definitive Securities but may have variations that
the Issuer considers appropriate for temporary Notes. Without unreasonable
delay, the Issuer shall prepare and the Trustee shall authenticate Definitive
Securities, with the Guarantee and deliver them in exchange for temporary Notes.
SECTION 2.10 CANCELLATION. The Issuer at any time may deliver Notes
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange, payment, repurchase, replacement, cancellation or payment.
The Trustee (and no one else) shall cancel and dispose of all Notes surrendered
for registration of transfer, exchange, payment or cancellation in accordance
with its policy of disposal and deliver a certificate of such disposition to the
Issuer unless the Issuer directs the Trustee to deliver canceled Notes the
Issuer. The Issuer may not issue new Notes to replace Notes it has redeemed,
purchased, paid or delivered to the Trustee for cancellation.
SECTION 2.11 DEFAULTED INTEREST. Any interest on any Note which is
payable, but is not punctually paid or duly provided for, on the dates and in
the manner provided in the Notes and this Indenture (herein called "DEFAULTED
INTEREST") shall forthwith cease to be payable to the Holder on the relevant
record date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Issuer, at its election in each case, as provided in clause
(i) or (ii) below:
(i) The Issuer may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes are registered at the
close of business on a special record date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Issuer shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Note and the date of the proposed
payment, at the same time the Issuer shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the payment of
such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Issuer of such special
record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special
record date therefor to be given to each Holder, not less than 10 days
prior to such special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Notes are registered at the close of business on such special record
date.
(ii) The Issuer may make payment of any Default Interest on the
Notes in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Issuer to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
22
Subject to the foregoing provisions of this Section 2.11, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.12 PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer, the Issuer, the Company, the Trustee, the
authenticating agent, if any, and any Paying Agent, the Registrar or any
co-registrar may treat the Holder of a Note as the owner of such Note for the
purpose of receiving payment of principal of, premium (if any) and, subject to
Section 2.11, interest on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Issuer, the Company, the
Trustee, the authenticating agent, if any, or any Paying Agent, the Registrar or
any co-registrar shall be affected by notice to the contrary.
SECTION 2.13 COMPUTATION OF INTEREST. Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.14 PREDECESSOR SECURITIES. All Definitive Securities and
Global Securities issued upon any registration of transfer or exchange of Notes
pursuant to Section 2.06 or in replacement of a lost, destroyed or wrongfully
taken Note pursuant to Section 2.07 shall evidence the same debt, and be
entitled to the same benefits under this Indenture, as the predecessor Note or
Notes surrendered upon such registration of transfer or exchange or lost,
destroyed or wrongfully taken, as the case may be.
SECTION 2.15 RECORD DATE. The Issuer may set a record date for
purposes of determining the identity of Noteholders entitled to vote or to
consent to any action by vote of consent authorized or permitted by any
provision hereof. Unless this Indenture provides otherwise, such record date
shall be the later of 30 days prior to the first solicitation of such consent or
the date of the most recent list of Holders furnished to the Trustee pursuant to
Section 2.05 prior to such solicitation.
ARTICLE 3
REDEMPTION
SECTION 3.01 NOTICES TO TRUSTEE. If the Issuer elects to redeem the
Notes pursuant to Section 5(a) or (b) of the Notes or if the Issuer is required
to redeem the Notes pursuant to Section 3.07 below, it shall notify the Trustee
in writing of the section and paragraph of the Notes pursuant to which the
redemption will occur, the redemption date, the redemption price, and the
principal amount of Notes to be redeemed.
The Issuer shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officer's
Certificate and an Opinion of Counsel from the Issuer to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED. If fewer than all the
Notes are to be redeemed, the Trustee shall select the Notes to be redeemed pro
rata or by lot or by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee considers fair and
appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances. The Trustee shall make the
selection from outstanding Notes not previously called for redemption. The
Trustee may select for redemption portions of the principal of Notes that have
denominations larger than $1.00. Notes and portions of them the Trustee selects
shall be in amounts of $1.00 or a whole multiple of $1.00. Provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption. The Trustee shall notify the Company and the Issuer
promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.03 NOTICE OF REDEMPTION. At least 30 days but not more than
60 days before a date for redemption of Notes, the Issuer shall (i) mail a
notice of redemption by first-class mail to each Holder of Notes to be redeemed
and (ii) publish a notice of redemption as contemplated in Section 15.02.
23
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that, unless the Issuer defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(6) the Section and paragraph of the Notes pursuant to which the
Notes called for redemption are being redeemed;
(7) that no representation is made as to the correctness or accuracy
of the CUSIP number or common code, if any, listed in such notice or printed on
the Notes;
(8) if fewer than all the outstanding Notes are to be redeemed, the
certificate numbers and principal amounts of the particular Notes to be
redeemed; and
(9) the CUSIP number, if any, printed on the Notes being redeemed.
At the Issuer's request, the Trustee shall give the notice of
redemption in the Issuer's name and at the Issuer's expense. In such event, the
Issuer shall provide the Trustee with the form of such notice containing the
information required by this Section.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed and published pursuant to Section 3.03, Notes called for
redemption become due and payable on the redemption date and at the redemption
price stated in the notice. Upon surrender to the Paying Agent, such Notes shall
be paid at the redemption price stated in the notice, plus accrued interest to
the redemption date (including all Additional Amounts owed in respect of such
Notes). Failure to give notice or any defect in the notice to any Holder shall
not affect the validity of the notice to any other Holder.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE. Prior to 10:00 a.m.
New
York City time on the redemption date, the Issuer shall deposit with the Paying
Agent money sufficient to pay the redemption price of and accrued interest
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date) on all Notes (without
giving effect to any earnings which may accrue on such deposit prior to the
redemption date) to be redeemed on that date other than Notes or portions of
Notes called for redemption which have been delivered by the Issuer to the
Trustee for cancellation. The Paying Agent shall promptly return to the Issuer
any money so deposited which is not required for that purpose upon the written
request of the Issuer.
SECTION 3.06 NOTES REDEEMED IN PART. Upon surrender of a Note that is
redeemed in part, the Issuer shall issue and the Trustee shall authenticate for
the Holder (at the Company's expense) a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
SECTION 3.07 MANDATORY REDEMPTION; MANDATORY REDEMPTION OF NOTES FROM
EXCESS CASH FLOW.Beginning on the fourth anniversary of the Issue Date, and not
later than 180 days following the end of each fiscal year thereafter, the Issuer
will redeem (the "EXCESS CASH FLOW REDEMPTION") the maximum principal amount of
Notes that is an integral multiple of $1.00 with 75% of the Excess Cash Flow of
the Company from such fiscal year (the "EXCESS CASH FLOW REDEMPTION AMOUNT"), at
a redemption price in cash equal to 100% of the principal amount of the Notes to
be redeemed (the "EXCESS CASH FLOW REDEMPTION PRICE"), together with accrued and
unpaid interest, if any, thereon to the date fixed for the redemption of the
Notes pursuant to such Excess Cash Flow
24
Redemption. The Issuer shall not make an Excess Cash Flow Redemption to purchase
Notes pursuant to this Section 3.07 if the available cumulative Excess Cash Flow
is less than US$2.0 million; PROVIDED, that any such lesser amount of Excess
Cash Flow (if positive) will be added to the Excess Cash Flow for each
subsequent fiscal year until an Excess Cash Flow Redemption is made.
Interest shall cease to accrue on the Notes or portions called for
redemption on and after the redemption date.
Any redemption made pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF NOTES; PAYMENT OF ADDITIONAL AMOUNTS
.
(a) Subject to Section 4.01(b), the Issuer shall promptly pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes and in this Indenture. Principal and interest shall be considered
paid on the date due if on such date the Trustee or the Paying Agent holds in
accordance with this Indenture money sufficient to pay all principal and
interest then due. All payments shall be made in United States dollars.
Interest on the Notes shall accrue from the Issue date and shall be
paid semi-annually in arrears on each June 15 and December 15.
The Issuer shall pay interest on overdue principal on the Notes, and
on overdue installments of interest on Notes, at a rate specified in the Notes,
plus 1% per annum.
(b) All payments of principal of, premium, if any, and interest on
each Note or Guarantee will be made free and clear of, and without withholding
or deduction for, any present or future taxes, duties, assessments or
Governmental charges of whatever nature imposed, levied, collected, withheld or
assessed by or within the Republic of Indonesia or The Netherlands or any
political subdivision or taxing authority thereof or therein, unless such
withholding or deduction is required by law or by regulation or governmental
policy having the force of law. In the event that any such withholding or
deduction in respect of principal, premium or interest is so required, the
Issuer or the Company, as the case may be, will pay such additional amounts
("ADDITIONAL AMOUNTS") as will result in receipt by each holder of any Note of
such gross amount as would have been received by such Holder or the beneficial
owner with respect to such Note or the Guarantee, as applicable, had no such
withholding or deduction (including any withholding or deduction applicable to
Additional Amounts payable) been required, except that no Additional Amounts
will be payable:
(i) for or on account of:
(1) any tax, duty, assessment or other Governmental charge
that would not have been imposed but for:
(A) the existence of any present or former connection
between such Holder or the beneficial owner of such Note and the
Republic of Indonesia or The Netherlands, as the case may be, other
than the mere acquisition, holding or disposition of such Note or the
receipt of payments thereunder, including, without limitation, such
Holder or the beneficial owner of such Note being or having been a
national, domiciliary or resident of or treated as a resident thereof,
being or having been present or engaged in a trade or business therein
or having or having had a permanent establishment therein; or
25
(B) the presentation of such Note (where presentation
is required) more than 30 days after the date on which the payment in
respect of such Note became due and payable or provided for, whichever
is later, except to the extent that such holder would have been
entitled to such Additional Amounts if it had presented such Note for
payment on any day within such period of 30 days;
(2) any estate, inheritance, gift, sale, transfer, personal
property or similar tax, duty, assessment or other Governmental charge;
(3) any tax, duty, assessment or other Governmental charge
that is imposed or withheld by reason of the failure of such Holder or the
beneficial owner of such Note to comply with a request by the Issuer or the
Company addressed to such Holder (A) to provide information concerning the
nationality, residence or identity of such Holder or such beneficial owner
or (B) to make any declaration or other similar claim or satisfy any
information or reporting requirement, which, in the case of (A) or (B), is
required or imposed by a statute, treaty, regulation or administrative
practice of the taxing jurisdiction as a precondition to exemption from all
or part of such tax, duty, assessment or other Governmental charge; or
(4) any combination of items (1), (2) and (3); or
(ii) with respect to any payment of the principal of, premium, if any,
or interest on such Note to such Holder (including a fiduciary or partnership)
to the extent that under the laws of the Republic of Indonesia or The
Netherlands, as the case may be, some person other than such Holder is required
to include such payment in income and such other person would not have been
entitled to such Additional Amounts had it been the holder of the Note.
In the event the Issuer could redeem Notes pursuant to Section 5(b) of
the Notes but elects not to so redeem, the Issuer or the Company shall pay such
Additional Amounts to the Holders as will result in receipt by such Holder of
such amounts that would have been received by such Holder had no withholding or
deduction been required, except that no such Additional Amounts shall be payable
with respect to any Notes under the circumstances described in clauses (a) or
(b) above.
(c) The Issuer or the Company, as the case may be, will pay any
present or future stamp, court or documentary taxes, or any other excise or
property taxes, charges or similar levies which arise in any jurisdiction from
the execution, delivery or registration of the Notes or any other document or
instrument referred to therein, or the receipt of any payments with respect to
the Notes, excluding any such taxes, charges or similar levies imposed by any
jurisdiction outside of The Netherlands or the Republic of Indonesia or any
jurisdiction in which a Paying Agent is located, except those resulting from, or
required to be paid in connection with, the enforcement of the Notes or any
other such document or instrument following the occurrence of any Event of
Default.
(d) Whenever in this Indenture or the Notes there is mentioned, in any
context, the payment of principal, premium or interest in respect of any Note or
the Guarantee or the net proceeds received on the sale or exchange of any Note,
such mention shall be deemed to include the payment of Additional Amounts
provided for in this Indenture to the extent that, in such context, Additional
Amounts are, were or would be payable in respect thereof pursuant to this
Indenture and express mention of the payment of Additional Amounts (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where express mention is not made.
(e) The Issuer and the Company hereby covenant that if the Trustee or
any Paying Agent is required by law to make any deduction or withholding or
payments of principal of, premium or interest on the Notes or the Guarantee for
or on account of any tax, duty, assessment or other Governmental charge, the
Issuer, with respect to Additional Amounts payable in connection with the Notes,
or the Company, with respect to Additional Amounts payable in connection with
the Guarantee, shall:
26
(A) at least 10 Business Days prior to the first
payment date on which such deduction or withholding is applicable (and
at least 10 Business Days prior to each succeeding payment date or any
redemption date or maturity date if there has been any change with
respect to the matters set forth in the below-mentioned Officer's
Certificate), deliver to the Trustee and each Paying Agent an
Officer's Certificate (A) specifying by country the amount so required
to be deducted or withheld on such payment to Holders and the
Additional Amounts, if any, due to Holders in connection with such
payment, and (B) certifying that the Issuer or the Company, as
applicable, shall pay such deduction or withholding;
(B) prior to the due date for the payment thereof, pay
any such tax, duty, assessment or other Governmental charge, together
with any penalties or interest applicable thereto;
(C) within 30 days after paying such tax, duty,
assessment or other Governmental charge, deliver to the Trustee and
each Paying Agent evidence of such payment and of the remittance
thereof to the relevant taxing or other authority; and
(D) pay any Additional Amounts due to Holders any
interest payment date, redemption date, purchase date or maturity date
to the Paying Agent in accordance with the provisions of this Section.
The Trustee and each Paying Agent shall be entitled to rely
conclusively on the fact that no such Officer's Certificate is delivered to them
as evidence that, as the case may be, either no such withholding or deduction is
required or that the matters set forth in any prior Officer's Certificate
delivered pursuant to this subsection; have not changed.
Each of the Issuer and the Company, as applicable, hereby covenants to
indemnify the Trustee and each Paying Agent for, and to hold each harmless
against, any loss, liability or expense properly incurred without negligence,
bad faith or willful misconduct on such Person's part, arising out of or in
connection with actions taken or omitted by any of them in reliance on any
Officer's Certificate furnished pursuant to this Section or the failure of the
Trustee or any Paying Agent for any reason (other than its own negligence, bad
faith or willful misconduct) to receive on a timely basis any such Officer's
Certificate or any information or documentation requested by it or otherwise
required by applicable law or regulations to be obtained, furnished or filed in
respect of such tax, duty, assessment or other Governmental charge. Each of the
Issuer and the Company, as applicable, shall make available to any Holder
requesting the same, evidence that the applicable tax, duty, assessment or other
Governmental charge have been paid including furnishing receipts if so
requested.
Any Officer's Certificate required by this Section 4.01 to be provided
to the Trustee and each Paying Agent shall be deemed to be duly provided if
received by facsimile by the Trustee and each Paying Agent.
SECTION 4.02 REPORTS. The Company will provide to the Trustee, and,
upon request, the Holders of the Notes, annual financial statements for each
fiscal year audited by an internationally recognized independent public
accountant, within 180 days after the end of such fiscal year. All such
financial statements shall be in English. The Issuer and the Company will also
comply with the other provisions of TIA section 314(a).
SECTION 4.03 LIMITATION ON INDEBTEDNESS
(a) Neither the Company nor the Issuer shall Incur, directly or
indirectly, any Indebtedness unless, on the date of such Incurrence, the
Consolidated Coverage Ratio exceeds 2.25 to 1.
(b) Notwithstanding Section 4.03(a), the Company or the Issuer may
Incur the following Indebtedness: (1) Indebtedness pursuant to the Loan
Facilities (or any other facility for working capital or general corporate
purposes); PROVIDED, HOWEVER, that, after giving effect to any such Incurrence,
the aggregate principal amount of such Indebtedness under all such Loan
Facilities then outstanding does not exceed the US$50.0 million; (2)
Indebtedness owed to and held by a Wholly Owned Subsidiary; PROVIDED, HOWEVER,
that any subsequent issuance
27
or transfer of any Capital Stock which results in any such Wholly Owned
Subsidiary ceasing to be a Wholly Owned Subsidiary or any subsequent transfer of
such Indebtedness (other than to another Wholly Owned Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Indebtedness by the
Company; (3) Indebtedness pursuant to the Senior Notes and the Senior Guarantee,
(4) Indebtedness evidenced by the Exchangeable Notes issued pursuant to the
Exchangeable Indenture up to the amounts issued on the Issue Date, and any
Guarantees thereof, plus any Exchangeable Notes issued as payment of interest
thereon in accordance with the terms thereof, and any Guarantees thereof, less
any amounts repaid or retired; (5) Indebtedness evidenced by the Guaranteed
Notes up to the amounts issued on the Issue Date; (6) Indebtedness outstanding
on the Issue Date (other than Indebtedness described in clause (1), (2), (3),
(4) or (5) of this paragraph (b)); (7) Refinancing Indebtedness in respect of
Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (3), (4),
(5), (6) this clause (7) or Section 4.04(b)(v); (8) Hedging Obligations to hedge
exposure against fluctuations in interest rates or currency rates in respect of
Indebtedness permitted to be Incurred by the Company or the Issuer pursuant to
this Indenture; (9) Indebtedness under Commodity Agreements entered into in the
ordinary course of the financial management of the Company or the Issuer and not
for speculative purposes; (10) Indebtedness pursuant to short term trade letters
of credit (and facilities therefor) and short-term trade guarantees, in each
case, entered into in the ordinary course of business of the Company or the
Issuer, as applicable; (11) Purchase Money Indebtedness the principal amount of
which Incurred in any single calendar year shall not exceed US$5.0 million;
PROVIDED, HOWEVER, that no Indebtedness may be Incurred pursuant to this clause
(11) to the extent the principal amount thereof would, when taken together with
all other Indebtedness Incurred pursuant to this clause (11) and then
outstanding, exceed US$10.0 million; and (12) Indebtedness in an aggregate
principal amount which, together with all other Indebtedness of the Company and
the Issuer outstanding on the date of such Incurrence (other than Indebtedness
permitted by clauses (l) through (11) above or Section 4.03(a)), does not exceed
US$20.0 million.
(c) Notwithstanding the foregoing, neither the Company nor the Issuer
shall Incur any Indebtedness pursuant to the foregoing paragraph (b) if the
proceeds thereof are used, directly or indirectly, to Refinance any Subordinated
Obligations unless such Indebtedness shall be subordinated to the Notes to at
least the same extent as such Subordinated Obligations.
(d) For purposes of determining compliance with this Section 4.03, (i)
in the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described above, the Company, in its sole discretion,
will classify (and may later classify) such item of Indebtedness and only be
required to include the amount and type of such Indebtedness in one of the above
clauses and (ii) an item of Indebtedness may be divided and classified in more
than one of the types of Indebtedness described above.
SECTION 4.04 LIMITATION ON INDEBTEDNESS AND PREFERRED STOCK OF
RESTRICTED SUBSIDIARIES
(a) Neither the Issuer nor the Company shall permit any Restricted
Subsidiary to Incur, directly or indirectly, any Indebtedness or Preferred
Stock; PROVIDED, HOWEVER, that the Issuer may Incur Indebtedness permitted
pursuant to Section 4.03(a) or Section 4.03(b).
(b) Notwithstanding the foregoing Section 4.04 (a) any Restricted
Subsidiary other than the Issuer may Incur:
(i) Indebtedness or Preferred Stock issued to and held by the
Company or a Wholly Owned Subsidiary; PROVIDED, HOWEVER, that any
subsequent issuance or transfer of any Capital Stock which results in any
such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of such Indebtedness or Preferred Stock (other than to
the Company or a Wholly Owned Subsidiary) shall be deemed, in each case, to
constitute the issuance of such Indebtedness or Preferred Stock by the
issuer thereof;
(ii) Indebtedness or Preferred Stock of a Subsidiary Incurred
and outstanding on or prior to the date on which such Subsidiary was
acquired by the Company (other than Indebtedness or Preferred Stock
Incurred in connection with, or to provide all or any portion of the funds
or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Subsidiary became a Subsidiary
or was acquired by the Company); PROVIDED, HOWEVER, that on the date of
such
28
acquisition and after giving effect thereto, the Company or the Issuer
would have been able to Incur at least US$1.00 of additional Indebtedness
pursuant to Section 4.03(a);
(iii) Indebtedness or Preferred Stock outstanding on the Issue
Date (other than Indebtedness described in clauses (i) or (ii)) of this
Section 4.04(b);
(iv) Indebtedness under Commodity Agreements entered into in
the ordinary course of financial management of such Restricted Subsidiary
and not for speculative purposes; and
(v) Refinancing Indebtedness Incurred in respect of
Indebtedness or Preferred Stock referred to in clauses (ii) or (iii) or
this clause (v) of this Section 4.04(b); PROVIDED, HOWEVER, that to the
extent such Refinancing Indebtedness directly or indirectly Refinances
Indebtedness or Preferred Stock of a Subsidiary described in Section
4.04(b)(ii), such Refinancing Indebtedness shall be Incurred only by such
Subsidiary.
SECTION 4.05 LIMITATION ON RESTRICTED PAYMENTS
(a) Neither the Company nor the Issuer shall, nor shall the Company
permit any Restricted Subsidiary, directly or indirectly, to, make a Restricted
Payment if at the time the Company, the Issuer or such other Restricted
Subsidiary makes such Restricted Payment: (1) a Default shall have occurred and
be continuing (or would result therefrom); (2) the Company or the Issuer is not
able to Incur an additional US$1.00 of Indebtedness pursuant to Section 4.03(a)
or (3) the aggregate amount of such Restricted Payment and all other Restricted
Payments since the Issue Date would exceed the sum of: (A) 50% of the
Consolidated Net Income accrued during the period (treated as one accounting
period) from the beginning of the fiscal quarter immediately following the
fiscal quarter during which the Notes are originally issued to the end of the
most recent fiscal quarter ending at least 45 days prior to the date of such
Restricted Payment (or, in case such Consolidated Net Income shall be a deficit,
minus 100% of such deficit); (B) the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other than Disqualified
Stock) subsequent to the Issue Date (other than an issuance or sale to a
Subsidiary of the Company); (C) the amount by which Indebtedness of the Company
is reduced on the Company's balance sheet upon the conversion or exchange (other
than by a Subsidiary of the Company) subsequent to the Issue Date, of any
Indebtedness of the Company issued after the Issue Date convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of the Company
(less the amount of any cash, or the fair market value of any other property,
distributed by the Company upon such conversion or exchange); (D) an amount
equal to the sum of (i) the net reduction in Investments in Unrestricted
Subsidiaries resulting from dividends, repayments of loans or advances or other
transfers of assets, in each case to the Company or any Restricted Subsidiary
from Unrestricted Subsidiaries, and (ii) the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; PROVIDED, HOWEVER, that the
foregoing sum shall not exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made (and treated as a Restricted Payment) by
the Company or any Restricted Subsidiary in such Unrestricted Subsidiary; and
(E) US$10.0 million.
(b) The provisions of Section 4.05(a) shall not prohibit: (i) any
purchase or redemption of Capital Stock or Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary of the Company or an
employee stock ownership plan or to a trust established by the Company or any of
its Subsidiaries for the benefit of their employees); PROVIDED, HOWEVER, that
(A) such purchase or redemption shall be excluded in the calculation of the
amount of Restricted Payments and (B) the Net Cash Proceeds from such sale shall
be excluded from the calculation of amounts under Section 4.05(a)(3)(B); (ii)
any purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Obligations made by exchange for, or out of
the proceeds of the substantially concurrent sale of, Indebtedness of the
Company which is permitted to be Incurred pursuant Section 4.03; PROVIDED,
HOWEVER, that such purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value shall be excluded in the calculation of the
amount of Restricted Payments; (iii) dividends paid within 60 days after the
date of declaration thereof if at such date of declaration such dividend would
have complied with this Section 4.05; PROVIDED, HOWEVER, that at the time of
payment of such dividend, no other Default shall have occurred and be continuing
(or result therefrom); PROVIDED FURTHER, HOWEVER, that such dividend shall be
included in the calculation of the amount of Restricted
29
Payments; and (iv) the repurchase of shares of, or options to purchase shares
of, common stock of the Company or any of its Subsidiaries from employees,
former employees, directors or former directors of the Company or any of its
Subsidiaries (or permitted transferees of such employees, former employees,
directors or former directors), pursuant to the terms of the agreements
(including employment agreements) or plans (or amendments thereto) approved by
the Board of Directors under which such individuals purchase or sell or are
granted the option to purchase or sell, shares of such common stock; PROVIDED,
HOWEVER, that the aggregate amount of such repurchases shall not exceed US$0.5
million in any calendar year; PROVIDED FURTHER, however, that such repurchases
shall be excluded in the calculation of the amount of Restricted Payments; and
(v) any purchase, repurchase, redemption, defeasance or other acquisition or
retirement of the Guaranteed Notes.
SECTION 4.06 LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES
. Neither the Company nor the Issuer shall, nor shall the Company
permit any other Restricted Subsidiary to, create or otherwise cause or permit
to exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary (a) to pay dividends or make any other
distributions on its Capital Stock to the Company or a Restricted Subsidiary or
pay any Indebtedness owed to the Company or the Issuer, (b) to make any loans or
advances to the Company or the Issuer or (c) to transfer any of its property or
assets to the Company or the Issuer, except: (i) any encumbrance or restriction
pursuant to an agreement in effect at or entered into on the Issue Date; (ii)
any encumbrance or restriction with respect to a Restricted Subsidiary pursuant
to an agreement relating to any Indebtedness Incurred by such Restricted
Subsidiary on or prior to the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness Incurred as consideration in,
or to provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company) and outstanding on such date; (iii) any encumbrance or restriction
pursuant to an agreement effecting a Refinancing of Indebtedness Incurred
pursuant to an agreement referred to in clause (i) or (ii) of this covenant or
this clause (iii) or contained in any amendment to an agreement referred to in
clause (i) or (ii) of this covenant or this clause (iii); PROVIDED, HOWEVER,
that the encumbrances and restrictions with respect to such Restricted
Subsidiary contained in any such refinancing agreement or amendment are no less
favorable to the Noteholders than encumbrances and restrictions with respect to
such Restricted Subsidiary contained in such agreements; (iv) any such
encumbrance or restriction consisting of customary non-assignment provisions in
leases governing leasehold interests to the extent such provisions restrict the
transfer of the lease or the property leased thereunder; (v) in the case of
clause (c) above, restrictions contained in security agreements or mortgages
securing Indebtedness of a Restricted Subsidiary to the extent such restrictions
restrict the transfer of the property subject to such security agreements or
mortgages; (vi) any restriction with respect to the Guaranteed Notes, any
defeasance trust or the Debt Service Reserve Account; and (vii) any restriction
with respect to a Restricted Subsidiary imposed pursuant to an agreement entered
into for the sale or disposition of all or substantially all the Capital Stock
or assets of such Restricted Subsidiary pending the closing of such sale or
disposition.
SECTION 4.07 LIMITATION ON SALES OF NON-COLLATERAL ASSETS AND
SUBSIDIARY STOCK
(a) Neither the Company nor the Issuer shall, nor shall the Company or
the Issuer permit the Issuer or any other Restricted Subsidiary to, make any
Asset Disposition that is not a disposition of Collateral, in whole or in part,
unless (1) the Company, the Issuer or such other Restricted Subsidiary, as the
case may be, receives consideration at the time of such Asset Disposition at
least equal to the fair market value of the Capital Stock or assets subject to
such Asset Disposition (including the value of all non cash consideration), as
determined in good faith by an officer (having a title of manager or more
senior) of the Company, the Issuer or such other Restricted Subsidiary, in the
case of an Asset Disposition involving consideration not greater than US$1.0
million, or by the Board of Directors, in the case of an Asset Disposition
involving consideration of more than US$1.0 million, (2) except in the case of
an Involuntary Loss, at least 75% of such consideration is in the form of cash
or cash equivalents and (3) the Company, the Issuer or such other Restricted
Subsidiary, as applicable, complies with the requirements of Sections 4.07(b)
below.
(b) In the case of any Asset Disposition which is not a disposition of
Collateral by the Company, the Issuer or any other Restricted Subsidiary, the
Company or such Restricted Subsidiary will apply the Net Available Cash from
such Asset Disposition (i) first, to the extent such Net Available Cash is
required to be so applied, to prepay, repay, redeem or purchase (A) Senior
Indebtedness of the Company or (B) unsubordinated
30
Indebtedness (other than Disqualified Stock) of the Company or any Restricted
Subsidiary (in each case other than Indebtedness owed to the Company or an
Affiliate of the Company), within 180 days after the later of such Asset
Disposition or receipt of the Net Available Cash, (ii) second, to the extent of
the balance of Net Available Cash after application in accordance with clause
(i), the Company or such other Restricted Subsidiary may apply such Net
Available Cash to acquire (or enter into a legally binding agreement to acquire)
Additional Assets within 270 days after the later of such Asset Disposition or
receipt of the Net Available Cash; PROVIDED, HOWEVER, that (l) if any such
legally binding commitment to acquire Additional Assets is terminated prior to
the later of 270 days following such Asset Disposition or 270 days following the
receipt of such Net Available Cash, the Company, the Issuer or any other
Restricted Subsidiary may, within 90 days following such termination or 270 days
following such Asset Disposition or 270 days following the receipt of such Net
Available Cash, whichever is latest, acquire (or enter into a single further
legally binding commitment to acquire) other Additional Assets, and (2) any
legally binding commitment to acquire Additional Assets shall be fully performed
within 24 months following such Asset Disposition or the receipt of such Net
Available Cash, whichever is later. Any Net Available Cash not applied as
provided above shall constitute "Excess Proceeds" and shall be applied in
accordance with Section 3.07.
(c) For the purposes of this Section 4.07 and Section 4.08, the
assumption of Indebtedness of the Company or any Restricted Subsidiary and the
release of the Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition shall be deemed to be
cash or cash equivalents.
(d) Pending application of Net Available Cash pursuant to Sections
4.07(b), such Net Available Cash will be invested in Temporary Cash Investments
and will not be deposited with the Collateral Agent.
SECTION 4.08 LIMITATION ON SALES OF COLLATERAL
(a) ALL COLLATERAL DISPOSITIONS. Neither the Company nor the Issuer
shall, nor shall the Company permit any Restricted Subsidiary, directly or
indirectly, to, consummate any Collateral Disposition, in whole or in part,
unless: (i) other than in the case of an Involuntary Loss, the Company or such
Restricted Subsidiary receives consideration at the time of such Collateral
Disposition at least equal to the fair market value (including the value of all
noncash consideration) of the Collateral subject to such Collateral Disposition,
as determined in good faith (A) in the case of a Collateral Disposition
involving consideration of US$1.0 million or less, by an officer of the Company
having the title of manager or more senior, or (B) in the case of a Collateral
Disposition involving consideration of more than US$1.0 million, by the Board of
Directors of the Company; (ii) other than in the case of an Involuntary Loss, at
least 75% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash and cash equivalents; (iii) any
such Collateral Disposition is in compliance with the provisions of Section 12;
(iv) an amount equal to 100% of the Net Available Cash from such Collateral
Disposition shall promptly be delivered and pledged by the Company (or such
Restricted Subsidiary, as the case may be) to the Collateral Agent for deposit
in the Collateral Accounts or, in the case of an Involuntary Loss that does not
constitute a Major Collateral Disposition, the Insurance Collateral Account,
pending application in accordance with the provisions of Sections 4.08(b), (c)
or (d) below, as applicable, in each case in the name and under the sole
dominion and control of the Collateral Agent; (v) the Liens of the Security
Documents (which shall be first priority perfected Liens) attach to all other
property and assets received, and the Company (or such Restricted Subsidiary, as
the case may be) shall take such other actions, at the sole expense of the
Company or such Restricted Subsidiary, to ensure that the Liens under the
Security Documents so attach to such property and assets; and (vi) in the event
of a Collateral Disposition that is: (A) a Major Collateral Disposition, the
Company (or such Restricted Subsidiary, as the case may be) shall comply with
Section 4.08(b) below; (B) a Collateral Disposition that does not constitute a
Major Collateral Disposition and does not result from an Involuntary Loss, the
Company (or such Restricted Subsidiary, as the case may be) shall comply with
Section 4.08(c) below; or (C) a Collateral Disposition that does not constitute
a Major Collateral Disposition but results from an Involuntary Loss, the Company
(or such Restricted Subsidiary, as the case may be) shall comply with Section
4.08(d) below.
(b) MAJOR COLLATERAL DISPOSITIONS. Neither the Company nor the Issuer
shall, nor shall the Company permit any Restricted Subsidiary to, consummate a
Major Collateral Disposition unless, in addition to complying with the
provisions set forth in Section 4.08(a) above, (i) the Net Available Cash from
such Major Collateral Disposition, other than in the event of a Major Collateral
Disposition occurring
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as a result of an Involuntary Loss, shall be sufficient to prepay all unpaid
principal, interest and all other amounts payable in respect of all Secured
Indebtedness and (ii) an amount equal to 100% of the Net Available Cash from any
such Major Collateral Disposition (including as a result of an Involuntary Loss)
is applied (A) first, (x) with respect to Net Available Cash deposited in the
Notes Collateral Account, to make an offer to the holders of the Notes to
purchase any and all of the outstanding Notes at a purchase price in cash equal
to 100% of the principal amount thereof plus, in each case, accrued and unpaid
interest, if any, plus any Additional Amounts due thereon or which will become
due as a result of the repurchase or otherwise, to the date of purchase (subject
to the right of holders of record on the relevant record date to receive
interest on the relevant interest payment date), in accordance with the
procedures set forth in this Section 4.08(b) and (y) with respect to Net
Available Cash deposited in the Additional Indebtedness Collateral Account to
the extent the Company or any Restricted Subsidiary is so required by the terms
of any Secured Indebtedness (other than the Notes and the Guarantee), to prepay,
repay, redeem or repurchase such Secured Indebtedness; and (B) second, to the
extent of the balance of such Net Available Cash, after application in
accordance with clause (A) and, to the extent the Company elects, to replace any
assets or property or to purchase properties, assets or rights to be used in the
business of the Company and owned by the Company, provided that such property,
assets or rights shall become subject to the Liens of the Security Documents
(which shall be first priority perfected Liens unless otherwise contemplated by
the Security Documents) and shall become Collateral governed by the Collateral
Agency Agreement. Any Net Available Cash not applied pursuant to clause (A) or
(B) shall remain in the Collateral Accounts except as provided in Section
4.08(c) below. The Issuer will be required to purchase all Notes tendered
pursuant to an offer by the Issuer under this Section 4.08(b) other than in the
event of an offer resulting from an Involuntary Loss, in which case, the Issuer
will be required to purchase Notes from all holders that tender their Notes, in
each case in accordance with the procedures (including, in the event of an offer
resulting from an Involuntary Loss, prorating in the event of oversubscription)
set forth in this Section 4.08(b).
Within 30 days following any Major Collateral Disposition, unless
notice of redemption of the Notes has been given pursuant to Section 3 of the
Notes, the Issuer shall mail a notice to each Holder with a copy to the Trustee
stating: (1) that a Major Collateral Disposition has occurred and that such
Holder has the right to require the Issuer to purchase (the "MCD OFFER") such
Holder's Notes at a purchase price in cash equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of holders of record on the relevant record date to
receive interest on the relevant interest payment date) plus any Additional
Amounts then due or which will become due as a result of the repurchase or
otherwise; (2) the circumstances and relevant facts regarding such Major
Collateral Disposition (including information with respect to the Collateral
disposed of, the circumstances surrounding such disposal and the intended use of
the Net Available Cash (including the identification of any Additional Assets to
be purchased), if any, after repurchasing all Notes tendered) in each case in
reasonable detail; (3) the repurchase date (the "MCD PURCHASE DATE") which shall
be no earlier than 30 days nor later than 60 days from the date such notice is
mailed; and (4) the instructions, as set forth below, determined by the Issuer,
consistent with this Section 4.08(b), that a Holder must follow in order to have
its Notes purchased.
Not later than the date upon which written notice of a Major
Collateral Disposition is delivered to the Trustee, the Issuer shall deliver to
the Trustee an Officer's Certificate as to (i) the amount of Net Available Cash
from such Major Collateral Disposition available to purchase Notes, including
principal and interest (the "MCD OFFER AMOUNT") and (ii) the compliance of the
allocation of Net Available Cash from such Major Collateral Disposition with the
provisions of Sections 4.08(a) and (b). On such date, the Issuer shall also
irrevocably deposit with the Trustee cash and Temporary Cash Investments
maturing on or prior to the MCD Purchase Date (or direct the Trustee to apply
Trust Monies in accordance with Section 13.02) in an amount equal to the MCD
Offer Amount to be held for payment in accordance with the provisions of this
Section. Upon the expiration of the period for which the MCD Offer remains open
(the "MCD OFFER PERIOD"), the Issuer shall deliver to the Trustee the Notes or
portions thereof which have been properly tendered to and are to be accepted by
the Issuer. The Trustee shall, on the MCD Purchase Date, mail or deliver payment
to each tendering Holder in the amount of the purchase price. Any unused funds
deposited by the Issuer (but not Trust Monies) shall be delivered by the Trustee
to the Issuer immediately after expiration of the MCD Offer Period. Any unused
Trust Monies shall be redeposited with the Collateral Agent in the Notes
Collateral Account.
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Holders electing to have a Note (or any portion thereof) purchased
will be required to surrender the Note, with an appropriate form duly completed,
to the Issuer at the address specified in the notice at least five Business Days
prior to the MCD Purchase Date. Holders will be entitled to withdraw their
election, in whole or in part, if the Trustee or the Issuer receives, not later
than three Business Days prior to the MCD Purchase Date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note (or any portion thereof) which was delivered for purchase by
the Holder and a statement, as applicable, that (x) such Holder is withdrawing,
in its entirety, such Holder's election to have such Note (or any portion
thereof) purchased or (y) such Holder is withdrawing, in part, such Holder's
election to have such Note (or any portion thereof) purchased and specifying the
amount of such Note to be purchased. If, at the expiration of the MCD Offer
Period, the aggregate principal amount of Notes surrendered by Holders exceeds
the MCD Offer Amount, the Issuer shall select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the Issuer so
that only Notes in denominations of $1.00, or integral multiples thereof, shall
be purchased). Holders whose Notes are purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered.
At the time the Issuer delivers Notes to the Trustee which are to be
accepted for purchase, the Issuer will also deliver an Officer's Certificate
stating that such Notes are to be accepted by the Issuer pursuant to and in
accordance with the terms of this Section. A Note (or any portion thereof) shall
be deemed to have been accepted for purchase at the time the Trustee, directly
or through an agent, mails or delivers payment therefor to the surrendering
Holder. All Notes delivered to the Trustee shall be canceled upon completion of
the purchase.
Each of the Issuer and the Company will comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase or
redemption of Notes as described above. To the extent that the provisions of any
securities laws or regulations conflict with provisions relating to the MCD
Offer, each the Issuer and the Company will comply with the applicable laws and
regulations and will not be deemed to have breached its obligations described
above by virtue thereof.
(c) VOLUNTARY NON-MAJOR COLLATERAL DISPOSITIONS. Neither the Company
nor the Issuer shall, nor shall the Company permit any Restricted Subsidiary to,
consummate a Collateral Disposition that does not constitute a Major Collateral
Disposition and that does not result from an Involuntary Loss unless, in
addition to complying with the provisions set forth in paragraph (a) above, an
amount equal to 100% of the Net Available Cash from such Collateral Disposition
shall be applied, to the extent the Company elects, to replace any assets or
property that were the subject of such Collateral Disposition or to acquire
properties, assets or rights to be used in the business of the Company and owned
by the Company (such replacement assets or property and such properties, assets
or rights to be acquired being hereinafter referred to as the "NEW COLLATERAL
ASSETS") within 18 months from the later of the date of such Collateral
Disposition or the receipt of such Net Available Cash, provided such New
Collateral Assets shall become subject to the Liens of the Security Documents
(which shall be first priority perfected Liens) and shall become Collateral
governed by the Collateral Agency Agreement; PROVIDED, HOWEVER, that if the Net
Available Cash from such Collateral Disposition, when aggregated with all the
Excess Collateral Proceeds on deposit in the Collateral Accounts, exceeds
US$10.0 million, the Issuer shall be required to make an offer pursuant to
paragraph (e) of this covenant; PROVIDED FURTHER, however, that (A) such offer
will not be required to be made if the Issuer delivers to the Trustee and the
holders of the Notes an Officer's Certificate within 30 days after such
Collateral Disposition certifying: (1) that the Issuer has identified New
Collateral Assets to be acquired (together with a description thereof), (2) that
delivery of such New Collateral Assets will be taken, and completion of the
purchase of such New Collateral Assets will occur, within 180 days after the
date of such Officer's Certificate, (3) the amount of Net Available Cash to be
used to purchase such New Collateral Assets and (4) that such amount of Net
Available Cash so to be used would reduce the Excess Collateral Proceeds in the
Collateral Accounts to less than US$l0.0 million; and (B) the completion of the
purchase of such New Collateral Assets shall take place on or before the 180 day
period specified in such certification. Any Net Available Cash not applied as
provided above in this paragraph (c) shall constitute "Excess Collateral
Proceeds" and shall be applied in accordance with Section 3.07.
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(d) INVOLUNTARY NON-MAJOR COLLATERAL DISPOSITIONS. In the event of a
Collateral Disposition that does not constitute a Major Collateral Disposition
but results from an Involuntary Loss, an amount equal to 100% of the Net
Available Cash from such Collateral Disposition shall be applied from the
Insurance Collateral Account to the extent the Company elects, to repair or
replace any assets or property that are the subject of such Involuntary Loss
within 18 months after the occurrence of such Involuntary Loss; PROVIDED,
HOWEVER, that such 18 month period may be extended for an additional 365 days
upon delivery to the Trustee of an Officer's Certificate certifying that the
Company shall use such proceeds to repair or replace such assets or property
during such subsequent 365 day period; PROVIDED FURTHER, however, that all other
holders of Secured Indebtedness permit such extension of time and permit such
Net Available Cash to be used for such purpose. Any Net Available Cash not
applied as provided above in this subsection (d) shall constitute Excess
Collateral Proceeds and shall be applied in accordance with Section 3.07.
The Collateral Agency Agreement provides that Net Available Cash in
the Insurance Collateral Account will constitute Excess Collateral Proceeds upon
the earliest of (i) receipt by the Collateral Agent of a Notice of Actionable
Default; (ii) the occurrence of a Foreclosure Event (as defined in the
Collateral Agency Agreement); and (iii) the last day of the period permitting
such Net Available Cash to be applied in the repair or replacement of assets or
property as such period is permitted to be extended.
(e) To the extent not otherwise applied pursuant to this Section 4.08,
Net Available Cash on deposit in the Notes Collateral Account will be released
from the Liens of the Security Documents when all principal, interest and other
amounts, if any, due on the Notes has been paid in full or released to the
Trustee as set forth in Article 13.
SECTION 4.09 LIMITATION ON AFFILIATE TRANSACTIONS
(a) Neither the Company nor the Issuer shall, nor shall the Company
permit any Restricted Subsidiary to, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property,
employee compensation arrangements or the rendering of any service) with any
Affiliate of the Company, (an "AFFILIATE TRANSACTION") unless the terms thereof
(1) are no less favorable to the Company or such Restricted Subsidiary than
those that could be obtained at the time of such transaction in arm's-length
dealings with a Person who is not such an Affiliate, (2) if such Affiliate
Transaction involves an amount in excess of US$1.0 million, (i) are set forth in
writing and (ii) have been approved by the Board of Directors of the Company and
(3) in addition, if such Affiliate Transaction involves as amount in excess of
US$5.0 million, have been determined by an internationally recognized investment
banking firm or, if pertaining to a matter for which such investment banking
firms do not customarily render such opinions, an appraisal or valuation firm of
international reputation, to be fair, from a financial standpoint, to the
Company and its Restricted Subsidiaries.
(b) The provisions of the foregoing paragraph (a) shall not prohibit
(i) any Restricted Payment permitted to be paid pursuant to Section 4.05, (ii)
any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock options and stock ownership plans approved by the Board of Directors,
(iii) the grant of stock options or similar rights to employees and directors of
the Company pursuant to plans approved by the Board of Directors, (iv) loans or
advances to employees in the ordinary course of business in accordance with the
past practices of the Company or its Restricted Subsidiaries, but in any event
not to exceed US$l.0 million in the aggregate outstanding at any one time, (v)
the payment of reasonable fees to directors of the Company and its Restricted
Subsidiaries who are not employees of the Company or its Restricted
Subsidiaries, (vi) any Affiliate Transaction between the Company and a Wholly
Owned Subsidiary or between Wholly Owned Subsidiaries, (vii) the payment of fees
for management services provided in the ordinary course of business in
accordance with the past practices of the Company or its Restricted
Subsidiaries, but in any event not to exceed US$1.0 million in the aggregate in
any calendar year, (viii) the Company from performing its obligations under the
Propylene Supply Agreement; PROVIDED that any amendment to the Propylene Supply
Contract complies with the provisions of Section 4.09(a) (1) and (a) (2) (i) and
(ii) above, and (ix) the Company from entering into agreements to sell
polypropylene in the ordinary course of business and consistent with past
practices; PROVIDED that any such agreement complies with the provisions of
clause (a) (1) above; PROVIDED FURTHER that if a Change of Control has occurred,
any such agreement complies also with the provisions of Section 4.09(a) (2) (ii)
above.
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SECTION 4.10 CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control, each Holder shall have
the right to require that the Issuer repurchase such Holder's Notes at a
purchase price in cash equal to 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (subject to the
right of holders of record on the relevant record date to receive interest on
the relevant interest payment date) plus any Additional Amounts then due or
which will become due as result of the repurchase or otherwise, in accordance
with the terms contemplated in Section 4.10(b) below.
(b) Within 30 days following any Change of Control, the Issuer shall
mail a notice to each Holder with a copy to the Trustee stating: (1) that a
Change of Control has occurred and that such Holder has the right to require the
Issuer to purchase such Holder's Notes at a purchase price in cash equal to 100%
of the principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of holders of record on the relevant
record date to receive interest on the relevant interest payment date) plus any
Additional Amounts then due or which will become due as a result of the
repurchase or otherwise; (2) the circumstances and relevant facts regarding such
Change of Control (including information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such Change of
Control); (3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and (4) the
instructions determined by the Issuer, consistent with this Section 4.10, that a
Holder must follow in order to have its Notes purchased.
(c) On or before the purchase date, the Issuer shall irrevocably
deposit with the Trustee or with a paying agent in cash or Temporary Cash
Investments maturing on or prior to the purchase date in an amount equal to the
purchase price plus accrued and unpaid interest, if any, be held for payment in
accordance with the provisions of this Section 4.10. Holders electing to have a
Note purchased will be required to surrender the Note, with an appropriate form
duly completed, to the Issuer at the address specified in the notice at least
five Business Days prior to the purchase date. Holders will be entitled to
withdraw their election in whole or in part if the Trust or the Issuer receives,
not later than three Business Days prior to the purchase date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note which was delivered for purchase to the Holder, the
certificate number of such Note and a statement that (x) such Holder is
withdrawing, in its entirety, such Holder's election to have such Note (or any
portion thereof) purchased or (y) such Holder is withdrawing, in part, such
Holder's election to have such Note (or any portion thereof) purchased and
specifying the amount of such Note to be purchased.
(d) On the purchase date, the Issuer shall deliver to the Trustee the
Notes or portions thereof which have been properly tendered to and are to be
accept by the Issuer. The Trustee shall, on the purchase date, mail or deliver
payment of the purchase price to each tendering Holder. Holders whose Notes are
purchased only in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered. In the event that the
aggregate purchase price of the Notes delivered by the Issuer to the Trustee is
less than the amount deposited with the Trustee, the Trustee shall deliver the
excess to the Issuer immediately after the end of the payment date.
(e) Each of the Company and the Issuer shall comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase of Notes
pursuant to this Section 4.10. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
4.10, each of the Company and Issuer shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 4.10 by virtue thereof.
SECTION 4.11 LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. Neither the Company nor the Issuer shall sell or
otherwise dispose of any shares of Capital Stock of a Restricted Subsidiary, and
the Company shall not permit any Restricted Subsidiary, directly or indirectly,
to issue or sell or otherwise dispose of any shares of its Capital Stock except
(i) to the Company or a Wholly Owned Subsidiary or (ii) if, immediately after
giving effect to such issuance, sale or other disposition, the Company and its
Restricted Subsidiaries would own less than 20% of the Voting Stock of such
Person that was a Restricted Subsidiary and have no greater economic interest in
such Restricted Subsidiary.
35
SECTION 4.12 LIMITATION ON LIENS AND PARI PASSU INDEBTEDNESS
(a) Neither the Company nor the Issuer shall, nor shall the Company
permit any Restricted Subsidiary to, directly or indirectly, create, Incur,
assume or suffer to exist any Lien of any kind upon any of the Collateral, or
right, title or interest thereto, except for Permitted Liens.
(b) Notwithstanding Section 4.12(a), the Company and the Issuer will
have the right from time to time to Incur Liens on the Collateral to secure
Additional Indebtedness on an equal and ratable basis with the Notes and the
Guarantee provided that (i) the proceeds of such Additional Indebtedness are
promptly used to finance the acquisition of a Qualified Project by the Company
or a Restricted Subsidiary (or to Refinance Additional Indebtedness used for
such purpose), (ii) such Additional Indebtedness with respect to such Qualified
Project Incurred or to be Incurred does not exceed 75% of the lesser of (x) the
Estimated Project Costs with respect to such Qualified Project and (y) the fair
market value determined by an Independent Appraiser of the additional Collateral
provided by such Qualified Project (or, if greater, of the increase in the fair
market value of the Collateral taken as a whole as a result of such Qualified
Project), (iii) after giving PRO FORMA effect to such Incurrence, the Company or
the Issuer would be permitted to Incur an additional US$1.00 of Indebtedness
pursuant to Section 4.03(a), (iv) such Additional Indebtedness will state by its
terms that it will be expressly subordinated to the Notes and the Guarantee
until such time as the existing registered security deed shall be increased (but
not decreased) by an amended or substitute security deed in an amount that
equals or exceeds (1) the aggregate principal amount of Additional Indebtedness
to be Incurred plus (2) an amount representing 12 full months of interest
payments with respect to the Additional Indebtedness with respect to such
Qualified Project (calculated on the basis of then current applicable rates),
PROVIDED that, to the extent such Additional Indebtedness is being Incurred to
Refinance a Qualified Project, such amount shall be increased only to reflect
any increased interest rates applicable to such Additional Indebtedness, (v) the
first priority perfected Lien of the Security Deed shall continue in full force
and effect uninterrupted and continuously at all times, (vi) the real property
rights, improvements, moveable assets and other assets comprising the Qualified
Project, and rights relating to insurance proceeds with respect to the Qualified
Project, shall become a part of the Collateral and be subject to the Liens of
the Security Documents (which shall be first priority perfected Liens), (vii)
the conditions precedent to the Incurrence of such Indebtedness in the
Collateral Agency Agreement are satisfied, (viii) all other amendments
necessary, in the Opinion, of Counsel to be delivered pursuant to clause (x)
below, shall have been made to cause the Security Documents to continue to be
first priority perfected Liens, (ix) with respect to Indebtedness Refinanced,
the holders of the Indebtedness so Refinanced release their interest in the
Collateral to the extent of such Refinancing, (x) no Default or Event of Default
shall have occurred and be continuing or would result from such Incurrence of
Additional Indebtedness and the Company shall deliver to the Trustee (A) a
written Board of Directors' resolution authorizing the Incurrence of the
Additional Indebtedness, (B) an Officer's Certificate that the conditions set
forth in clauses (i) through (x) have been met and (C) an Opinion of Counsel, in
form and substance satisfactory to the Trustee with respect to those matters
referred to in clauses (v), (vi) and (vii) above.
SECTION 4.13 LIMITATION ON SALE/LEASEBACK TRANSACTIONS. Neither the
Company nor the Issuer shall, nor shall the Company permit any Restricted
Subsidiary to, enter into any Sale/Leaseback Transaction with respect to any
property unless (i) the Company or such Subsidiary would be entitled to (A)
Incur Indebtedness in an amount equal to the Attributable Debt with respect to
such Sale/Leaseback Transaction pursuant to Section 4.03 and (B) create a Lien
on such property securing such Attributable Debt pursuant to Section 4.12, (ii)
the net proceeds received by the Company or any Restricted Subsidiary in
connection with such Sale/Leaseback Transaction are at least equal to the fair
market value (as determined by the Board of Directors of the Company) of such
property and (iii) the Company applies the proceeds of such transaction in
compliance with Section 4.07. Notwithstanding anything contained in this Section
4.13, neither the Company nor the Issuer will, nor will the Company or the
Issuer permit any other Restricted Subsidiary to, enter into, guarantee or
otherwise become liable with respect to, any Sale/Leaseback Transaction
involving Collateral.
SECTION 4.14 LIMITATION ON ISSUER ACTIVITIES
. The Issuer will, not engage in any business activity or undertake
any other activity, except any activity relating to the offering, sale or
issuance of Indebtedness or the lending or otherwise advancing the proceeds
thereof to the Company or any Restricted Subsidiary and any other activities
reasonably incidental thereto.
36
SECTION 4.15 KEEPWELL COMMITMENT
. The Company and the Issuer shall, prior to or on the Issue Date,
amend and restate the existing Keepwell Commitment (the "KEEPWELL") between the
Company and the Issuer, which shall remain in force for so long as any Note or
Senior Note remains outstanding under this Indenture or the Senior Indenture,
regarding which agreement the Issuer shall, for the benefit of the Trustee and
the Noteholders, use its reasonable best efforts to enforce its rights against
the Company under the Keepwell.
SECTION 4.16 AMENDMENTS TO SECURITY DOCUMENTS
. Neither the Company nor the Issuer shall, nor shall the Company
permit any Restricted Subsidiary to, amend, modify or supplement, or permit or
consent to any amendment, modification or supplement of, the Security Documents,
the Pledge Agreement or the Collateral Agency Agreement in any way that would be
adverse to the holders of the Notes.
SECTION 4.17 LIMITATION ON COMPANY'S BUSINESS
. The Company will not, and will not permit any of its Restricted
Subsidiaries (other than the Issuer) to, directly or indirectly, engage in any
business other than the manufacture, production, processing, marketing,
distribution and sale (or activities or related processes reasonably incident
thereto) of petrochemical products or any material produced by or in connection
with such activities.
SECTION 4.18 INSURANCE
. The Company will and will cause each of its Subsidiaries to
maintain, with financially sound and reputable insurance companies, insurance on
the Collateral and substantially all of its other insurable property, in such
amounts and against such risks as is normally carried by corporations engaged in
the same or similar businesses in the Republic of Indonesia as the Company. All
such policies shall only be subject to deductibles and exclusions which are
typical for similarly situated companies.
SECTION 4.19 TAXES
. The Company and the Issuer will and the Company will cause its
Subsidiaries to pay and discharge when due and payable all taxes imposed on it
or on its income or profits or on any of its properties except such taxes as are
being contested in good faith in appropriate proceedings, and to remit to the
relevant authority any taxes required to be withheld or deducted from payments
made with respect to the Notes or the Guarantee.
SECTION 4.20 BUSINESSES AND PROPERTIES; COMPLIANCE WITH LAWS
(a) The Company shall, and shall cause each of its Subsidiaries to, do
or cause to be done all things necessary to obtain, preserve, renew, extend and
keep in full force and effect the rights, licenses, concessions, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business
(including the Collateral) substantially in the manner proposed to be conducted
and operated; comply in all material respects with all material applicable laws,
rules, regulations and statutes (including environmental laws and zoning and
building ordinances, codes, approvals, any building permits or any restrictions
of record or agreement affecting the Real Property Collateral) and decrees and
orders of any Governmental Authority, whether now in effect or hereafter
enacted; and at all times maintain and preserve all property material to the
conduct of such business (including the Collateral) and keep such property in
good repair, working order and condition and from time to time make, or cause to
be made, all needful and proper repairs, renewals, additions, improvements and
replacements necessary in order that the business carried on in connection
therewith may be properly conducted at all times.
(b) (i) The Company shall comply with all requirements to file
particulars of its offshore borrowings (including the Guarantee and the
borrowing by the Company of the proceeds of the sale of the Notes from the
Issuer) with initially the Minister of Finance, Bank Indonesia and the Team for
the Coordination of the
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Management of Offshore Commercial Loans (the "PKLN TEAM") and to report to each
such Person on a monthly basis with respect to such borrowings the Company's or
the Issuer's business or properties including the Collateral) and would not
affect the enforceability of the Securities, this Indenture, the Collateral
Agency Agreement and the Security Documents.
(ii) In the event the Issuer or the Company does not make all
necessary filings with Bank Indonesia, the Ministry of Finance and the PKLN
Team with respect to the Guarantee or the borrowing from the Issuer, the
Company shall cause, and hereby irrevocably authorizes, the Collateral
Agent to make such filings on its behalf, and if at any time the Collateral
Agent is unwilling or unable to make such filings, the Company shall
promptly authorize and cause such other Person to make such filings on its
behalf. The Company shall deliver or cause to be delivered all necessary
information and evidence of due compliance with the filing requirements
described above to the Trustee.
(c) The Company shall, and shall cause any Restricted Subsidiary which
owns Collateral to, maintain good and marketable title to the Plant and
Qualified Projects, in all material respects. The Company shall, and shall cause
any Restricted Subsidiary which owns Collateral to refrain from impairing the
Collateral in any material respect.
SECTION 4.21 CORPORATE EXISTENCE. Subject to Article 5 hereof, each
of the Issuer and the Company will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents of the Company and its
Subsidiaries and the rights (charter and statutory), registrations, licenses and
franchises of the Company and its Subsidiaries; PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right, license, registration
or franchise or the corporate, partnership or other existence of any such
Subsidiary (other than the Issuer), if the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and the loss thereof is not adverse in any material respect to
the Holders; PROVIDED FURTHER, that, if such Subsidiary has more than a de
minimus amount of assets, a majority of the Company's directors shall be
required to make a determination to the foregoing effect.
SECTION 4.22 INSPECTION
. The Company shall, and shall cause each of its Subsidiaries to,
permit authorized representatives of the Collateral Agent and the Trustee (a) to
inspect and obtain copies of all records and documents relating to the
properties of the Company or its Subsidiaries constituting Collateral and
Moveable Assets (b) to visit and inspect the properties of the Company or its
Subsidiaries constituting Collateral and Moveable Assets, and any or all books,
records and documents in the possession of the Company relating to the
Collateral and Moveable Assets, and to make copies and take extracts therefrom
and to visit and inspect the Collateral, the Moveable Assets and the Plant, all
upon reasonable prior notice and at such reasonable times during normal business
hours and as often as may be reasonably requested.
SECTION 4.23 COMPLIANCE CERTIFICATE
. The Issuer and the Company shall deliver to the Trustee, within 120
days after the end of each fiscal year of the Company, an Officer's Certificate
(at least one of the signers of which is the principal executive officer,
principal financial officer or principal accounting officer) stating that, in
the course of the performance by the signers of their duties as Officers of the
Issuer or the Company, as applicable, they would normally have knowledge of any
Default and whether or not the signers know of any Default that occurred during
such period and as to compliance with the conditions and covenants of this
Indenture (for purposes of this paragraph, compliance shall be determined
without regard any period of grace or requirement of notice under this
Indenture). The Issuer and the Company shall deliver to the Trustee, within 30
days after the occurrence thereof, written notice of any event which would
constitute certain Defaults, their status and what action the Issuer or the
Company is taking or proposes to take in respect thereof.
SECTION 4.24 FURTHER INSTRUMENTS AND ACTS
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. Upon request of the Trustee, the Issuer and the Company will execute
and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of this
Indenture.
SECTION 4.25 MANAGEMENT OF THE COMPANY. The Company shall not change
any member on the Company's Board of Directors or Board of Commissioners who was
appointed by the Majority Shareholder without the consent of the holders of a
majority of the aggregate principal amount of the Notes and the Senior Notes
then outstanding, voting as a single class.
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01 WHEN COMPANY MAY MERGE OR TRANSFER ASSETS
(a) Merger and Consolidation. The Company shall not consolidate with
or merge with or into, or convey, transfer or lease all or substantially all its
assets to, any Person at any time after December 15, 2005. In addition to the
restrictions imposed by the previous sentence, the Company shall not consolidate
with or merge with or into, or convey, transfer or lease all or substantially
all its assets to, any Person, unless: (i) there has not been an Event of
Default at any time after December 15, 2005; (ii) the resulting, surviving or
transferee Person (the "Successor Company") shall be a corporation organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia or the Republic of Indonesia, and the Successor Company
(if not the Company) shall expressly, assume, by an indenture supplemental to
this Indenture, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company, including the obligations under
this Indenture, the Guarantee, the Collateral Agency Agreement and the Security
Documents; (iii) immediately after giving effect to such transaction on a pro
forma basis (and treating any Indebtedness which becomes an obligation of the
Successor Company or any Restricted Subsidiary as a result of such transaction
as having been Incurred by the Successor Company or such Restricted Subsidiary
at the time of such transaction), no Default or Event of Default shall have
occurred and be continuing (or would result therefrom); (iv) immediately after
giving effect to such transaction on a pro forma basis (and treating any
Indebtedness which becomes an obligation of the Successor Company or any
Restricted Subsidiary as a result of such transaction as having been Incurred by
the Successor Company or such Restricted Subsidiary at the time of such
transaction), the Successor Company would be able to Incur an additional US$1.00
of Indebtedness pursuant to Section 4.03(a); (v) immediately after giving effect
to such transaction on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the Successor Company or any Restricted Subsidiary as a
result of such transaction as having been Incurred by the Successor Company or
such Restricted Subsidiary at the time of such transaction), the Successor
Company shall have Consolidated Net Worth in an amount which is not less than
the Consolidated Net Worth of the Company immediately prior to such transaction;
(vi) the Successor Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the holders will not recognize income, gain, or loss
for United States Federal income tax purposes as a result of such transaction,
and will be subject to United States Federal income tax on the same amounts and
at the same times as would be the case as if the transaction had not occurred
and there will be no additional Indonesian Withholding Taxes and no Withholding
Taxes of any other jurisdiction imposed on any payments made pursuant to the
Notes or the Guarantee; and (vii) each of the Company and the Issuer shall have
delivered to the Trustee an Officer's Certificate and an Opinion of Counsel
stating that such consolidation, merger or transfer and such supplemental
indenture comply with this Indenture, and this Indenture (including the
Guarantee), the Collateral Agency Agreement, the Security Documents, and the
Notes remain and will be in full force and effect against all applicable parties
and the Lien of the Security Documents (which shall be a first priority
perfected Lien unless otherwise contemplated by the Security Documents) with
respect to the Collateral continues in full force and effect.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power, of the Company under this Indenture, but the
predecessor Company in the case of a lease shall not be released from the
obligation to pay the principal of and interest on the Securities.
(b) The Issuer shall not consolidate or merge with or into any other
Person, or convey, transfer or lease all or substantially all its assets to any
other Person and all of its outstanding Capital Stock shall at all times be
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owned by the Company free and clear of all Liens; provided the limitation in
this sentence shall not apply from and after the time the Company assumes the
Issuer's obligations pursuant to Section 5.02.
SECTION 5.02 ASSUMPTION BY COMPANY OF ISSUER'S OBLIGATIONS
(a) The Company may, at its option, assume the obligations of the
Issuer as obligor under the Notes and this Indenture, PROVIDED that:
(i) the Company expressly assumes such obligations by an
indenture supplemental hereto, in the form satisfactory to the Trustee,
executed and delivered to the Trustee;
(ii) the Company expressly agrees to pay in such supplemental
indenture the Additional Amounts pursuant to Section 4.01(b) substituting,
where applicable, "the Republic of Indonesia" for each reference to "The
Netherlands or the Republic of Indonesia";
(iii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and
(iv) the Company shall have delivered to the Trustee an
Officer's Certificate stating that such assumption and such supplemental
indenture comply with this Section 5.02 and that all conditions precedent
herein provided for relating to such transactions have been complied with
and an Opinion of Counsel or tax consultant of recognized standing to the
effect that Noteholders will not recognize income, gain or loss for United
States Federal income tax purposes as a result of such assumption and will
be subject to United States Federal income tax on the same amounts and in
the same manner and at the same times as would have been the case if such
assumption had not occurred. The Trustee shall accept such Officer's
Certificate Opinion of Counsel (and shall be held harmless with respect
thereto) as conclusive evidence of the satisfaction of the conditions
precedent described above, in which event it shall be conclusive and
binding on the Holders.
(b) In the event of such an assumption, in lieu of the Issuer's
redemption option set forth under Section 5(b) of the Notes, the Company shall
have the option to redeem the Notes outstanding as a whole but not in part, at
any time, upon giving not less than 30 nor more than 60 days' notice to the
Holders (which shall be irrevocable), at a redemption price equal to the
principal amount thereof, together with accrued interest to the date fixed by
the Company for redemption, and all Additional Amounts then due and which will
become due as a result of the redemption or otherwise, if the Company determines
and certifies to the Trustee in an Officer's Certificate immediately prior to
giving such notice that as a result of any change in, or amendment to, the laws
or treaties (or any regulations or rules promulgated thereunder) of Indonesia
(or any political subdivision or taxing authority of Indonesia) affecting
taxation, or any change in official position regarding the application or
interpretation of such laws, treaties, regulations or rulings (including a
holding judgment, or order by a court of competent jurisdiction) which change,
amendment, application or interpretation is proposed and becomes effective on or
after the date the Company assumes the obligations of the Issuer pursuant to
this Section 5.02, with respect to any payment due or to become due under the
Notes or this Indenture, the Company is, or on the next interest payment date
would be, required to deduct or withhold any taxes, duties, assessments or other
Governmental charges whatsoever imposed of Indonesia (or any political
subdivision or taxing authority thereof or therein) at a rate in excess of the
greater of 20% and the rate in effect on the date of the assumption (calculated
without giving effect to any reduction of the rate of taxes, duties, assessments
or other Governmental charges available under any tax treaty which Indonesia is
a party) and such taxes in excess of greater of 20% and the rate in effect on
the date of the assumption cannot be avoided by the use of reasonable means
available to the Company. No such notice of redemption shall be given earlier
than 90 days prior to the earliest date on which the Company would be obligated
to make such payment or withholding if a payment with respect to any Note were
then due. The provisions of Article 3 shall be applicable to any redemption
hereunder and are incorporated mutatis mutandis herein. Any Notes that are
redeemed will be canceled.
(c) Upon any assumption pursuant to Section 5.02 (a), the Company
shall succeed to, and be substituted for, and may exercise every right and power
of the Issuer under this Indenture and the Issuer shall be released from its
liability as obligor under the Notes and this Indenture.
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(d) In the event of such assumption, the Holders of the Notes shall be
notified by the Issuer and the Company in accordance with article 156, paragraph
1 of Book 6 of The Netherlands Civil Code.
SECTION 5.03 ISSUER REINCORPORATION AND OTHER ACTIONS. In the event
the Issuer reincorporates or changes its principal place of business, the
Company shall pay all amounts of principal and interest with respect to the
Notes without deduction or withholding for any and all taxes, duties,
assessments other Governmental charges whatsoever imposed by Indonesia (or any
political subdivision or taxing authority of Indonesia), or by any other taxing
authority of any other jurisdiction that are attributable to (i) a change in the
Issuer's principal place of business or (ii) a reincorporation of the Issuer,
or, if such deduction or withholding is required, the Company will pay such
Additional Amounts in respect of payments of principal of, and interest on, the
Notes as may be necessary in order that the net amounts received by holder of
the Notes, after such withholding or deduction, shall equal the respective
amounts of principal, interest, redemption price, purchase price, and premium
that would have been receivable in respect of the Notes in the absence of such
withholding or deduction, calculated in the same manner as, and subject to
exceptions of the type described in Section 4.01(b)(i). Prior to any such Issuer
reincorporation or change in principal place of business, pursuant to the
foregoing, the Company shall deliver to the Trustee an opinion of an independent
tax counsel or tax consultant of recognized standing to the effect that (i)
foregoing conditions will be satisfied and (ii) the holder will not recognize
income, gain or loss for United States Federal income tax purposes as a result
of such Issuer reincorporation or change in principal place of business, and
will be subject to United States Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case in such Issuer
reincorporation or change in principal place of business had not occurred. The
Trustee shall accept such opinion as conclusive evidence of the satisfaction of
the conditions precedent described above.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT. An "Event of Default" occurs with
respect to the Securities if:
(a) the Company or the Issuer fails to make any payment of interest or
any Additional Amounts on any Note when the same becomes due and payable, and
such default continues for a period of 30 days;
(b) the Company or the Issuer fails to (i) make the payment of the
principal on any Note when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required repurchase, upon declaration
or otherwise;
(c) any Change of Control of the Company after December 15, 2005;
(d) the Company or the Issuer fails to comply with any of its
agreements in any Senior Note or the Senior Indenture and in each case such
failure continues for 60 days after notice is given as provided in the Senior
Indenture of the Issuer or the Company fails to give notice as provided in the
Senior Indenture;
(e) the Company or the Issuer fails to comply with the provisions of
Section 5.01;
(f) (A) the Company or the Issuer fails to comply with the provisions
of Section 4.02, 4.03, 4.04, 4.05, 4.06, 4.07 (other than a failure to purchase
Notes), 4.08 (other than a failure to purchase Notes), 4.09, 4.10 (other than a
failure to purchase Notes), 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18 or
4.19 or (B) the Company or the Issuer fails to comply with the provisions of
Section 12.04, 12.05 or 12.07, and, in the case of clause (A) or (B), such
failure continues for 30 days after notice is given as provided below or the
Issuer or the Company fails to give the notice as provided below;
(g) the Company or the Issuer fails to comply with any of its
agreements in any Note or the Guarantee or this Indenture (other than those
referred to in (a), (b), (c) (e) or (f) above) and in each case such failure
continues for 60 days after notice is given as provided below or the Issuer or
the Company fails to give notice as provided below;
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(h) Indebtedness of the Company, the Issuer or any Significant
Subsidiary, other than the Senior Notes is not paid within any applicable grace
period after final maturity or is accelerated by the holders thereof because of
a default and the total amount of such Indebtedness unpaid or accelerated
exceeds US$5.0 million or its foreign currency equivalent at the time;
(i) (1) the Company, the Issuer or any Significant Subsidiary pursuant
to or within the meaning of any Bankruptcy Law (A) commences a voluntary case,
including seeking a moratorium on the payment of indebtedness; (B) consents to
the entry of an order relief against it in an involuntary bankruptcy case; (C)
consents to the appointment of a Custodian for it or for any substantial part of
its property; or (D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign laws relating to
insolvency; or (2) a court competent jurisdiction enters an order or decree
under any Bankruptcy Law that (A) is for relief against the Company, the Issuer
or any Significant Subsidiary in involuntary case; (B) appoints a Custodian of
the Company, the Issuer or any Significant Subsidiary or for any substantial
part of the property of any of them; (C) orders the winding up or liquidation of
the Company, the Issuer or any Significant Subsidiary; or (D) any similar relief
is granted under any foreign laws and, in the case of each of clauses (2)(A),
(B) (C) or (D), the order or decree remains unstayed and effect for 60 days;
(j) any judgment or decree for the payment of money in excess of
US$5.0 million, or its foreign currency equivalent at the time, is rendered
against the Company, the Issuer or a Significant Subsidiary, remains outstanding
for a period of 60 days following the entry of such judgment or decree and such
judgment or decree is not discharged, waived or stayed within 10 days after
notice is given as provided below or the Issuer of the Company fails to give
notice as provided below;
(k) the Guarantee ceases to be in full force or effect (other than in
accordance with the terms of such Guarantee), or the Company denies or
disaffirms its obligations under its Guarantee; or
(l) (A) the security interests under the Security Documents or the
Collateral Agency Agreement shall, at any time, cease to be in full force and
effect for any reason other than the satisfaction in full of all obligations
under this Indenture and discharge of this Indenture or any security interest
created thereunder shall be declared invalid or unenforceable, or the Company or
the Issuer shall assert, in any pleading in any court of competent jurisdiction,
that any such security interest is invalid or unenforceable or (B) the
Collateral Agent ceases to have first priority perfected security interests in
the Moveable Assets Collateral, the Proceeds Collateral, the Real Property
Collateral (from and after the registry of the Security Deed) or the Assigned
Rights;
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar federal or state or Indonesia law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (e), (f), (g), or (j) will not constitute an
Event of Default until the Trustee or the Holders at least 25% in principal
amount of the Notes notify the Company of the Default and the Issuer or the
Company, as the case may be, does not cure such Default within the time
specified after receipt of such notice. Such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of Default."
The Issuer and the Company shall deliver to the Trustee, within 30
days after the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (e), (f), (g), or (j), its status
and what action the Issuer and the Company are taking or propose to take with
respect thereto.
SECTION 6.02 ACCELERATION
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. If an Event of Default occurs and is continuing, the Trustee, by
notice to the Issuer, the Company and the Collateral Agent, or the Holders of at
least 50% in principal amount of the Notes by notice to the Issuer, the Company
and the Trustee (who shall promptly notify the Collateral Agent), may declare
the principal of, accrued but unpaid interest on and any Additional Amounts then
due or which will be due on all the Notes to be due and payable. Upon such a
declaration, such principal, interest and Additional Amounts shall be due and
payable. In an Event of Default specified in Section 6.01(h) occurs and is
continuing, the principal of, interest and Additional Amounts on, all the Notes
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. Upon any
acceleration pursuant to this paragraph (but not otherwise) the Trustee may
deliver a Notice of Actionable Default with respect to the Notes to the
Collateral Agent in accordance with the Collateral Agency Agreement. The Holders
of a majority in principal amount of the Notes by notice to the Trustee may
rescind an acceleration and its consequences, including the delivery of the
Notice of Actionable Default, if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived, except any Event of Default with respect to nonpayment of principal or
interest that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03 OTHER REMEDIES
. If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy (including without limitation, the giving of any
notice and the taking of any action contemplated be the Collateral Agency
Agreement) to collect the payment of principal of or interest on the Notes or to
enforce the performance of any provision of the Notes for this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative. The
exercise of any remedy by the Trustee and the Holders expressly limited by the
terms of the Collateral Agency Agreement.
SECTION 6.04 WAIVER OF PAST DEFAULTS
. The Holders of a majority in principal amount of the Securities may
by notice to the Trustee waive an existing Default and its consequences with
respect to the Securities, except (i) a Default in the payment of the principal
of or interest on any Note or (ii) a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Noteholder
affected. When a Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or impair any consequent right.
SECTION 6.05 CONTROL BY HOLDERS
. The Holders of at least a majority in principal amount of the Notes
then outstanding may direct the time, method a place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee with respect to the Notes including directing the
Trustee to take any action or exercise any power permitted to the Trustee under
the Collateral Agency Agreement. However, the Trustee may refuse to follow any
direction that conflicts with applicable law, this Indenture, the Security
Documents or the Collateral Agency Agreement or, subject to Section 7.01, that
the Trustee determines is unduly prejudicial to the rights of other Holders of
the Securities or would involve the Trustee in personal liability; PROVIDED,
HOWEVER, that the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction. Prior to taking any action under
this Section, the Trustee shall be entitled to indemnification satisfactory to
it in its sole discretion against all losses and expenses caused by taking or
not taking such action, including any necessary indemnity which must be provided
to the Collateral Agent under the Collateral Agency Agreement.
SECTION 6.06 LIMITATION ON SUITS
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. Except to enforce the right to receive payment of principal, premium
or Additional Amounts, if any, or interest when due, a Noteholder may not pursue
any remedy with respect to this Indenture, the Collateral Agency Agreement, the
Security Documents, or the Notes unless:
(1) such Holder gives to the Trustee written notice stating
that an Event of Default with respect the Notes is continuing;
(2) the Holders of at least 50% in principal amount of the
Notes outstanding make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee security or
indemnity satisfactory to it against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the notice, and the offer of security or indemnity;
and
(5) the Holders of a majority in principal amount of the
Notes do not give the Trustee a written direction inconsistent with the
request during such 60-day period.
A Noteholder may not use this Indenture to prejudice the
rights of another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT
. Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on the Notes held by
such Holder, on or after the respective due dates expressed or provided for in
the Notes, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE. If a Event of Default in
payment of interest or principal specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Issuer or the Company for the whole amount of
principal and interest remaining unpaid (together with interest on overdue
principal and premium if any, and on such unpaid interest to the extent lawful)
and the amounts provided for in Section 7.07.
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM
. The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Noteholders allowed in any judicial proceedings relative to the
Company or the Issuer or their respective creditors or property and unless
prohibited by law or applicable regulations, may vote on behalf of the Holders
in any election of a trustee in bankruptcy or other Person performing similar
functions, an any Custodian in any such judicial proceeding is hereby authorized
by each Holder to make payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07.
SECTION 6.10 PRIORITIES
. If the Trustee collects any money or property pursuant to this
Article 6, or receives a distribution from the Collateral Agent pursuant to the
Collateral Agency Agreement and an Event of Default has occurred and is
continuing, it shall pay out money or property in the following order, subject
to the Collateral Agency Agreement:
FIRST: to the Trustee for amounts due under Section 7.07;
44
SECOND: to Noteholders for amounts due and unpaid on the Notes
for principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date of for any payment
to Noteholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Noteholder and the Trustee, and
publish pursuant to Section 15.02, a notice that states the record date, the
payment date and amount to be paid.
SECTION 6.11 UNDERTAKING FOR COSTS
. In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 or a suit by Holders of more than 10% in principal
amount of the Notes then outstanding.
SECTION 6.12 WAIVER OF STAY OR EXTENSION LAWS
. Each of the Company and the Issuer (to the extent they may lawfully
do so) shall not at any time insist upon, or plead or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which, as applicable may affect
the covenants or the performance of this Indenture, the Guarantee, the
Collateral Agency Agreement or any other Security Document; and each of the
Company and the Issuer (to the extent they may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and shall not hinder, delay or
impede the execution of any power herein or therein granted to the Trustee or
the Collateral Agent, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01 DUTIES OF TRUSTEE
(a) If an Event of Default has occurred and is continuing, the Trust
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default: (1) the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and (2) in the absence of
bad faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that: (1) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01; (2) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and (3) the
Trustee shall
45
not be liable with respect to any action it takes or omits to take in good faith
in accordance with a direction received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture, the Collateral Agency Agreement or
any Security Document shall require the Trustee to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of rights or powers, if it shall have
reasonable grounds to believe that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.01 and to the provisions of the TIA.
SECTION 7.02 RIGHTS OF TRUSTEE
. Subject to Section 7.01:
(a) The Trustee may conclusively rely on any document believed by it
to be genuine and to have been signed or presented the proper person. The
Trustee need not investigate any fact or matter stated in the document:
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate or Opinion of Counsel.
(c) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any agent or attorney appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; PROVIDED, HOWEVER, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel of it selection, and the
advice or opinion of such counsel with respect to legal matters relating to this
Indenture, the Collateral Agency Agreement, the Security Documents, the Notes
and the Guarantee shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
note or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in principal amount of the Notes at the time
outstanding, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney.
(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall
46
have offered to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction.
(h) The Trustee shall not be liable for any action taken, suffered, or
omitted to be taken, by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture.
(i) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture.
(j) The Trustee shall have no duty to determine whether to file,
perfect or record or maintain filed, perfected or recorded any document or
instrument hereunder.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE
. The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Issuer, the
Company or their Affiliates with the same rights it would have if it were not
Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent do the
same with like rights. However, the Trustee must comply with Sections 7.10 and
7.11.
SECTION 7.04 TRUSTEE'S DISCLAIMER
. The Trustee shall not be responsible for and makes no representation
to the validity or adequacy of this Indenture, the Collateral, the Guarantee, or
the Notes, it shall not be accountable for the Issuer's or the Company's use of
the proceeds from the Notes, and it shall not be responsible for any statement
of the Issuer or the Company in this Indenture or in any document issue in
connection with the sale or issuance of the Notes or in the Notes other than the
Trustee's certificate of authentication. The Trustee shall not be responsible
for monitoring the compliance of the Collateral Agent with its duties hereunder
or under the Collateral Agency Agreement, and shall not be liable for negligence
or non-feasance by the Collateral Agent.
SECTION 7.05 NOTICE OF DEFAULTS
. If a Default occurs and is continuing and if it is actually known to
a Trust Officer of the Trustee, the Trustee shall mail to each Holder and
publish in accordance with Section 15.02 notice of the Default within 90 days
after it occurs. Except in the case of a Default in the payment of principal of,
or interest or Additional Amounts on, any Note (including payments pursuant to
the mandatory redemption provisions of such Note, if any), the Trustee may
withhold notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is not opposed to the interests of
the Holders.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS
. Within 60 days after each December 15, beginning with December 15,
2002, the Trustee shall mail to each Holder a brief report dated as of December
15 that complies with TIA Section 313(a) if and to the extent required be such
Section. The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange (if any) on which the Notes are
listed. The Issuer agrees to notify promptly the Trustee whenever the Notes
become listed on any stock exchange and of any delisting thereof.
SECTION 7.07 COMPENSATION AND INDEMNITY
. The Issuer and the Company jointly and severally shall pay to the
Trustee (and any co-trustee appointed pursuant to and in accordance with Section
7.12) from time to time compensation for its services as shall be agreed to from
time to time between the Company and the Trustee (or such co-trustee, as the
case may be) in
47
connection with the administration and execution of this Indenture and any
amendments thereto. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuer and the Company,
jointly and severally, shall reimburse the Trustee upon request (and shall be
jointly and severally liable therefor) for all out-of-pocket expenses properly
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Issuer and the Company shall indemnify the Trustee
(which for purposes of this Section 7.07 shall include its directors, officers,
employees and agents) and shall be jointly and severally liable therefor against
any and all loss, liability or expense (including attorneys' fees and expenses)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder or under the Collateral Agency Agreement.
The Trustee shall notify the Issuer and the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee so to notify the Issuer and
the Company shall not relieve the Issuer or the Company of their obligations
hereunder. The Issuer and the Company shall defend the claim and the Trustee may
have separate counsel and the Issuer and the Company shall pay the fees and
expenses of such counsel. The Issuer and the Company need not reimburse the
Trustee for any expense, or indemnify the Trustee against, any loss, liability
or expense incurred by the Trustee through the Trustee's own willful misconduct,
negligence or bad faith.
To secure the Issuer's and the Company's payment obligations in this
Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee other than money or property held in
trust to pay principal of and interest on particular Notes.
The Company's and the Issuer's payment obligations pursuant to this
Section 7.07 shall survive the discharge of this Indenture and the resignation
or removal of the Trustee. Without limiting any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(h) with respect to the Company
or the Issuer, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08 REPLACEMENT OF TRUSTEE
.
(a) The Trustee may at any time resign with respect to the Notes by
giving 30 days written notice of such resignation to the Issuer and the Company
and by mailing notice thereof to the Holders at their addresses as they shall
appear on the registry books of the Issuer. Upon receiving such notice of
resignation, the Issuer shall promptly appoint a successor trustee or trustees
with respect to Notes by written instrument, in duplicate, executed by order of
the director of the Issuer, one copy of which instrument shall be delivered to
the resigning Trustee and one copy to each successor trustee (provided that
there shall be only one Trustee with respect to the Notes except as provided in
Section 7.12). If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the mailing of such notice of
resignation to the Noteholders, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Noteholder who has been a bona fide holder of a Note or Notes for at least six
months may, subject to the provisions of Section 6.11, on behalf of himself and
all others similarly situated, petition any such court for the appointment of
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall have occurred:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting;
48
then, in any such case, the Issuer may remove the Trustee and appoint a
successor trustee or trustees by written instrument, in duplicate, executed by
order of the Issuer's board of directors, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to each successor trustee, or,
subject to the provisions of Section 6.11, any Noteholder who has been a bona
fide holder of a Note or Notes for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor trustee or
trustees. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee or
trustees.
(c) The Holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and nominate a
successor trustee which shall be deemed appointed as successor trustee.
(d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section 7.08 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.08(e).
(e) In the case of the appointment hereunder of a successor trustee,
any successor trustee so appointed as provided in this Section 7.08 shall
execute, acknowledge deliver to the Issuer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligation of its predecessor hereunder, with
like effect as if originally named as trustee herein; nevertheless, on the
written request of the Issuer or of the successor trustees the trustee ceasing
to act shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act. Upon request of any such successor trustee, the Issuer shall
execute any and all instruments in writing in order to more fully and certainly
vest in and confirm to such successor trustee all such rights, powers and trusts
referred to in the two preceding sentences. Any trustee ceasing to act shall,
nevertheless retain a lien upon all property or funds held or collected by such
trustee to secure any amounts then due it pursuant to the provisions of Section
7.07.
No successor trustee shall accept appointment as provided in this
Section 7.08 unless at the time of such acceptance such successor trustee shall
be qualified and eligible under the provisions of Section 7.10.
Upon acceptance of appointment by a successor trustee as provided in
this Section 7.08, the Issuer shall mail notice of the succession of such
trustee hereunder to all Holders as the names and addresses of such Holders
appear on the registry books of the Issuer. If the Issuer fails to mail such
notice in the prescribed manner within ten days after the acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Issuer.
(f) Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Issuer's and Company's obligations under Section 7.07 shall
continue the benefit of the retiring Trustee.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such case
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
49
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50.0 million as set forth in its most
recent published annual report of condition. Subject to the provisions of the
penultimate paragraph thereof, the Trust shall comply with TIA Section 310(b);
PROVIDED, HOWEVER, that there shall be excluded from the operation of TIA
Section 310(b) (1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth TIA Section 310(b)
(1) are met.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311 (a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Sectiion 311(a) to the extent indicated.
SECTION 7.12 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE
(a) Notwithstanding any other provision of this Indenture, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Collateral may at the time be located, the Issuer and the
Trustee acting jointly shall have the power to execute and deliver and shall
execute and deliver all instruments necessary to appoint one or more persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, of all or any part of the Collateral, or separate trustee or separate
trustees of any part of the Collateral, to vest in such person or persons, in
such capacity and for the benefit of the Holders, such title to the Collateral,
or any part thereof, and, subject to the other provisions of this Section 7.12,
such powers, duties, obligations, rights and trusts as the Issuer and the
Trustee may consider necessary or desirable hereunder or under the Collateral
Agency Agreement or the Security Documents. If the Issuer shall not have joined
in such appointment within 15 days after the receipt by it of a request to do
so, or in case a Default or Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility under Section 7.10 and no notice to Holders of the appointment of
any co-trustee or separate trustee shall be required under Section 7.08.
(b) Every separate trustee and co-trustee shall to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee hereunder or under the Collateral Agency Agreement
or any Security Document shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder,
under the Collateral Agency Agreement or any Security Document) the Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the holding of
title to the Collateral or any portion thereof in any such jurisdiction)
shall be exercised and performer singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Issuer and the Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and, to the extent
applicable, the Collateral Agency Agreement and the Security Documents. Each
separate trustee and co-trustee, upon its acceptance of the trusts conferred,
shall be vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be provided
therein, subject to all the provisions of this Indenture and, to the extent
applicable, the Collateral Agency Agreement and the Security Documents,
specifically including every
50
provision hereof thereof relating to the conduct of, affecting the liability of,
or affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee and a copy thereof given to the Issuer and the Company.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee (subject to the Trustee's consent), its agent or attorney-in-fact, with
full power and authority, to the extent not prohibited by law, to do any lawful
act under or in respect of this Indenture and, to the extent applicable, the
Collateral Agency Agreement and the Security Documents, on its behalf and in its
name. If any separate trustee or co-trustee shall become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and exercised by the Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee; PROVIDED, HOWEVER,
that the Trustee shall not be obligated to act outside the United States.
SECTION 7.13 NO DUTY TO OPERATE. Nothing in this Indenture or any
agreement, document, certificate or other instrument shall at any time be deemed
to constitute the Trustee as the owner or the operator of, or as being
responsible for, or as requiring the Trustee to build, or operate, manage or
control the Plant.
SECTION 7.14 OTHER MATTERS RELATED TO THE COLLATERAL AGENCY AGREEMENT
.
(a) The Trustee shall have no obligation (i) to instruct or direct the
Collateral Agent take any action under or in connection with the Collateral
Agency Agreement or any Security Document or (ii) to give any consent or
exercise any discretion under or in connection with the Collateral Agency
Agreement or any Security Document unless, in either case directed to do in
accordance with Section 6.05 or such instruction, direction or consent is
authorized or required to be given in accordance with the express terms of this
Indenture.
(b) The Trustee shall have no obligation to act any Actionable Default
under the Collateral Agency Agreement.
(c) The Trustee shall have no obligation to provide to the Collateral
Agent any indemnity or security under Section 2.03(e) of the Collateral Agency
Agreement unless such indemnity or security shall have been furnished to it by
the Holders of the Securities for the purpose of delivery thereof by the Trustee
to the Collateral Agent pursuant to said Section.
(d) The Trustee shall not be liable for the negligence or willful
misconduct of the Collateral Agent.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE
(a) When (i) the Issuer or the Company delivers to the Trustee all
outstanding Notes (other than Notes replaced pursuant to Section 2.07) for
cancellation or (ii) all outstanding Notes have become due and payable, whether
at maturity or as a result of the mailing of a notice of redemption pursuant to
Article 3 and the Issuer or the Company irrevocably deposits with the Trustee
funds sufficient to pay at maturity or permissible redemption all outstanding
Notes, including interest thereon (other than Notes replaced pursuant Section
2.07), and if in either case the Issuer or the Company pays all other sums
payable hereunder with respect to the Notes, then this Indenture shall, subject
to Sections 8.01(c) and 8.06, cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture upon satisfaction of
the conditions set for in clause (i) or (ii) above on demand of the Company
accompanied by an Officer's Certificate and an Opinion of Counsel.
(b) Subject to Sections 8.01(c), 8.02 and 8.06, the Issuer or the
Company at any time may terminate (i) all of the Issuer's and the Company's
obligations under the Notes and under this Indenture with respect thereto
("LEGAL DEFEASANCE OPTION") or (ii) the Issuer's and the Company's obligations
under Sections 4.03, 4.04,
51
4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17,
4.18 and 4.19 and the operation of Sections 6.01(d) and 6.01(f) (to the extent
the Event of Default under Sections 6.01(d) or 6.01(f) arises from a Default
under a Section otherwise subject to covenant defeasance) and the operation of
Sections 6.01(g), 6.01(h) with respect to Significant Subsidiaries, 6.01(i),
6.01(j), 6.01(k), and Section 5.01 (iii) and (iv) ("COVENANT DEFEASANCE
OPTION"). The Issuer or the Company may exercise the legal defeasance option
notwithstanding the prior exercise of the covenant defeasance option.
If the Issuer or the Company exercises the legal defeasance option,
payment of Notes may not be accelerated because of an Event of Default. If the
Issuer or the Company exercises the covenant defeasance option, payment of such
Notes may not be accelerated because of an Event of Default specified in Section
6.01(d), Section 6.01(f) (to the extent the Event of Default under Sections
6.01(d) or (f) arises from a Default under a Section otherwise subject to
covenant defeasance), 6.01(g), 6.01(h) with respect only to Significant
Subsidiaries or Sections 6.01(i), 6.01(j) or 6.,01(k), or because of a failure
to comply with clauses (iii) or (iv) of Section 5.01, except, in each case, to
the extent covenants or agreements referenced in such Sections remain
applicable.
Upon satisfaction of the conditions set forth herein with respect to
the Notes, and upon request of the Issuer or the Company, the Trustee shall
acknowledge in writing the discharge of those obligations with respect to the
Notes that the Issuer or the Company terminated.
(c) Notwithstanding; clauses (a) and (b) above, the Issuer's and the
Company's obligations with respect to the Notes in Sections 2.03, 2.04, 2.05,
2.06, 2.07, 4.20(c), 7.07, 7.08, 8.03, 8.04. 8.05 and 8.06 shall survive until
such Notes have been paid in full. Thereafter the Issuer's and the Company's
obligations in Sections 7.07, 8.04 and 8.05 shall survive.
(d) Subject to Section 8.01(c), if the Issuer or the Company exercises
its legal defeasance option or its covenant defeasance option with respect to
the Securities, the Company will be released from all its obligations with
respect to the Guarantee and the Security Documents.
SECTION 8.02 CONDITIONS TO DEFEASANCE
The Issuer or the Company may exercise the legal defeasance option or
the covenant defeasance option only if:
(1) the party exercising the defeasance option irrevocably
deposits in trust with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Notes to maturity or
redemption, as the case maybe:
(2) the party exercising the defeasance option delivers to
the Trustee a certificate from an internationally recognized firm of
independent accountants expressing their opinion that the payments of
principal and interest when due and without reinvestment on the deposited
U.S. Government Obligations plus any deposited money without investment
will provide cash at such times and in such amounts as will be sufficient
to pay principal and interest when due all the Notes to maturity or
redemption, as the case may be;
(3) 91 days pass after the deposit is made and during the
91-day period no Default specified in Section 6.01(h) with respect to the
Issuer or the Company occurs which is, continuing at the end of the period;
(4) no Default or Event of Default has occurred and is
continuing on the date of such deposit and after giving effect thereto;
(5) the deposit does not result in a breach or violation of,
or constitute a default under, any material agreement or instrument (other
than this Indenture) binding on the Issuer or the Company;
52
(6) the party exercising the defeasance option delivers to
the Trustee an Opinion of Counsel to the effect that the trust resulting
from the deposit does not constitute, or is qualified as, a regulated
investment company under the Investment Company Xxx 0000;
(7) in the case of the legal defeasance option, the party
exercising the defeasance option shall have delivered to the Trustee an
Opinion or Opinions of Counsel stating that (i) the Issuer has received
from, or there has been published by, the United States Internal Revenue
Service a ruling, or (ii) since the Issue Date, there has been a change in
applicable United States Federal income tax law, in either case, to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Noteholders will not recognize income, gain or loss for United States
Federal income tax purposes as a result of such defeasance and will be
subject to United States Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
defeasance had not occurred;
(8) in the case of the covenant defeasance option the party
exercising the defeasance option shall have delivered to the Trustee an
Opinion or Opinions of Counsel to the effect that the Noteholders will not
recognize income, gain or loss for United States Federal income tax
purposes as a result of such covenant defeasance and will be subject to
United States Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant
defeasance had not occurred;
(9) the party exercising the defeasance option shall have
delivered to the Trustee an Opinion of Counsel to the effect that under
Indonesian and The Netherlands law Holders will not recognize gain for
Indonesian or The Netherlands tax purposes, as the case may be, and
payments from the defeasance trust in respect of such Note to any such
Holder will not be subject to withholding payments under either Indonesian
or The Netherlands law; and
(10) the party exercising the defeasance option shall have
delivered to the Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that all conditions precedent to the defeasance and
discharge of the Notes as contemplated by this Article 8 have been complied
with.
If the U.S. Government Obligations deposited under Section 8.02(1)
provide for payment of the Notes on a redemption date, then no legal or covenant
defeasance shall be effective until prior to or simultaneously with such
deposit, notice of such redemption shall have been given to the Holders under
Article 3 or the Trustee shall have received from the Issuer irrevocable
instructions to give such notice under arrangements satisfactory to the Trustee.
SECTION 8.03 APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Notes.
SECTION 8.04 REPAYMENT TO ISSUER. Upon the satisfaction and discharge
of this Indenture with respect to the Notes, the Trustee and the Paying Agent
shall promptly turn over to the Issuer upon request any excess money or Notes in
respect of the Notes held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Issuer upon request any money held by them for the
payment of principal or interest on any Notes that remains unclaimed for two
years, and, thereafter, the Trustee and the Paying Agent shall have no liability
with respect to such money and Noteholders entitled to the money must look to
the Issuer for payment as general creditors.
SECTION 8.05 INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Issuer and the
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
53
SECTION 8.06 REINSTATEMENT
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in respect of any Notes in accordance with this Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Issuer's obligations under such Notes and this Indenture
and the Company's obligations under the Guarantee and this Indenture with
respect to such Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this Article 8 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with this Article 8; PROVIDED, HOWEVER, that, if the Issuer has made
any payment of interest on or principal of any Notes because of the
reinstatement of its obligations, the Issuer shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01 WITHOUT CONSENT OF HOLDERS
(a) Subject to the provisions of the Collateral Agency Agreement
limiting the ability of the Trustee to amend the Notes and this Indenture, the
Issuer, the Company and the Trustee may amend this Indenture or the Notes
without notice to or consent of any Holder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with and as allowed by the provisions related
to Article 5;
(3) to provide for uncertificated Notes in addition to or in
place of certificated Notes; provided, that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code or in
a manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code;
(4) to further secure the Notes and to add additional
guarantees with respect thereto;
(5) to establish or maintain the Liens of the Security
Documents (including the perfection and priority contemplated by the
Security Documents) with respect to the Collateral or to correct or amplify
the description of the Collateral subject to the Liens of the Security
Documents or to subject additional property to the Liens of the Security
Documents;
(6) to add to the covenants of the Issuer or the Company for
the benefit of the Holders or to surrender any right or power conferred
upon the Issuer the Company;
(7) to comply with any requirements of the SEC in connection
with qualifying this Indenture under the TIA;
(8) to make any change that does not adversely affect the
rights of any Holder.
(b) The Trustee may enter into amendments of the Collateral Agency
Agreement and enter into amendments or consent to amendments of the Pledge
Agreement and the Security Documents without notice to or the consent of any
Holder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
54
(2) to comply with and as allowed by the provisions related
to Article 5;
(3) to further secure the Notes or to add guarantees with
respect thereto;
(4) to add to the covenants of the Company or the Issuer for
the benefit of the holders of the Indebtedness, the representatives of
which are parties to the Collateral Agency Agreement;
(5) to establish or maintain the Liens of the Pledge
Agreement and the Security Documents (including the perfection and priority
contemplated by the Security Documents) with respect to the Collateral or
to correct or amplify the description of the Collateral subject to the
Liens of the Pledge Agreement, the Security Documents or to subject
additional property to the Liens of the Pledge Agreement or the Security
Documents;
(6) subject to the provisions of Section 4.12, to permit
holders of Additional Indebtedness and Secondary Indebtedness to become
parties to the Collateral Agency Agreement and receive the benefit of the
Security Documents and to otherwise effect transactions permitted by
Sections 4.12. 12.04, 12.05, 12.07, 12.08, 12.09 and 12.10; and
(7) to make any change that does not adversely affect the
rights of any Noteholder as evidenced by an Opinion of Counsel delivered to
the Trustee;
PROVIDED, that no such action shall be permitted if it causes any Lien to cease
to be a first priority perfected Lien (or such other perfection and priority
contemplated by the Security Documents) or diminishes the security afforded the
Liens of the Security Documents; PROVIDED, HOWEVER, that if the Trustee so
requires, the Trustee shall have received an Opinion of Counsel with respect to
such matters.
Without limiting the generality of the foregoing, the Trustee, upon
request of the Company and subject to the following paragraph, may, and shall at
the direction of the majority of Holders, grant any consent not required to be
granted hereunder (which consents which are required to be granted include those
set forth in Article 12 and 13 hereof) with respect to the Collateral Agency
Agreement and the Security Documents that does not impair the rights of the
Holders or the security afforded the Holders through the Collateral Agency
Agreement and the Security Documents. Prior to requesting any such consent, the
Company shall provide the Trustee with an Officer's Certificate that no Default
or Event of Default has or will occur as a result of such extension, renewal or
replacement or other action taken or to be taken for which such consent is
requested.
(c) After an amendment under this Section 9.01 becomes effective
(except for any amendment prior to the issuance of the Notes) the Issuer shall
mail to Holders, and publish in accordance with Section 15.02, a notice briefly
describing such amendment. The failure to give such notice to all Holders or to
publish such notice, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.01.
(d) This Indenture may be amended without notice to any Noteholder, by
agreement between the Company, the Issuer and the Trustee, at any time prior to
the Issue Date.
SECTION 9.02 WITH CONSENT OF HOLDERS
(a) The Issuer, the Company and the Trustee may amend this Indenture
and enter into amendments of the Collateral Agency Agreement and enter into
amendments or consent to amendments of the Security Documents or the Notes
without notice to any Holder but with the written consent of the Holders of at
least a majority in principal amount of the outstanding Notes. However, without
the consent of each Holder affected, an amendment may not:
(1) reduce the rate of or extend the time for payment of
interest on any Note;
55
(2) reduce the principal of or extend the Stated Maturity of
any Note;
(3) reduce the premium payable upon the redemption of any
Note or change the time at which any Note may be redeemed or repurchased in
accordance with Article 3, or Sections 4.07, 4.08 or 4.10 of this Indenture
or Section 5 of the Notes;
(4) make any Note payable in money other than that stated in
the Note;
(5) impair the right of any Holder to receive payment of
principal of, and interest and Additional Amounts on, such Holder's Notes
on or after the due dates thereon or to institute suit for the enforcement
of any payment on or with respect to such Holder's Notes;
(6) make any change in Section 6.04, 9.01 or 9.02 (a) or the
provisions relating to amendments, modifications or waivers of the Security
Documents or the Collateral Agency Agreement;
(7) make any change in Section 6.07;
(8) modify any provisions of Articles 6 or 9, except to
increase the percentage of outstanding Notes required for such actions or
to provide that other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Note; or
(9) amend any provisions related to amendments,
modifications or waivers of the Security Documents or the Collateral Agency
Agreement.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
(b) After an amendment under this Section becomes effective, the
Issuer shall mail to Noteholders, and publish in accordance with Section 15.02,
a notice briefly describing such amendment. The failure to give such notice to
all Noteholders or to publish such notice, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.02.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to
this Indenture or the Note shall comply with the TIA as then in effect.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A consent
to an amendment or a waiver by a Holder with respect to this Indenture, the
Notes, the Guarantee, the Collateral Agency Agreement or the Security Documents
shall bind the Holder and every subsequent Holder of that Note or portion of the
Note that evidences the same debt as the consenting Holder's Note, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Note or portion of the Note if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Noteholder.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture, the Notes, the Guarantee, the Collateral Agency
Agreement and the Security Documents. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Noteholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
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SECTION 9.05 NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment
changes the terms of a Note, the Trustee may require the Holder of such Security
to deliver it to the Trustee. The Trustee may place an appropriate notation on
the Note regarding the changed terms and return it to the Holder. Alternatively,
if the Issuer or the Trustee so determines, the Issuer in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
shall not affect the validity of such amendment.
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment to this Indenture, the Collateral Agency Agreement or the Security
Documents or grant any consent authorized pursuant to this Article 9 if the
amendment or consent does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it
or grant such consent. In signing such amendment or granting such consent the
Trustee shall be entitled to receive indemnity satisfactory to it and to
receive, and (subject to Section 7.01) shall be fully protected in relying upon,
an Officer's Certificate and an Opinion of Counsel (including, if the Trustee so
chooses, an Opinion of Counsel of the Company or the Issuer) stating that such
(i) amendment or consent is authorized or permitted by this Indenture and that
all conditions precedent to the execution, delivery and performance of such
amendment or consent have been satisfied; (ii) each of the Issuer and the
Company, as applicable, has all necessary corporate power and authority to
execute and deliver the amendment and that the execution, delivery and
performance of such amendment has been duly authorized by all necessary
corporate action; (iii) the execution, delivery and performance of the amendment
do not conflict with, or result in the breach of or constitute a default under
any of the terms, conditions or provisions of (a) this Indenture, (b) the
constitutive documents of the Issuer or the Company (c) any law or regulation
applicable to the Issuer or the Company (d) any material order, writ, injunction
or decree of any court or governmental instrumentality applicable to the Issuer
or Company or (e) any material agreement or instrument to which the Issuer or
the Company is subject; (iv) such amendment has been duly and validly executed
and delivered by each the Issuer and the Company (where applicable) and this
Indenture together with any such amendment of the Security Documents constitutes
a legal, valid and binding obligation of each of the Issuer and the Company, as
applicable, enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles; and (v) this Indenture together with such amendment
complies with the TIA.
SECTION 9.07 PAYMENT FOR CONSENT. Neither the Issuer, the Company,
nor any of their Affiliates shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise to any
Holder for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of this Indenture, the Notes, the Guarantee, the Collateral
Agency Agreement or the Security Documents unless such consideration is offered
to be paid to all Holders that so consent, waive or agree to amend in the time
frame set forth in solicitation documents relating to such consent, waiver or
agreement.
SECTION 9.08 TRUSTEE AUTHORIZED TO EXECUTE COLLATERAL AGENCY
AGREEMENT AND TAKE ACTIONS THEREUNDER
. The Trustee is hereby authorized to execute the Collateral Agency
Agreement and the Security Documents and to take actions necessary or desirable
to comply with the terms hereof and the Collateral Agency Agreement and to
preserve and protect the Collateral.
SECTION 9.09 VOTING UNDER COLLATERAL AGENCY AGREEMENT. Unless
otherwise set forth herein, if the Trustee seeks the instruction of the Holders
of the Securities with respect to any amendment, waiver or consent necessary or
desirable under the Collateral Agency Agreement or the Security Documents, the
Trustee shall take such action as is directed by a majority in principal amount
of Securities then outstanding, subject to the conditions Set forth in Section
6.05.
ARTICLE 10
GUARANTEE OF NOTES; INDEMNITY
SECTION 10.01 GUARANTEE. The Company, as principal obligor and not
merely as surety, irrevocably and unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and
57
to the Trustee and its successors and assigns, that: (i) principal of, premium,
if any, and interest on the Notes (including any Additional Amounts payable in
respect thereof) will be promptly paid in full when due, subject to any
applicable grace period, whether on the relevant Stated Maturity, on an interest
payment date, by acceleration, by call for redemption or upon repurchase or
purchase pursuant to Article 3 or Sections 4.07, 4.08 or 4.10 or otherwise and
interest on the overdue principal and premium, if any, and purchase price and
interest on any interest; to the extent lawful (in each case including interest
accruing on or after filing of any petition in bankruptcy or reorganization
relating to the Issuer or the Company, whether or not a claim for post filing
interest is allowed in such proceeding), on the Notes and all other amounts
payable under the Notes and obligations of the Issuer to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or performed when
and as the same shall become due and payable, whether on the relevant maturity
date, upon acceleration, by call for redemption, upon repurchase or purchase as
a result of a Change of Control Offer, Asset Disposition Offer or otherwise, all
in accordance with the terms hereof and thereof; and (ii) in case of any
extension of time of payment or renewal of any Notes or of any such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, subject to an
applicable grace period, whether at maturity, on an interest payment date, by
acceleration, required repurchase or otherwise. All payments under this
Guarantee shall be made in U.S. dollars.
All payments made by the Company under the Guarantee with respect to
the Notes will be made in U.S. dollars free and clear of and without withholding
or deduction for or on account of any present or future tax, duty, assessment or
other Governmental charge imposed or levied by or on behalf of The Netherlands
or the Republic of Indonesia (or any political subdivision or taxing authority
of or in The Netherlands or the Republic of Indonesia), unless the Company is
required to withhold or deduct such tax, duty, assessment or other Governmental
charge by law or by the interpretation or administration thereof. In the event
that payments under the Guarantee are subject to withholding or deduction for or
on account of any present or future tax, duty, assessment or other Governmental
charge imposed by The Netherlands or the Republic of Indonesia (or any political
subdivision or taxing authority of or in The Netherlands or the Republic of
Indonesia), the Company shall pay Additional Amounts in such amounts and to the
extent set forth in Section 4.01(b).
The Company hereby agrees that its obligations hereunder shall be
unconditional and irrevocable, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture or the obligations of the Issuer
hereunder or thereunder, the absence of any action to enforce the same, any
waiver or consent by any Holder of Notes with respect to any provisions hereof
or thereof, the recovery of any judgment against the Issuer, any action to
enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor.
The Company hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Issuer, any right to require a proceeding first against the Issuer, any right to
pursue or exhaust its legal or equitable remedies against the Issuer (including
any right which the Company may have to require the seizure and sale of the
assets of the Issuer to satisfy the outstanding principal of, interest on or any
other amounts payable under each Note prior to recourse against the Company or
its assets), protest, notice and all demands whatsoever and covenants that the
Guarantee will not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture. If any Noteholder or the
Trustee is required by any court or otherwise to return to the Issuer, the
Company, or any custodian, trustee, liquidator or other similar official acting
in relation to the Issuer or the Company any amount paid by the Issuer or the
Company to the Trustee or such Noteholder, the Guarantee to the extent
theretofore discharged, shall be reinstated in full force and effect.
The Company agrees that, as between the Company, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of the Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article 6, such obligations (whether or not then due and payable)
shall forthwith become due and payable by the Company for the purposes of the
Guarantee.
The Company also agrees, to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee or
any Holders in enforcing any rights under the Guarantee.
58
The Company hereby waives, in favor of the Holders and the Trustee,
any and all of its rights, protections, privileges and defenses provided by law
to a guarantor and in particular the provisions in Articles 1430, 1831, 1833,
1837, 1843 and 1847 through 1850 of the Indonesian Civil Code (Kitab
Undang-Undang Hukum Perdata) and:
(i) waives any right of set-off which the Company may have
against the registered Holder in respect of any amounts which are or may
become payable by the registered Holder to the Issuer;
(ii) agrees that the Company is still under an obligation to
make payment to the registered Holder or the Trustee under this Guarantee
upon demand by the registered Holder even though the registered Holder has
not made any demand upon the Issuer, the Trustee or the Collateral Agent or
taken any steps or proceedings against the issuer to seize and sell its
assets or property to recover the secured indebtedness or, if such steps or
proceedings are taken, the registered Holder is otherwise unable to satisfy
the Indebtedness under this Indenture from such assets or property;
(iii) relinquishes any right or privilege which it may have to
demand from any court that the registered Holder or the Trustee should
split or apportion the Indebtedness under this Indenture either
proportionately or otherwise against the Company and any other person who
has given any Guarantee or other security to the registered Holder in
respect of the Indebtedness under this Indenture;
(iv) agrees that (subject to the other provisions of this
Guarantee) the Company shall not be entitled to claim from the issuer any
compensation or release in respect of the obligations and liabilities of
the Company under this Guarantee in circumstances where the Company has not
made any actual payment under this Guarantee;
(v) agrees that the Company shall not make use of any of the
exceptions or defenses against the registered Holder or the Trustee which
are or may be available to the Issuer and which concerns the Indebtedness
under this Indenture;
(vi) agrees that the Company shall still be bound by and liable
under this Guarantee even though due to the fault of the registered Holder
of a Security or the Trustee, the Company can no longer be subrogated to
the rights, security interests and other privileges of the registered
Holder against the Issuer;
(vii) agrees that the Company shall still be bound by and liable
under this Guarantee in circumstances where the registered Holder
voluntarily accepts certain moveable or any other goods as payment for the
Indebtedness under this Indenture, but subsequently such goods, by reason
of a judicial decision, have to be delivered to some other person; and
(viii) agrees that the Company shall not have the right to
demand the Issuer to repay the Indebtedness under this Indenture to the
registered Holder of a Security, or to release the Company from its
liability under this Guarantee in circumstances where the registered Holder
has granted any time or other indulgence to the issuer.
SECTION 10.02 INDEMNITY
(a) The Company hereby irrevocably and unconditionally agrees as a
primary obligor to indemnify (the "INDEMNITY") fully the Holders and the Trustee
for and against any amounts owed by the Issuer in respect of the Notes and this
Indenture that otherwise would be payable under the Guarantee in the event that
the Guarantee is for any reason deemed to be unenforceable. Except as otherwise
indicated herein or as the context may otherwise require, all references herein
and in the Notes and the Guarantee shall be deemed to constitute references to
the Indemnity.
(b) The obligations of the Company assumed under this Indenture with
respect to the Indemnity are independent undertakings and constitute the
Company's own debt and obligation, as meant by or in accordance
59
with Article 1316 of the Indonesian Civil Code, separate from the Guarantee
contained in Section 10.01, not accessory to any of the Security Documents, and
with respect to which Indemnity Articles 1820 to 1850 of the Indonesian Civil
Code do not therefore apply.
SECTION 10.03 REPRESENTATION AND WARRANTY. The Company hereby
represents and warrants that all acts, conditions and things required to be done
and performed and to have happened precedent to the creation and issuance of the
Guarantee and the Indemnity, and to constitute the same legal, valid and binding
obligations of the Company enforceable in accordance with their respective
terms, have been done and performed and have happened in compliance with all
applicable laws.
SECTION 10.04 WAIVER OF SUBROGATION. The Company hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
the Issuer that arise from the existence, payment, performance or enforcement of
the Company's obligations under the Guarantee, the Indemnity and this Indenture,
including, without limitation, any right of subrogation, reimbursement,
exoneration, indemnification, and any right to participate in any claim or
remedy of any Holder against the Issuer whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including,
without limitation, the right to take or receive from the Issuer, directly or
indirectly, in cash or other property or by setoff or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to the Company in violation of the preceding sentence and the
Notes shall not have been paid in full; such amount shall have been deemed to
have been paid to the Company for the benefit of, and held in trust for the
benefit of, the Holders of the Securities, and shall forthwith be paid to the
Trustee for the benefit of such Holders to be credited and applied upon the
Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. The Company acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 10.04 is knowingly made in contemplation of
such benefits.
SECTION 10.05 EXECUTION OF GUARANTEE. To evidence the Guarantee
specified in Section 10.01 to the Noteholders, the Company hereby agrees to
execute this Indenture and the endorsement on the Notes of a notation of such
Guarantee (the "Guarantee Endorsement") in substantially the form of the Notes
attached hereto as Exhibit A recited to be endorsed on each Security ordered to
be authenticated and delivered by the Trustee. The Company hereby agrees that
the Guarantee set forth in Section 10.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Guarantee. Each Guarantee shall be signed on behalf of Company by two Officers
of the Company (each of whom shall have been duly authorized by all requisite
corporate actions) prior to the authentication of the Note on which it is
endorsed, and the delivery of such Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee on behalf of
the Company. Such signatures upon the Guarantee Endorsement may be by manual or
facsimile signature of such Officers and may be imprinted or otherwise
reproduced on the Guarantee Endorsement. If an officer whose signature is on a
Guarantee Endorsement no longer holds his office at the time the Note on which
such Guarantee Endorsement is endorsed is authenticated, such Guarantee
Endorsement shall be valid nevertheless. The Company shall execute the Guarantee
Endorsement in the foregoing manner for the initial issuance of Notes hereunder
and for any other issuance of Notes required or permitted hereunder, including
pursuant to Section 2.06, 2.07 and 2.09.
SECTION 10.06 RANKING. The Guarantee is secured and ranks pari passu
in right of payment with all existing and future Senior Indebtedness of the
Company.
ARTICLE 11
[INTENTIONALLY OMITTED]
ARTICLE 12
SECURITY DOCUMENTS
SECTION 12.01 SECURITY DOCUMENTS
(a) In order to secure the due and punctual payment of all amounts
payable under the Notes and this Indenture, the Company, the Issuer, the
Collateral Agent, the Trustee and the Secured Creditors have entered
60
into the Collateral Agency Agreement and the Security Documents to create the
Liens of the Security Documents and for related matters.
(b) The Company covenants and agrees that it has full right, power and
lawful authority to grant, bargain, sell, release, convey, hypothecate, assign,
mortgage, pledge and transfer the Collateral, in the manner and form done, or
intended to be done, in this Indenture, the Collateral Agency Agreement and the
Security Documents. The Company further covenants and agrees that the Security
Documents and the actions taken hereunder and thereunder create a perfected
first priority lien (subject, with respect to the Security Deed, to statutory
exceptions for taxes and enforcement costs) (or such other perfection and
priority contemplated by the Security Documents) on the relevant portion of the
Collateral which it purports to create prior to all other Liens, other than
Permitted Liens.
(c) As amongst the Holders, the Collateral as now or hereafter
constituted shall be held for the equal and ratable benefit of the Holders
without preference, priority or distinction of any thereof over any other by
reason of difference in time of issuance, sale or otherwise, as security for the
Issuer's and the Company's obligations under this Indenture.
SECTION 12.02 HOLDERS' CONSENT
. Each Holder, by its acceptance of a Note, (i) consents and agrees to
the terms of the Collateral Agency Agreement and the Security Documents and
authorizes and approves the Trustee's execution thereof, and (ii) agrees that
such Holder is bound by the terms thereof and that such Holder may not take any
action contrary thereto.
SECTION 12.03 RECORDING, DEPOSIT OF PLEDGED ASSETS, etc
.
(a) The Company shall, and shall cause any Restricted Subsidiary which
owns Collateral to, take or cause to be taken all action required or desirable
to maintain, preserve and protect the Lien on the Collateral granted by the
Collateral Agency Agreement and the Security Documents, including, but not
limited to, causing all instruments of further assurance requested by the
Trustee or the Collateral Agent to be promptly recorded, registered and filed,
and to keep the Security Documents and such instruments of further assurance
recorded, registered and filed at all times, and will execute and file such
instruments in such manner and in such places as may be required by law to fully
preserve and protect the rights of the holders and the Trustee under this
Indenture, the Collateral Agency Agreement and the Security Documents to all
property comprising the Collateral.
The Company and the Issuer will from time to time promptly pay and
discharge all hypothec and filing fees, charges and taxes relating to this
Indenture, the Collateral Agency Agreement, the Security Documents, any
amendments thereto and any other instruments of further assurance.
(b) Upon the cancellation and discharge of any prior Permitted Lien,
the Company will cause all cash, cash equivalents, obligations and securities
then held by the trustee, mortgagee or other holder of such prior Permitted
Lien, which were received by such trustee, mortgagee or other holder on account
of the release or the taking by eminent domain or the purchase by a public
authority or the sale by virtue of a designation or order of a public authority
or any other disposition of, or insurance on, the Collateral, or any part
thereof (including all proceeds of or substitutions for any thereof), to be paid
to or deposited and pledged with the Collateral Agent for distribution in
accordance with the Collateral Agency Agreement.
(c) The Issuer and the Company shall furnish to the Trustee:
(i) promptly after execution and delivery of the Note, an
Opinion or Opinions of Counsel to the effect that, in the opinion of such
counsel (subject customary exceptions), this Indenture and the assignment
of the Collateral intended to be made by each Security Document and all
other instruments of further assurance or assignment have been properly
recorded, registered and filed to the extent necessary to perfect the Lien
intended to be created by each such Security Document and reciting the
details of such
61
action or referring to prior Opinions of Counsel in which such details are
given, and stating that as to the Lien intended to be created pursuant to
each such Security Document, such recordings, registering and filings are
the only recordings, registering and filings necessary, and further stating
that all Security Documents have been executed and filed that are necessary
fully to preserve and protect the rights of the Holders (except, with
respect to the Security Deed, registration thereof in the manner
contemplated by Section 6.01(k) (B) and the Trustee with respect to the
Liens intended to be created by each Security Document;
(ii) within 30 days after December 1 in each year beginning
with December 1, 2003, an Opinion or Opinions of Counsel, dated as of such
date, either (A) to the effect that, in the opinion of such counsel, such
actions have been taken with respect to the recordings, registering,
filings, recordings, re-registering and refilings of all Security Documents
or other instruments of further assurance as are necessary to maintain and
continue the perfection of the Liens of the Security Documents and reciting
with respect to such Liens the details of such action or referring to prior
Opinions of Counsel in which such details are given, and stating that all
Security Documents and instruments have been executed and filed that are
necessary fully to preserve and protect the rights of the Holders and the
Trustee with respect to the Liens intended to be created by each Security
Document or (B) to the effect that, in the opinion of such counsel, no such
action is necessary to maintain such Liens.
SECTION 12.04 DISPOSITION OF COLLATERAL WITHOUT TRUSTEE CONSENT.
Notwithstanding the provisions of Sections 12.05 and 12.07, so long as no
Default or Event of Default shall have occurred and be continuing or would
result therefrom (or, with respect to clause (iv) or (v) below, so long as no
Notice of Actionable Default has been delivered to the Collateral Agent) and the
Company complies with the provisions of Section 4.08, if applicable, the
Company, in the case of Sections 12.04(a) (i) to (iv), inclusive, may without
any consent by the Trustee:
(i) sell or otherwise dispose of any Collateral subject to the
Liens of the Security Documents, which may have become worn out or
obsolete, not exceeding a book value of US$2.0 million in any one calendar
year;
(ii) demolish, dismantle, tear down or scrap any Collateral, or
abandon any thereof other than land or interests in land (other than
leases), if such demolition, dismantling, tearing down, scrapping or
abandonment is in the best interests of the Company and the fair market
value (except to the extent of the relevant Collateral being released) and
utility of the Collateral as an entirety, will not thereby be impaired
(such determination to be evidenced by a written resolution of a majority
of the Board of Directors if the relevant Collateral has a fair market
value in excess of US$2.0 million); and
(iii) sell or otherwise dispose of Collateral in isolated
transactions that do not exceed US$2.0 million in the aggregate.
(b) In the event that the Company has sold, exchanged, or otherwise
disposed of or proposes to sell, exchange or otherwise dispose of any portion of
the Collateral which under the provisions of this Section 12.04 may be sold,
exchanged or otherwise disposed of by the Company without any consent of the
Trustee, such Collateral shall be, upon such sale, exchange or other
disposition, automatically released from the Liens of the Security Documents and
the Company may request the Trustee to furnish a written disclaimer, release or
quitclaim of any interest in such property under this Indenture, the Collateral
Agency Agreement and any of the Security Documents (by providing to the Trustee
a counterpart of the instruments proposed to give effect to such disclaimer,
release or quitclaim fully executed and acknowledged (if applicable) by all
parties thereto other than the Trustee, the other Secured Creditors and Secured
Creditors' Representatives and in form for execution by the Trustee). If the
Company so requests, the Trustee shall execute such an instrument upon delivery
to the Trustee of (i) an Officer's Certificate by the Company reciting the sale,
exchange or other disposition made or proposed to be made and describing in
reasonable detail the property affected thereby, and stating that such property
is property which by the provisions of this Section 12.04 may be sold, exchanged
or otherwise disposed of or dealt with by the Company without any release or
consent of the Trustee, (ii) an Opinion of Counsel stating that the sale,
exchange or other disposition made or proposed to be made was duly taken by the
Company in conformity with a designated
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subsection of Section 12.04(a) and (iii) an Officer's Certificate and Opinion of
Counsel complying with Sections 15.04 and 15.05.
Any disposition of Collateral made in strict compliance with the
provisions of this Section 12.04 shall be deemed not to impair the Liens of the
Security Documents in contravention of the provisions of this Indenture.
SECTION 12.05 RELEASE OF COLLATERAL WITH TRUSTEE CONSENT. In addition
to its rights under Sections 12.04 and 12.07, the Company shall have the right,
at any time and from time to time, to sell, exchange or otherwise dispose of any
of the Collateral (other than Trust Monies, which are subject to release from
the Liens of the Security Documents as provided under Article 13) upon
compliance with the requirements and conditions of Sections 4.08, 12.11 and this
Section 12.05, and the Trustee shall, subject to the terms of the Collateral
Agency Agreement, direct the Collateral Agent to release the same from the Liens
of any Security Document upon receipt by the Trustee of a notice requesting such
release and describing the property to be so released, provided that:
(a) if the property to be released has a book value of more than
US$2.0 million, the Trustee is provided with a written resolution of a majority
of the Board of Directors requesting such release and authorizing an application
to the Trustee therefor;
(b) the security afforded by the Liens of the Security Documents will
not be impaired by such release (except with respect to the Collateral so
released) and the proceeds from the property to be released are deposited in
accordance with the provisions set forth under Section 4.08;
(c) the Company has disposed of or will dispose of the Collateral so
to be released for a consideration representing its fair market value;
(d) no Default or Event of Default shall have occurred and be
continuing (or shall result therefrom);
(e) if the Collateral to be released is real property, following such
release and the release of the Lien of any applicable Security Deed with respect
thereto, the non-released property has sufficient utility services and
sufficient access to public roads, rail spurs, harbors, canals, terminals and
other transportation structures for the continued use of such non-released
property in substantially the manner carried on by the Company and its
Subsidiaries prior to such release;
(f) if the Collateral to be released is real property, following such
release, the non-released property subject to the Security Deed will continue to
comply in all material respects with applicable laws rules, regulations and
ordinances relating to land use and building and work place safety;
(g) if the Collateral to be released is real property, following such
release, the fair market value of the non-released property (exclusive of the
fair market value of the released property) shall not be less than the fair
market value of such non-released property subject to the Security Deed prior to
such release;
(h) if the Collateral to be released is subject to a prior Permitted
Lien, there shall be delivered to the Trustee a certificate of the trustee,
fiduciary, transferee or other holder of such prior Permitted Lien that it has
received the Net Proceeds sufficient to discharge such prior Permitted Lien and
has been irrevocably authorized by the Company to pay over to the Collateral
Agent any balance of such Net Proceeds remaining after the discharge of such
Indebtedness secured by such prior Permitted Lien; and, if any property other
than cash or cash equivalents is included in the consideration for any
Collateral to be released, there shall be delivered to the Trustee such
instruments of conveyance, assignment and transfer, if any, as may be reasonably
necessary, in the Opinion of Counsel to be given pursuant to paragraph (k), to
subject to the Liens of the Security Documents all the right, title and interest
of the Company in and to such property;
(i) the first priority perfected security interest pursuant to the
Security Deed shall be in full force and effect continuously and uninterrupted
at all times with respect to the Collateral not to be released;
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(j) (A) the Company delivers an Officer's Certificate with respect to
the matters set forth in paragraphs (a) through (i) above and stating that all
conditions precedent relating to the release of such Collateral have been
complied with, PROVIDED that matters set forth in paragraphs (b), (c) and (d)
may be an opinion of the officer and (B) the Officer's Certificate shall also be
signed, in the case of clauses (b) (as to impairment of security), (c) and (g)
by an Independent Appraiser; and
(k) an Opinion of Counsel shall be delivered to the Trustee
substantially to the effect (subject to customary exceptions) (i) that any
obligation included in the consideration for any property so to be released and
to be received by the Trustee pursuant to Section 12.05(h) is a valid and
binding obligation enforceable in accordance with its terms and is effectively
pledged under the Security Documents, (ii) that any Lien granted by a purchaser
to secure Purchase Money Indebtedness is a first priority purchase money Lien,
or with respect to moveable assets is not subordinate to any other Lien or
security interest and such instrument granting such Lien is enforceable in
accordance with its terms, (iii) either (x) that such instruments of conveyance,
assignment and transfer as have been or are then delivered to the Collateral
Agent are sufficient to subject to the Liens of the applicable Security
Documents all the right, title and interest of the Company in and to any
property, other than cash, Temporary Cash Investments and obligations, that is
included in the consideration for the Collateral so to be released, or (y) that
no instruments of conveyance, assignment or transfer are necessary for such
purpose, (iv) that the Company has corporate power to own all property included
in the consideration for such release, (v) in case any part of the money or
obligations referred to in Section 12.05(h) has been deposited with a trustee
other holder of a prior Permitted Lien, that the Collateral to be released, or a
specified portion thereof, is or immediately before such release was subject to
such prior Permitted Lien and that such deposit is required by such prior
Permitted Lien and (vi) that all conditions precedent herein relating to the
release of such Collateral xxxx been complied with.
In connection with any release, the Company shall (i) execute, deliver
and record or file and obtain such instruments as shall be necessary to
evidence, effect or give notice of such release or as the Trustee may reasonably
require for such purpose, including, without limitation, amendments to the
Security Documents, the Collateral Agency Agreement and this Indenture and (ii)
deliver to the Trustee such evidence of the satisfaction of the requirements of
this Indenture, the Collateral Agency Agreement and the other Security Documents
as the Trustee may reasonably require.
The Company shall exercise its rights under this Section 12.05 by
delivery to the Trustee of a notice (each, a "Release Notice"), which shall
refer to this Section, describe with particularity the items of property
proposed to be covered by the release and be accompanied by a counterpart of the
instruments proposed to give effect to the release fully executed and
acknowledged (if applicable) by all parties thereto other than the Trustee, the
other Secured Creditors and Secured Creditors' Representatives and in form for
execution by the Trustee. Upon such compliance, the Company shall direct the
Trustee to execute, acknowledge (if applicable) and deliver to the Company such
counterpart within 20 Business Days after receipt by the Trustee of the Release
Notice and the satisfaction of the requirements of this covenant.
In case a Default or an Event of Default shall have occurred and be
continuing, the Company, while in possession of the Collateral (other than Trust
Monies, cash, cash equivalents, securities and other personal property held by
or required to be deposited or pledged with the Collateral Agent hereunder or
with the trustee, fiduciary transferee or other holder of a prior Permitted
Lien), may do any of the things enumerated in this Section 12.05 with respect to
such Collateral, if each of the Holders by appropriate action of such Holder,
shall consent to such action. In such event, any certificate filed under this
Section shall omit the statement to the effect that no Default or Event of
Default has occurred and is continuing (or would result therefrom). This
paragraph shall not apply, however, during the continuance of an Event of
Default of the type specified in Section 6.01(h).
All cash or cash equivalents allocable to Holders received by the
Collateral Agent pursuant to this Section 12.05 shall be held by the Collateral
Agent, for the benefit of the Holders, as Trust Monies subject to application as
provided in Article 13 or as provided in Section 4.08.
Any releases of Collateral made in strict compliance with the
provisions of this Section 12.05 shall be deemed not to impair the Liens of the
Security Documents in contravention of the provisions of this Indenture.
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SECTION 12.06 POSSESSION AND USE OF COLLATERAL. Unless an Event of
Default shall have occurred and be continuing, and subject to the terms of this
Indenture, the Security Documents and the Collateral Agency Agreement, the
Company shall have the right to remain in possession and retain control of the
Collateral (other than any cash, securities, obligations and cash equivalents
deposited with the Collateral Agent and other than as set forth in the
Collateral Agency Agreement or the Security Documents), to operate the
Collateral and to collect, invest and dispose any income thereon.
SECTION 12.07 SUBSTITUTE COLLATERAL
(a) The Company may, at its option, obtain a release of any of the
Moveable Assets Collateral and the Trustee shall release and direct the
Collateral Agent to release the related Collateral, provided that:
(i) the Company subjects other similar (that is performs the
same functions with like capabilities) moveable assets related to or used
or to be used in the Plant ("Substitute Collateral") to the Liens of the
Security Documents (which shall be a first priority perfected Lien unless
otherwise contemplated by the Security Documents);
(ii) such Substitute Collateral has a fair market value greater
than or equal to the fair market value of the Collateral to be released and
the Substitute Collateral is not subject to Permitted Liens securing
Indebtedness greater than any Permitted Liens with respect to the Moveable
Assets Collateral to be released;
(iii) the Company delivers to the Trustee (or in case of clause
(4) and (5) below, the Collateral Agent):
(1) an application of the Company requesting such
substitution of Substitute Collateral for any of the Moveable Assets
Collateral and describing the property to be so released and the property
that is related to or used or to be used in the Plant to be substituted
therefor;
(2) an Officer's Certificate (A) with respect to the matters
set forth in paragraphs (i) through (iii) above and stating that all
conditions precedent herein relating to the release and substitution of
Collateral have been complied with, provided that matters set forth in
paragraph (ii) may be an opinion of the Officer; PROVIDED that the
Officer's Certificate shall also be signed, in the case of clause (ii) by
an Independent Appraiser; and (B) stating that any Lien on the Substitute
Collateral prior to the Liens of the Security Documents on the Substitute
Collateral are Liens of the character which, under the provisions of this
Indenture, the Collateral Agency Agreement and the Security Documents, are
permitted to be prior to the Liens of the Security Documents;
(3) an Opinion of Counsel substantially to the effect
(subject to customary exceptions) that (A) either (x) such instruments of
conveyance, assignment and transfer as have been or are then delivered to
the Collateral Agent are sufficient to subject all the right, title and
interest of the Company in and to the Substitute Collateral to the Liens of
the applicable Security Documents (y) no instruments of conveyance,
assignment or transfer are necessary for such purpose, (B) the Company has
corporate power to own all Substitute Collateral, (C) the property so
released is Moveable Assets Collateral, (D) each of Liens of the Security
Documents constitutes a Lien which is not subordinate to any other Lien or
security interest other than a Permitted Lien on such Substitute
Collateral, and (E) all conditions precedent herein relating to the release
of such Collateral have been complied with;
(4) any instrument required by the Opinion of Counsel to be
rendered pursuant to clause (iii) (3) of this Section 12.07 for the Lien of
any other applicable Security Document to cover the Substitute Collateral
and any other property received in connection with such transaction;
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(5) original title documents and other evidence of ownership
with respect to the Substitute Collateral are delivered to the Collateral
Agent; and
(6) evidence of payment or a closing statement indicating
payments have been made (or will be made concurrently with the release and
substitution of Collateral) by the Company of all filing fees, recording
charges, transfer taxes a other costs and expenses, including reasonable
legal fees and disbursements of counsel for the Trustee (and any local
counsel) that may be incurred to validly and effectively subject the
Substitute Collateral to the Lien of any Security Document.
(b) In connection with any release, the Company shall (i) execute,
deliver and record or file and obtain such instruments as shall be necessary to
evidence, effect or give notice of such release and substitution or as the
Trustee may reasonably require for such purpose, including, without limitation,
amendments to the Security Documents, the Collateral Agency Agreement and this
Indenture and (ii) deliver to the Trustee such evidence of the satisfaction of
the requirements of this Indenture, the Collateral Agency Agreement and the
other Security Document as the Trustee may reasonably require.
(c) The Company shall exercise its rights under this Section 12.07 by
delivery to the Trustee of a notice (each, a "SUBSTITUTION NOTICE"), which shall
refer to this Section, describe with particularity the items of property
proposed to be covered by the release and substitution and be accompanied by a
counterpart of the instruments proposed to give effect to the release and
substitution fully executed and acknowledged (if applicable) by all parties
thereto other than the Trustee, the other Secured Creditors and Secured
Creditors' Representatives and in form for execution by the Trustee. Upon such
compliance, the Company shall direct the Trustee to execute, acknowledge (if
applicable) and deliver to the Company such counterpart within 20 Business Days
after receipt by the Trustee of Substitution Notice and the satisfaction of the
requiem of this covenant.
(d) In case a Default or an Event of Default shall have occurred and
be continuing, the Company, while possession of the Collateral (other than Trust
Monies, cash, cash equivalents, securities and other personal property held by
or required to be deposited or pledged with the Collateral Agent or with the
trustee, fiduciary, transferee or other holder of a prior Permitted Lien), may
do any of the things enumerated in this Section 12.07 with respect such
Collateral, if each of the holders, shall consent to such action. In such event,
any certificate filed pursuant to this paragraph shall omit the statement to the
effect that no Default or Event of Default has occurred and is continuing (or
would result therefrom). This paragraph shall not apply, however, during the
continuance of an Event of Default of the type specified in Section 6.01(h).
(e) The Company shall cause all cash or Temporary Cash Investments
received by it in connection with any substitution of property permitted hereby
to be deposited with and held by the Collateral Agent as if such cash or
Temporary Cash Investment were received in connection with an Asset Disposition
upon the terms set forth in Section 4.08 and in the Collateral Agency Agreement.
(f) Any release and substitution of Collateral made in strict
compliance with the provisions of this Section 12.07 shall be deemed not to
impair the Liens of the Security Documents in contravention of the provisions of
this Indenture.
(g) This Section does not limit the Company's rights to obtain the
release of Moveable Assets Collateral under Section 12.05 or any other Section.
This Section is intended to be used for transactions which are primarily a
substitution of like Collateral, as opposed to a sale of Collateral.
SECTION 12.08 GOVERNMENTAL TAKINGS. Should any of the Collateral be
taken pursuant to the lawful exercise by the government of the Republic of
Indonesia or any political subdivision thereof of any right which it may then
have to purchase, or to designate a purchaser or to order sale of, all or any
part of the Collateral (a "GOVERNMENTAL TAKING"), the Trustee shall release the
property so taken or purchased, but only upon receipt by the Trustee of the
following:
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(a) an Officer's Certificate stating that (i) such property has been
taken pursuant to a lawful right vested in the government of the Republic of
Indonesia or any political subdivision thereof to purchase, or to designate a
purchaser or order a sale of, such property and the amount of the proceeds of
such sale, and that all conditions precedent herein provided for relating to
such release have been complied with and (ii) that the amount of the proceeds of
the property so sold is not less than the amount to which the Company is
entitled under the terms of such Governmental Taking;
(b) acknowledgment by the Collateral Agent that the award for such
property or the proceeds of such sale, has been deposited in the Collateral
Accounts subject to the disposition thereof pursuant to Section 4.08 hereof;
PROVIDED, HOWEVER, that, in lieu of all or any part of such award or proceeds,
the Company shall have the right to deliver to the Trustee a certificate of the
trustee, mortgagee or other holder of a prior Permitted Lien on all or any part
of the property to be released, stating that such award or proceeds, or a
specified portion thereof, has been deposited with such trustee, mortgagee or
other holder pursuant to the requirements of such prior Lien, in which case the
balance of the award, if any, shall be delivered to the Collateral Agent for
deposit in the Notes Collateral Account;
(c) an Opinion of Counsel substantially to the effect that:
(1) such Governmental Taking was a lawful exercise of a
right vested in the government of Indonesia or any political subdivision
thereof;
(2) the award for the property so taken has become final or
that, to the best of such counsel's knowledge, no appeal is contemplated or
pending.
(3) if, pursuant to Section 12.08(b), the award for such
property or the proceeds of such sale, or a specified portion thereof,
shall be certified to have been deposited with the trustee, mortgagee or
other holder of a prior Permitted Lien, that the property to be released,
or a specified portion thereof, is or immediately before such taking or
purchase was subject to such prior Permitted Lien, and that such deposit is
required by such prior Permitted Lien; and
(4) that the instrument or the instruments and the award or
proceeds of such sale which have been or are therewith delivered to and
deposited with the Collateral Agent conform to the requirements of this
Indenture, the Collateral Agency Agreement and the Security Documents and
that, upon the basis of such application, the Trustee is permitted by the
terms hereof to execute and deliver the release requested, and that all
conditions precedent herein provided for relating to such release have been
complied with; and
(d) a counterpart of the instruments proposed to give effect to such
release fully executed and acknowledged (if applicable) by all parties thereto
other than any applicable governmental entity, the Trustee, the other Secured
Creditors and Secured Creditors' Representatives and in form for execution by
the Trustee.
In any proceedings for any Governmental Taking of any part of the Collateral, by
virtue of any such right to purchase or designate a purchaser or to order a
sale, the Trustee may be represented by counsel who may be counsel for the
Company.
The Company shall cause all cash and Temporary Cash Investments
received pursuant to this Section 12.08 to be deposited with and held by the
Collateral Agent upon the terms set forth herein and in the Collateral Agency
Agreement. The Company shall cause all purchase money and other obligations
received to be deposited with and held by Collateral Agent upon the terms set
forth herein and in the Collateral Agency Agreement.
SECTION 12.09 TIA REQUIREMENTS
(a) The release of any Collateral from the terms hereof, the
Collateral Agency Agreement and of the Security Documents or the release of, in
whole or in part, the Liens created by any of the Security Documents,
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will not be deemed to impair the Liens of the Security Documents in
contravention of the provisions hereof if and to the extent the Collateral or
Liens are released pursuant to the terms hereof. Each of the Holders
acknowledges that a release of Collateral or Liens strictly in accordance with
the terms hereof will not be deemed for any purpose to be an impairment of the
Liens in contravention of the terms of this Indenture.
(b) To the extent applicable, without limitation, the Company, the
Issuer and each obligor on the Notes shall comply with TIA Section 314(d)
relating to the release of property or securities from the Liens of the Security
Documents.
SECTION 12.10 SUITS TO PROTECT THE COLLATERAL. The Trustee shall have
power to instruct the Collateral Agent to institute and to maintain such suits
and proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts which may be unlawful or in violation of the terms hereof
or any of the Security Documents, and to instruct the Collateral Agent to
institute and maintain such suits and proceedings as the Trustee may deem
expedient to preserve or protect its interests and the interests of the Holders
in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be invalid if the
enforcement of, or compliance with, such enactment, rule or order would impair
the Liens of the Security Documents or be prejudicial to the interests of the
Holders or the Trustee). The Trustee shall also have the power to institute and
to maintain suits against the Collateral Agent, the Company, the Issuer, the
Secured Creditor's Representatives and the Secured Creditors to the extent the
Collateral Agent does not follow the foregoing instructions or as otherwise
necessary to cause the Collateral Agent, the Company, the Issuer, the Secured
Creditor's Representatives and the Secured Creditors to fulfill their
obligations under the Collateral Agency Agreement or the Security Documents.
SECTION 12.11 PURCHASER PROTECTED. In no ever shall any purchaser in
good faith of any property purported to be released hereunder be bound to
ascertain the authority of the Trustee to execute the release or to inquire as
to the satisfaction of any conditions required by the provisions hereof for the
exercise of such authority or to see to the application of any consideration
given by such purchaser or other transferee; nor shall any purchaser or other
transferee of any property or rights permitted by this Article 12 to be sold be
under obligation to ascertain or inquire into the authority of the Company to
make any such sale or other transfer.
SECTION 12.12 POWERS EXERCISABLE BY RECEIVER OR TRUSTEE. In case the
Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Article 12 upon the Company with respect
to the release, sale or other disposition of such property may be exercised by
such receiver or trustee, and an instrument signed by such receiver or trustee
shall be deemed the equivalent of any similar instrument of the Company or of
any officer or officers thereof required by the provisions of this Article 12.
SECTION 12.13 DISPOSITION OF OBLIGATIONS RECEIVED
(a) The Company shall cause all obligations permitted to be received
under this Article 12 or the other provisions of this Indenture (including,
without limitation, securities, notes, receivables and the like received in
connection with an Asset Disposition) to be deposited with the Collateral Agent
to be held by the Collateral Agent as part of the Collateral.
(b) The Trustee shall direct the Collateral Agent to release any such
obligation referred to in the foregoing paragraph (a) upon (i) payment by or on
behalf of the Company in cash or Temporary Cash Investments to the Collateral
Agent for deposit in the Collateral Accounts in accordance with the provisions
of the Collateral Agency Agreement of the entire unpaid principal amount of such
obligation and (ii) upon receipt of an Officer's Certificate and an Opinion of
Counsel that the foregoing condition has been satisfied.
(c) The Company shall cause the cash or Temporary Cash Investments
received by the Collateral Agent in respect of principal of any such obligations
referred to in subsection (a) above to be deposited in the Collateral Accounts
in accordance with the provisions of the Collateral Agency Agreement. The
Company may use any such funds on deposit, or funds deposited pursuant to
subsection (b) above, to purchase Additional Assets as permitted by Section 4.08
(with relevant time periods being calculated based upon the date of deposit in
the Notes Collateral Account) or as set forth in Section 13.02. If such funds
are not so used within the time period permitted by Section 4.08, such amounts
shall become Excess Proceeds, and shall become subject to disposition as set
forth in
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Section 4.08, including if the Excess Proceeds Offer is not fully subscribed, to
purchase New Collateral Assets as set forth in Section 4.08(c).
(d) Until the Notes are accelerated pursuant to Section 6.02, all
interest and other income on any obligations referred to in paragraph (a), when
received by the Collateral Agent shall be paid to the Company from time to time
to the extent allocable to the Trustee as a Secured Creditor. If the Notes have
been accelerated pursuant to Section 6.02, any such interest or other income not
theretofore paid, when collected by the Collateral Agent, and distributed to the
Trustee in accordance with the Collateral Agency Agreement, shall be applied by
the Trustee in accordance with Section 6.10.
(e) Any release of any portion of the Collateral made strictly in
compliance with the provisions of this Section 12.13 shall not be deemed to
impair the Liens created by the Security Documents in contravention of the
provisions of this Indenture.
SECTION 12.14 LIMITATION ON DUTY OF TRUSTEE IN RESPECT OF COLLATERAL;
INDEMNIFICATION
(a) Beyond the exercise of reasonable care in the custody thereof, the
Trustee shall have no duty as to any Collateral in its possession or control or
in the possession or control of any agent or bailee or any income thereon or as
to preservation of rights against prior parties or any other rights pertaining
thereto and the Trustee shall not be responsible for filing any financing or
continuation statements or recording any documents or instruments in any public
office at any time or times or otherwise perfecting or maintaining the
perfection of any security interest in the Collateral. The Trustee shall be
deemed to have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which other Trustees under similar circumstances would accord similar
Collateral, and shall not be liable or responsible for any loss or diminution in
the value of any of the Collateral, by reason of the act or omission of any
carrier, forwarding agency or other agent or bailee selected by the Trustee in
good faith.
(b) The Trustee shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Liens in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder, except to the extent such action or omission constitutes
negligence, bad faith or willful misconduct on the part of the Trustee, for the
validity or sufficiency of the Collateral or any agreement or assignment
contained therein, for the validity of the title of the Company to the
Collateral, for insuring the Collateral or for the payment of taxes, charges,
assessments or Liens upon the Collateral or otherwise as to the maintenance of
the Collateral. The Trustee shall have no duty to ascertain or inquire as to the
performance or observance of any of the terms of this Indenture, the Collateral
Agency Agreement or the Security Documents by the Company, the Issuer, the
Secured Creditors' Representatives, the Secured Creditors or the Collateral
Agent.
SECTION 12.15 RELEASE UPON TERMINATION OF THE COMPANY'S AND ISSUER'S
OBLIGATIONS
(a) In the event that the Company and the Issuer deliver an Officer's
Certificate certifying that the Company and the Issuer have complied with
Section 8.01 and, if applicable, Section 8.02 with respect to all the
Securities, or that all obligations under this Indenture have been satisfied and
discharged in accordance with this Indenture, the Trustee shall deliver the
Company and the Collateral Agent on behalf of the Holders, a notice disclaiming,
relinquishing and releasing (without recourse or warranty) any and all rights it
has in respect of the Collateral and any other instruments or documents
evidencing or effecting such release in such form as the Company may reasonably
request.
(b) Any release of any portion of the Collateral made strictly in
compliance with the provisions of this Section 12.15 shall not be deemed to
impair the Liens created by the Security Documents in contravention of the
provisions of this Indenture.
ARTICLE 13
APPLICATION OF TRUST MONIES
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SECTION 13.01 "TRUST MONIES" DEFINED. The Company and the Issuer agree
that all funds on deposit in the Notes Collateral Account and the Insurance
Collateral Account pursuant to the terms of this Indenture, the Collateral
Agency Agreement and the Security Documents, including all Net Available Cash
consisting of cash and cash equivalents and Temporary Cash Investments required
to be deposited with the Collateral Agent (Trust Monies) shall be held by the
Collateral Agent as a part of the security for the Notes, and, long as no
Default or Event of Default shall have occurred and be continuing or no Notice
of Actionable Default is outstanding, may, at the direction of the Company, be
applied from time to time in accordance with Sections 3.07, 4.08 or 4.10 or to
the payment of the principal on any Notes, at maturity, in each case in
accordance with the terms of this Indenture. Upon any entry upon or sale of the
Collateral or any part thereof pursuant to Article 6 or any exercise of remedies
pursuant to the Collateral Agency Agreement, the Trust Monies allocable to the
Holders of the Securities shall be applied in accordance with Section 6.10
hereof at the time released to the Trustee under the Collateral Agency
Agreement; but prior to any such entry or sale, all or any part of the Trust
Monies may be withdrawn, and shall be released, paid or applied by the Trustee,
from time to time as provided in Sections 13.02 to 13.06, inclusive.
SECTION 13.02 RETIREMENT OF SECURITIES. The Trustee shall direct the
Collateral Agent to release to the Trustee Trust Monies and the Trustee shall
hold and apply such Trust Monies from time to time to the payment of the
principal on the applicable Notes, at Stated Maturity or to the purchase thereof
pursuant to Sections 4.08 or 4.10, as the Company shall request, upon receipt by
the Trustee of the following:
(i) resolution of a majority of the Company's Board of
Directors directing the application pursuant to this Section 13.02 of a
specified amount of Trust Monies and, in any case any such monies are to be
applied to payment, designating Notes so to be paid and prescribing the
method of purchase, the price or prices to be paid and the maximum
principal amount of Notes to be purchased and any other provisions of this
Indenture governing such purchase;
(ii) cash which equals or exceeds in the aggregate the maximum
amount of the accrued interest (including Additional Amounts), if any,
required to be paid in connection with any such purchase or payment at
Stated Maturity, which cash shall be held by the Trustee in trust for such
purpose;
(iii) an Officer's Certificate, dated not more than five days
prior to the date of the relevant application, stating that all conditions
precedent covenants herein provided for relating to such application of
Trust Monies have been complied with;
(iv) an Opinion of Counsel stating that the documents and the
cash or Temporary Cash Investments, if any, which have been or are
therewith delivered to and deposited with the Collateral Agent for the
purposes of payment of the principal and interest on the Notes, at Stated
Maturity or to purchase thereof pursuant to Sections 4.08 or 4.10, conform
to the requirements of this Indenture and that all conditions precedent
herein provided for relating to such application of Trust Monies have been
complied with.
Upon compliance with the foregoing provisions this Section 13.02, the
Trustee shall apply funds released from the Notes Collateral Account as directed
and specified by such resolution up to, but not exceeding, the principal amount
of the Notes so paid or purchased and shall apply any other funds received
pursuant to Section 13.02 (ii) to pay accrued and unpaid interest.
A resolution of a majority of the Company's Board of Directors
expressed to be irrevocable directing the application of funds from the Notes
Collateral Account under this Section 13.02 to the payment of the principal and
any other funds received pursuant to Section 13.02(ii) to the payment of accrued
interest and unpaid interest on the Notes shall, for all purposes of this
Indenture, be deemed the equivalent of the deposit of money with the Trustee in
trust for such purpose. Such funds from the Notes Collateral Account and any
cash deposited with the Trustee, pursuant to clause (ii) of this Section 13.02
for the payment of accrued interest (including Additional Amounts) shall not,
after compliance with the foregoing provisions of this Section, be deemed to be
part of the Collateral or Trust Monies.
SECTION 13.03 WITHDRAWALS OF ASSET DISPOSITION PROCEEDS, INSURANCE
PROCEEDS AND PROCEEDS FROM GOVERNMENT TAKINGS
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(a) The Trustee shall consent to the release of funds on deposit in
the Insurance Collateral Account to the Company or the Restricted Subsidiary
which owned the related Collateral upon compliance with the conditions set forth
herein; provided that (x) no Major Collateral Disposition shall have occurred
and (y) Section 13.04 shall control with respect to business interruption
insurance. The Company shall request the Trustee to consent to such release by
request to the Trustee by an Officer of the Company to reimburse the Company or
the Restricted Subsidiary which owned the related Collateral for expenditures
made by the Company in connection with the repair, rebuilding or replacement of
the property destroyed, damaged or taken, providing the Trustee with the
following:
(i) an Officer's Certificate, dated not more than 30 days
prior to the date of the application for the withdrawal and payment of such
funds on deposit in the Insurance Collateral Account setting forth:
(A) that expenditures have been made, or costs
incurred, by the Company or the Restricted Subsidiary which owned the
related Collateral in a specified amount in connection with certain
repairs, rebuildings and replacements of the Collateral, which shall
be briefly described, stating the fair market value thereof to the
Company or such Restricted Subsidiary at the date of the acquisition
thereof by the Company or such Restricted Subsidiary;
(B) that no part of such expenditures or costs, in any
previous or then pending application, has been or is being made the
basis for the withdrawal of any Trust Monies pursuant to this Section
13.03;
(C) that no part of such expenditures or costs has
been paid out of either the proceeds insurance upon any part of the
Collateral not required to be deposited with the Collateral Agent
under the Security Documents or any award for or the proceeds from any
of the Collateral being taken not required to be deposited with the
Collateral Agent under the Security Documents, as the case may be;
(D) that there is no outstanding indebtedness, other
than costs for which payment is being requested, known to the Company,
after due inquiry, for the purchase price or construction of such
repairs, rebuildings or replacements, or for labor, wages, materials
or supplies in connection with the making thereof, which, if unpaid,
might become the basis of a vendor's, mechanics', laborers',
materialmen's, statutory or other similar Lien upon any of such
repairs, rebuildings or replacement, which Lien might, in the opinions
of the signers of such certificate, materially impair the security
afforded by such repairs, rebuildings or replacement;
(E) that the property to be repaired, rebuilt or
replaced is necessary or desirable in the conduct of the Company's or
such Restricted Subsidiary's business;
(F) that the title to any assets subject to such
repairs, rebuildings and replacements is substantially similar to the
title to the property destroyed, damaged or taken;
(G) that no Notice of Actionable Default is
outstanding;
(H) that no Event of Default shall have occurred and
be continuing (or would result therefrom); and
(I) that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with.
(ii) An Opinion of Counsel substantially stating: (A) that the
instruments that have been or are therewith delivered to the Trustee
conform to the requirements of this Indenture and that, upon the basis of
such Company request and the accompanying documents specified in this
Section 13.03, all conditions precedent herein provided for relating to
such withdrawal and payment have been complied
71
with, and the Trust Monies of which withdrawal is then requested may be
lawfully paid over under this Section 13.03(a); and (B) that all the
Company's or such Restricted Subsidiary's right, title and interest in and
to said repairs, rebuilding or replacements, or combination thereof, are
then subject to the Lien of the Security Documents (which shall be a first
priority perfected Lien unless otherwise contemplated by the Security
Documents).
Upon compliance with the foregoing provisions of this Section
13.03(a), the Trustee shall direct the Collateral Agent upon receipt of the
foregoing Officer's Certificate to pay to the Company or the Restricted
Subsidiary which owned the Collateral an amount of Trust Monies of the character
aforesaid equal to the amount of expenditures or costs stated in the Officer's
Certificate required by Section 13.03(a)(i)(A), or the fair market value to the
Company or such Restricted Subsidiary of such repairs, rebuildings and
replacements stated in such Officer's Certificate, whichever is less.
The Trustee may provide its preliminary consent (as opposed to final
release) to the use of funds on deposit in the Insurance Collateral Account upon
application and evidence that such funds will be used in the manner provided
herein; PROVIDED that no such funds shall be released to the Company until the
documentation set forth above is provided.
(b) The Trustee shall consent to the release of funds on deposit in
the Notes Collateral Account to the Company or the Restricted Subsidiary which
owned the related Collateral from any Asset Disposition that was not an
Involuntary Loss or a Major Collateral Disposition to purchase New Collateral
Assets when permitted by Section 4.08. The Company shall request the Trustee to
consent to such release by request to the Trustee by an Officer of the Company
to reimburse the Company or the Restricted Subsidiary which owned the related
Collateral for expenditures made to purchase New Collateral Assets by providing
the Trustee with the following:
(i) an Officer's Certificate, dated not more than 30 days
prior to the date of the application for the withdrawal and payment of such
funds from the Notes Collateral Account setting forth:
(A) that expenditures have been made, or costs
incurred, by the Company or the Restricted Subsidiary which owned the
Collateral in a specified amount in connection the acquisition of New
Collateral Assets by the Company or such Restricted Subsidiary which
shall be briefly described, and stating the fair value thereof to the
Company or such Restricted Subsidiary at the date of the acquisition
thereof by the Company or such Restricted Subsidiary;
(B) that no part of such expenditures or costs, in any
previous or then pending application, has been or is being made the
basis for the withdrawal of any Trust Monies pursuant to this Section
13.03;
(C) that no part of such expenditures or costs has
been paid out of either the proceeds insurance upon any part of the
Collateral not required to be deposited with the Collateral Agent
under the Security Documents or any award for the proceeds from any of
the Collateral being taken not required to be deposited with the
Collateral Agent under the Security Documents, as the case may be;
(D) that there is no outstanding indebtedness, other
than costs for which payment is being requested, known to the Company,
after due inquiry, for the purchase price or construction of such New
Collateral Assets, which if unpaid, might become the basis of a
vendor's, mechanics', laborers', materialmen's, statutory or other
similar Lien upon any of such New Collateral Assets, which Lien might,
in the opinions of the signers of such certificate, materially impair
the security afforded by such repairs, rebuildings or replacement;
(E) that the property is a New Collateral Asset for
which such application may be properly made under Section 4.08 and
such New Collateral Asset is necessary or desirable in the conduct of
the Company's or such Restricted Subsidiary's business;
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(F) that the Company has title to such New Collateral
Assets;
(G) that no Notice of Actionable Default is
outstanding;
(H) that no Event of Default shall have occurred and
be continuing; and
(I) that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with.
(ii) An Opinion of Counsel substantially stating:
(A) that the instruments that have been or are
therewith delivered to the Trustee conform to the requirements of this
Indenture and that, upon the basis of such Company request and the
accompanying documents specified in this Section 13.03(b), all
conditions precedent herein provided for relating to such withdrawal
and payment have been complied with, and the Trust Monies whose
withdrawal is then requested may be lawfully paid over under this
Section 13.03(b); and
(B) that all the Company's or such Restricted
Subsidiary's right, title and interest in and to said New Collateral
Assets are then subject to the Lien of the Security Documents (which
shall be first priority perfected Lien unless otherwise contemplated
by the Security Documents).
Upon compliance with the foregoing provisions of this Section
13.03(b), the Trustee shall direct the Collateral Agent upon receipt of the
foregoing Officer's Certificate to pay to the Company or the Restricted
Subsidiary which owned the Collateral an amount of funds on deposit in the Notes
Collateral Account of the character aforesaid equal to the amount of the
expenditures or costs stated in the Officer's Certificate required by Section
13.03(b)(i)(A), or the fair value to the Company or such Restricted Subsidiary
of such New Collateral Assets stated in such Officer's Certificate, whichever is
less.
(c) Notwithstanding anything to the contrary in this Section, no funds
may be withdrawn and paid to the Company from and after any Major Collateral
Disposition.
SECTION 13.04 BUSINESS INTERRUPTION INSURANCE. So long as no Notice of
Actionable Default is outstanding, the Company may use the proceeds of business
interruption insurance associated with any event or Involuntary Loss that is not
a Major Collateral Disposition provided that such insurance proceeds are used in
the ordinary course of the Company's business. The fair value of such business
interruption insurance so used shall not be considered in determining whether
the aggregate fair value of Collateral released from the Lien of the Security
Documents in any calendar year exceeds the 10% threshold specified in TIA
Section 314 (d). The Trustee need not consent to any such release but shall
confirm any such release of proceeds upon receipt by the Trustee of an Officer's
Certificate stating (i) the event which gave rise to the receipt of proceeds of
such business interruption insurance was not a Major Collateral Disposition and
(ii) there is no Notice of Actionable Default outstanding.
Any releases of Collateral made in strict compliance with the
provisions of this Section 13.04 shall be deemed not to impair the Liens created
by this Indenture the Collateral Agency Agreement and the Security Documents in
contravention of the provisions of this Indenture.
Notwithstanding anything to the contrary in this Section, no funds may
be withdrawn and paid to the Company from and after any Major Collateral
Disposition.
SECTION 13.05 POWERS EXERCISABLE NOTWITHSTANDING EVENT OF DEFAULT. In
case a Default or Event of Default shall have occurred and shall be continuing,
the Company may do any of the things enumerated in Sections 13.02, 13.03 and
13.04, if the Trustee in its discretion, or the Holders of 66 2/3% in aggregate
principal amount of the Notes outstanding, by appropriate action of such
Holders, shall consent to such action, in which event any certificate filed
under any of such Sections shall omit the statement to the effect that no Event
of Default has
73
occurred and is continuing; PROVIDED that, without the consent of the Trustee,
no consent pursuant to this Section shall deprive the Trustee of its rights
under paragraph FIRST of Section 6.10. This Section 13.05 shall not apply,
however, during the continuance of an Event of Default of the type specified in
Section 6.01(h) with respect to the Notes.
SECTION 13.06 POWERS EXERCISABLE BY TRUSTEE OR RECEIVER. In case the
Collateral (other than any cash, Temporary Cash Investments, securities and
other personal property held by, or required to be deposited or pledged with,
the Collateral Agent hereunder or under the Collateral Agency Agreement
(including all amounts on deposit in the Notes Collateral Account) or under the
other Security Documents or with the trustee, mortgagee or other holder a prior
Permitted Lien) shall be in the possession of a receiver or trustee lawfully
appointed, the powers hereinbefore in this Article 13 conferred upon the Company
with respect to the withdrawal or application of Trust Monies may be exercised
by such receiver or trustee, in which case a certificate signed by such receiver
or trustee shall be deemed the equivalent of any Officer's Certificate required
by this Article 13.
SECTION 13.07 DISPOSITION OF NOTES RETIRED. All Notes received by the
Trustee and for whose purchase Trust Monies are applied under this Article 13,
may, but shall not be required to, be promptly canceled and disposed of by the
Trustee in accordance with its customary procedures unless the Trustee shall be
otherwise directed by the Company or the Issuer; PROVIDED that the Trustee shall
not be required to destroy any Notes. Upon such disposition of any Notes, the
Trustee shall issue a certificate of disposition to the Company and the Issuer.
SECTION 13.08 INVESTMENT OF TRUST MONIES
. All or any part of any Trust Monies held by the Collateral Agent
shall from time to time be invested or reinvested as set forth in the Collateral
Agency Agreement. Unless an Event of Default occurs and is continuing, or so
long as any Notice of Actionable Default remains outstanding and unrescinded,
any interest on cash or such Temporary Cash Investments (in excess of any
accrued interest paid at the time of purchase) which may be received by the
Collateral Agent with respect to the Notes Collateral Account shall be forthwith
paid to the Company. The Trustee shall not be liable or responsible for any loss
resulting from such investments or sales.
Notwithstanding anything to the contrary in this Section, no funds may
be withdrawn and paid to the Company from and after any Major Collateral
Disposition.
ARTICLE 14
EXCHANGE
SECTION 14.01 EXCHANGE. Upon any failure of the Issuer to redeem the
Notes at their Stated Maturity, the Issuer and the Company will each have the
right, at its option, to exchange any portion of the principal amount of the
Notes that is $1.00 or an integral multiple thereof at any time thereafter.
SECTION 14.02 EXERCISE OF EXCHANGE. Upon delivery of notice from the
Issuer that it shall redeem the Notes pursuant to Section 14.01, each of the
Holders of the Note to be exchanged shall surrender such Note to the Issuer at
any time during usual business hours at its office or agency maintained for the
purpose as provided in this Indenture, accompanied by a fully executed written
notice, in substantially the form set forth on the reverse of the Note, that the
Holder is exchanging its Notes pursuant to this Article 14.
Such notice of exchange shall also state the name or names (with
address) in which the certificate or certificates for Exchange Shares shall be
issued. Notes surrendered for exchange shall (if reasonably required by the
Issuer or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Issuer duly
executed by, the Holder or his attorney duly authorized in writing, with
appropriate signature guarantee. As promptly as practicable after the receipt of
such notice and the surrender of such Note as aforesaid, the Issuer shall,
subject to the provisions of Section 14.08 hereof, issue and deliver at such
office or agency to such Holder, or on his written order, a certificate or
certificates for the number of full shares of Exchange Shares issuable on such
exchange of Notes in accordance with the provisions of this Article 14 and any
cash, as provided in Section 14.03 hereof.
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Such exchange shall be deemed to have been effected immediately prior
to the close of business on the date (herein called the "Date of Exchange") on
which such Note shall have been surrendered as aforesaid, and the person or
persons in whose name or names any certificate or certificates for Exchange
Shares shall be issuable upon such exchange shall be deemed to have become on
the Date of Exchange the holder or holders of record of the shares represented
thereby; PROVIDED, HOWEVER, that any such surrender on any date when the stock
transfer books of the Company shall be closed shall cause the person or persons
in whose name or names the certificate or certificates for such shares are to be
issued to be deemed to have become the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open but such exchange shall nevertheless be at the
Exchange Price in effect at the close of business on the date when such Note
shall have been so surrendered with the exchange notice. Except as otherwise
expressly provided in this Indenture, no payment or adjustment shall be made for
interest accrued on any Note (or portion thereof) exchanged or for dividends or
distributions on any Exchange Share issued upon exchange of any Note.
The exchange right shall terminate at the Date of Exchange.
SECTION 14.03 CASH PAYMENT FOR UNPAID INTEREST; FRACTIONAL INTERESTS
.
(a) In the event any Note has been exchanged into Exchange Shares
after any interest payment record date, but on or before the next interest
payment date, interest shall be payable on the interest payment date
notwithstanding the exchange, and the interest shall be paid to the Holder of
the Note who was a Holder on the applicable record date. Notes submitted for
exchange after any record date but before the next interest payment date (other
than Notes called for redemption or delivered for repurchase during such period)
must include payment of an amount equal to the interest payable on the interest
payment date on the principal amount of Notes being surrendered for exchange. As
a result of the foregoing provisions, Holders who surrender Notes for exchange
on a date that is not an interest payment date shall not receive any interest
for the period from the interest payment date next preceding the date of
exchange to the date of exchange or for any later period. A Holder shall not be
required to make that payment if it is exchanging a Note, or a portion thereof,
that the Issuer has called for redemption, or that it is entitled to require the
Issuer to repurchase, if the exchange right would terminate because of the
redemption or repurchase between such record date and the applicable interest
payment date.
(b) The Company shall not issue any fractional shares of its common
stock upon exchange. Instead, the Company shall pay holders who exchange their
Notes an appropriate amount in cash based on the Exchange Price, as adjusted, of
the common stock at the close of business on the Business Day immediately prior
to the day of exchange (subject to a minimum of US$10.00).
SECTION 14.04 EXCHANGE PRICE. The exchange rate is equal to 0.75
Exchange Shares per $1.00 principal amount at maturity of Notes, determined as
provided in Section 14.05 below, which is equivalent to an initial exchange
price of US$1.33 per Exchange Share (the "Exchange Price"); PROVIDED THAT, if
the aggregate principal amount of Notes to be exchanged at their Stated Maturity
exceeds US$40.0 million, the Exchange Price shall be adjusted to equal the price
determined by dividing 1 by (x) the product of the total number of shares of
common stock of the Company outstanding immediately prior to such exchange and
0.66667, divided by (y) the aggregate principal amount of Notes to be exchanged.
SECTION 14.05 ADJUSTMENT OF EXCHANGE PRICE. The Exchange Price shall
be subject to adjustment following the issuance of the Notes upon the following
events:
(a) In case there shall be made or paid a dividend or made a
distribution in shares of common stock on any class of Capital Stock of the
Company, the Exchange Price in effect immediately following the record date
fixed for the determination of shareholders entitled to receive such dividend or
other distribution shall be reduced by multiplying such Exchange Price by a
fraction of which the numerator shall be the number of shares of common stock
outstanding at the close of business on such date and the denominator shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution. An adjustment made pursuant to this
subsection (a) shall become effective immediately, except as provided in
subsection (i) and (j) below, after such record date.
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(b) In case the Company shall (1) subdivide or reclassify its
outstanding shares of common stock into a greater number of shares or (2)
combine or reclassify its outstanding shares of common stock into a smaller
number of shares, the Exchange Price in effect immediately following the
effectiveness of such action shall be adjusted by multiplying such Exchange
Price by a fraction of which the numerator shall be the number of shares of
common stock outstanding immediately prior to such subdivision or combination
and the denominator shall be the number of shares outstanding immediately after
giving effect to such subdivision, combination or reclassification. An
adjustment made pursuant to this subsection (b) shall become effective
immediately, except as provided in subsection (i) and (j) below, after the
effective date of a subdivision, combination or reclassification.
(c) In case there shall be an issuance of rights, options or warrants
to all or substantially all holders of common stock entitling them to subscribe
for or purchase shares of common stock at a price per share less than the then
Fair Market Value per share of the common stock on the record date fixed for
determination of the shareholders entitled to receive such rights, option or
warrants, the Exchange Price in effect immediately following such record date
shall be adjusted to a price, computed to the nearest cent, so that the same
shall equal the price determined by multiplying:
(i) such Exchange Price by a fraction, of which
(ii) the numerator shall be (A) the number of shares of common
stock outstanding on such record date plus (B) the number of shares which
the aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such Fair Market Value
(determined by multiplying such total number of shares by the exercise
price of such rights, options or warrants and dividing the product so
obtained by such Fair Market Value), and of which
(iii) the denominator shall be (A) the number of shares of
common stock outstanding on such record date plus (B) the number of
additional shares of common stock which are so offered for subscription or
purchase.
Such adjustment shall become effective immediately, except as provided
in subsection (i) and (j) below, after the record date for the determination of
holders entitled to receive such rights, options or warrants; PROVIDED, HOWEVER,
that if any such rights, options or warrants issued by the Company as described
in this subsection (c) are only exercisable upon the occurrence of certain
triggering events, then the Exchange Price will not be adjusted as provided in
this subsection (c) until such triggering events occur. Upon the expiration or
termination of any rights, options or warrants without the exercise of such
rights, options or warrants, the Exchange Price then in effect shall be adjusted
immediately to the Exchange Price which would have been in effect at the time of
such expiration or termination had such rights, options or warrants, to the
extent outstanding immediately prior to such expiration or termination, never
been issued.
(d) In case there shall be a distribution to all or substantially all
holders of common stock, of any assets, evidences of indebtedness, cash or
securities (other than (x) dividends or distributions exclusively in cash, (y)
any dividend or distribution for which an adjustment is required to be made in
accordance with subsection (a) or (c) above and in mergers and consolidations to
which Section 14.06 applies, or (z) any distribution of rights or warrants
subject to subsection (1) below or any distribution in connection with a
liquidation, dissolution or winding up of the Company) then in each such case
the Exchange Price in effect immediately following the record date fixed for the
determination of the shareholders entitled to such distribution shall be
adjusted so that the same shall equal the price determined by multiplying such
Exchange Price by a fraction of which the numerator shall be the then Fair
Market Value per share of the common stock on such record date less the then
fair market value (as reasonably determined in good faith by the Board of
Directors of the Company) of the portion of the assets so distributed applicable
to one share of common stock, and of which the denominator shall be such Fair
Market Value per share of the common stock. Such adjustment shall become
effective immediately, except as provided in subsection (i) and (j) below, after
the record date for the determination of shareholders entitled to receive such
distribution.
(e) Rights or warrants distributed by the Company to all holders of
its shares of common stock entitling them to subscribe for or purchase shares of
the Company's Capital Stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
("TRIGGER EVENT"), (i) are deemed to be transferred with such shares of common
stock, (ii) are not exercisable and (iii) are also issued in
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respect of future issuances of shares of common stock shall be deemed not to
have been distributed for purposes of Section 14.05(c) (and no adjustment to the
Exchange Price under Section 14.05(c) will be required) until the occurrence of
the earliest Trigger Event. If such right or warrant is subject to subsequent
events, upon the occurrence of which such right or warrant shall become
exercisable to purchase different distributed assets, evidences of indebtedness
or other assets, or entitle the holder to purchase a different number or amount
of the foregoing or to purchase any of the foregoing at a different purchase
price, then the occurrence of each such event shall be deemed to be the date of
issuance and record date with respect to a new right or warrant (and a
termination or expiration of the existing right or warrant without exercise by
the holder thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto, that resulted in
an adjustment to the Exchange Price under Section 14.05(c).
(f) In addition to the foregoing adjustments in subsections (a), (b),
(c) and (d) above, the Company, from time to time and to the extent permitted by
law, may reduce the Exchange Price by any amount for at least 20 Business Days,
if the Board of Directors has made a determination, which determination shall be
conclusive, that such reduction would be in the best interests of the Company.
The Company shall give notice to the Trustee and cause notice of such reduction
to be mailed to each Holder of Notes at such Holder's address as the same
appears on the registry books of the Registrar, at least 15 days prior to the
date on which such reduction commences. The Company may, at its option, also
make such reductions in the Exchange Price in addition to those set forth above,
as the Board of Directors deems advisable to avoid or diminish any income tax to
holders of shares of common stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such for United
States Federal income tax purposes.
(g) In any case in which this Section 14.05 shall require that an
adjustment be made immediately following a record date, the Company may elect to
defer the effectiveness of such adjustment (but in no event until a date later
than the effective time of the event giving rise to such adjustment), in which
case the Company shall, with respect to any Note exchanged after such record
date and on and before such adjustment shall have become effective (i) defer
paying any Cash payment pursuant to Section 14.03 hereof or issuing to the
Holder of such Note the number of shares of common stock and other capital stock
of the Company (or other assets or securities) issuable upon such exchange in
excess of the number of shares of common stock and other Capital Stock of the
Company issuable thereupon only on the basis of the Exchange Price prior to
adjustment, and (ii) not later than five Business Days after such adjustment
shall have become effective, pay to such Holder the appropriate Cash payment
pursuant to Section 14.03 hereof and issue to such Holder the additional shares
of common stock and other Capital Stock of the Company issuable on such
exchange. Notwithstanding the foregoing, no adjustment of the Exchange Price
shall be made if the event giving rise to such adjustment does not occur.
(h) No adjustment in the Exchange Price shall be required unless such
adjustment would require an increase or decrease of at least 1.0% of the
Exchange Price; PROVIDED that any adjustments which by reason of this subsection
(i) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Article 14 shall be
made to the nearest cent or to the nearest one-hundredth of a share, as the case
may be. In no event shall the Exchange Price be less than the par value of a
share of the Company's common stock.
(i) Whenever the Exchange Price is adjusted as herein provided, the
Company shall promptly (i) file with the Trustee and each exchange agent an
Officers' Certificate setting forth the Exchange Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment and
showing in reasonable detail the facts upon which such adjustment is based,
which certificate shall be conclusive evidence of the correctness of such
adjustment, and (ii) mail or cause to be mailed a notice of such adjustment to
each Holder of Notes at such Holder's address as the same appears on the
registry books of the Registrar. Unless and until a Trust Officer has received
an Officers' Certificate setting forth an adjustment of the Exchange Price, the
Trustee may assume that no such adjustment has been made and that the last
Exchange Price for which the Trustee has received an Officers' Certificate is
the current Exchange Price. Neither the Trustee nor any exchange agent shall be
under any duty or responsibility with respect to any such Officer's Certificate
or the information and calculation contained therein, except to exhibit the same
to any Holder deserving inspection thereof, at its office during normal business
hours.
77
(j) In the event that the Company distributes rights or warrants
(other than those referred to in subsection (c) above) pro rata to holders of
common stock, so long as any such rights or warrants have not expired or been
redeemed by the Company, instead of making an adjustment in the Exchange Price,
the Company may make proper provision so that the Holder of any Note surrendered
for exchange shall be entitled to receive upon such exchange, in addition to the
Exchange Shares, a number of rights or warrants to be determined as follows: (i)
if such exchange occurs on or prior to the date for the distribution to the
holders of rights or warrants of separate certificates evidencing such rights or
warrants (the "DISTRIBUTION DATE"), the same number of rights or warrants to
which a holder of a number of shares of common stock equal to the number of
Exchange Shares is entitled at the time of such exchange in accordance with the
terms and provisions of and applicable to the rights or warrants, and (ii) if
such exchange occurs after such Distribution Date, the same number of rights or
warrants to which a holder of the number of shares of common stock into which
the principal amount of such Note so exchanged was exchangeable immediately
prior to such Distribution Date would have been entitled on such Distribution
Date in accordance with the terms and provisions of and applicable to the rights
or warrants.
No adjustment need be made for any of the foregoing transactions if
Holders of the Notes are to participate in the transaction on a basis and with
notice that the Board of Directors of the Company has determined to be fair and
appropriate in light of the basis on which other holders of common stock of the
Company participate in the transaction. In addition, no adjustments will be
required upon the adoption of a stockholder rights plan, and the issuance of
rights thereunder.
SECTION 14.06 CONTINUATION OF EXCHANGE PRIVILEGE IN CASE OF
RECLASSIFICATION, CHANGE, MERGER, CONSOLIDATION OR SALE OF ASSETS. If there
shall occur: (a) any reclassification or change of outstanding shares of common
stock issuable upon exchange of the Notes (other than a change in par value, or
from par value to no par value, or from no par value, to par value, or as a
result of a subdivision or combination), (b) any consolidation or merger of the
Company with or into any other Person, or the consolidation or merger of any
other Person with or into the Company (other than a merger which does not result
in any reclassification, change, conversion, exchange or cancellation of
outstanding shares of common stock) or (c) any sale, transfer or conveyance of
all or substantially all of the assets of the Company (computed on a
consolidated basis), then the Company, or such successor or purchasing entity,
as the case may be, shall, as a condition precedent to such reclassification,
change, consolidation, merger, sale or conveyance, execute and deliver to the
Trustee a supplemental indenture providing that the Holder of each Note then
outstanding shall have the right to exchange such Note only into the kind and
amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, consolidation, merger, sale,
transfer or conveyance by a holder of the number of shares of common stock
issuable upon exchange of such Note immediately prior to such reclassification,
change, consolidation, merger, sale, transfer or conveyance assuming such holder
of common stock of the Company failed to exercise his rights of an election, if
any, as to the kind or amount of securities, cash and other property receivable
upon such reclassification, change, consolidation, merger, sale, transfer or
conveyance (PROVIDED that if the kind or amount of securities, cash, and other
property receivable upon such reclassification, change, consolidation, merger,
sale, transfer or conveyance is not the same for each share of common stock of
the Company held immediately prior to such reclassification, change,
consolidation, merger, sale, transfer or conveyance in respect of which such
rights of election shall not have been exercised ("non-electing share"), then
for the purpose of this Section 14.06 the kind and amount of securities, cash
and other property receivable upon such reclassification, change, consolidation,
merger, sale, transfer or conveyance by each non-electing share shall be deemed
to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 14. If, in the case of any such consolidation,
merger, sale or conveyance, the stock or other securities and property
(including cash) receivable thereupon by a holder of shares of common stock
includes shares of stock or other securities and property (including cash) of a
corporation other than the successor or purchasing corporation, as the case may
be, in such consolidation, merger, sale or conveyance, then such supplemental
indenture shall also be executed by such other corporation and shall contain
such additional provisions to protect the interests of the Holders of the
securities as the Board of Directors of the Company shall reasonably consider
necessary by reason of the foregoing. The provisions of this Section 14.06 shall
similarly apply to successive consolidations, mergers, sales or conveyances.
Notice of the execution of each such supplemental indenture shall be mailed to
each Holder of Notes at such Holder's address as the same appears on the
registry books of the Registrar. Neither the Trustee nor any exchange agent
shall be under any responsibility to determine the correctness of any provisions
contained in any such supplemental indenture relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Holders of Notes upon the
78
exchange of their Notes after any such reclassification, change, consolidation,
merger, sale or conveyance or to any adjustment to be made with respect thereto,
but, subject to the provisions of Article 7 hereof, may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected in
relying upon, the Officers' Certificate (which the Company shall be obligated to
file with the Trustee prior to the execution of any such supplemental indenture)
with respect thereto.
SECTION 14.07 NOTICE OF CERTAIN EVENTS
. In case:
(a) the Company shall declare a dividend (or any other distribution)
payable to the holders of common stock (other than cash dividends);
(b) the Company shall authorize the granting to all or substantially
all the holders of common stock of rights, warrants or options to subscribe for
or purchase any shares of stock of any class or of any other rights;
(c) the Company shall authorize any reclassification or change of the
common stock (including a subdivision or combination of its outstanding shares
of common stock), or any consolidation or merger to which the Company is a party
and for which approval of any shareholders of the Company is required, or the
sale or conveyance of all or substantially all the property or business of the
Company; or
(d) there shall be proposed any voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, the Company shall cause to be filed at the office or agency maintained for
the purpose of exchange of the Notes as provided in Section 14.02 hereof, and
shall cause to be mailed to each Holder of Notes, at such Holder's address as it
shall appear on the registry books of the Registrar, at least 10 days before the
date hereinafter specified (or the earlier of the dates hereinafter specified,
in the event that more than one date is specified), a notice stating the date on
which (1) a record is expected to be taken for the purpose of such dividend,
distribution, rights, warrants or options, or if a record is not to be taken,
the date as of which the holders of common stock of record to be entitled to
such dividend, distribution, rights, warrants or options are to be determined,
or (2) such reclassification, change, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding-up is expected to become effective and the
date, if any is to be fixed, as of which it is expected that holders of common
stock of record shall be entitled to exchange their shares of common stock for
securities or other property deliverable upon such reclassification, change,
consolidation, merger, sale, conveyance, dissolution, liquidation or winding-up.
SECTION 14.08 TAXES ON EXCHANGE. The Company shall pay any and all
documentary, stamp or similar taxes payable to the United States of America
[, the Republic of Indonesia or The Netherlands] or any political subdivision or
taxing authority thereof or therein in respect of the issue or delivery of
shares of common stock on exchange of Notes pursuant thereto; PROVIDED, HOWEVER,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of common
stock in a name other than that of the Holder of the Notes to be exchanged and
no such issue or delivery shall be made unless and until the person requesting
such issue or delivery has paid to the Company the amount of any such tax or has
established, to the satisfaction of the Company, that such tax has been paid.
The Company extends no protection with respect to any other taxes imposed in
connection with the exchange of Notes.
SECTION 14.09 COMPANY TO PROVIDE STOCK. The Company shall reserve,
free from preemptive rights, out of its authorized but unissued shares,
sufficient shares to provide for the exchange of the Notes from time to time as
such Notes are presented for exchange, PROVIDED that nothing contained in this
Section 14.09 shall be construed to preclude the Company from satisfying its
obligations in respect of the exchange of Notes by delivery of repurchased
shares of common stock which are held in the treasury of the Company.
If any shares of common stock to be reserved for the purpose of
exchange of Notes hereunder require registration with or approval of any
governmental authority under any applicable law before such shares may
79
be validly issued or delivered upon exchange, then the Company covenants that it
will in good faith and as expeditiously as possible use its reasonable efforts
to secure such registration or approval, as the case may be, PROVIDED, HOWEVER,
that nothing in this Section 14.09 shall be deemed to limit in any way the
obligations of the Company provided in this Article 14.
Before taking any action which would cause an adjustment reducing the
Exchange Price below the then par value, if any, of the common stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of common stock at such adjusted Exchange Price.
The Company covenants that all shares of common stock which may be
issued upon exchange of Notes will upon issue be fully paid and non- assessable
by the Company and free of preemptive rights.
SECTION 14.10 DISCLAIMER OF RESPONSIBILITY FOR CERTAIN MATTERS.
Neither the Trustee nor any agent of the Trustee shall at any time be under any
duty or responsibility to any Holder of Notes to determine whether any facts
exist which may require any adjustment of the Exchange Price, or with respect to
the Officers' Certificate referred to in Section 14.05 hereof, or with respect
to the nature or extent of any such adjustment when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same. Neither the Trustee nor any agent of the Trustee
shall be accountable with respect to the validity or value (or the kind or
amount) of any shares of common stock, or of any securities or property
(including cash), which may at any time be issued or delivered upon the exchange
of any Note; and neither the Trustee nor any exchange agent makes any
representation with respect thereto. Neither the Trustee nor any agent of the
Trustee shall be responsible for any failure of the Company to issue, register
the transfer of or deliver any shares of common stock or stock certificates or
other securities or property (including cash) upon the surrender of any Note for
the purpose of exchange or, subject to Article 8 hereof, to comply with any of
the covenants of the Company contained in this Article 14.
SECTION 14.11 RETURN OF FUNDS DEPOSITED FOR REDEMPTION OF EXCHANGED
NOTES. Any funds which at any time shall have been deposited by the Issuer or on
its behalf with the Trustee or any other Paying Agent for the purpose of paying
the principal of and interest on any of the Notes and which shall not be
required for such purposes because of the exchange of such Notes, as provided in
this Article 14, shall promptly after such exchange be repaid to the Company by
the Trustee or such other Paying Agent in accordance with the Issuer's written
instructions.
ARTICLE 15
MISCELLANEOUS
SECTION 15.01 TRUST INDENTURE ACT CONTROLS. If and to the extent that
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, Sections 310 to 318, inclusive, of the TIA, such
imposed duties or incorporated provision shall control.
SECTION 15.02 NOTICES. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service or sent by facsimile, telex, graphic scanning or other telegraphic
communications equipment of the sending party (or with respect with
communications to Noteholders, mailed) to the address set forth below. Notices
must purport to be signed by a duly authorized representative of the party
giving notice. All notices shall be in the English language.
if to the Issuer:
Polytama International Finance B.V.
c/o HB Management Europe B.V.
World Trade Center Amsterdam Airport
Schiphol Xxxxxxxxx 000
00
0000 XX Xxxxxxxxx,
Xxx Xxxxxxxxxxx
Tel. No.: 00-00-000-0000
Fax. No.: 00-00-000-0000
Attention of:
HB Management Europe B.V.
Managing Director,
with a copy to the Company.
if to the Company:
P.T. Polytama Propindo
Xxx Xxxxx 0 Xxxxxxxx, 00xx Xxxxx
Xx. Xxxx. Xxxxxxxx Xxx. 00-00
Xxxxxxx, Xxxxxxxxx 10220
Tel. No. 00-00-000-0000
Fax. No. 00-00-000-0000
Attention of:
Xxxxxxx X. Xxxxxxxxx
Finance Director
with a copy to the Issuer.
if to the Trustee:
The Bank of New York
Corporate Trust Administration
Floor 21 West
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax. No. 0-000-000-0000/5803
Attention of: Global Trust Services
with copies to:
The Bank of New York
Xxx Xxxxxxx Xxxxxx
#00-00 Xxxxxxxx Xxxxx
Xxxxxxxxx 000000
Fax. No. 00-00000000
Attention of: Global Trust Services
81
The Issuer, the Company or the Trustee by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
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 delivered by hand or overnight courier service
sent by facsimile, telex, graphic scanning or other telegraphic communications
equipment of the sender, or with respect to communications mailed to
Noteholders, five business days after mailing, in each case delivered or sent
(properly addressed) to such party as provided in this Section 15.02 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 15.02.
All notices to Holders shall be published in English in a leading
English language newspaper, such as the Wall Street Journal, being published on
each day in morning editions, whether or not it shall be published on Saturday,
Sunday or holiday editions. Notices shall be deemed to have been given on the
date of publication as aforesaid or if published on different dates, on the date
of the first such publication. In addition, notices shall be mailed to the
Holder at Holder's address as it appears on the registration books of the
Registrar.
SECTION 15.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Notes. The Issuer, the Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
SECTION 15.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by the Issuer or the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Issuer or the
Company, as the case may be, shall furnish to the Trustee:
(1) an Officer's Certificate in form satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel in form satisfactory to the
Trustee stating that, in the opinion Of such counsel, all such conditions
precedent have been complied with.
SECTION 15.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 15.06 ENGLISH LANGUAGE. All communications to the Trustee
hereunder all requests the Trustee to take any action and Officer's Certificates
and Opinions of Counsel and reports, financial statements financial information,
certificates, opinions, records, registers, agreements with Registrars, Paying
Agents, co-registrars and information required by the TIA or hereunder shall be
in the English language. The Company shall furnish the Trustee with certified
and sworn English translations of any documents provided pursuant to the terms
hereof in conjunction with any request that the Trustee take any action
hereunder and such other documents as the Trustee shall reasonably request in
order to perform its duties hereunder.
82
SECTION 15.07 RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 15.08 MEETINGS OF HOLDERS. A meeting of Holders to consider
matters affecting such Holders' interests, including the approval of amendments
and modifications as provided for under Section 9.02, may be convened by Holders
holding not less than 10% of the principal amount of the outstanding Notes. The
quorum at such meeting shall be two or more persons entitled to vote a majority
in principal amount of the outstanding Notes, or at an adjourned meeting, two or
more persons entitled to vote 50% in principal amount of the outstanding Notes.
SECTION 15.09 LEGAL HOLIDAYS. A "LEGAL HOLIDAY" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 15.10 GOVERNING LAW
. THIS INDENTURE, THE NOTES AND THE GUARANTEE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 15.11 WAIVER OF INDEMNITY; SUBMISSION TO JURISDICTION AND
APPOINTMENT OF AGENT FOR SERVICE OF PROCESS
(a) To the extent that the Issuer or the Company or any of their
respective revenues, assets or properties has or hereafter may acquire any
immunity from jurisdiction of any court or from attachment in aid of execution,
execution, or any other legal process for enforcement of judgment in any action
or proceeding in any manner arising out of this Indenture, the Notes, the
Guarantee, the Collateral Agency Agreement or the Security Documents or the
transactions contemplated hereby or thereby, each of the Issuer and the Company
hereby irrevocably agrees not to claim, and irrevocably waives (to the extent it
lawfully may be so), any such immunity, and any defense based on such immunity,
in respect of its obligations arising out of this Indenture, the Notes, the
Guarantee, the Collateral Agency Agreement and the Security Documents and the
transactions contemplated here and thereby.
(b) Each of the Issuer and the Company agrees that any legal suit,
action or proceeding brought by the Trustee or any Holder arising out of or
based upon this Indenture the Notes or the Guarantee (including the Collateral
Agency Agreement or the Security Documents) may be instituted in any state or
Federal court located in New York City, waives any claim that such proceeding
has been brought in an inconvenient forum, irrevocably submits to and accepts
the nonexclusive jurisdiction of such courts in any such proceeding and
irrevocably hereby appoints CT Corporation System, 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, as its authorized agent (the "AUTHORIZED AGENT") upon which process
may be served in any such action which may be instituted any such court. Each of
the Issuer and the Company agrees to take any and all action, including the
filing of any and all documents and instruments and paying all such fees that
may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent and written notice of
such service to the Issuer or the Company (mailed or delivered to the Issuer or
the Company at its address set forth above) shall be deemed effective service of
process upon the Issuer or the Company, as the case may be. Notwithstanding the
foregoing, any action based on this Indenture, the Securities or the
transactions contemplated hereby or thereby may be instituted by the Trustee or
any Holder in any competent court, including courts in The Netherlands and
Indonesia.
SECTION 15.12 INDEMNIFICATION FOR JUDGMENT CURRENCY FLUCTUATIONS. The
obligations of the Issuer and the Company to any Holder under this Indenture or
the Notes shall, notwithstanding any judgment in a currency (the "JUDGMENT
CURRENCY") other than U.S. dollars (the "AGREEMENT CURRENCY"), be discharged
only to the extent that on the day following receipt by such Holder or the
Trustee, as the case may be, of any amount in the Judgment Currency, such Holder
may in accordance with normal banking procedures purchase the Agreement Currency
with the Judgment Currency. If the amount of the Agreement Currency so purchased
is less than the
83
amount originally to be paid to such Holder or the Trustee, as the case may be,
in the Agreement Currency, each of the Issuer and the Company agrees, as a
separate obligation and notwithstanding such judgment, to pay the difference,
and if the amount of the Agreement Currency so purchased exceeds the amount
originally to be paid to such Holder or the Trustee, as the case may be, such
Holder or the Trustee, as the case may be, agrees to pay to or for the account
of the Issuer or the Company, as the case may be, such excess, PROVIDED that
such Holder or the Trustee, as the case may be, shall not have any obligation to
pay any such excess as long as a Default by the Issuer in its respective
obligations under the Securities or this Indenture, as the case may be, has
occurred and is continuing, in which case such excess may be applied by such
Holder to such obligations.
SECTION 15.13 NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Issuer or the Company shall not have
any liability for any obligations of the Issuer or the Company under the Notes,
the Guarantee or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Note, each
Noteholder shall waive and release all such liability. The waiver and release
shall be part of the consideration for the issue of the Notes and the Guarantee.
SECTION 15.14 SUCCESSORS. All agreements of each of the Issuer and the
Company in this Indenture, the Notes and the Guarantee shall bind any of its
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 15.15 MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 15.16 TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 15.17 TAX CONSIDERATIONS. It is the intention of the Issuer
and the Company that for U.S. Federal, state and local income tax purposes: (i)
neither the Holders nor the Trustee shall be at any time the owner of the
Collateral for U.S. Federal, state or local tax purposes and (ii) the trust
estate created hereby is intended solely to be a security arrangement and not a
trust and neither the Trustee nor the Holders shall file any returns, reports or
other documents or take any position inconsistent therewith for U.S. Federal,
state or local tax law purposes.
SECTION 15.18 SEVERABILITY. In case any provision in this Indenture,
in the Notes or in the Guarantee shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not, any
way, be affected or impaired thereby.
SECTION 15.19 ACTS OF HOLDERS
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor the Trustee, the Issuer and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The
84
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also b proved in any other
manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Notes shall be computed as of such record date;
PROVIDED that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after the record
date.
(Signatures on next page)
85
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
POLYTAMA INTERNATIONAL FINANCE
B.V., as Issuer,
By HB Management Europe B.V.
-------------------------
By
------------------
Authorized Signatory
By
------------------
Authorized Signatory
P.T. POLYTAMA PROPINDO, as
Guarantor,
By
--------------------------------
Name:
Title: Director
THE BANK OF NEW YORK, as
Trustee,
By
-------------------------
Name:
Title:
EXHIBIT
[FORM OF FACE OF NOTE DUE 2012]
No._____ $_____
CUSIP No.
6% Guaranteed Secured Exchangeable Note Due 2012
[Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
This Note is in global form within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. Unless and until it is exchanged in whole or in part
for Notes in certificated form, this Note may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor depository or a nominee of such
successor depository.](1)
POLYTAMA INTERNATIONAL FINANCE B.V., a closed company with limited
liability duly organized and existing under the laws of The Netherlands, with
its statutory seat in Rotterdam, The Netherlands, promises to pay to CEDE & CO.,
or registered assigns, the principal sum of US$______, and to pay interest
thereon.
Interest Payment Dates: June 15 and December 15 of each year,
commencing June 15, 2003.
Record Dates: June 1 and December 1.
----------
(1) To be included in the Global Security.
Additional provisions of this Note are set forth on the other side of
this Note.
Dated: , 2002
POLYTAMA INTERNATIONAL FINANCE
B.V.,
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one of the Notes referred to in the
within-mentioned Indenture.
By:
--------------------------------------
Authorized Signatory
(FORM OF REVERSE SIDE OF NOTE DUE 2012)
6% Guaranteed Secured Exchangeable Note Due 2012
1. INTEREST
POLYTAMA INTERNATIONAL FINANCE B.V., a closed company with limited
liability duly organized and existing under the laws of The Netherlands, with
its statutory seat in Rotterdam, The Netherlands (herein referred to as the
"Issuer," which term includes its successors and assigns under the Indenture
hereinafter referred to), for value received, hereby promises to pay interest
(as set forth in the Indenture, such term includes Additional Amounts) on the
principal amount of this Note at the rate per annum shown above. The Issuer will
pay interest semiannually on June 15 and December 15 of each year. Interest on
the Notes will accrue from the most recent date to which interest has been paid
or duly provided for or, if no interest has been paid or duly provided for, from
[ ], 2003. Interest on the Notes, including interest on overdue principal or
installments of interest, if any, shall be paid in cash or, at the option of the
Issuer, through the issuance of additional Notes, the principal amount of which
is equal to all or a portion of the interest then due, as determined by the
Issuer. Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Issuer shall pay interest on overdue principal at the rate
borne by this Note plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. METHOD OF PAYMENT
The Issuer will pay principal and interest on the Notes (except
defaulted interest) to the Persons who are registered holders of Notes at the
close of business on the June 1 or December 1 next preceding the interest
payment date even if Notes are cancelled after the record date and on or before
the interest payment date. The Issuer will pay principal and interest in money
of the United States of America that at the time of payment is legal tender for
payment of public and private debts. However, the Issuer may pay principal and
interest by check payable in such money. Payment on this Note will be made upon
surrender or presentation of this Note to a Paying Agent. However, at the option
of the Issuer, it may mail an interest check to a Holder's registered address.
3. PAYING AGENT AND REGISTRAR
Initially, the Corporate Trust Department of the Trustee, at Floor 21
West, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, will act as Paying Agent and
Registrar. In the event definitive Notes are issued under the Indenture, the
Issuer shall also maintain a Paying Agent in Luxembourg and registered holders
shall be entitled to receive payment through such Paying Agent. The Issuer may
appoint and change any Paying Agent or Registrar without notice.
4. INDENTURE, SECURITY AND GUARANTEE
The Issuer issued this Note under an Indenture dated as of December
[ ], 2002, among the Issuer, P.T. Polytama Propindo, an Indonesian
corporation (the "Company") and Trustee (the "Indenture"). The terms of this
Note include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture (the "Act"). Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. This Note is subject to all such terms of the Indenture, and the
registered holder of this Note is referred to the Indenture and the Act for a
statement of those terms those terms.
The Notes are an obligation of the Issuer limited to $72,250,000
aggregate principal amount (subject to Section 2.02 of the Indenture) and,
unless earlier redeemed under the circumstances described herein, will be paid
at maturity at 100% of the principal amount thereof.
This Note is irrevocably and unconditionally guaranteed by the Company, as set
forth in the Guarantee endorsed on this Note.
EACH HOLDER, BY ITS ACCEPTANCE OF A NOTE, (I) CONSENTS AND AGREES TO
THE TERMS OF THE COLLATERAL AGENCY AGREEMENT AND THE SECURITY DOCUMENTS AND
AUTHORIZES AND APPROVES THE TRUSTEE'S EXECUTION THEREOF AND (II) AGREES THAT
SUCH HOLDER IS BOUND BY THE TERMS THEREOF AND THAT SUCH HOLDER MAY NOT TAKE ANY
ACTION CONTRARY THERETO.
The Indenture imposes certain limitations on the Company and its
Restricted Subsidiaries (which includes the Issuer), including limitations on
the Incurrence of Indebtedness, Restricted Payments (including payment of
dividends and other distributions on and retirements of the Capital Stock of the
Company and its Restricted Subsidiaries, redemption of Subordinated Obligations
of the Company and the making of certain Investments), Liens and Pari Passu
Indebtedness, Sale/Leaseback Transactions, Restrictions on Distributions from
Restricted Subsidiaries, Transactions with Affiliates, the Company's Business,
Sales of non-Collateral Assets and Restricted Subsidiary Stock and Sales of
Collateral. In addition, the Indenture limits the ability of the Issuer to,
among other things, engage in any business activities other than those relating
to the Notes.
5. OPTIONAL REDEMPTION
(a) At any time after the Issue Date, the Notes will be subject to
redemption at the option of the Issuer, in whole or in part, upon not less than
30 nor more than 60 days' notice, at a redemption price equal to the principal
amount of Notes to be redeemed, plus accrued and unpaid interest thereon to the
date fixed for redemption.
(b) If as a result of any change in or amendment to the laws, treaties,
regulations or rulings of the Republic of Indonesia or The Netherlands (or of
any political subdivision or taxing authority in the Republic of Indonesia or
The Netherlands), or any change in official position regarding the application
or interpretation of such laws, treaties, regulations or rulings (including a
holding, judgment or order by a court of competent jurisdiction), which is
proposed and becomes effective on or after the date of the Indenture, in making
any payment due or to become due under any Note, the Indenture, or pursuant to
the Guarantee, (i) the Issuer is or would be required on the next succeeding
interest payment date to pay Additional Amounts, (ii) the Company is, or on the
next interest payment date would be, unable, for reasons outside its control, to
cause the Issuer to pay amounts due under the Notes, and with respect to any
amount due under the Guarantee or the Indenture, the Company is, or on the next
interest payment date would be, required to deduct or withhold (x) any tax of
The Netherlands (or any political subdivision or taxing authority thereof or
therein) or (y) any tax of the Republic of Indonesia (or any political
subdivision or taxing authority thereof or therein) that is imposed at a rate in
excess of 20% or (iii) with respect to any payment to the Issuer to enable the
Issuer to make any payment of principal of, or interest on, the Notes or the
Additional Amounts, the Company is, or on the next interest payment date would
be, required to deduct or withhold any tax of the Republic of Indonesia (or any
political subdivision or taxing authority thereof or therein) at a rate in
excess of 10% (calculated after giving effect to any reduction of the rate of
withholding tax available under any tax treaty between The Netherlands and the
Republic of Indonesia), the Notes may be redeemed at the option of the Issuer,
in whole but not in part, upon not less than 30 nor more than 60 days' notice
given as provided in the Indenture, at any time, at a redemption price equal to
the principal amount thereof, plus accrued and unpaid interest to the date fixed
for redemption; PROVIDED that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the Issuer or the
Company, as the case may be, would be obligated to make such withholding if a
payment in respect of any Note or the Guarantee were then due. The Issuer will
also pay to holders of the Notes on the redemption date any Additional Amounts
then due and which will become due as a result of the redemption or otherwise.
Prior to the publication of any notice of redemption in accordance
with the foregoing, the Issuer shall deliver to the Trustee an Officer's
Certificate stating that the Issuer is entitled to effect such redemption based
on an Opinion of Counsel or written advice of a qualified tax expert, such
counsel or tax expert being reasonably acceptable to the Trustee, that the
Issuer or the Company has or will become obligated to pay Additional Amounts or
withhold, as described in the preceding paragraph, as the case may be, as a
result of such change or amendment. Such notice, once delivered by the Issuer to
the Trustee, will be irrevocable.
6. MANDATORY REDEMPTION; MANDATORY REDEMPTION OF NOTES FROM EXCESS CASH FLOW
Beginning on the fourth anniversary of the Issue Date, and not later
than 180 days following the end of each fiscal year thereafter, the Issuer will
redeem the maximum principal amount of Notes that is an integral multiple of
$1.00 with 75% of the Excess Cash Flow of the Company from such fiscal year, at
a redemption price in cash equal to 100% of the principal amount of the Notes to
be redeemed, together with any accrued and unpaid interest, if any, thereon to
the date of redemption.
7. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each registered holder of Notes to be
redeemed at his registered address. If money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on the redemption date
is deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Notes called for redemption.
8. NOTE REPURCHASE
The Issuer may at any time purchase Notes by tender (available to all
Holders alike) or in the open market at any price. If the Issuer shall acquire
any Notes, such acquisition shall not operate as, or be deemed for any purpose
to be, a satisfaction of the indebtedness represented by such Notes unless and
until such Notes are delivered to the Trustee for cancellation and are cancelled
and retired by the Trustee.
9. CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder shall have the
right to require that the Issuer repurchase such Holder's Notes at a purchase
price in cash equal to 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of repurchase, (subject to the right of
holders of record on the relevant record date to receive interest on the
relevant interest payment date) plus any Additional Amounts then due or which
will become due as a result of the repurchase or otherwise, in accordance with
the terms of the Indenture.
10. ASSET AND COLLATERAL SALES
(a) MAJOR COLLATERAL DISPOSITIONS. Upon a Major Collateral Disposition, in
accordance with the terms of the Indenture, each Holder shall have the right to
require the Issuer to purchase such Holder's Notes at a purchase price in cash
equal to 100% of the principal amount thereof (or, in the case of a Major
Collateral Disposition resulting from an Involuntary Loss, 100% of the principal
amount thereof) plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of holders of record on the relevant record date
to receive interest on the relevant interest payment date) plus any Additional
Amounts then due or which will become due as a result of the repurchase or
otherwise.
(b) OTHER COLLATERAL SALES. The Issuer shall apply any Excess Collateral
Proceeds in accordance with the Mandatory Redemption provision.
(c) OTHER ASSET SALES. The Issuer shall apply any Excess Proceeds in
accordance with the Mandatory Redemption provision.
11. DENOMINATIONS; TRANSFER; EXCHANGE
The Notes are issued only in registered form without coupons in
denominations of $1.00 and whole multiples of $1.00. A registered holder may
transfer or exchange this Note in accordance with the Indenture. The Registrar
may require the registered holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture.
12. PERSONS DEEMED OWNERS
The registered Holder of this Note may be treated as the owner of it
for all purposes.
13. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Issuer at its request subject to any applicable abandoned property law
designating another Person. After such payment, Holders entitled to the money
must look only to the Issuer and not to the Trustee for payment.
14. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Issuer or the Company at any time
may terminate some or all of their obligations under the Notes or the Guarantee
and the Indenture if the party exercising such option deposits with the Trustee
money or U.S. Government Obligations for the payment of principal and interest
on the Notes to redemption or maturity, as the case may be.
15. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Notes, the Guarantee, the Collateral Agency Agreement and the
Security Documents may be amended with the written consent of the Holders of at
least a majority in principal amount outstanding of Notes and (ii) any default
under the Notes or the Indenture may be waived with the written consent of the
Holders of a majority in principal amount outstanding of the Notes. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Holder, the Company and the Trustee may amend the Indenture the Notes or the
Guarantee to, among other things, cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to further secure the Securities or add guarantees with respect to the
Securities, or to add additional covenants or surrender rights and powers
conferred on the Company or the Issuer, or to comply with any requirement of the
SEC in connection with qualifying the Indenture under the Act, or to make any
change that does not adversely affect the rights of any Holder.
16. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default with respect to the Securities
include (i) a default in the payment of interest or any Additional Amounts on
the Notes when due, continued for 30 days, (ii) a default in the payment of
principal of any Security when due at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or otherwise, (iii) any
Change of Control of the Company during certain time periods, (iv) the failure
by the Company or the Issuer to comply for 60 days after notice with its other
agreements contained in the Senior Indenture, (v) the failure by the Company or
the Issuer to comply with its obligations under Article 5 of the Indenture, (vi)
failure by the Company or the Issuer to comply with other covenants and
agreements in the
Indenture, in certain cases subject to notice and lapse of time, (vii)
Indebtedness of the Company, the Issuer or any Significant Subsidiary, other
than the Senior Notes is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default and the
total amount such Indebtedness unpaid or accelerated exceeds $5.0 million,
(viii) certain events of bankruptcy, insolvency or reorganization of the
Company, the Issuer or a Significant Subsidiary, (ix) certain judgments or
decrees for the payment of money in excess of $5.0 million, (x) the Guarantee
ceases to be in full force and effect (other than in accordance with the terms
of the Guarantee) or the Company denies or disaffirms its obligations under its
Guarantee or (xi) certain Liens with respect to the Collateral cease to have the
perfection and priority contemplated by the Security Documents.
Holders may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes
unless it receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in principal amount of the Notes may direct
the Trustee in its exercise of any trust or power with respect to the Notes. The
Trustee may withhold from Holders notice of any continuing Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in the interest of the Holders.
17. EXCHANGE
Upon the failure of the Issuer to redeem the Notes at their Stated
Maturity the Issuer will have the right, at its option, to exchange any portion
of the principal amount of the Notes that is $1.00 or an integral multiple
thereof at any time thereafter. The Exchange Price is equal to 0.75 Exchange
Shares per $1.00 principal amount at maturity of Notes; PROVIDED THAT, if the
aggregate principal amount of Notes to be exchanged at their Stated Maturity
exceeds $40 million, the Exchange Price shall be adjusted to equal a price
determined by dividing 1 by (x) the product of the total number of shares of
common stock of the Company outstanding immediately prior to such exchange and
0.66667, divided by (y) the aggregate principal amount of Notes to be exchanged.
The Exchange Prince shall be subject to adjustment upon certain
events, including: (i) the payment by the Company or dividends and other
distributions on its common stock in shares of its common stock, (ii)
subdivision, combinations, and reclassifications or the Company's common stock,
(iii) the issuance to all holders of common stock of the Company of rights,
options or warrants entitling them to subscribe for shares of its common stock
or securities convertible into, or exchangeable or exercisable for, its common
stock at a price which is less than the Fair Market Value per share thereof,
(iv) certain distributions to all holders of common stock of the Company of any
of the Company's assets, debt securities or other securities or any rights or
warrants to purchase such securities (excluding those rights and warrants
referred to in (iii)), (v) the issuance of share of the Company's common stock
for consideration per share less than the then Fair Market Value per share
thereof (excluding securities issue in transactions referred to in (i), (ii),
(iii), (iv) and (vi)), and (vi) the issuance of securities convertible into or
exchangeable for shares of the Company's common stock for a conversion or
exchange price plus consideration received upon issuance less than the then Fair
Market Value per share at the time of issuance of such convertible or
exchangeable security (excluding securities issued in transactions referred to
in (i), (ii), (iii) or (iv)).
Any Notes surrendered for exchange shall include a fully executed
exchange notice substantially in the form attached hereto as Exhibit I.
18. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Issuer, the Company or their Affiliates and may otherwise deal with the
Issuer, the Company or their Affiliates with the same rights it would have if it
were not Trustee.
19. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Issuer,
the Company or the Trustee shall not have any liability for any obligations of
the Issuer or the Company under the Notes, the Guarantee or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Note, each registered holder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Notes.
20. AUTHENTICATION
This Note shall not be valid or become obligatory for any purpose
until an authorized officer of the Trustee (or an authenticating agent) manually
signs the certificate of authentication on the other side of this Note.
21. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (= tenant in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
22. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Issuer has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to the registered holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
23. CHOICE OF LAW
THIS NOTE (INCLUDING THE GUARANTEE ENDORSED UPON IT) SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
The Issuer will furnish to any registered holder upon written request
and without charge to the registered holder a copy of the Indenture which has in
it the text of this Note.
Requests may be made to:
Polytama International Finance B.V.
c/oHB Management Europe B.V.
World Trade Center Amsterdam Airport
Xxxxxxxx Xxxxxxxxx 000
0000 XX Xxxxxxxxx,
Xxx Xxxxxxxxxxx
(011)(31)(00) 000-0000
GUARANTEE
FOR VALUE RECEIVED, P.T. POLYTAMA PROPINDO (herein referred to as the
"Company"), as principal obligor and not merely as surety, has, pursuant to the
Indenture, irrevocably and unconditionally guaranteed to the registered holder
of this Note upon which this notation of such Guarantee is endorsed that: (i)
principal of, premium, if any, and interest on this Note, will be promptly paid
in full when due, subject to any applicable grace period, whether on the stated
maturity, on an interest payment date, by acceleration, by call for redemption,
upon repurchase or purchase pursuant to the Indenture referred to therein or
otherwise, and interest on the overdue principal and premium, if any, and
interest on any interest, to the extent lawful (in each case including interest
accruing on or after filing of any petition in bankruptcy or reorganization
relating to the Issuer or the Company, whether or not a claim for post filing
interest is allowed in such proceeding on said Note) and all other obligations
of the Issuer to the registered holder of this Note under this Note or the
Indenture, including any Additional Amounts payable, will be promptly paid in
full when due or performed, all in accordance with the terms of this Note and
the Indenture; and (ii) in case of any extension of time of payment or renewal
of said Note or of any such other obligations, that the same will be promptly
paid in full, when due or performed in accordance with the terms of the
extension or renewal, subject to any applicable grace period, whether at
maturity, on an interest payment date, by acceleration, required repurchase or
otherwise.
The obligations of the Company to the registered holder of this
Security and to the Trustee pursuant to the Guarantee and the Indenture are
expressly set forth in the Indenture to which reference is hereby made for the
precise terms of such obligations.
P.T. POLYTAMA PROPINDO,
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITY(2)
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Principal Amount
Amount of Amount of of this Global Signature of
decrease in increase in Security authorized officer
Principal Amount Principal Amount following such of Trustee or
of this Global of this Global decrease (or Security
Date of Exchange Security Security increase) Custodian
---------------------- -------------------- ------------------- -------------------- -------------------
---------------------- -------------------- ------------------- -------------------- -------------------
---------------------- -------------------- ------------------- -------------------- -------------------
---------------------- -------------------- ------------------- -------------------- -------------------
---------------------- -------------------- ------------------- -------------------- -------------------
---------------------- -------------------- ------------------- -------------------- -------------------
----------
(2) This should be included only if the Note is issued in global form.
OPTION OF REGISTERED HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer
pursuant to Section 4.10 of the Indenture, check the box:
/ / Section 4.10 / /
If you want to elect to have only part of this Note purchased by the
Issuer pursuant to Section 4.10 of the Indenture, state the amount (such
specified amount must be in an integral multiple of $1.00):
$_______________________________
Date:
-----------------
-----------------------------
Signature
-----------------------------
Signature Guaranteed
NOTICE: The signature must correspond to the name as written upon the face
of this Note in every particular without alteration or any change whatsoever.
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
ASSIGNMENT FORM
(To be executed by the registered holder if such holder
desires to transfer this Note)
FOR VALUE RECEIVED ____________________
hereby sells, assigns and transfers unto
PLEASE INSERT ASSIGNEE'S SOCIAL SECURITY
OR OTHER TAX IDENTIFYING NUMBER
_____________________________________________________________(Print or type
assignee's name, address and zip code)
this Note, together with all right, title and interest herein and does hereby
irrevocably constitute and appoint _______________ Agent to transfer this Note
on the Register relating to this Note. The Agent may substitute another to act
for him.
Date:
---------------
-----------------------------
Signature
-----------------------------
Signature Guaranteed
NOTICE: The signature must correspond to the name as written upon the face of
this Note in every particular, without alternation or any change whatsoever.
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT 1
[FORM OF EXCHANGE NOTICE]
TO: POLYTAMA INTERNATIONAL FINANCE B.V.
The undersigned owner of this Note hereby: (i) irrevocably exchanges
this Note, for shares of common stock of P.T. Polytama Propindo in accordance
with the terms of the Indenture referred to in this Note and (ii) directs that
such shares of common stock deliverable upon the conversion, together with any
check in cash payment for any fractional shares, be delivered to the registered
holder hereof unless a different name has been indicated below. The undersigned
acknowledges that is such shares of common stock have not yet been registered
with the Securities and Exchanges Commission, such shares may be required to
bear a restrictive legend. If shares are to be delivered registered in the name
of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto.
Dated:
-------
--------------------------------
Signature
Fill in for registration of shares if to be delivered, and of Notes if to be
issued, otherwise that to and in the name of the registered holder.
________________________________________________________
Social Security or other Taxpayer Identifying Number
________________________________________________________
(Name)
________________________________________________________
(Street Address)
________________________________________________________
(City, State and Zip Code)
________________________________________________________
================================================================================
INDENTURE
Dated as of December [ ], 2002
among
POLYTAMA INTERNATIONAL FINANCE B.V.
as Issuer,
P.T. POLYTAMA PROPINDO
as Guarantor,
and
THE BANK OF NEW YORK
as Trustee
---------------------------------
$40,000,000 6% Guaranteed Secured Exchangeable Notes Due 2012
---------------------------------
================================================================================
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
----------- -----------
310 (a)(1) .......................................................... 7.10
(a)(2) .......................................................... 7.10
(a)(3) .......................................................... 7.12
(a)(4) .......................................................... N.A.
(b) .......................................................... 7.10
(c) .......................................................... N.A.
311 (a) .......................................................... 7.11
(b) .......................................................... 7.11
(c) .......................................................... N.A
312 (a) .......................................................... 2.05.
(b)(1) .......................................................... 15.03
(c)(2) .......................................................... 15.03
313 (a) .......................................................... 7.06
(b)(1) .......................................................... 7.06
(b)(2) .......................................................... 7.06
(c) .......................................................... 7.06; 15.02
(d) .......................................................... 7.06
314 (a) .......................................................... 4.02; 15.02
(b) .......................................................... N.A.
(c)(1) .......................................................... 15.04
(c)(2) .......................................................... 15.04
(c)(3) .......................................................... N.A.
(d) .......................................................... 12.09(ii)
(e) .......................................................... 15.05
(f) .......................................................... N.A.
315 (a) .......................................................... 7.01
(b) .......................................................... 7.05; 15.02
(c) .......................................................... 7.01
(d) .......................................................... 7.01
(e) .......................................................... 6.11
316 (a)(last sentence).......................................................... 2.08
(a)(1)(A) .......................................................... 6.05
(a)(1)(B) .......................................................... 6.04
(a)(2) .......................................................... N.A.
(b) .......................................................... 6.07
(c) .......................................................... 2.15
TIA Indenture
Section Section
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317 (a)(1) .......................................................... 6.08
(a)(2) .......................................................... 6.09
(b) .......................................................... 2.04
318 (a) .......................................................... 15.01
(b) .......................................................... N.A.
(c) .......................................................... 15.01
N.A. means Not Applicable
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE 1 Definitions and Incorporation by Reference
SECTION 1.01 Definitions........................................................... 1
SECTION 1.02 Other Definitions.................................................... 15
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.................... 16
SECTION 1.04 Rules of Construction................................................ 17
ARTICLE 2 The Securities
SECTION 2.01 Form and Dating...................................................... 17
SECTION 2.02 Execution and Authentication..........................................18
SECTION 2.03 Registrar and Paying Agent........................................... 18
SECTION 2.04 Paying Agent To Hold Money in Trust.................................. 18
SECTION 2.05 Noteholder Lists..................................................... 19
SECTION 2.06 Transfer and Exchange.................................................19
SECTION 2.07 Replacement Notes.....................................................21
SECTION 2.08 Outstanding Notes.....................................................21
SECTION 2.09 Temporary Notes.......................................................22
SECTION 2.10 Cancellation..........................................................22
SECTION 2.11 Defaulted Interest....................................................22
SECTION 2.12 Persons Deemed Owners.................................................23
SECTION 2.13 Computation of Interest...............................................23
SECTION 2.14 Predecessor Securities................................................23
SECTION 2.15 Record Date...........................................................23
ARTICLE 3 Redemption
SECTION 3.01 Notices to Trustee....................................................23
SECTION 3.02 Selection of Notes To Be Redeemed.....................................23
SECTION 3.03 Notice of Redemption..................................................23
SECTION 3.04 Effect of Notice of Redemption........................................24
SECTION 3.05 Deposit of Redemption Price...........................................24
SECTION 3.06 Notes Redeemed in Part................................................24
SECTION 3.07 Mandatory Redemption; Mandatory Redemption of Notes From
Excess Cash Flow......................................................24
ARTICLE 4 Covenants
SECTION 4.01 Payment of Notes; Payment of Additional Amounts;
Exchange Feature......................................................25
SECTION 4.02 Reports...............................................................27
SECTION 4.03 Limitation on Indebtedness............................................27
SECTION 4.04 Limitation on Indebtedness and Preferred Stock
of Restricted Subsidiaries............................................28
SECTION 4.05 Limitation on Restricted Payments.....................................29
SECTION 4.06 Limitation on Restrictions on Distributions from
Restricted Subsidiaries...............................................30
SECTION 4.07 Limitation on Sales of Non-Collateral Assets and Subsidiary Stock.....30
SECTION 4.08 Limitation on Sales of Collateral.....................................31
SECTION 4.09 Limitation on Affiliate Transactions..................................34
SECTION 4.10 Change of Control.....................................................35
SECTION 4.11 Limitation on the Sale or Issuance of Capital Stock of Restricted
Subsidiaries 35
SECTION 4.12 Limitation on Liens and Pari Passu Indebtedness.......................36
SECTION 4.13 Limitation on Sale/Leaseback Transactions.............................36
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SECTION 4.14 Limitation on Issuer Activities.......................................36
SECTION 4.15 Keepwell Commitment...................................................37
SECTION 4.16 Amendments to Security Documents......................................37
SECTION 4.17 Limitation on Company's Business......................................37
SECTION 4.18 Insurance.............................................................37
SECTION 4.19 Taxes.................................................................37
SECTION 4.20 Businesses and Properties; Compliance with Laws.......................37
SECTION 4.21 Corporate Existence...................................................38
SECTION 4.22 Inspection............................................................38
SECTION 4.23 Compliance Certificate................................................38
SECTION 4.24 Further Instruments and Acts..........................................38
SECTION 4.25 Management of the Company.............................................39
ARTICLE 5 Successor Company
SECTION 5.01 When Company May Merge or Transfer Assets.............................39
SECTION 5.02 Assumption by Company of Issuer's Obligations.........................40
SECTION 5.03 Issuer Reincorporation and Other Actions..............................41
ARTICLE 6 Defaults and Remedies
SECTION 6.01 Events of Default.....................................................41
SECTION 6.02 Acceleration..........................................................42
SECTION 6.03 Other Remedies........................................................43
SECTION 6.04 Waiver of Past Defaults...............................................43
SECTION 6.05 Control by Holders....................................................43
SECTION 6.06 Limitation on Suits...................................................43
SECTION 6.07 Rights of Holders To Receive Payment..................................44
SECTION 6.08 Collection Suit by Trustee............................................44
SECTION 6.09 Trustee May File Proofs of Claim......................................44
SECTION 6.10 Priorities............................................................44
SECTION 6.11 Undertaking for Costs.................................................45
SECTION 6.12 Waiver of Stay or Extension Laws......................................45
ARTICLE 7 Trustee
SECTION 7.01 Duties of Trustee.....................................................45
SECTION 7.02 Rights of Trustee.....................................................46
SECTION 7.03 Individual Rights of Trustee..........................................47
SECTION 7.04 Trustee's Disclaimer..................................................47
SECTION 7.05 Notice of Defaults....................................................47
SECTION 7.06 Reports by Trustee to Holders.........................................47
SECTION 7.07 Compensation and Indemnity............................................47
SECTION 7.08 Replacement of Trustee................................................48
SECTION 7.09 Successor Trustee by Merger...........................................49
SECTION 7.10 Eligibility; Disqualification.........................................50
SECTION 7.11 Preferential Collection of Claims Against Company.....................50
SECTION 7.12 Appointment of Co-Trustee or Separate Trustee.........................50
SECTION 7.13 No Duty To Operate....................................................51
SECTION 7.14 Other Matters Related to the Collateral Agency Agreement..............51
ARTICLE 8 Discharge of Indenture; Defeasance
SECTION 8.01 Discharge of Liability on Securities; Defeasance......................51
SECTION 8.02 Conditions to Defeasance..............................................52
SECTION 8.03 Application of Trust Money............................................53
SECTION 8.04 Repayment to Issuer...................................................53
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SECTION 8.05 Indemnity for Government Obligations..................................53
SECTION 8.06 Reinstatement.........................................................54
ARTICLE 9 Amendments
SECTION 9.01 Without Consent of Holders............................................54
SECTION 9.02 With Consent of Holders...............................................55
SECTION 9.03 Compliance with Trust Indenture Act...................................56
SECTION 9.04 Revocation and Effect of Consents and Waivers.........................56
SECTION 9.05 Notation on or Exchange of Securities.................................57
SECTION 9.06 Trustee To Sign Amendments............................................57
SECTION 9.07 Payment for Consent...................................................57
SECTION 9.08 Trustee Authorized To Execute Collateral Agency
Agreement and Take Actions Thereunder.................................57
SECTION 9.09 Voting Under Collateral Agency Agreement..............................57
ARTICLE 10 Guarantee of Notes; Indemnity
SECTION 10.01 Guarantee.............................................................57
SECTION 10.02 Indemnity.............................................................59
SECTION 10.03 Representation and Warranty...........................................60
SECTION 10.04 Waiver of Subrogation.................................................60
SECTION 10.05 Execution of Guarantee................................................60
SECTION 10.06 Ranking...............................................................60
ARTICLE 11 [Intentionally Omitted]
ARTICLE 12 Security Documents
SECTION 12.01 Security Documents....................................................60
SECTION 12.02 Holders' Consent......................................................61
SECTION 12.03 Recording, Deposit of Pledged Assets, etc.............................61
SECTION 12.04 Disposition of Collateral Without Trustee Consent.....................62
SECTION 12.05 Release of Collateral with Trustee Consent............................63
SECTION 12.06 Possession and Use of Collateral......................................65
SECTION 12.07 Substitute Collateral.................................................65
SECTION 12.08 Governmental Takings..................................................66
SECTION 12.09 TIA Requirements......................................................67
SECTION 12.10 Suits To Protect the Collateral.......................................68
SECTION 12.11 Purchaser Protected...................................................68
SECTION 12.12 Powers Exercisable by Receiver or Trustee.............................68
SECTION 12.13 Disposition of Obligations Received...................................68
SECTION 12.14 Limitation on Duty of Trustee in Respect of Collateral;
Indemnification.......................................................69
SECTION 12.15 Release upon Termination of the Company's and
Issuer's Obligations..................................................69
ARTICLE 13 Application of Trust Monies
SECTION 13.01 "Trust Monies" Defined................................................70
SECTION 13.02 Retirement of Securities..............................................70
SECTION 13.03 Withdrawals of Asset Disposition Proceeds, Insurance Proceeds and
Proceeds from Government Takings......................................70
SECTION 13.04 Business Interruption Insurance.......................................73
SECTION 13.05 Powers Exercisable Notwithstanding Event of Default...................73
SECTION 13.06 Powers Exercisable by Trustee or Receiver.............................74
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SECTION 13.07 Disposition of Notes Retired..........................................74
SECTION 13.08 Investment of Trust Monies............................................74
ARTICLE 14 Exchange
SECTION 14.01 Exchange..............................................................74
SECTION 14.02 Exercise of Exchange..................................................74
SECTION 14.03 Cash Payment for Unpaid Interest; Fractional Interests................75
SECTION 14.04 Exchange Price........................................................75
SECTION 14.05 Adjustment of Exchange Price..........................................75
SECTION 14.06 Continuation of Exchange Privilege in Case of Reclassification,
Change, Merger, Consolidationor Sale of Assets.......................78
SECTION 14.07 Notice of Certain Events..............................................79
SECTION 14.08 Taxes on Exchange.....................................................79
SECTION 14.09 Company to Provide Stock..............................................79
SECTION 14.10 Disclaimer of Responsibility for Certain Matters......................80
SECTION 14.11 Return of Funds Deposited for Redemption of Exchanged Notes...........80
ARTICLE 15 Miscellaneous
SECTION 15.01 Trust Indenture Act Controls..........................................80
SECTION 15.02 Notices...............................................................80
SECTION 15.03 Communication by Holders with Other Holders...........................82
SECTION 15.04 Certificate and Opinion as to Conditions Precedent....................82
SECTION 15.05 Statements Required in Certificate or Opinion.........................82
SECTION 15.06 English Language......................................................82
SECTION 15.07 Rules by Trustee, Paying Agent and Registrar..........................83
SECTION 15.08 Meetings of Holders...................................................83
SECTION 15.09 Legal Holidays........................................................83
SECTION 15.10 Governing Law.........................................................83
SECTION 15.11 Waiver of Indemnity; Submission to Jurisdiction and Appointment
of Agent for Service of Process......................................83
SECTION 15.12 Indemnification for Judgment Currency Fluctuations....................83
SECTION 15.13 No Recourse Against Others............................................84
SECTION 15.14 Successors............................................................84
SECTION 15.15 Multiple Originals....................................................84
SECTION 15.16 Table of Contents; Headings...........................................84
SECTION 15.17 Tax Considerations....................................................84
SECTION 15.18 Severability..........................................................84
SECTION 15.19 Acts of Holders.......................................................84
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