Exhibit 4.7
CONDITIONAL SALE AND PURCHASE AGREEMENT
BY AND AMONG
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA TBK.
AS PURCHASER
AND
PT PRAMINDO IKAT NUSANTARA
AS THE COMPANY
AND
(1) PT ASTRATEL NUSANTARA
(2) FRANCE CABLES ET RADIO
(3) PERUSAHAAN PERSEROAN (PERSERO)
PT INDONESIAN SATELLITE CORPORATION TBK
(4) MARUBENI CORPORATION
(5) INTERNATIONAL FINANCE CORPORATION
(6) NMP SINGAPORE PTE LIMITED
AS THE SELLING SHAREHOLDERS
RELATING TO THE ACQUISITION OF 100% OF THE SHARES OF
PT PRAMINDO IKAT NUSANTARA
DATED AS OF APRIL 19, 2002
CONDITIONAL SALE AND PURCHASE AGREEMENT
CONDITIONAL SALE AND PURCHASE AGREEMENT (this "AGREEMENT"), dated as of April
19, 2002, by and among PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI
INDONESIA TBK., a limited liability public state-owned company organized under
the laws of the Republic of Indonesia ("Purchaser"), PT ASTRATEL NUSANTARA a
limited liability company organized under the laws of the Republic of Indonesia
("Astraiel"), FRANCE CABLES ET RADIO, a company organized under the laws of
France ("FCR"), PERUSAHAAN PERSEROAN (PERSERO) PT INDONESIAN SATELLITE
CORPORATION TBK., a limited liability public state-owned company organized under
the laws of the Republic of Indonesia ("Indosat"), MARUBENI CORPORATION, a
company organized under the laws of Japan ("Marubeni"), INTERNATIONAL FINANCE
CORPORATION, an international organization established by Articles of Agreement
among its member countries ("IFC"), and NMP SINGAPORE PLE. LIMITED, a company
organized under the laws of Singapore ("NMP") (collectively Astratel, FCR,
Indosat, Marubeni, IFC and NMP, the "Selling Shareholders" and each a "Selling
Shareholder") and PT PRAMINDO IKAT NUSANTARA, a limited liability company
organized under the laws of the Republic of Indonesia (the "Company").
CAPITALIZED TERMS NOT OTHERWISE DEFINED HAVE THE MEANINGS ASSIGNED TO THEM IN
ARTICLE 1.
WHEREAS, the Selling Shareholders wish to sell to Purchaser and Purchaser wishes
to purchase from the Selling Shareholders eleven million four hundred forty six
thousand (11,446,000) Class A shares and three hundred fifty four thousand
(354,000) Class B shares, in aggregate amount eleven million eight hundred
thousand (11,800,000) ordinary shares of nominal value Rp.22,800 (US$10) per
share of the Company, representing 100% of the total issued and paid-up ordinary
shares of the Company, in three separate sale transactions in accordance with
the terms and conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
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ARTICLE 1.
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context clearly requires otherwise:
"FINANCIAL ESCROW AGENT" shall mean the offshore financial escrow, fiscal and
paying agent or the onshore financial escrow fiscal and paying agent, as
relevant, appointed under the Financial Escrow Agreement.
"INDONESIAN ESCROW AGENT" shall have the meaning assigned to such term in
Section 7.7.
"ACCOUNTANT" shall have the meaning assigned to such term in Section 4.1(b).
"SUBSIDIARY" shall mean, with respect to any Person, any corporation or other
organization, whether incorporated or unincorporated, (a) of which at least a
majority of the securities or other interests having by their terms ordinary
voting power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or Controlled by such Person or by any one or more
of its Subsidiaries or (b) of which such Person or any other Subsidiary of such
Person is a general partner (excluding any such partnership where such Person or
any Subsidiary of such Person does not have a majority of the voting interest in
such partnership).
"DISPUTE AUDITOR" shall have the meaning assigned to such term in Section 4.4.
"GOVERNMENTAL ENTITY" shall mean any court, arbitral tribunal, administrative
agency or commission or other governmental or regulatory authority or agency of
any national, provincial, state or local government or any national, provincial,
state or local government.
"SELLING SHAREHOLDERS' INDEMNITY SHARE" shall mean the percentage basis on which
the Indemnifying Shareholders will indemnify Purchaser for any Damages and/or
Taxes pursuant to Section 10.2B, as follows: FCR 42.133%; Astratel 36.866%;
Indosat 13%; and Marubeni 8%.
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"PRO RATA SHARE" shall mean with respect to each Selling Shareholder, the ratio
of the number of Sale Shares owned by such Selling Shareholder to the total
number of Sale Shares owned by all the Selling Shareholders in aggregate, at the
relevant time.
"EXCESS FUNDS" shall have the meaning assigned to such term in Section 7.7(f).
"UNITED STATES DOLLAR" and "US$" shall mean the lawful currency of the United
States of America.
"SHARE PLEDGES" shall mean the share pledges over the Sale Shares of each
Selling Shareholder other than IFC in favour of PT BNP Bank Lippo Indonesia, as
security agent, for the Existing IFC Loans and the irrevocable powers of
attorney to vote and to sell shares related to the share pledges.
"INTELLECTUAL PROPERTY" shall mean all intellectual property rights including
but not limited to trade marks, service marks, trade names, logos, patents,
inventions, registered and unregistered design rights, copyrights, trade
secrets, software rights, semi-conductor topography rights, database rights and
all other similar proprietary rights which may subsist in any part of the world
(including Know-how) including, where such rights are obtained or enhanced by
registration, any registration of such rights and applications and rights to
apply for such registrations.
"PURCHASE PRICE" shall mean the aggregate amount of the following:
(a) in respect of the thirty (30) percent of the Sale Shares which will be
sold by the Selling Shareholders on the Initial Closing:
(i) each Selling Shareholder's Pro Rata Share of the Initial
Payment (such amount for all Selling Shareholders being
US$9,263,953); and
(ii) the purchase price for each Selling Shareholder's Sale Shares
(x) set forth under such Selling Shareholder's name in
Schedule 7.6(b) (Series I Notes) opposite the column entitled
"Initial Sale Shares: 30%" evidenced by the Series I
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Notes maturing on December 15, 2002, March 15, 2003 and June
15, 2003 (such amount for all Selling Shareholders being the
aggregate of US$105,185,711) and (y) in the amounts payable
under the Series II Notes issued to such Selling Shareholder
described in Schedule 7.6(b) (Series II Notes) and maturing on
September 15, 2002, and March 15, 2003, in each case in
accordance with their terms; and
(b) in respect of the fifteen (15) percent of the Sale Shares which will be
sold by the Selling Shareholders on the Interim Closing, the purchase
price for each Selling Shareholder's Sale Shares (x) set forth under
such Selling Shareholder's name in Schedule 7.6(b) (Series I Notes)
opposite the column entitled "Interim Sale Shares: 15%" evidenced by
the Series I Notes maturing on June 15, 2003, September 15, 2003 and
December 15, 2003 (such amount for all Selling Shareholders being the
aggregate of US$57,224,830), and (y) in the amounts payable under the
Series II Notes issued to such Selling Shareholder described in
Schedule 7.6(b) (Series II Notes) and maturing on September 15, 2003
and March 15, 2004 in each case in accordance with their terms); and
(c) in respect of the fifty five (55) percent of the Sale Shares which will
be sold by the Selling Shareholders on the Subsequent Closing, the
purchase price for each Selling Shareholder's Sale Shares set forth
under such Selling Shareholder's name in Schedule 7.6(b) (Series I
Notes) opposite the column entitled "Subsequent Sale Shares: 55%"
evidenced by Series I Notes maturing on December 15, 2003, March 15,
2004, June 15, 2004, September 15, 2004 and December 15, 2004 (such
amount for all Selling Shareholders being the aggregate of
US$209,824,378), and (y) in the amounts payable under the Series II
Notes issued to such Selling Shareholder described in Schedule 7.6(b)
(Series II Notes) and maturing on June 15, 2004, September
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15, 2004 and December 15, 2004 in each case in accordance with their
terms).
The Purchase Price will be paid in the manner contemplated in Sections 3.8 and
7.6 and in the Financial Escrow Agreement.
"BUSINESS DAY" shall mean any day, other than a Saturday or Sunday, on which
banks in Jakarta are open for business.
"REAL PROPERTIES" shall mean all real properties that are owned, occupied or
used by the Company or that are reflected as an asset of the Company on the
Balance Sheet and "REAL PROPERTY" shall mean any of them.
"ENVIRONMENTAL LAWS" means the laws and regulations of Indonesia (including but
not limited to Law No. 23 of 1997 and its implementing regulations) and all
ministerial decrees, regulation instructions and letters issued pursuant to such
laws and regulations providing for:
(a) the protection of, and/or prevention of harm or damage to, the
Environment and/or the provision of remedies or compensation for harm
or damage to the Environment;
(b) health and safety matters (including, without limitation, Laws relating
to workers and public or consumer health and safety).
"INDEBTEDNESS" shall mean (i) all indebtedness for borrowed money or for the
deferred purchase price of property or services (other than trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices), (ii) any other indebtedness that is evidenced by a note,
bond, debenture or similar instrument, (iii) all obligations under financing
leases, (iv) all obligations in respect of acceptances issued or created, (v)
all liabilities secured by any lien on any property, (vi) all guarantee,
financial support, keepwell and other similar obligations and (vii) any other
liabilities (actual, contingent or otherwise).
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"EXCESS LIABILITIES" shall have the meaning assigned to such term in Section
4.8(b)(ii).
"VOTING DEBT" shall mean with respect to any Person indebtedness having the
right to vote at a General Meeting of Shareholders of such Person or to appoint
or nominate directors and debt convertible into securities having such rights.
"EXCLUSIVITY PERIOD" shall mean the period beginning on the date hereof and
ending on the earlier of the Subsequent Closing and 31 December 2005.
"WHT COLLAR AMOUNT" shall have the meaning assigned to such term in Section
7.6(j).
"MONTHLY AMOUNT" shall have the meaning assigned to such term in Section 7.6(a).
"SHAREHOLDER BALANCE AMOUNT" shall mean, from time to time, with respect to each
Selling Shareholder, such Selling Shareholder's Pro Rata Share of the then
outstanding and unpaid portion of the Purchase Price (excluding such Selling
Shareholder's Pro Rata Share of the Initial Payment and, for the avoidance of
doubt, excluding such Selling Shareholder's Pro Rata Share of the Net Working
Capital Reimbursement), the initial amount of which is the aggregate of (i) the
amount set forth opposite such Selling Shareholder's name in Schedule 2.1 under
the column "Shareholder Balance Amounts", the payment obligation of which will
be evidenced by the Series I Notes, and (ii) the amount payable on the Series II
Notes, in each case in accordance with their respective terms.
"TERMINATED PERSONNEL" shall have the meaning assigned to such term in Section
7.5(a).
"SECONDED FCR PERSONNEL" shall have the meaning assigned to such term in Section
7.5(b).
"FAILURE TO REMEDY A MATERIAL DEFAULT" shall have the meaning assigned to such
term in the Shareholders' Voting Agreement.
"CONTROL" shall mean with respect to any Person, the power to direct or to cause
the direction of the business and affairs of such Person or the power to
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elect or appoint a majority of the board of directors (or other body performing
similar functions) of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"DAMAGES" shall mean, collectively, any loss, liability, claim, damage, expense
(including costs of investigation and defense and reasonable attorney's fees) or
diminution of value, whether or not involving a third party claim, actually
suffered or incurred by a Person.
"KNOW-HOW" shall mean confidential industrial and commercial information and
techniques in any form (including paper, electronically or optically stored
data, magnetic media, film and microfilm) including without limitation drawings,
test results, reports, project reports and testing procedures, instruction and
training manuals, tables of operating conditions, market forecasts, lists and
particulars of customers and suppliers.
"CONTRACT CONSULTANTS" shall have the meaning assigned to such term in Section
4.2.
"CONTRACTS" shall have the meaning assigned to such term in Section 5.23(a).
"DISCLOSURE SCHEDULE" shall mean the disclosure schedule to be prepared and
signed by (i) each Selling Shareholder in relation to the disclosures being made
by such Selling Shareholder, (ii) FCR and Astratel on behalf of all Selling
Shareholders (except IFC and NMP) in relation to the disclosures being made by
the Selling Shareholders (except IFC and NMP) with respect to the Company, and
(iii) the Company in relation to the disclosures being made by itself; and
delivered by the Company to Purchaser pursuant to Section 8.2B(i).
"FINANCIAL STATEMENTS" shall mean the balance sheet of the Company as of 31
December 2001 together with the related statements of income, changes in
shareholders' equity and cash flows for the fiscal year then ended, including
the notes thereto, all audited by Xxxxxxxxx Xxxxxxxxx & Harsono (a member firm
of KPMG), independent certified public accountants, whose reports thereon are
included therein.
"MANAGEMENT REPORTS" shall mean the management reports of the Company prepared
since the Balance Sheet Date as attached to the Disclosure Schedule.
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"TAX RETURN" shall mean any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any such document
prepared on a consolidated, combined or unitary basis, and also including any
schedule or attachment thereto, and including any amendment thereof.
"LIBOR" means:
(a) the London interbank offer rate per annum (on the basis of a 360-day
year) shown on the Telerate Page 3750 (or such other page as may
replace Telerate Page 3750 on such service) as "British Bankers
Association Interest Settlement Rate" in US Dollars (LIBOR) for three
months, at 11:00 a.m. (London time) on the due date for payment; or
(b) in respect of each of the Series II Notes, the London interbank offer
rate per annum (on the basis of a 360-day year) shown on the Telerate
Page 3750 (or such other page as may replace Telerate Page 3750 on such
service) as "British Bankers Association Interest Settlement Rate" in
US Dollars (LIBOR) for three months or six months, as the case may be,
at 11:00 a.m. (London time) on the first date of the period in respect
of which interest is calculated under each such Note.
"ENVIRONMENT" means a unity of space with all objects, capacities, conditions
and living creatures, including human beings and their behaviour, which will
affect the sustainability of life and welfare of human beings and other living
creatures, as defined under the Indonesian Environmental Law No. 23 of 1997.
"THREATENED" shall mean a claim, Proceeding, dispute, action, or other matter
which, if any demand, statement or notice has been made or given in writing or
if any other event has occurred or any other circumstances exist with respect
thereto, would lead a prudent person to conclude that such a claim, Proceeding,
dispute, action, or other matter is likely to be asserted, commenced, taken, or
otherwise pursued in the future.
"WORKING CAPITAL" shall mean with respect to the Company, (1) all of the current
assets of the Company minus (2) all accounts payable and other liabilities
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whether absolute, contingent, accrued or otherwise and including any off-balance
sheet liabilities and accrued interest and other amounts (excluding principal)
owing under the Existing IFC Loans but excluding deferred tax liabilities.
"FINAL ADJUSTED WORKING CAPITAL OF THE COMPANY" shall have the meaning assigned
to such term in Section 4.2.
"PROFORMA ADJUSTED WORKING CAPITAL OF THE COMPANY" shall have the meaning
assigned to such term in Section 4.1(d).
"BALANCE SHEET" shall mean the most recent audited balance sheet of the Company
included in the Financial Statements.
"FINAL CLOSING BALANCE SHEET" shall have the meaning assigned to such term in
Section 4.2.
"PROFORMA CLOSING BALANCE SHEET" shall have the meaning assigned to such term in
Section 4.1(b).
"TAX" OR "TAXES" shall mean all taxes, charges, fees, duties, levies, penalties
or other assessments of whatever nature imposed by any Governmental Entity
including income, capital gains, value added, receipts, fringe benefits,
franchise, withholding, employee, payroll, social security, stamp, transfer or
similar taxes, and all interest, fines, charges, penalties or additions with
respect thereto or attributable to any failure to comply with any requirement
regarding Taxes or Tax Returns.
"MAJORITY SHAREHOLDERS" shall mean (i) for the purposes of Article 4 of this
Agreement, Astratel and FCR acting jointly and (ii) for any other provision of
this Agreement those Selling Shareholders holding in aggregate 61% or more of
the Sale Shares held by the Selling Shareholders at the relevant time, acting
jointly.
"INDEMNIFYING SHAREHOLDERS" shall mean each of FCR, Astratel, Indosat and
Marubeni (and shall exclude IFC and NMP).
"DEFAULTING SHAREHOLDER" shall have the meaning assigned to such term in Section
2.9.
"INITIAL PAYMENT" shall mean the sum of US$9,263,953, being an initial payment
of the
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Purchase Price to be paid by Purchaser on the Share Pledge Release Date.
"QUARTERLY PAYMENT" shall mean the amount payable on a Payment Date pursuant to
Section 7.6(b).
"ENCUMBRANCES" shall mean any and all encumbrances, liens, fiducia, security
interests, options, claims, mortgages, hak tanggungan, hak gadai, hak agunan,
pledges, proxies, voting agreements, obligations, understandings or arrangements
or other restrictions on title or transfer of any nature whatsoever.
"PURCHASER" shall have the meaning assigned to such term in the preamble.
"SECOND NOTICE" shall have the meaning assigned to such term in Section 4.1(a).
"FIRST NOTICE" shall have the meaning assigned to such term in Section 4.1(a).
"SELLING SHAREHOLDER" shall have the meaning assigned to such term in the
preamble.
"REGISTERED HOLDER" shall have the meaning assigned to such term in Section
3.8(c).
"COUNSEL" means in respect of Indonesian legal counsel, (i) Xxxxx Xxxxx
Xxxxxxxxxxx or Xxx Xxxxxxxxx, Xxxxxxx, Xxxxxxxxxxxx or (ii) other Indonesian
legal counsel selected by a Selling Shareholder and reasonably satisfactory to
Purchaser and in respect of foreign legal counsel, legal counsel selected by a
Selling Shareholder and reasonably satisfactory to Purchaser.
"PURCHASER OPINION" shall have the meaning assigned to such term in Section
3.3(c).
"SELLING SHAREHOLDER OPINIONS" shall have the meaning assigned to such term in
Section 3.2(h).
"NET WORKING CAPITAL REIMBURSEMENT" shall mean the aggregate amount payable by
Purchaser to the Selling Shareholders, as such term is defined in Section 4.6(a)
as adjusted in accordance with Section 4.8.
"KSO WAIVER" shall have the meaning assigned to such term in Section 3.12(b).
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"COMPANY WAIVER" shall have the meaning assigned to such term in Section
3.12(a).
"KNOWLEDGE" of any Selling Shareholder shall mean the knowledge of such Selling
Shareholder, including each of the officers, directors and commissioners of such
Selling Shareholder, which in each case is actually known; and, in addition,
with respect to each Selling Shareholder, "Knowledge" concerning a particular
subject, area or aspect of the Company's business or affairs shall mean the
knowledge of the commissioners and directors of the Company such Selling
Shareholder has nominated under the Joint Venture Agreement.
"CLOSING" shall mean, as the context may require, any one of or all of the
Initial Closing, the Interim Closing and the Subsequent Closing.
"INITIAL CLOSING" shall mean the closing referred to in Section 3.1(a).
"INTERIM CLOSING" shall mean the closing referred to in Section 3.l(b).
"SUBSEQUENT CLOSING" shall mean the closing referred to in Section 3.1(c).
"ICC RULES" shall have the meaning assigned to such term in Section 11.8(b).
"AGREEMENT" shall mean this Conditional Sale and Purchase Agreement, together
with the Schedules and Exhibits hereto and the Disclosure Schedule.
"INDONESIAN ESCROW AGREEMENT" shall mean the document substantially in the form
attached as Exhibit G.
"FINANCIAL ESCROW AGREEMENT" shall mean the document substantially in the form
attached as Exhibit F.
"SECURITY AGREEMENTS" shall mean the Financial Escrow Agreement, the
Shareholders' Voting Agreement, the Indonesian Escrow Agreement and each power
of attorney given by the parties hereto under the Shareholders' Voting
Agreement.
"CONFIDENTIALITY AGREEMENT" shall mean a letter agreement, dated February 21,
2002 between Purchaser and the Company, relating to information to be furnished
by the Company to Purchaser in
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connection with the Transactions and attached as Exhibit B.
"KSO AGREEMENT" means the KSO Agreement for the joint operating scheme in the
Regional Division I Sumatera telecommunications operating area, dated October
20, 1995 No. PKS. 221/K.810/UTA.00/95, between Purchaser and the Company and the
"KSO Construction Agreement", as amended, as such term is defined in the KSO
Agreement.
"MATERIAL AGREEMENT" shall mean, with respect to any Person, any material
license, material contract, material agreement or material instrument or
obligation to which such Person is a party or by which such Person or any of
such Person's properties or assets may be bound, and in addition with respect to
the Company, any Indebtedness in the principal amount of US$250,000 or more or
which requires total payments equal to or in excess of such sum, any lease of
real or personal property calling for annual payments in excess of US$250,000
per annum.
"SHAREHOLDERS' VOTING AGREEMENT" shall mean the document substantially in the
form attached as Exhibit E.
"PURCHASER LOAN AGREEMENT" shall mean a document substantially in the form
attached as Exhibit H.
"JOINT VENTURE AGREEMENT" shall have the meaning assigned to such term in
Section 2.7.
"DISPUTE" shall have the meaning assigned to such term in Section 11.8(a).
"COMPANY" shall have the meaning assigned to such term in the preamble.
"CONSENT" shall mean, with respect to any Governmental Entity or any other
Person, any approval, consent, ratification, permit, license, waiver or other
authorization of, filing with, or notice to such Governmental Entity or other
Person, as the case may be.
"REQUIRED COMPANY CONSENTS" shall have the meaning assigned to such term in
Section 5.9.
"PERSON" shall mean a natural person, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity or organization.
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"RELATED PERSON" shall have the meaning assigned to such term in Section
5.28(a).
"INDEMNIFYING PARTY" shall have the meaning assigned to such term in Section
10.4(a).
"INDEMNIFIED PARTY" shall have the meaning assigned to such term in Section
10.4(a).
"EXISTING IFC LOANS" shall mean the loans made by IFC to the Company on the
terms and conditions set forth with respect to such loans in the IFC Investment
Agreement dated July 29, 1996 between the Company and IFC, the Common Terms
Agreement dated July 29, 1996 among the Company, IFC and certain financial
institutions and any amendments thereto, as more fully described in Schedule
1.1.
"PURCHASER LOAN" shall have the meaning assigned to such term in Section 2.4.
"NON-COLLECTIBLE RECEIVABLES" shall have the meaning assigned to such term in
Section 4.8(d)(i).
"PLAN" shall mean each deferred compensation, incentive compensation, stock
purchase, stock option and other equity compensation plan, program, agreement or
arrangement, each severance or termination pay, medical, surgical,
hospitalization, life insurance and other plan, and each profit-sharing, bonus
or pension or retirement or annuity plan, fund or program as stipulated under
Indonesian Manpower law and relevant regulations including but not limited to
Law No. 3 of 1992 regarding the Employee Social Security Program (Jamsosiek),
Law No. 11 of 1992 regarding Pension Fund, and Decree of the Minister of
Manpower No. Kep-150/Men/2000 regarding the Settlement of Termination of
Employment and the Determination of Severance Pay, Service Pay and Compensation
in a Company; in each case, that is sponsored, maintained or contributed to or
required to be contributed to by the Company or to which the Company is party,
whether written or oral, for the benefit of any director, officer, commissioner,
employee or former employee of the Company.
"ACQUISITION PROPOSAL" shall mean any proposal or offer made by any Person other
than Purchaser or any Subsidiary of Purchaser to acquire all or a substantial
part of the business or properties of the Company or the Sale Shares, whether by
merger, lender offer,
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exchange offer, sale of assets or similar transactions involving the Company or
any division or operating or principal business unit of the Company.
"PROCEEDING" shall mean any action, arbitration, audit, hearing, litigation,
suit, inquiry, proceeding or investigation (whether civil, criminal,
administrative, investigative or informal) commenced, brought, conducted or
heard by or before, or otherwise involving, any Governmental Entity or
arbitrator.
"GAAP" shall mean generally accepted accounting principles, applied
consistently, in the Republic of Indonesia established by the Indonesian
Accounting Association as in effect at the relevant time.
"STANDBY ACCOUNT" shall have the meaning assigned to such term in Section
7.6(f).
"FINANCIAL ESCROW ACCOUNT" shall have the meaning assigned to such term in
Section 7.6(a).
"INDONESIAN FINANCIAL ESCROW ACCOUNT" shall have the meaning assigned to such
term in Section 7.7(d).
"INDONESIAN SHARE ESCROW ACCOUNT" shall have the meaning assigned to such term
in Section 7.7(a).
"RUPIAH" and "Rp." shall mean the lawful currency of the Republic of Indonesia.
"EVENT OF REPAYMENT" shall have the meaning assigned to such term in Section
3.11.
"SHARES" shall mean me Class A and Class B ordinary shares of nominal value
Rp.22,800 (US$10) per share of the Company.
"SALE SHARES" shall mean eleven million four hundred forty six thousand
(11,446,000) Class A shares and three hundred fifty four thousand (354,000)
Class B shares, in aggregate amount eleven million eight hundred thousand
(11,800,000) Shares (subject to adjustment to reflect share splits, reverse
share splits, share dividends or equivalent changes to the capital stock of the
Company), representing, in the aggregate, 100% of the issued and paid-up Shares,
the number of Sale Shares set forth opposite such Selling Shareholder's name on
Schedule 2.1 under the column entitled "Total No. of Shares".
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"TRANSFER CERTIFICATE" shall have the meaning assigned to such term in Section
3.8(c).
"LEASE" shall mean each lease pursuant to which the Company leases any real or
personal property.
"SPV" has the meaning assigned to such term in Section 2.9(i)(A).
"POWER OF ATTORNEY TO VOTE" shall mean a power of attorney from a party hereto,
as required by and substantially in the form attached to the Shareholders'
Voting Agreement.
"NOTE" shall have the meaning assigned to such term in Section 3.8(c).
"BALANCE SHEET DATE" shall mean the date of the Balance Sheet.
"CLOSING BALANCE SHEET DATE" shall have the meaning assigned to such term in
Section 4.1(b).
"PAYMENT DATE" shall mean each date set out in Schedule 7.6(b) other than any
such date that falls after the date that all obligations of Purchaser to pay the
Purchase Price and the Net Working Capital Reimbursement have been satisfied in
full; provided that, in each case, if such date is not a Business Day, then the
"Payment Date" shall mean the next succeeding Business Day (for the purpose of
this definition a "Business Day" shall have the meaning assigned to such term in
the Financial Escrow Agreement.)
"CALL DATE" shall mean the date on which Purchaser has, pursuant to the
Financial Escrow Agreement, called and paid all outstanding Notes and thereby
extinguished the obligation to pay the Shareholder Balance Amounts.
"RELEASE DATE" shall have the meaning assigned to such term in Section 4.8(a).
"SHARE PLEDGE RELEASE DATE" shall mean the date on which the Share Pledges are
released fully and unconditionally by PT BNP Bank Lippo Indonesia upon repayment
of all amounts of principal, interest and other amounts payable under or in
respect of the IFC Investment Agreement and the Common Terms Agreement -
currently anticipated to be on 15 September 2002.
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"INITIAL SALE SHARES TRANSFER DATE" means the date being the earlier of:
(a) the date of full payment by Purchaser to the Selling Shareholders of
the Net Working Capital Reimbursement if ninety (90) percent or more of
the Company's current assets, as at the Initial Closing Date, were
represented by cash and/or realisable cash equivalents and/or accounts
receivable from the KSO Unit as certified by Accountant pursuant to
Article 4; and
(b) ninety (90) days after the Initial Closing Date if Jess than ninety
(90) percent of the Company's current assets, as at the Initial Closing
Date, were represented by cash and/or realisable cash equivalents
and/or accounts receivable from the KSO Unit as certified by Accountant
pursuant to Article 4.
"FINAL DISCLOSURE DATE" shall have the meaning assigned to such term in Section
8.2B(i).
"CLOSING DATE" shall mean, as the context may require, any one of or all of the
Initial Closing Date, the Interim Closing Date and the Subsequent Closing Date.
"INITIAL CLOSING DATE" shall mean the date and time at which the Initial Closing
actually occurs.
"INTERIM CLOSING DATE" shall mean the date and time at which the Interim Closing
actually occurs.
"SUBSEQUENT CLOSING DATE" shall mean the date and time at which the Subsequent
Closing actually occurs.
"PERMITTED PREPARATORY ACTIONS" shall mean the actions taken by the Company
prior to the Initial Closing Date to reduce its workforce, dispose of vehicles
and office equipment, terminate certain commercial, residential and other rental
arrangements and otherwise minimize the Company's day to day administrative
activities.
"SBI RATE" means the rate for three (3) month Certificate of Bank Indonesia
(Sertifikat Bank Indonesia-SBI) ("3M SBI") based on the last monthly auction
("3M SBI RATE") which appears on the Reuters Screen at 11 a.m. (Jakarta time) on
the due date for payment.
16
"TRANSACTIONS" shall mean the purchase by Purchaser and sale and transfer by the
Selling Shareholders of the Sale Shares and the performance by each of the
parties hereto of their other respective obligations under this Agreement, and
the agreements contemplated hereunder, including to the Security Agreements and
the Purchaser Loan Agreement.
"KSO UNIT" shall mean the co-operative organization responsible for the
management and operation of the KSO system for Regional Division I Sumatera
telecommunications operating area pursuant to the KSO Agreement.
Section 1.2 Interpretation.
(a) When a reference is made in this Agreement to a Section, Article,
Schedule or Exhibit, such reference shall be to a Section or Article of
this Agreement or to a Schedule or an Exhibit to this Agreement unless
otherwise clearly indicated to the contrary.
(b) Whenever the words "include", "includes" or "including" are used in
this Agreement they shall be deemed to be followed by the words
"without limitation".
(c) The words "hereof", "herein" and "herewith" and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement.
(d) The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term,
and words denoting any gender shall include all genders. Where a word
or phrase is defined herein, each of its other grammatical forms shall
have a corresponding meaning.
(e) A reference to any party to this Agreement or any other agreement or
document shall include such party's successors and permitted assigns.
(f) A reference to any legislation or to any provision of any legislation
as of a particular date shall mean as of such date and any
17
amendment to, and any modification or re-enactment thereof, any
legislative provision substituted therefor and all regulations and
statutory instruments issued thereunder or pursuant hereto.
(g) As used in this Agreement, any reference to a document in the "agreed
form" means a document in a form approved and, for the purposes of
identification, initialed by or on behalf of each party hereto.
(h) As used in this Agreement, any reference to any event, change or effect
being material or having a material adverse effect on or with respect
to any entity (or group of entities taken as a whole) means such event,
change or effect that is materially adverse 10 (i) the prospects,
financial condition, businesses or results of operations of such entity
as a whole (or, if used with respect thereto, of such group of entities
taken as a whole), or (ii) the ability of such entity (or group) to
consummate the Transactions.
(i) Except for IFC, NMP and Indosat, the panics have participated jointly
in the negotiation of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, no presumption or burden
of proof shall arise favoring or disfavoring any parry by virtue of the
authorship of any provisions of this Agreement.
(j) The section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(k) Unless otherwise specifically provided for, whenever the word
"several" is used herein with respect to a Selling Shareholder, it
shall mean several in proportion to the percentage of the total Sale
Shares applicable to such Selling Shareholder.
18
ARTICLE 2.
PURCHASE AND SALE OF THE SALE SHARES AND REPAYMENT OF EXISTING IFC LOANS
Section 2.1 Sale and Transfer of Sale Shares. In consideration of the Purchase
Price and the Net Working Capita] Reimbursement and subject to the terms and on
the conditions set forth in this Agreement:
(a) at the Initial Closing each Selling Shareholder, other than IFC, shall
contemporaneously sell, convey, assign, transfer and deliver to
Purchaser all rights to thirty (30) percent of such Selling
Shareholder's Sale Shares being that number of Sale Shares set forth
opposite such Selling Shareholder's name in the column entitled "30%
Initial Closing/No. of Shares" in Schedule 2.1, and, on the Share
Pledge Release Date, IFC shall contemporaneously sell, convey, assign,
transfer and deliver to Purchaser all rights 10 thirty (30) percent of
IFC's Sale Shares being that number of Sale Shares set forth opposite
IFC's name in the column entitled "30% Initial Closing/No. of Shares"
in Schedule 2.1;
(b) at the Interim Closing each Selling Shareholder shall contemporaneously
sell, convey, assign, transfer and deliver to Purchaser fifteen (15)
percent of such Selling Shareholder's Sale Shares being that number of
Sale Shares set forth opposite such Selling Shareholder's name in the
column entitled "15% Interim Closing/No. of Shares" in Schedule 2.1;
and
(c) at the Subsequent Closing each Selling Shareholder shall
contemporaneously sell, convey, assign, transfer and deliver to
Purchaser fifty-five (55) percent of such Selling Shareholder's Sale
Shares being that number of Sale Shares set forth opposite such Selling
Shareholder's name in the column entitled "55% Subsequent Closing/No.
of Shares" in Schedule 2.1,
19
subject to Sections 2.3 and 3.9 and the articles of association of the Company,
with full legal title, free and clear of all Encumbrances and all other
limitations and restrictions (including any restriction on the right to vote,
sell or otherwise dispose of such Shareholder Sale Shares) and with all voting,
distribution and other rights attaching thereto as of and from each Closing
Date.
Section 2.2 The Purchase Price and Net Working Capital Reimbursement. Subject to
the terms and on the conditions set forth in this Agreement, in consideration of
the aforesaid sale, conveyance, assignment, transfer and delivery to Purchaser
of the Sale Shares, Purchaser shall pay or cause to be paid:
(a) to each Selling Shareholder its Pro Rala Share of the Initial Payment
in accordance with Section 3.8(a);
(b) to each Selling Shareholder its Pro Rata Share of the Net Working
Capital Reimbursement in accordance with Section 4.8; and
(c) to each Selling Shareholder, the Shareholder Balance Amount of such
Selling Shareholder, as evidenced by the Notes issued by the Purchaser
to such Selling Shareholder (provided that, to the extent such Selling
Shareholder has transferred some or all of the Notes issued to it by
Purchaser, the Purchaser shall pay or cause to be paid to each
Registered Holder of such transferred Notes the Shareholder Balance
Amount evidenced by such Notes, thereby reducing the Shareholder
Balance Amount payable to such Selling Shareholder by an amount equal
to the amount paid against any such Notes (such amount to include
permitted deductions or withholdings for tax, if any)), in accordance
with Sections 3.8(b) and 7.6.
Section 2.3 Existing Pledges. The Sale Shares (other than those owned by IFC)
are subject to the Share Pledges and such Share Pledges shall only be released
upon the Share Pledge Release Date.
20
Section 2.4 Purchaser Loans. Purchaser shall provide to the Company the loans
specified in Section 2.6 on the terms set out in the Purchaser Loan Agreement
("Purchaser Loan") for the express purpose of enabling the Company to prepay the
Existing IFC Loans and to fund Purchaser's obligation to pay the Net Working
Capital Reimbursement.
Section 2.5 Powers of Attorney on Share Pledge Release Date. On the later of (i)
the Initial Sale Shares Transfer Date and (ii) Share Pledge Release Date,
Purchaser shall deliver a Power of Attorney to Vote to each Selling Shareholder
relating to thirty (30) percent of such Selling Shareholder's Sale Shares being
that number of Sale Shares set forth opposite such Selling Shareholder's name in
the column entitled "30% Initial Closing/No, of Shares" in Schedule 2.1, duly
executed and delivered by the Purchaser.
Section 2.6 Repayment of Existing IFC Loans.
(a) The parties hereto shall take all reasonable steps to ensure that:
(i) all principal, interest and other amounts payable under the
IFC Investment Agreement and the Common Terms Agreement with
respect to the Existing IFC A and B Loans are fully prepaid at
the Initial Closing; and
(ii) the Share Pledge Release Date occurs no later than September
15, 2002,
and that, subject to paragraph (c) below, all available funds of the
Company, including for the avoidance of doubt, the Purchaser Loans, and
other funds of the Company that would otherwise be available for use
directly or indirectly towards funding Purchaser's obligation to pay
the Net Working Capital Reimbursement but other than an amount of
Rupiah 5,000,000,000 (five billion) to meet the Company's liabilities
accrued on or before the Initial Closing Date and operating expenses,
shall be made available for the foregoing purposes. The parties hereto
further agree that if all principal, interest and other amounts payable
under the IFC Investment Agreement and the Common
21
Terms Agreement with respect to such Existing IFC Loans are not fully
prepaid and paid on such dates, Purchaser shall have no obligation to
provide any funds in addition to the Purchaser Loans to ensure the
payment and prepayment of all amounts payable under and in respect of
the IFC Investment Agreement and the Common Terms Agreement in respect
of such Existing IFC Loans.
(b) Pursuant to the Purchaser Loan Agreement, Purchaser shall lend to the
Company and the Company shall borrow:
(i) the sum set out in Part A of Schedule 2.6 on the date set out
in Part A of Schedule 2.6 ("Tranche A"); and
(ii) the sums set out in Part B of Schedule 2.6 on the date set out
in Part B of Schedule 2.6 ("Tranche B"),
and such sums shall be unsecured obligations of the Company and
subordinated to the Company's obligations to pay all amounts payable
under and in respect of the IFC Investment Agreement and the Common
Terms Agreement with respect to the Existing IFC Loans.
(c) The Company shall:
(i) (A) utilise Tranche A of the Purchaser Loan solely for the
purposes of partially paying and prepaying the principal,
accrued interest and all other amounts payable under the IFC
Investment Agreement and the Common Terms Agreement in respect
of the Existing IFC A Loan and Existing IFC B Loan, and (B)
ensure that it has sufficient additional funds as may be
required to pay and prepay the balance of amounts payable
under the IFC Investment Agreement and the Common Terms
Agreement in respect of the Existing IFC A Loan and the
Existing IFC B Loan, in
22
each case on the Initial Closing Date in accordance with the
terms of the IFC Investment Agreement and the Common Terms
Agreement; and
(ii) utilise Tranche B of the Purchaser Loan prior to any other
utilisation thereof, to the extent required to pay and prepay
all principal, accrued interest and all other amounts payable
under the IFC Investment Agreement and the Common Terms
Agreement in respect of the Existing IFC C Loan and to fund
the Purchaser's obligation to pay the Net Working Capital
Reimbursement no later than September 15, 2002, and otherwise
in accordance with the terms of the IFC Investment Agreement
and the Common Terms Agreement.
(d) The Company shall pay interest on and shall repay the Purchaser Loans
to Purchaser in accordance with the Purchaser Loan Agreement. Payments
and repayments to Purchaser in respect of the Purchaser Loans shall be
subordinated to payments and prepayments by the Company in respect of
the Existing IFC Loans, and such subordination shall be provided for in
the Purchaser Loan Agreement.
(e) The parties hereto agree by way of a direction to pay issued by the
Company to Purchaser, that the amount of the Purchaser Loans required
to be applied as provided in Sections 2.6(c)(i)(A) and 2.6(c)(ii)
shall, on drawdown, which shall be no later than the respective dates
for payment and repayment to IFC specified in Sections 2.6(c)(i) and
2.6(c)(ii), be paid directly by Purchaser in US Dollars, on behalf of
the Company to IFC at account no. 10215220300, CHIPS ID 142255, ABA
000000000, Northern Trust International Banking Corporation, New York,
New York, USA for payment and
23
repayment of the Existing IFC Loans as provided hereinabove in this
Section 2.6.
Section 2.7 Waiver of Pre-emptive Rights. Each of the Selling Shareholders
hereby irrevocably waives all its rights of first refusal and preemptive rights
under the Company's articles of association, and, in the case of Astratel, FCR,
Indosat, Marubeni and NMP, consents to and waives any and all similar rights
under the joint venture agreement between Astratel, FCR, Indosat, Marubeni and
NMP dated October 17, 1995 (as amended, the "Joint Venture Agreement"), with
respect to the transfer of the Sale Shares contemplated under the Transactions
(and for the avoidance of doubt, Purchaser shall not be required to become a
party to the Joint Venture Agreement).
Section 2.8 Company Law. The parties hereto agree that the Transactions are
being conducted pursuant to Article 103(6) of the, Law No. 1 of 1995 concerning
Limited Liability Company and its implementing regulations (Indonesian Company
Law).
Section 2.9 Insolvency of Selling Shareholder. If after the Initial Closing but
prior to or on the Subsequent Closing any Selling Shareholder (other than IFC
which, by its nature as an international organization, is not susceptible to the
actions and conditions described in Sections 2.9(a), 2.9(b) and 2.9(c)) (the
"Defaulting Shareholder"):
(a) files a voluntary petition for bankruptcy under any applicable law or
enters into a suspension of payment, composition with its creditors,
administration or other arrangement under any applicable law or an
order for the receivership or bankruptcy of the Defaulting Shareholder
is made and is not discharged, dismissed or permanently stayed within
45 days of being made; or
(b) any curator, receiver or liquidator or similar officer, is appointed
whether by a competent court or pursuant to a shareholder resolution of
the Defaulting Shareholder (other than pursuant to a voluntary
reorganization) in respect of the Defaulting Shareholder or over
24
all or substantially all of its assets; or
(c) any corporate action or other steps are taken by the Defaulting
Shareholder for the bankruptcy, liquidation, winding-up, or dissolution
of the Defaulting Shareholder or for the appointment of a curator,
liquidator or receiver or similar officer of the Defaulting Shareholder
or over any of its assets or revenues,
then during the term of this Agreement, notwithstanding that any Notes,
evidencing its Shareholder Balance Amount, remain outstanding:
(i) Purchaser shall be entitled to:
(A) demand an immediate transfer of all the Defaulting
Shareholder's Sale Shares to a special purpose vehicle
established for the purpose of holding such Sale Shares in
trust for the benefit of the non-Defaulting Shareholders or to
such other entity (including Purchaser) if agreed by all of
the non-Defaulting Shareholders or such other arrangement as
reasonably agreed by the Purchaser and the non-Defaulting
Shareholders (any of such entities or arrangements the "SPV").
All decisions relating to such Defaulting Shareholder's Sale
Shares shall be made by those non-Defaulting Shareholders
holding a simple majority of the aggregate Sale Shares owned
by all of the non-Defaulting Shareholders (the "Majority
Non-Defaulting Shareholders"). If the transfer occurs prior to
the Interim Closing Date, on the Interim Closing Date the
Majority Non-Defaulting Shareholders shall use their best
efforts to cause the number of Sale Shares set forth opposite
such Defaulting Shareholder's name in Schedule 2.1 under
the column entitled "15% Interim Closing/No. of Shares" to be
transferred to Purchaser, and the remaining Defaulting
Shareholder's Sale Shares shall be held under such trust or
other arrangement (as agreed by such parties) until all of the
Notes,
25
the Initial Payment and the Net Working Capital Reimbursement
shall have been paid by Purchaser in accordance with this
Agreement and the Financial Escrow Agreement. Upon all such
amounts being paid by Purchaser in accordance with this
Agreement and the Financial Escrow Agreement the Majority
Non-Defaulting Shareholders shall use their best efforts to
cause the remaining Defaulting Shareholder's Sale Shares to be
transferred to Purchaser;
(B) utilize the power of attorney of each Selling Shareholder in
article IX of the Indonesian Escrow Agreement to obtain all
necessary approvals for and to effect all such transfers of
all or a portion of the Defaulting Shareholder's Sale Shares
as contemplated in paragraph (A) above; and
(C) issue relevant notices to the Indonesian Escrow Agent pursuant
to the Indonesian Escrow Agreement to permit the directors and
commissioners of the Company to amend the Company's register
of shareholders and endorse for transfer or issue share
certificates to reflect the transfers of the Defaulting
Shareholder's Sale Shares contemplated in paragraph (A) above;
and
(ii) Purchaser shall, in the event of the transfer of the relevant portion
of the Defaulting Shareholder's Sale Shares on the Interim Closing Date
to Purchaser (if applicable), issue to the non-Defaulting Shareholders
a Power of Attorney to Vote in respect of the Defaulting Shareholder's
Sale Shares
26
(conditional or unconditional as the case may be required in accordance
with the intent of the Shareholders' Voting Agreement);
(iii) the Majority Non-Defaulting Shareholders shall in the event of the
transfer of the Defaulting Shareholder's Sale Shares to the SPV prior
to the issuance of a Notice of Cancellation under (and as defined in)
the Shareholders' Voting Agreement, cause the SPV to issue to the
Purchaser a Power of Attorney to Vote in respect of the Defaulting
Shareholder's Sale Shares held by the SPV in accordance with the intent
of the Shareholders' Voting Agreement;
(iv) the other parties hereto shall perform any further acts and execute and
deliver any further documents and instruments and do or refrain from
doing all such further acts and things as may from time to time
reasonably be requested by Purchaser to carry out effectively or better
evidence or perfect the true spirit, intent, meaning and purpose of
this Section 2.9;
(v) all reasonable costs and expenses (including reasonable attorneys fees)
shall be borne by the Defaulting Shareholder or in the event of the
failure of the Defaulting Shareholder to pay such fees within 30 days
after a request therefor each party hereto shall pay its own costs and
expenses provided that Purchaser shall pay the incorporation fees of
the SPV, if any.
Section 2.10 Failure of Certain Conditions Precedent. If as a result of the
condition precedent in Section 8.1 (a) not being satisfied prior to or on the
Interim Closing and/or the Subsequent Closing, such Closing cannot occur:
(a) subject as provided in proviso (ii) in this Section 2.10(a) the Selling
Shareholder in respect of whose obligations such condition precedent
was not fulfilled shall nevertheless deliver to Purchaser all
instruments, deeds, notices, agreements, certificates and other
documents required to be delivered on such
27
Closing, duly executed by such Selling Shareholder and/or any other
relevant Person provided that (i) Purchaser shall not be entitled to
execute the deed of transfer (akta pemindahan hak atas saham) of such
Selling Shareholder's Sale Shares to be transferred at such Closing if
doing so would result in a breach of any statute, rule or regulation or
any order, writ or injunction of a court of competent jurisdiction
prohibiting the consummation of such Closing and (ii) no Selling
Shareholder shall be required to take any action under this paragraph
(a) that would in its reasonable opinion result in a breach of any
statute, rule or regulation or any order, writ or injunction of a court
of competent jurisdiction;
(b) Purchaser shall be entitled to deliver a notice to the Indonesian
Escrow Agent notifying the Indonesian Escrow Agent to hold such Selling
Shareholder's Sale Shares to be transferred on such Closing for the
account and at the direction of Purchaser; and
(c) the Selling Shareholder in respect of whose obligations such condition
precedent was not fulfilled shall not take any action or do any thing
that might otherwise affect the rights of Purchaser to such Selling
Shareholder's Sale Shares to be transferred at such Closing and shall
do all matters, acts or things reasonably required by Purchaser either
for Purchaser to obtain title to such Sale Shares and/or for such Sale
Shares to be transferred to a Person, including any offshore trust,
designated by Purchaser.
Section 2.11 No Closing. If notwithstanding any action taken to complete a
Closing pursuant to Sections 2.9, 2.10, 3.4 or 3.6, any relevant transfer of
Sale Shares to Purchaser required under this Agreement on either the Interim
Closing or Subsequent Closing has not occurred on or before the date scheduled
for the Subsequent Closing, then:
28
(x) provided the Initial Payment, the Net Working Capital Reimbursement and
the Notes (and any and all accrued and unpaid interest on any of the
foregoing) shall have been paid by Purchaser in accordance with this
Agreement, the Indonesian Escrow Agreement, the Financial Escrow
Agreement and their respective terms (and provided such payments are
not the subject of an arbitral dispute in accordance with the terms of
any of such agreements or the Notes); or
(y) provided the Initial Payment and the Net Working Capital Reimbursement
(and any and all accrued and unpaid interest on any of the foregoing)
shall have been paid by Purchaser in accordance with this Agreement and
the Indonesian Escrow Agreement (and such payments are not the subject
of an arbitral dispute in accordance with the terms of any of such
agreements), and all of the then outstanding Notes have been purchased
and are held by the Company,
Purchaser shall, in its sole discretion, be entitled to amend, effect an early
expiration of or terminate the KSO Agreement pursuant to the terms of the
Shareholders' Voting Agreement to effect the transfer, for Rupiah one hundred
(100), of any and all of the Company's rights, title and interests in all New
Installations (as defined in the KSO Agreement) and all and any other assets and
installations, work in progress, inventories, equipment, materials, plans and
data (whether or not related to Additional New Installations (as defined in the
KSO Agreement)) in respect of the KSO arrangements under the KSO Agreement on
the date of early expiration of or termination of the KSO Agreement to the
Purchaser in the manner and in accordance with terms as if the KSO Agreement had
expired (as such terms may be mutually amended by the Company and the
Purchaser).
Each of the Selling Shareholders that is a shareholder of the Company at that
time and the Company undertakes to cooperate fully and, to the extent permitted
by law, to do all matters, acts and things to give effect to the provisions of
this Section 2.11 and the corresponding provisions under the Shareholders'
Voting Agreement.
29
Upon the occurrence of all of the following:
(a) any such Selling Shareholder, or its nominated members to the boards of
directors and commissioners of the Company, shall in the absence of
good faith, prevent, hinder or challenge the right of Purchaser to give
effect in a timely manner to the terms of this Section 2.11 and the
corresponding provisions under the Shareholders' Voting Agreement;
(b) such Selling Shareholder's Sale Shares were not transferred to
Purchaser in accordance with the terms hereof otherwise than as a
result of a material breach by Purchaser prior to the relevant Closing;
and
(c) the KSO Agreement has not been so amended or terminated as a result of
such prevention, hindrance, or challenge by such Selling Shareholder,
such Selling Shareholder shall upon demand, but in any event within ninety (90)
days pay to Purchaser the amount of the Purchase Price paid to such Selling
Shareholder for such Selling Shareholders' Sale Shares that were not so
transferred.
For the avoidance of doubt such Selling Shareholder shall not be required to pay
such amount to Purchaser in the event the KSO Agreement has been amended,
terminated or has expired in accordance with this Section 2.11 and the
Shareholders' Voting Agreement.
ARTICLE 3.
CLOSING; PAYMENT OF PURCHASE PRICE
Section 3.1 The Closing. Each Closing of the sale and transfer of the Sale
Shares by the Selling Shareholders to Purchaser shall take place at the offices
of Xxxxxxxxxxxx, Xxxxxxxx & Partners at The Jakarta Stock Exchange Building,
Tower II, 21st Floor, JI. Jend. Xxxxxxxx Xxx. 00-00, Xxxxxxx 00000 at 10:00
a.m. local time, or at such other place and time as may be agreed by the parties
hereto. The parties hereto agree that:
30
(a) the Initial Closing shall occur on 1 August 2002;
(b) the Interim Closing shall occur on the earlier of (i) the Call Date and
(ii) 30 September 2003; and
(c) the Subsequent Closing shall occur on the earliest of (i) the Call
Date, (ii) 31 December 2004 and (iii) the date being thirty (30) days
after the Company acquires all of the then outstanding Notes as
envisaged in Section 3.13,
in each case if not a Business Day, then the following Business Day, or at such
other dates as may be agreed by the parties hereto, provided that:
(i) in respect of the Interim Closing which is not the Call Date, Purchaser
shall have paid the Net Working Capital Reimbursement, the Initial
Payment and, in accordance with their terms, all Notes evidencing the
Purchase Price for the Sale Shares to be transferred on the Interim
Closing which are due and payable on or before the Interim Closing
(such Notes being the Series I Notes with Payment Dates of June 15,
2003 and September 15, 2003 and Series II Notes with Payment Date of
September 15, 2003); and
(ii) in respect of the Subsequent Closing which is not the Call Date or
occurs otherwise than as a result of the Company holding all the then
outstanding Notes, the Purchaser shall have paid the Net Working
Capital Reimbursement, the Initial Payment and in accordance with their
terms all Notes evidencing the Purchase Price for the Sale Shares to be
transferred on (a) the Interim Closing which were due and payable after
the Interim Closing Date (such Notes being Series I Notes with Payment
Date of December 15, 2003 and Series II Notes with Payment Date of
March 15, 2004) and (b) the Subsequent Closing which are due and
payable on or before the Subsequent Closing (such Notes being the
Series I Notes with Payment Dates of December 15, 2003, March 15, 2004,
June 15, 2004, September 15, 2004 and December 15, 2004 and Series II
Notes with Payment Dates of June 15, 2004, September 15, 2004 and
December 15, 2004).
31
Section 3.2 Deliveries by the Selling Shareholders on the Initial Closing. On
the Initial Closing, each Selling Shareholder (or as otherwise provided herein)
shall deliver to Purchaser:
(a) except in the case of IFC, a deed or other instrument acknowledging the
completion of the Initial Closing and certifying that all rights to
such Selling Shareholder's Sale Shares to be transferred on the Initial
Closing pursuant to Section 2.1(a) available for transfer under and
subject to the relevant Share Pledges, including all voting rights and
economic rights, on the Initial Closing have been transferred to
Purchaser;
(b) a copy of the resolutions of the Board of Commissioners or the Board of
Directors, as the case may be, and the minutes of the General Meeting
of Shareholders of such Selling Shareholder (or, as applicable,
evidence of such other corporate approvals as are required to be
obtained by such Selling Shareholder) authorizing such Selling
Shareholder's execution and delivery of this Agreement and the
consummation of the Transactions contemplated on or before the
Subsequent Closing and such other documents evidencing such authority
as Purchaser may reasonably request;
(c) a copy of each of the Consents with respect to such Selling Shareholder
referred to in Section 8.2A(g) (including, without limitation, those
set forth in Schedule 5.4), if any;
(d) (to be delivered by FCR and Astratel on behalf of the Selling
Shareholders) a copy of each of the Required Company Consents;
(e) a certificate dated the Initial Closing Date and executed by such
Selling Shareholder to the effect that (i) each of such Selling
Shareholder's representations and warranties in this Agreement that is
qualified as to materiality is true and correct in all respects and
each of such Selling Shareholder's
32
representations and warranties that is not so qualified is true and
correct in all material respects, in each case as of the date such
representations and warranties are first given and as of the Initial
Closing Date and (ii) such Selling Shareholder has performed all
obligations required to be performed by it under this Agreement on or
prior to the Initial Closing Date;
(f) except in the case of IFC, a certificate dated the Initial Closing Date
and executed by such Selling Shareholder to the effect that as of the
Initial Closing Date the Company has no bank debt except as set forth
on Schedule 1.1;
(g) (to be delivered by FCR and Astratel on behalf of the Selling
Shareholders) a certificate setting forth the names of each of the
directors and commissioners, nominated and serving as a member of the
Board of Directors and Board of Commissioners of the Company by the
Selling Shareholders pursuant to the Joint Venture Agreement, being
directors and commissioners resigning as of the Initial Closing;
(h) (A) in the case of FCR, the opinion of Indonesian Counsel to FCR and
French Counsel to FCR each dated the Initial Closing Date and addressed
to Purchaser, substantially in the form set forth in Exhibit I.
(B) in the case of Marubeni, the opinion of Indonesian Counsel to
Marubeni and Japanese Counsel to Marubeni each dated the Initial
Closing Date and addressed to Purchaser, substantially in the form set
forth in Exhibit I.
(C) in the case of IFC, the opinion of Indonesian Counsel to IFC dated
the Initial Closing Date and addressed to Purchaser, substantially in
the form set forth in Exhibit I, and a certificate dated the Initial
Closing Date signed by IFC's secretary confirming the authority of
IFC's signatory hereto to sign and thereby bind IFC.
33
(D) in the case of NMP, the opinion of Indonesian Counsel to NMP and
Singaporean Counsel to NMP each dated the Initial Closing Date and
addressed to Purchaser, substantially in the form set forth in Exhibit
I.
(E) in the case of Astratel, the opinion of Indonesian Counsel to
Astratel, dated the Initial Closing Date and addressed to Purchaser
substantially in the form set forth in Exhibit I.
(F) in the case of Indosat, the opinion of Indonesian Counsel to
Indosat, dated the Initial Closing Date and addressed to Purchaser
substantially in the form set forth in Exhibit I,
(each of the aforementioned opinions of counsel are collectively
referred to as "Selling Shareholder Opinions");
(i) (to be delivered by FCR and Astratel on behalf of the Selling
Shareholders) complete and accurate copies of documentation evidencing
each Existing IFC Loan;
(j) the KSO Waiver, duly executed and delivered by such Selling
Shareholder;
(k) the Company Waiver, duly executed and delivered by the Company and by
such Selling Shareholder;
(l) the Shareholders' Voting Agreement, duly executed and delivered by such
Selling Shareholder and the Company;
(m) the Financial Escrow Agreement duly executed and delivered by the
Selling Shareholders and the Financial Escrow Agent;
34
(n) the Indonesian Escrow Agreement duly executed and delivered by the
Selling Shareholders and the Indonesian Escrow Agent;
(o) (to be delivered by FCR and Astratel on behalf of the Selling
Shareholders) the Purchaser Loan Agreement duly executed and delivered
by the Company;
(p) minutes of a shareholders' meeting or circular resolutions of the
Company (i) accepting the resignations of the existing members of the
board of directors and board of commissioners of the Company, (ii)
appointing such persons as Purchaser may nominate to such boards, (iii)
adopting a new set of articles of association of the Company
substantially in the form of Exhibit K and (iv) authorising signatory
changes to the bank accounts of the Company and approving new
signatories nominated by Purchaser;
(q) evidence of the partial or full repayment of the Existing IFC A and B
Loans by the Company utilising cash on hand (such evidence to be in the
form of bank transfer instructions, or such other evidence reasonably
satisfactory to the Purchaser, evidencing the payment of such amounts);
(r) (to be delivered by FCR and Astratel on behalf of the Selling
Shareholders) all of the minute books, corporate and financial records
and files and all other documents, contracts, correspondence, and
materials related to the Company and all bank statements and check
books related to any and all bank accounts of the Company (provided
that if any minutes, correspondence or records contain confidential or
sensitive information relating to Purchaser and/or the KSO Agreement
either such materials do not have to be provided or sanitised copies
thereof may be provided);
(s) a Power of Attorney to Vote relating to all of such Selling
Shareholder's Sale Shares not sold on Initial Closing duly executed and
delivered by such Selling Shareholder provided, however, in the case of
IFC's Power of Attorney to Vote the attorney shall be entitled to
attend a meeting but not
35
exercise the right to vote; and
(t) in respect of a Selling Shareholder domiciled outside of Indonesia
except IFC, such Selling Shareholder shall deliver (i) a certified copy
of a certificate of domicile from the relevant Government Entity in the
jurisdiction of its tax domicile and (ii) an original certificate
signed by such Selling Shareholder certifying that such Selling
Shareholder has no permanent establishment in Indonesia (as such term
is interpreted under applicable Indonesian tax laws).
Any statement contained in any certificate delivered by or on behalf of a
Selling Shareholder at the Initial Closing shall constitute a representation and
warranty by such Selling Shareholder under this Agreement.
The foregoing obligations are for the sole benefit of Purchaser, and may be
waived by Purchaser, in whole or in part, at any time or from time to time, in
the sole discretion of Purchaser. The failure by Purchaser to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time prior to or on the Initial Closing.
Section 3.3 Deliveries by Purchaser on the Initial Closing. On the Initial
Closing, Purchaser shall deliver to each Selling Shareholder:
(a) a copy of the authorization of Purchaser's Board of Commissioners, if
required, and the minutes of the General Meeting of Shareholders of
Purchaser authorizing Purchaser's execution and delivery of this
Agreement and the Purchaser Loan Agreement and the consummation of the
Transactions contemplated on or before the Subsequent Closing and such
other documents evidencing such authority as the Selling Shareholders
or any of them shall reasonably request;
36
(b) a certificate dated the Initial Closing Date and executed by Purchaser
to the effect that (i) each of Purchaser's representations and
warranties in this Agreement that is qualified as to materiality is
true and correct in all respects and each of the Purchaser's
representations and warranties that is not so qualified is true and
complete in all material respects, in each case as of the date the
representations and warranties are first given and as of the Initial
Closing Date and (ii) Purchaser has performed all obligations required
to be performed by it under this Agreement on or prior to the Initial
Closing Date;
(c) the opinion of Xxxxxxxxxxxx, Xxxxxxxx & Partners, Indonesian legal
counsel to Purchaser, dated the Initial Closing Date and addressed to
each of the Selling Shareholders substantially in the form set forth in
Exhibit J and reasonably satisfactory to the Majority Selling
Shareholders ("Purchaser Opinion");
(d) a copy of each of the Consents referred to in Section 8.3(d)
(including, without limitation, those set forth in Schedule 6.4);
(e) Notes evidencing Purchaser's obligation to pay each Selling
Shareholder's Shareholder Balance Amount;
(f) a KSO Waiver duly executed by Purchaser;
(g) the Shareholders' Voting Agreement, duly executed and delivered by
Purchaser;
(h) the Financial Escrow Agreement duly executed and delivered by Purchaser
and the Indonesian Escrow Agent and the Financial Escrow Agent;
(i) the Indonesian Escrow Agreement duly executed and delivered by
Purchaser and the Indonesian Escrow Agent and the Financial Escrow
Agent; and
(j) the Purchaser Loan Agreement duly executed and delivered by Purchaser
and evidence of
37
the advance by Purchaser to the Company of the loan envisaged under
Section 2.6(b)(i) by way of payment directly to IFC as envisaged under
Section 2.6(e).
Any statement contained in any certificate delivered by or on behalf of
Purchaser at the Initial Closing shall constitute a representation and warranty
by Purchaser under this Agreement.
The foregoing obligations are for the sole benefit of the Selling Shareholders,
and may be waived by each Selling Shareholder on its behalf in respect of the
sale of its Sale Shares, in whole or in part, at any time or from time to time,
in the sole discretion of each Selling Shareholder. The failure by any Selling
Shareholder to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time on or prior to the Initial
Closing.
Section 3.4 Deliveries by the Selling Shareholders on the Interim Closing. At
the Interim Closing, each Selling Shareholder shall deliver to Purchaser:
(a) a notice to the Indonesian Escrow Agent as required under the
Indonesian Escrow Agreement certifying that the Interim Closing has
occurred and directing that certificates representing such Selling
Shareholder's Sale Shares being transferred on the Interim Closing be
held for the account of Purchaser, together with all documents
necessary: (i) to effect the transfer of title to such Sale Shares to
Purchaser (including a duly executed deed of share transfer (akta
pemindahan hak atas saham)) and (ii) to effect registration of such
Sale Shares in Purchaser's name in the Company's register of
shareholders;
(b) to the extent not previously delivered to Purchaser, a copy of each of
the Consents with respect to such Selling Shareholder referred to in
Section 8.2A(g) (including, without limitation, those set forth in
Schedule 5.4), if any and any other Consents required for the Interim
Closing;
38
(c) a certificate dated the Interim Closing Date and executed by such
Selling Shareholder to the effect that (i) each of such Selling
Shareholder's representations and warranties in this Agreement
applicable to the Interim Closing that is qualified as to materiality
is true and correct in all respects and each of such Selling
Shareholder's representations and warranties applicable to the Interim
Closing that is not so qualified is true and correct in all material
respects as of the Interim Closing Date and (ii) such Selling
Shareholder has performed all obligations required to be performed by
it under this Agreement on or prior to the Interim Closing Date;
(d) a certificate dated the Interim Closing Date and executed by such
Selling Shareholder confirming that it has received confirmation from
the Financial Escrow Agent that its Pro Rata Share of the Purchase
Price payable on or before the Interim Closing has been paid for the
Sale Shares transferred at the Interim Closing;
(e) the issuance of updated Selling Shareholder Opinions dated the date of
the Interim Closing; and
(f) a Power of Attorney to Vote from each Selling Shareholder to Purchaser
relating to the remaining Sale Shares owned by such Selling
Shareholder, duly executed and delivered by each such Selling
Shareholder provided, however, in the case of IFC's Power of Attorney
to Vote the attorney shall be entitled to attend a meeting but not
exercise the right to vote.
Any statement contained in any certificate delivered by or on behalf of such
Selling Shareholder at the Interim Closing shall constitute a representation and
warranty by such Selling Shareholder under this Agreement.
The foregoing obligations are for the sole benefit of Purchaser, and may be
waived by Purchaser, in whole or in part, at any time or from time to time, in
the sole discretion of Purchaser and Purchaser shall be
39
entitled to utilise the power of attorney granted by the Selling Shareholders in
the Indonesian Escrow Agreement to effect the Interim Closing. The failure by
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
Section 3.5 Deliveries by Purchaser on the Interim Closing. At the Interim
Closing, Purchaser shall deliver to each Selling Shareholder:
(a) a certificate dated the Interim Closing Date and executed by Purchaser
to the effect that (i) each of Purchaser's representations and
warranties in this Agreement applicable to the Interim Closing that is
qualified as to materiality is true and correct in all respects and
each of Purchaser's representations and warranties applicable to the
Interim Closing that is not so qualified is true and complete in all
material respects as of the Interim Closing Date and (ii) Purchaser has
performed all obligations required to be performed by it under this
Agreement on or prior to the Interim Closing Date;
(b) to the extent not previously delivered to the Selling Shareholders, a
copy of each of the Consents referred to in Section 8.3(d) (including,
without limitation, those set forth in Schedule 6.4) and any other
Consents required for the Interim Closing;
(c) to the extent not previously delivered to the Selling Shareholders, a
copy of each of the Required Company Consents and any other Consents
required for the Interim Closing;
(d) the issuance of an updated Purchaser Opinion dated the date of the
Interim Closing;
(e) each Power of Attorney to Vote delivered to Purchaser pursuant to
Section 3.2(s) on the Initial Closing Date, to the relevant Selling
Shareholder for cancellation; and
40
(f) a Power of Attorney to Vote to each Selling Shareholder relating to
fifteen (15) percent of such Selling Shareholder's Sale Shares being
that number of Sale Shares set forth opposite such Selling
Shareholder's name in the column entitled "15% Interim Closing/No. of
Shares" in Schedule 2.1, duly executed and delivered by the Purchaser.
Any statement contained in any certificate delivered by or on behalf of
Purchaser at the Interim Closing shall constitute a representation and warranty
by Purchaser under this Agreement.
The foregoing obligations are for the sole benefit of the Selling Shareholders,
and may be waived by each Selling Shareholder in respect of the sale of its Sale
Shares, in whole or in part, at any time or from time to time, in the sole
discretion of such Selling Shareholder prior to or on the Interim Closing. The
failure by any Selling Shareholder to exercise any of the foregoing rights shall
not be deemed a waiver of any such right and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time prior to
or on the Interim Closing. Notwithstanding the foregoing, if any Selling
Shareholder shall fail to attend (whether by a duly authorised representative or
attorney or otherwise) the Interim Closing to effect the transactions
contemplated on the Interim Closing, the Interim Closing may proceed without
such Selling Shareholder and the deliveries by Purchaser shall be deemed to have
been waived in respect of such Selling Shareholder.
Section 3.6 Deliveries by the Selling Shareholders on the Subsequent Closing. At
the Subsequent Closing, each Selling Shareholder shall deliver to Purchaser:
(a) a notice to the Indonesian Escrow Agent as required under the
Indonesian Escrow Agreement certifying that the Subsequent Closing has
occurred and directing that all certificates representing such Selling
Shareholder's Sale Shares being transferred on the Subsequent Closing
and the Company's register of shareholders be released, together with
all documents necessary: (i) to effect the transfer of title to
41
such Sale Shares to Purchaser or Purchaser's designee (including a duly
executed deed of share transfer (akta pemindahan hak atas saham)) and
(ii) to effect registration of such Sale Shares in Purchaser's name in
the Company's register of shareholders; -
(b) to the extent not previously delivered to Purchaser, a copy of each of
the Consents with respect to such Selling Shareholder referred to in
Section 8.2A(g) (including, without limitation, those set forth in
Schedule 5.4), if any and any other Consents required for the
Subsequent Closing;
(c) a certificate dated the Subsequent Closing Date and executed by such
Selling Shareholder to the effect that (i) each of such Selling
Shareholder's representations and warranties in this Agreement
applicable to the Subsequent Closing that is qualified as to
materiality is true and correct in all respects and each of such
Selling Shareholder's representations and warranties applicable to the
Subsequent Closing that is not so qualified is true and correct in all
material respects, as of the Subsequent Closing Date and (ii) such
Selling Shareholder has performed all obligations required to be
performed by it under this Agreement on or prior to the Subsequent
Closing Date;
(d) a certificate dated the Subsequent Closing Date and executed by such
Selling Shareholder confirming that it has received confirmation from
the Financial Escrow Agent that its Pro Rata Share of the Purchase
Price payable on or before the Subsequent Closing has been paid for the
Sale Shares transferred at the Subsequent Closing;
(e) a termination of the Shareholders' Voting Agreement duly signed and
delivered by each Selling Shareholder;
(f) the issuance of updated Selling Shareholder Opinions dated the date of
the Subsequent Closing;
42
(g) a KSO Waiver, duly executed and delivered by such Selling Shareholder;
(h) the Company Waiver, duly executed and delivered by such Selling
Shareholder;
(i) each Power of Attorney to Vote delivered by Purchaser pursuant to
Section 2.5, the Shareholders' Voting Agreement and/or Section 3.5(f)
on the Interim Closing Date, to Purchaser for cancellation; and
(j) any documents relating to the Company not provided to Purchaser on the
Initial Closing pursuant to Section 3.2(r).
Any statement contained in any certificate delivered by or on behalf of such
Selling Shareholder at the Subsequent Closing shall constitute a representation
and warranty by such Selling Shareholder under this Agreement.
The foregoing obligations are for the sole benefit of Purchaser, and may be
waived by Purchaser, in whole or in part, at any time or from time to time, in
the sole discretion of Purchaser and Purchaser shall be entitled to utilise the
power of attorney granted by the Selling Shareholders in the Indonesian Escrow
Agreement to effect the Subsequent Closing. The failure by Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
Section 3.7 Deliveries by Purchaser on the Subsequent Closing. At the Subsequent
Closing, Purchaser shall deliver to each Selling Shareholder:
(a) a certificate dated the Subsequent Closing Date and executed by
Purchaser to the effect that (i) each of Purchaser's representations
and warranties in this Agreement applicable to the Subsequent Closing
that is qualified as to materiality is true and correct in all respects
and each of Purchaser's representations and warranties applicable to
the Subsequent Closing that is not so qualified is true and complete in
all material respects as of the Subsequent Closing Date and (ii)
Purchaser has performed all obligations required to be performed by it
43
under this Agreement on or prior to the Subsequent Closing Date;
(b) to the extent not previously delivered to the Selling Shareholders, a
copy of each of the Consents referred to in Section 8.3(b) (including,
without limitation, those set forth in Schedule 6.4) and any other
Consents required for the Subsequent Closing;
(c) a copy of each of the Required Company Consents and any other Consents
required for the Subsequent Closing;
(d) a termination of the Shareholders' Voting Agreement duly signed and
delivered by Purchaser and the Company;
(e) the issuance of Purchaser Opinion dated the date of the Subsequent
Closing;
(f) a KSO Waiver duly executed by Purchaser;
(g) the Company Waiver, duly executed by the Company and Purchaser; and
(h) each Power of Attorney to Vote delivered to the Purchaser pursuant to
Section 3.4(f) and/or the Shareholders' Voting Agreement on the Interim
Closing Date, to the respective Selling Shareholder for cancellation.
Any statement contained in any certificate delivered by or on behalf of
Purchaser at the Subsequent Closing shall constitute a representation and
warranty by Purchaser under this Agreement.
The foregoing obligations are for the sole benefit of the Selling Shareholders,
and may be waived by each Selling Shareholder in respect of the sale of its Sale
Shares, in whole or in part, at any time or from time to time, in the sole
discretion of such Selling Shareholder prior to or on the Subsequent Closing.
The failure by any Selling Shareholder to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time
prior to or on the Subsequent Closing. Notwithstanding the foregoing, if any
Selling
44
Shareholder shall fail to attend (whether by a duly authorised representative or
attorney or otherwise) the Subsequent Closing or on such Closing fails to effect
the transactions contemplated on the Subsequent Closing, the Subsequent Closing
may proceed without such Selling Shareholder and the deliveries by Purchaser
shall be deemed to have been waived in respect of such Selling Shareholder.
Section 3.8 Payment of the Purchase Price. Purchaser shall pay the Initial
Payment and the Shareholder Balance Amount in United States Dollars, by wire
transfer in immediately available funds in accordance with the following
provisions:
(a) On the Share Pledge Release Date, Purchaser shall pay or cause to be
paid the Initial Payment to the Selling Shareholders in their
respective Pro Rata Shares, as set out in Schedule 3.8(a), to each
Selling Shareholder's bank account nominated in writing to Purchaser at
least twelve (12) Business Days prior to the Share Pledge Release Date.
(b) Thereafter, Purchaser shall fund the Financial Escrow Account in United
States Dollars, by wire transfer in immediately available funds in
accordance with Section 7.6 hereof, and payments from the Financial
Escrow Account shall be made by the Financial Escrow Agent (i) to each
Selling Shareholder representing payments of such Selling Shareholder's
Shareholder Balance Amount as evidenced by the Notes issued to each
Selling Shareholder pursuant to Section 3.8(c), or (ii) to the extent
such Selling Shareholder has transferred some or all of the Notes
issued to it by Purchaser, to each Registered Holder of such Notes (in
each case, thereby reducing the Shareholder Balance Amount payable to
such Selling Shareholder by an amount equal to the amount paid in
respect of such Notes) in the manner contemplated in Section 7.6
hereof.
45
(c) Purchaser's payment obligations in respect of each Selling
Shareholder's Shareholder Balance Amount and each Selling Shareholder's
entitlement to receive payment of such Selling Shareholder's
Shareholder Balance Amount shall be evidenced by Series I Notes and
Series II Notes substantially in the form in Exhibits A1 and A2,
respectively, (each, a "Note" and together, the "Notes") payable to
such Selling Shareholder in the amounts and on the dates set forth in
Schedule 7.6(b). The Notes shall, subject to Section 3.8(e), be freely
transferable in accordance with the terms and conditions of the Notes,
the relevant transfer certificates for the Notes (substantially in the
form in Exhibits A1 and A2, respectively, each a "Transfer Certificate"
and together the "Transfer Certificates"), and the procedures set forth
in the Financial Escrow Agreement. Each transferee of a Note, upon the
due execution and delivery of a Transfer Certificate (each such
transferee, a "Registered Holder"), shall be entitled to the Selling
Shareholder's (or other transferor's) rights under the Note to receive
payment of the Shareholder Balance Amount evidenced thereby. In
addition, a Selling Shareholder may, with the prior written consent of
Purchaser (such consent not to be unreasonably withheld), on the
transfer to a third party of all of its Notes also novate all its
rights and obligations under this Agreement (including for the
avoidance of doubt delivery of the relevant Sale Shares) and the
Security Agreements on terms and conditions reasonably required by
Purchaser to maintain the sanctity of the Transactions so as not to
prejudice the rights of Purchaser and the obligations of such Selling
Shareholder provided that any such Selling Shareholder shall remain
fully liable for the performance under this Agreement and the Security
Agreements of any such third party.
46
(d) Each Selling Shareholder shall be entitled, upon giving prior written
notice to Purchaser (such notice shall contain sufficient information
demonstrating that the sanctity of the Transactions and the terms and
conditions of this Agreement and the Security Agreements are maintained
so as not to prejudice the rights of Purchaser and the obligations of
such Selling Shareholder), to sell and assign its rights to, and/or to
assume the obligations of any other Selling Shareholder under this
Agreement and the Security Agreements.
(e) The Selling Shareholder shall not be entitled to sell any Notes until
after the Share Pledge Release Date and all Notes delivered on the
Initial Closing shall be placed into escrow until the Share Pledge
Release Date and shall be dealt with in accordance with the terms of
the Indonesian Escrow Agreement.
(f) Each of the parties hereto agrees to sign, execute and deliver a
Transfer Certificate and any agreement, instrument, deed or other
document required to effect any transfer of a Note, and/or the
assignment of any rights and/or the assumption of any obligations
referred to in this Section 3.8 and shall promptly do any and all acts,
matters or things necessary to perfect such actions and to maintain the
sanctity of this Agreement, the Security Agreements and the
Transactions so as not to prejudice the rights of Purchaser and the
obligations of such other party.
(g) Upon the written request of a Selling Shareholder or a Registered
Holder, Purchaser shall issue replacement Notes in place of Notes that
have been lost, stolen, mutilated, defaced or destroyed.
47
(h) To the extent that Purchaser incurs any reasonable costs, expenses,
fees (including reasonable attorney fees) in documenting any assignment
or transfer and/or assumption pursuant to this Section 3.8, all such
reasonable costs, expenses and fees (including reasonable attorney
fees) shall be borne by the relevant Selling Shareholder or the
Registered Holder, as applicable, and shall be payable within thirty
(30) days of an invoice being issued by Purchaser to such Selling
Shareholder or Registered Holder, as relevant.
(i) All payments made by Purchaser under (i) this Agreement, (ii) the
Indonesian Escrow Agreement, and (iii) subject to Section 7.6(j), the
Financial Escrow Agreement and the Notes shall be made without setoff,
counterclaim or deduction except that Purchaser shall be entitled to
withhold and deduct (with no obligation to gross up) all amounts
required to be withheld and deducted under applicable Indonesian laws
and regulations on account of withholding tax.
(j) Notwithstanding any other provision of this Agreement, it is expressly
acknowledged and agreed by each party hereto that (i) the Purchaser's
obligation to pay each Selling Shareholder's Shareholder Balance Amount
is evidenced by the Notes and (ii) payment under such Notes
extinguishes the Purchaser's obligation to pay a corresponding amount
of such Selling Shareholder's Shareholder Balance Amount.
Section 3.9 Title to Sale Shares Sold at Initial Closing. On the later of (i)
the Initial Sale Shares Transfer Date and (ii) the Share Pledge Release Date:
(a) each Selling Shareholder (other than IFC) shall deliver to Purchaser duly
executed deeds of transfer (akta pemindahan hak atas saham) in respect of the
Selling Shareholder's Sale Shares sold to Purchaser on the Initial Closing and
(b) IFC shall deliver to Purchaser duly executed deeds of transfer (akta
pemindahan hak atas saham) in respect of IFC's Sale Shares sold to Purchaser on
the Share Pledge Release Date,
48
in each case together with all documents necessary (a) to effect the transfer of
title to such Sale Shares sold to Purchaser and (b) to effect registration of
such Sale Shares in Purchaser's name in the Company's register of shareholders.
Section 3.10 Changes in Shareholdings. With the written authorisation of the
Majority Shareholders, the Company and Purchaser jointly delivered to the
Indonesian Escrow Agent, the commissioners and directors of the Company shall be
entitled, in compliance with the escrow arrangements set forth in the Indonesian
Escrow Agreement, to amend the Company's register of shareholders and endorse
for transfer share certificates or to cancel share certificates and issue new
share certificates to reflect the entitlements of Purchaser to any Sale Shares,
subject to Section 3.9, sold by the Selling Shareholders and purchased by
Purchaser on any Closing.
Section 3.11 Default.
(a) In the event any payment required to be made by Purchaser pursuant to
Sections 3.8(a), 3.8(b) or 7.6 is not paid when due and any such
payment remains unpaid for a period of ten (10) Business Days after
receipt by Purchaser of notice thereof from any Selling Shareholder in
accordance with Section 11.3; or
(b) any drawdown payment required to be paid by Purchaser in respect of any
Purchaser Loan under Section 2.6(b)(ii) is not duly advanced to the
Company in a timely manner in respect of (i) the Existing IFC C Loan
and (ii) in respect of the Purchaser's obligation to pay the Net
Working Capital Reimbursement; or
(c) Purchaser files a voluntary petition for bankruptcy at the relevant
Indonesian Commercial Court or enters into a suspension of payment,
composition or other arrangement under the Indonesian Bankruptcy Law or
an order for the receivership or bankruptcy of Purchaser is made and is
not discharged, dismissed or permanently stayed within 45 days of
service; or
49
(d) any curator, receiver or liquidator or similar officer, is appointed
whether by a competent court or pursuant to a shareholder resolution of
Purchaser (other than pursuant to a voluntary reorganization) in
respect of the Purchaser or all or substantially all of its assets; or
(e) any corporate action or other steps are taken by the Purchaser for the
bankruptcy, liquidation, winding-up, or dissolution of the Purchaser or
for the appointment of a curator, liquidator or receiver or similar
officer of the Purchaser or any of its assets or revenues; or
(f) there exists a Failure to Remedy a Material Default,
(each, an "Event of Repayment") then,
(i) notwithstanding any other provision hereof, the Notes evidencing each
Selling Shareholder's Shareholder Balance Amount shall become
immediately due and payable by Purchaser (in the face amount with
respect to the Series I Notes, and in an amount equal to the product of
the "Base Amount", the "Applicable Period" and the LIBOR rate
applicable on the last date (preceding the Event of Repayment) on which
interest was calculated with respect to the Series II Notes as set out
in Schedule 7.6(b)); and
(ii) the Selling Shareholders and Registered Holders, as relevant, shall,
subject to the terms and conditions of the Financial Escrow Agreement,
be entitled to withdraw and to apply to the payment of the then
outstanding Selling Shareholder's Shareholder Balance Amount amounts on
deposit with the Financial Escrow Agent pursuant to the terms of the
Financial Escrow Agreement to the extent necessary to pay all amounts
due under Section 3.8(b) and such amounts shall be deemed as payment
for and a reduction in the then outstanding Selling Shareholders'
Shareholders Balance Amounts.
50
Section 3.12 Releases and Waivers.
(a) At each of the Initial Closing and the Subsequent Closing, each of the
Selling Shareholders and the Company shall execute and deliver to
Purchaser a release and waiver of claims in the form of Exhibit C (a
"Company Waiver").
(b) At each of the Initial Closing and the Subsequent Closing, each of the
Selling Shareholders and Purchaser shall execute and deliver a release
and waiver of claims in the form of Exhibit D (a "KSO Waiver").
The KSO Waivers and the Company Waivers delivered on the Initial Closing shall
be placed into escrow, and shall be released on the Share Pledge Release Date in
accordance with the terms of the Indonesian Escrow Agreement.
Section 3.13 Use of Company Funds. The parties hereto agree that during the
Exclusivity Period, notwithstanding an Event of Repayment, all moneys of the
Company, less certain operating expenses and capita] expenditure as permitted
under the Shareholders' Voting Agreement, shall be used firstly, as relevant, to
fund the payment of the Existing IFC Loans, secondly, to fund the payment of the
Initial Payment, thirdly, to fund the payment of the Net Working Capital
Reimbursement and fourthly, to fund payment on the Notes by Purchaser and/or
purchase of the Notes by the Company and all such moneys shall be deemed to be
either repayments of the Purchaser Loans or loans to Purchaser subordinated in
repayment to all moneys necessary for payment of operating expenses and to fund
payment of the Net Working Capital Reimbursement and the Initial Payment, and
shall be documented accordingly by the Company and Purchaser on commercial arms'
length terms.
ARTICLE 4.
NET WORKING CAPITAL REIMBURSEMENT
Section 4.1 Preparation of the Proforma Closing Balance Sheet.
(a) Thirty (30) days prior to the scheduled Initial Closing Date the
Selling Shareholders shall cause the Company to publish a notice in one
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leading nationwide Bahasa Indonesia language newspaper and one leading
nationwide English language newspaper, in a form reasonably agreed by
Purchaser (the "First Notice"), and in the same manner a second notice
twenty-five (25) days before the scheduled Initial Closing Date (the
"Second Notice") stating that the ownership of the Company is being
transferred and inviting all creditors, potential litigants and other
Persons who may have a claim against the Company to lodge with the
Company and Accountant (as defined below) a notice of claim within
forty five (45) days after the First Notice and within forty (40) days
after the Second Notice.
(b) Forty five (45) days prior to the scheduled date for the Initial
Closing, the Company shall (i) cause the preparation of a proforma
balance sheet of the Company as of the close of business of the Company
on the calendar day before the Initial Closing Date (such date, the
"Closing Balance Sheet Date"); (ii) cause Xxxxxxxx Xxxxx & Co. (an
affiliated firm of Xxxxxx Xxxxxxxx) (or any successor thereto) or as
mutually agreed between Purchaser and the Majority Shareholders, in
each case an independent firm of accountants ("Accountant"), to audit
such proforma closing balance sheet and issue an audited proforma
closing balance sheet (the "Proforma Closing Balance Sheet") no later
than five (5) Business Days prior to the scheduled date of the Initial
Closing; and (iii) provide to Accountant all necessary assistance and
updating of changes in the circumstances of the Company during that
period. The Proforma Closing Balance Sheet (i) shall be prepared in
accordance with GAAP, (ii) shall not reflect any revaluation after
December 31, 2001 of any fixed asset shown on the Financial Statements,
(iii) shall fairly present in all material respects the proforma
financial position of the Company as of the Closing Balance Sheet Date,
and (iv) shall be accompanied by an audit certificate of Accountant to
that effect.
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(c) Based upon the Proforma Closing Balance Sheet, Accountant shall
calculate the Working Capital of the Company as of the Closing Balance
Sheet Date.
(d) In calculating the Working Capital Accountant shall strictly adhere to
the working capital instructions set out in Schedule 4.1 and the
Working Capital so calculated shall be the proforma adjusted working
capital of the Company (the "Proforma Adjusted Working Capital of the
Company").
(e) No later than five (5) Business Days prior to the Initial Closing, a
copy of the Proforma Closing Balance Sheet shall be delivered by
Accountant to each of Purchaser, the Company and the Selling
Shareholders and Accountant shall issue an audit certificate to each of
Purchaser, the Company and the Selling Shareholders certifying:
(i) the Proforma Adjusted Working Capital of the Company;
(ii) the extent to which the Proforma Adjusted Working Capital of
the Company exceeds or is less than Rupiah 5,000,000,000 (five
billion); and
(iii) whether or not ninety (90) percent or more of the Company's
current assets as defined in Section 4B of Schedule 4.1, as at
the Closing Balance Sheet Date, are likely to be represented
by cash and/or realisable cash equivalents and/or accounts
receivable from the KSO Unit.
Section 4.2 Preparation of Final Closing Balance Sheet. Accountant shall, within
thirty (30) days after the Initial Closing Date, update and finalize, in
accordance with the parameters in Section 4.1 and the working capital
instructions in Schedule 4.1, a balance sheet of the Company as of the Closing
Balance Sheet Date (the "Final Closing Balance Sheet") and its determination of
the Working Capital of the Company strictly in accordance with the working
capital instructions in Schedule 4.1 (the "Final Adjusted Working Capital of the
Company"). A copy of the Final Closing Balance Sheet shall be delivered by
Accountant to each of Purchaser, the Company and
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the Selling Shareholders and Accountant shall issue a compilation report to each
of Purchaser, the Company and the Selling Shareholders certifying:
(a) the Final Adjusted Working Capital of the Company;
(b) the extent to which the Final Adjusted Working Capital of the Company
exceeds or is less than Rupiah 5,000,000,000 (five billion);
(c) the amount of the Net Working Capital Reimbursement; and
(d) whether or not ninety (90) percent or more of the Company's current
assets as defined in Section 4B of Schedule 4.1, as at the Closing
Balance Sheet Date, were represented by cash and/or realisable cash
equivalents and/or accounts receivable from the KSO Unit.
FCR and Astratel, on behalf of Selling Shareholders, shall use their reasonable
efforts to procure the services of one or more persons who are now employees of
the Company, on a contract basis as needed, to assist Accountant in the audit of
the Final Closing Balance Sheet (the "Contract Consultants"). Purchaser and FCR
and Astratel, as necessary, shall cooperate with Accountant in the preparation
of the Final Closing Balance Sheet.
Section 4.3 Final Closing Balance Sheet Disputes. If either the Majority
Shareholders or Purchaser believes there has been manifest error in preparing
the Final Closing Balance Sheet it may, by giving written notification delivered
to the other parties hereto not more than fourteen (14) calendar days after
receipt of the Final Closing Balance Sheet, dispute the conclusions indicated in
the Final Closing Balance Sheet, including the computation of the Final Adjusted
Working Capital of the Company. During the 25-calendar day period following the
parties' receipt of the Final Closing Balance Sheet, Purchaser's and the
Majority Shareholders' representatives shall be entitled to reasonably access,
review and discuss with Accountant the work records which Accountant prepared in
connection with the preparation of the Proforma Closing Balance Sheet and the
Final Closing Balance Sheet. Any notification delivered by Purchaser or the
Majority Shareholders pursuant to this Section 4.3 shall specify in reasonable
detail the nature of their objection to the conclusions indicated in the Final
Closing Balance Sheet or to the
54
computation of the Final Adjusted Working Capital of the Company. If no notice
of a dispute has been delivered by either Purchaser or the Majority Shareholders
within the 14-day period under this Section 4.3, then the Final Closing Balance
Sheet and the calculation of the Final Adjusted Working Capital of the Company
shall be final, conclusive and binding on Purchaser and all Selling
Shareholders. In the event either Purchaser or the Majority Shareholders timely
delivers notice of a dispute in accordance with this Section 4.3, then the
Majority Shareholders and Purchaser shall negotiate in good faith to settle such
dispute. Any written agreement, between Purchaser and the Majority Shareholders
settling such dispute, in full or in part, shall be final, binding and
conclusive, as to all matters so agreed, on all the Selling Shareholders and
Purchaser, including, for the avoidance of doubt, any Selling Shareholder that
is not a party to such agreement.
Section 4.4 Dispute Auditor. In the event that no agreement among Purchaser and
the Majority Shareholders is reached which fully settles the dispute raised by
them pursuant to Section 4.3 within twenty-five (25) days following written
notification of a dispute, then either Purchaser or the Majority Shareholders
may submit the items remaining in dispute for resolution to the Indonesian
affiliate of an internationally recognized accounting firm in Jakarta (the
"Dispute Auditor"), which is independent of Purchaser and each of the Majority
Shareholders and which is reasonably acceptable to Purchaser and the Majority
Shareholders. All determinations made by the Dispute Auditor shall be final,
conclusive and binding on all parties hereto with respect to the calculation of
the Final Adjusted Working Capital of the Company; and payments shall be made in
respect thereof in accordance with Section 4.6. If a Dispute Auditor is not
agreed upon by the Majority Shareholders and Purchaser within thirty (30) days
of a request by Purchaser or the Majority Shareholders for agreement on the
identity of a Dispute Auditor to whom one or more items are proposed to be
submitted for resolution, then Purchaser or the Majority Shareholders may
request the Chairman of the Indonesian Accounting Association (Asosiasi Akuntan
Indonesia) to select a Dispute Auditor and such selection of a Dispute Auditor
shall be final and binding on Purchaser and all Selling Shareholders.
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Section 4.5 No Stay of Payments in Respect of the Adjusted Working Capital of
the Company. The existence of a dispute with respect to the Final Closing
Balance Sheet or the Final Adjusted Working Capital of the Company contemplated
by Sections 4.3 and 4.4 shall not relieve any party hereto of its obligations to
effect any payment as and when required under Section 4.6 provided that on any
final determination pursuant to Section 4.3 or 4.4 the parties hereto shall
promptly account to each other accordingly.
Section 4.6 Payments in respect of Final Adjusted Working Capital.
(a) If the Final Adjusted Working Capital of the Company is positive, such
sum, subject to a cap of Rupiah two hundred and fifty billion (Rp.
250,000,000,000) (the "Net Working Capital Reimbursement") shall be
paid in Rupiah (or as instructed by each Selling Shareholder, in any
other currency, at such Selling Shareholder's cost in an amount
calculated at the spot exchange rate applicable at the date of payment)
by Purchaser to the Selling Shareholders in their respective Pro Rata
Shares in accordance with Section 4.8.
(b) If the Final Adjusted Working Capital of the Company is negative, then
as soon as practicable, but in any event no later than thirty (30) days
from the date of each Selling Shareholder's respective receipt of the
Final Closing Balance Sheet, each Selling Shareholder shall pay to
Purchaser, its Pro Rata Share, of an amount equal to the amount by
which the Final Adjusted Working Capital of the Company is negative, in
Rupiah by wire transfer in immediately available funds to the bank
account previously designated in writing by Purchaser.
Section 4.7 Expenses. Each of Purchaser on the one hand and the Selling
Shareholders, in their respective Pro Rata Shares, on the other hand shall be
responsible for one half of any fees and expenses charged by Accountant, one
half of any fees and
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expenses charged by the Dispute Auditor and one half of any fees and expenses of
the Contract Consultants.
Section 4.8 Funding and Payment of Net Working Capital Reimbursement.
(a) Subject to Section 4.8(b) and the retention of moneys required to
prepay and pay any outstanding or owing amounts under or in respect of
the IFC Investment Agreement and the Common Terms Agreement in respect
of the Existing IFC A and B Loans and any interest payable or accrued
through the Initial Closing Date on the Existing IFC C Loan, all cash
on hand on the Initial Closing Date and all moneys received by the
Company on and after the Initial Closing Date until the date being the
later of (i) the date that the Final Closing Balance Sheet is issued by
Accountant and (ii) the Share Pledge Release Date (such later date, the
"Release Date") (excluding the US Dollar components of the Purchaser
Loans), shall be remitted by the Company to the Indonesian Financial
Escrow Account on the Initial Closing Date (with respect to the cash on
hand) and promptly upon receipt thereof, but in any event within five
(5) Business Days after receipt thereof (with respect to all monies
received on and after the Initial Closing Date). Notification of the
Release Date shall be given to the Company and the Indonesian Escrow
Agent by Purchaser and the Majority Shareholders jointly.
(b) The Company shall not be required to remit to the Indonesian Financial
Escrow Account any moneys as required under Section 4.8(a):
(i) unless immediately following the Initial Closing it has had or
until it has after the Initial Closing Date in its bank
accounts at least the sum of Rupiah 5,000,000,000 (five
billion) (or its equivalent in any other currency), excluding
any payments by the Company of any sort after the Initial
Closing Date and then it shall only be required to so remit
the excess over such amount; or
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(ii) if during the ninety (90) day period following the Initial
Closing it is required to pay liabilities, accrued on or
before the Initial Closing Date, exceeding, in aggregate,
Rupiah 5,000,000,000 (five billion) (or its equivalent in any
other currency) (such amounts in excess of Rupiah
5,000,000,000 (five billion), the "Excess Liabilities") until
such time as funds are received to pay the Excess Liabilities.
(c) The Net Working Capital Reimbursement shall be paid by Purchaser as
follows:
(i) The Company shall issue standing instructions to the
Indonesian Escrow Agent under the Indonesian Escrow Agreement
to remit within three (3) Business Days after the Release Date
to the Selling Shareholders in their respective Pro Rata
Shares in Rupiah (or in any other currency as instructed by
any Selling Shareholder, at its cost, in an amount calculated
at the spot exchange rate applicable on the date of such
remittance) all moneys in the Indonesian Financial Escrow
Account in an amount not exceeding the Net Working Capital
Reimbursement as notified to the Indonesian Escrow Agent by
Purchaser or the Majority Shareholders, by delivering a true
copy of the Accountant's certificate issued pursuant to
Section 4.2; and
(ii) if the amount of the Net Working Capital Reimbursement exceeds
the amount in the Indonesian Financial Escrow Account, then
Purchaser shall pay the balance of the Net Working Capital
Reimbursement directly to the Selling Shareholders
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in their respective Pro Rata Shares in Rupiah (or in any other
currency as instructed by any Selling Shareholder, at its
cost, in an amount calculated at the spot exchange rate
applicable on the date of such remittance obtained by
Purchaser from Citibank N.A., Jakarta Branch or another
remitting bank) as follows: (A) if the Release Date occurs
prior to the 7th day of the month then on the fifteenth (15th)
calendar day of such month; and (B) if the Release Date occurs
on or after the 7th day of such month then on the fifteenth
(15th) calendar day of the month following the month in which
the Release Date occurs, in either case, all moneys received
by the Company after the Release Date (subject to Sections
4.8(a) and 4.8(b)) until the Net Working Capital Reimbursement
has been paid in full, it being agreed that Purchaser shall
pay the Net Working Capital Reimbursement in full by that date
which is the earlier of (i) ninety (90) days after the Initial
Closing Date, provided that ninety (90) percent or more of the
Company's current assets, as at the Closing Balance Sheet
Date, were represented by cash and/or realisable cash
equivalents and/or accounts receivable from the KSO Unit
failing which 180 days after the Initial Closing Date and (ii)
the day that the Company is able to provide to Purchaser
sufficient funds to pay the Net Working Capital Reimbursement.
(d) (i) The Contract Consultants shall be charged by the parties
hereto in ensuring that all receivables (including all
accounts receivable, interest receivable and security deposits
and other refundable deposits) included in the Final Closing
Balance Sheet which are not cash, other than receivables from
the KSO Unit, are collected within
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ninety (90) days after the Closing Balance Sheet Date. If
prior to the final installment payment of the Net Working
Capital Reimbursement, receivables (including all accounts
receivable, interest receivable and security deposits and
other refundable deposits) included in the Final Closing
Balance Sheet, other than receivables from the KSO Unit, are
not collected, Purchaser shall be entitled to deduct from the
Net Working Capital Reimbursement an amount equal to the
non-collected receivables (the "Non-collectible Receivables")
and each Selling Shareholder's Pro Rata Share of the Net
Working Capital Reimbursement shall be adjusted accordingly.
(ii) If as a result of the reconciliation made pursuant to Section
4.8(d)(i), there are moneys owing to Purchaser each Selling
Shareholder shall pay upon written demand by Purchaser, within
thirty (30) days, its Pro Rata Share of any deficiency to a
bank account of Purchaser nominated in writing.
(iii) If there are any Non-collectible Receivables and determined by
Accountant, the parties hereto shall discuss in good faith
either (A) the assignment of such receivables to the Selling
Shareholders, which prior to any assignment will be written
down to a zero value in the books of the Company, or (B) a
mechanism by which if the Non-collectible Receivables are
subsequently paid to the Company, a payment by Purchaser to
the Selling Shareholders in their respective Pro Rata Shares
of the sum so paid. Any such payment shall be deemed as part
of the Net Working Capital Reimbursement. The Majority
Shareholders shall have full rights of access to the books and
records of the Company for a period of 120
60
days after the Initial Closing to verify the
non-collectibility of the Non-collectible Receivables.
(e) The moneys of the Company utilised by Purchaser pursuant to this
Section 4.8 to pay the Net Working Capital Reimbursement shall
constitute partial repayment of the Purchaser Loans to the extent of
such payment.
(f) The parties hereto acknowledge and agree that the current management of
the Company may prepare and submit bank transfer instructions to be
executed on the Initial Closing Date, to give effect to the transfer
contemplated in Section 4.8(a).
Section 4.9 Interest.
(a) Any Rupiah payment required to be made by a party to another party
under Sections 4.8(c)(ii) and 4.8(d)(ii) and not paid as required by
its due date, shall bear interest from such due date to the date of
actual payment at an interest rate of SBI Rate plus 4.5% per annum.
(b) Any US Dollar payment required to be made by any party to any other
party under this Agreement after the Initial Closing and prior to or on
31 December 2004, and not paid as required by its due date, shall bear
interest from such due date to the date of actual payment at an
interest rate of LIBOR plus 4.5% per annum.
(c) After 31 December 2004 any US Dollar payment required to be made by any
party to any other party under this Agreement, and not paid as required
by its due date, shall bear interest from such due date to the date of
actual payment at an interest rate of twelve (12) percent per annum
compounded quarterly.
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ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF
THE SELLING SHAREHOLDERS
Except as specifically and fairly set forth in the Disclosure Schedule
(including any formal amendments thereto) prepared and signed by each of the
Selling Shareholders and annexed hereto, each Selling Shareholder (save as
provided in the penultimate paragraph of this Article 5), severally, represents
and warrants to Purchaser as of the date of this Agreement that those matters
set out in Sections 5.1, 5.2, 5.3, 5.5 and 5.6 with respect to itself are true
and correct, and on the date that the Disclosure Schedule is delivered to
Purchaser by the Company pursuant to Section 8.2B(j) and again as of the Initial
Closing Date that all of the following statements applicable with respect to
itself contained in this Article 5 are true and correct:
Section 5.1 Legal Power; Organization. Such Selling Shareholder is a legal
entity, duly organized and validly existing under the laws of its jurisdiction
of organization (or, in the case of IFC, established under its Articles of
Agreement and existing) and has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
Section 5.2 Authorization. Such Selling Shareholder has taken all necessary
corporate or other action to authorize the execution and delivery of this
Agreement and the consummation by such Selling Shareholder of the Transactions,
except for the approval of the board of directors of each of FCR and Marubeni.
As of the date evidence of each such board of director approval (or a
certificate stating that it has been obtained) is furnished to the Purchaser and
on the Initial Closing Date, each of FCR and Marubeni represents and warrants
that the approval of its board of directors has been obtained and remains in
full force and effect.
Section 5.3 Binding Agreement. This Agreement has been duly executed and
delivered by such Selling Shareholder and, assuming due and valid authorization,
execution and delivery hereof by Purchaser, the Company and each other Selling
Shareholder, this Agreement constitutes a legal, valid and binding obligation of
such Selling Shareholder,
62
and, except with respect to IFC having regard to its immunities, enforceable
against it in accordance with its terms.
Section 5.4 Selling Shareholders' Consents and Approvals: No Conflicts
Violations or Defaults. Except for such Consents as are set forth in Schedule
5.4, neither the execution and delivery of this Agreement by such Selling
Shareholder, nor the consummation by such Selling Shareholder of the
Transactions, will:
(i) conflict with or result in any breach of any provision of the
organizational documents of such Selling Shareholder;
(ii) require any Consent of any Governmental Entity or other Person;
(iii) require any Consent under, or result in a violation or breach of, or
constitute (with or without due notice or the passage of time or both)
a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or
provisions of any agreement, license, contract, commitment, obligation,
understanding, undertaking, arrangement or instrument to which such
Selling Shareholder is a party or by which such Selling Shareholder or
any of the properties or assets of such Selling Shareholder is bound;
(iv) violate any binding order, writ, injunction applicable to such Selling
Shareholder or any of the properties or assets of such Selling
Shareholder; or
(v) violate any decree, statute, rule or regulation applicable to such
Selling Shareholder or any of the properties or assets of such Selling
Shareholder,
excluding from the foregoing clauses (ii), (iii) and (v) such violations,
breaches or defaults which would not, individually or in the aggregate, have an
adverse effect on such Selling Shareholder's ability to perform its obligations
under this Agreement, its ability to consummate the purchase and sale of its
Selling
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Shareholder's Sale Shares and to transfer title to its Selling Shareholder's
Sale Shares or the enforceability against such Selling Shareholder or the
validity of this Agreement.
As of the Initial Closing Date, such Selling Shareholder represents and warrants
that each Consent of any Governmental Entity or other Person required in order
for such Selling Shareholder to consummate the Transactions including the
Consents with respect to such Selling Shareholder set forth in Schedule 5.4 has
been obtained and remains in full force and effect.
Section 5.5 Legal Proceedings. Except as disclosed in Schedule 5.5 of the
Disclosure Schedule and other than any Proceedings which may be initiated by
Purchaser or are primarily caused as a result of the actions of Purchaser, there
are no Proceedings pending or Threatened involving or affecting such Selling
Shareholder which question or challenge the validity of this Agreement or any
action taken or to be taken by such Selling Shareholder pursuant to this
Agreement or in connection with the Transactions or which may result in the
issuance of a judgment, order or decree prohibiting or making illegal the
consummation of the Transactions by such Selling Shareholder and, to the
Knowledge of such Selling Shareholder, there is no valid basis for any such
Proceeding. Such Selling Shareholder is not subject to any judgment, order or
decree prohibiting or making illegal the consummation of the Transactions.
Section 5.6 Share Ownership. Such Selling Shareholder is the legal owner of, and
has legal title to, the Sale Shares of such Selling Shareholder set out against
its name in Schedule 2.1. Neither such Selling Shareholder nor any of its
Subsidiaries owns any other securities issued by, or other obligations of, the
Company. The Sale Shares of such Selling Shareholder are now, and will, subject
to the Transactions, be at all times between the date hereof and the Subsequent
Closing owned by such Selling Shareholder and held by such Selling Shareholder,
or by a custodian for the sole and exclusive benefit of such Selling
Shareholder, subject to the Share Pledges, free and clear of all Encumbrances
whatsoever except as disclosed in Schedule 5.6 of the Disclosure Schedule.
64
Section 5.7 Legal Title Conveyed. As of each Closing, such Selling Shareholder
has conveyed to Purchaser good and valid title to the relevant Sale Shares of
such Selling Shareholder to be transferred on a Closing, free and clear of all
Encumbrances and all other limitations and restrictions (including any
restriction on the right to vote, sell or otherwise dispose of such Sale
Shares), provided that on the Initial Closing the Selling Shareholders' Sale
Shares to be transferred to Purchaser shall be subject to the Share Pledges and
good and valid title shall only be transferred upon the later of the Share
Pledge Release Date and the date that the Net Working Capital Reimbursement is
fully paid by Purchaser to the Selling Shareholders.
Section 5.8 Organization; Qualification of Company. The Company is a limited
liability company duly organized and validly existing under the laws of the
Republic of Indonesia, with full corporate power and authority to carry on its
business as it is now being conducted and to own or use the properties and
assets it now purports to own and use.
Section 5.9 Company's Consents and Approvals; No Conflicts, Violations or
Defaults. Except for such Consents as are set forth in Schedule 5.9, neither the
execution and delivery of this Agreement by the Selling Shareholders nor the
consummation by the Selling Shareholders of the Transactions will:
(a) conflict with or result in any breach of any provision of the
organizational documents of the Company;
(b) require that the Company obtain any Consent of any Governmental Entity
or other Person;
(c) require any Consent under, or result in a violation or breach of, or
constitute (with or without due notice or the passage of time or both)
a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or
provisions of any agreement, license, contract, commitment, obligation,
understanding, undertaking, arrangement or instrument to which the
Company is a party or by which the Company or any of the properties or
assets is bound;
65
(any Consents referred to in the clauses (b) and (c) being referred to
herein as the "Required Company Consents");
(d) violate any binding order, writ, injunction, applicable to the Company
or any of the properties or assets of the Company; or
(e) violate any decree, statute, rule or regulation applicable to the
Company or any of the properties or assets of the Company;
excluding from the foregoing clauses (c) and (e) such violations, breaches,
defaults or impositions which would not, individually or in the aggregate, have
an adverse effect on the prospects, consolidated financial condition, business
or results of operations of the Company.
As of the Initial Closing Date, such Selling Shareholder represents and warrants
that all Required Company Consents (including the Consents set forth in Schedule
5.9) have been obtained and remain in full force and effect.
Section 5.10 KSO Unit. There have been and are no other businesses conducted by
the Company other than the business contemplated or permitted under the KSO
Agreement.
Section 5.11 Capitalization. The authorized capital stock of the Company
consists of eleven million four hundred forty six thousand (11,446,000) Class A
shares and three hundred fifty four thousand (354,000) Class B shares or in
total eleven million eight hundred thousand (11,800,000) Shares all of which are
issued and paid-up as of the date hereof. The Sale Shares of each Selling
Shareholder are duly authorized, validly issued, fully paid-up and
non-assessable, and not issued in violation of any pre-emptive rights, and
(a) there is no Voting Debt of the Company issued and outstanding;
(b) except as set forth above, there are no shares of capital stock of the
Company authorized, issued or paid-up;
(c) except for the Transactions, there are no existing options, warrants,
calls, pre-emptive
66
rights, subscriptions or other rights, agreements, contracts,
undertakings, understandings, obligations, arrangements or commitments
of any character, relating to the issued or capital stock of the
Company, obligating the Company or such Selling Shareholder to issue,
transfer or sell or cause to be issued, transferred or sold any shares
of capital stock or Voting Debt of, or other equity or debt interest
in, the Company or securities convertible into or exchangeable for such
shares, equity interests, options, warrants, calls, subscriptions or
other rights or Voting Debt, or obligating the Company or such Selling
Shareholder to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, contract, undertaking,
understanding, obligation, arrangement or commitment; and
(d) there are no outstanding contractual obligations of the Company or of
such Selling Shareholder to repurchase, redeem or otherwise acquire any
Shares or other capital stock of the Company or for the Company to
provide funds to make any investment (in the form of a loan, capital
contribution or otherwise) in any other entity.
Except as set out in Schedule 5.11 of the Disclosure Schedule, there are no
voting trust agreements or understandings to which such Selling Shareholder or
the Company is a party with respect to the voting of the capital stock of the
Company.
Section 5.12 Financial Statements. True and complete copies of the Financial
Statements, together with the related auditor's reports, are included in the
Disclosure Schedule. The Financial Statements have been prepared from, are in
accordance with and accurately reflect, the books and records of the Company,
fully comply with applicable accounting requirements, have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except as may be stated in the notes thereto), are true and correct and fairly
present the financial position and the results of operations and cash flows (and
changes in financial position, if any) of the Company as of the times and for
the periods referred to therein.
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The Management Reports for any period or drawn up as at any date since the
Balance Sheet Date and for any subsequent month (the "Relevant Management
Reports Date") have been properly prepared in accordance with accounting
policies consistent with those used in preparing the Financial Statements. The
Management Reports fairly present the state of affairs and business of the
Company as at the Relevant Management Reports Date and the profits or losses for
the period concerned.
Section 5.13 Books and Records. The books of account are complete and correct in
all material respects and have been maintained in accordance with sound business
practices, including the maintenance of an adequate system of internal controls
and the minute books of (i) the shareholders of the Company, (ii) the Board of
Directors of the Company, and (iii) the Board of Commissioners of the Company
and share register of the Company are complete and correct in all material
respects. The minute books of the Company contain accurate and complete records
of all meetings of, and corporate action taken by, the shareholders of the
Company, the Board of Directors of the Company and Board of Commissioners of the
Company, and no meeting of any of such shareholders. Board of Directors or Board
of Commissioners has been held at which material decisions were made for which
minutes have not been prepared and are not contained in such minute books. True
and complete copies of all minute books and share register of the Company have
heretofore been made available to Purchaser except to the extent that such
minute books contain confidential or sensitive information relating to Purchaser
and the KSO Agreement.
Section 5.14 No Undisclosed Liabilities.
Since the Balance Sheet Date, the Company has incurred no liability or
obligation of any nature, whether or not absolute, accrued, contingent or
otherwise except:
(a) as disclosed in the Financial Statements; and
(b) for liabilities and obligations incurred in the ordinary course of
business and consistent with past practice.
The reserves reflected in the Financial Statements are in accordance with GAAP
and applicable law and have been calculated in a consistent manner in accordance
with GAAP.
Section 5.15 Accounts Receivable. Excluding account receivables of the Company
received from the KSO
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Unit for the purpose of this Section 5.15, all accounts receivable of the
Company, whether reflected in the Balance Sheet or otherwise, represent sales
and payment for services actually made in the ordinary course of business.
Section 5.16 Disputed Accounts Payable. To the Knowledge of such Selling
Shareholder there are no unpaid invoices or bills representing amounts alleged
to be owed by the Company or other alleged obligations of the Company, which the
Company has disputed or determined to dispute or refused to pay.
Section 5.17 Absence of Certain Changes. Since the Balance Sheet Date, the
Company has conducted its business only in the ordinary and usual course and
consistent with past practice, and the Company has not (except for the Permitted
Preparatory Action and otherwise as expressly permitted elsewhere herein):
(a) suffered any material adverse change in its Working Capital, financial
condition, results of operation, assets, liabilities (absolute,
accrued, contingent or otherwise), reserves, business, operations or
prospects;
(b) incurred any liability or obligation (absolute, accrued, contingent or
otherwise) except items incurred in the ordinary course of business and
consistent with past practice, none of which exceeds US$500,000
(counting obligations or liabilities arising from one transaction or a
series of similar transactions, and all periodic installments or
payments under any lease or other agreement providing for periodic
installments or payments, as a single obligation or liability), or
increased, or experienced any change in any assumptions underlying or
methods of calculating, any bad debt, contingency or other reserves;
(c) paid, discharged or satisfied any claim, liability or obligation
(whether absolute, accrued, contingent or otherwise) other than the
payment, discharge or satisfaction in the ordinary course of business
and consistent with past practice of liabilities and obligations
reflected or reserved against in the Balance Sheet or in the ordinary
course of business and consistent with past practice
69
since the Balance Sheet Date;
(d) permitted or allowed any of its property or assets (real, personal or
mixed, tangible or intangible) to be subjected to any Encumbrance of
any kind, except for liens for current taxes not yet due;
(e) written down the value of any inventory (including write-downs by
reason of shrinkage or mark-down) or written off as uncollectible any
notes or accounts receivable, except for write-downs and write-offs in
the ordinary course of business and consistent with past practice;
(f) cancelled any debts or waived any claims or rights of substantial value
other than pursuant to this Agreement;
(g) sold, transferred, or otherwise disposed of any of its properties or
assets (real, personal or mixed, tangible or intangible), except in the
ordinary course of business and consistent with past practice;
(h) except as otherwise disclosed in Schedule 5.17(h) of the Disclosure
Schedule, made any single capital expenditure or commitment in excess
of US$500,000 for additions to property, plant, equipment or intangible
capital assets or made aggregate capital expenditures and commitments
in excess of US$2,000,000 for additions to property, plant, equipment
or intangible capital assets;
(i) declared, paid or set aside for payment any dividend or other
distribution in respect of its capital stock or redeemed, purchased or
otherwise acquired, directly or indirectly, any shares of capital stock
or other securities of the Company;
(j) made any change in any method of accounting or accounting practice;
(k) except as otherwise disclosed in Schedule 5.17(k) of the Disclosure
Schedule or as provided in Section 7.5, paid, loaned or
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advanced any amount to, or sold, transferred or leased any properties
or assets (real, personal or mixed, tangible or intangible) to, or
entered into any agreement or arrangement with, any of its
commissioners or directors or any Person Controlled by any of its
commissioners or directors except for commissioners' fees and
compensation to directors, in each case at rates not exceeding 130% of
such fees and compensation paid during the year ended 31 December 2001;
(l) made any loan to or entered into any transaction with any Selling
Shareholder or any Person related thereto except as disclosed in
Schedule 5.17(1) of the Disclosure Schedule or as otherwise
contemplated specifically by this Agreement; or
(m) agreed, whether in writing or otherwise, to take any action described
in this Section 5.17 other than pursuant to this Agreement.
Section 5.18 Insurance.
(a) The Company maintains all policies of fire, liability, workmen's
compensation and other forms of insurance as required under the
Existing IFC Loans.
(b) in respect of such insurances:
(i) all premiums have been duly paid to date;
(ii) all the policies are in full force and effect and to the
Knowledge of such Selling Shareholder, there has been no
breach of the terms, conditions and warranties of any of the
policies that would entitle insurers to decline to pay all or
any part of any claim made under the policies;
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(iii) no claims, exceeding in aggregate an amount of US$20,000, are
outstanding; and
(iv) the Company has not waived any rights of a material value
under any insurance policy.
Section 5.19 Title to Properties; Encumbrances.
(a) The Company has good and valid title to (i) all the properties and
assets reflected in the Balance Sheet or books of account (other than
Real Property) and (ii) all personal properties and assets purchased by
the Company since the Balance Sheet Date which personal properties and
assets (other than inventory and short term investments) are listed in
the Disclosure Schedule and (iii) all Real Property listed in Schedule
5.20 to the Disclosure Schedule other than Real Property referred to in
paragraph (b). The rights, properties and other assets presently owned,
leased or licensed by the Company and described elsewhere in this
Agreement include all such rights, properties and other assets
necessary to permit the Company to conduct its business in all material
respects in the same manner as such businesses have been conducted
prior to the date hereof;
(b) In respect of the Real Property set out in Schedule 5.19(b) of the
Disclosure Schedule, the Company has fully paid for all such property,
and save as otherwise disclosed in Schedule 5.19(b) of the Disclosure
Schedule: (i) has entered into duly executed and authorized sale and
purchase agreements and deeds of relinquishment (akta pelepasan hak)
and/or land transfer deeds (akta penyerahan dan penggunaan hak atas
tanah) and/or other land transfer or compensation documents that form
the basis for applications for land title under the practices of the
relevant land office; and (ii) has received from the relevant vendors,
transferors or occupants of the land (or their authorized
representatives) powers of attorney and spousal consents or comparable
authorizations and the relevant land certificates or other relevant
document in the name of the last individual owner in respect of such
property and there are no grounds or circumstances whereby the Company
will be refused the grant of title to such property or on which the
Company may not be registered as the owner of such
72
property;
(c) each Real Property has the benefit, whether, legally or by custom or by
usage, of rights of access over property adjoining the Real Property;
(d) no Real Property nor any of its title deeds (as the case may require)
is subject to any Encumbrance, nor subject to any power of attorney to
sell or to establish a hypotec/hak tanggungan nor is any Real Property
the subject of any court attachment;
(e) except as disclosed in Schedule 5.19(b) to the Disclosure Schedule
(section F), there is no person in possession or occupation of, or who
has or claims any right or interest of any kind in, any Real Property
adversely to the interest of the Company;
(f) the Company has duly performed or observed any obligation, condition,
restriction, agreement or legal requirement affecting each Real
Property, its occupation of such Real Property or the existing use
thereof provided that, to the extent of any non-compliance, this will
not have a material adverse affect on the business or operations of the
Company;
(g) no Real Property is subject to any outgoing other than any normal rate
of tax or rent or other sum payable under any lease under which it is
held by the Company or other payments made for utilities provided to
the Real Property;
(h) except as disclosed in Schedule 5.19(b) to the Disclosure Schedule
(section F) there is no outstanding dispute affecting any Real Property
and to the Knowledge of such Selling Shareholder none has been
threatened;
(i) to the Knowledge of such Selling Shareholder, there is no resolution or
proposal for compulsory acquisition of any
73
Real Property by any applicable governmental, local or other authority
or body.
Section 5.20 Real Property. Schedule 5.20 of the Disclosure Schedule sets forth
a complete list and the location of all Real Property. True and complete copies
of (i) all sale and purchase deeds, binding commitments to acquire land and/or
buildings, and powers of attorney to sell relating to the Real Property and (ii)
all documents evidencing all Encumbrances upon the Real Property have heretofore
been made available to Purchaser. The Company is not a party to any lease,
assignment or similar arrangement under which the Company is a lessor, assignor
or otherwise makes available for use by any third party any portion of the Real
Property.
Section 5.21 Leases. Schedule 5.21 of the Disclosure Schedule contains an
accurate and complete list of the Leases. A true and complete copy of each Lease
has heretofore been made available to Purchaser.
Section 5.22 Plant and Equipment. All network installation constructed by the
Company have been constructed in compliance with Purchaser's specifications.
Section 5.23 Contracts and Commitments.
(a) Schedule 5.23(a) of the Disclosure Schedule contains a complete and
accurate list of all agreements, contracts and commitments of any kind,
including all indentures, loans, mortgages, notes, installment
obligations (including finance leases), consulting agreements, services
agreements, agreements for the sale of goods or provision of services
under which the Company or such other third party would be liable for
at least US$10,000 in payments for a single contract or commitment
("Contracts").
(b) Each of the Contracts is a valid, binding and enforceable obligation of
the parties thereto. The Company is not in default under or in
violation of, nor has any event occurred that with the giving of notice
or lapse of time or both would constitute a default or event of default
under, nor is there any valid basis for any claim of default under or
violation of, any Contract. Such Selling Shareholder has no Knowledge
of any such default, violation or event on the part of any other party
to a Contract.
74
(c) To the Knowledge of such Selling Shareholder, the Company has no
outstanding (i) agreement to acquire any debt obligations of others or
(ii) power of attorney or any obligations or liabilities (whether
absolute, accrued, contingent or otherwise), as guarantor, surety,
co-signer, endorser, co-maker, indemnitor or otherwise in respect of
the obligation of any other Person, corporation, partnership, joint
venture, association, organization or other entity.
(d) The Company has no other employees or other workers other than those
numbers of employees and other workers listed in Schedule 7.5(a).
Section 5.24 Suppliers. To the Knowledge of such Selling Shareholder, since
January 1, 2002, no material supplier of the Company has cancelled or otherwise
modified its commercial relationship with the Company and, to the Knowledge of
such Selling Shareholder, no such Person has any intention to do so.
Section 5.25 Labor; Employee Benefit Plans.
(a) To the Knowledge of such Selling Shareholder, the Company is, and has
at all times been in compliance, in all material respects, with all
applicable laws respecting employment and employment practices, terms
and conditions of employment, wages, hours of work and occupational
safety and health.
(b) The Company has no commitments or formal plans, whether legally binding
or not, to create any additional Plan or modify or change any existing
Plan that would affect any employee or former employee of the Company.
(c) Except for routine claims for benefits, and any claims that may arise
from the termination of employees of the Company pursuant to Section
7.5(a) (for which it is agreed the Company remains responsible
75
under Section 7.5), there are no pending, or to the Knowledge of such
Selling Shareholder, threatened in writing or anticipated claims by or
on behalf of any Plan, by any employee or beneficiary covered under any
such Plan, or otherwise involving any such Plan.
Section 5.26 Legal Proceedings Against the Company. There are no Proceedings
pending or threatened in writing or, to the Knowledge of such Selling
Shareholder, anticipated against, involving or affecting the Company which could
be reasonably expected to have a material adverse effect on the financial
position, assets, liabilities (absolute, accrued, contingent or otherwise),
reserves, business, results of operations or prospects of the Company or which
may result in the issuance of a judgment, order or decree prohibiting or making
illegal the consummation of the Transactions. The Company is not subject to any
judgment, order or decree prohibiting or making illegal or otherwise affecting
the consummation of the Transactions.
Section 5.27 Compliance with Laws. The Company has complied in a timely manner
and in all material respects with all laws, rules, decrees and regulations, and
in all respects with any judgments and orders of all Governmental Entities that
affect the business, properties or assets of the Company, and no notice, charge,
claim, action or assertion has been received by the Company or has been filed,
commenced or threatened in writing or, to the Knowledge of such Selling
Shareholder, anticipated against the Company alleging any violation of any of
the foregoing.
Section 5.28 Insider Interests, Debt and Guarantees.
(a) None of the Company's directors, commissioners, senior management,
auditors, or shareholders, or any of its shareholders' Affiliates, or
any entity in which any such person or entity has a significant
economic or financial interest, (each a "Related Person") has any
interest in any material contracts (except any employment contracts,
Plans and labor agreements, between the Company and its directors,
officers or senior management, in each case entered into the ordinary
course of business), property, real or personal, tangible or
intangible, including any Intellectual
76
Property, used in or pertaining to the business of the Company or its
assets;
(b) the Company has no outstanding indebtedness to any Related Person and
no Related Person has outstanding any indebtedness to the Company other
than indebtedness arising in the ordinary course of business and
consistent with past practice;
(c) the Company has not entered into any guarantees. keep-wells or
financial support arrangements or other accommodations to any third
party with respect to indebtedness of any Related Person or of any of
its affiliates; and
(d) Except as disclosed in Schedule 5.28(d) of the Disclosure Schedule, the
Company does not (i) have any Subsidiaries, (ii) own, directly or
indirectly, any capital stock or other securities, or any Voting Debt,
of any corporation or (iii) have any other direct or indirect equity or
ownership interest in any business, partnership, joint venture,
association, organization or other entity (other than the KSO Unit
pursuant to the KSO Agreement).
The Company is not a party to any other agreement, arrangement or understanding
(whether oral or otherwise), with any Related Person and all contracts between
the Company and any of the Selling Shareholders are listed in the Disclosure
Schedule.
Section 5.29 Tax Matters. The Company has duly filed all Tax Returns that are
required to be filed and has duly paid or caused to be duly paid in full or made
provision in accordance with GAAP in the Financial Statements (or there has been
paid or provision has been made on their behalf) for the payment of all Taxes
for all periods or portions thereof ending through the date hereof. All such Tax
Returns are correct and complete and accurately reflect all liability for Taxes
for the periods covered thereby and:
(a) There are no liens for Taxes upon any property or assets of the
Company, except for liens for Taxes not yet due;
77
(b) The Company has not made any change in accounting methods, received a
ruling from any taxing authority (other than tax clearance certificates
(surat ketetapan pajak)) or signed an agreement with respect thereto or
signed any closing agreement with respect to any Tax year;
(c) The Company has complied in all respects with all applicable laws,
rules and regulations relating to the payment and withholding of Taxes
and has, within the time and the manner prescribed by law, withheld and
paid over to the proper taxing authorities all amounts required to be
so withheld and paid over under applicable laws;
(d) There are no unresolved questions or claims concerning Tax liability of
the Company;
(e) Other than any Tax Returns that have not yet been required to be filed,
the Company has made available to Purchaser true, correct and complete
copies of all Tax Returns of the Company;
(f) The net operating loss and credit carryovers, if any, available to the
Company, and their expiration dates, is set forth in the Balance Sheet;
and
(g) the Company has properly charged VAT on goods and services delivered,
properly assessed VAT on charges for services from offshore and has
claimed credit only for valid input VAT charged by suppliers.
Section 5.30 Intellectual Property. To the Knowledge of such Selling
Shareholder, the Company owns, or otherwise possesses licenses for all
Intellectual Property currently used in or necessary for the conduct of the
business of the Company, and the consummation of the Transactions will not alter
or impair such right or ability in any respect. To the Knowledge of such Selling
Shareholder, there are no oppositions, cancellations, invalidity proceedings,
interferences or re-examination proceedings presently pending with respect to
any Intellectual Property used in the business of the Company. To the Knowledge
of such Selling Shareholder, the conduct of the business of the Company and the
use by the Company of such Intellectual Property does not infringe any
Intellectual
78
Property rights or any other proprietary right of any Person, and the Company
has not received any written notice from any other Person pertaining to or
challenging the right of the Company to use any of the Intellectual Property
currently used in its business as it is now conducted. The Company has not made
any claim of a violation or infringement by any other Person of its rights to or
in connection with the Intellectual Property currently used in its business as
it is now conducted which is still pending.
Section 5.31 Bank Accounts. Schedule 5.31 of the Disclosure Schedule sets forth
the names and locations of all banks, and other financial institutions at which
the Company maintains safe deposit boxes, checking accounts or other accounts of
any nature and the names of all Persons authorized to draw thereon, make
withdrawals therefrom or have access thereto.
Section 5.32 Brokers or Finders. Such Selling Shareholder has not entered into
any agreement or arrangement entitling any agent, broker, investment banker,
financial advisor or other firm or Person to any broker's or finder's fee or any
other commission or similar fee in connection with any of the Transactions
although the Company has entered into an agreement with JP Xxxxxx Xxxxx, whose
fees and expenses will be paid by the Company in accordance with the Company's
agreement with such firm.
Section 5.33 Environmental.
(a) The Company has complied in all material respects with Environmental
Laws and has obtained all permits, licences and other authorisations
required under such Environmental Laws.
(b) There is no civil, criminal, regulatory or administrative action, claim
or other proceeding or suit pending or threatened in writing against
the Company arising from or relating to a breach of the Environmental
Laws nor have such Selling Shareholder or the Company received written
notice of any complaint, claim, dispute, investigation or other action
against the Company arising from or relating to any such matters;
79
(c) none of the activities of the Company results in any environmental
damage to any third party nor has such Selling Shareholder or the
Company received from any third party written notice of any complaint,
claim, dispute or other action against the Company arising from or
relating to any environmental damage.
Section 5.34 Full Disclosure. No statement contained in any document (including
Financial Statements and the Disclosure Schedule), certificate or other writing
furnished or to be furnished by the Selling Shareholders or the Company to
Purchaser pursuant to the provisions hereof or in connection with the
Transactions, contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary in order to make such
statements in light of the circumstances under which such statements were made
not misleading.
Each exception set forth in the Disclosure Schedule and each other response to
this Agreement set forth in the Disclosure Schedule is identified by reference
to, or has been grouped under a heading referring to, a specific individual
Section of this Agreement and relates only to such Section, unless such
exception is fully, fairly and reasonably disclosed in which case it shall
relate to all relevant Sections of Article 5.
The Selling Shareholders undertake to deliver the Disclosure Schedule to
Purchaser within fifteen (15) calendar days of the date of this Agreement. The
Purchaser undertakes to notify each of the Selling Shareholders within fourteen
(14) calendar days of receipt of the Disclosure Schedule or any amendment
thereto whether the Purchaser accepts or rejects such Disclosure Schedule or
amendment thereto.
For the purposes of this Article 5, the only representations and warranties
given by IFC and NMP are Sections 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7 and 5.32.
The representations and warranties of each Selling Shareholder in Sections 5.1,
5.2, 5.3, 5.4, 5.5, 5.6,
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5.7, 5.32 and 5.34 (solely in respect of certificates furnished on the relevant
date) shall be repeated on the Interim Closing and on the Subsequent Closing.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF
PURCHASER
Purchaser represents and warrants to each Selling Shareholder that as of the
date of this Agreement and on the Initial Closing Date all of the following
statements contained in this Article 6 are true and correct:
Section 6.1 Organization. Purchaser is a limited liability public state-owned
company duly organized and validly existing under the laws of the Republic of
Indonesia and has all requisite power and authority to execute and deliver this
Agreement, and to perform its obligations hereunder.
Section 6.2 Authorization; Validity of Agreement. Purchaser has taken all
corporate action necessary to execute and deliver this Agreement and for the
consummation by Purchaser of the Transactions except for the approval of the
General Meeting of Shareholders and board of commissioners of Purchaser. As of
the Initial Closing Date only, Purchaser represents and warrants that the
approval of the General Meeting of Shareholders and board of commissioners of
Purchaser for the consummation by Purchaser of the Transactions has been
obtained and remains in full force and effect.
Section 6.3 Binding Agreement. This Agreement has been duly executed and
delivered by Purchaser, and, assuming due and valid authorization, execution and
delivery hereof by each of the Selling Shareholders, this Agreement constitutes
a legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms.
Section 6.4 Consents and Approvals; No Conflicts, Violations or Defaults. Except
for such Consents as are set forth in Schedule 6.4, neither the execution or
delivery of this Agreement by Purchaser nor the consummation by Purchaser of the
Transactions will:
(a) conflict with or result in any breach of any provision of Purchaser's
organizational documents;
81
(b) require any Consent of any Governmental Entity or any other Person;
(c) require any Consent under, or result in a violation or breach of, or
constitute (with or without due notice or the passage of time or both)
a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or
provisions of any agreement, license, contract, commitment, obligation,
understanding, undertaking, arrangement or instrument to which
Purchaser is a party or by which Purchaser or any of its properties or
assets is bound;
(d) violate any binding order, writ or injunction, applicable to Purchaser
or any of its properties or assets; or
(e) violate any decree, statute, rule or regulation applicable to Purchaser
or any of its properties or assets,
excluding from the foregoing clauses (c) and (e) such violations, breaches or
defaults which would not, individually or in the aggregate, have an adverse
effect on Purchaser's ability to perform its obligations under this Agreement,
its ability to consummate the purchase and sale of the Sale Shares and to accept
title to the Sale Shares, make the Purchaser Loans or the enforceability against
Purchaser or the validity of this Agreement.
As of the Initial Closing Date, Purchaser represents and warrants that each
Consent of any Governmental Entity and any other Person required in order for
Purchaser to consummate the Transactions (including, without limitation, the
Consents set forth in Schedule 6.4) have been obtained and remain in full force
and effect.
Section 6.5 Legal Proceedings. Other than any Proceedings which may be initiated
by the Selling Shareholders or are primarily caused as a result of the actions
of the Selling Shareholders, there are no Proceedings pending or threatened or,
to the actual knowledge of Purchaser, anticipated against, involving or
affecting Purchaser which question or challenge the validity of this Agreement
or any action taken or to be taken by Purchaser pursuant to this Agreement or in
82
connection with the Transactions or which may result in the issuance of any
judgment, order or decree prohibiting or making illegal the consummation by
Purchaser of the Transactions. Purchaser is not subject to any judgment, order
or decree prohibiting or making illegal the consummation by Purchaser of the
Transactions or which might have a material adverse effect upon the financial
condition or business of Purchaser or the financial condition or business of any
of the Subsidiaries of Purchaser or upon the ability of Purchaser to perform or
comply with any of the obligations expressed to be assumed by it under any of
this Agreement or any Security Agreements to which it is a party.
Section 6.6 Brokers or Finders. Purchaser has not entered into any agreement or
arrangement entitling any agent, broker, investment banker, financial advisor or
other firm or Person to any broker's or finder's fee or any other commission or
similar fee in connection with any of the Transactions, except Xxxxxxx Xxxxx
Barney, whose fees and expenses will be paid by Purchaser in accordance with
Purchaser's agreement with such firm.
Section 6.7 No Bankruptcy Action. Purchaser has not taken any corporate action
nor have any other steps been taken or legal proceedings been started or, to the
actual knowledge of Purchaser, threatened against it for its bankruptcy,
liquidation, winding-up, dissolution, administration, judicial management, the
suspension of its debts, composition with its creditors, or reorganisation or
for the appointment of a curator, liquidator or receiver or similar officer of
Purchaser or of a substantial portion of its assets or revenues.
Section 6.8 No Distress or Execution Against Purchaser. No distress, execution
or other process is being levied or enforced upon or sued or, to the actual
knowledge of Purchaser, threatened against the whole or a substantial part of
the business, undertaking or assets of Purchaser which might have a material
adverse effect upon its financial condition or business or upon its ability to
perform or comply with any of the obligations expressed to be assumed by it
under any of this Agreement or the Security Agreements to which it is a party,
the Purchaser Loan Agreement or the Notes.
83
Section 6.9 Default. Except as disclosed in Schedule 6.9, Purchaser is not in
breach of or in default under any agreement to which it is a party or which is
binding on it or any of its assets to an extent or in a manner which might have
a material adverse effect on its business or financial condition or upon its
ability to perform or comply with any of the obligations expressed to be assumed
by it under the Notes, this Agreement, the Purchaser Loan Agreement or any of
the Security Agreements to which it is a party.
Section 6.10 Full Disclosure. No statement contained in any document,
certificate or other writing furnished or to be furnished by the Purchaser to
any of the Selling Shareholders pursuant to the provisions hereof or in
connection with the Transactions, contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary in
order to make such statements in light of the circumstances under which such
statements were made, not misleading.
The representations and warranties of Purchaser in the Sections 6.1, 6.2, 6.3,
6.4, 6.5, 6.6, and 6.10 shall be repeated on the Interim Closing and on the
Subsequent Closing.
ARTICLE 7
COVENANTS
Section 7.1 Interim Operations of the Company. Each Selling Shareholder (other
than IFC and NMP) shall use its reasonable efforts to cause the Company, from
the date hereof to the Initial Closing Date, except (i) as expressly provided in
this Agreement, (ii) as are Permitted Preparatory Actions or (iii) as may be
mutually agreed by Purchaser and the Selling Shareholders:
(a) to conduct its business in the ordinary course and in accordance with
all material applicable laws and regulations;
(i) so as to keep available the services of its current directors;
and
(ii) so as to maintain relations with suppliers, creditors,
business
84
partners and others having business dealings with it so that
the goodwill and ongoing business of the Company shall be
unimpaired at the Initial Closing Date; and other than in each
case with a view to winding down its operations in accordance
with the Permitted Preparatory Actions;
(b) not to:
(i) amend its organizational documents;
(ii) issue, sell, transfer, pledge, dispose of or encumber any
shares of any class or series of its capital stock, or
securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire,
any shares of any class or series of its capital stock or any
Voting Debt;
(iii) declare, set aside or pay any dividend or other distribution
payable in cash, stock or property with respect to any shares
of any class or series of its capital stock;
(iv) split, combine or reclassify any shares of any class or series
of its capital stock;
(v) redeem, purchase or otherwise acquire, directly or indirectly,
any shares of any class or series of its capital stock, or any
instrument or security which consists of or includes a right
to acquire such shares; or
(vi) make any loan to or enter into any transaction with any
Selling Shareholder or Person related thereto except as
contemplated specifically by this Agreement.
85
(c) not to organize any new Subsidiary or acquire any capital stock or
other equity securities, or equity or ownership interest in the
business, of any other Person;
(d) not to modify, amend or terminate any of its Material Agreements or
waive, release or assign any material rights or claims, except in the
ordinary course of business and with a view to winding down its
operations in accordance with the Permitted Preparatory Actions;
(e) not to:
(i) incur or assume any indebtedness except in the ordinary course
of business;
(ii) subject to Section 7.9, pay, repay, discharge, purchase,
repurchase or satisfy any indebtedness issued or guaranteed by
the Company, except as required by the terms thereof;
(iii) modify the terms of any indebtedness or other liability, other
than modifications of short term debt in the ordinary and
usual course of business and consistent with past practice; or
(iv) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for
the obligations of any other Person;
(f) not to sell, lease, license, hypothecate, mortgage, pledge, transfer or
otherwise encumber or dispose of any assets or property, individually
or in the aggregate, material to its business, other than in the
ordinary course of business and with a view to winding down its
operations in accordance with the Permitted Preparatory Actions;
(g) except as contemplated by Section 7.5 hereof, not to make any change in
the compensation payable or to become payable to any of its directors,
commissioners,
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employees, agents or consultants or to Persons providing management
services, or enter into or amend any employment, severance, consulting,
termination or other agreement with, or employee benefit plan for, or
make any loan or advance to, any of its directors, commissioners,
employees, agents or consultants or make any change in its existing
borrowing or lending arrangements for or on behalf of any of such
Persons pursuant to an employee benefit plan or otherwise other than in
each case with a view to winding down its operations in accordance with
the Permitted Preparatory Actions;
(h) except as contemplated by Section 7.5 hereof, not to:
(i) pay or make any accrual or arrangement for payment of any
pension, retirement allowance or other employee benefit
pursuant to any existing plan, agreement or arrangement to any
director, commissioner or employee, except to the extent it is
unconditionally obligated to do so on the date hereof (except
in respect of a change of law) and other than in each case
with a view to winding down its operations in accordance with
the Permitted Preparatory Actions;
(ii) adopt or pay, grant, issue, accelerate or accrue salary or
other payments or benefits pursuant to any pension,
profit-sharing, bonus, extra compensation, incentive, deferred
compensation, stock purchase, stock option, stock appreciation
right, group insurance, severance pay, retirement or other
employee benefit plan, agreement or arrangement, or any
employment or consulting agreement with or for the benefit of
any director, employee, agent or consultant, whether past or
present, except to the extent the Company is unconditionally
obligated to do so on the date hereof (except in respect of a
change of law) and other than in
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each case with a view to winding down its operations in
accordance with the Permitted Preparatory Actions; or
(iii) amend in any material respect any such existing plan,
agreement or arrangement in a manner inconsistent with the
foregoing;
(i) not to enter into any agreement, contract or transaction or make any
payment under any agreement, contract or transaction entered into on
other than an arm's length basis, and other than in the ordinary course
of business and consistent with past practice or in accordance with the
Permitted Preparatory Actions;
(j) other than in each case with a view to winding down its operations in
accordance with the Permitted Preparatory Actions not to pay,
repurchase, discharge or satisfy any of its claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction of:
(i) claims, liabilities or obligations in the ordinary course of
business and consistent with past practice; or
(ii) claims, liabilities or obligations reflected or reserved
against in, or contemplated by, the Financial Statements to
the extent so reflected or reserved against; or
(iii) payments in respect of the Existing IFC Loans;
(k) not to:
(i) change any of the accounting methods used by it unless
required by GAAP; or
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(ii) make any election relating to Taxes, change any election
relating to Taxes already made, adopt any accounting method
relating to Taxes, change any accounting method relating to
Taxes unless required by GAAP, enter into any closing
agreement relating to Taxes, settle any claim or assessment
relating to Taxes or consent to any claim or assessment
relating to Taxes or any waiver of the statute of limitations
for any such claim or assessment;
(l) not to enter into any agreement, contract, commitment or arrangement to
do any of the foregoing, or authorize, recommend, propose or announce
an intention to do, any of the foregoing; and
(m) to cause the delivery to Purchaser at the Initial Closing of letter(s)
evidencing the resignation and removal of each of the members of the
Board of Commissioners and Board of Directors of the Company nominated
by such Selling Shareholder without claims for compensation.
PROVIDED that each of IFC and NMP agrees for the benefit of Purchaser that it
shall not vote in favour of any resolution which may be tabled which would, if
passed, cause any of the above covenants to be contravened.
Section 7.2 Access; Confidentiality.
(a) From the date hereof until the Initial Closing, the Selling
Shareholders (other than IFC and NMP) will use their respective
reasonable efforts to cause the Company to:
(i) afford Purchaser and its authorized representatives reasonable
access during business hours to all books and records (except
to the extent sensitive information is contained therein
regarding Purchaser and/or the KSO Agreement), offices and
other facilities of the Company and real property owned,
leased or used
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by the Company and to personnel and suppliers of the Company;
(ii) permit Purchaser to make such reasonable inspections during
business hours (including making such investigations and
assessments, as Purchaser deems reasonably necessary or
appropriate in its sole and absolute discretion), of the
environmental condition of such properties or the business
conducted there and to make copies of such books and records
as it may reasonably require (except to the extent sensitive
information is contained therein regarding Purchaser and/or
the KSO Agreement); and
(iii) furnish Purchaser with such financial and operating data and
other information as Purchaser may from time to time
reasonably request.
Purchaser and its authorized representatives shall conduct all such inspections
in a manner that will minimize disruptions to the business and operations of the
Company.
In addition, in the event that Purchaser identifies matters in the course of its
due diligence which Purchaser determines, in its sole discretion, are not
satisfactory, Purchaser shall use its reasonable efforts to provide the Selling
Shareholders with a reasonable opportunity to address Purchaser's concerns.
The Company and each of the Selling Shareholders shall continue to afford
Purchaser and its authorized representative, such reasonable access during
business hours, and to permit Purchaser to make such inspections and copies as
Purchaser may reasonably request (except to the extent sensitive information is
contained therein regarding Purchaser and/or the KSO Agreement) to enable it to
satisfactorily address its concerns.
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(b) The provisions of the Confidentiality Agreement shall remain binding
and in full force and effect until the Initial Closing, except that the
Confidentiality Agreement shall not apply to any documents prepared in
connection with or filed with, or other disclosure made to, a court,
arbitration tribunal or mediation service in order to enforce any
Purchaser's rights arising in connection with the termination of this
Agreement pursuant to Article 9. The information contained in this
Agreement or delivered to Purchaser or its authorized representatives
pursuant hereto shall be subject to the Confidentiality Agreement as
Confidential Information (as defined and subject to the exceptions
contained therein) until the Initial Closing and, for that purpose and
to that extent, the terms of the Confidentiality Agreement are
incorporated herein by reference. All obligations of Purchaser under
the Confidentiality Agreement shall terminate simultaneously with the
Initial Closing.
From the date hereof and at all times thereafter except as otherwise provided
herein, each of the Selling Shareholders and Purchaser shall, and, other than
IFC and NMP, shall cause the Company and its consultants, advisors and
representatives to, treat (unless compelled to disclose by judicial or
administrative process or, in the reasonable opinion of the disclosing party, by
other requirements of law) the terms of this Agreement and the Transactions and
all nonpublic, confidential or proprietary information concerning the Company as
strictly confidential. The Selling Shareholders shall not use (at all times),
and other than IFC and NMP, shall cause the Company (from the date hereof to the
Initial Closing Date) and its consultants, advisors and representatives to
refrain from using, such information to the detriment of the Company or
Purchaser.
Section 7.3 Efforts and Actions to Cause each Closing to Occur.
(a) Prior to each Closing, each Selling Shareholder, the Company and
Purchaser shall use its respective reasonable efforts in respect of the
Initial Closing and its best efforts in respect of the Interim Closing
and the Subsequent Closing to take, or cause to
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be taken, all actions, and to do, or cause to be done and to cooperate
with each other in order to do, all things necessary, proper or
advisable (in view of applicable laws and regulations) to consummate
each Closing and the relevant Transactions upon the terms and subject
to the conditions of, as applicable, this Agreement, the Security
Agreements, the Purchaser Loan Agreement and the Notes (including the
preparation and filing of all forms, registrations and notices required
to be filed to consummate such Closing and the relevant Transactions
and the taking of such actions as are necessary to obtain any requisite
Consents of any Governmental Entity or any other Person).
In addition, no party hereto shall take any action after the date
hereof that could reasonably be expected to materially delay the
obtaining of, or result in the failure to obtain, any Consent from any
Governmental Entity or other Person required to be obtained prior to a
Closing, provided that this restriction shall not apply to the date
chosen by a party for such General Meeting of Shareholders of that
party. Nothing in this Agreement shall require a party to hold its
General Meeting of Shareholders on or by any particular date.
(b) Prior to each Closing, each party hereto shall promptly consult with
the other parties hereto with respect to, provide any necessary
information with respect to, and provide, upon request, the other
parties (or their respective counsel) with copies of, all filings made
by such party with any Governmental Entity or any other information
supplied by such party to a Governmental Entity in connection with this
Agreement and the Transactions. Each party hereto shall promptly
provide the other parties with copies of any written communication
received by such party from any Governmental Entity regarding any of
the Transactions. If any party hereto receives a request for additional
information or documentary material from any such
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Governmental Entity with respect to any of the Transactions, then such
party shall endeavor in good faith to make, or cause to be made, as
soon as reasonably practicable and after consultation with the other
parties, an appropriate response in compliance with such request. To
the extent that transfers, amendments or modifications of permits are
required as a result of the execution of this Agreement or consummation
of any of the Transactions, each Selling Shareholder, with respect to
permits applicable to it, and the Company shall use its respective best
efforts to effect such transfers, amendments or modifications.
(c) Nothing in this Section 7.3 shall require any party to waive, or
otherwise exercise in a particular manner any discretion it may have
under, any condition to Closing.
(d) The parties hereto shall (i) procure upon payment and repayment by the
Company of all amounts payable under the IFC Investment Agreement and
the Common Terms Agreement with respect to the Existing IFC Loans, in
accordance with their respective terms, the immediate release of the
Share Pledges by PT BNP Bank Lippo Indonesia, as security agent, and
(ii) immediately provide such other consents, notifications and filings
as are required to consummate the relevant Transactions contemplated by
this Agreement to be consummated on or around that time.
(e) The Selling Shareholders shall vote in favor of all resolutions of the
Company and any other Person which are necessary to consummate the
Transactions contemplated.
Section 7.4 Notification of Certain Matters.
(a) Each of the Selling Shareholders shall give notice to Purchaser
promptly after becoming aware of (i) the occurrence or non-occurrence
of any event whose occurrence or
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non-occurrence would be likely to cause either (A) (x) any
representation or warranty on its part contained in this Agreement or
in any certificate delivered by it in connection with the Initial
Closing to be untrue or incorrect in any respect at any time from the
date the relevant representation and warranty is first given until the
Initial Closing Date and (y) any representation or warranty on its part
in Sections 5.1, 5.2, 5.3, 5.4, 5.6, 5.7 and 5.32 to the extent
required by this Agreement to be true and correct in material respects
at the date of the relevant Closing, or in connection with any
certificate delivered by it in connection any other Closing to be
untrue or incorrect in any material aspect from the Initial Closing
Date to the relevant subsequent Closing Date or (B) any condition to be
performed by or otherwise relating to such Selling Shareholder set
forth in Article 8 to be unsatisfied in any respect at any time from
the date hereof to any Closing Date and (ii) any material failure of
such Selling Shareholder, the Company or any director, commissioner,
employee or agent of such Selling Shareholder or of the Company, to
comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that
(i) the delivery of any notice pursuant to this Section 7.4 shall
not limit or otherwise affect the remedies available hereunder
to the party receiving such notice nor shall any delivery of
any notice be deemed to affect any representation and warranty
or the Disclosure Schedule hereunder unless such delivery
occurs as a formal amendment to the Disclosure Schedule on or
before the date being twenty-five (25) calendar days prior to
the proposed date of the Initial Closing; and
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(ii) notice shall not be required from and after the time the party
to whom such notice is to be given has actual knowledge of the
information required to be included in such notice.
(b) Exclusive Dealings. During the Exclusivity Period:
(A) save, in the case of IFC, upon enforcement of any Share Pledge
prior to the Share Pledge Release Date, no Selling Shareholder
shall, directly or indirectly, including, through any of its
respective advisors:
(i) sell or agree to sell any of the Sale Shares other
than through a sale pursuant to the Transactions;
(ii) encourage, solicit, initiate, continue or participate
in discussions or negotiations with, or provide any
information to, any Person or group (other than
Purchaser, its Subsidiaries or any of their
representatives) concerning any Acquisition Proposal;
or
(iii) enter into any agreement with respect to any
Acquisition Proposal; and
(B) Each of the Selling Shareholders shall, and each of the
Selling Shareholders (other than IFC and NMP) shall prior to
the Initial Closing cause the Company to:
(i) immediately notify Purchaser of the existence of any
proposal or inquiry concerning any Acquisition
Proposal received by it;
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(ii) immediately communicate to Purchaser the terms of any such
proposal or inquiry which it may receive (and shall
immediately provide to Purchaser copies of any written
materials received in connection with such proposal,
discussion, negotiation or inquiry) and the identity of the
party making such proposal or inquiry; and
(C) Each of the Selling Shareholders, other than IFC and NMP, shall use its
reasonable efforts to cause the Company to not enter into any agreement
with respect to any Acquisition Proposal provided that IFC and NMP
agree for the benefit of Purchaser that they shall not vote in favour
of any such proposal.
PROVIDED that if an Event of Repayment has occurred the Selling Shareholders
shall from the date being the latter of (i) the occurrence of an Event of
Repayment and (ii) January 1, 2005, notwithstanding the foregoing provisions of
Section 7.4(b)(A)(ii) and Section 7.4(b)(B), be permitted to encourage, solicit,
initiate or participate or engage in discussions or negotiations with, and enter
into any agreement with, any third party regarding an Acquisition Proposal or
sale of Sale Shares and shall not be required to disclose such proposal or
agreement or any terms thereof to Purchaser. Any such agreement concerning an
Acquisition Proposal or sale of Sale Shares shall be conditional on the
Subsequent Closing not occurring on or before 31 December 2005 solely due to the
breach by Purchaser of its obligations in respect of such Closing.
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Section 7.5 Personnel.
(a) Personnel Terminated by the Company. On or prior to the Initial Closing
Date, the Company shall, and each of the Selling Shareholders (other
than IFC and NMP) shall cause the Company to, terminate the employment
of each of the employees, directors and commissioners of the Company
and the General Manager of the KSO Unit identified on Schedule 7.5(a)
of the Disclosure Schedule (the "Terminated Personnel"). All costs and
expenses of terminating the employment with the Company of the
Terminated Personnel shall be borne by the Company.
(b) Transfer of Seconded FCR Personnel. The names of all employees of FCR
seconded to the Company as of the date hereof (the "Seconded FCR
Personnel") are set forth on Schedule 7.5(b) of the Disclosure
Schedule. On or prior to the Initial Closing Date, the Company and each
Selling Shareholder (other than IFC and NMP) shall use its reasonable
efforts to cause the Company to, transfer the Seconded FCR Personnel to
FCR. FCR hereby acknowledges and agrees to such transfer of the
Seconded FCR Personnel. All costs and expenses of transferring the
Seconded FCR Personnel from the Company to FCR shall be borne by FCR.
All of the actions taken with respect to paragraphs (a) and (b) above shall, by
each party responsible for taking such action with respect to the employees,
directors and commissioners, be performed in a manner which is in compliance
with all applicable Indonesian labor and employment laws. Except to the extent
otherwise contemplated in Section 7.5(b), all costs and expenses relating to the
termination of the General Manager of the KSO Unit and any employees, directors
and commissioners of the Company as contemplated hereby, including all severance
and other termination costs and expenses, shall be paid by the Company prior to
the Initial Closing or fully provided for in the Company's balance sheet prior
to the Initial Closing and so taken into account in calculating the Proforma
Adjusted Working Capital and Final Adjusted Working Capital under Article 4. To
the extent any such costs and expenses are not so provided, the Selling
Shareholders shall severally in their respective Pro Rata Shares indemnify and
hold harmless Purchaser with respect
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to all such costs and expenses.
Section 7.6 Financial Escrow Agreement. On or prior to the Initial Closing,
Purchaser and the Selling Shareholders shall enter into the Financial Escrow
Agreement. In the event of and only to the extent of any inconsistency between
on the one hand the provisions of Sections 3.8(b), 3.8(c), 3.8(i), 3.11 and this
Section 7.6 and on the other hand the provisions of the Financial Escrow
Agreement, the provisions of the Financial Escrow Agreement shall control.
Subject to Section 7.6(f) below, all monies deposited with the Financial Escrow
Agent as provided for herein shall be effected in United States Dollars by wire
transfer in immediately available funds. Notwithstanding the occurrence of any
event described in Section 7.6(f) below, Purchaser shall not be relieved of its
obligations to pay the Purchase Price in United States Dollars.
(a) Funding of the Financial Escrow Account. Purchaser will deposit or
cause to be deposited into a bank account in Singapore ("Financial
Escrow Account") under and pursuant to the Financial Escrow Agreement
such sums as are specified in and at the times set out in Schedule
7.6(a) (the "Monthly Amount").
(b) Wire Transfers. On each Payment Date, the Financial Escrow Agent shall
be required by the terms of the Financial Escrow Agreement to pay out
of the Financial Escrow Account by wire transfer in immediately
available funds to the bank account of each Selling Shareholder and
Registered Holder, as relevant (such bank account details having been
notified in writing to Purchaser and the Financial Escrow Agent in the
manner stipulated in the Financial Escrow Agreement), the following
amounts: (i) to each Selling Shareholder, such Selling Shareholder's
Shareholder Balance Amount due on such Payment Date as evidenced by the
Notes issued by Purchaser to such Selling Shareholder, and/or (ii) to
the extent such Selling Shareholder has transferred some or all of the
Notes issued to it by Purchaser to each Registered Holder of Notes, the
Shareholder Balance Amount evidenced thereby due on such Payment Date
(in each case, thereby reducing the Shareholder Balance Amount of such
Selling Shareholder by an amount equal to the amount paid
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against any such Notes (such amounts to include permitted deductions or
withholdings for tax, if any)). The amounts payable and the Payment
Dates for the Notes evidencing the Shareholder Balance Amounts are set
out in Schedule 7.6(b) hereof ("Quarterly Payments"). Each such payment
against the Notes shall extinguish a corresponding amount of the
Shareholder Balance Amount.
(c) Notice of Shortfall. The Financial Escrow Agreement shall require the
Financial Escrow Agent to notify Purchaser, at the times and in the
manner specified in the Financial Escrow Agreement, if there is a delay
in payment/receipt of a Monthly Amount or if the Financial Escrow Agent
determines that with respect to any Payment Date, the funds on deposit
in the Financial Escrow Account will be insufficient to make all
payments on such Payment Date.
(d) Payment of Shortfall Amounts. In the event of receipt of notification
under (c) above, Purchaser shall ensure that amounts are paid into the
Financial Escrow Account so that the Financial Escrow Agent has
sufficient funds to make such payments.
(e) Financial Escrow Account. Subject to (f) below, the Financial Escrow
Account shall be a U.S. dollar-denominated account at a Singapore
branch of a bank agreed between the parties, and shall be so held
subject to the terms of the Financial Escrow Agreement. Any moneys
available in the Financial Escrow Account after payment by the
Purchaser of the Notes in accordance with their terms evidencing
Purchaser's obligations to pay Shareholder Balance Amounts shall be
paid to Purchaser.
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(f) Standby Account. Upon a change in law prohibiting Purchaser from
converting Rupiah into United States Dollars or remitting funds outside
of the Republic of Indonesia, an escrow account shall be promptly
opened (the "Standby Account") in the name of Purchaser with the
Financial Escrow Agent in Jakarta denominated (to the extent permitted
under applicable Indonesian laws and regulations) in United States
Dollars, failing which in Rupiah.
(g) Payments into Standby Account. After delivery of the Notice of Standby
Account (as defined in the Financial Escrow Agreement) by Purchaser in
accordance with the provisions of the Financial Escrow Agreement,
Purchaser shall pay into the Standby Account the full amounts (at the
times specified in this Section 7.6 and as provided for in the
Financial Escrow Agreement) that it would otherwise have paid into the
Financial Escrow Account pursuant to Section 7.6(b). Payments into the
Standby Account shall be in United States Dollars to the extent
permitted under applicable Indonesian laws and regulations, failing
which, the Rupiah equivalent (at the time of deposit) of the relevant
United States Dollar amount using the spot rate of exchange quoted by
the Financial Escrow Agent at the time of deposit or, if not available,
the exchange rate quoted by the Financial Escrow Agent last available
for such currencies.
(h) Conversion. If amounts are paid into the Standby Account in Rupiah and
subsequently the Rupiah is able to be converted into United States
Dollars and/or funds can be transferred outside Indonesia, Purchaser
shall promptly cause the Financial Escrow Agent to effect conversion of
such amounts and/or transfer of those amounts to the Financial Escrow
Account.
(i) Call Notes. Purchaser shall be entitled to call all (and not part only)
of the outstanding Notes (other than those Notes that, notwithstanding
such call, mature and are payable on the Call Date) evidencing the
corresponding Shareholder Balance Amounts
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on a Call Date by giving notice in accordance with the Financial Escrow
Agreement and paying in exchange for cancellation of such Notes the
call amount per Note as set out in part one of Schedule 7.6(i),
thereby, subject to redemption of all Notes that, notwithstanding such
call, mature and are payable on the Call Date reducing each Selling
Shareholder's Shareholder Balance Amount to zero (0).
(j) Indonesian Withholding Tax. All payments contemplated to be made by or
on behalf of Purchaser pursuant to the Financial Escrow Agreement in
respect of the Series I Notes shall be made without set off,
counterclaim or other deduction provided that Purchaser shall be
entitled to withhold and deduct, or to have withheld and deducted by
the Financial Escrow Agent, (with no obligation to gross up) all
amounts (that are less than or equal to the WHT Collar Amount, as
defined below) required to be withheld or deducted under applicable
Indonesian laws and regulations on account of withholding tax. In the
event that such amount required to be withheld and deducted is greater
than the amount equivalent to the withholding tax payable in relation
to the discount or interest component of such payment under the
Financial Escrow Agreement or with respect to a Series I Note in either
case calculated at a deemed effective discount or interest rate of
8.85% per annum, compounded quarterly and at the applicable tax treaty
rate (the "WHT Collar Amount"), Purchaser shall only be entitled to
withhold and deduct or have withheld or deducted an amount equal to (or
less than) the WHT Collar Amount in relation to the interest component
of such payment and Purchaser shall be solely responsible for the
payment of any withholding tax payable on the interest component of
such payment which is greater than the WHT Collar Amount. Any amount
that is less than or equal to the WHT Collar Amount that is withheld or
deducted with respect to a payment under a Series I Note shall
correspondingly reduce the amount of such Selling Shareholder's
Shareholder Balance Amount owing by Purchaser and shall extinguish a
corresponding amount outstanding under that Series I Note evidencing
such Selling Shareholder's
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Shareholder Balance Amount (and so shall reduce the amount payable to such
Registered Holder by the Financial Escrow Agent under the Financial Escrow
Agreement).
All payments contemplated to be made by or on behalf of Purchaser pursuant the
Financial Escrow Agreement in respect of the Series II Notes, shall be made
without set off, counterclaim or other deduction, provided that Purchaser shall
be entitled to withhold and deduct, or to have withheld and deducted by the
Financial Escrow Agent, (with no obligation to gross up) all amounts required to
be withheld or deducted under applicable Indonesian laws and regulations on
account of withholding tax, subject to the applicable tax treaty, if any. Any
amount withheld or deducted with respect to a payment under a Series II Note
shall correspondingly reduce the amount of such Selling Shareholder's
Shareholder Balance Amount owing by Purchaser and shall extinguish a
corresponding amount outstanding under that Series II Note evidencing such
Selling Shareholder's Shareholder Balance Amount (and so, for the avoidance of
doubt, shall reduce the amount payable to such Registered Holder by the
Financial Escrow Agent under the Financial Escrow Agreement).
Any and all receipts and other evidence of amounts withheld or deducted and paid
to the relevant Indonesian tax authorities in respect of the Notes shall be
promptly delivered to the relevant Registered Holders pursuant to the terms of
the Financial Escrow Agreement.
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(k) Transfer Notes. A Selling Shareholder or, where relevant, a Registered
Holder may transfer its Notes in accordance with the following
procedures. The Transferor shall endorse the Note in favor of and
deliver the Note to the transferee. Contemporaneously, the transferor
and transferee shall execute a Transfer Certificate in the form set out
in Exhibit A1 (in the case of a Series I Note) and in Exhibit A2 (in
the case of a Series II Note) and deliver it, in accordance with its
terms, to Purchaser and Financial Escrow Agent. The parties hereto
agree that the Financial Escrow Agent, upon receipt of a duly executed
Transfer Certificate, shall record the transfer of the Note in the
register of Notes kept by the Financial Escrow Agent and the Financial
Escrow Agent shall be authorized and instructed to and shall
countersign the Transfer Certificate on behalf of Purchaser and the
other parties to the Financial Escrow Agreement and thereby cause the
transferee to (i) become party to the Financial Escrow Agreement and
(ii) be subject to and bound by the terms and conditions thereof.
Section 7.7 Indonesian Escrow Account. On or prior to the Initial Closing,
Purchaser and the Selling Shareholders will enter into the Indonesian Escrow
Agreement with an Indonesian escrow agent (the "Indonesian Escrow Agent"). In
the event of and only to the extent of any inconsistency between on the one hand
the provisions of Sections 4.8(a), 4.8(b), 4.8(c)(i) and this Section 7.7 and on
the other hand the provisions of the Indonesian Escrow Agreement, the provisions
of the Indonesian Escrow Agreement shall prevail.
(a) On:
(i) the Share Pledge Release Date:
(A) the Selling Shareholders (other than IFC) shall, and Purchaser
shall (to the extent that it has control or the ability to
control the delivery of the Sale Shares), procure that all of
the
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share certificates representing their Sale Shares shall be
deposited with the Indonesian Escrow Agent and IFC shall
deliver certificates representing its Sale Shares to the
Indonesian Escrow Agent, and all such Sale Shares, being in
aggregate all of the Sale Shares, which shall be placed in a
share escrow account (the "Indonesian Share Escrow Account");
and
(B) the Company shall delete the notation of the Share Pledges and
shall deliver the Company's register of shareholders to the
Indonesian Escrow Agent which likewise will be delivered into
the Indonesian Share Escrow Account,
pursuant to Section 3.9, such share certificates shall be endorsed for
transfer or new certificates issued and the Company's register of
shareholders updated to reflect the transactions on the Initial
Closing. If, as a result of the Net Working Capital Reimbursement not
being paid prior to the Share Pledge Release Date, the share
certificates are not able to be endorsed for transfer or new
certificates issued to reflect the transactions on the Initial Closing,
the Majority Shareholders, Purchaser and the Company shall upon payment
of the Net Working Capital Reimbursement promptly issue a written
authorisation pursuant to Section 3.10 to permit the directors and
commissioners to amend the Company's register of shareholders and
endorse for transfer or issue share certificates to reflect the
transactions on the Initial Closing.
(ii) the Initial Closing the parties hereto shall deposit with the
Indonesian Escrow Agent all the KSO Waivers, the Company Waivers and
all the Notes delivered on the Initial Closing, which shall be placed
in the Indonesian Share Escrow Account.
(b) If Purchaser defaults under the terms of the Financial Escrow
Agreement, the entitlements of the parties hereto to the Sale Shares
shall be solely determined by the occurrence of any Closing hereunder
and not by the amount of the Purchase Price already paid to the Selling
Shareholders as provided
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for in the Financial Escrow Agreement (including moneys to be
transferred to the Selling Shareholders by the Financial Escrow Agent
on a default under the Financial Escrow Agreement).
(c) All Sale Shares shall be released from the Indonesian Share Escrow
Account in accordance with the terms of the Indonesian Escrow
Agreement.
(d) The Indonesian Escrow Agreement shall also contain provisions for the
setting up of a financial escrow account (the "Indonesian Financial
Escrow Account").
(e) All interest paid on funds in the Indonesian Financial Escrow Account
to be lent to Purchaser for the purposes of funding the Net Working
Capital Reimbursement in accordance with Section 4.8 will be paid, in
addition to the principal amount of the Net Working Capital
Reimbursement, to the Selling Shareholders from the Indonesian
Financial Escrow Account pursuant to Section 4.8(c).
(f) If any amount remains in the Indonesian Financial Escrow Account after
satisfaction of the payments under Section 4.8 ("Excess Funds"), the
Excess Funds and any accrued interest thereon shall be paid by the
Indonesian Escrow Agent to the Company. After distribution of all
moneys in the Indonesian Financial Escrow Account, the Indonesian
Escrow Agent shall close such account on the joint written instruction
of the Company and Purchaser.
(g) Upon payment of the Notes evidencing the corresponding Shareholder
Balance Amounts in accordance with their terms, Purchaser shall be
entitled to utilize a power of attorney in its favor from each Selling
Shareholder, contained in article IX of the Indonesian Escrow
Agreement, to effect the transfer to Purchaser or its designatee of any
remaining Sale Shares not in the name of Purchaser or its designee.
Section 7.8 Meeting to Appoint Board of Directors and Board of Commissioners.
Each of the Selling Shareholders and Purchaser shall cause a General Meeting of
Shareholders of the Company, whether in person or by circular resolution of all
Selling Shareholders, to be held on the Initial Closing Date
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for the purpose of electing each of the persons nominated by Purchaser to the
Board of Directors of the Company and the Board of Commissioners of the Company
with effect on Initial Closing.
7.9 Funding of Financial Escrow Accounts and other Payments. Subject to Section
2.6, after the Initial Closing but prior to the Subsequent Closing the Company
shall first (a) repay the Purchaser Loans and (b) after full repayment of the
Purchaser Loans, advance funds to Purchaser, in each case for the purpose of
funding:
(i) Purchaser's obligations in respect of paying the Net Working Capital
Reimbursement;
(ii) Purchaser's obligations in respect of the Monthly Amounts and the Notes
evidencing the Shareholder Balance Amounts;
(iii) any capital expenditures by Purchaser on its own network in the area of
the KSO Unit, provided that the Company may only provide funds to the
Purchaser under this Section 7.9(iii) to the extent:
(a) the Net Working Capital Reimbursement has been paid in full;
and
(b) the Monthly Amount for that month has been funded.
Any funds advanced by the Company to Purchaser pursuant to this Section 7.9
shall initially be used to repay the Purchaser Loans and thereafter shall be
recorded as loans to Purchaser and shall be repayable by Purchaser to the
Company on arms length terms and conditions to be agreed between the Company and
Purchaser.
Section 7.10 Finalisation of Agreements. The parties hereto acknowledge and
agree that the agreements in Exhibits E, F, G and H are still subject to
negotiation and need to be discussed and agreed with the counter-parties to
those agreements which are not parties to this Agreement. Consequently, although
the intention is to enter into such agreements substantially in accordance with
their respective terms in such Exhibits, amendments prior to execution of such
agreements may be required to reflect the comments of the counter-parties to
such agreements and to reflect the agreed arrangements for the Transactions. The
parties hereto agree to finalize in good faith such
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agreements as soon as possible after the date of this Agreement.
Section 7.11 Approvals. Each of FCR and Marubeni shall use its reasonable
endeavours to deliver to Purchaser on or prior to the date of the Purchaser's
annual general meeting scheduled for 2002, evidence of or a certificate stating
that the approval of its board of directors for this Agreement and the
consummation by it of the Transactions, has been obtained. Purchaser shall use
its reasonable endeavours to deliver to each Selling Shareholder on or prior to
the date of the Purchaser's annual general meeting scheduled for 2002, evidence
of or a certificate stating that the approval of its board of commissioners for
this Agreement and the consummation by it of the Transactions has been obtained.
Section 7.12 Disclosure Schedule. Each Selling Shareholder agrees that the
Disclosure Schedule (and any amendments thereto) signed by the Selling
Shareholders and delivered by the Company shall be valid, binding and
enforceable against it (except in the case of each of IFC and NMP, in respect
only of those representations and warranties not being given by it in Article
5).
Section 7.13 Tax Clearance Certificate 2001. The Selling Shareholders (other
than IFC and NMP) shall use their reasonable endeavors to cause the Company to
obtain a tax clearance certificate (surat ketetapan pajak) for the Company for
the financial year 2001 prior to the date being ninety (90) days after the
Initial Closing Date.
Section 7.14 Limitation. For the purposes of this Article 7, the only covenants
given by IFC and NMP are those in Sections 7.1 (the last paragraph), 7.3, 7.4
(excluding sub-sections 7.4(b)(B) and (C)), 7.6, 7.7, 7.10 and 7.12.
ARTICLE 8
CONDITIONS PRECEDENT
Section 8.1 Conditions to Each Party's Obligation to Effect Each Closing. The
respective obligation of each party hereto to effect a Closing shall, in
addition to the satisfaction of the requirements relevant to such Closing
specified in Article 3, be subject to the
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satisfaction (or non-occurrence in respect of paragraphs (a) and (b)) at or
prior to the relevant Closing Date specified below of each of the following
conditions:
(a) Statutes; Court Orders. In respect of any Closing, no statute, rule or
regulation shall have been enacted or promulgated by any Governmental
Entity which prohibits the consummation of the Transactions; and there
shall be no order, writ or injunction of a court of competent
jurisdiction actually precluding consummation of the Transactions.
(b) Termination. In respect of the Initial Closing only, none of the
Transactions shall have been terminated or abandoned in accordance with
the terms of the relevant agreements.
(c) Certain Selling Shareholders' Consents. In respect of the Initial
Closing only, each of the Consents necessary for the consummation of
the Transactions by each of FCR, Indosat and Marubeni (including, those
set forth in Schedule 5.4) shall have been obtained and shall be in
full force and effect.
(d) Purchaser's Consents. In respect of the Initial Closing only, each of
the Consents necessary for the consummation of the Transaction by
Purchaser (including those set forth in Schedule 6.4) shall have been
obtained and shall be in full force and effect.
(e) IFC Approval. In respect of the Initial Closing only, approval by IFC
for the prepayment of the Existing IFC Loans as contemplated herein
and, to the extent required, a waiver by IFC under the agreements and
other documents relating to the Existing IFC Loans as necessary to
enable the Selling Shareholders and the Company to consummate the
Transactions contemplated hereunder shall have been obtained and shall
be in full force and effect.
(f) Bapepam Documents. In respect of the Initial Closing only, copies of
statements from each of the respective boards of each of Indosat and
Purchaser submitted to the Indonesian Capital Markets Supervisory
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Board (Bapepam) certifying that each member of the respective boards of
each of Indosat and Purchaser does not have an economic interest in
respect of the Transactions for the purposes of Bapepam Regulation
NO.KEP-32/PM/2000, dated 22 August 2000.
(g) Simultaneous Closing. In respect of the Initial Closing only, any sale
and purchase of the Sale Shares relating to the Initial Closing shall
be for not less than all of the Selling Shareholders' Sale Shares for
the Initial Closing (excluding IFC as envisaged under Sections 2.1(a)
and 3.2(a)).
The foregoing conditions are for the benefit of all of the Selling Shareholders
and Purchaser and may be waived only by all of them. The failure by any party at
any time to exercise any of the foregoing rights shall not be deemed to be a
waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time.
Section 8.2 Conditions to Obligations of Purchaser to Effect Each Closing. The
obligations of Purchaser to consummate the Closing shall be subject to the
satisfaction on or prior to the Closing Date of each of the following
conditions:
A. In respect of any Closing:
(a) Accuracy of Representations and Warranties of the Selling Shareholders.
All of the representations and warranties of each of the Selling
Shareholders in this Agreement relevant to each Closing or in any
certificate delivered in connection herewith in respect of (i) those
qualified as to materiality shall have been true and correct in all
respects and (ii) those not so qualified shall have been true and
complete in all material respects, as of such Closing.
(b) Performance by the Selling Shareholders.
(i) All of the covenants and obligations that each Selling
Shareholder is required to perform or to comply with pursuant
to this Agreement at or prior to a Closing (considered
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collectively), and each of these covenants and obligations
(considered individually), shall have been duly performed and
complied with in all material respects.
(ii) Each document required to be delivered pursuant to the
relevant provisions of Article 3 shall have been delivered.
(c) Additional Documents. The Selling Shareholders shall have delivered
such other documents as Purchaser may reasonably request for the
purpose of evidencing the satisfaction of any condition referred to in
Sections 8.2A(b)(i), 8.2B(a), (k), (l) and (m) (as appropriate).
(d) Opinion of the Selling Shareholders' Counsel. The Selling Shareholders
shall have delivered to Purchaser at the relevant Closing the Selling
Shareholder Opinions, dated the relevant Closing Date.
(e) Simultaneous Closings. In respect of the Interim Closing and the
Subsequent Closing, any sale and purchase of the Sale Shares of not
less than all of the Selling Shareholders for a Closing shall be
consummated at such Closing.
(f) Company's Consents. Each of the Required Company Consents (including,
without limitation, those set forth in Schedule 5.9) shall have been
obtained and shall be in full force and effect.
(g) Selling Shareholders' Consents. Each of the Consents necessary for the
consummation of the Transactions by each of the Selling Shareholders
(including, those set forth in Schedule 5.4, if any) shall have been
obtained and shall be in full force and effect.
The foregoing conditions in this Section 8.2A are for the sole benefit of
Purchaser, and may be waived by Purchaser, in whole or in part, at any time and
from time to time in the sole discretion of Purchaser and Purchaser shall be
entitled to utilise the power of attorney granted by the Selling Shareholders in
the Indonesian Escrow Agreement to effect the Interim Closing and the Subsequent
Closing. The failure by
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Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
B. In respect of the Initial Closing only:
(a) Borrowings. The Company shall have no indebtedness except as set forth
in Schedule 1.1 and the terms and conditions of all such indebtedness
conforms in all material respects to the descriptions thereof in
Schedule 1.1.
(b) Existing IFC Loans. Unless otherwise mutually agreed, Purchaser shall
have received the documentation for each of the Existing IFC Loans.
(c) Personnel. Purchaser shall have determined in its sole discretion, that
after the Initial Closing, the Company shall have no liability in
respect of the employees of the Company transferred to FCR pursuant to
Section 7.5(b) or in respect of the employees, directors and
commissioners whose employment with the Company was terminated pursuant
to Section 7.5(a).
(d) Boards/Articles of Association/Bank Accounts. Purchaser shall have
received valid and binding minutes of a shareholders' meeting or
circular resolutions of the Company (i) accepting the resignations of
the existing members of the Board of Directors and Board of
Commissioners of the Company, (ii) appointing such persons as Purchaser
may nominate to such boards, (iii) adopting a new set of articles of
association of the Company and substantially in the form of Exhibit K,
and (iv) authorising signatory changes to the bank accounts of the
Company and appointing new signatories nominated by Purchaser.
(e) Technical Agreement. The Technology Transfer Agreement dated October
30, 1996 between the Company and FCR shall have been terminated.
(f) Resignations. Each of the members of the Board of Commissioners and the
Board of Directors of the Company nominated by each of the Selling
Shareholders shall have
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resigned from such office without compensation claims and each Selling
Shareholder shall have delivered to Purchaser at the Initial Closing
copies of the letters evidencing such resignations without compensation
claims.
(g) Investigations; Etc. Neither any investigations of the Company by
Purchaser nor any certificate of any Selling Shareholder or other
document delivered to Purchaser as contemplated by this Agreement,
shall have revealed any facts or circumstances which, in the sole and
exclusive judgment of Purchaser, reflect in a material adverse way on
the financial condition, assets, liabilities (absolute, accrued,
contingent or otherwise), reserves, business, operations or prospects
of the Company.
(h) Tax Clearances. Purchaser shall have received, to its reasonable
satisfaction, tax clearance certificates (surat ketetapan pajak) for
the Company for each financial year since its incorporation up to and
including the 2000 financial year.
(i) Disclosure Schedule. Purchaser shall have received in substance
satisfactory to it a Disclosure Schedule within fifteen (15) calendar
days of the date of this Agreement and any formal amendments thereto on
or prior to twenty-five (25) calendar days prior to the proposed date
of the Initial Closing (the "Final Disclosure Date").
(j) Existing IFC Loan. The prepayment in full of all amounts of principal,
interest and other amounts payable under the IFC Investment Agreement
and the Common Terms Agreement in respect of the Existing IFC A and B
Loans on or before the Initial Closing utilising Tranche A of the
Purchaser Loan and any cash on hand.
(k) Performance by the Company. All of the covenants and obligations that
the Company is required to perform or comply with pursuant to this
Agreement at or prior to the Initial Closing (considered collectively),
and each of the these covenants and obligations (considered
individually), shall have been duly performed and completed in all
material respects.
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(l) No Legal Proceedings. Since the date of this Agreement, there shall not
have been commenced or Threatened against Purchaser or the Company, any
Proceeding (i) involving any challenge to, or seeking damages or other
relief in connection with, the Transactions, or (ii) that may have the
effect of preventing, delaying, making illegal, or otherwise
interfering with the Transactions.
(m) No Claim Regarding Stock Ownership. There must not have been made or
Threatened by any Person any claim asserting that any of the Selling
Shareholders is not the legal owner of Sale Shares of such Selling
Shareholder or that any of the Sale Shares are not authorized, validly
issued or fully paid.
The foregoing conditions in this Section 8.2B are for the sole benefit of
Purchaser, and may be waived by Purchaser, in whole or in part, at any time and
from time to time on or prior to the Initial Closing in the sole discretion of
Purchaser. The failure by Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time on or prior to the Initial Closing.
Section 8.3 Conditions to Obligations of the Selling Shareholders to Effect Each
Closing. The obligations of each Selling Shareholder to consummate the relevant
Closing shall be subject to the satisfaction on or prior to the relevant Closing
Date of each of the following conditions:
(a) Accuracy of Representations and Warranties of Purchaser. In respect of
the Initial Closing and the Interim Closing only, all of the
representations and warranties of Purchaser set forth in this Agreement
relevant to each Closing or in any certificate delivered in connection
herewith (i) in respect of those qualified as to its materiality shall
have been true and correct in all respects and (ii) those not so
qualified shall have been true and correct in all material respects.
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(b) Performance by Purchaser.
(A) In respect of the Initial Closing and the Interim Closing
only, all of the covenants and obligations that Purchaser is
required to perform or to comply with pursuant to this
Agreement at or prior to the relevant Closing (considered
collectively), and each of the covenants and obligations
(considered individually), shall have been duly performed and
complied with in all material respects.
(B) In respect of the Initial Closing and the Interim Closing
only, each of the documents required to be delivered by
Purchaser pursuant to Article 3 shall have been delivered.
(c) Opinion of Purchaser's Counsel. In respect of the Initial
Closing and the Interim Closing only, Purchaser shall have
delivered to the Selling Shareholders at the relevant Closing
the Purchaser Opinion, dated the relevant Closing Date.
(d) Purchaser's Consents. In respect of the Initial Closing and
the Interim Closing only, each of the Consents necessary for
the consummation of the Transactions by Purchaser (including
those set forth in Schedule 6.4) shall have been obtained and
shall be in full force and effect.
(e) No Legal Proceedings. In respect of the Initial Closing only,
since the date of this Agreement, there shall not have been
commenced or Threatened against such Selling Shareholder or
the Company, any Proceeding (i) involving any challenge to, or
seeking damages or other relief in connection with, the
Transactions, or (ii) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with the
Transactions.
(f) Company's Consents. In respect of the Initial Closing and the
Interim Closing only, each of the Required Company Consents
(including, without limitation, those set forth in Schedule
5.9) shall have been obtained and shall be in
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full force and effect.
The foregoing conditions are for the sole benefit of the Selling Shareholders,
and may be waived by each Selling Shareholder in respect of the sale of its Sale
Shares, in whole or in part, at any time or from time to time, in the sole
discretion of each Selling Shareholder prior to or on the relevant Closing. The
failure by any Selling Shareholder to exercise any of the foregoing rights shall
not be deemed a waiver of any such right and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time prior to
or on the relevant Closing. Notwithstanding the foregoing, if any Selling
Shareholder shall fail to attend (whether by a duly authorised representative or
attorney or otherwise) the Interim Closing and/or the Subsequent Closing or on
such Closing fails to effect the transactions contemplated on such Closing, such
Closing may proceed without such Selling Shareholder and the deliveries by
Purchaser in Article 3 and the above condition precedent shall be deemed to have
been waived in respect of such Selling Shareholder.
ARTICLE 9
TERMINATION
Section 9.1 Termination. This Agreement may be terminated:
(a) by the mutual written consent of Purchaser and each of the Selling
Shareholders at any time prior to the Subsequent Closing, provided that
there is an agreed reconciliation between the partial payment by
Purchaser of the Purchase Price and the Net Working Capital
Reimbursement, where relevant, and the Sale Shares held by the parties
hereto;
(b) by the Majority Shareholders:
(i) prior to Initial Closing, if Purchaser shall have breached any
of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach would
give rise to the failure of a condition set forth in Article 8
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in respect of the Initial Closing and which breach cannot be
or has not been cured within 30 days after the giving of
written notice by the Majority Shareholders to Purchaser
specifying such breach and such breach has not been waived by
the Majority Shareholders; or
(ii) on or after September 30, 2002, if the Initial Closing shall
not have theretofore occurred; or
(iii) at any time a final non-appealable court order in Indonesia
has been made for the bankruptcy of Purchaser; or
(iv) at any time after Purchaser expressly repudiates its payment
obligations under the Notes by challenging the validity or
enforceability of the Notes; or
(v) the Subsequent Closing has not occurred on or before December
31, 2005 solely as a result of the default of Purchaser under
this Agreement or any Security Agreement (or such other date
as the Majority Shareholders and Purchaser may otherwise agree
in writing).
(c) by Purchaser:
(i) prior to Initial Closing, if any Selling Shareholder shall
have breached any representation, warranty, covenant or other
agreement contained in this Agreement which would give rise to
the failure of a condition set forth in Article 8 in respect
of the Initial Closing and which breach cannot be or has not
been cured within 30 days after the giving of written notice
by Purchaser to the Majority Shareholders specifying such
breach and such breach has not been waived by Purchaser; or
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(ii) on or after 30 September 2002, if the Initial Closing shall
not have theretofore occurred; or
(iii) within fourteen (14) days after the date being fourteen (14)
days after receipt by Purchaser of the Disclosure Schedule or
any amendment thereto if Purchaser is not satisfied as to the
contents of the Disclosure Schedule or any amendment thereto
or the measures to be adopted by the Selling Shareholders to
rectify matters in the Disclosure Schedule or any amendment
thereto which are not to Purchaser's satisfaction; or
(iv) the Share Pledge Release Date has not occurred, other than
solely as a result of Purchaser breaching this Agreement, any
Security Agreement or the Purchaser Loan Agreement, on or
prior to 30 November 2002 (or such other date as the Majority
Shareholders and Purchaser may otherwise agree in writing).
Section 9.2 Effect of Termination.
(a) In the event of termination of this Agreement by Purchaser or the
Majority Shareholders pursuant to the terms of this Agreement, written
notice thereof shall forthwith be given to the Selling Shareholders or
Purchaser (with a copy to all Selling Shareholders), as the case may
be, specifying the provision hereof pursuant to which such termination
is made, and, except as provided specifically hereunder or under any
Security Agreement, there shall be no liability or obligation
thereafter on the part of Purchaser or any of the Selling Shareholders
except for fraud or breach of, or other obligation under, this
Agreement or any Security Agreement arising prior to such termination.
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(b) The parties hereto acknowledge and agree that, if Purchaser has paid
any Monthly Amounts to the Financial Escrow Agent and an Event of
Repayment occurs, the amounts paid by Purchaser, to the extent not yet
paid as Quarterly Payments to the Selling Shareholders and on deposit
with the Financial Escrow Agreement shall be applied to the payment of
the then outstanding Notes evidencing the Shareholder Balance Amounts
in the manner contemplated in Section 3.11(ii).
(c) In case of a termination pursuant to Section 9.1(c)(iv) Purchaser shall
be entitled, without penalty or liability, to immediately cancel all of
the Notes by providing written notice thereof to the Financial Escrow
Agent and each of the other parties hereto; whereupon the parties
hereto shall take all actions to terminate the Transactions including:
(i) any and all rights to any of the Sale Shares which were
conveyed, assigned, transferred, and/or delivered by each
Selling Shareholder to Purchaser on the Initial Closing
pursuant to Section 2.1(a) or otherwise shall be deemed to be
reconveyed, reassigned, retransferred, and/or redelivered to
each such Selling Shareholder;
(ii) the Majority Shareholders, the Company and Purchaser shall
discuss in good faith procedures for the prompt repayment of
the Purchaser Loans to Purchaser and failing a resolution
within a period of sixty (60) days the parties hereto shall
resolve the matter pursuant to Section 11.8 provided that
until such time as a resolution is reached the Company shall
be required to comply with the terms of the Purchaser Loan
Agreement;
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(iii) the Purchaser and the Majority Shareholders shall issue
instructions to the Indonesian Escrow Agent to transfer to the
Company any and all funds which have been remitted to the
Indonesian Financial Escrow Account;
(iv) the Purchaser and the Majority Shareholders shall issue
instructions to the Indonesian Escrow Agent to deliver:
(A) all of the share certificates relating to the Sale
Shares, if any are held in escrow, and the Company's
register of shareholders to the Company;
(B) the KSO Waivers and the Company Waivers to the
Selling Shareholders; and
(C) all the Notes to Purchaser,
such KSO Waivers, the Company Waivers and Notes shall be
deemed as of the date of termination to be null and void and
of no effect;
(v) the Purchaser and the Majority Shareholders shall issue
instructions to the Financial Escrow Agent to transfer to the
Purchaser any and all funds which have been remitted to the
Financial Escrow Account;
(vi) the parties hereto shall take all actions necessary to close
the Indonesian Share Escrow Account, the Indonesian Financial
Escrow Account and the Financial Escrow Account and to
terminate the Indonesian Escrow Agreement the Financial Escrow
Agreement and all of the other Security Agreements; and
(vii) The return of all deliveries made by any party hereto prior to
the date of termination to the party which delivered such
deliveries.
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(d) In respect of any termination pursuant to this Article 9 after the
Share Pledge Release Date, without limiting the contractual rights of
the parties hereto provided under Indonesian law, the proceeds of any
sale by any Selling Shareholder of any Sale Shares to a third party
after the date that this Agreement terminates shall, for the avoidance
of doubt, be deemed to be a mitigation of any damages that such Selling
Shareholder may otherwise claim against Purchaser.
Section 9.3 Waiver of Court Pronouncement. Purchaser and the Selling
Shareholders hereby waive the provisions of Article 1266 of the Indonesian Civil
Code to the extent it requires a court pronouncement in respect of termination
of this Agreement.
ARTICLE 10
INDEMNIFICATION
Section 10.1 Scope of Indemnification; Effect of Investigation. Damages in
accordance with the provisions of this Article 10 arise if the party seeking
indemnification notifies each party from whom it seeks indemnification of any
claim prior to the second anniversary of the relevant Closing Date on which the
representations and warranties or covenants on which the claim is based were
made except (i) for representations under Sections 5.1, 5.2, 5.3, 5.6, 5.7, 5.8
and 5.29 and 6.1, 6.2, 6.3 and 6.4 for which indemnification may be sought until
thirty (30) days after the expiration of applicable statutes of limitations, and
(ii) in the event of fraudulent representation or intentional breach. No Damages
for events described in Sections 10.2 and 10.3 shall be paid by a party hereto
to another except in accordance with the provisions of this Article 10, and
indemnification for any such event described in Sections 10.2 and 10.3 shall be
limited to the payment of Damages, after giving effect to the reduction in
Taxes, if any, for the Company or the party (or parties) seeking indemnification
which will result from such Damages. The right to indemnification for Damages
based on any representation, warranty, covenant or obligation of a party hereto
contained in or made pursuant to this Agreement shall not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable
of being acquired) at any time, and any notification delivered pursuant to
Section 7.4 with respect to, the accuracy or inaccuracy of or compliance with,
any such representation, warranty or obligation provided, however, Purchaser
shall have no right to be
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indemnified for Damages arising in relation to any representation, warranty,
covenant or obligation of a party hereto modified or amended after the date
hereof but before the Final Disclosure Date (as such term is defined in Section
8.2B(i)), by inclusion in the Disclosure Schedule and formal amendments thereto
prior to such Final Disclosure Date. The waiver of any condition to consummation
of the Transactions, where such condition is based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, shall not affect the right to indemnification for
Damages or other remedy based on such representation, warranty or obligation.
Section 10.2A Indemnification and Payment of Damages by the Selling
Shareholders. Subject to Section 10.7, each Selling Shareholder shall:
(a) severally but not jointly, indemnify and hold harmless Purchaser for,
and shall pay to Purchaser the amount of any and all Damages, arising
from or in connection with:
(A) any breach of any representation or warranty under Sections
5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.7 and 5.34 made by such
Selling Shareholder or in any certificate or document
delivered by such Selling Shareholder in connection with this
Agreement, or
(B) any breach by such Selling Shareholder of any covenant or
obligation of such Selling Shareholder under this Agreement;
(b) severally on the basis of its Pro Rata Share as of the Initial Closing,
and not jointly, indemnify and hold harmless Purchaser for, and shall
pay to Purchaser the amount of any and all Taxes imposed upon the
Company on or prior to the Initial Closing Date (other than any amount
for Taxes specifically identified and reflected as a liability for
unpaid Taxes in the Final Closing Balance Sheet).
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Section 10.2B Indemnification and Payment of Damages by the Indemnifying
Shareholders. Subject to Section 10.7, each Indemnifying Shareholder shall,
severally on the basis of the Selling Shareholders' Indemnity Share, indemnify
and hold harmless Purchaser for, and shall pay to Purchaser any and all Damages,
arising from or in connection with any breach of any representation or warranty
made by an Indemnifying Shareholder in this Agreement (other than those stated
in Section 10.2A(a)(A)) or in any certificate or document delivered by such
Indemnifying Shareholder in connection with this Agreement.
Section 10.3 Indemnification for Damages by Purchaser. Purchaser shall indemnify
and hold harmless each Selling Shareholder, and shall pay to each Selling
Shareholder the amount of, any and all Damages arising from or in connection
with:
(a) any breach of any representation or warranty made by Purchaser in this
Agreement or in any certificate delivered by Purchaser in connection
with this Agreement; or
(b) any breach by Purchaser of any covenant or obligation of Purchaser
under this Agreement.
Section 10.4 Procedure for Indemnification - Third-Party Claims.
(a) (i) The party seeking indemnification under Sections 10.2 or 10.3
(an "Indemnified Party") shall give the party from whom it
seeks indemnification under such Section (an "Indemnifying
Party") notice of any third-party claim that may give rise to
any indemnification obligation under this Article 10. Such
notice shall be given as soon as possible after the
Indemnified Party becomes aware of such third party claim and
shall refer to the provision(s) of this Agreement that the
Indemnified Party claims to be breached, and shall contain a
copy of any and all documents related to
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such third party claim.
(ii) Notwithstanding the foregoing, if any tax assessment, claim or
demand that may give rise to any indemnification under this
Article 10 is received by the Company from the Indonesian tax
authorities in respect of which Purchaser seeks to make a
claim against the Selling Shareholders, Purchaser shall
promptly in the circumstances, but in any event within ten
(10) Business Days after receipt of any such claim by the
Company, give to the Selling Shareholders notice of such claim
along with a copy of any and all documents related to such
claim.
Failure to give both such notice and documents as described in Sections
10.4(a)(i) and (ii) above, within forty-five (45) days, shall deprive
the Indemnified Party of any payment of Damages or other remedy.
(b) The Indemnifying Party shall have the right either to participate in or
to assume the defense (at the Indemnifying Party's option and expense)
of any such claim through counsel of the Indemnifying Party's own
choosing by so notifying the Indemnified Party within fifteen (15) days
of its receipt of notice of such claim from the Indemnified Party;
provided, however, that any such counsel shall be reasonably
satisfactory to the Indemnified Party. In such event, the Indemnifying
Party and its counsel shall have full access to any and all information
relating to the third-party and its claim or otherwise useful to defend
such third-party's claim, including by way of counter-claim. Such
information shall include, but not be limited to, access to any and all
documents, premises and personnel of the Company. If the Indemnifying
Party assumes the defense of a third-party claim, no compromise or
settlement of such claims may be effected by the Indemnifying Party
without the Indemnified Party's consent unless (A) there
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is no finding or admission of any violation of law or regulation or any
violation of the rights of any Person and no effect on any other claims
that may be made against the Indemnified Party and (B) the sole relief
provided is monetary damages that are paid in full by the Indemnifying
Party. If notice of a third-party claim is given to an Indemnifying
Party and the Indemnifying Party does not, within fifteen (15) days
after receipt of the Indemnified Party's written notice is given, give
notice to the Indemnified Party of its election to participate in or
assume the defense of such claim, the Indemnifying Party will be bound
by any final determination made in such Proceeding or any compromise or
settlement effected by the Indemnified Party. The Indemnifying Party
shall be liable for the fees and expenses of counsel employed by the
Indemnified Party for any period during which the Indemnifying Party
has not assumed the defense of any such third-party claim (other than
during any period in which the Indemnified Party will have failed to
give notice of the third-party claim as provided above). If the
Indemnified Party determines in good faith that a conflict exists
between it and the Indemnifying Party with respect to any significant
issue in respect of such third-party claim, the Indemnifying Party (if
applicable, in their respective Pro Rata Shares) and the Indemnified
Party shall pay, in two equal shares, the reasonable fees and expenses
of such additional counsel as may be required to be retained by the
Indemnified Party in order to resolve such conflict.
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(c) In the event of a third-party claim, the Purchaser shall and, to the
extent it has control over the Company pursuant to the Shareholders'
Voting Agreement, shall cause the Company to use its reasonable efforts
to cause the Company to mitigate any and all Damages.
(d) Notwithstanding any provision to the contrary, no claim by the
Purchaser against the Company, in particular, but not limited to, in
connection with the KSO Agreement, may be considered as a third-party
claim and the Purchaser may not seek payment of Damages or any other
remedy in connection with any claim that it may have against the
Company.
Section 10.5 Procedure for Indemnification - Other Claims.
(a) A claim for indemnification for any matter not involving a third-party
claim may be asserted by notice to the party from whom indemnification
is sought. Such notice shall be sent by the Indemnified Party as soon
as possible after such party becomes aware of the grounds for such
claim and shall fairly refer to the provision(s) of this Agreement that
the Indemnified Party claims to be breached. Failure to give such
notice within forty-five (45) days shall deprive the Indemnified Party
of any payment of Damages or other remedy.
(b) Notwithstanding anything in this Agreement to the contrary, none of the
parties hereto shall be obliged to indemnify any other party for any
Damages that arise from the enactment subsequent to the Subsequent
Closing of any laws, rules, statutes or regulations not in effect on or
prior to the Subsequent Closing Date or from changes subsequent to the
Subsequent Closing Date of requirements or interpretations of any laws,
rules, statutes or regulations existing on or prior to the Subsequent
Closing Date.
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Section 10.6 Survival of Indemnification Claims. The indemnification obligations
set forth in this Article 10 shall survive each Closing and termination
hereunder.
Section 10.7 Basket.
(a) Subject to Section 10.7(b) the Selling Shareholders shall not be liable
under this Article 10 in respect of any claim unless the aggregate
amount of all claims for which the Selling Shareholders would otherwise
be liable hereunder exceeds US$705,000 (or equivalent) but if the
aggregate liability of all such claims exceeds US$705,000, then the
Selling Shareholders shall be liable for all claims hereunder,
including such initial US$705,000 of claims provided that in no event
shall a Selling Shareholder's liability exceed its Pro Rata Share of
the Purchase Price and the Net Working Capital Reimbursement.
(b) Section 10.7(a) shall not apply to, and the Selling Shareholders, as
relevant, shall be immediately liable to the extent of their several
liability provided for herein for all claims (i) under Section
10.2A(b), (ii) with respect to any breach of representation and
warranty under Sections 5.1, 5.2, 5.3, 5.5, 5.6, 5.7, 5.8, 5.9, 5.11
and 5.29 and (iii) with respect to any fraudulent misrepresentation.
Section 10.8 No Set-Off. The parties hereto expressly agree that any amount
which may have to be paid by one party to another pursuant to this Article 10
shall not be set off against the Purchase Price and the Net Working Capital
Reimbursement and that no claim for indemnification of Damages shall entitle
Purchaser to delay payment of the Purchase Price or the Net Working Capital
Reimbursement.
Section 10.9 Tax Effect of Indemnification Payments. All indemnity payments made
by any Selling Shareholder to Purchaser or by Purchaser to any Selling
Shareholder, pursuant to this Agreement shall be treated for all Tax purposes as
adjustments to the Purchase Price paid with respect to the Sale Shares.
126
ARTICLE 11
MISCELLANEOUS
Section 11.1 Fees and Expenses. Save as expressly provided for herein and in the
Security Agreements all costs and expenses incurred in connection with this
Agreement and the consummation of the Transactions shall be paid by the party
incurring such expenses, including the fees and expenses of its legal and
financial advisors.
Section 11.2 Amendment and Modification. This Agreement may be amended, modified
and supplemented in any and all respects, but only by a written instrument
signed by all of the parties hereto expressly stating that such instrument is
intended to amend, modify or supplement this Agreement.
Section 11.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given five days after being sent by courier service
and shall be deemed given when sent by facsimile (which is confirmed) or
hand-delivered, in each case to the parties at the following addresses (or at
such other address for a party as shall be specified by such party by like
notice):
If to the Company, to:
PT Pramindo Ikat Nusantara
Setiabudi Atrium Building, 6th Floor, Suite 610
Xx. X.X. Xxxxxx Xxxx, Xxx. 00
Xxxxxxx 00000, Xxxxxxxxx
Attention : President Director
Telephone : (0000) 000-0000
Facsimile : (0000) 000-0000
If to Purchaser, to:
Perusahaan Perseroan (Persero) PT Telekomunikasi
Indonesia Tbk.
Xx. Xxxxxx Xx. 0
Xxxxxxx 00000
Xxxxxxxxx
Attention : President Director
Telephone : (00) 00 000 0000
Facsimile : (00) 00 000 0000
127
If to Astratel, to:
PT Astratel Nusantara
Setiabudi Atrium Building, 3th Floor, Suite 303
Setiabudi Office Park
Xx. X.X. Xxxxxx Xxxx, Xxx. 00
Xxxxxxx 00000, Xxxxxxxxx
Attention : President Director
Telephone : (0000) 000-0000
Facsimile : (0000) 000-0000
If to FCR, to:
France Cables et Radio
000, xxx Xxxxxx 00000
Xxxxx, Xxxxxx
Attention : President
Telephone : (000) 0000-0000
Facsimile : (000) 0000-0000
with a copy to:
General Counsel International
Legal Operations
Branche Ressource-
Direction Juridique Internationale
6, place d' Alleray
75505 Xxxxx Xxxxx 00, Xxxxxx
Telephone : 00-0-0000-0000
Facsimile : 00-0-0000-0000
If to Indosat, to:
Perusahaan Perseroan (Persero) PT Indonesian
Satellite Corporation Tbk
Xxxxx Xxxxx Xxxxxxx Xxxxx 00
Xxxxxxx 00000, Xxxxxxxxx
Attention : Executive Vice President for Corporate Development
Telephone : (0000) 000-0000
Facsimile : (0000) 000-0000
If to Marubeni, to:
Xxxxxxxx Xxxxxxxxxxx
0-0, Xxxxxxxxx 0-Xxxxx
Xxxxxxx-Xx, Xxxxx
Xxxxx
Attention : General Manager, Telecommunication
Infrastructure Project Department
Telephone : (000) 0000-0000
Facsimile : (000) 0000-0000
128
If to IFC, to:
International Finance Corporation
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxx XX 00000
XXX
Attention : Director, Infrastructure Department
Telephone : (0-000) 000-0000
Facsimile : (0-000) 000-0000
If to NMP, to:
NMP Singapore Pte Limited
c/o Nichimen Corporation
Tokyo Head Office
1-23, Xxxxx 0-Xxxxx,
Xxxxxx-xx, Xxxxx 000-0000
Xxxxx
Attention : Director
Telephone : (000) 0000-0000
Facsimile : (000) 0000-0000
Section 11.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties hereto.
Section 11.5 Entire Agreement; No Third Party Beneficiaries. This Agreement and
the Confidentiality Agreement (a) supersede and replace the Memorandum of
Understanding, dated February 20, 2002, among Purchaser, the Selling
Shareholders and the Company, (b) constitute the entire agreement and supersede
and replace all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof and thereof and (c)
are not intended to confer any rights or remedies upon any Person other than
parties hereto and thereto and, in respect of the Company Waiver and KSO Waiver
only, the Government of the Republic of Indonesia.
Section 11.6 Severability. Any term or provision of this Agreement that is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof in that
jurisdiction or any other jurisdiction or the validity or enforceability of the
offending term or provision in any other situation or in any other jurisdiction.
If the final judgment of a court of competent jurisdiction or other authority
declares that any term or provision hereof is invalid, void or unenforceable,
the parties agree that the court making such determination shall have the power
to reduce the scope, duration, area or applicability of the term or provision,
to delete
129
specific words or phrases, or to replace any invalid, void or unenforceable term
or provision with a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision.
Section 11.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Republic of Indonesia.
Section 11.8 Arbitration.
(a) Amicable Settlement. Purchaser and the Selling Shareholders agree that
if any difference, dispute, conflict or controversy (a "Dispute"),
arises out of or in connection with this Agreement or its performance,
including without limitation any dispute regarding its existence,
validity, termination of rights or obligations of any party hereto,
Purchaser and the Selling Shareholders will attempt, for a period of
thirty (30) days after the receipt by one party of a written notice
from the other party of the existence of the Dispute, to settle the
Dispute by amicable settlement between the parties.
(b) Referral to Arbitration. If Purchaser and the Selling Shareholders are
unable to reach agreement to settle the Dispute within the 30-day
period set forth in Section 11.8(a), then at the request of any party,
the Dispute shall be submitted to a Board of Arbitration under the
Rules of Arbitration of the International Chamber of Commerce (the "ICC
Rules"). The arbitration will be conducted and the award will be
rendered in the English language in Geneva, Switzerland.
Notwithstanding the provisions of Section 11.3, any notice of
arbitration, response or other communication given to or by a party to
the arbitration must be given and deemed received as provided in the
ICC Rules. For the purpose of any arbitration brought pursuant to this
Agreement, the Selling Shareholders shall act and be considered as one
party.
130
(c) Appointments. The Board of Arbitration will consist of three
arbitrators. One arbitrator will be nominated by Purchaser, one
arbitrator will be nominated by the Selling Shareholders, and one
arbitrator will be nominated by the arbitrators appointed by Purchaser
and the Selling Shareholders, in each case in accordance with the ICC
Rules. If any arbitrator is not timely nominated, at the request of any
party, such arbitrator shall be appointed by the ICC Court of
Arbitration in accordance with the ICC Rules.
(d) Procedures. The Board of Arbitration appointed must conduct the
arbitration in accordance with this Agreement, the ICC Rules and the
prevailing laws and regulations relating to arbitration of the place of
arbitration. The parties shall use their reasonable efforts to ensure
that a hearing on the merits shall be commenced no later than nine (9)
months after the appointment of the third arbitrator, unless the
parties agree on an extension of time or the tribunal extends such time
for good cause shown.
(e) Arbitration Exclusive Remedy. Neither Purchaser nor the Selling
Shareholders will be entitled to commence or file any action in a court
of law relating to any Dispute until the matter will have been
determined by the Board of Arbitration as provided in this Section 11.8
and then only for the enforcement of this arbitration agreement or the
arbitration award.
(f) Award Binding. Any decision of the Board of Arbitration will be final,
binding and incontestable and may be used as a basis for enforcement
thereon in the Republic of Indonesia or elsewhere. The parties hereby
waive any application or appeal to any court of competent jurisdiction
to the fullest extent permitted by law in connection with any question
of law arising during the course of the arbitration or any award made.
The Board of Arbitration will be entitled to include in its decision a
determination as to the payment of the cost and expenses of the
arbitrators, the administrative costs of the arbitration, the
reasonable legal fees incurred by the parties, the cost and expenses of
witnesses and all other costs and expenses necessarily incurred in the
opinion of the Board of Arbitration in order to properly settle the
Dispute.
131
(g) Decision. Purchaser and the Selling Shareholders expressly agree (i)
that the decisions of the Board of Arbitration must be made based on
majority votes of the arbitrators, (ii) that the Board of Arbitration
must state the reasons for its decisions in writing and must make the
decisions entirely on the basis of applicable laws and not on the basis
of the principle of ex aequo et bono, and (iii) that the mandate of the
Board of Arbitration duly constituted in this Agreement will remain in
effect until a final arbitration award has been issued by the Board of
Arbitration.
PROVIDED that the provisions in this Section 11.8 shall not prevent any Selling
Shareholder from participating in any bankruptcy or similar proceedings
initiated against Purchaser by any third Person but, for the avoidance of doubt,
not initiated by any Selling Shareholder.
Section 11.9 Extension; Waiver. At any time prior to any Closing Date, the
Majority Shareholders, on the one hand, and Purchaser, on the other hand, may
(a) extend the time for the performance of any of the obligations or other acts
of Purchaser (in the case of the Majority Shareholders) and the Majority
Shareholders (in the case of Purchaser), (b) waive any inaccuracies in the
representations and warranties of the other parry contained in this Agreement or
in any document delivered pursuant to this Agreement or (c) waive compliance by
the other party with any of the agreements or conditions contained in this
Agreement.
Any agreement on the part of a party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of those rights.
Section 11.10 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that: (a) Purchaser may assign, in its sole
discretion, any or all of its rights and interests hereunder to any direct or
indirect wholly owned Subsidiary of Purchaser provided that Purchaser shall
remain liable for all of its obligations hereunder; (b) each Selling Shareholder
may assign, in its sole discretion, any or all of its rights and interests
hereunder to any direct or indirect wholly owned Subsidiary of such Selling
Shareholder or to any other
132
Selling Shareholder pursuant to Section 3.8(d) provided that such Selling
Shareholder shall remain liable for all of its obligations hereunder and (c) any
Selling Shareholder or Registered Holder may transfer the Notes in accordance
with the terms hereof, the Transfer Certificates and the Financial Escrow
Agreement.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and permitted assigns.
Section 11.11 Language. This Agreement is concluded in both Bahasa Indonesia and
English. In the event of any inconsistency or contradiction between the Bahasa
Indonesia and English texts, the Bahasa Indonesia text shall prevail.
Section 11.12 Further Assurance. Each party hereto agrees from time to time to
perform any further acts and execute and deliver any further documents and
instruments and do or refrain from doing all such further acts as may from time
to time reasonably be requested by the other parties hereto to carry out
effectively or better evidence or perfect the true spirit, intent, meaning and
purpose of this Agreement and the Transactions.
Section 11.13 Immunity. Purchaser hereby expressly waives any and all claims to
sovereign immunity for itself or any of its assets from suit, execution,
attachment or other legal process in any proceedings taken in relation to this
Agreement. Indosat hereby expressly waives any and all claims to sovereign
immunity for itself or any of its assets from suit, execution, attachment or
other legal process in any proceedings taken in relation to this Agreement.
133
IN WITNESS WHEREOF, the duly authorized representative of each party has
executed this Agreement as of 19th day of April 2002.
PERUSAHAAN PERSEROAN (PERSERO) PT ASTRATEL NUSANTARA
PT TELEKOMUNIKASI INDONESIA TBK.
By /s/ Xxxxxxxxx Xxxxx By /s/ Xxxxxx B Xxxxxxxxx
--------------------------- -----------------------------
Name : XXXXXXXXX XXXXX Name : XXXXXX B SUBIGANTO
Title: PRESIDENT DIRECTOR Title: PRESIDENT DIRECTOR
FRANCE CABLES ET RADIO By /s/ Angky U Tisnadisastor
-----------------------------
By /s/ Godiniaux Name : ANGKY U XXXXXXXXXXXXX
--------------------------- Title: VICE PRESIDENT DIRECTOR
Name : GODINIAUX
Title: UNDER POWER OF ATTORNEY PERUSAHAAN PERSEROAN (PERSERO)
PT INDONESIAN SATELLITE CORPORATION
MARUBENI CORPORATION TBK
By /s/ Hajime Sasagaki By /s/ Xxxxxxx Xxxxxxxxx
--------------------------- -----------------------------
Name : XXXXXX XXXXXXXX Xxxx : XXXXXXX XXXXXXXXX
Title: UNDER PROXY Title: EM DIVESTASI ANAK PERUSAHAAN
NMP SINGAPORE PTE. LIMITED INTERNATIONAL FINANCE CORPORATION
By /s/ Seiichi Micue By /s/ Xxxxxxx Xxxxxxxx
--------------------------- -----------------------------
Name : SEIICHI MICUE Name : XXXXXXX XXXXXXXX
Title: UNDER DELEGATION OF AUTHORITY Title: MANAGER & REGIONAL
REPRESENTATIVE
PT PRAMINDO IKAT NUSANTARA
By /s/ J M Xxxxxxxx
--------------------
Name : J M XXXXXXXX
Title: Managing Director
