INDENTURE dated as of December [ ], 2002, among POLYTAMA
INTERNATIONAL FINANCE B.V., a private company with limited
liability incorporated under the laws of The Netherlands having
its corporate seat in Rotterdam, The Netherlands (the "ISSUER"),
as issuer, P.T. POLYTAMA PROPINDO, an Indonesian corporation (the
"COMPANY"), as guarantor, and THE BANK OF NEW YORK, a New York
banking corporation (the "TRUSTEE"), as trustee.
Each party agrees as follows for the benefit of the other parties and
for the benefit (except as otherwise provided in this Indenture) of the Holders
of the Issuer's 8% Guaranteed Secured Notes Due 2017 (the "NOTES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS
"Accounts Receivable" means any and all rights to payment for
Inventory sold or services performed in the ordinary course of business, whether
due or to become due, whether or not earned by performance, whether now in
existence or arising from time to time hereafter, including, without limitation,
rights evidenced by or in the form of an account, note, draft, letter of credit,
contract right, security agreement, or other evidence of Indebtedness or
security.
"Actionable Default" means (i) any Event of Default or (ii) any event
of default under and as defined in any agreement pursuant to which Additional
Indebtedness is Incurred; PROVIDED that only those events which give the Holders
or the holders of Additional Indebtedness, as the case may be, the right to
accelerate Indebtedness or result in the automatic acceleration of Indebtedness,
including after notice or passage of time or both, shall be an Actionable
Default.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; (ii) the Capital Stock of
a Person that becomes a Restricted Subsidiary as a result of the acquisition of
such Capital Stock by the Company or another Restricted Subsidiary or (iii)
Capital Stock constituting a minority interest in any Person that at such time
is a Restricted Subsidiary; PROVIDED, HOWEVER, that any such Restricted
Subsidiary described in clauses (ii) or (iii) above is primarily engaged in a
Related Business.
"Additional Indebtedness" means Indebtedness, including any guarantees
thereof, the holders of which become party to the Collateral Agency Agreement in
accordance with the terms of Section 4.12.
"Additional Indebtedness Agent" means any agent appointed by the
holders of Additional Indebtedness to represent such Persons in respect to the
Additional Indebtedness and the Collateral.
"Additional Indebtedness Collateral Account" has the meaning given in
Section 5.01 of the Collateral Agency Agreement.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.05, 4.07 and 4.09 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 5% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease (including, without
limitation, any Sale/Leaseback Transaction), transfer or other disposition (or
series of related sales, leases, transfers or dispositions) by the Company or
any Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction or any Involuntary Loss (each referred to
for the purposes of this definition as a "disposition"), of (i) any shares of
Capital Stock of a Restricted Subsidiary (other than directors' qualifying
shares or shares required by applicable law to be held by a Person other than
the Company or a Restricted Subsidiary), (ii) all or substantially all the
assets of any division or line of business of the Company or any Restricted
Subsidiary or (iii) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such Restricted
Subsidiary (other than, in the case of (i), (ii) and (iii) above, (y) a
disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly Owned Subsidiary and (z) for purposes of
Section 4.07 only, a disposition that constitutes a Restricted Payment permitted
by Section 4.05.
"Assigned Rights" means all rights including the proceeds, meaning all
right, title and interest in and to all amounts now or in the future payable to
the assignor under or in connection with any Contract, arising from contracts
and leases relating to the Plant, its operation and the manufacture therein of
polypropylene, including, without limitation, (a) the Himont License Agreement
between Himont Incorporated ("Himont") and P.T. Tirtamas Majutama ("PTTM") dated
April 21, 1993 and April 15, 1993 novated by a Novation Agreement dated July 7,
1994 among the Company, Himont and PTTM, (b) the Propylene Supply Agreement; and
(c) the Amended and Restated Polypropylene Offtake Agreement between BP Asia
Trading Pte. Ltd. and the Company dated June 2, 1997.
"Assignment of Rights" has the meaning given in the Collateral Agency
Agreement.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Notes, compounded annually) of the total obligations of the
lessee for rental payments during the remaining term of the lease included in
such Sale/Leaseback Transaction (including any period for which such lease has
been extended).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Board of Directors" means (i) in relation to the Company, the Board
of Directors of the Company and (ii) in relation to the Issuer, the board of
Managing Directors of the Issuer and, in each case, any committee thereof duly
authorized to act on behalf of such Board of Directors. Any determination to be
made, or approval to be given, by a Board of Directors shall be made by a
majority of the members having no personal stake in such determination or
approval.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Casualty Event" shall mean any destruction or damage by flood, fire,
explosion, wind, storm, earthquake or any other casualty.
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"Change of Control" means the occurrence of any of the following
events: (i) the Permitted Holders cease to be the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of at
least 51% in the aggregate of the total voting power of the Voting Stock of the
Company, whether as a result of issuance of securities of the Company, any
merger, consolidation, liquidation or dissolution of the Company, any direct or
indirect transfer of securities by the Company or otherwise (for purposes of
this clause (i) and clause (ii) below, the Permitted Holders shall be deemed to
beneficially own any Voting Stock of a corporation (the "specified corporation")
held by any other corporation (the "parent corporation") so long as the
Permitted Holders beneficially own (as so defined), directly or indirectly, in
the aggregate a majority of the voting power of the Voting Stock of the parent
corporation); (ii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company
was approved by a vote of 66-2/3% of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company then in
office; or (iii) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the sale of
all or substantially all the assets of the Company to another Person (other than
a Person that is controlled by the Permitted Holders), and, in the case of any
such merger or consolidation, the securities of the Company that are outstanding
immediately prior to such transaction and which represent 100% of the aggregate
voting power of the Voting Stock of the Company are changed into or exchanged
for cash, securities or property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving corporation that represent
immediately after such transaction, at least a majority of the aggregate voting
power of the Voting Stock of the surviving corporation.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Collateral" means the Real Property Collateral, the Moveable Assets
Collateral, the Proceeds Collateral and the Assigned Rights.
"Collateral Accounts" means the accounts established pursuant to the
Collateral Agency Agreement for holding cash and cash equivalents for the
benefit of the Secured Creditors and includes the Notes Collateral Account (as
described in the Collateral Agency Agreement) and the Additional Indebtedness
Collateral Account (as described in the Collateral Agency Agreement).
"Collateral Agency Agreement" means the Collateral Agency Agreement
dated the date hereof among the Issuer, the Company, the Trustee on behalf of
the Noteholders, the Exchangeable Notes Trustee and PT Bank Mandiri (Persero) as
Collateral Agent for the Trustee and the representative of the other Secured
Creditors with respect to the Collateral.
"Collateral Agent" means PT Bank Mandiri (Persero).
"Collateral Disposition" means any Asset Disposition with respect to
any Collateral; PROVIDED, HOWEVER, that a substitution of Moveable Assets
Collateral in compliance with Section 12.07 shall be excluded from the
definition of "Collateral Disposition."
"Commodity Agreement" means, with respect to any Person, any forward
contract, futures contract or option or other agreement, instrument or
arrangement or combination thereof entered into in the ordinary course of such
Person's business and designed to provide protection against fluctuations in the
price of any commodity used or produced in the business in which such Person is
engaged.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successors.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (ii) Consolidated Interest Expense for such four
fiscal quarters; PROVIDED, HOWEVER,
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that (1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding or if
the transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is an Incurrence of Indebtedness, or both, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving effect on a
pro forma basis to such Indebtedness as if such Indebtedness had been Incurred
on the first day of such period and the discharge of any other Indebtedness
repaid, repurchased, defeated or otherwise discharged with the proceeds of such
new Indebtedness as if such discharge had occurred on the first day of such
period, (2) if since the beginning of such period the Company or any Restricted
Subsidiary shall have made any Asset Disposition, the EBITDA for such period
shall be reduced by an amount equal to the EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset Disposition for
such period, or increased by an amount equal to the EBITDA (if negative),
directly attributable thereto for such period and Consolidated Interest Expense
for such period shall be reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeated or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries in connection
with such Asset Disposition for such period (or, if the Capital Stock of any
Restricted Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary to the
extent the Company and is continuing Restricted Subsidiaries are no longer
liable for such Indebtedness after such sale), (3) if since the beginning of
such period the Company or any Restricted Subsidiary (by merger or otherwise)
shall have made an Investment in any Restricted Subsidiary (or any person which
becomes a Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit of a business, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness) as if such Investment or acquisition
occurred on the first day of such period and (4) if since the beginning of such
period any Person (that subsequently became a Restricted Subsidiary or was
merged with or into the Company or any Restricted Subsidiary since the beginning
of such period) shall have made any Asset Disposition, any Investment or
acquisition of assets that would have required an adjustment pursuant to clause
(2) or (3) above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Disposition,
Investment or acquisition occurred on the first day of such period. For purposes
of this definition, whenever pro forma effect is to be given to an acquisition
of assets, the amount of income or earnings relating thereto in the amount of
Consolidated Interest Expense associated with any Indebtedness Incurred in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting Officer of the Company. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest of such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate Agreement has a remaining term in excess of
12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent Incurred by the Company or its Restricted Subsidiaries, (i) interest
expense attributable to capital leases and one-third of the rental expense
attributable to operating leases, (ii) amortization of debt discount and debt
issuance cost, (iii) capitalized interest, (iv) non cash interest expenses, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (vi) net costs associated with
Hedging Obligations (including amortization of fees), (vii) Preferred Stock
dividends in respect of all Preferred Stock held by Persons other than the
Company or a Wholly Owned Subsidiary, (viii) interest Incurred in connection
with Investments in discontinued operations, (ix) interest accruing on any
Indebtedness of any other Person to the extent such Indebtedness is guaranteed
by, or secured by the assets of, the Company or any Restricted Subsidiary and
(x) the cash contributions to any employee stock ownership plan or similar trust
to the extent such contributions are used by such plan or trust to pay interest
or fees to any Person (other than the Company) in connection with Indebtedness
Incurred by such plan or trust.
"Consolidated Net Income" means, for any period the net income of the
Company and its consolidated Subsidiaries; PROVIDED, HOWEVER, that there shall
not be included in such Consolidated Net Income: (i) any net income of any
Person if such Person is not a Restricted Subsidiary, except that (A) subject to
the exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by such
Person
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during such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other distribution
paid to a Restricted Subsidiary, to the limitations contained in clause (iii)
below) and (B) the Company's equity in a net loss of any such Person for such
period shall be included in determining such Consolidated Net Income; (ii) any
net income (or loss) of any Person acquired by the Company or a Subsidiary in a
pooling of interests transaction for any period prior to the date of such
acquisition; (iii) any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that (A) subject to
the exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Restricted Subsidiary during such period to the Company or
another Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution paid to another Restricted
Subsidiary, to the limitation contained in this clause) and (B) the Company's
equity in a net loss of any such Restricted Subsidiary for such period shall be
included in determining such Consolidated Net Income; (iv) any gain (but not
loss) realized upon the sale or other disposition of any assets of the Company
or its consolidated Subsidiaries (including pursuant to any sale-and-leaseback
arrangement) which is not sold or otherwise disposed of in the ordinary course
of business and any gain (but not loss) realized upon the sale or other
disposition of any Capital Stock of any Person; (v) extraordinary gains or
losses; and (vi) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of Section 4.05 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
the Company or a Restricted Subsidiary to the extent such dividends, repayments
or transfers increase the amount of Restricted Payments permitted under Section
4.05(a)(3)(D).
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of the Company plus (ii)
paid-in capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement to which such
Person is a party or a beneficiary.
"Debt Service Reserve Account" means the securities account in which
the Issuer will deposit on the last business day of each month during the period
from January 15, 2002 through June 15, 2003, for the benefit of the Holders, the
pro rata portion an amount of cash sufficient to acquire U.S. Government
Obligations in an amount that will be sufficient to provide payment in full when
due of the first scheduled interest and principal payment on the Notes.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Definitive Securities" means Securities that are in the form of
Exhibit A attached hereto that do not include the information called for by
footnote 1 thereof.
"Depositary" means The Depository Trust Company, a New York
corporation, or any successor thereto or any replacement depository.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock or (iii) is redeemable at the option of the holder thereof,
in whole or in part, in each case on or prior to the first anniversary of the
Stated Maturity of the Notes; PROVIDED, HOWEVER, that any Capital Stock that
would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require such Person to repurchase or redeem such
Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of
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the Notes shall not constitute Disqualified Stock if the "asset sale" or "change
of control" provisions applicable to such Capital Stock are not more favorable
to the holders of such Capital Stock than the provisions of Sections 4.07, 4.08
and 4.10.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
Consolidated Interest Expense plus the following to the extent deducted in
calculating such Consolidated Net Income: (a) all income tax expense of the
Company, (b) depreciation expense, (c) amortization expense and (d) non-cash
losses or charges related to impairment of goodwill and other intangible assets,
in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
of, a Subsidiary of the Company shall be added to Consolidated Net Income to
compute EBITDA only to the extent (and in the same proportion) that the net
income of such Subsidiary was included in calculating Consolidated Net Income
and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
Governmental, regulations applicable to such Subsidiary or its stockholders.
"Estimated Project Costs" means, with respect to a Qualified Project,
all costs and expenses reasonably estimated by the Company and set forth in a
written resolution for the Company's Board of Directors prior to the
commencement of such Qualified Project to be Incurred by the Company to acquire,
develop, design, construct, start up and finance such Qualified Project,
including the acquisition of the facility site, equipment and supplies, and
including interest during construction, sales and other taxes, financing fees
and reasonable advisory, legal and management fees and expenses.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable Indenture" means the Indenture among the Issuer, the
Company and the Bank of New York, a New York banking corporation, governing the
Exchangeable Notes, dated the date hereof.
"Exchangeable Notes" means the Issuer's 6% Guaranteed Secured
Exchangeable Notes due 2012, issued the date hereof.
"Exchangeable Notes Guarantee" means the guarantee of the Exchangeable
Notes by the Company pursuant to the Exchangeable Indenture.
"Exchangeable Notes Trustee" means the then acting trustee under the
Exchangeable Indenture.
"Fiduciary Assignment of Accounts" has the meaning given in the
Collateral Agency Agreement.
"Fiduciary Transfer" has the meaning given in the Collateral Agency
Agreement.
"GAAP" means generally accepted accounting principles in the Republic
of Indonesia which are in effect on the date of determination.
"Global Security" means a Security that is in the form of Exhibit A
hereto that includes the information called for by footnote 1 thereof.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any Person and any obligation, direct or indirect, contingent or otherwise,
of such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such Person
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial
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statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); PROVIDED, HOWEVER, that the term
"guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "guarantee" used as a verb has a
corresponding meaning. The term "guarantor" shall mean any Person guaranteeing
any obligation.
"Guarantee" means the irrevocable and unconditional guarantee of the
Notes by the Company pursuant to Article 10.
"Guaranteed Notes" means the Issuer's 11 1/4% Series B Guaranteed
Secured Notes due 2007, issued on the Issue Date.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means issue, assume, guarantee, incur or otherwise become
liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary. The term "Incurrence" when used
as a noun shall have a correlative meaning. The accretion of principal of a
non-interest bearing or other discount security shall not be deemed a separate
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable; (ii) all Capital
Lease Obligations of such Person and all Attributable Debt in respect of
Sale/Leaseback Transactions entered into by such Person; (iii) all obligations
of such Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such Person and all obligations of such Person
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business); (iv) all obligations of such Person
for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction (other than obligations with respect to
letters of credit securing obligations (other than obligations described in (i)
through (iii) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the tenth Business
Day following receipt by such Person of a demand for reimbursement following
payment on the letter of credit); (v) all obligations of such Person with
respect to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of such Person, the liquidation
preference with respect to any Preferred Stock (but excluding, in each case, any
accrued dividends); (vi) all obligations under agreements to maintain working
capital, equity capital or any other financial statement condition or liquidity
of any other Person; (vii) all obligations of the type referred to in clauses
(i) through (vi) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable, directly
or indirectly, as obligor, guarantor or otherwise, including by means of any
guarantee; (viii) all obligations of the type referred to in clauses (i) through
(vi) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the value of such property or
assets or the amount of the obligation so secured and (ix) to the extent not
otherwise included in this definition, Hedging Obligations and all indebtedness
and other obligations under any Commodity Agreements of such Person. The amount
of Indebtedness of any Person at any date shall be the outstanding balance at
such date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable
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provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture, the mandatory provisions of the TIA, which are
incorporated by reference in this Indenture pursuant to Section 1.03 and are
deemed to be a part of and govern this instrument, and any such supplemental
indenture, respectively.
"Independent Appraiser" means an internationally recognized appraisal,
accounting, investment banking, or other firm, as appropriate, that (i) is in
fact independent in respect of the transaction in question; (ii) is an expert in
respect of the relevant valuation or appraisal activity; (iii) does not have any
direct financial interest or any material indirect financial interest in the
Company or any Subsidiary, the Trustee, the Collateral Agent or in any Affiliate
of any of them; and (iv) is not connected with the Company or a Subsidiary, the
Trustee, the Collateral Agent or any such Affiliate as a director, officer,
employee or Affiliate.
"Insurance Assignment" has the meaning given in the Collateral Agency
Agreement.
"Insurance Collateral Account" means the account established for the
benefit of the parties to the Collateral Agency Agreement to hold certain
insurance proceeds pending repair or replacement of the Collateral subject to an
Involuntary Loss.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement designed
to protect the Company or any Restricted Subsidiary against fluctuations in
interest rates.
"Inventory" means all stocks of products and goods produced, all
extractions, all raw materials, all work in progress, stocks of spare parts,
fuels, lubricants, and all stocks and all assets of similar kind now existing
and hereafter acquired.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary," the definition of "Restricted Payment" and Section
4.05, (i) "Investment" shall include the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net assets
of any Subsidiary of the Company at the time that such Subsidiary is designated
an Unrestricted Subsidiary; PROVIDED, HOWEVER, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent "Investment" in an Unrestricted Subsidiary equal to an
amount (if positive) equal to (x) the Company's "Investment" in such Subsidiary
at the time of such redesignation less (y) the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of such Subsidiary at the time of such redesignation; and (ii) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined
in good faith by the Board of Directors.
"Involuntary Loss" means a loss or disposition resulting from the
requisition by any Governmental entity of title to, seizure by any Governmental
entity of, or forfeiture to such Governmental entity of, any property or assets,
or any actual or constructive loss or an agreed or compromised loss, including
any Casualty Event.
"Issue Date" means the date on which the Notes are originally issued.
"Issuer" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Keepwell Commitment" means an agreement by any Person to maintain
working capital, equity capital or any other financial statement condition or
liquidity of any other Person.
8
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Loan Facilities" means any facility utilized for working capital
purposes, not exceeding $50.0 million.
"Major Collateral Disposition" means any Asset Disposition, in one or
a series of related transactions, of Collateral with a book value of more than
25% of the aggregate book value of all Collateral, determined by reference to
the Company's most recent quarterly financial statements.
"Majority Shareholder" means either Tirtamas or Tuban Petro, whichever
owns the largest equity stake in the Company.
"Moveable Assets Collateral" means all moveable assets (other than
Inventory, goods in process and raw materials), whether now owned or hereafter
acquired, which form part of, or are used in connection with, the Plant.
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to such properties or assets or received in any other
noncash form) in each case net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses Incurred, and all Federal,
state, provincial, foreign (including Indonesian) and local taxes due and
payable at the time of such Asset Disposition or required to be accrued as a
liability under GAAP, as a consequence of such Asset Disposition, (ii) all
payments made on any Indebtedness which is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon or other
security agreement of any kind with respect to such assets, or which must by its
terms, or in order to obtain a necessary consent to such Asset Disposition, or
by applicable law be, repaid out of the proceeds from such Asset Disposition,
(iii) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset
Disposition and (iv) the deduction of appropriate amounts provided by the seller
as a reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and retained by
the Company or any Restricted Subsidiary after such Asset Disposition. In the
case of an Asset Disposition that is a disposition of Collateral, any amount of
insurance or other proceeds received in connection with an Involuntary Loss
(excluding payments received for loss of profits or excess costs in respect of
business interruption insurance) shall be included in the foregoing definition
of "Net Available Cash;" PROVIDED that, any such proceeds received by the
Company or any Restricted Subsidiary in connection with any assets sold or
transferred to any Restricted Subsidiary shall be excluded from the definition
of Net Available Cash for the purposes of Section 4.07.
"Net Cash Proceeds," with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Note Custodian" means The Bank of New York, as custodian of the Notes
in global form for the Depositary under a custody agreement or any similar
successor agreement.
"Notes Collateral Account" has the meaning given in Section 5.01 of
the Collateral Agency Agreement.
"Notice of Actionable Default" means a notice delivered to the
Collateral Agent stating that an Actionable Default has occurred, which
describes with reasonable particularity the nature of the Actionable Default,
and is delivered to the Collateral Agent by (i) the Trustee for the holders of
the Notes, acting pursuant to this Indenture, (ii) the Exchangeable Notes
Trustee, acting pursuant to the Exchange Notes Indenture, or (iii) the
Additional Indebtedness Agent, acting upon the instructions of the holders of a
majority of the Outstanding
9
Additional Indebtedness Obligations (as defined in the Collateral Agency
Agreement). A Notice of Actionable Default shall be deemed to have been given
when the notice referred to in the preceding sentence has actually been received
by a Responsible Officer (as defined in the Collateral Agency Agreement) of the
Collateral Agent. A Notice of Actionable Default shall be deemed to be
outstanding at all times after such notice has been given until the earlier of
such time, if any, as (i) the Collateral Agent has been notified by the Trustee
or the Additional Indebtedness Agent, as the case may be, which delivered such
notice, that such notice has been rescinded or waived or (ii) the Trustee and
the Additional Indebtedness Agent, if any, have determined, in accordance with
Section 3.03 of the Collateral Agency Agreement, to rescind or waive such
notice.
"Officer" means the Chairman of the Board, the President, any Vice
President, any Managing Director, the Treasurer or the Secretary of the Company
or the Issuer, as applicable.
"Officer's Certificate" means (i) in relation to the Issuer, a
certificate signed by one officer and (ii) in relation to the Company, a
certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Permitted Holders" means each of Tirtamas, The British Petroleum
Company Plc, a corporation established under the laws of the United Kingdom or
any Wholly Owned Subsidiary of The British Petroleum Company Plc (each, a "BP
Company"), Nissho Iwai Corporation, a corporation established under the laws of
Japan ("NIC") and Tuban Petro.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) the Company or a Restricted Subsidiary or a Person
that will, upon the making of such Investment, become a Restricted Subsidiary;
PROVIDED, HOWEVER, that the primary business of such Restricted Subsidiary is a
Related Business; (ii) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Subsidiary;
PROVIDED, HOWEVER, that such Person's primary business is a Related Business;
(iii) Temporary Cash Investments; (iv) receivables owing to the Company or any
Restricted Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; PROVIDED,
HOWEVER, that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances; (v) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business;
(vi) loans or advances to employees made in the ordinary course of business
consistent with past practices of the Company or such Restricted Subsidiary;
PROVIDED that if any such loans or advances involve, in the aggregate, an amount
in excess of US$1.0 million, such loans or advances are set forth in writing and
have been approved by the Board of Directors of the Company; (vii) stock,
obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments; and (viii) any Person to the extent
such Investment represents the non-cash portion of the consideration received
for an Asset Disposition as permitted pursuant to Section 4.07.
"Permitted Liens" means (i) Liens created pursuant to the Pledge
Agreement, the Collateral Agency Agreement or Security Documents; (ii) Liens for
taxes, assessments or Governmental charges or claims that either (a) are not yet
delinquent by more than 30 days or (b) are being contested in good faith by
appropriate proceedings and as to which appropriate reserves have been
established or other provisions have been made in accordance with GAAP; (iii)
statutory and other Liens imposed by law and arising in the ordinary course of
business of landlords, carriers, warehousemen, mechanics, suppliers,
materialmen, employees, repairmen or laborers with respect to amounts that, to
the extent applicable: either (a) are not yet delinquent by more than 30 days or
(b) are being contested in good faith by appropriate proceedings and as to
which, to the extent required, appropriate reserves have been established or
other provisions have been made in accordance with GAAP; (iv) easements,
servitude, rights-of-way, restrictions and other similar encumbrances with
respect to the Real Property Collateral which in the aggregate are not material
in amount and which do not materially detract from the value of the Plant or
interfere in any material way with the Company's use of the Plant for the
purposes for which such property is intended; (v) any Subsequent Liens; (vi)
Liens securing Additional Indebtedness created in accordance with Section 4.12;
(vii)
10
Liens securing Indebtedness represented by the Exchangeable Notes (and any
Guarantees thereof), including under the Security Documents relating thereto,
Incurred in accordance with Section 4.03; and (viii) Liens securing Indebtedness
represented by the Guaranteed Notes (and any Guarantees thereof), the Debt
Service Reserve Account and any defeasance trust, including under any security
documents relating thereto.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
Government or any agency or political subdivision thereof or any other entity.
"Pipeline" means the Company's propylene supply pipeline that runs
from the Plant to the adjacent refinery owned by Pertambangan Minyak Xxx Gas
Bumi Negara ("Pertamina").
"Plant" means all of the buildings, constructions, facilities and
appurtenances comprising or related to the Company's existing or future
polypropylene and other production facilities located on the Plant Site, and any
and all planned machinery, fixtures, fittings, equipment and improvements and
additions now existing or in the future affixed to or forming part of or
otherwise located on the Plant Site.
"Plant Site" means (a) a plot of land with an area of 79,860 square
meters, as described in HGB Certificate No. 1/Limbangan in the name of the
Company; (b) a plot of land with an area of 63,390 square meters, as described
in HGB Certificate No. 2/Limbangan in the name of the Company; and (c) a plot of
land with an area of 56,225 square meters, as described in HGB Certificate No.
3/Limbangan in the name of the Company, in each case, located in Desa Limbangan,
Kecamatan Juntinyuat, Kabupaten Indramayu, West Java, Indonesia.
"Pledge Agreement" means that certain Pledge Agreement between the
Issuer and the Trustee dated as of the Issue Date.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Principal" or "principal" of a Note means the principal of the Note
plus the premium, if any, payable on the Note which is due or overdue or is to
become due at the relevant time.
"Proceeds Collateral" means all right, title, interest and benefit,
including without limitation all proceeds, returns of premiums and other amounts
payable to or at the direction of the Company, under, in and to each Insurance
Policy in relation to the Plant.
"Propylene Supply Agreement" means either (i) the Amended and Restated
Propylene Supply Agreement between BP Chemicals and the Company, dated June 4,
1997 or (ii) any other long term agreement for the supply of propylene to the
Company, each as amended.
"Purchase Money Indebtedness" of any Person means all obligations of
such Person (i) consisting of the deferred purchase price of property,
conditional sale obligations, obligations under any title retention agreement
(but excluding accounts payable arising in the ordinary course of business) and
other purchase money obligations, in each case where the maturity of such
obligation does not exceed the anticipated useful life of the asset being
financed and (ii) incurred to finance the acquisition of such asset, including
additions and improvements.
"Qualified Project" means the acquisition or construction of assets
which expand, add to or improve (but not repair) the then existing assets at the
Plant Site.
"Real Property Collateral" means the Plant Site and all buildings
(including, but not limited to, any pipelines), plant, machinery, fixtures,
fittings, equipment, improvements and additions now or hereafter affixed to such
buildings, constructions and pipelines which, according to prevailing laws are
regarded as immoveable property together with all other items which permanently
constitute one unit within the Plant Site.
11
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, decease or retire, or to issue
other Indebtedness in exchange for or the substantially concurrent replacement,
refinancing or repayment of, such Indebtedness. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with the Indenture including Indebtedness that
Refinances Refinancing Indebtedness; PROVIDED, HOWEVER, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; PROVIDED FURTHER,
however, that Refinancing Indebtedness shall not include (x) Indebtedness of a
Subsidiary that Refinances Indebtedness of the Company or (y) Indebtedness of
the Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
"Related Business" means any business related, ancillary or
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock or similar payment to the direct or indirect
holders of its Capital Stock (other than dividends or distributions payable
solely in its Capital Stock (other than Disqualified Stock)) other than
dividends or distributions payable solely to the Company or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation)), (ii) the purchase, redemption or other acquisition
or retirement for value of any Capital Stock of the Company held by any Person
or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary), including the exercise of any
option to exchange any Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock), (iii) the purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of acquisition) or (iv) the making of any
Investment in any Person (other than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary; PROVIDED, however, that notwithstanding anything
to the contrary in the definition of "Unrestricted Subsidiary," the Issuer (or
any successor thereof as obligor under the Notes) shall always be a Restricted
Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person.
"Scheduled Payment Date" means every June 15 and December 15,
beginning with June 15, 2003 and until all outstanding principal amounts have
been paid in full.
"SEC" means the Securities and Exchange Commission.
"Secured Creditors" means the holders of the Notes represented by the
Trustee, the holders of the Exchangeable Notes represented by the Exchangeable
Notes Trustee and the holders of Additional Indebtedness represented by the
Additional Indebtedness Agent, as the same may from time to time be reflected as
parties to the Security Documents.
12
"Secured Indebtedness" means the Notes, the Guarantee, the
Exchangeable Notes, the Exchangeable Notes Guarantee, the Additional
Indebtedness and any other Indebtedness secured by a Lien on Collateral.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the Global
Security (as appointed by the Depositary), or any successor entity thereto and
shall initially be the Trustee.
"Security Deed" has the meaning given in the Collateral Agency
Agreement.
"Security Documents" means, collectively, the Security Deed, the
Fiduciary Transfer, the Fiduciary Assignment of Accounts, the Assignment of
Rights and the Insurance Assignment.
"Senior Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) Indebtedness of such Person, whether
outstanding on the Issue Date or thereafter Incurred and (ii) accrued and unpaid
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to such Person to the extent
post-filing interest is allowed in such proceeding) in respect of (A)
Indebtedness of such Person for money borrowed and (B) Indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are subordinate in right of payment to the Notes;
PROVIDED, HOWEVER, that Senior Indebtedness shall not include (1) any obligation
of such Person to any Subsidiary of such Person, (2) any liability for Federal,
state, local or other taxes owed or owing by such Person, (3) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business of such Person (including guarantees thereof or instruments evidencing
such liabilities), (4) any Indebtedness of such Person (and any accrued and
unpaid interest in respect thereof) which is subordinate or junior in any
respect to any other Indebtedness or other obligation of such Person or (5) that
portion of any Indebtedness which at the time of Incurrence is Incurred in
violation of the Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Issuer or the
Company (whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes or the Guarantee,
respectively, pursuant to a written agreement to that effect.
"Subsequent Lien" means any Lien that (a) covers any or all of the
land on which the Plant is located and any or all fixtures thereon that is
subsequent in time and junior in priority to any Lien thereon granted to the
Collateral Agent pursuant to the Security Deed; (b) secures Indebtedness of the
Issuer or the Company; and (c) does not, together with all such other then
existing Subsequent Liens, secure Indebtedness in an amount which exceeds the
aggregate principal amount of Secured Indebtedness, if any, which has been
repaid, redeemed or repurchased by the Issuer or the Company, as applicable,
simultaneously with or prior to the creation of such Subsequent Lien.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
13
"Tangible Assets" means the net book value of property, plant and
equipment and other noncurrent and current assets held by the Company at the
date of determination, less any intangible assets.
"Temporary Cash Investments" means any of the following: (i) any
evidence of Indebtedness, maturing not more than one year after the date of
Investment by the Company, the Issuer or any other Restricted Subsidiary, Issued
by the United States of America or any instrumentality or agency thereof, or by
the Republic of Indonesia or any instrumentality or agency thereof, or by the
Asian Development Bank the World Bank or any other supranational organization
(collectively, "Government Entities") and guaranteed or otherwise backed,
directly or indirectly, fully as to principal, premium, if any, and interest, by
the Government Entity issuing such Indebtedness, (ii) investments in time
deposit accounts, certificates of deposit and money market deposits maturing
within 180 days of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States, and which
bank or trust company has capital, surplus and undivided profits aggregating in
excess of US$50.0 million (or the foreign currency equivalent thereof) and has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) or any money-market fund sponsored
by a registered broker dealer or mutual fund distributor, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above, (iv) investments in commercial
paper, maturing not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company) organized and in existence
under the laws of the United States of America or any foreign country recognized
by the United States of America with a rating at the time as of which any
investment therein is made of "P-1" (or higher) according to Xxxxx'x Investors
Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings
Group and (v) investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America or by any political
subdivision or taxing authority thereof, and rated at least "A" by Standard &
Poor's Ratings Group or "A" by Xxxxx'x Investors Service, Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"Tirtamas" means P.T. Tirtamas Majutama, a company incorporated under
the laws of the Republic of Indonesia.
"Trustee" mean the party named as such in this Indenture until a
successor replaces it and, thereafter, means successor.
"Trust Officer" means any trust officer or any other officer or
assistant officer of the Trustee assigned by the Trustee to administer its
corporate trust matters with respect to the Notes.
"Tuban Petro" means P.T. Tuban Petrochemical Industries, a company
incorporated under the laws of the Republic of Indonesia and owned 70% by the
Indonesian Bank Restructuring Agency ("IBRA") which has been established for the
settlement of Tirtmas' obligations to IBRA.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary) to be
an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries
owns any Capital Stock or Indebtedness of, or holds any Lien on any property of,
the Company or any other Subsidiary of the Company that is not a Subsidiary of
the Subsidiary to be so designated; PROVIDED, HOWEVER, that either (A) the
Subsidiary to be so designated has total assets of US$1,000 or less or (B) if
such Subsidiary has assets greater than US$1,000, such designation would be
permitted under Section 4.05. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that
immediately after giving effect to such designation (x) the Company could Incur
US$1.00 of additional Indebtedness under paragraph (a) of Section 4.03 and (y)
no Default shall have occurred and be continuing. Any such designation by the
Board of Directors shall be by the Company to the Trustee by promptly filing
with the
14
Trustee a copy of the board resolution giving effect to such designation and an
Officer's Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the Issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares and shares held
by other Persons to the extent such shares are required by applicable law to be
held by a Person other than the Company or a Restricted Subsidiary) is owned by
the Company or one or more Wholly Owned Subsidiaries.
SECTION 1.02 OTHER DEFINITIONS.
Term Defined in Section
---- ------------------
"Additional Amounts".............................................. 4.01(b)
"Affiliate Transaction"........................................... 4.09
"Agent Members" .................................................. 2.01
"Agreement Currency".............................................. 14.12
"Authorized Agent"................................................ 14.11(b)
"Bankruptcy Law".................................................. 6.01
"covenant defeasance option"...................................... 8.01(b)
"Collateral Offer"................................................ 4.08(e)
"Collateral Offer Amount"......................................... 4.08(e)
"Collateral Offer Period"......................................... 4.08(e)
"Collateral Offer Purchase Date".................................. 4.08(e)
"Custodian"....................................................... 6.01
"Defaulted Interest".............................................. 2.11
"Event of Default"................................................ 6.01
"Excess Collateral Process"....................................... 4.08(c)
"Excess Proceeds"................................................. 4.07
"Excess Proceeds Offer"........................................... 4.07
"Governmental Taking"............................................. 12.08
"Incorporated Provision".......................................... 13.01
"Indemnity"....................................................... 10.02
"Judgment Currency"............................................... 14.12
"Keepwell"........................................................ 4.15
"legal defeasance option"......................................... 8.01(b)
"Legal Holiday"................................................... 15.09
"MCD Offer"....................................................... 4.08(b)
"MCD Offer Amount"................................................ 4.08(b)
15
Term Defined in Section
---- ------------------
"MCD Purchase Date"............................................... 4.08(b)
"New Collateral Assets"........................................... 4.08(c)
"Offer"........................................................... 4.07
"Offer Amount".................................................... 4.07
"Offer Period".................................................... 4.07
"PKLN Team"....................................................... 4.20
"Paying Agent".................................................... 2.03
"Purchase Date"................................................... 4.07
"Registrar"....................................................... 2.03
"Release Notice".................................................. 12.05
"Restricted Payment".............................................. 4.05
"Substitute Collateral"........................................... 12.07
"Substitution Notice"............................................. 12.07
"Successor Company"............................................... 5.01
"Trust Monies".................................................... 13.01
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04 RULES OF CONSTRUCTION. Unless context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
16
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed be subordinate
or junior to Secured Indebtedness merely by virtue of its nature as
unsecured Indebtedness;
(7) the principal amount of any non-interest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP and accretion of principal on such security shall be
deemed to be the Incurrence of Indebtedness; and
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE 2
THE SECURITIES
SECTION 2.01 FORM AND DATING. The Notes and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. Subject to
Section 2.06, the Notes shall be represented in global form. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Issuer shall furnish any such legend not contained in Exhibit A to
the Trustee in writing. Each Note shall be dated the date of its authentication.
The terms of the Notes set forth in Exhibit A are part of the terms of this
Indenture.
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Security, and the Depositary or its nominee, as the case may be, may be
treated by the Company, the Issuer, the Trustee and any agent of the Company,
the Issuer or the Trustee as the absolute owner of the Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Issuer, the Trustee or any agent of the Company, the Issuer or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices of such Depositary
governing the exercise of the rights of a holder of a beneficial interest in any
Global Security.
The Definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which such Notes may
then be listed, all as determined by the Officers of the Issuer executing such
Notes, as evidenced by their execution of such Notes in accordance with Section
2.02.
Any Definitive Security which is issued shall be printed in a manner
which satisfies the Royal Decree No. H7 of January 8, 1947 of the law of The
Netherlands, if such decree remains in effect on the date of printing.
SECTION 2.02 EXECUTION AND AUTHENTICATION. One Officer of the Issuer
shall sign the Notes for the Issuer. The Company shall execute the Guarantee in
the manner set forth in Section 10.05. The signatures required by this paragraph
may be manual or facsimile signatures.
If an Officer of the Issuer whose signature is on a Note no longer
holds that office at the time the Trustee authenticates the Note, the Note shall
be valid nevertheless.
A Note shall not be valid until an authorized officer of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
17
The Trustee shall authenticate and deliver Notes for original issue in
the aggregate principal amount of not more than $120,000,000, pursuant to a
written order of the Issuer signed by an Officer of the Issuer. The order shall
specify the amount of Notes to be authenticated and the date on which the
original issue of the Notes is to be authenticated. The aggregate principal
amount of Notes which may be outstanding any time may not exceed $120,000,000,
except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Issuer to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as any Registrar (as defined below), Paying Agent (as defined below) or
agent for service of notices demands.
SECTION 2.03 REGISTRAR AND PAYING AGENT. The Issuer shall maintain in
the City of
New York an office or agency where Notes may be presented for
registration of transfer or for exchange (the "REGISTRAR") and an office agency
where Notes may be presented for payment (the "PAYING AGENT") and the Issuer and
the Company shall maintain in the City of
New York an office or agency where
notices or demands to or upon the Issuer and the Company in respect of the Notes
and this Indenture may be served. If the Notes are issued in definitive form,
the Issuer shall also maintain a Paying Agent and Holders shall be entitled to
receive payment and transfer Notes through such Paying Agent. The Registrar
shall keep a register for the Notes and of their transfer and exchange. The
Issuer may have one or more co-registrars and one or more additional paying
agents, which may be located within or outside the City of
New York. The term
"Paying Agent" includes any additional paying agent and the term "Registrar"
includes any additional registrar.
Notwithstanding the foregoing, there shall be only one register for
the Notes.
The Issuer and the Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a party to this
Indenture, which shall incorporate the terms of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such agent. The Issuer
and the Company shall notify the Trustee of the name and address of any such
agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such and shall be entitled to appropriate compensation therefor
pursuant to Section 7.07. The Issuer may appoint any Person regularly providing
corporate trust services as Registrar, co-registrar or Paying Agent.
The Issuer initially appoints the Trustee at the address specified in
Section 14.02 as Registrar and Paying Agent.
The Company initially appoints the Depository Trust Company to act as
Depositary with respect to the Global Securities.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each due
date of the principal and interest on any Note, the Issuer shall deposit with
the Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Issuer shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust or the
benefit of the Noteholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Notes, shall notify the Trustee
of any default by the Issuer in making any such payment and shall at any time
during the continuance of any such default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying
Agent. The Issuer at any time may require a Paying Agent to pay all money held
by it to the Trustee and to account for any funds disbursed by the Paying Agent.
Upon payment to the Trustee, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
SECTION 2.05 NOTEHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Noteholders. If the Trustee is not the Registrar,
the Issuer shall furnish to the Trustee, in writing at least five Business Days
before each interest payment date for the Notes and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Noteholders.
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SECTION 2.06 TRANSFER AND EXCHANGE.
(a) Subject to Section 2.06(g), when a Note is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of the Registrar
are met. Subject to Section 2.06(f), when Notes are presented to the Registrar
or a co-registrar with a request to exchange them for an equal principal amount
of Definitive Securities of other authorized denominations, the Registrar shall
make the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Issuer shall execute and the
Trustee shall authenticate Notes and the Company shall execute the Guarantee
endorsed thereon at the Registrar's or co-registrar's request, subject to the
limitations set forth Section 2.06(f).
(b) Prior to the due presentation for registration of transfer of
any Note, the Issuer, the Company, the Trustee, the Paying Agent, the Registrar
or a co-registrar may deem and treat the Person in whose name such Note is
registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Note and for all other purposes
whatsoever, whether or not such Note is overdue, and none of the Issuer, the
Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall
be affected by notice to the contrary.
(c) All Notes issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Notes surrendered upon such transfer
or exchange.
(d) TRANSFER OF A DEFINITIVE SECURITY FOR A BENEFICIAL INTEREST IN A
GLOBAL SECURITY. A Definitive Security may not be exchanged for a beneficial
interest in Global Security except upon satisfaction of the requirements set
forth below. Upon receipt by the Trustee of a Definitive Security, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with written instructions from the Holder thereof
directing the Trustee to make, or to direct the Note Custodian to make, an
endorsement on the Global Security to reflect an increase in the aggregate
principal amount of Notes represented by the Global Securities, the Trustee
shall cancel such Definitive Security in accordance with Section 2.10 and cause,
or direct the Notes Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Notes
Custodian, the aggregate principal amount of Notes represented by the Global
Security to be increased accordingly. If no Global Securities are then
outstanding, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.02, the Trustee shall authenticate a new
Global Security in the appropriate principal amount.
(e) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer and
exchange of beneficial interests in Global Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with the
procedures of the Depositary therefor.
(f) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
DEFINITIVE SECURITY.
(i) In the event that an Event of Default has occurred and is
continuing and the Trustee or other registrar has received a request from
the Depositary to issue Notes in definitive form in lieu of all or a
portion of the Global Securities (in which case the Company will deliver
Notes in definitive form within 30 days of such request), any Person having
a beneficial interest in a Global Security may upon request exchange such
beneficial interest for a Definitive Security. In any such event, upon
receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depositary, from the Depositary or its
nominee on behalf of any Person having a beneficial interest in a Global
Security, the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and procedures
existing between the Depositary and the Note Custodian, cause the aggregate
principal amount of the Global Security to be reduced accordingly and,
following such reduction, the Issuer shall execute and, upon receipt of an
authentication order in accordance with Section 2.02, the Trustee shall
authenticate and deliver to the transferee a Definitive Security in the
appropriate principal amount and the Company shall execute the Guarantee
endorsed thereon.
19
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.06(f) and 2.06(h)
shall be registered in such names and in such authorized denominations as
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct Trustee. The Trustee shall
deliver such Definitive Securities to the Persons in whose names such Notes
are so registered.
(iii) If the Trustee has instituted or has been directed to
institute any judicial proceeding in a court to enforce the rights of the
Holders under the Notes, and the Trustee has been advised by counsel that
in connection with such proceeding it is necessary or appropriate for the
Trustee to obtain possession of the Notes, the Trustee may in its sole
discretion determine that the Notes represented by Global Securities shall
no longer be represented by such Global Securities. In such event, the
Issuer hereby agrees to execute and the Trustee will authenticate deliver,
in exchange for such Global Securities, individual Notes (and if the
Trustee has in its possession individual Notes previously executed the
Issuer, the Trustee will authenticate and deliver such Notes), in
authorized denominations, in an aggregate principal amount equal to the
principal amount of such Global Securities and registered in such name or
names as the Trustee deems appropriate.
(g) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (h) of this Section 2.06), a Global Security may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(h) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF
DEPOSITARY. If at any time:
(i) the Depositary for the Notes notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the Global
Securities and a successor Depositary for the Global Securities is not
appointed by the Issuer within 90 days after delivery of such notice; or
(ii) the Issuer, in its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Securities
under this Indenture,
then the Issuer shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02, authenticate and deliver
and the Company shall execute the Guarantee endorsed thereon Definitive
Securities in an aggregate principal amount equal to the principal amount of the
Global Securities in exchange for such Global Securities.
(i) LEGENDS. Each Note certificate evidencing Global Securities (and
all Notes issued in exchange therefor or substitution thereof), to the extent
required, shall bear such legends set forth in Exhibit A hereto.
(j) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SECURITIES. At such
time as all beneficial interests in Global Securities have been exchanged for
Definitive Securities, redeemed, repurchased or canceled, all Global Securities
shall be returned to or retained and canceled by the Trustee in accordance with
Section 2.10. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for a Definitive Security, redeemed,
repurchased or canceled, the principal amount of Notes represented by such
Global Security shall be reduced accordingly and an endorsement shall be made on
such Global Security, by the Trustee or the Note Custodian, at the direction of
the Trustee, to reflect such reduction.
(k) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Issuer shall execute and the Trustee shall (subject to Sections 2.06(f) and
(g)) authenticate Definitive Securities and Global Securities, and the
Company shall execute the Guarantee endorsed thereon, at the Registrar's
request.
20
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Registrar may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith.
(iii) The Registrar may require a Holder to furnish appropriate
endorsements and transfer documents.
(iv) The Registrar shall not be required to register the
transfer of or exchange of any Security called for redemption, and the
Registrar shall not be required to register the transfer of or exchange of
any Security for a period of 15 days before the mailing of a notice of
redemption and ending at the close of business on the day of such mailing.
(l) PAYMENT OF PRINCIPAL AND INTEREST. Payment of principal and
interest on any Global Security shall be made to the Depositary or its nominee
in accordance with the applicable procedures of the Depositary.
SECTION 2.07 REPLACEMENT NOTES. If a mutilated Note is surrendered to
the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall, at
the Issuer's expense, authenticate a replacement Note if the requirements of the
Trustee and the Issuer are met. If required by the Trustee or the Issuer, such
Holder shall furnish an indemnity bond sufficient in the judgment of the Issuer
and the Trustee to protect the Issuer, the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss which any of them may
suffer if a Note is replaced. The Issuer and the Trustee may charge the Holder
for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuer and
the Company and shall be entitled to the benefits of this Indenture.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
of mutilated, wrongfully taken, lost or destroyed Notes.
SECTION 2.08 OUTSTANDING NOTES. Notes outstanding at any time are all
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. A Note does not cease to be outstanding because the Issuer, the
Company or any Affiliate of the Issuer or the Company holds such Note.
If a Note is misplaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Issuer receive proof satisfactory to them
that the replaced Note is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, then on and
after that date the Notes (or portions thereof) cease to be outstanding and
interest on them ceases to accrue.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction or consent or any amendment, modification
or other change to this Indenture or any other action requiring the consent of
the Noteholders, Notes owned by the Issuer or the Company or any Affiliate of
the Issuer or the Company shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent or any amendment, modification or other change to
this Indenture, only Notes which the Trustee actually knows are so owned shall
be so disregarded. Notes so owned which have been pledged in good faith shall
not be disregarded if the pledgee establishes to the satisfaction of the Trustee
the pledgee's right so to act with respect to the Notes that the pledgee is not
the Issuer, the Company or any Affiliate of the Issuer or the Company.
SECTION 2.09 TEMPORARY NOTES. Until Definitive Securities are ready
for delivery, the Issuer may prepare and the Trustee shall authenticate
temporary Notes with the Guarantee endorsed thereon.
21
Temporary Notes shall be substantially in the form of Definitive Securities but
may have variations that the Issuer considers appropriate for temporary Notes.
Without unreasonable delay, the Issuer shall prepare and the Trustee shall
authenticate Definitive Securities, with the Guarantee and deliver them in
exchange for temporary Notes.
SECTION 2.10 CANCELLATION. The Issuer at any time may deliver Notes
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange, payment, repurchase, replacement, cancellation or payment.
The Trustee (and no one else) shall cancel and dispose of all Notes surrendered
for registration of transfer, exchange, payment or cancellation in accordance
with its policy of disposal and deliver a certificate of such disposition to the
Issuer unless the Issuer directs the Trustee to deliver canceled Notes the
Issuer. The Issuer may not issue new Notes to replace Notes it has redeemed,
purchased, paid or delivered to the Trustee for cancellation.
SECTION 2.11 DEFAULTED INTEREST. Any interest on any Note which is
payable, but is not punctually paid or duly provided for, on the dates and in
the manner provided in the Notes and this Indenture (herein called "DEFAULTED
INTEREST") shall forthwith cease to be payable to the Holder on the relevant
record date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Issuer, at its election in each case, as provided in clause
(i) or (ii) below:
(i) The Issuer may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes are registered at the
close of business on a special record date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Issuer shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Note and the date of the proposed
payment, at the same time the Issuer shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the payment of
such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Issuer of such special
record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special
record date therefor to be given to each Holder, not less than 10 days
prior to such special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Notes are registered at the close of business on such special record
date.
(ii) The Issuer may make payment of any Default Interest on the
Notes in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Issuer to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.11, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.12 PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer, the Issuer, the Company, the Trustee, the
authenticating agent, if any, and any Paying Agent, the Registrar or any
co-registrar may treat the Holder of a Note as the owner of such Note for the
purpose of receiving payment of principal of, premium (if any) and, subject to
Section 2.11, interest on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Issuer, the Company, the
Trustee, the authenticating agent, if any, or any Paying Agent, the Registrar or
any co-registrar shall be affected by notice to the contrary.
22
SECTION 2.13 COMPUTATION OF INTEREST. Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.14 PREDECESSOR SECURITIES. All Definitive Securities and
Global Securities issued upon any registration of transfer or exchange of Notes
pursuant to Section 2.06 or in replacement of a lost, destroyed or wrongfully
taken Note pursuant to Section 2.07 shall evidence the same debt, and be
entitled to the same benefits under this Indenture, as the predecessor Note or
Notes surrendered upon such registration of transfer or exchange or lost,
destroyed or wrongfully taken, as the case may be.
SECTION 2.15 RECORD DATE. The Issuer may set a record date for
purposes of determining the identity of Noteholders entitled to vote or to
consent to any action by vote of consent authorized or permitted by any
provision hereof. Unless this Indenture provides otherwise, such record date
shall be the later of 30 days prior to the first solicitation of such consent or
the date of the most recent list of Holders furnished to the Trustee pursuant to
Section 2.05 prior to such solicitation.
ARTICLE 3
REDEMPTION
SECTION 3.01 NOTICES TO TRUSTEE. If the Issuer elects to redeem the
Notes pursuant to Section 5(a) or (b) of the Notes, it shall notify the Trustee
in writing of the section and paragraph of the Notes pursuant to which the
redemption will occur, the redemption date, the redemption price, and the
principal amount of Notes to be redeemed.
The Issuer shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officer's
Certificate and an Opinion of Counsel from the Issuer to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED. If fewer than all the
Notes are to be redeemed, the Trustee shall select the Notes to be redeemed pro
rata or by lot or by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee considers fair and
appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances. The Trustee shall make the
selection from outstanding Notes not previously called for redemption. The
Trustee may select for redemption portions of the principal of Notes that have
denominations larger than $1.00. Notes and portions of them the Trustee selects
shall be in amounts of $1.00 or a whole multiple of $1.00. Provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption. The Trustee shall notify the Company and the Issuer
promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.03 NOTICE OF REDEMPTION. At least 30 days but not more than
60 days before a date for redemption of Notes, the Issuer shall (i) mail a
notice of redemption by first-class mail to each Holder of Notes to be redeemed
and (ii) publish a notice of redemption as contemplated in Section 14.02.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
23
(5) that, unless the Issuer defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(6) the Section and paragraph of the Notes pursuant to which the
Notes called for redemption are being redeemed;
(7) that no representation is made as to the correctness or accuracy
of the CUSIP number or common code, if any, listed in such notice or printed on
the Notes;
(8) if fewer than all the outstanding Notes are to be redeemed, the
certificate numbers and principal amounts of the particular Notes to be
redeemed; and
(9) the CUSIP number, if any, printed on the Notes being redeemed.
At the Issuer's request, the Trustee shall give the notice of
redemption in the Issuer's name and at the Issuer's expense. In such event, the
Issuer shall provide the Trustee with the form of such notice containing the
information required by this Section.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed and published pursuant to Section 3.03, Notes called for
redemption become due and payable on the redemption date and at the redemption
price stated in the notice. Upon surrender to the Paying Agent, such Notes shall
be paid at the redemption price stated in the notice, plus accrued interest to
the redemption date (including all Additional Amounts owed in respect of such
Notes). Failure to give notice or any defect in the notice to any Holder shall
not affect the validity of the notice to any other Holder.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE. Prior to 10:00 a.m.
New
York City time on the redemption date, the Issuer shall deposit with the Paying
Agent money sufficient to pay the redemption price of and accrued interest
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date) on all Notes (without
giving effect to any earnings which may accrue on such deposit prior to the
redemption date) to be redeemed on that date other than Notes or portions of
Notes called for redemption which have been delivered by the Issuer to the
Trustee for cancellation. The Paying Agent shall promptly return to the Issuer
any money so deposited which is not required for that purpose upon the written
request of the Issuer.
SECTION 3.06 NOTES REDEEMED IN PART. Upon surrender of a Note that is
redeemed in part, the Issuer shall issue and the Trustee shall authenticate for
the Holder (at the Company's expense) a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF NOTES; PAYMENT OF ADDITIONAL AMOUNTS.Subject
to Section 4.01(b), the Issuer shall promptly pay the principal of and
interest on the Notes on the dates and in the manner provided in the Notes and
in this Indenture. Principal and interest shall be considered paid on the date
due if on such date the Trustee or the Paying Agent holds in accordance with
this Indenture money sufficient to pay all principal and interest then due. All
payments shall be made in United States dollars.
Interest on the Notes shall accrue from the Issue date and shall be
paid semi-annually in arrears on each June 15 and December 15.
Principal of the Notes shall be paid in an amount on the Scheduled
Payment Date as set forth in Schedule I attached to the Form of Note. All
principal of the Notes which remain outstanding on the final Scheduled Payment
Date set forth on Schedule I to the Form of Note shall be due and payable in
such Scheduled Payment Date.
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The Issuer shall pay interest on overdue principal on the Notes, and
on overdue installments of interest on Notes, at a rate specified in the Notes,
plus 1% per annum.
(b) All payments of principal of, premium, if any, and interest on
each Note or Guarantee will be made free and clear of, and without withholding
or deduction for, any present or future taxes, duties, assessments or
Governmental charges of whatever nature imposed, levied, collected, withheld or
assessed by or within the Republic of Indonesia or The Netherlands or any
political subdivision or taxing authority thereof or therein, unless such
withholding or deduction is required by law or by regulation or governmental
policy having the force of law. In the event that any such withholding or
deduction in respect of principal, premium or interest is so required, the
Issuer or the Company, as the case may be, will pay such additional amounts
("ADDITIONAL AMOUNTS") as will result in receipt by each holder of any Note of
such gross amount as would have been received by such Holder or the beneficial
owner with respect to such Note or the Guarantee, as applicable, had no such
withholding or deduction (including any withholding or deduction applicable to
Additional Amounts payable) been required, except that no Additional Amounts
will be payable:
(i) for or on account of:
(1) any tax, duty, assessment or other Governmental charge
that would not have been imposed but for:
(A) the existence of any present or former connection
between such Holder or the beneficial owner of such Note and the
Republic of Indonesia or The Netherlands, as the case may be, other
than the mere acquisition, holding or disposition of such Note or the
receipt of payments thereunder, including, without limitation, such
Holder or the beneficial owner of such Note being or having been a
national, domiciliary or resident of or treated as a resident thereof,
being or having been present or engaged in a trade or business therein
or having or having had a permanent establishment therein; or
(B) the presentation of such Note (where presentation is
required) more than 30 days after the date on which the payment in
respect of such Note became due and payable or provided for, whichever
is later, except to the extent that such holder would have been
entitled to such Additional Amounts if it had presented such Note for
payment on any day within such period of 30 days;
(2) any estate, inheritance, gift, sale, transfer, personal
property or similar tax, duty, assessment or other Governmental
charge;
(3) any tax, duty, assessment or other Governmental charge
that is imposed or withheld by reason of the failure of such Holder or
the beneficial owner of such Note to comply with a request by the
Issuer or the Company addressed to such Holder (A) to provide
information concerning the nationality, residence or identity of such
Holder or such beneficial owner or (B) to make any declaration or
other similar claim or satisfy any information or reporting
requirement, which, in the case of (A) or (B), is required or imposed
by a statute, treaty, regulation or administrative practice of the
taxing jurisdiction as a precondition to exemption from all or part of
such tax, duty, assessment or other Governmental charge; or
(4) any combination of items (1), (2) and (3); or
(ii) with respect to any payment of the principal of, premium,
if any, or interest on such Note to such Holder (including a fiduciary
or partnership) to the extent that under the laws of the Republic of
Indonesia or The Netherlands, as the case may be, some person other
than such Holder is required to include such payment in income and
such other person would not have been entitled to such Additional
Amounts had it been the holder of the Note.
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In the event the Issuer could redeem Notes pursuant to Section 5(b) of
the Notes but elects not to so redeem, the Issuer or the Company shall pay such
Additional Amounts to the Holders as will result in receipt by such Holder of
such amounts that would have been received by such Holder had no withholding or
deduction been required, except that no such Additional Amounts shall be payable
with respect to any Notes under the circumstances described in clauses (a) or
(b) above.
(c) The Issuer or the Company, as the case may be, will pay any
present or future stamp, court or documentary taxes, or any other excise or
property taxes, charges or similar levies which arise in any jurisdiction from
the execution, delivery or registration of the Notes or any other document or
instrument referred to therein, or the receipt of any payments with respect to
the Notes, excluding any such taxes, charges or similar levies imposed by any
jurisdiction outside of The Netherlands or the Republic of Indonesia or any
jurisdiction in which a Paying Agent is located, except those resulting from, or
required to be paid in connection with, the enforcement of the Notes or any
other such document or instrument following the occurrence of any Event of
Default.
(d) Whenever in this Indenture or the Notes there is mentioned, in
any context, the payment of principal, premium or interest in respect of any
Note or the Guarantee or the net proceeds received on the sale or exchange of
any Note, such mention shall be deemed to include the payment of Additional
Amounts provided for in this Indenture to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
this Indenture and express mention of the payment of Additional Amounts (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where express mention is not made.
(e) The Issuer and the Company hereby covenant that if the Trustee
or any Paying Agent is required by law to make any deduction or withholding or
payments of principal of, premium or interest on the Notes or the Guarantee for
or on account of any tax, duty, assessment or other Governmental charge, the
Issuer, with respect to Additional Amounts payable in connection with the Notes,
or the Company, with respect to Additional Amounts payable in connection with
the Guarantee, shall:
(A) at least 10 Business Days prior to the first payment
date on which such deduction or withholding is applicable (and at
least 10 Business Days prior to each succeeding payment date or any
redemption date or maturity date if there has been any change with
respect to the matters set forth in the below-mentioned Officer's
Certificate), deliver to the Trustee and each Paying Agent an
Officer's Certificate (A) specifying by country the amount so required
to be deducted or withheld on such payment to Holders and the
Additional Amounts, if any, due to Holders in connection with such
payment, and (B) certifying that the Issuer or the Company, as
applicable, shall pay such deduction or withholding;
(B) prior to the due date for the payment thereof, pay any
such tax, duty, assessment or other Governmental charge, together with
any penalties or interest applicable thereto;
(C) within 30 days after paying such tax, duty, assessment
or other Governmental charge, deliver to the Trustee and each Paying
Agent evidence of such payment and of the remittance thereof to the
relevant taxing or other authority; and
(D) pay any Additional Amounts due to Holders any interest
payment date, redemption date, purchase date or maturity date to the
Paying Agent in accordance with the provisions of this Section.
The Trustee and each Paying Agent shall be entitled to rely
conclusively on the fact that no such Officer's Certificate is delivered to them
as evidence that, as the case may be, either no such withholding or deduction is
required or that the matters set forth in any prior Officer's Certificate
delivered pursuant to this subsection; have not changed.
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Each of the Issuer and the Company, as applicable, hereby covenants to
indemnify the Trustee and each Paying Agent for, and to hold each harmless
against, any loss, liability or expense properly incurred without negligence,
bad faith or willful misconduct on such Person's part, arising out of or in
connection with actions taken or omitted by any of them in reliance on any
Officer's Certificate furnished pursuant to this Section or the failure of the
Trustee or any Paying Agent for any reason (other than its own negligence, bad
faith or willful misconduct) to receive on a timely basis any such Officer's
Certificate or any information or documentation requested by it or otherwise
required by applicable law or regulations to be obtained, furnished or filed in
respect of such tax, duty, assessment or other Governmental charge. Each of the
Issuer and the Company, as applicable, shall make available to any Holder
requesting the same, evidence that the applicable tax, duty, assessment or other
Governmental charge have been paid including furnishing receipts if so
requested.
Any Officer's Certificate required by this Section 4.01 to be provided
to the Trustee and each Paying Agent shall be deemed to be duly provided if
received by facsimile by the Trustee and each Paying Agent.
SECTION 4.02 REPORTS. The Company shall provide to the Trustee, and,
upon request, the Holders of the Notes, annual financial statements for each
fiscal year audited by an internationally recognized independent public
accountant, within 180 days after the end of such fiscal year. All such
financial statements shall be in English. The Issuer and the Company will also
comply with the other provisions of TIA section 314(a).
SECTION 4.03 LIMITATION ON INDEBTEDNESS
(a) Neither the Company nor the Issuer shall Incur, directly or
indirectly, any Indebtedness unless, on the date of such Incurrence, the
Consolidated Coverage Ratio exceeds 2.25 to 1.
(b) Notwithstanding Section 4.03(a), the Company or the Issuer may
Incur the following Indebtedness: (1) Indebtedness pursuant to the Loan
Facilities (or any other facility for working capital or general corporate
purposes); PROVIDED, HOWEVER, that, after giving effect to any such Incurrence,
the aggregate principal amount of such Indebtedness under all such Loan
Facilities then outstanding does not exceed the US$50.0 million; (2)
Indebtedness owed to and held by a Wholly Owned Subsidiary; PROVIDED, HOWEVER,
that any subsequent issuance or transfer of any Capital Stock which results in
any such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of such Indebtedness (other than to another Wholly Owned
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the Company; (3) Indebtedness pursuant to the Notes and the
Guarantee, (4) Indebtedness evidenced by the Exchangeable Notes issued pursuant
to the Exchangeable Indenture up to the amounts issued on the Issue Date, and
any Guarantees thereof, plus any Exchangeable Notes issued as payment of
interest thereon in accordance with the terms thereof, and any Guarantees
thereof, less any amounts repaid or retired; (5) Indebtedness evidenced by the
Guaranteed Notes up to the amount issued on or before the Issuer Date, and any
Guarantees thereof; (6) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2), (3), (4) or (5) of this paragraph
(b)); (7) Refinancing Indebtedness in respect of Indebtedness Incurred pursuant
to paragraph (a) or pursuant to clause (3), (4), (5), (6) this clause (7) or
Section 4.04(b)(v); (8) Hedging Obligations to hedge exposure against
fluctuations in interest rates or currency rates in respect of Indebtedness
permitted to be Incurred by the Company or the Issuer pursuant to this
Indenture; (9) Indebtedness under Commodity Agreements entered into in the
ordinary course of the financial management of the Company or the Issuer and not
for speculative purposes; (10) Indebtedness pursuant to short term trade letters
of credit (and facilities therefor) and short-term trade guarantees, in each
case, entered into in the ordinary course of business of the Company or the
Issuer, as applicable; (11) Purchase Money Indebtedness the principal amount of
which Incurred in any single calendar year shall not exceed US$5.0 million;
PROVIDED, HOWEVER, that no Indebtedness may be Incurred pursuant to this clause
(12) to the extent the principal amount thereof would, when taken together with
all other Indebtedness Incurred pursuant to this clause (13) and then
outstanding, exceed US$10.0 million; and (14) Indebtedness in an aggregate
principal amount which, together with all other Indebtedness of the Company and
the Issuer outstanding on the date of such Incurrence (other than Indebtedness
permitted by clauses (l) through (11) above or Section 4.03(a)), does not exceed
US$20.0 million.
(c) Notwithstanding the foregoing, neither the Company nor the
Issuer shall Incur any Indebtedness pursuant to the foregoing paragraph (b) if
the proceeds thereof are used, directly or indirectly, to
27
Refinance any Subordinated Obligations unless such Indebtedness shall be
subordinated to the Notes to at least the same extent as such Subordinated
Obligations.
(d) For purposes of determining compliance with this Section 4.03,
(i) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify (and may later classify) such item of Indebtedness and
only be required to include the amount and type of such Indebtedness in one of
the above clauses and (ii) an item of Indebtedness may be divided and classified
in more than one of the types of Indebtedness described above.
SECTION 4.04 LIMITATION ON INDEBTEDNESS AND PREFERRED STOCK OF
RESTRICTED SUBSIDIARIES
(a) Neither the Issuer nor the Company shall permit any Restricted
Subsidiary to Incur, directly or indirectly, any Indebtedness or Preferred
Stock; PROVIDED, HOWEVER, that the Issuer may Incur Indebtedness permitted
pursuant to Section 4.03(a) or Section 4.03(b).
(b) Notwithstanding the foregoing Section 4.04 (a) any Restricted
Subsidiary other than the Issuer may Incur:
(i) Indebtedness or Preferred Stock issued to and held by the
Company or a Wholly Owned Subsidiary; PROVIDED, HOWEVER, that any
subsequent issuance or transfer of any Capital Stock which results in any
such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of such Indebtedness or Preferred Stock (other than to
the Company or a Wholly Owned Subsidiary) shall be deemed, in each case, to
constitute the issuance of such Indebtedness or Preferred Stock by the
issuer thereof;
(ii) Indebtedness or Preferred Stock of a Subsidiary Incurred
and outstanding on or prior to the date on which such Subsidiary was
acquired by the Company (other than Indebtedness or Preferred Stock
Incurred in connection with, or to provide all or any portion of the funds
or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Subsidiary became a Subsidiary
or was acquired by the Company); PROVIDED, HOWEVER, that on the date of
such acquisition and after giving effect thereto, the Company or the Issuer
would have been able to Incur at least US$1.00 of additional Indebtedness
pursuant to Section 4.03(a);
(iii) Indebtedness or Preferred Stock outstanding on the Issue
Date (other than Indebtedness described in clauses (i)or (ii)) of this
Section 4.04(b);
(iv) Indebtedness under Commodity Agreements entered into in
the ordinary course of financial management of such Restricted Subsidiary
and not for speculative purposes; and
(v) Refinancing Indebtedness Incurred in respect of
Indebtedness or Preferred Stock referred to in clauses (ii) or (iii) or
this clause (v) of this Section 4.04(b); PROVIDED, HOWEVER, that to the
extent such Refinancing Indebtedness directly or indirectly Refinances
Indebtedness or Preferred Stock of a Subsidiary described in Section
4.04(b)(ii), such Refinancing Indebtedness shall be Incurred only by such
Subsidiary.
SECTION 4.05 LIMITATION ON RESTRICTED PAYMENTS
(a) Neither the Company nor the Issuer shall, nor shall the Company
permit any Restricted Subsidiary, directly or indirectly, to, make a Restricted
Payment if at the time the Company, the Issuer or such other Restricted
Subsidiary makes such Restricted Payment: (1) a Default shall have occurred and
be continuing (or would result therefrom); (2) the Company or the Issuer is not
able to Incur an additional US$1.00 of Indebtedness pursuant to Section 4.03(a)
or (3) the aggregate amount of such Restricted Payment and all other Restricted
Payments since the Issue Date would exceed the sum of: (A) 50% of the
Consolidated Net Income accrued during the period (treated as one accounting
period) from the beginning of the fiscal quarter immediately following the
28
fiscal quarter during which the Notes are originally issued to the end of the
most recent fiscal quarter ending at least 45 days prior to the date of such
Restricted Payment (or, in case such Consolidated Net Income shall be a deficit,
minus 100% of such deficit); (B) the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other than Disqualified
Stock) subsequent to the Issue Date (other than an issuance or sale to a
Subsidiary of the Company); (C) the amount by which Indebtedness of the Company
is reduced on the Company's balance sheet upon the conversion or exchange (other
than by a Subsidiary of the Company) subsequent to the Issue Date, of any
Indebtedness of the Company issued after the Issue Date convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of the Company
(less the amount of any cash, or the fair market value of any other property,
distributed by the Company upon such conversion or exchange); (D) an amount
equal to the sum of (i) the net reduction in Investments in Unrestricted
Subsidiaries resulting from dividends, repayments of loans or advances or other
transfers of assets, in each case to the Company or any Restricted Subsidiary
from Unrestricted Subsidiaries, and (ii) the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; PROVIDED, HOWEVER, that the
foregoing sum shall not exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made (and treated as a Restricted Payment) by
the Company or any Restricted Subsidiary in such Unrestricted Subsidiary; and
(E) US$10.0 million.
(b) The provisions of Section 4.05(a) shall not prohibit: (i) any
purchase or redemption of Capital Stock or Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary of the Company or an
employee stock ownership plan or to a trust established by the Company or any of
its Subsidiaries for the benefit of their employees); PROVIDED, HOWEVER, that
(A) such purchase or redemption shall be excluded in the calculation of the
amount of Restricted Payments and (B) the Net Cash Proceeds from such sale shall
be excluded from the calculation of amounts under Section 4.05(a)(3)(B); (ii)
any purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Obligations made by exchange for, or out of
the proceeds of the substantially concurrent sale of, Indebtedness of the
Company which is permitted to be Incurred pursuant Section 4.03; PROVIDED,
HOWEVER, that such purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value shall be excluded in the calculation of the
amount of Restricted Payments; (iii) dividends paid within 60 days after the
date of declaration thereof if at such date of declaration such dividend would
have complied with this Section 4.05; PROVIDED, HOWEVER, that at the time of
payment of such dividend, no other Default shall have occurred and be continuing
(or result therefrom); PROVIDED FURTHER, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments; and (iv) the
repurchase of shares of, or options to purchase shares of, common stock of the
Company or any of its Subsidiaries from employees, former employees, directors
or former directors of the Company or any of its Subsidiaries (or permitted
transferees of such employees, former employees, directors or former directors),
pursuant to the terms of the agreements (including employment agreements) or
plans (or amendments thereto) approved by the Board of Directors under which
such individuals purchase or sell or are granted the option to purchase or sell,
shares of such common stock; PROVIDED, HOWEVER, that the aggregate amount of
such repurchases shall not exceed US$0.5 million in any calendar year; PROVIDED
FURTHER, however, that such repurchases shall be excluded in the calculation of
the amount of Restricted Payments; and (v) any purchase, repurchase, redemption,
defeasance or other acquisition or retirement of the Guaranteed Notes.
SECTION 4.06 LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. Neither the Company nor the Issuer shall, nor shall the
Company permit any other Restricted Subsidiary to, create or otherwise cause or
permit to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary (a) to pay dividends or make any other
distributions on its Capital Stock to the Company or a Restricted Subsidiary or
pay any Indebtedness owed to the Company or the Issuer, (b) to make any loans or
advances to the Company or the Issuer or (c) to transfer any of its property or
assets to the Company or the Issuer, except: (i) any encumbrance or restriction
pursuant to an agreement in effect at or entered into on the Issue Date; (ii)
any encumbrance or restriction with respect to a Restricted Subsidiary pursuant
to an agreement relating to any Indebtedness Incurred by such Restricted
Subsidiary on or prior to the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness Incurred as consideration in,
or to provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company) and outstanding on such date; (iii) any encumbrance or restriction
pursuant to an agreement effecting a
29
Refinancing of Indebtedness Incurred pursuant to an agreement referred to in
clause (i) or (ii) of this covenant or this clause (iii) or contained in any
amendment to an agreement referred to in clause (i) or (ii) of this covenant or
this clause (iii); PROVIDED, HOWEVER, that the encumbrances and restrictions
with respect to such Restricted Subsidiary contained in any such refinancing
agreement or amendment are no less favorable to the Noteholders than
encumbrances and restrictions with respect to such Restricted Subsidiary
contained in such agreements; (iv) any such encumbrance or restriction
consisting of customary non-assignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the lease or
the property leased thereunder; (v) in the case of clause (c) above,
restrictions contained in security agreements or mortgages securing Indebtedness
of a Restricted Subsidiary to the extent such restrictions restrict the transfer
of the property subject to such security agreements or mortgages; (vi) any
restriction with respect to the Guaranteed Notes, any defeasance trust or the
Debt Service Reserve Account; and (vii) any restriction with respect to a
Restricted Subsidiary imposed pursuant to an agreement entered into for the sale
or disposition of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or disposition.
SECTION 4.07 LIMITATION ON SALES OF NON-COLLATERAL ASSETS AND
SUBSIDIARY STOCK
(a) Neither the Company nor the Issuer shall, nor shall the Company
or the Issuer permit the Issuer or any other Restricted Subsidiary to, make any
Asset Disposition that is not a disposition of Collateral, in whole or in part,
unless (1) the Company, the Issuer or such other Restricted Subsidiary, as the
case may be, receives consideration at the time of such Asset Disposition at
least equal to the fair market value of the Capital Stock or assets subject to
such Asset Disposition (including the value of all non cash consideration), as
determined in good faith by an officer (having a title of manager or more
senior) of the Company, the Issuer or such other Restricted Subsidiary, in the
case of an Asset Disposition involving consideration not greater than US$1.0
million, or by the Board of Directors, in the case of an Asset Disposition
involving consideration of more than US$1.0 million, (2) except in the case of
an Involuntary Loss, at least 75% of such consideration is in the form of cash
or cash equivalents and (3) the Company, the Issuer or such other Restricted
Subsidiary, as applicable, complies with the requirements of Sections 4.07(b),
(c) and (d) and (f) below.
(b) In the case of any Asset Disposition which is not a disposition
of Collateral by the Company, the Issuer or any other Restricted Subsidiary, the
Company or such Restricted Subsidiary will apply the Net Available Cash from
such Asset Disposition (i) first, to the extent such Net Available Cash is
required to be so applied, to prepay, repay, redeem or purchase (A) Senior
Indebtedness of the Company or (B) unsubordinated Indebtedness (other than
Disqualified Stock) of the Company or any Restricted Subsidiary (in each case
other than Indebtedness owed to the Company or an Affiliate of the Company),
within 180 days after the later of such Asset Disposition or receipt of the Net
Available Cash, (ii) second, to the extent of the balance of Net Available Cash
after application in accordance with clause (i), the Company or such other
Restricted Subsidiary may apply such Net Available Cash to acquire (or enter
into a legally binding agreement to acquire) Additional Assets within 270 days
after the later of such Asset Disposition or receipt of the Net Available Cash;
PROVIDED, HOWEVER, that (l) if any such legally binding commitment to acquire
Additional Assets is terminated prior to the later of 270 days following such
Asset Disposition or 270 days following the receipt of such Net Available Cash,
the Company, the Issuer or any other Restricted Subsidiary may, within 90 days
following such termination or 270 days following such Asset Disposition or 270
days following the receipt of such Net Available Cash, whichever is latest,
acquire (or enter into a single further legally binding commitment to acquire)
other Additional Assets, and (2) any legally binding commitment to acquire
Additional Assets shall be fully performed within 24 months following such Asset
Disposition or the receipt of such Net Available Cash, whichever is later. Any
Net Available Cash not applied as provided above shall constitute "Excess
Proceeds."
(c) If at any time the Exchangeable Notes are outstanding, the
Issuer shall apply any Excess Proceeds in accordance with the Exchangeable
Indenture. If no Exchangeable Notes are outstanding, and when the aggregate
amount of Excess Proceeds from all Asset Dispositions which are not dispositions
of Collateral exceeds the equivalent of US$10.0 million, the Issuer shall,
within 30 days thereafter, make an offer (the "Excess Proceeds Offer") in
accordance with the provisions of this Indenture to purchase on a pro rata basis
Notes at 100% of the principal amount thereof plus accrued and unpaid interest,
if any, to the purchase date, plus any Additional Amounts due thereon (and any
other Secured Indebtedness for which the Issuer or the Company is require to
make a similar offer pursuant to the terms of such Secured Indebtedness, at a
price no greater than par), in an aggregate amount
30
equal to the Excess Proceeds. To the extent that the aggregate amount of Notes
and other Secured Indebtedness tendered in response to the Excess Proceeds Offer
is less than the amount of Excess Proceeds, the Company may use the balance of
such Excess Proceeds in any manner not otherwise prohibited by this Indenture.
Upon completion of such Excess Proceeds Offer, the amount of Excess Proceeds
shall be reset at zero or such greater amount based on Net Available Cash
received in connection with Asset Dispositions that occur subsequent to the date
the US$10.0 million threshold is exceeded.
For the purposes of this Section 4.07 and Section 4.08, the assumption
of Indebtedness of the Company or any Restricted Subsidiary and the release of
the Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition shall be deemed to be
cash or cash equivalents.
(d) (1) Promptly, and in any event within 10 days after the Issuer
becomes obligated to make an Excess Proceeds Offer, the Issuer shall be
obligated to deliver to the Trustee and (x) send, by first-class mail to each
Holder and (y) publish in the manner provided in Section 14.02, a written notice
stating that the Holder may elect to have his Notes purchased by the Issuer
either in whole or in part (subject to prorationing as hereinafter described in
the event the Excess Proceeds Offer is oversubscribed) in integral multiples of
$1.00 of principal amount, at the applicable purchase price. The notice shall
specify a purchase date not less than 30 days nor more than 60 days after the
date of such notice (the "Purchase Date") and shall contain such information
concerning the business of the Company and the Issuer which the Issuer in good
faith believes will enable such Holders to make an informed decision (which at a
minimum shall include (i) the most recent reports required to be delivered by
the Company to the Trustee pursuant to Section 4.02, together with the Company's
most recent audited and unaudited financial statements, (ii) a description of
material developments in the Company's business subsequent to the date of the
latest of such reports, and (iii) if material, appropriate pro forma financial
information) and all instructions and materials necessary to tender Notes
pursuant to the Excess Proceeds Offer, together with the address referred in
clause (3).
(2) Not later than the date upon which written notice of an
Excess Proceeds Offer is delivered to the Trustee as provided above, the
Issuer shall deliver to the Trustee an Officer's Certificate as to (i) the
amount of the Offer (the "Offer Amount"), (ii) the allocation of the Net
Available Cash from the Asset Dispositions pursuant to which such Offer is
being made and (iii) the compliance of such allocation with the provisions
of Sections 4.07(b). On such date, the Issuer shall also irrevocably
deposit with the Trustee or with the Paying Agent an amount equal to the
Offer Amount to be invested in Temporary Cash Investments and to be held
for payment in accordance with the provisions of this Section. Upon the
expiration of the period for which the Offer remains open (the "Offer
Period"), the Issuer shall deliver to the Trustee for cancellation the
Notes or portions thereof that have been properly tendered to and are to be
accepted by the Issuer. The Trustee (or the Paying Agent, if not the
Trustee) shall, on the Purchase Date, mail or deliver payment to each
tendering Holder in the amount of the purchase price. In the event that the
aggregate purchase price of the Notes delivered by the Issuer to the
Trustee is less than the Offer Amount, the Trustee shall deliver the excess
to the Issuer immediately after the expiration of the Offer Period for
application in accordance with this Section.
(3) Holders electing to have a Security purchase shall be
required to surrender the Security, with an appropriate form duly
completed, to the Issuer at the address specified in the notice at least
three Business Days prior to the Purchase Date. Holders will be entitled to
withdraw their election if the Trustee or the Issuer receives not later
than one Business Day prior to the Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security which was delivered by the Holder for
purchase and a statement that such Holder is withdrawing his election to
have such Security purchased. If, at the expiration of the Offer Period the
aggregate principal amount of Notes surrendered by Holders exceeds the
Offer Amount, the Issuer shall select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the
Issuer so that only Notes in denominations of $1.00, or integral multiples
thereof, shall be purchased). Holders whose Notes are purchased only in
part will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
31
(4) At the time the Issuer delivers Notes to the Trustee which
are to be accepted for purchase, the Issuer will also deliver an Officer's
Certificate stating that such Notes are to be accepted by the Issuer
pursuant to and in accordance with the terms of this Section 4.07. A Note
shall be deemed to have been accepted for purchase at the time the Trustee,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
(e) Pending application of Net Available Cash pursuant to Sections
4.07(b) and (c), such Net Available Cash will be invested in Temporary Cash
Investments and will not be deposited with the Collateral Agent.
(f) The Company and the Issuer each shall comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase of Notes
pursuant to this Section 4.07. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 4.07,
the Company and the Issuer each shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this clause by virtue thereof.
SECTION 4.08 LIMITATION ON SALES OF COLLATERAL
(a) All Collateral Dispositions. Neither the Company nor the Issuer
shall, nor shall the Company permit any Restricted Subsidiary, directly or
indirectly, to, consummate any Collateral Disposition, in whole or in part,
unless: (i) other than in the case of an Involuntary Loss, the Company or such
Restricted Subsidiary receives consideration at the time of such Collateral
Disposition at least equal to the fair market value (including the value of all
noncash consideration) of the Collateral subject to such Collateral Disposition,
as determined in good faith (A) in the case of a Collateral Disposition
involving consideration of US$1.0 million or less, by an officer of the Company
having the title of manager or more senior, or (B) in the case of a Collateral
Disposition involving consideration of more than US$1.0 million, by the Board of
Directors of the Company; (ii) other than in the case of an Involuntary Loss, at
least 75% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash and cash equivalents; (iii) any
such Collateral Disposition is in compliance with the provisions of Section 12;
(iv) an amount equal to 100% of the Net Available Cash from such Collateral
Disposition shall promptly be delivered and pledged by the Company (or such
Restricted Subsidiary, as the case may be) to the Collateral Agent for deposit
in the Collateral Accounts or, in the case of an Involuntary Loss that does not
constitute a Major Collateral Disposition, the Insurance Collateral Account,
pending application in accordance with the provisions of Sections 4.08(b), (c)
or (d) below, as applicable, in each case in the name and under the sole
dominion and control of the Collateral Agent; (v) the Liens of the Security
Documents (which shall be first priority perfected Liens) attach to all other
property and assets received, and the Company (or such Restricted Subsidiary, as
the case may be) shall take such other actions, at the sole expense of the
Company or such Restricted Subsidiary, to ensure that the Liens under the
Security Documents so attach to such property and assets; and (vi) in the event
of a Collateral Disposition that is: (A) a Major Collateral Disposition, the
Company (or such Restricted Subsidiary, as the case may be) shall comply with
Section 4.08(b) below; (B) a Collateral Disposition that does not constitute a
Major Collateral Disposition and does not result from an Involuntary Loss, the
Company (or such Restricted Subsidiary, as the case may be) shall comply with
Section 4.08(c) below; or (C) a Collateral Disposition that does not constitute
a Major Collateral Disposition but results from an Involuntary Loss, the Company
(or such Restricted Subsidiary, as the case may be) shall comply with Section
4.08(d) below.
(b) MAJOR COLLATERAL DISPOSITIONS. Neither the Company nor the
Issuer shall, nor shall the Company permit any Restricted Subsidiary to,
consummate a Major Collateral Disposition unless, in addition to complying with
the provisions set forth in Section 4.08(a) above, (i) the Net Available Cash
from such Major Collateral Disposition, other than in the event of a Major
Collateral Disposition occurring as a result of an Involuntary Loss, shall be
sufficient to prepay all unpaid principal, interest and all other amounts
payable in respect of all Secured Indebtedness and (ii) an amount equal to 100%
of the Net Available Cash from any such Major Collateral Disposition (including
as a result of an Involuntary Loss) is applied (A) first, (x) with respect to
Net Available Cash deposited in the Notes Collateral Account, to make an offer
to the holders of the Notes to purchase any and all of the outstanding Notes at
a purchase price in cash equal to 100% of the principal amount thereof plus, in
each case, accrued and unpaid interest, if any, plus any Additional Amounts due
thereon or which will become due as a result of the repurchase or
32
otherwise, to the date of purchase (subject to the right of holders of record on
the relevant record date to receive interest on the relevant interest payment
date), in accordance with the procedures set forth in this Section 4.08(b) and
(y) with respect to Net Available Cash deposited in the Additional Indebtedness
Collateral Account to the extent the Company or any Restricted Subsidiary is so
required by the terms of any Secured Indebtedness (other than the Notes and the
Guarantee), to prepay, repay, redeem or repurchase such Secured Indebtedness;
and (B) second, to the extent of the balance of such Net Available Cash, after
application in accordance with clause (A) and, to the extent the Company elects,
to replace any assets or property or to purchase properties, assets or rights to
be used in the business of the Company and owned by the Company, provided that
such property, assets or rights shall become subject to the Liens of the
Security Documents (which shall be first priority perfected Liens unless
otherwise contemplated by the Security Documents) and shall become Collateral
governed by the Collateral Agency Agreement. Any Net Available Cash not applied
pursuant to clause (A) or (B) shall remain in the Collateral Accounts except as
provided in Section 4.08(e) below. The Issuer will be required to purchase all
Notes tendered pursuant to an offer by the Issuer under this Section 4.08(b)
other than in the event of an offer resulting from an Involuntary Loss, in which
case, the Issuer will be required to purchase Notes from all holders that tender
their Notes, in each case in accordance with the procedures (including, in the
event of an offer resulting from an Involuntary Loss, prorating in the event of
oversubscription) set forth in this Section 4.08(b).
Within 30 days following any Major Collateral Disposition, unless
notice of redemption of the Notes has been given pursuant to Section 3 of the
Notes, the Issuer shall mail a notice to each Holder with a copy to the Trustee
stating: (1) that a Major Collateral Disposition has occurred and that such
Holder has the right to require the Issuer to purchase (the "MCD OFFER") such
Holder's Notes at a purchase price in cash equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of holders of record on the relevant record date to
receive interest on the relevant interest payment date) plus any Additional
Amounts then due or which will become due as a result of the repurchase or
otherwise; (2) the circumstances and relevant facts regarding such Major
Collateral Disposition (including information with respect to the Collateral
disposed of, the circumstances surrounding such disposal and the intended use of
the Net Available Cash (including the identification of any Additional Assets to
be purchased), if any, after repurchasing all Notes tendered) in each case in
reasonable detail; (3) the repurchase date (the "MCD PURCHASE DATE") which shall
be no earlier than 30 days nor later than 60 days from the date such notice is
mailed; and (4) the instructions, as set forth below, determined by the Issuer,
consistent with this Section 4.08(b), that a Holder must follow in order to have
its Notes purchased.
Not later than the date upon which written notice of a Major
Collateral Disposition is delivered to the Trustee, the Issuer shall deliver to
the Trustee an Officer's Certificate as to (i) the amount of Net Available Cash
from such Major Collateral Disposition available to purchase Notes, including
principal and interest (the "MCD OFFER AMOUNT") and (ii) the compliance of the
allocation of Net Available Cash from such Major Collateral Disposition with the
provisions of Sections 4.08(a) and (b). On such date, the Issuer shall also
irrevocably deposit with the Trustee cash and Temporary Cash Investments
maturing on or prior to the MCD Purchase Date (or direct the Trustee to apply
Trust Monies in accordance with Section 13.02) in an amount equal to the MCD
Offer Amount to be held for payment in accordance with the provisions of this
Section. Upon the expiration of the period for which the MCD Offer remains open
(the "MCD OFFER PERIOD"), the Issuer shall deliver to the Trustee the Notes or
portions thereof which have been properly tendered to and are to be accepted by
the Issuer. The Trustee shall, on the MCD Purchase Date, mail or deliver payment
to each tendering Holder in the amount of the purchase price. Any unused funds
deposited by the Issuer (but not Trust Monies) shall be delivered by the Trustee
to the Issuer immediately after expiration of the MCD Offer Period. Any unused
Trust Monies shall be redeposited with the Collateral Agent in the Notes
Collateral Account.
Holders electing to have a Note (or any portion thereof) purchased
will be required to surrender the Note, with an appropriate form duly completed,
to the Issuer at the address specified in the notice at least five Business Days
prior to the MCD Purchase Date. Holders will be entitled to withdraw their
election, in whole or in part, if the Trustee or the Issuer receives, not later
than three Business Days prior to the MCD Purchase Date, a facsimile
transmission or letter setting forth the name of the Holder, the
33
principal amount of the Note (or any portion thereof) which was delivered for
purchase by the Holder and a statement, as applicable, that (x) such Holder is
withdrawing, in its entirety, such Holder's election to have such Note (or any
portion thereof) purchased or (y) such Holder is withdrawing, in part, such
Holder's election to have such Note (or any portion thereof) purchased and
specifying the amount of such Note to be purchased. If, at the expiration of the
MCD Offer Period, the aggregate principal amount of Notes surrendered by Holders
exceeds the MCD Offer Amount, the Issuer shall select the Notes to be purchased
on a pro rata basis (with such adjustments as may be deemed appropriate by the
Issuer so that only Notes in denominations of $1.00, or integral multiples
thereof, shall be purchased). Holders whose Notes are purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered.
At the time the Issuer delivers Notes to the Trustee which are to be
accepted for purchase, the Issuer will also deliver an Officer's Certificate
stating that such Notes are to be accepted by the Issuer pursuant to and in
accordance with the terms of this Section. A Note (or any portion thereof) shall
be deemed to have been accepted for purchase at the time the Trustee, directly
or through an agent, mails or delivers payment therefor to the surrendering
Holder. All Notes delivered to the Trustee shall be canceled upon completion of
the purchase.
Each of the Issuer and the Company will comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase or
redemption of Notes as described above. To the extent that the provisions of any
securities laws or regulations conflict with provisions relating to the MCD
Offer, each the Issuer and the Company will comply with the applicable laws and
regulations and will not be deemed to have breached its obligations described
above by virtue thereof.
(c) VOLUNTARY NON-MAJOR COLLATERAL DISPOSITIONS. Neither the Company
nor the Issuer shall, nor shall the Company permit any Restricted Subsidiary to,
consummate a Collateral Disposition that does not constitute a Major Collateral
Disposition and that does not result from an Involuntary Loss unless, in
addition to complying with the provisions set forth in paragraph (a) above, an
amount equal to 100% of the Net Available Cash from such Collateral Disposition
shall be applied, to the extent the Company elects, to replace any assets or
property that were the subject of such Collateral Disposition or to acquire
properties, assets or rights to be used in the business of the Company and owned
by the Company (such replacement assets or property and such properties, assets
or rights to be acquired being hereinafter referred to as the "NEW COLLATERAL
ASSETS") within 18 months from the later of the date of such Collateral
Disposition or the receipt of such Net Available Cash, provided such New
Collateral Assets shall become subject to the Liens of the Security Documents
(which shall be first priority perfected Liens) and shall become Collateral
governed by the Collateral Agency Agreement; PROVIDED, HOWEVER, that if the Net
Available Cash from such Collateral Disposition, when aggregated with all the
Excess Collateral Proceeds on deposit in the Collateral Accounts, exceeds
US$10.0 million, the Issuer shall be required to make an offer pursuant to
paragraph (e) of this covenant; PROVIDED FURTHER, however, that (A) such offer
will not be required to be made if the Issuer delivers to the Trustee and the
holders of the Notes an Officer's Certificate within 30 days after such
Collateral Disposition certifying: (1) that the Issuer has identified New
Collateral Assets to be acquired (together with a description thereof), (2) that
delivery of such New Collateral Assets will be taken, and completion of the
purchase of such New Collateral Assets will occur, within 180 days after the
date of such Officer's Certificate, (3) the amount of Net Available Cash to be
used to purchase such New Collateral Assets and (4) that such amount of Net
Available Cash so to be used would reduce the Excess Collateral Proceeds in the
Collateral Accounts to less than US$l0.0 million; and (B) the completion of the
purchase of such New Collateral Assets shall take place on or before the 180 day
period specified in such certification. Any Net Available Cash not applied as
provided above in this paragraph (c) shall constitute "Excess Collateral
Proceeds."
(d) INVOLUNTARY NON-MAJOR COLLATERAL DISPOSITIONS. In the event of a
Collateral Disposition that does not constitute a Major Collateral Disposition
but results from an Involuntary Loss, an amount equal to 100% of the Net
Available Cash from such Collateral Disposition shall be applied from the
Insurance Collateral Account to the extent the Company elects, to repair or
replace any assets or property
34
that are the subject of such Involuntary Loss within 18 months after the
occurrence of such Involuntary Loss; PROVIDED, HOWEVER, that such 18 month
period may be extended for an additional 365 days upon delivery to the Trustee
of an Officer's Certificate certifying that the Company shall use such proceeds
to repair or replace such assets or property during such subsequent 365 day
period; PROVIDED FURTHER, however, that all other holders of Secured
Indebtedness permit such extension of time and permit such Net Available Cash to
be used for such purpose. Any Net Available Cash not applied as provided above
in this subsection (d) shall constitute Excess Collateral Proceeds.
The Collateral Agency Agreement provides that Net Available Cash in
the Insurance Collateral Account will constitute Excess Collateral Proceeds upon
the earliest of (i) receipt by the Collateral Agent of a Notice of Actionable
Default; (ii) the occurrence of a Foreclosure Event (as defined in the
Collateral Agency Agreement); and (iii) the last day of the period permitting
such Net Available Cash to be applied in the repair or replacement of assets or
property as such period is permitted to be extended.
(e) COLLATERAL OFFER. (1) If at any time the Exchangeable Notes are
outstanding, the Issuer shall apply any Excess Collateral Proceeds in accordance
with the Exchangeable Notes Indenture. If no Exchangeable Notes are outstanding
and if the aggregate amount of Excess Collateral Proceeds in the Collateral
Accounts at any time exceeds US$10.0 million (i) the Issuer shall make an offer
(a "COLLATERAL OFFER") in accordance with the terms of Section 4.08(e)(2), to
purchase Notes in an aggregate principal amount equal to the Excess Collateral
Proceeds in the Notes Collateral Account, on the date such threshold is
exceeded, at 100% of the principal amount thereof, plus accrued interest, if
any, plus any Additional Amounts then due or which will become due as a result
of the repurchase or otherwise, to the date of purchase and (ii) to the extent
the Company or any Restricted Subsidiary is required by the terms of any Secured
Indebtedness (other than the Notes or the Guarantee), the Company or such
Restricted Subsidiary shall prepay, repay, redeem or repurchase such Secured
Indebtedness with Net Available Cash from the Additional Indebtedness Collateral
Account. The Issuer will be required to purchase all Notes tendered pursuant to
any such Collateral Offer in accordance with the procedures (including prorating
in the event of oversubscription) set forth in Section 4.08(e)(2). If the
aggregate purchase price of the Notes tendered pursuant to any Collateral Offer
is less than the Excess Collateral Proceeds in the Notes Collateral Account at
the time such Collateral Offer is made, such excess may be used to acquire New
Collateral Assets; PROVIDED that such New Collateral Assets become subject to
the Liens of the Security Documents (which shall be first priority perfected
Liens) and shall become Collateral governed by the Collateral Agency Agreement.
(2) (A) Promptly, and in any event within 10 days after the
Issuer becomes obligated to make a Collateral Offer, the Issuer shall be
obligated to deliver to the Trustee and (x) send by first class mail to each
Holder and (y) publish, in the manner provided in Section 14.02, a written
notice stating that the Holder may elect to have such Holder's Notes purchased
by the Issuer either in whole or in part (subject to prorationing as hereinafter
described in the event the Collateral Offer is oversubscribed) in integral
multiples of $1.00 of principal amount, at the applicable purchase price. The
notice shall specify a purchase date (the "COLLATERAL OFFER PURCHASE DATE") not
less than 30 days nor more than 60 days after the date of such notice and shall
contain information concerning the business of the Company which the Issuer in
good faith believes will enable such Holders to make an informed decision (which
at a minimum will include (i) the most recent reports required to be delivered
by the Company to the Trustee pursuant to Section 4.02, together with the
Company's most recent audited and unaudited financial statements, (ii) a
description of material developments in the Company's business subsequent to the
date of the latest of such reports and (iii) if material, appropriate pro forma
financial information) and all instructions and materials necessary to tender
Securities or any portion thereof pursuant to the Collateral Offer, together
with the information contained in clause (C) below.
(B) Not later than the date upon which written notice, of
a Collateral Offer is delivered to the Trustee, the Issuer shall deliver to the
Trustee an Officer's Certificate as to (i) the amount of the Collateral Offer
including principal and interest to the Collateral Offer Purchase Date (the
"COLLATERAL OFFER AMOUNT"), (ii) the allocation of the consideration received in
connection with the Asset Dispositions in respect of Collateral pursuant to
which such Collateral Offer is being made and (iii) the compliance of such
allocation with the
35
provisions of Sections 4.08(a) and (d). On such date, the Issuer shall also
irrevocably deposit with the Trustee or with a Paying Agent cash and Temporary
Cash Investments maturing on or prior to the Collateral Offer Purchase Date (or
direct the Trustee to apply Trust Monies in accordance with Section 13.02) in an
amount equal to the Collateral Offer Amount to be held for payment in accordance
with the provisions of this Section. Upon the expiration of the period for which
the Collateral Offer remains open (the "COLLATERAL OFFER PERIOD"), the Issuer
shall deliver to the Trustee the Notes or portions thereof which have been
properly tendered to and are to be accepted by the Issuer. The Trustee shall, on
the Collateral Offer Purchase Date, mail or deliver payment to each tendering
Holder in the amount the purchase price. Any unused funds deposited by the
Issuer (but not Trust Monies) shall be delivered by the Trustee to the Issuer
immediately after expiration of the Collateral Offer Period. Any unused Trust
Monies shall be redeposited with the Collateral Agent in the applicable Notes
Collateral Account.
(C) Holders electing to have a Note (or any portion
thereof) purchased will be required to surrender the Note, with an appropriate
form duly completed, to the Issuer at the address specified in the notice at
least five Business Days prior to the Collateral Offer Purchase Date. Holders
will be entitled to withdraw their election, in whole or in part, if the Trustee
or the Issuer receives, not later than three Business Days prior to the
Collateral Offer Purchase Date, a facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Note (or any portion
thereof) which was delivered for purchase by the Holder and a statement, as
applicable, that (x) such Holder is withdrawing, in its entirety, such Holder's
election to have such Note (or any portion thereof) purchased or (y) such Holder
is withdrawing, in part, such Holder's election to have such Note (or any
portion thereof) purchased and specifying the amount of such Note to be
purchased. If, at the expiration of the Collateral Offer Period, the aggregate
principal amount of Notes surrendered by Holders exceeds the Collateral Offer
Amount, the Issuer shall select the Notes to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Issuer so that only
Notes in denominations of $1.00, or integral multiples thereof, shall be
purchased). Holders whose Notes are purchased only in part shall be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered.
(D) At the time the Issuer delivers Notes to the Trustee
which are to be accepted for purchase, the Issuer will also deliver an Officer's
Certificate stating that such Notes are to be accepted by the Issuer pursuant to
and in accordance with the terms of this Section. A Note (or any portion
thereof) shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to the
surrendering Holder. All Notes delivered to the Trustee shall be canceled upon
completion of the purchase.
(f) Each of the Company and the Issuer will comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase or
redemption of Notes as described above. To the extent that the provisions of any
securities laws or regulations conflict with provisions relating to the
Collateral Offer, each of the Company and the Issuer will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations described above by virtue thereof.
(g) To the extent not otherwise applied pursuant to this
Section 4.08, Net Available Cash on deposit in the Notes Collateral Account will
be released from the Liens of the Security Documents when all principal,
interest and other amounts, if any, due on the Notes has been paid in full or
released to the Trustee as set forth under Article 13.
SECTION 4.09 LIMITATION ON AFFILIATE TRANSACTIONS
(a) Neither the Company nor the Issuer shall, nor shall the Company
permit any Restricted Subsidiary to, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property,
employee compensation arrangements or the rendering of any service) with any
Affiliate of the Company, (an "AFFILIATE TRANSACTION") unless the terms thereof
(1) are no less favorable to the Company or such Restricted Subsidiary than
those that could be obtained at the time of such transaction in arm's-length
dealings with a Person who is not such an Affiliate, (2) if such Affiliate
Transaction involves an amount in excess of US$1.0 million, (i) are set forth in
writing and (ii) have been approved by the Board of Directors of the Company and
(3) in addition, if such Affiliate Transaction involves as amount in excess of
US$5.0 million, have been determined by an
36
internationally recognized investment banking firm or, if pertaining to a matter
for which such investment banking firms do not customarily render such opinions,
an appraisal or valuation firm of international reputation, to be fair, from a
financial standpoint, to the Company and its Restricted Subsidiaries.
(b) The provisions of the foregoing paragraph (a) shall not prohibit
(i) any Restricted Payment permitted to be paid pursuant to Section 4.05, (ii)
any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock options and stock ownership plans approved by the Board of Directors,
(iii) the grant of stock options or similar rights to employees and directors of
the Company pursuant to plans approved by the Board of Directors, (iv) loans or
advances to employees in the ordinary course of business in accordance with the
past practices of the Company or its Restricted Subsidiaries, but in any event
not to exceed US$l.0 million in the aggregate outstanding at any one time, (v)
the payment of reasonable fees to directors of the Company and its Restricted
Subsidiaries who are not employees of the Company or its Restricted
Subsidiaries, (vi) any Affiliate Transaction between the Company and a Wholly
Owned Subsidiary or between Wholly Owned Subsidiaries, (vii) the payment of fees
for management services provided in the ordinary course of business in
accordance with the past practices of the Company or its Restricted
Subsidiaries, but in any event not to exceed US$1.0 million in the aggregate in
any calendar year, (viii) the Company from performing its obligations under the
Propylene Supply Agreement; PROVIDED that any amendment to the Propylene Supply
Contract complies with the provisions of Section 4.09(a) (1) and (a) (2) (i) and
(ii) above, and (ix) the Company from entering into agreements to sell
polypropylene in the ordinary course of business and consistent with past
practices; PROVIDED that any such agreement complies with the provisions of
clause (a) (1) above; PROVIDED FURTHER that if a Change of Control has occurred,
any such agreement complies also with the provisions of Section 4.09(a) (2) (ii)
above.
SECTION 4.10 CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control, each Holder shall
have the right to require that the Issuer repurchase such Holder's Notes at a
purchase price in cash equal to 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (subject to the
right of holders of record on the relevant record date to receive interest on
the relevant interest payment date) plus any Additional Amounts then due or
which will become due as result of the repurchase or otherwise, in accordance
with the terms contemplated in Section 4.10(b) below.
(b) Within 30 days following any Change of Control, the Issuer shall
mail a notice to each Holder with a copy to the Trustee stating: (1) that a
Change of Control has occurred and that such Holder has the right to require the
Issuer to purchase such Holder's Notes at a purchase price in cash equal to 100%
of the principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of holders of record on the relevant
record date to receive interest on the relevant interest payment date) plus any
Additional Amounts then due or which will become due as a result of the
repurchase or otherwise; (2) the circumstances and relevant facts regarding such
Change of Control (including information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such Change of
Control); (3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and (4) the
instructions determined by the Issuer, consistent with this Section 4.10, that a
Holder must follow in order to have its Notes purchased.
(c) On or before the purchase date, the Issuer shall irrevocably
deposit with the Trustee or with a paying agent in cash or Temporary Cash
Investments maturing on or prior to the purchase date in an amount equal to the
purchase price plus accrued and unpaid interest, if any, be held for payment in
accordance with the provisions of this Section 4.10. Holders electing to have a
Note purchased will be required to surrender the Note, with an appropriate form
duly completed, to the Issuer at the address specified in the notice at least
five Business Days prior to the purchase date. Holders will be entitled to
withdraw their election in whole or in part if the Trust or the Issuer receives,
not later than three Business Days prior to the purchase date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note which was delivered for purchase to the Holder, the
certificate number of such Note and a statement that (x) such Holder is
withdrawing, in its entirety, such Holder's election to have such Note (or any
portion thereof) purchased or (y) such Holder is withdrawing, in part,
37
such Holder's election to have such Note (or any portion thereof) purchased and
specifying the amount of such Note to be purchased.
(d) On the purchase date, the Issuer shall deliver to the Trustee
the Notes or portions thereof which have been properly tendered to and are to be
accept by the Issuer. The Trustee shall, on the purchase date, mail or deliver
payment of the purchase price to each tendering Holder. Holders whose Notes are
purchased only in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered. In the event that the
aggregate purchase price of the Notes delivered by the Issuer to the Trustee is
less than the amount deposited with the Trustee, the Trustee shall deliver the
excess to the Issuer immediately after the end of the payment date.
(e) Each of the Company and the Issuer shall comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase of Notes
pursuant to this Section 4.10. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
4.10, each of the Company and Issuer shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 4.10 by virtue thereof.
SECTION 4.11 LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. Neither the Company nor the Issuer shall sell or
otherwise dispose of any shares of Capital Stock of a Restricted Subsidiary, and
the Company shall not permit any Restricted Subsidiary, directly or indirectly,
to issue or sell or otherwise dispose of any shares of its Capital Stock except
(i) to the Company or a Wholly Owned Subsidiary or (ii) if, immediately after
giving effect to such issuance, sale or other disposition, the Company and its
Restricted Subsidiaries would own less than 20% of the Voting Stock of such
Person that was a Restricted Subsidiary and have no greater economic interest in
such Restricted Subsidiary.
SECTION 4.12 LIMITATION ON LIENS AND PARI PASSU INDEBTEDNESS
(a) Neither the Company nor the Issuer shall, nor shall the Company
permit any Restricted Subsidiary to, directly or indirectly, create, Incur,
assume or suffer to exist any Lien of any kind upon any of the Collateral, or
right, title or interest thereto, except for Permitted Liens.
(b) Notwithstanding Section 4.12(a), the Company and the Issuer will
have the right from time to time to Incur Liens on the Collateral to secure
Additional Indebtedness on an equal and ratable basis with the Notes and the
Guarantee provided that (i) the proceeds of such Additional Indebtedness are
promptly used to finance the acquisition of a Qualified Project by the Company
or a Restricted Subsidiary (or to Refinance Additional Indebtedness used for
such purpose), (ii) such Additional Indebtedness with respect to such Qualified
Project Incurred or to be Incurred does not exceed 75% of the lesser of (x) the
Estimated Project Costs with respect to such Qualified Project and (y) the fair
market value determined by an Independent Appraiser of the additional Collateral
provided by such Qualified Project (or, if greater, of the increase in the fair
market value of the Collateral taken as a whole as a result of such Qualified
Project), (iii) after giving pro forma effect to such Incurrence, the Company or
the Issuer would be permitted to Incur an additional US$1.00 of Indebtedness
pursuant to Section 4.03(a), (iv) such Additional Indebtedness will state by its
terms that it will be expressly subordinated to the Notes and the Guarantee
until such time as the existing registered security deed shall be increased (but
not decreased) by an amended or substitute security deed in an amount that
equals or exceeds (1) the aggregate principal amount of Additional Indebtedness
to be Incurred plus (2) an amount representing 12 full months of interest
payments with respect to the Additional Indebtedness with respect to such
Qualified Project (calculated on the basis of then current applicable rates),
provided that, to the extent such Additional Indebtedness is being Incurred to
Refinance a Qualified Project, such amount shall be increased only to reflect
any increased interest rates applicable to such Additional Indebtedness, (v) the
first priority perfected Lien of the Security Deed shall continue in full force
and effect uninterrupted and continuously at all times, (vi) the real property
rights, improvements, moveable assets and other assets comprising the Qualified
Project, and rights relating to insurance proceeds with respect to the Qualified
Project, shall become a part of the Collateral and be subject to the Liens of
the Security Documents (which shall be first priority perfected Liens), (vii)
the conditions precedent to the Incurrence of such Indebtedness in the
Collateral Agency Agreement are satisfied, (viii) all other amendments
necessary, in the Opinion, of Counsel to be delivered
38
pursuant to clause (x) below, shall have been made to cause the Security
Documents to continue to be first priority perfected Liens, (ix) with respect to
Indebtedness Refinanced, the holders of the Indebtedness so Refinanced release
their interest in the Collateral to the extent of such Refinancing, (x) no
Default or Event of Default shall have occurred and be continuing or would
result from such Incurrence of Additional Indebtedness and the Company shall
deliver to the Trustee (A) a written Board of Directors' resolution authorizing
the Incurrence of the Additional Indebtedness, (B) an Officer's Certificate that
the conditions set forth in clauses (i) through (x) have been met and (C) an
Opinion of Counsel, in form and substance satisfactory to the Trustee with
respect to those matters referred to in clauses (v), (vi) and (vii) above.
SECTION 4.13 LIMITATION ON SALE/LEASEBACK TRANSACTIONS. Neither the
Company nor the Issuer shall, nor shall the Company permit any Restricted
Subsidiary to, enter into any Sale/Leaseback Transaction with respect to any
property unless (i) the Company or such Subsidiary would be entitled to (A)
Incur Indebtedness in an amount equal to the Attributable Debt with respect to
such Sale/Leaseback Transaction pursuant to Section 4.03 and (B) create a Lien
on such property securing such Attributable Debt pursuant to Section 4.12, (ii)
the net proceeds received by the Company or any Restricted Subsidiary in
connection with such Sale/Leaseback Transaction are at least equal to the fair
market value (as determined by the Board of Directors of the Company) of such
property and (iii) the Company applies the proceeds of such transaction in
compliance with Section 4.07. Notwithstanding anything contained in this Section
4.13, neither the Company nor the Issuer will, nor will the Company or the
Issuer permit any other Restricted Subsidiary to, enter into, guarantee or
otherwise become liable with respect to, any Sale/Leaseback Transaction
involving Collateral.
SECTION 4.14 LIMITATION ON ISSUER ACTIVITIES. The Issuer will, not
engage in any business activity or undertake any other activity, except any
activity relating to the offering, sale or issuance of Indebtedness or the
lending or otherwise advancing the proceeds thereof to the Company or any
Restricted Subsidiary and any other activities reasonably incidental thereto.
SECTION 4.15 KEEPWELL COMMITMENT. The Company and the Issuer shall,
prior to or on the Issue Date, amend and restate the existing Keepwell
Commitment (the "KEEPWELL") between the Company and the Issuer, which shall
remain in force for so long as any Note or Exchangeable Note remains outstanding
under this Indenture or the Exchangeable Indenture, regarding which agreement
the Issuer shall, for the benefit of the Trustee and the Noteholders, use its
reasonable best efforts to enforce its rights against the Company under the
Keepwell.
SECTION 4.16 AMENDMENTS TO SECURITY DOCUMENTS. Neither the Company
nor the Issuer shall, nor shall the Company permit any Restricted Subsidiary to,
amend, modify or supplement, or permit or consent to any amendment, modification
or supplement of, the Security Documents, the Pledge Agreement or the Collateral
Agency Agreement in any way that would be adverse to the holders of the Notes.
SECTION 4.17 LIMITATION ON COMPANY'S BUSINESS. The Company will not,
and will not permit any of its Restricted Subsidiaries (other than the Issuer)
to, directly or indirectly, engage in any business other than the manufacture,
production, processing, marketing, distribution and sale (or activities or
related processes reasonably incident thereto) of petrochemical products or any
material produced by or in connection with such activities.
SECTION 4.18 INSURANCE. The Company will and will cause each of its
Subsidiaries to maintain, with financially sound and reputable insurance
companies, insurance on the Collateral and substantially all of its other
insurable property, in such amounts and against such risks as is normally
carried by corporations engaged in the same or similar businesses in the
Republic of Indonesia as the Company. All such policies shall only be subject to
deductibles and exclusions which are typical for similarly situated companies.
SECTION 4.19 TAXES. The Company and the Issuer will and the Company
will cause its Subsidiaries to pay and discharge when due and payable all taxes
imposed on it or on its income or profits or on any of its properties except
such taxes as are being contested in good faith in appropriate proceedings, and
to remit to the relevant authority any taxes required to be withheld or deducted
from payments made with respect to the Notes or the Guarantee.
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SECTION 4.20 BUSINESSES AND PROPERTIES; COMPLIANCE WITH LAWS
(a) The Company shall, and shall cause each of its Subsidiaries to,
do or cause to be done all things necessary to obtain, preserve, renew, extend
and keep in full force and effect the rights, licenses, concessions, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business
(including the Collateral) substantially in the manner proposed to be conducted
and operated; comply in all material respects with all material applicable laws,
rules, regulations and statutes (including environmental laws and zoning and
building ordinances, codes, approvals, any building permits or any restrictions
of record or agreement affecting the Real Property Collateral) and decrees and
orders of any Governmental Authority, whether now in effect or hereafter
enacted; and at all times maintain and preserve all property material to the
conduct of such business (including the Collateral) and keep such property in
good repair, working order and condition and from time to time make, or cause to
be made, all needful and proper repairs, renewals, additions, improvements and
replacements necessary in order that the business carried on in connection
therewith may be properly conducted at all times.
(b) (i) The Company shall comply with all requirements to file
particulars of its offshore borrowings (including the borrowing by the Company
of the proceeds of the sale of the Notes from the Issuer) with initially the
Minister of Finance, Bank Indonesia and the Team for the Coordination of the
Management of Offshore Commercial Loans (the "PKLN TEAM") and to report to each
such Person on a monthly basis with respect to such borrowings the Company's or
the Issuer's business or properties including the Collateral) and would not
affect the enforceability of the Securities, this Indenture, the Collateral
Agency Agreement and the Security Documents.
(ii) In the event the Issuer or the Company does not make all
necessary filings with Bank Indonesia, the Ministry of Finance and the PKLN Team
with respect to the Guarantee or the borrowing from the Issuer, the Company
shall cause, and hereby irrevocably authorizes, the Collateral Agent to make
such filings on its behalf, and if at any time the Collateral Agent is unwilling
or unable to make such filings, the Company shall promptly authorize and cause
such other Person to make such filings on its behalf. The Company shall deliver
or cause to be delivered all necessary information and evidence of due
compliance with the filing requirements described above to the Trustee.
(c) The Company shall, and shall cause any Restricted Subsidiary
which owns Collateral to, maintain good and marketable title to the Plant and
Qualified Projects, in all material respects. The Company shall, and shall cause
any Restricted Subsidiary which owns Collateral to refrain from impairing the
Collateral in any material respect.
SECTION 4.21 CORPORATE EXISTENCE. Subject to Article 5 hereof, each
of the Issuer and the Company will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents of the Company and its
Subsidiaries and the rights (charter and statutory), registrations, licenses and
franchises of the Company and its Subsidiaries; PROVIDED, however, that the
Company shall not be required to preserve any such right, license, registration
or franchise or the corporate, partnership or other existence of any such
Subsidiary (other than the Issuer), if the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and the loss thereof is not adverse in any material respect to
the Holders; PROVIDED FURTHER, that, if such Subsidiary has more than a de
minimus amount of assets, a majority of the Company's directors shall be
required to make a determination to the foregoing effect.
SECTION 4.22 INSPECTION. The Company shall, and shall cause each of
its Subsidiaries to, permit authorized representatives of the Collateral Agent
and the Trustee (a) to inspect and obtain copies of all records and documents
relating to the properties of the Company or its Subsidiaries constituting
Collateral and Moveable Assets (b) to visit and inspect the properties of the
Company or its Subsidiaries constituting Collateral and Moveable Assets, and any
or all books, records and documents in the possession of the Company relating to
the Collateral and Moveable Assets, and to make copies and take extracts
therefrom and to visit and inspect the Collateral, the Moveable Assets and the
Plant, all upon reasonable prior notice and at such reasonable times during
normal business hours and as often as may be reasonably requested.
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SECTION 4.23 COMPLIANCE CERTIFICATE. The Issuer and the Company shall
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company, an Officer's Certificate (at least one of the signers of which is the
principal executive officer, principal financial officer or principal accounting
officer) stating that, in the course of the performance by the signers of their
duties as Officers of the Issuer or the Company, as applicable, they would
normally have knowledge of any Default and whether or not the signers know of
any Default that occurred during such period and as to compliance with the
conditions and covenants of this Indenture (for purposes of this paragraph,
compliance shall be determined without regard any period of grace or requirement
of notice under this Indenture). The Issuer and the Company shall deliver to the
Trustee, within 30 days after the occurrence thereof, written notice of any
event which would constitute certain Defaults, their status and what action the
Issuer or the Company is taking or proposes to take in respect thereof.
SECTION 4.24 FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Issuer and the Company will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
SECTION 4.25 MANAGEMENT OF THE COMPANY. The Company shall not change
any member on the Company's Board of Directors or Board of Commissioners who was
appointed by the Majority Shareholder without the consent of the holders of the
majority of the aggregate principal amount of the Notes and the holders of the
Exchangeable Notes then outstanding, voting as a single class.
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01 WHEN COMPANY MAY MERGE OR TRANSFER ASSETS
(a) Merger and Consolidation. The Company shall not consolidate with
or merge with or into, or convey, transfer or lease all or substantially all its
assets to, any Person at any time after December 15, 2005. In addition to the
restrictions imposed by the previous sentence, the Company shall not consolidate
with or merge with or into, or convey, transfer or lease all or substantially
all its assets to, any Person, unless: (i) there has not been an Event of
Default at any time after December 15, 2005; (ii) the resulting, surviving or
transferee Person (the "SUCCESSOR COMPANY") shall be a corporation organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia or the Republic of Indonesia, and the Successor Company
(if not the Company) shall expressly, assume, by an indenture supplemental to
this Indenture, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company, including the obligations under
this Indenture, the Guarantee, the Collateral Agency Agreement and the Security
Documents; (iii) immediately after giving effect to such transaction on a pro
forma basis (and treating any Indebtedness which becomes an obligation of the
Successor Company or any Restricted Subsidiary as a result of such transaction
as having been Incurred by the Successor Company or such Restricted Subsidiary
at the time of such transaction), no Default or Event of Default shall have
occurred and be continuing (or would result therefrom); (iv) immediately after
giving effect to such transaction on a pro forma basis (and treating any
Indebtedness which becomes an obligation of the Successor Company or any
Restricted Subsidiary as a result of such transaction as having been Incurred by
the Successor Company or such Restricted Subsidiary at the time of such
transaction), the Successor Company would be able to Incur an additional US$1.00
of Indebtedness pursuant to Section 4.03(a); (v) immediately after giving effect
to such transaction on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the Successor Company or any Restricted Subsidiary as a
result of such transaction as having been Incurred by the Successor Company or
such Restricted Subsidiary at the time of such transaction), the Successor
Company shall have Consolidated Net Worth in an amount which is not less than
the Consolidated Net Worth of the Company immediately prior to such transaction;
(vi) the Successor Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the holders will not recognize income, gain, or loss
for United States Federal income tax purposes as a result of such transaction,
and will be subject to United States Federal income tax on the same amounts and
at the same times as would be the case as if the transaction had not occurred
and there will be no additional Indonesian Withholding Taxes and no Withholding
Taxes of any other jurisdiction imposed on any payments made pursuant to the
Notes or the Guarantee; and (vii) each of the Company and the Issuer shall have
delivered to the Trustee an Officer's Certificate and an Opinion of Counsel
stating that such consolidation, merger
41
or transfer and such supplemental indenture comply with this Indenture, and this
Indenture (including the Guarantee), the Collateral Agency Agreement, the
Security Documents, and the Notes remain and will be in full force and effect
against all applicable parties and the Lien of the Security Documents (which
shall be a first priority perfected Lien unless otherwise contemplated by the
Security Documents) with respect to the Collateral continues in full force and
effect.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power, of the Company under this Indenture, but the
predecessor Company in the case of a lease shall not be released from the
obligation to pay the principal of and interest on the Securities.
(b) The Issuer shall not consolidate or merge with or into any other
Person, or convey, transfer or lease all or substantially all its assets to any
other Person and all of its outstanding Capital Stock shall at all times be
owned by the Company free and clear of all Liens; provided the limitation in
this sentence shall not apply from and after the time the Company assumes the
Issuer's obligations pursuant to Section 5.02.
SECTION 5.02 ASSUMPTION BY COMPANY OF ISSUER'S OBLIGATIONS
(a) The Company may, at its option, assume the obligations of
the Issuer as obligor under the Notes and this Indenture, PROVIDED that:
(i) the Company expressly assumes such obligations by an
indenture supplemental hereto, in the form satisfactory to the Trustee,
executed and delivered to the Trustee;
(ii) the Company expressly agrees to pay in such
supplemental indenture the Additional Amounts pursuant to Section 4.01(b)
substituting, where applicable, "the Republic of Indonesia" for each
reference to "The Netherlands or the Republic of Indonesia";
(iii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing; and
(iv) the Company shall have delivered to the Trustee an
Officer's Certificate stating that such assumption and such supplemental
indenture comply with this Section 5.02 and that all conditions precedent
herein provided for relating to such transactions have been complied with
and an Opinion of Counsel or tax consultant of recognized standing to the
effect that Noteholders will not recognize income, gain or loss for United
States Federal income tax purposes as a result of such assumption and will
be subject to United States Federal income tax on the same amounts and in
the same manner and at the same times as would have been the case if such
assumption had not occurred. The Trustee shall accept such Officer's
Certificate Opinion of Counsel (and shall be held harmless with respect
thereto) as conclusive evidence of the satisfaction of the conditions
precedent described above, in which event it shall be conclusive and
binding on the Holders.
(b) In the event of such an assumption, in lieu of the Issuer's
redemption option set forth under Section 5(b) of the Notes, the Company shall
have the option to redeem the Notes outstanding as a whole but not in part, at
any time, upon giving not less than 30 nor more than 60 days' notice to the
Holders (which shall be irrevocable), at a redemption price equal to the
principal amount thereof, together with accrued interest to the date fixed by
the Company for redemption, and all Additional Amounts then due and which will
become due as a result of the redemption or otherwise, if the Company determines
and certifies to the Trustee in an Officer's Certificate immediately prior to
giving such notice that as a result of any change in, or amendment to, the laws
or treaties (or any regulations or rules promulgated thereunder) of Indonesia
(or any political subdivision or taxing authority of Indonesia) affecting
taxation, or any change in official position regarding the application or
interpretation of such laws, treaties, regulations or rulings (including a
holding judgment, or order by a court of competent jurisdiction) which change,
amendment, application or interpretation is proposed and becomes effective on or
after the date the Company assumes the obligations of the Issuer pursuant to
this Section 5.02, with respect to any payment due or to become due under the
Notes or this Indenture, the Company is, or on the next interest payment date
would be, required to deduct or withhold any taxes, duties, assessments or other
Governmental charges whatsoever imposed of
42
Indonesia (or any political subdivision or taxing authority thereof or therein)
at a rate in excess of the greater of 20% and the rate in effect on the date of
the assumption (calculated without giving effect to any reduction of the rate of
taxes, duties, assessments or other Governmental charges available under any tax
treaty which Indonesia is a party) and such taxes in excess of greater of 20%
and the rate in effect on the date of the assumption cannot be avoided by the
use of reasonable means available to the Company. No such notice of redemption
shall be given earlier than 90 days prior to the earliest date on which the
Company would be obligated to make such payment or withholding if a payment with
respect to any Note were then due. The provisions of Article 3 shall be
applicable to any redemption hereunder and are incorporated mutatis mutandis
herein. Any Notes that are redeemed will be canceled.
(c) Upon any assumption pursuant to Section 5.02 (a), the Company
shall succeed to, and be substituted for, and may exercise every right and power
of the Issuer under this Indenture and the Issuer shall be released from its
liability as obligor under the Notes and this Indenture.
(d) In the event of such assumption, the Holders of the Notes shall
be notified by the Issuer and the Company in accordance with article 156,
paragraph 1 of Book 6 of The Netherlands Civil Code.
SECTION 5.03 ISSUER REINCORPORATION AND OTHER ACTIONS. In the event
the Issuer reincorporates or changes its principal place of business, the
Company shall pay all amounts of principal and interest with respect to the
Notes without deduction or withholding for any and all taxes, duties,
assessments other Governmental charges whatsoever imposed by Indonesia (or any
political subdivision or taxing authority of Indonesia), or by any other taxing
authority of any other jurisdiction that are attributable to (i) a change in the
Issuer's principal place of business or (ii) a reincorporation of the Issuer,
or, if such deduction or withholding is required, the Company will pay such
Additional Amounts in respect of payments of principal of, and interest on, the
Notes as may be necessary in order that the net amounts received by holder of
the Notes, after such withholding or deduction, shall equal the respective
amounts of principal, interest, redemption price, purchase price, and premium
that would have been receivable in respect of the Notes in the absence of such
withholding or deduction, calculated in the same manner as, and subject to
exceptions of the type described in Section 4.01(b)(i). Prior to any such Issuer
reincorporation or change in principal place of business, pursuant to the
foregoing, the Company shall deliver to the Trustee an opinion of an independent
tax counsel or tax consultant of recognized standing to the effect that (i)
foregoing conditions will be satisfied and (ii) the holder will not recognize
income, gain or loss for United States Federal income tax purposes as a result
of such Issuer reincorporation or change in principal place of business, and
will be subject to United States Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case in such Issuer
reincorporation or change in principal place of business had not occurred. The
Trustee shall accept such opinion as conclusive evidence of the satisfaction of
the conditions precedent described above.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT. An "Event of Default" occurs with
respect to the Securities if:
(a) the Company or the Issuer fails to make any payment of interest
or any Additional Amounts on any Note when the same becomes due and payable, and
such default continues for a period of 30 days;
(b) the Company or the Issuer fails to (i) make the payment of the
principal on any Note when the same becomes due and payable at each Scheduled
Payment Date, upon optional redemption, upon required repurchase, upon
declaration or otherwise;
(c) the Company or the Issuer fails to comply with the provisions of
Section 5.01;
(d) (A) the Company or the Issuer fails to comply with the
provisions of Section 4.02, 4.03, 4.04, 4.05, 4.06, 4.07 (other than a failure
to purchase Notes), 4.08 (other than a failure to purchase Notes), 4.09, 4.10
(other than a failure to purchase Notes), 4.11, 4.12, 4.13, 4.14, 4.15, 4.16,
4.17, 4.18 or 4.19 or (B) the
43
Company or the Issuer fails to comply with the provisions of Section 12.04,
12.05 or 12.07, and, in the case of clause (A) or (B), such failure continues
for 30 days after notice is given as provided below or the Issuer or the Company
fails to give the notice as provided below;
(e) any Change of Control of the Company after December 15, 2005;
(f) the Issuer or the Company fails to comply with any of its
agreements in any Note or the Guarantee or this Indenture (other than those
referred to in (a), (b), (c) or (d) above) and in each case such failure
continues for 60 days after notice is given as provided below or the Issuer or
the Company fails to give notice as provided below;
(g) Indebtedness of the Company, the Issuer or any Significant
Subsidiary, other than the Exchangeable Notes (except the failure of the Issuer
or the Company to redeem the Exchangeable Notes at their Stated Maturity or to
exchange the Exchangeable Notes within 180 days after their Stated Maturity), is
not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total amount of
such Indebtedness unpaid or accelerated exceeds US$5.0 million or its foreign
currency equivalent at the time;
(h) (i) the Company, the Issuer or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law (A) commences a
voluntary case, including seeking a moratorium on the payment of indebtedness;
(B) consents to the entry of an order relief against it in an involuntary
bankruptcy case; (C) consents to the appointment of a Custodian for it or for
any substantial part of its property; or (D) makes a general assignment for the
benefit of its creditors; or takes any comparable action under any foreign laws
relating to insolvency; or (ii) a court competent jurisdiction enters an order
or decree under any Bankruptcy Law that (A) is for relief against the Company,
the Issuer or any Significant Subsidiary in involuntary case; (B) appoints a
Custodian of the Company, the Issuer or any Significant Subsidiary or for any
substantial part of the property of any of them; (C) orders the winding up or
liquidation of the Company, the Issuer or any Significant Subsidiary; or (D) any
similar relief is granted under any foreign laws and, in the case of each of
clauses (ii)(A), (B) (C) or (D), the order or decree remains unstayed and effect
for 60 days;
(i) any judgment or decree for the payment of money in excess of
US$5.0 million, or its foreign currency equivalent at the time, is rendered
against the Company, the Issuer or a Significant Subsidiary, remains outstanding
for a period of 60 days following the entry of such judgment or decree and such
judgment or decree is not discharged, waived or stayed within 10 days after
notice is given as provided below or the Issuer of the Company fails to give
notice as provided below;
(j) the Guarantee ceases to be in full force or effect (other than
in accordance with the terms of such Guarantee), or the Company denies or
disaffirms its obligations under its Guarantee; or
(k) (A) the security interests under the Pledge Agreement, Security
Documents or the Collateral Agency Agreement shall, at any time, cease to be in
full force and effect for any reason other than the satisfaction in full of all
obligations under this Indenture and discharge of this Indenture or any security
interest created thereunder shall be declared invalid or unenforceable, or the
Company or the Issuer shall assert, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or unenforceable or (B)
the Collateral Agent ceases to have first priority perfected security interests
in the Moveable Assets Collateral, the Proceeds Collateral, the Real Property
Collateral (from and after the registry of the Security Deed), the Assigned
Rights or the Debt Service Reserve Account;
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar federal or state or Indonesia law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
44
A Default under clause (c), (d), (f), or (h) will not constitute an
Event of Default until the Trustee or the Holders at least 25% in principal
amount of the Notes notify the Company of the Default and the Issuer or the
Company, as the case may be, does not cure such Default within the time
specified after receipt of such notice. Such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of Default."
The Issuer and the Company shall deliver to the Trustee, within 30
days after the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (c), (d), (f), or (h), its status
and what action the Issuer and the Company are taking or propose to take with
respect thereto.
SECTION 6.02 ACCELERATION. If an Event of Default occurs and is
continuing, the Trustee, by notice to the Issuer, the Company and the Collateral
Agent, or the Holders of at least 50% in principal amount of the Notes by notice
to the Issuer, the Company and the Trustee (who shall promptly notify the
Collateral Agent), may declare the principal of, accrued but unpaid interest on
and any Additional Amounts then due or which will be due on all the Notes to be
due and payable. Upon such a declaration, such principal, interest and
Additional Amounts shall be due and payable. In an Event of Default specified in
Section 6.01(h) occurs and is continuing, the principal of, interest and
Additional Amounts on, all the Notes shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holders. Upon any acceleration pursuant to this paragraph (but not
otherwise) the Trustee may deliver a Notice of Actionable Default with respect
to the Notes to the Collateral Agent in accordance with the Collateral Agency
Agreement. The Holders of a majority in principal amount of the Notes by notice
to the Trustee may rescind an acceleration and its consequences, including the
delivery of the Notice of Actionable Default, if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived, except any Event of Default with respect to nonpayment of
principal or interest that has become due solely because of acceleration. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.03 OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy (including without
limitation, the giving of any notice and the taking of any action contemplated
be the Collateral Agency Agreement) to collect the payment of principal of or
interest on the Notes or to enforce the performance of any provision of the
Notes for this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative. The
exercise of any remedy by the Trustee and the Holders expressly limited by the
terms of the Collateral Agency Agreement.
SECTION 6.04 WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the Securities may by notice to the Trustee waive an
existing Default and its consequences with respect to the Securities, except (i)
a Default in the payment of the principal of or interest on any Note or (ii) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Noteholder affected. When a Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other Default
or impair any consequent right.
SECTION 6.05 CONTROL BY HOLDERS. The Holders of at least a majority
in principal amount of the Notes then outstanding may direct the time, method a
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee with respect to the Notes
including directing the Trustee to take any action or exercise any power
permitted to the Trustee under the Collateral Agency Agreement. However, the
Trustee may refuse to follow any direction that conflicts with applicable law,
this Indenture, the Security Documents or the Collateral Agency Agreement or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Holders of the Securities or would involve the Trustee in
personal liability; PROVIDED, HOWEVER, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action under this Section, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses
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caused by taking or not taking such action, including any necessary indemnity
which must be provided to the Collateral Agent under the Collateral Agency
Agreement.
SECTION 6.06 LIMITATION ON SUITS. Except to enforce the right to
receive payment of principal, premium or Additional Amounts, if any, or interest
when due, a Noteholder may not pursue any remedy with respect to this Indenture,
the Collateral Agency Agreement, the Security Documents, or the Notes unless:
(1) such Holder gives to the Trustee written notice stating
that an Event of Default with respect the Notes is continuing;
(2) the Holders of at least 50% in principal amount of the
Notes outstanding make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee security or
indemnity satisfactory to it against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the notice, and the offer of security or indemnity;
and
(5) the Holders of a majority in principal amount of the Notes
do not give the Trustee a written direction inconsistent with the request
during such 60-day period.
A Noteholder may not use this Indenture to prejudice the rights
of another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Notes held by such Holder, on or
after the respective due dates expressed or provided for in the Notes, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE. If a Event of Default in
payment of interest or principal specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Issuer or the Company for the whole amount of
principal and interest remaining unpaid (together with interest on overdue
principal and premium if any, and on such unpaid interest to the extent lawful)
and the amounts provided for in Section 7.07.
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Noteholders allowed
in any judicial proceedings relative to the Company or the Issuer or their
respective creditors or property and unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, an any Custodian in any
such judicial proceeding is hereby authorized by each Holder to make payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due it
for the compensation, expenses, disbursements and advances of the Trustee, its
agents and its counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10 PRIORITIES. If the Trustee collects any money or
property pursuant to this Article 6, or receives a distribution from the
Collateral Agent pursuant to the Collateral Agency Agreement and an Event of
Default has occurred and is continuing, it shall pay out money or property in
the following order, subject to the Collateral Agency Agreement:
FIRST: to the Trustee for amounts due under Section 7.07;
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SECOND: to Noteholders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date of for any payment
to Noteholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Noteholder and the Trustee, and
publish pursuant to Section 14.02, a notice that states the record date, the
payment date and amount to be paid.
SECTION 6.11 UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Notes then outstanding.
SECTION 6.12 WAIVER OF STAY OR EXTENSION LAWS. Each of the Company
and the Issuer (to the extent they may lawfully do so) shall not at any time
insist upon, or plead or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which, as applicable may affect the covenants or the
performance of this Indenture, the Guarantee, the Collateral Agency Agreement or
any other Security Document; and each of the Company and the Issuer (to the
extent they may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and shall not hinder, delay or impede the execution of any
power herein or therein granted to the Trustee or the Collateral Agent, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01 DUTIES OF TRUSTEE
(a) If an Event of Default has occurred and is continuing, the Trust
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default: (1) the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and (2) in the absence of
bad faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that: (1) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01; (2) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and (3) the
Trustee shall not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section
6.05.
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(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture, the Collateral Agency Agreement
or any Security Document shall require the Trustee to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of rights or powers, if it shall have
reasonable grounds to believe that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.01 and to the provisions of the TIA.
SECTION 7.02 RIGHTS OF TRUSTEE. Subject to Section 7.01:
(a) The Trustee may conclusively rely on any document believed by it
to be genuine and to have been signed or presented the proper person. The
Trustee need not investigate any fact or matter stated in the document:
(b) Before the Trustee acts or refrains from acting, it may require
an Officer's Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate or Opinion of Counsel.
(c) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any agent or attorney appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; PROVIDED, HOWEVER, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel of it selection, and the
advice or opinion of such counsel with respect to legal matters relating to this
Indenture, the Collateral Agency Agreement, the Security Documents, the Notes
and the Guarantee shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other paper or document unless requested in writing to do so
by the Holders of not less than a majority in principal amount of the Notes at
the time outstanding, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney.
(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction.
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(h) The Trustee shall not be liable for any action taken, suffered,
or omitted to be taken, by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture.
(i) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture.
(j) The Trustee shall have no duty to determine whether to file,
perfect or record or maintain filed, perfected or recorded any document or
instrument hereunder.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Issuer, the Company or their Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04 TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation to the validity or adequacy of this
Indenture, the Collateral, the Guarantee, or the Notes, it shall not be
accountable for the Issuer's or the Company's use of the proceeds from the
Notes, and it shall not be responsible for any statement of the Issuer or the
Company in this Indenture or in any document issue in connection with the sale
or issuance of the Notes or in the Notes other than the Trustee's certificate of
authentication. The Trustee shall not be responsible for monitoring the
compliance of the Collateral Agent with its duties hereunder or under the
Collateral Agency Agreement, and shall not be liable for negligence or
non-feasance by the Collateral Agent.
SECTION 7.05 NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is actually known to a Trust Officer of the Trustee, the
Trustee shall mail to each Holder and publish in accordance with Section 14.02
notice of the Default within 90 days after it occurs. Except in the case of a
Default in the payment of principal of, or interest or Additional Amounts on,
any Note (including payments pursuant to the mandatory redemption provisions of
such Note, if any), the Trustee may withhold notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is not opposed to the interests of the Holders.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each
December 15, beginning with December 15, 2002, the Trustee shall mail to each
Holder a brief report dated as of December 15 that complies with TIA Section
313(a) if and to the extent required be such Section. The Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange (if any) on which the Notes are
listed. The Issuer agrees to notify promptly the Trustee whenever the Notes
become listed on any stock exchange and of any delisting thereof.
SECTION 7.07 COMPENSATION AND INDEMNITY. The Issuer and the Company
jointly and severally shall pay to the Trustee (and any co-trustee appointed
pursuant to and in accordance with Section 7.12) from time to time compensation
for its services as shall be agreed to from time to time between the Company and
the Trustee (or such co-trustee, as the case may be) in connection with the
administration and execution of this Indenture and any amendments thereto. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer and the Company, jointly and severally,
shall reimburse the Trustee upon request (and shall be jointly and severally
liable therefor) for all out-of-pocket expenses properly incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the compensation and expenses, disbursements and
advances of the Trustee's agents, counsel, accountants and experts. The Issuer
and the Company shall indemnify the Trustee (which for purposes of this Section
7.07 shall include its directors, officers, employees and agents) and shall be
jointly and severally liable therefor against any and all loss, liability or
expense (including attorneys' fees and expenses) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder or under the Collateral
49
Agency Agreement. The Trustee shall notify the Issuer and the Company promptly
of any claim for which it may seek indemnity. Failure by the Trustee so to
notify the Issuer and the Company shall not relieve the Issuer or the Company of
their obligations hereunder. The Issuer and the Company shall defend the claim
and the Trustee may have separate counsel and the Issuer and the Company shall
pay the fees and expenses of such counsel. The Issuer and the Company need not
reimburse the Trustee for any expense, or indemnify the Trustee against, any
loss, liability or expense incurred by the Trustee through the Trustee's own
willful misconduct, negligence or bad faith.
To secure the Issuer's and the Company's payment obligations in this
Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee other than money or property held in
trust to pay principal of and interest on particular Notes.
The Company's and the Issuer's payment obligations pursuant to this
Section 7.07 shall survive the discharge of this Indenture and the resignation
or removal of the Trustee. Without limiting any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(h) with respect to the Company
or the Issuer, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08 REPLACEMENT OF TRUSTEE.
(a) The Trustee may at any time resign with respect to the Notes by
giving 30 days written notice of such resignation to the Issuer and the Company
and by mailing notice thereof to the Holders at their addresses as they shall
appear on the registry books of the Issuer. Upon receiving such notice of
resignation, the Issuer shall promptly appoint a successor trustee or trustees
with respect to Notes by written instrument, in duplicate, executed by order of
the director of the Issuer, one copy of which instrument shall be delivered to
the resigning Trustee and one copy to each successor trustee (provided that
there shall be only one Trustee with respect to the Notes except as provided in
Section 7.12). If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the mailing of such notice of
resignation to the Noteholders, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Noteholder who has been a bona fide holder of a Note or Notes for at least six
months may, subject to the provisions of Section 6.11, on behalf of himself and
all others similarly situated, petition any such court for the appointment of
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall have occurred:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting;
then, in any such case, the Issuer may remove the Trustee and appoint a
successor trustee or trustees by written instrument, in duplicate, executed by
order of the Issuer's board of directors, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to each successor trustee, or,
subject to the provisions of Section 6.11, any Noteholder who has been a bona
fide holder of a Note or Notes for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor trustee or
trustees. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee or
trustees.
(c) The Holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and nominate a
successor trustee which shall be deemed appointed as successor trustee.
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(d) Any resignation or removal of the Trustee and any appointment of
a successor trustee pursuant to any of the provisions of this Section 7.08 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.08(e).
(e) In the case of the appointment hereunder of a successor trustee,
any successor trustee so appointed as provided in this Section 7.08 shall
execute, acknowledge deliver to the Issuer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligation of its predecessor hereunder, with
like effect as if originally named as trustee herein; nevertheless, on the
written request of the Issuer or of the successor trustees the trustee ceasing
to act shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act. Upon request of any such successor trustee, the Issuer shall
execute any and all instruments in writing in order to more fully and certainly
vest in and confirm to such successor trustee all such rights, powers and trusts
referred to in the two preceding sentences. Any trustee ceasing to act shall,
nevertheless retain a lien upon all property or funds held or collected by such
trustee to secure any amounts then due it pursuant to the provisions of Section
7.07.
No successor trustee shall accept appointment as provided in this
Section 7.08 unless at the time of such acceptance such successor trustee shall
be qualified and eligible under the provisions of Section 7.10.
Upon acceptance of appointment by a successor trustee as provided in
this Section 7.08, the Issuer shall mail notice of the succession of such
trustee hereunder to all Holders as the names and addresses of such Holders
appear on the registry books of the Issuer. If the Issuer fails to mail such
notice in the prescribed manner within ten days after the acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Issuer.
(f) Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Issuer's and Company's obligations under Section 7.07 shall
continue the benefit of the retiring Trustee.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such case
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50.0 million as set forth in its most
recent published annual report of condition. Subject to the provisions of the
penultimate paragraph thereof, the Trust shall comply with TIA Section 310(b);
PROVIDED, HOWEVER, that there shall be excluded from the operation of TIA
Section 310(b) (1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth TIA Section 310(b)
(1) are met.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311 (a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
SECTION 7.12 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE
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(a) Notwithstanding any other provision of this Indenture, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Collateral may at the time be located, the Issuer and the
Trustee acting jointly shall have the power to execute and deliver and shall
execute and deliver all instruments necessary to appoint one or more persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, of all or any part of the Collateral, or separate trustee or separate
trustees of any part of the Collateral, to vest in such person or persons, in
such capacity and for the benefit of the Holders, such title to the Collateral,
or any part thereof, and, subject to the other provisions of this Section 7.12,
such powers, duties, obligations, rights and trusts as the Issuer and the
Trustee may consider necessary or desirable hereunder or under the Collateral
Agency Agreement or the Security Documents. If the Issuer shall not have joined
in such appointment within 15 days after the receipt by it of a request to do
so, or in case a Default or Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility under Section 7.10 and no notice to Holders of the appointment of
any co-trustee or separate trustee shall be required under Section 7.08.
(b) Every separate trustee and co-trustee shall to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee hereunder or under the Collateral Agency Agreement
or any Security Document shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder,
under the Collateral Agency Agreement or any Security Document) the Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the holding of
title to the Collateral or any portion thereof in any such jurisdiction)
shall be exercised and performer singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Issuer and the Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and, to the extent
applicable, the Collateral Agency Agreement and the Security Documents. Each
separate trustee and co-trustee, upon its acceptance of the trusts conferred,
shall be vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be provided
therein, subject to all the provisions of this Indenture and, to the extent
applicable, the Collateral Agency Agreement and the Security Documents,
specifically including every provision hereof thereof relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Issuer and the Company.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee (subject to the Trustee's consent), its agent or attorney-in-fact, with
full power and authority, to the extent not prohibited by law, to do any lawful
act under or in respect of this Indenture and, to the extent applicable, the
Collateral Agency Agreement and the Security Documents, on its behalf and in its
name. If any separate trustee or co-trustee shall become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and exercised by the Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee; PROVIDED, HOWEVER,
that the Trustee shall not be obligated to act outside the United States.
SECTION 7.13 NO DUTY TO OPERATE. Nothing in this Indenture or any
agreement, document, certificate or other instrument shall at any time be deemed
to constitute the Trustee as the owner or the operator of, or as being
responsible for, or as requiring the Trustee to build, or operate, manage or
control the Plant.
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SECTION 7.14 OTHER MATTERS RELATED TO THE COLLATERAL AGENCY
AGREEMENT.
(a) The Trustee shall have no obligation (i) to instruct or direct
the Collateral Agent take any action under or in connection with the Collateral
Agency Agreement or any Security Document or (ii) to give any consent or
exercise any discretion under or in connection with the Collateral Agency
Agreement or any Security Document unless, in either case directed to do in
accordance with Section 6.05 or such instruction, direction or consent is
authorized or required to be given in accordance with the express terms of this
Indenture.
(b) The Trustee shall have no obligation to act any Actionable
Default under the Collateral Agency Agreement.
(c) The Trustee shall have no obligation to provide to the
Collateral Agent any indemnity or security under Section 2.03(e) of the
Collateral Agency Agreement unless such indemnity or security shall have been
furnished to it by the Holders of the Securities for the purpose of delivery
thereof by the Trustee to the Collateral Agent pursuant to said Section.
(d) The Trustee shall not be liable for the negligence or willful
misconduct of the Collateral Agent.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE
(a) When (i) the Issuer or the Company delivers to the Trustee all
outstanding Notes (other than Notes replaced pursuant to Section 2.07) for
cancellation or (ii) all outstanding Notes have become due and payable, whether
at maturity or as a result of the mailing of a notice of redemption pursuant to
Article 3 and the Issuer or the Company irrevocably deposits with the Trustee
funds sufficient to pay at maturity or permissible redemption all outstanding
Notes, including interest thereon (other than Notes replaced pursuant Section
2.07), and if in either case the Issuer or the Company pays all other sums
payable hereunder with respect to the Notes, then this Indenture shall, subject
to Sections 8.01(c) and 8.06, cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture upon satisfaction of
the conditions set for in clause (i) or (ii) above on demand of the Company
accompanied by an Officer's Certificate and an Opinion of Counsel.
(b) Subject to Sections 8.01(c), 8.02 and 8.06, the Issuer or the
Company at any time may terminate (i) all of the Issuer's and the Company's
obligations under the Notes and under this Indenture with respect thereto
("LEGAL DEFEASANCE OPTION") or (ii) the Issuer's and the Company's obligations
under Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13,
4.14, 4.15, 4.16, 4.17, 4.18 and 4.19 and the operation of Sections 6.01(d) and
6.01(f) (to the extent the Event of Default under Sections 6.01(d) or 6.01(f)
arises from a Default under a Section otherwise subject to covenant defeasance)
and the operation of Sections 6.01(g), 6.01(h) with respect to Significant
Subsidiaries, 6.01(i), 6.01(j), 6.01(k), and Section 5.01 (iii) and (iv)
("COVENANT DEFEASANCE OPTION"). The Issuer or the Company may exercise the legal
defeasance option notwithstanding the prior exercise of the covenant defeasance
option.
If the Issuer or the Company exercises the legal defeasance option,
payment of Notes may not be accelerated because of an Event of Default. If the
Issuer or the Company exercises the covenant defeasance option, payment of such
Notes may not be accelerated because of an Event of Default specified in Section
6.01(d), Section 6.01(f) (to the extent the Event of Default under Sections
6.01(d) or (f) arises from a Default under a Section otherwise subject to
covenant defeasance), 6.01(g), 6.01(h) with respect only to Significant
Subsidiaries or Sections 6.01(i), 6.01(j) or 6.,01(k), or because of a failure
to comply with clauses (iii) or (iv) of Section 5.01, except, in each case, to
the extent covenants or agreements referenced in such Sections remain
applicable.
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Upon satisfaction of the conditions set forth herein with respect to
the Notes, and upon request of the Issuer or the Company, the Trustee shall
acknowledge in writing the discharge of those obligations with respect to the
Notes that the Issuer or the Company terminated.
(c) Notwithstanding; clauses (a) and (b) above, the Issuer's and the
Company's obligations with respect to the Notes in Sections 2.03, 2.04, 2.05,
2.06, 2.07, 4.20(c), 7.07, 7.08, 8.03, 8.04. 8.05 and 8.06 shall survive until
such Notes have been paid in full. Thereafter the Issuer's and the Company's
obligations in Sections 7.07, 8.04 and 8.05 shall survive.
(d) Subject to Section 8.01(c), if the Issuer or the Company
exercises its legal defeasance option or its covenant defeasance option with
respect to the Securities, the Company will be released from all its obligations
with respect to the Guarantee and the Security Documents.
SECTION 8.02 CONDITIONS TO DEFEASANCE
The Issuer or the Company may exercise the legal defeasance option or
the covenant defeasance option only if:
(1) the party exercising the defeasance option irrevocably
deposits in trust with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Notes to maturity or
redemption, as the case maybe:
(2) the party exercising the defeasance option delivers to the
Trustee a certificate from an internationally recognized firm of
independent accountants expressing their opinion that the payments of
principal and interest when due and without reinvestment on the deposited
U.S. Government Obligations plus any deposited money without investment
will provide cash at such times and in such amounts as will be sufficient
to pay principal and interest when due all the Notes to maturity or
redemption, as the case may be;
(3) 91 days pass after the deposit is made and during the
91-day period no Default specified in Section 6.01(h) with respect to the
Issuer or the Company occurs which is, continuing at the end of the period;
(4) no Default or Event of Default has occurred and is
continuing on the date of such deposit and after giving effect thereto;
(5) the deposit does not result in a breach or violation of,
or constitute a default under, any material agreement or instrument (other
than this Indenture) binding on the Issuer or the Company;
(6) the party exercising the defeasance option delivers to the
Trustee an Opinion of Counsel to the effect that the trust resulting from
the deposit does not constitute, or is qualified as, a regulated investment
company under the Investment Company Xxx 0000;
(7) in the case of the legal defeasance option, the party
exercising the defeasance option shall have delivered to the Trustee an
Opinion or Opinions of Counsel stating that (i) the Issuer has received
from, or there has been published by, the United States Internal Revenue
Service a ruling, or (ii) since the Issue Date, there has been a change in
applicable United States Federal income tax law, in either case, to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Noteholders will not recognize income, gain or loss for United States
Federal income tax purposes as a result of such defeasance and will be
subject to United States Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
defeasance had not occurred;
54
(8) in the case of the covenant defeasance option the party
exercising the defeasance option shall have delivered to the Trustee an
Opinion or Opinions of Counsel to the effect that the Noteholders will not
recognize income, gain or loss for United States Federal income tax
purposes as a result of such covenant defeasance and will be subject to
United States Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant
defeasance had not occurred;
(9) the party exercising the defeasance option shall have
delivered to the Trustee an Opinion of Counsel to the effect that under
Indonesian and The Netherlands law Holders will not recognize gain for
Indonesian or The Netherlands tax purposes, as the case may be, and
payments from the defeasance trust in respect of such Note to any such
Holder will not be subject to withholding payments under either Indonesian
or The Netherlands law; and
(10) the party exercising the defeasance option shall have
delivered to the Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that all conditions precedent to the defeasance and
discharge of the Notes as contemplated by this Article 8 have been complied
with.
If the U.S. Government Obligations deposited under Section 8.02(1)
provide for payment of the Notes on a redemption date, then no legal or covenant
defeasance shall be effective until prior to or simultaneously with such
deposit, notice of such redemption shall have been given to the Holders under
Article 3 or the Trustee shall have received from the Issuer irrevocable
instructions to give such notice under arrangements satisfactory to the Trustee.
SECTION 8.03 APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Notes.
SECTION 8.04 REPAYMENT TO ISSUER. Upon the satisfaction and discharge
of this Indenture with respect to the Notes, the Trustee and the Paying Agent
shall promptly turn over to the Issuer upon request any excess money or Notes in
respect of the Notes held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Issuer upon request any money held by them for the
payment of principal or interest on any Notes that remains unclaimed for two
years, and, thereafter, the Trustee and the Paying Agent shall have no liability
with respect to such money and Noteholders entitled to the money must look to
the Issuer for payment as general creditors.
SECTION 8.05 INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Issuer and the
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION 8.06 REINSTATEMENT
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in respect of any Notes in accordance with this Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Issuer's obligations under such Notes and this Indenture
and the Company's obligations under the Guarantee and this Indenture with
respect to such Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this Article 8 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with this Article 8; PROVIDED, HOWEVER, that, if the Issuer has made
any payment of interest on or principal of any Notes because of the
reinstatement of its obligations, the Issuer shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENTS
SECTION 9.01 WITHOUT CONSENT OF HOLDERS
(a) Subject to the provisions of the Collateral Agency Agreement
limiting the ability of the Trustee to amend the Notes and this Indenture, the
Issuer, the Company and the Trustee may amend this Indenture or the Notes
without notice to or consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with and as allowed by the provisions related to
Article 5;
(3) to provide for uncertificated Notes in addition to or in
place of certificated Notes; provided, that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code or in
a manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code;
(4) to further secure the Notes and to add additional
guarantees with respect thereto;
(5) to establish or maintain the Liens of the Security
Documents (including the perfection and priority contemplated by the
Security Documents) with respect to the Collateral or to correct or amplify
the description of the Collateral subject to the Liens of the Security
Documents or to subject additional property to the Liens of the Security
Documents;
(6) to add to the covenants of the Issuer or the Company for
the benefit of the Holders or to surrender any right or power conferred
upon the Issuer the Company;
(7) to comply with any requirements of the SEC in connection
with qualifying this Indenture under the TIA;
(8) to make any change that does not adversely affect the
rights of any Holder.
(b) The Trustee may enter into amendments of the Collateral Agency
Agreement and enter into amendments or consent to amendments of the Pledge
Agreement and the Security Documents without notice to or the consent of any
Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with and as allowed by the provisions related to
Article 5;
(3) to further secure the Notes or to add guarantees with
respect thereto;
(4) to add to the covenants of the Company or the Issuer for
the benefit of the holders of the Indebtedness, the representatives of
which are parties to the Collateral Agency Agreement;
(5) to establish or maintain the Liens of the Pledge Agreement
and the Security Documents (including the perfection and priority
contemplated by the Security Documents) with respect to the Collateral or
to correct or amplify the description of the Collateral subject to the
Liens of the Pledge Agreement, the Security Documents or to subject
additional property to the Liens of the Pledge Agreement or the Security
Documents;
56
(6) subject to the provisions of Section 4.12, to permit
holders of Additional Indebtedness and Secondary Indebtedness to become
parties to the Collateral Agency Agreement and receive the benefit of the
Security Documents and to otherwise effect transactions permitted by
Sections 4.12. 12.04, 12.05, 12.07, 12.08, 12.09 and 12.10; and
(7) to make any change that does not adversely affect the
rights of any Noteholder as evidenced by an Opinion of Counsel delivered to
the Trustee;
PROVIDED, that no such action shall be permitted if it causes any Lien to cease
to be a first priority perfected Lien (or such other perfection and priority
contemplated by the Security Documents) or diminishes the security afforded the
Liens of the Security Documents; PROVIDED, HOWEVER, that if the Trustee so
requires, the Trustee shall have received an Opinion of Counsel with respect to
such matters.
Without limiting the generality of the foregoing, the Trustee, upon
request of the Company and subject to the following paragraph, may, and shall at
the direction of the majority of Holders, grant any consent not required to be
granted hereunder (which consents which are required to be granted include those
set forth in Article 12 and 13 hereof) with respect to the Collateral Agency
Agreement and the Security Documents that does not impair the rights of the
Holders or the security afforded the Holders through the Collateral Agency
Agreement and the Security Documents. Prior to requesting any such consent, the
Company shall provide the Trustee with an Officer's Certificate that no Default
or Event of Default has or will occur as a result of such extension, renewal or
replacement or other action taken or to be taken for which such consent is
requested.
(c) After an amendment under this Section 9.01 becomes effective
(except for any amendment prior to the issuance of the Notes) the Issuer shall
mail to Holders, and publish in accordance with Section 14.02, a notice briefly
describing such amendment. The failure to give such notice to all Holders or to
publish such notice, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.01.
(d) This Indenture may be amended without notice to any Noteholder,
by agreement between the Company, the Issuer and the Trustee, at any time prior
to the Issue Date.
SECTION 9.02 WITH CONSENT OF HOLDERS
(a) The Issuer, the Company and the Trustee may amend this Indenture
and enter into amendments of the Collateral Agency Agreement and enter into
amendments or consent to amendments of the Security Documents or the Notes
without notice to any Holder but with the written consent of the Holders of at
least a majority in principal amount of the outstanding Notes. However, without
the consent of each Holder affected, an amendment may not:
(1) reduce the rate of or extend the time for payment of
interest on any Note;
(2) reduce the principal of or extend the Stated Maturity of
any Note;
(3) reduce the premium payable upon the redemption of any Note
or change the time at which any Note may be redeemed or repurchased in
accordance with Article 3, or Sections 4.07, 4.08 or 4.10 of this Indenture
or Section 5 of the Notes;
(4) make any Note payable in money other than that stated in
the Note;
(5) impair the right of any Holder to receive payment of
principal of, and interest and Additional Amounts on, such Holder's Notes
on or after the due dates thereon or to institute suit for the enforcement
of any payment on or with respect to such Holder's Notes;
57
(6) make any change in Section 6.04, 9.01 or 9.02 (a) or the
provisions relating to amendments, modifications or waivers of the Security
Documents or the Collateral Agency Agreement;
(7) make any change in Section 6.07;
(8) modify any provisions of Articles 6 or 9, except to
increase the percentage of outstanding Notes required for such actions or
to provide that other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Note; or
(9) amend any provisions related to amendments, modifications
or waivers of the Pledge Agreement, the Security Documents or the
Collateral Agency Agreement.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
(b) After an amendment under this Section becomes effective, the
Issuer shall mail to Noteholders, and publish in accordance with Section 14.02,
a notice briefly describing such amendment. The failure to give such notice to
all Noteholders or to publish such notice, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.02.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to
this Indenture or the Note shall comply with the TIA as then in effect.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A consent
to an amendment or a waiver by a Holder with respect to this Indenture, the
Notes, the Guarantee, the Collateral Agency Agreement or the Security Documents
shall bind the Holder and every subsequent Holder of that Note or portion of the
Note that evidences the same debt as the consenting Holder's Note, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Note or portion of the Note if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Noteholder.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture, the Notes, the Guarantee, the Collateral Agency
Agreement and the Security Documents. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Noteholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05 NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment
changes the terms of a Note, the Trustee may require the Holder of such Security
to deliver it to the Trustee. The Trustee may place an appropriate notation on
the Note regarding the changed terms and return it to the Holder. Alternatively,
if the Issuer or the Trustee so determines, the Issuer in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
shall not affect the validity of such amendment.
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment to this Indenture, the Collateral Agency Agreement or the Security
Documents or grant any consent authorized pursuant to this Article 9 if the
amendment or consent does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it
or grant such consent. In signing such amendment or granting such consent the
Trustee shall be entitled to receive indemnity satisfactory to it and to
58
receive, and (subject to Section 7.01) shall be fully protected in relying upon,
an Officer's Certificate and an Opinion of Counsel (including, if the Trustee so
chooses, an Opinion of Counsel of the Company or the Issuer) stating that such
(i) amendment or consent is authorized or permitted by this Indenture and that
all conditions precedent to the execution, delivery and performance of such
amendment or consent have been satisfied; (ii) each of the Issuer and the
Company, as applicable, has all necessary corporate power and authority to
execute and deliver the amendment and that the execution, delivery and
performance of such amendment has been duly authorized by all necessary
corporate action; (iii) the execution, delivery and performance of the amendment
do not conflict with, or result in the breach of or constitute a default under
any of the terms, conditions or provisions of (a) this Indenture, (b) the
constitutive documents of the Issuer or the Company (c) any law or regulation
applicable to the Issuer or the Company (d) any material order, writ, injunction
or decree of any court or governmental instrumentality applicable to the Issuer
or Company or (e) any material agreement or instrument to which the Issuer or
the Company is subject; (iv) such amendment has been duly and validly executed
and delivered by each the Issuer and the Company (where applicable) and this
Indenture together with any such amendment of the Security Documents constitutes
a legal, valid and binding obligation of each of the Issuer and the Company, as
applicable, enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles; and (v) this Indenture together with such amendment
complies with the TIA.
SECTION 9.07 PAYMENT FOR CONSENT. Neither the Issuer, the Company,
nor any of their Affiliates shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise to any
Holder for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of this Indenture, the Notes, the Guarantee, the Collateral
Agency Agreement or the Security Documents unless such consideration is offered
to be paid to all Holders that so consent, waive or agree to amend in the time
frame set forth in solicitation documents relating to such consent, waiver or
agreement.
SECTION 9.08 TRUSTEE AUTHORIZED TO EXECUTE COLLATERAL AGENCY
AGREEMENT AND TAKE ACTIONS THEREUNDER. The Trustee is hereby authorized to
execute the Collateral Agency Agreement and the Security Documents and to take
actions necessary or desirable to comply with the terms hereof and the
Collateral Agency Agreement and to preserve and protect the Collateral.
SECTION 9.09 VOTING UNDER COLLATERAL AGENCY AGREEMENT. Unless
otherwise set forth herein, if the Trustee seeks the instruction of the Holders
of the Securities with respect to any amendment, waiver or consent necessary or
desirable under the Collateral Agency Agreement or the Security Documents, the
Trustee shall take such action as is directed by a majority in principal amount
of Securities then outstanding, subject to the conditions Set forth in Section
6.05.
ARTICLE 10
GUARANTEE OF NOTES; INDEMNITY
SECTION 10.01 GUARANTEE. The Company, as principal obligor and not
merely as surety, irrevocably and unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, that: (i) principal of, premium, if any, and interest on
the Notes (including any Additional Amounts payable in respect thereof) will be
promptly paid in full when due, subject to any applicable grace period, whether
on the relevant Stated Maturity, on an interest payment date, by acceleration,
by call for redemption or upon repurchase or purchase pursuant to Article 3 or
Sections 4.07, 4.08 or 4.10 or otherwise and interest on the overdue principal
and premium, if any, and purchase price and interest on any interest; to the
extent lawful (in each case including interest accruing on or after filing of
any petition in bankruptcy or reorganization relating to the Issuer or the
Company, whether or not a claim for post filing interest is allowed in such
proceeding), on the Notes and all other amounts payable under the Notes and
obligations of the Issuer to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed when and as the same shall become due
and payable, whether on the relevant maturity date, upon acceleration, by call
for redemption, upon repurchase or purchase as a result of a Change of Control
Offer, Asset Disposition Offer or otherwise, all in accordance with the terms
hereof and thereof; and (ii) in case of any extension of time of payment or
renewal of any Notes or of any such other obligations, that the same will be
promptly paid in full when due or performed in
59
accordance with the terms of the extension or renewal, subject to an applicable
grace period, whether at maturity, on an interest payment date, by acceleration,
required repurchase or otherwise. All payments under this Guarantee shall be
made in U.S. dollars.
All payments made by the Company under the Guarantee with respect to
the Notes will be made in U.S. dollars free and clear of and without withholding
or deduction for or on account of any present or future tax, duty, assessment or
other Governmental charge imposed or levied by or on behalf of The Netherlands
or the Republic of Indonesia (or any political subdivision or taxing authority
of or in The Netherlands or the Republic of Indonesia), unless the Company is
required to withhold or deduct such tax, duty, assessment or other Governmental
charge by law or by the interpretation or administration thereof. In the event
that payments under the Guarantee are subject to withholding or deduction for or
on account of any present or future tax, duty, assessment or other Governmental
charge imposed by The Netherlands or the Republic of Indonesia (or any political
subdivision or taxing authority of or in The Netherlands or the Republic of
Indonesia), the Company shall pay Additional Amounts in such amounts and to the
extent set forth in Section 4.01(b).
The Company hereby agrees that its obligations hereunder shall be
unconditional and irrevocable, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture or the obligations of the Issuer
hereunder or thereunder, the absence of any action to enforce the same, any
waiver or consent by any Holder of Notes with respect to any provisions hereof
or thereof, the recovery of any judgment against the Issuer, any action to
enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor.
The Company hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Issuer, any right to require a proceeding first against the Issuer, any right to
pursue or exhaust its legal or equitable remedies against the Issuer (including
any right which the Company may have to require the seizure and sale of the
assets of the Issuer to satisfy the outstanding principal of, interest on or any
other amounts payable under each Note prior to recourse against the Company or
its assets), protest, notice and all demands whatsoever and covenants that the
Guarantee will not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture. If any Noteholder or the
Trustee is required by any court or otherwise to return to the Issuer, the
Company, or any custodian, trustee, liquidator or other similar official acting
in relation to the Issuer or the Company any amount paid by the Issuer or the
Company to the Trustee or such Noteholder, the Guarantee to the extent
theretofore discharged, shall be reinstated in full force and effect.
The Company agrees that, as between the Company, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of the Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article 6, such obligations (whether or not then due and payable)
shall forthwith become due and payable by the Company for the purposes of the
Guarantee.
The Company also agrees, to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee or
any Holders in enforcing any rights under the Guarantee.
The Company hereby waives, in favor of the Holders and the Trustee,
any and all of its rights, protections, privileges and defenses provided by law
to a guarantor and in particular the provisions in Articles 1430, 1831, 1833,
1837, 1843 and 1847 through 1850 of the Indonesian Civil Code (Kitab
Undang-Undang Hukum Perdata) and:
(i) waives any right of set-off which the Company may have
against the registered Holder in respect of any amounts which are or may
become payable by the registered Holder to the Issuer;
(ii) agrees that the Company is still under an obligation to
make payment to the registered Holder or the Trustee under this Guarantee
upon demand by the registered Holder even though the registered Holder has
not made any demand upon the Issuer, the Trustee or the Collateral Agent or
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taken any steps or proceedings against the issuer to seize and sell its
assets or property to recover the secured indebtedness or, if such steps or
proceedings are taken, the registered Holder is otherwise unable to satisfy
the Indebtedness under this Indenture from such assets or property;
(iii) relinquishes any right or privilege which it may have to
demand from any court that the registered Holder or the Trustee should
split or apportion the Indebtedness under this Indenture either
proportionately or otherwise against the Company and any other person who
has given any Guarantee or other security to the registered Holder in
respect of the Indebtedness under this Indenture;
(iv) agrees that (subject to the other provisions of this
Guarantee) the Company shall not be entitled to claim from the issuer any
compensation or release in respect of the obligations and liabilities of
the Company under this Guarantee in circumstances where the Company has not
made any actual payment under this Guarantee;
(v) agrees that the Company shall not make use of any of the
exceptions or defenses against the registered Holder or the Trustee which
are or may be available to the Issuer and which concerns the Indebtedness
under this Indenture;
(vi) agrees that the Company shall still be bound by and liable
under this Guarantee even though due to the fault of the registered Holder
of a Security or the Trustee, the Company can no longer be subrogated to
the rights, security interests and other privileges of the registered
Holder against the Issuer;
(vii) agrees that the Company shall still be bound by and liable
under this Guarantee in circumstances where the registered Holder
voluntarily accepts certain moveable or any other goods as payment for the
Indebtedness under this Indenture, but subsequently such goods, by reason
of a judicial decision, have to be delivered to some other person; and
(viii) agrees that the Company shall not have the right to
demand the Issuer to repay the Indebtedness under this Indenture to the
registered Holder of a Security, or to release the Company from its
liability under this Guarantee in circumstances where the registered Holder
has granted any time or other indulgence to the issuer.
SECTION 10.02 INDEMNITY
(a) The Company hereby irrevocably and unconditionally agrees as a
primary obligor to indemnify (the "INDEMNITY") fully the Holders and the Trustee
for and against any amounts owed by the Issuer in respect of the Notes and this
Indenture that otherwise would be payable under the Guarantee in the event that
the Guarantee is for any reason deemed to be unenforceable. Except as otherwise
indicated herein or as the context may otherwise require, all references herein
and in the Notes and the Guarantee shall be deemed to constitute references to
the Indemnity.
(b) The obligations of the Company assumed under this Indenture with
respect to the Indemnity are independent undertakings and constitute the
Company's own debt and obligation, as meant by or in accordance with Article
1316 of the Indonesian Civil Code, separate from the Guarantee contained in
Section 10.01, not accessory to any of the Security Documents, and with respect
to which Indemnity Articles 1820 to 1850 of the Indonesian Civil Code do not
therefore apply.
SECTION 10.03 REPRESENTATION AND WARRANTY. The Company hereby
represents and warrants that all acts, conditions and things required to be done
and performed and to have happened precedent to the creation and issuance of the
Guarantee and the Indemnity, and to constitute the same legal, valid and binding
obligations of the Company enforceable in accordance with their respective
terms, have been done and performed and have happened in compliance with all
applicable laws.
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SECTION 10.04 WAIVER OF SUBROGATION. The Company hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
the Issuer that arise from the existence, payment, performance or enforcement of
the Company's obligations under the Guarantee, the Indemnity and this Indenture,
including, without limitation, any right of subrogation, reimbursement,
exoneration, indemnification, and any right to participate in any claim or
remedy of any Holder against the Issuer whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including,
without limitation, the right to take or receive from the Issuer, directly or
indirectly, in cash or other property or by setoff or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to the Company in violation of the preceding sentence and the
Notes shall not have been paid in full; such amount shall have been deemed to
have been paid to the Company for the benefit of, and held in trust for the
benefit of, the Holders of the Securities, and shall forthwith be paid to the
Trustee for the benefit of such Holders to be credited and applied upon the
Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. The Company acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 10.04 is knowingly made in contemplation of
such benefits.
SECTION 10.05 EXECUTION OF GUARANTEE. To evidence the Guarantee
specified in Section 10.01 to the Noteholders, the Company hereby agrees to
execute this Indenture and the endorsement on the Notes of a notation of such
Guarantee (the "GUARANTEE ENDORSEMENT") in substantially the form of the Notes
attached hereto as Exhibit A recited to be endorsed on each Security ordered to
be authenticated and delivered by the Trustee. The Company hereby agrees that
the Guarantee set forth in Section 10.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Guarantee. Each Guarantee shall be signed on behalf of Company by two Officers
of the Company (each of whom shall have been duly authorized by all requisite
corporate actions) prior to the authentication of the Note on which it is
endorsed, and the delivery of such Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee on behalf of
the Company. Such signatures upon the Guarantee Endorsement may be by manual or
facsimile signature of such Officers and may be imprinted or otherwise
reproduced on the Guarantee Endorsement. If an officer whose signature is on a
Guarantee Endorsement no longer holds his office at the time the Note on which
such Guarantee Endorsement is endorsed is authenticated, such Guarantee
Endorsement shall be valid nevertheless. The Company shall execute the Guarantee
Endorsement in the foregoing manner for the initial issuance of Notes hereunder
and for any other issuance of Notes required or permitted hereunder, including
pursuant to Section 2.06, 2.07 and 2.09.
SECTION 10.06 RANKING. The Guarantee is secured and ranks pari passu
in right of payment with all existing and future Senior Indebtedness of the
Company.
ARTICLE 11
[INTENTIONALLY OMITTED]
ARTICLE 12
SECURITY DOCUMENTS
SECTION 12.01 SECURITY DOCUMENTS
(a) In order to secure the due and punctual payment of all amounts
payable under the Notes and this Indenture, the Company, the Issuer, the
Collateral Agent, the Trustee and the Secured Creditors have entered into the
Collateral Agency Agreement and the Security Documents to create the Liens of
the Security Documents and for related matters.
(b) The Company covenants and agrees that it has full right, power
and lawful authority to grant, bargain, sell, release, convey, hypothecate,
assign, mortgage, pledge and transfer the Collateral, in the manner and form
done, or intended to be done, in this Indenture, the Collateral Agency Agreement
and the Security Documents. The Company further covenants and agrees that the
Security Documents and the actions taken hereunder and thereunder create a
perfected first priority lien (subject, with respect to the Security Deed, to
statutory exceptions for taxes and enforcement costs) (or such other perfection
and priority contemplated by the Security
62
Documents) on the relevant portion of the Collateral which it purports to create
prior to all other Liens, other than Permitted Liens.
(c) As amongst the Holders, the Collateral as now or hereafter
constituted shall be held for the equal and ratable benefit of the Holders
without preference, priority or distinction of any thereof over any other by
reason of difference in time of issuance, sale or otherwise, as security for the
Issuer's and the Company's obligations under this Indenture.
SECTION 12.02 HOLDERS' CONSENT. Each Holder, by its acceptance of a
Note, (i) consents and agrees to the terms of the Collateral Agency Agreement
and the Security Documents and authorizes and approves the Trustee's execution
thereof, and (ii) agrees that such Holder is bound by the terms thereof and that
such Holder may not take any action contrary thereto.
SECTION 12.03 RECORDING, DEPOSIT OF PLEDGED ASSETS, etc
(a) The Company shall, and shall cause any Restricted Subsidiary
which owns Collateral to, take or cause to be taken all action required or
desirable to maintain, preserve and protect the Lien on the Collateral granted
by the Collateral Agency Agreement and the Security Documents, including, but
not limited to, causing all instruments of further assurance requested by the
Trustee or the Collateral Agent to be promptly recorded, registered and filed,
and to keep the Security Documents and such instruments of further assurance
recorded, registered and filed at all times, and will execute and file such
instruments in such manner and in such places as may be required by law to fully
preserve and protect the rights of the holders and the Trustee under this
Indenture, the Collateral Agency Agreement and the Security Documents to all
property comprising the Collateral.
The Company and the Issuer will from time to time promptly pay and
discharge all hypothec and filing fees, charges and taxes relating to this
Indenture, the Collateral Agency Agreement, the Security Documents, any
amendments thereto and any other instruments of further assurance.
(b) Upon the cancellation and discharge of any prior Permitted Lien,
the Company will cause all cash, cash equivalents, obligations and securities
then held by the trustee, mortgagee or other holder of such prior Permitted
Lien, which were received by such trustee, mortgagee or other holder on account
of the release or the taking by eminent domain or the purchase by a public
authority or the sale by virtue of a designation or order of a public authority
or any other disposition of, or insurance on, the Collateral, or any part
thereof (including all proceeds of or substitutions for any thereof), to be paid
to or deposited and pledged with the Collateral Agent for distribution in
accordance with the Collateral Agency Agreement.
(c) The Issuer and the Company shall furnish to the Trustee:
(i) promptly after execution and delivery of the Note, an
Opinion or Opinions of Counsel to the effect that, in the opinion of such
counsel (subject customary exceptions), this Indenture and the assignment
of the Collateral intended to be made by each Security Document and all
other instruments of further assurance or assignment have been properly
recorded, registered and filed to the extent necessary to perfect the Lien
intended to be created by each such Security Document and reciting the
details of such action or referring to prior Opinions of Counsel in which
such details are given, and stating that as to the Lien intended to be
created pursuant to each such Security Document, such recordings,
registering and filings are the only recordings, registering and filings
necessary, and further stating that all Security Documents have been
executed and filed that are necessary fully to preserve and protect the
rights of the Holders (except, with respect to the Security Deed,
registration thereof in the manner contemplated by Section 6.01(k) (B) and
the Trustee with respect to the Liens intended to be created by each
Security Document;
(ii) within 30 days after December 1 in each year beginning
with December 1, 2003, an Opinion or Opinions of Counsel, dated as of such
date, either (A) to the effect that, in the opinion of such counsel, such
actions have been taken with respect to the recordings, registering,
filings, recordings, re-registering and refilings of all Security Documents
or other instruments of further assurance as are
63
necessary to maintain and continue the perfection of the Liens of the
Security Documents and reciting with respect to such Liens the details of
such action or referring to prior Opinions of Counsel in which such details
are given, and stating that all Security Documents and instruments have
been executed and filed that are necessary fully to preserve and protect
the rights of the Holders and the Trustee with respect to the Liens
intended to be created by each Security Document or (B) to the effect that,
in the opinion of such counsel, no such action is necessary to maintain
such Liens.
SECTION 12.04 DISPOSITION OF COLLATERAL WITHOUT TRUSTEE CONSENT. (a)
Notwithstanding the provisions of Sections 12.05 and 12.07, so long as no
Default or Event of Default shall have occurred and be continuing or would
result therefrom (or, with respect to clause (iv) or (v) below, so long as no
Notice of Actionable Default has been delivered to the Collateral Agent) and the
Company complies with the provisions of Section 4.08, if applicable, the
Company, in the case of Sections 12.04(a) (i) to (iv), inclusive, may without
any consent by the Trustee:
(i) sell or otherwise dispose of any Collateral subject to the
Liens of the Security Documents, which may have become worn out or
obsolete, not exceeding a book value of US$2.0 million in any one calendar
year;
(ii) demolish, dismantle, tear down or scrap any Collateral, or
abandon any thereof other than land or interests in land (other than
leases), if such demolition, dismantling, tearing down, scrapping or
abandonment is in the best interests of the Company and the fair market
value (except to the extent of the relevant Collateral being released) and
utility of the Collateral as an entirety, will not thereby be impaired
(such determination to be evidenced by a written resolution of a majority
of the Board of Directors if the relevant Collateral has a fair market
value in excess of US$2.0 million); and
(iii) sell or otherwise dispose of Collateral in isolated
transactions that do not exceed US$2.0 million in the aggregate.
(b) In the event that the Company has sold, exchanged, or otherwise
disposed of or proposes to sell, exchange or otherwise dispose of any portion of
the Collateral which under the provisions of this Section 12.04 may be sold,
exchanged or otherwise disposed of by the Company without any consent of the
Trustee, such Collateral shall be, upon such sale, exchange or other
disposition, automatically released from the Liens of the Security Documents and
the Company may request the Trustee to furnish a written disclaimer, release or
quitclaim of any interest in such property under this Indenture, the Collateral
Agency Agreement and any of the Security Documents (by providing to the Trustee
a counterpart of the instruments proposed to give effect to such disclaimer,
release or quitclaim fully executed and acknowledged (if applicable) by all
parties thereto other than the Trustee, the other Secured Creditors and Secured
Creditors' Representatives and in form for execution by the Trustee). If the
Company so requests, the Trustee shall execute such an instrument upon delivery
to the Trustee of (i) an Officer's Certificate by the Company reciting the sale,
exchange or other disposition made or proposed to be made and describing in
reasonable detail the property affected thereby, and stating that such property
is property which by the provisions of this Section 12.04 may be sold, exchanged
or otherwise disposed of or dealt with by the Company without any release or
consent of the Trustee, (ii) an Opinion of Counsel stating that the sale,
exchange or other disposition made or proposed to be made was duly taken by the
Company in conformity with a designated subsection of Section 12.04(a) and (iii)
an Officer's Certificate and Opinion of Counsel complying with Sections 14.04
and 14.05.
Any disposition of Collateral made in strict compliance with the
provisions of this Section 12.04 shall be deemed not to impair the Liens of the
Security Documents in contravention of the provisions of this Indenture.
SECTION 12.05 RELEASE OF COLLATERAL WITH TRUSTEE CONSENT. In addition
to its rights under Sections 12.04 and 12.07, the Company shall have the right,
at any time and from time to time, to sell, exchange or otherwise dispose of any
of the Collateral (other than Trust Monies, which are subject to release from
the Liens of the Security Documents as provided under Article 13) upon
compliance with the requirements and conditions of Sections 4.08, 12.11 and this
Section 12.05, and the Trustee shall direct the Collateral Agent to release
64
the same from the Liens of any Security Document upon receipt by the Trustee of
a notice requesting such release and describing the property to be so released,
provided that:
(a) if the property to be released has a book value of more than
US$2.0 million, the Trustee is provided with a written resolution of a majority
of the Board of Directors requesting such release and authorizing an application
to the Trustee therefor;
(b) the security afforded by the Liens of the Security Documents
will not be impaired by such release (except with respect to the Collateral so
released) and the proceeds from the property to be released are deposited in
accordance with the provisions set forth under Section 4.08;
(c) the Company has disposed of or will dispose of the Collateral so
to be released for a consideration representing its fair market value;
(d) no Default or Event of Default shall have occurred and be
continuing (or shall result therefrom);
(e) if the Collateral to be released is real property, following
such release and the release of the Lien of any applicable Security Deed with
respect thereto, the non-released property has sufficient utility services and
sufficient access to public roads, rail spurs, harbors, canals, terminals and
other transportation structures for the continued use of such non-released
property in substantially the manner carried on by the Company and its
Subsidiaries prior to such release;
(f) if the Collateral to be released is real property, following
such release, the non-released property subject to the Security Deed will
continue to comply in all material respects with applicable laws rules,
regulations and ordinances relating to land use and building and work place
safety;
(g) if the Collateral to be released is real property, following
such release, the fair market value of the non-released property (exclusive of
the fair market value of the released property) shall not be less than the fair
market value of such non-released property subject to the Security Deed prior to
such release;
(h) if the Collateral to be released is subject to a prior Permitted
Lien, there shall be delivered to the Trustee a certificate of the trustee,
fiduciary, transferee or other holder of such prior Permitted Lien that it has
received the Net Proceeds sufficient to discharge such prior Permitted Lien and
has been irrevocably authorized by the Company to pay over to the Collateral
Agent any balance of such Net Proceeds remaining after the discharge of such
Indebtedness secured by such prior Permitted Lien; and, if any property other
than cash or cash equivalents is included in the consideration for any
Collateral to be released, there shall be delivered to the Trustee such
instruments of conveyance, assignment and transfer, if any, as may be reasonably
necessary, in the Opinion of Counsel to be given pursuant to paragraph (k), to
subject to the Liens of the Security Documents all the right, title and interest
of the Company in and to such property;
(i) the first priority perfected security interest pursuant to the
Security Deed shall be in full force and effect continuously and uninterrupted
at all times with respect to the Collateral not to be released;
(j) (A) the Company delivers an Officer's Certificate with respect
to the matters set forth in paragraphs (a) through (i) above and stating that
all conditions precedent relating to the release of such Collateral have been
complied with, PROVIDED that matters set forth in paragraphs (b), (c) and (d)
may be an opinion of the officer and (B) the Officer's Certificate shall also be
signed, in the case of clauses (b) (as to impairment of security), (c) and (g)
by an Independent Appraiser; and
(k) an Opinion of Counsel shall be delivered to the Trustee
substantially to the effect (subject to customary exceptions) (i) that any
obligation included in the consideration for any property so to be released and
to be received by the Trustee pursuant to Section 12.05(h) is a valid and
binding obligation enforceable in accordance with its terms and is effectively
pledged under the Security Documents, (ii) that any Lien granted by a purchaser
to secure Purchase Money Indebtedness is a first priority purchase money Lien,
or with respect to
65
moveable assets is not subordinate to any other Lien or security interest and
such instrument granting such Lien is enforceable in accordance with its terms,
(iii) either (x) that such instruments of conveyance, assignment and transfer as
have been or are then delivered to the Collateral Agent are sufficient to
subject to the Liens of the applicable Security Documents all the right, title
and interest of the Company in and to any property, other than cash, Temporary
Cash Investments and obligations, that is included in the consideration for the
Collateral so to be released, or (y) that no instruments of conveyance,
assignment or transfer are necessary for such purpose, (iv) that the Company has
corporate power to own all property included in the consideration for such
release, (v) in case any part of the money or obligations referred to in Section
12.05(h) has been deposited with a trustee other holder of a prior Permitted
Lien, that the Collateral to be released, or a specified portion thereof, is or
immediately before such release was subject to such prior Permitted Lien and
that such deposit is required by such prior Permitted Lien and (vi) that all
conditions precedent herein relating to the release of such Collateral xxxx been
complied with.
In connection with any release, the Company shall (i) execute, deliver
and record or file and obtain such instruments as shall be necessary to
evidence, effect or give notice of such release or as the Trustee may reasonably
require for such purpose, including, without limitation, amendments to the
Security Documents, the Collateral Agency Agreement and this Indenture and (ii)
deliver to the Trustee such evidence of the satisfaction of the requirements of
this Indenture, the Collateral Agency Agreement and the other Security Documents
as the Trustee may reasonably require.
The Company shall exercise its rights under this Section 12.05 by
delivery to the Trustee of a notice (each, a "RELEASE NOTICE"), which shall
refer to this Section, describe with particularity the items of property
proposed to be covered by the release and be accompanied by a counterpart of the
instruments proposed to give effect to the release fully executed and
acknowledged (if applicable) by all parties thereto other than the Trustee, the
other Secured Creditors and Secured Creditors' Representatives and in form for
execution by the Trustee. Upon such compliance, the Company shall direct the
Trustee to execute, acknowledge (if applicable) and deliver to the Company such
counterpart within 20 Business Days after receipt by the Trustee of the Release
Notice and the satisfaction of the requirements of this covenant.
In case a Default or an Event of Default shall have occurred and be
continuing, the Company, while in possession of the Collateral (other than Trust
Monies, cash, cash equivalents, securities and other personal property held by
or required to be deposited or pledged with the Collateral Agent hereunder or
with the trustee, fiduciary transferee or other holder of a prior Permitted
Lien), may do any of the things enumerated in this Section 12.05 with respect to
such Collateral, if each of the Holders by appropriate action of such Holder,
shall consent to such action. In such event, any certificate filed under this
Section shall omit the statement to the effect that no Default or Event of
Default has occurred and is continuing (or would result therefrom). This
paragraph shall not apply, however, during the continuance of an Event of
Default of the type specified in Section 6.01(h).
All cash or cash equivalents allocable to Holders received by the
Collateral Agent pursuant to this Section 12.05 shall be held by the Collateral
Agent, for the benefit of the Holders, as Trust Monies subject to application as
provided in Article 13 or as provided in Section 4.08.
Any releases of Collateral made in strict compliance with the
provisions of this Section 12.05 shall be deemed not to impair the Liens of the
Security Documents in contravention of the provisions of this Indenture.
SECTION 12.06 POSSESSION AND USE OF COLLATERAL. Unless an Event of
Default shall have occurred and be continuing, and subject to the terms of this
Indenture, the Security Documents and the Collateral Agency Agreement, the
Company shall have the right to remain in possession and retain control of the
Collateral (other than any cash, securities, obligations and cash equivalents
deposited with the Collateral Agent and other than as set forth in the
Collateral Agency Agreement or the Security Documents), to operate the
Collateral and to collect, invest and dispose any income thereon.
SECTION 12.07 SUBSTITUTE COLLATERAL
(a) The Company may, at its option, obtain a release of any of the
Moveable Assets Collateral and the Trustee shall release and direct the
Collateral Agent to release the related Collateral, provided that:
66
(i) the Company subjects other similar (that is performs the same
functions with like capabilities) moveable assets related to or used or to be
used in the Plant ("SUBSTITUTE COLLATERAL") to the Liens of the Security
Documents (which shall be a first priority perfected Lien unless otherwise
contemplated by the Security Documents);
(ii) such Substitute Collateral has a fair market value greater than
or equal to the fair market value of the Collateral to be released and the
Substitute Collateral is not subject to Permitted Liens securing Indebtedness
greater than any Permitted Liens with respect to the Moveable Assets Collateral
to be released;
(iii) the Company delivers to the Trustee (or in case of clause (4)
and (5) below, the Collateral Agent):
(1) an application of the Company requesting such substitution
of Substitute Collateral for any of the Moveable Assets Collateral and
describing the property to be so released and the property that is related to or
used or to be used in the Plant to be substituted therefor;
(2) an Officer's Certificate (A) with respect to the matters set
forth in paragraphs (i) through (iii) above and stating that all conditions
precedent herein relating to the release and substitution of Collateral have
been complied with, provided that matters set forth in paragraph (ii) may be an
opinion of the Officer; PROVIDED that the Officer's Certificate shall also be
signed, in the case of clause (ii) by an Independent Appraiser; and (B) stating
that any Lien on the Substitute Collateral prior to the Liens of the Security
Documents on the Substitute Collateral are Liens of the character which, under
the provisions of this Indenture, the Collateral Agency Agreement and the
Security Documents, are permitted to be prior to the Liens of the Security
Documents;
(3) an Opinion of Counsel substantially to the effect (subject
to customary exceptions) that (A) either (x) such instruments of conveyance,
assignment and transfer as have been or are then delivered to the Collateral
Agent are sufficient to subject all the right, title and interest of the Company
in and to the Substitute Collateral to the Liens of the applicable Security
Documents (y) no instruments of conveyance, assignment or transfer are necessary
for such purpose, (B) the Company has corporate power to own all Substitute
Collateral, (C) the property so released is Moveable Assets Collateral, (D) each
of Liens of the Security Documents constitutes a Lien which is not subordinate
to any other Lien or security interest other than a Permitted Lien on such
Substitute Collateral, and (E) all conditions precedent herein relating to the
release of such Collateral have been complied with;
(4) any instrument required by the Opinion of Counsel to be
rendered pursuant to clause (iii) (3) of this Section 12.07 for the Lien of any
other applicable Security Document to cover the Substitute Collateral and any
other property received in connection with such transaction;
(5) original title documents and other evidence of ownership
with respect to the Substitute Collateral are delivered to the Collateral Agent;
and
(6) evidence of payment or a closing statement indicating
payments have been made (or will be made concurrently with the release and
substitution of Collateral) by the Company of all filing fees, recording
charges, transfer taxes a other costs and expenses, including reasonable legal
fees and disbursements of counsel for the Trustee (and any local counsel) that
may be incurred to validly and effectively subject the Substitute Collateral to
the Lien of any Security Document.
67
(b) In connection with any release, the Company shall (i) execute,
deliver and record or file and obtain such instruments as shall be necessary to
evidence, effect or give notice of such release and substitution or as the
Trustee may reasonably require for such purpose, including, without limitation,
amendments to the Security Documents, the Collateral Agency Agreement and this
Indenture and (ii) deliver to the Trustee such evidence of the satisfaction of
the requirements of this Indenture, the Collateral Agency Agreement and the
other Security Document as the Trustee may reasonably require.
(c) The Company shall exercise its rights under this Section 12.07
by delivery to the Trustee of a notice (each, a "SUBSTITUTION NOTICE"), which
shall refer to this Section, describe with particularity the items of property
proposed to be covered by the release and substitution and be accompanied by a
counterpart of the instruments proposed to give effect to the release and
substitution fully executed and acknowledged (if applicable) by all parties
thereto other than the Trustee, the other Secured Creditors and Secured
Creditors' Representatives and in form for execution by the Trustee. Upon such
compliance, the Company shall direct the Trustee to execute, acknowledge (if
applicable) and deliver to the Company such counterpart within 20 Business Days
after receipt by the Trustee of Substitution Notice and the satisfaction of the
requiem of this covenant.
(d) In case a Default or an Event of Default shall have occurred and
be continuing, the Company, while possession of the Collateral (other than Trust
Monies, cash, cash equivalents, securities and other personal property held by
or required to be deposited or pledged with the Collateral Agent or with the
trustee, fiduciary, transferee or other holder of a prior Permitted Lien), may
do any of the things enumerated in this Section 12.07 with respect such
Collateral, if each of the holders, shall consent to such action. In such event,
any certificate filed pursuant to this paragraph shall omit the statement to the
effect that no Default or Event of Default has occurred and is continuing (or
would result therefrom). This paragraph shall not apply, however, during the
continuance of an Event of Default of the type specified in Section 6.01(h).
(e) The Company shall cause all cash or Temporary Cash Investments
received by it in connection with any substitution of property permitted hereby
to be deposited with and held by the Collateral Agent as if such cash or
Temporary Cash Investment were received in connection with an Asset Disposition
upon the terms set forth in Section 4.08 and in the Collateral Agency Agreement.
(f) Any release and substitution of Collateral made in strict
compliance with the provisions of this Section 12.07 shall be deemed not to
impair the Liens of the Security Documents in contravention of the provisions of
this Indenture.
(g) This Section does not limit the Company's rights to obtain the
release of Moveable Assets Collateral under Section 12.05 or any other Section.
This Section is intended to be used for transactions which are primarily a
substitution of like Collateral, as opposed to a sale of Collateral.
SECTION 12.08 GOVERNMENTAL TAKINGS. Should any of the Collateral be
taken pursuant to the lawful exercise by the government of the Republic of
Indonesia or any political subdivision thereof of any right which it may then
have to purchase, or to designate a purchaser or to order sale of, all or any
part of the Collateral (a "GOVERNMENTAL TAKING"), the Trustee shall release the
property so taken or purchased, but only upon receipt by the Trustee of the
following:
(a) an Officer's Certificate stating that (i) such property has been
taken pursuant to a lawful right vested in the government of the Republic of
Indonesia or any political subdivision thereof to purchase, or to designate a
purchaser or order a sale of, such property and the amount of the proceeds of
such sale, and that all conditions precedent herein provided for relating to
such release have been complied with and (ii) that the amount of the proceeds of
the property so sold is not less than the amount to which the Company is
entitled under the terms of such Governmental Taking;
(b) acknowledgment by the Collateral Agent that the award for such
property or the proceeds of such sale, has been deposited in the Collateral
Accounts subject to the disposition thereof pursuant to Section 4.08 hereof;
PROVIDED, HOWEVER, that, in lieu of all or any part of such award or proceeds,
the Company shall have the right to deliver to the Trustee a certificate of the
trustee, mortgagee or other holder of a prior Permitted Lien on all or
68
any part of the property to be released, stating that such award or proceeds, or
a specified portion thereof, has been deposited with such trustee, mortgagee or
other holder pursuant to the requirements of such prior Lien, in which case the
balance of the award, if any, shall be delivered to the Collateral Agent for
deposit in the Notes Collateral Account;
(c) an Opinion of Counsel substantially to the effect that:
(1) such Governmental Taking was a lawful exercise of a right
vested in the government of Indonesia or any political subdivision thereof;
(2) the award for the property so taken has become final or
that, to the best of such counsel's knowledge, no appeal is contemplated or
pending.
(3) if, pursuant to Section 12.08(b), the award for such
property or the proceeds of such sale, or a specified portion thereof,
shall be certified to have been deposited with the trustee, mortgagee or
other holder of a prior Permitted Lien, that the property to be released,
or a specified portion thereof, is or immediately before such taking or
purchase was subject to such prior Permitted Lien, and that such deposit is
required by such prior Permitted Lien; and
(4) that the instrument or the instruments and the award or
proceeds of such sale which have been or are therewith delivered to and
deposited with the Collateral Agent conform to the requirements of this
Indenture, the Collateral Agency Agreement and the Security Documents and
that, upon the basis of such application, the Trustee is permitted by the
terms hereof to execute and deliver the release requested, and that all
conditions precedent herein provided for relating to such release have been
complied with; and
(d) a counterpart of the instruments proposed to give effect to such
release fully executed and acknowledged (if applicable) by all parties thereto
other than any applicable governmental entity, the Trustee, the other Secured
Creditors and Secured Creditors' Representatives and in form for execution by
the Trustee.
In any proceedings for any Governmental Taking of any part of the Collateral, by
virtue of any such right to purchase or designate a purchaser or to order a
sale, the Trustee may be represented by counsel who may be counsel for the
Company.
The Company shall cause all cash and Temporary Cash Investments
received pursuant to this Section 12.08 to be deposited with and held by the
Collateral Agent upon the terms set forth herein and in the Collateral Agency
Agreement. The Company shall cause all purchase money and other obligations
received to be deposited with and held by Collateral Agent upon the terms set
forth herein and in the Collateral Agency Agreement.
SECTION 12.09 TIA REQUIREMENTS
(a) The release of any Collateral from the terms hereof, the
Collateral Agency Agreement and of the Security Documents or the release of, in
whole or in part, the Liens created by any of the Security Documents, will not
be deemed to impair the Liens of the Security Documents in contravention of the
provisions hereof if and to the extent the Collateral or Liens are released
pursuant to the terms hereof. Each of the Holders acknowledges that a release of
Collateral or Liens strictly in accordance with the terms hereof will not be
deemed for any purpose to be an impairment of the Liens in contravention of the
terms of this Indenture.
(b) To the extent applicable, without limitation, the Company, the
Issuer and each obligor on the Notes shall comply with TIA Section 314(d)
relating to the release of property or securities from the Liens of each of the
Security Documents.
SECTION 12.10 SUITS TO PROTECT THE COLLATERAL. The Trustee shall have
power to instruct the Collateral Agent to institute and to maintain such suits
and proceedings as it may deem expedient to
69
prevent any impairment of the Collateral by any acts which may be unlawful or in
violation of the terms hereof or any of the Security Documents, and to instruct
the Collateral Agent to institute and maintain such suits and proceedings as the
Trustee may deem expedient to preserve or protect its interests and the
interests of the Holders in the Collateral (including power to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with
any legislative or other governmental enactment, rule or order that may be
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the Liens of the Security Documents or be prejudicial to the
interests of the Holders or the Trustee). The Trustee shall also have the power
to institute and to maintain suits against the Collateral Agent, the Company,
the Issuer, the Secured Creditor's Representatives and the Secured Creditors to
the extent the Collateral Agent does not follow the foregoing instructions or as
otherwise necessary to cause the Collateral Agent, the Company, the Issuer, the
Secured Creditor's Representatives and the Secured Creditors to fulfill their
obligations under the Collateral Agency Agreement or the Security Documents.
SECTION 12.11 PURCHASER PROTECTED. In no ever shall any purchaser in
good faith of any property purported to be released hereunder be bound to
ascertain the authority of the Trustee to execute the release or to inquire as
to the satisfaction of any conditions required by the provisions hereof for the
exercise of such authority or to see to the application of any consideration
given by such purchaser or other transferee; nor shall any purchaser or other
transferee of any property or rights permitted by this Article 12 to be sold be
under obligation to ascertain or inquire into the authority of the Company to
make any such sale or other transfer.
SECTION 12.12 POWERS EXERCISABLE BY RECEIVER OR TRUSTEE. In case the
Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Article 12 upon the Company with respect
to the release, sale or other disposition of such property may be exercised by
such receiver or trustee, and an instrument signed by such receiver or trustee
shall be deemed the equivalent of any similar instrument of the Company or of
any officer or officers thereof required by the provisions of this Article 12.
SECTION 12.13 DISPOSITION OF OBLIGATIONS RECEIVED
(a) The Company shall cause all obligations permitted to be received
under this Article 12 or the other provisions of this Indenture (including,
without limitation, securities, notes, receivables and the like received in
connection with an Asset Disposition) to be deposited with the Collateral Agent
to be held by the Collateral Agent as part of the Collateral.
(b) The Trustee shall direct the Collateral Agent to release any
such obligation referred to in the foregoing paragraph (a) upon (i) payment by
or on behalf of the Company in cash or Temporary Cash Investments to the
Collateral Agent for deposit in the Collateral Accounts in accordance with the
provisions of the Collateral Agency Agreement of the entire unpaid principal
amount of such obligation and (ii) upon receipt of an Officer's Certificate and
an Opinion of Counsel that the foregoing condition has been satisfied.
(c) The Company shall cause the cash or Temporary Cash Investments
received by the Collateral Agent in respect of principal of any such obligations
referred to in subsection (a) above to be deposited in the Collateral Accounts
in accordance with the provisions of the Collateral Agency Agreement. The
Company may use any such funds on deposit, or funds deposited pursuant to
subsection (b) above, to purchase Additional Assets as permitted by Section 4.08
(with relevant time periods being calculated based upon the date of deposit in
the Notes Collateral Account) or as set forth in Section 13.02. If such funds
are not so used within the time period permitted by Section 4.08, such amounts
shall become Excess Proceeds, and shall become subject to disposition as set
forth in Section 4.08, including if the Excess Proceeds Offer is not fully
subscribed, to purchase New Collateral Assets as set forth in Section 4.08(c).
(d) Until the Notes are accelerated pursuant to Section 6.02, all
interest and other income on any obligations referred to in paragraph (a), when
received by the Collateral Agent shall be paid to the Company from time to time
to the extent allocable to the Trustee as a Secured Creditor. If the Notes have
been accelerated pursuant to Section 6.02, any such interest or other income not
theretofore paid, when collected by the Collateral Agent, and distributed to the
Trustee in accordance with the Collateral Agency Agreement, shall be applied by
the Trustee in accordance with Section 6.10.
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(e) Any release of any portion of the Collateral made strictly in
compliance with the provisions of this Section 12.13 shall not be deemed to
impair the Liens created by the Security Documents in contravention of the
provisions of this Indenture.
SECTION 12.14 LIMITATION ON DUTY OF TRUSTEE IN RESPECT OF COLLATERAL;
INDEMNIFICATION
(a) Beyond the exercise of reasonable care in the custody thereof,
the Trustee shall have no duty as to any Collateral in its possession or control
or in the possession or control of any agent or bailee or any income thereon or
as to preservation of rights against prior parties or any other rights
pertaining thereto and the Trustee shall not be responsible for filing any
financing or continuation statements or recording any documents or instruments
in any public office at any time or times or otherwise perfecting or maintaining
the perfection of any security interest in the Collateral. The Trustee shall be
deemed to have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which other Trustees under similar circumstances would accord similar
Collateral, and shall not be liable or responsible for any loss or diminution in
the value of any of the Collateral, by reason of the act or omission of any
carrier, forwarding agency or other agent or bailee selected by the Trustee in
good faith.
(b) The Trustee shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Liens in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder, except to the extent such action or omission constitutes
negligence, bad faith or willful misconduct on the part of the Trustee, for the
validity or sufficiency of the Collateral or any agreement or assignment
contained therein, for the validity of the title of the Company to the
Collateral, for insuring the Collateral or for the payment of taxes, charges,
assessments or Liens upon the Collateral or otherwise as to the maintenance of
the Collateral. The Trustee shall have no duty to ascertain or inquire as to the
performance or observance of any of the terms of this Indenture, the Collateral
Agency Agreement or the Security Documents by the Company, the Issuer, the
Secured Creditors' Representatives, the Secured Creditors or the Collateral
Agent.
SECTION 12.15 RELEASE UPON TERMINATION OF THE COMPANY'S AND ISSUER'S
OBLIGATIONS
(a) In the event that the Company and the Issuer deliver an
Officer's Certificate certifying that the Company and the Issuer have complied
with Section 8.01 and, if applicable, Section 8.02 with respect to all the
Securities, or that all obligations under this Indenture have been satisfied and
discharged in accordance with this Indenture, the Trustee shall deliver the
Company and the Collateral Agent on behalf of the Holders, a notice disclaiming,
relinquishing and releasing (without recourse or warranty) any and all rights it
has in respect of the Collateral and any other instruments or documents
evidencing or effecting such release in such form as the Company may reasonably
request.
(b) Any release of any portion of the Collateral made strictly in
compliance with the provisions of this Section 12.15 shall not be deemed to
impair the Liens created by the Security Documents in contravention of the
provisions of this Indenture.
ARTICLE 13
APPLICATION OF TRUST MONIES
SECTION 13.01 "TRUST MONIES" DEFINED. The Company and the Issuer agree
that all funds on deposit in the Notes Collateral Account and the Insurance
Collateral Account pursuant to the terms of this Indenture, the Collateral
Agency Agreement and the Security Documents, including all Net Available Cash
consisting of cash and cash equivalents and Temporary Cash Investments required
to be deposited with the Collateral Agent (Trust Monies) shall be held by the
Collateral Agent as a part of the security for the Notes, and, long as no
Default or Event of Default shall have occurred and be continuing or no Notice
of Actionable Default is outstanding, may, at the direction of the Company, be
applied from time to time in accordance with Sections 4.08 or 4.10 or to the
payment of the principal on any Notes, at maturity, in each case in accordance
with the terms of this Indenture or, for so long as the Exchangeable Notes are
outstanding, for Exchangeable Notes tendered under Section 3.07
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of the Exchangeable Indenture. Upon any entry upon or sale of the Collateral or
any part thereof pursuant to Article 6 or any exercise of remedies pursuant to
the Collateral Agency Agreement, the Trust Monies allocable to the Holders of
the Securities shall be applied in accordance with Section 6.10 hereof at the
time released to the Trustee under the Collateral Agency Agreement; but prior to
any such entry or sale, all or any part of the Trust Monies may be withdrawn,
and shall be released, paid or applied by the Trustee, from time to time as
provided in Sections 13.02 to 13.06, inclusive.
SECTION 13.02 RETIREMENT OF SECURITIES. The Trustee shall direct the
Collateral Agent to release to the Trustee Trust Monies and the Trustee shall
hold and apply such Trust Monies from time to time to the payment of the
principal on the applicable Notes, at Stated Maturity or to the purchase thereof
pursuant to Sections 4.08 or 4.10, as the Company shall request, upon receipt by
the Trustee of the following:
(i) resolution of a majority of the Company's Board of
Directors directing the application pursuant to this Section 13.02 of a
specified amount of Trust Monies and, in any case any such monies are to be
applied to payment, designating Notes so to be paid and prescribing the
method of purchase, the price or prices to be paid and the maximum
principal amount of Notes to be purchased and any other provisions of this
Indenture governing such purchase;
(ii) cash which equals or exceeds in the aggregate the maximum
amount of the accrued interest (including Additional Amounts), if any,
required to be paid in connection with any such purchase or payment at
Stated Maturity, which cash shall be held by the Trustee in trust for such
purpose;
(iii) an Officer's Certificate, dated not more than five days
prior to the date of the relevant application, stating that all conditions
precedent covenants herein provided for relating to such application of
Trust Monies have been complied with;
(iv) an Opinion of Counsel stating that the documents and the
cash or Temporary Cash Investments, if any, which have been or are
therewith delivered to and deposited with the Collateral Agent for the
purposes of payment of the principal and interest on the Notes, at Stated
Maturity or to purchase thereof pursuant to Sections 4.08 or 4.10, conform
to the requirements of this Indenture and that all conditions precedent
herein provided for relating to such application of Trust Monies have been
complied with.
Upon compliance with the foregoing provisions this Section 13.02, the
Trustee shall apply funds released from the Notes Collateral Account as directed
and specified by such resolution up to, but not exceeding, the principal amount
of the Notes so paid or purchased and shall apply any other funds received
pursuant to Section 13.02 (ii) to pay accrued and unpaid interest.
A resolution of a majority of the Company's Board of Directors
expressed to be irrevocable directing the application of funds from the Notes
Collateral Account under this Section 13.02 to the payment of the principal and
any other funds received pursuant to Section 13.02(ii) to the payment of accrued
interest and unpaid interest on the Notes shall, for all purposes of this
Indenture, be deemed the equivalent of the deposit of money with the Trustee in
trust for such purpose. Such funds from the Notes Collateral Account and any
cash deposited with the Trustee, pursuant to clause (ii) of this Section 13.02
for the payment of accrued interest (including Additional Amounts) shall not,
after compliance with the foregoing provisions of this Section, be deemed to be
part of the Collateral or Trust Monies.
SECTION 13.03 WITHDRAWALS OF ASSET DISPOSITION PROCEEDS, INSURANCE
PROCEEDS AND PROCEEDS FROM GOVERNMENT TAKINGS
(a) The Trustee shall consent to the release of funds on deposit in
the Insurance Collateral Account to the Company or the Restricted Subsidiary
which owned the related Collateral upon compliance with the conditions set forth
herein; provided that (x) no Major Collateral Disposition shall have occurred
and (y) Section 13.04 shall control with respect to business interruption
insurance. The Company shall request the Trustee to consent to such release by
request to the Trustee by an Officer of the Company to reimburse the Company or
the
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Restricted Subsidiary which owned the related Collateral for expenditures made
by the Company in connection with the repair, rebuilding or replacement of the
property destroyed, damaged or taken, providing the Trustee with the following:
(i) an Officer's Certificate, dated not more than 30 days
prior to the date of the application for the withdrawal and payment of such
funds on deposit in the Insurance Collateral Account setting forth:
(A) that expenditures have been made, or costs
incurred, by the Company or the Restricted Subsidiary which owned the
related Collateral in a specified amount in connection with certain
repairs, rebuildings and replacements of the Collateral, which shall
be briefly described, stating the fair market value thereof to the
Company or such Restricted Subsidiary at the date of the acquisition
thereof by the Company or such Restricted Subsidiary;
(B) that no part of such expenditures or costs, in any
previous or then pending application, has been or is being made the
basis for the withdrawal of any Trust Monies pursuant to this Section
13.03;
(C) that no part of such expenditures or costs has
been paid out of either the proceeds insurance upon any part of the
Collateral not required to be deposited with the Collateral Agent
under the Security Documents or any award for or the proceeds from any
of the Collateral being taken not required to be deposited with the
Collateral Agent under the Security Documents, as the case may be;
(D) that there is no outstanding indebtedness, other
than costs for which payment is being requested, known to the Company,
after due inquiry, for the purchase price or construction of such
repairs, rebuildings or replacements, or for labor, wages, materials
or supplies in connection with the making thereof, which, if unpaid,
might become the basis of a vendor's, mechanics', laborers',
materialmen's, statutory or other similar Lien upon any of such
repairs, rebuildings or replacement, which Lien might, in the opinions
of the signers of such certificate, materially impair the security
afforded by such repairs, rebuildings or replacement;
(E) that the property to be repaired, rebuilt or
replaced is necessary or desirable in the conduct of the Company's or
such Restricted Subsidiary's business;
(F) that the title to any assets subject to such
repairs, rebuildings and replacements is substantially similar to the
title to the property destroyed, damaged or taken;
(G) that no Notice of Actionable Default is
outstanding;
(H) that no Event of Default shall have occurred and
be continuing (or would result therefrom); and
(I) that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with.
(ii) An Opinion of Counsel substantially stating: (A) that the
instruments that have been or are therewith delivered to the Trustee
conform to the requirements of this Indenture and that, upon the basis of
such Company request and the accompanying documents specified in this
Section 13.03, all conditions precedent herein provided for relating to
such withdrawal and payment have been complied with, and the Trust Monies
of which withdrawal is then requested may be lawfully paid over under this
Section 13.03(a); and (B) that all the Company's or such Restricted
Subsidiary's right, title and interest in and to said repairs, rebuilding
or replacements, or combination thereof, are then subject to the Lien of
the Security Documents (which shall be a first priority perfected Lien
unless otherwise contemplated by the Security Documents).
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Upon compliance with the foregoing provisions of this Section
13.03(a), the Trustee shall direct the Collateral Agent upon receipt of the
foregoing Officer's Certificate to pay to the Company or the Restricted
Subsidiary which owned the Collateral an amount of Trust Monies of the character
aforesaid equal to the amount of expenditures or costs stated in the Officer's
Certificate required by Section 13.03(a)(i)(A), or the fair market value to the
Company or such Restricted Subsidiary of such repairs, rebuildings and
replacements stated in such Officer's Certificate, whichever is less.
The Trustee may provide its preliminary consent (as opposed to final
release) to the use of funds on deposit in the Insurance Collateral Account upon
application and evidence that such funds will be used in the manner provided
herein; PROVIDED that no such funds shall be released to the Company until the
documentation set forth above is provided.
(b) The Trustee shall consent to the release of funds on deposit in
the Notes Collateral Account to the Company or the Restricted Subsidiary which
owned the related Collateral from any Asset Disposition that was not an
Involuntary Loss or a Major Collateral Disposition to purchase New Collateral
Assets when permitted by Section 4.08. The Company shall request the Trustee to
consent to such release by request to the Trustee by an Officer of the Company
to reimburse the Company or the Restricted Subsidiary which owned the related
Collateral for expenditures made to purchase New Collateral Assets by providing
the Trustee with the following:
(i) an Officer's Certificate, dated not more than 30 days
prior to the date of the application for the withdrawal and payment of such
funds from the Notes Collateral Account setting forth:
(A) that expenditures have been made, or costs incurred,
by the Company or the Restricted Subsidiary which owned the Collateral
in a specified amount in connection the acquisition of New Collateral
Assets by the Company or such Restricted Subsidiary which shall be
briefly described, and stating the fair value thereof to the Company
or such Restricted Subsidiary at the date of the acquisition thereof
by the Company or such Restricted Subsidiary;
(B) that no part of such expenditures or costs, in any
previous or then pending application, has been or is being made the
basis for the withdrawal of any Trust Monies pursuant to this Section
13.03;
(C) that no part of such expenditures or costs has been
paid out of either the proceeds insurance upon any part of the
Collateral not required to be deposited with the Collateral Agent
under the Security Documents or any award for the proceeds from any of
the Collateral being taken not required to be deposited with the
Collateral Agent under the Security Documents, as the case may be;
(D) that there is no outstanding indebtedness, other than
costs for which payment is being requested, known to the Company,
after due inquiry, for the purchase price or construction of such New
Collateral Assets, which if unpaid, might become the basis of a
vendor's, mechanics', laborers', materialmen's, statutory or other
similar Lien upon any of such New Collateral Assets, which Lien might,
in the opinions of the signers of such certificate, materially impair
the security afforded by such repairs, rebuildings or replacement;
(E) that the property is a New Collateral Asset for which
such application may be properly made under Section 4.08 and such New
Collateral Asset is necessary or desirable in the conduct of the
Company's or such Restricted Subsidiary's business;
(F) that the Company has title to such New Collateral
Assets;
(G) that no Notice of Actionable Default is outstanding;
(H) that no Event of Default shall have occurred and be
continuing; and
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(I) that all conditions precedent herein provided for
relating to such withdrawal and payment have been complied with.
(ii) An Opinion of Counsel substantially stating:
(A) that the instruments that have been or are therewith
delivered to the Trustee conform to the requirements of this Indenture
and that, upon the basis of such Company request and the accompanying
documents specified in this Section 13.03(b), all conditions precedent
herein provided for relating to such withdrawal and payment have been
complied with, and the Trust Monies whose withdrawal is then requested
may be lawfully paid over under this Section 13.03(b); and
(B) that all the Company's or such Restricted
Subsidiary's right, title and interest in and to said New Collateral
Assets are then subject to the Lien of the Security Documents (which
shall be first priority perfected Lien unless otherwise contemplated
by the Security Documents).
Upon compliance with the foregoing provisions of this Section
13.03(b), the Trustee shall direct the Collateral Agent upon receipt of the
foregoing Officer's Certificate to pay to the Company or the Restricted
Subsidiary which owned the Collateral an amount of funds on deposit in the Notes
Collateral Account of the character aforesaid equal to the amount of the
expenditures or costs stated in the Officer's Certificate required by Section
13.03(b)(i)(A), or the fair value to the Company or such Restricted Subsidiary
of such New Collateral Assets stated in such Officer's Certificate, whichever is
less.
(c) Notwithstanding anything to the contrary in this Section, no
funds may be withdrawn and paid to the Company from and after any Major
Collateral Disposition.
SECTION 13.04 BUSINESS INTERRUPTION INSURANCE. So long as no Notice of
Actionable Default is outstanding, the Company may use the proceeds of business
interruption insurance associated with any event or Involuntary Loss that is not
a Major Collateral Disposition provided that such insurance proceeds are used in
the ordinary course of the Company's business. The fair value of such business
interruption insurance so used shall not be considered in determining whether
the aggregate fair value of Collateral released from the Lien of the Security
Documents in any calendar year exceeds the 10% threshold specified in TIA
Section 314 (d). The Trustee need not consent to any such release but shall
confirm any such release of proceeds upon receipt by the Trustee of an Officer's
Certificate stating (i) the event which gave rise to the receipt of proceeds of
such business interruption insurance was not a Major Collateral Disposition and
(ii) there is no Notice of Actionable Default outstanding.
Any releases of Collateral made in strict compliance with the
provisions of this Section 13.04 shall be deemed not to impair the Liens created
by this Indenture the Collateral Agency Agreement and the Security Documents in
contravention of the provisions of this Indenture.
Notwithstanding anything to the contrary in this Section, no funds may
be withdrawn and paid to the Company from and after any Major Collateral
Disposition.
SECTION 13.05 POWERS EXERCISABLE NOTWITHSTANDING EVENT OF DEFAULT. In
case a Default or Event of Default shall have occurred and shall be continuing,
the Company may do any of the things enumerated in Sections 13.02, 13.03 and
13.04, if the Trustee in its discretion, or the Holders of 66 2/3% in aggregate
principal amount of the Notes outstanding, by appropriate action of such
Holders, shall consent to such action, in which event any certificate filed
under any of such Sections shall omit the statement to the effect that no Event
of Default has occurred and is continuing; PROVIDED that, without the consent of
the Trustee, no consent pursuant to this Section shall deprive the Trustee of
its rights under paragraph FIRST of Section 6.10. This Section 13.05 shall not
apply, however, during the continuance of an Event of Default of the type
specified in Section 6.01(h) with respect to the Notes.
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SECTION 13.06 POWERS EXERCISABLE BY TRUSTEE OR RECEIVER. In case the
Collateral (other than any cash, Temporary Cash Investments, securities and
other personal property held by, or required to be deposited or pledged with,
the Collateral Agent hereunder or under the Collateral Agency Agreement
(including all amounts on deposit in the Notes Collateral Account) or under the
other Security Documents or with the trustee, mortgagee or other holder a prior
Permitted Lien) shall be in the possession of a receiver or trustee lawfully
appointed, the powers hereinbefore in this Article 13 conferred upon the Company
with respect to the withdrawal or application of Trust Monies may be exercised
by such receiver or trustee, in which case a certificate signed by such receiver
or trustee shall be deemed the equivalent of any Officer's Certificate required
by this Article 13.
SECTION 13.07 DISPOSITION OF NOTES RETIRED. All Notes received by the
Trustee and for whose purchase Trust Monies are applied under this Article 13,
may, but shall not be required to, be promptly canceled and disposed of by the
Trustee in accordance with its customary procedures unless the Trustee shall be
otherwise directed by the Company or the Issuer; PROVIDED that the Trustee shall
not be required to destroy any Notes. Upon such disposition of any Notes, the
Trustee shall issue a certificate of disposition to the Company and the Issuer.
SECTION 13.08 INVESTMENT OF TRUST MONIES. All or any part of any Trust
Monies held by the Collateral Agent shall from time to time be invested or
reinvested as set forth in the Collateral Agency Agreement. Unless an Event of
Default occurs and is continuing, or so long as any Notice of Actionable Default
remains outstanding and unrescinded, any interest on cash or such Temporary Cash
Investments (in excess of any accrued interest paid at the time of purchase)
which may be received by the Collateral Agent with respect to the Notes
Collateral Account shall be forthwith paid to the Company. The Trustee shall not
be liable or responsible for any loss resulting from such investments or sales.
Notwithstanding anything to the contrary in this Section, no funds may
be withdrawn and paid to the Company from and after any Major Collateral
Disposition.
ARTICLE 14
MISCELLANEOUS
SECTION 14.01 TRUST INDENTURE ACT CONTROLS. If and to the extent that
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "INCORPORATED PROVISION") included in
this Indenture by operation of, Sections 310 to 318, inclusive, of the TIA, such
imposed duties or incorporated provision shall control.
SECTION 14.02 NOTICES. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service or sent by facsimile, telex, graphic scanning or other telegraphic
communications equipment of the sending party (or with respect with
communications to Noteholders, mailed) to the address set forth below. Notices
must purport to be signed by a duly authorized representative of the party
giving notice. All notices shall be in the English language.
if to the Issuer:
Polytama International Finance B.V.
c/o HB Management Europe B.V.
World Trade Center Amsterdam Airport
Xxxxxxxx Xxxxxxxxx 000
0000 XX Xxxxxxxxx,
Xxx Xxxxxxxxxxx
Tel. No.: 00-00-000-0000
Fax No.: 00-00-000-0000
Attention of:
76
HB Management Europe B.V.
Managing Director,
with a copy to the Company.
if to the Company:
P.T. Polytama Propindo
Xxx Xxxxx 0 Xxxxxxxx, 00xx Xxxxx
Xx. Xxxx. Xxxxxxxx Xxx. 00-00
Xxxxxxx, Xxxxxxxxx 10220
Tel. No. 00-00-000-0000
Fax. No. 00-00-000-0000
Attention of:
Xxxxxxx X. Xxxxxxxxx
Finance Director
with a copy to the Issuer.
if to the Trustee:
The Bank of New York
Corporate Trust Administration
Floor 21 West
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax. No. 0-000-000-0000/5803
Attention of: Global Trust Services
with copies to:
The Bank of New York
Xxx Xxxxxxx Xxxxxx
#00-00 Xxxxxxxx Xxxxx
Xxxxxxxxx 000000
Fax. No. 00-00000000
Attention of: Global Trust Services
The Issuer, the Company or the Trustee by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
sent by facsimile, telex, graphic scanning or other telegraphic communications
equipment of the sender, or with respect to communications mailed to
Noteholders, five business days after mailing, in each case
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delivered or sent (properly addressed) to such party as provided in this Section
14.02 or in accordance with the latest unrevoked direction from such party given
in accordance with this Section 14.02.
All notices to Holders shall be published in English in a leading
English language newspaper, such as the Wall Street Journal, being published on
each day in morning editions, whether or not it shall be published on Saturday,
Sunday or holiday editions. Notices shall be deemed to have been given on the
date of publication as aforesaid or if published on different dates, on the date
of the first such publication. In addition, notices shall be mailed to the
Holder at Holder's address as it appears on the registration books of the
Registrar.
SECTION 14.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Notes. The Issuer, the Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
SECTION 14.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by the Issuer or the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Issuer or the
Company, as the case may be, shall furnish to the Trustee:
(1) an Officer's Certificate in form satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel in form satisfactory to the Trustee
stating that, in the opinion Of such counsel, all such conditions precedent
have been complied with.
SECTION 14.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 14.06 ENGLISH LANGUAGE. All communications to the Trustee
hereunder all requests the Trustee to take any action and Officer's Certificates
and Opinions of Counsel and reports, financial statements financial information,
certificates, opinions, records, registers, agreements with Registrars, Paying
Agents, co-registrars and information required by the TIA or hereunder shall be
in the English language. The Company shall furnish the Trustee with certified
and sworn English translations of any documents provided pursuant to the terms
hereof in conjunction with any request that the Trustee take any action
hereunder and such other documents as the Trustee shall reasonably request in
order to perform its duties hereunder.
SECTION 14.07 RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
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SECTION 14.08 MEETINGS OF HOLDERS. A meeting of Holders to consider
matters affecting such Holders' interests, including the approval of amendments
and modifications as provided for under Section 9.02, may be convened by Holders
holding not less than 10% of the principal amount of the outstanding Notes. The
quorum at such meeting shall be two or more persons entitled to vote a majority
in principal amount of the outstanding Notes, or at an adjourned meeting, two or
more persons entitled to vote 50% in principal amount of the outstanding Notes.
SECTION 14.09 LEGAL HOLIDAYS. A "LEGAL HOLIDAY" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 14.10 GOVERNING LAW.THIS INDENTURE, THE NOTES AND THE
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 14.11 WAIVER OF INDEMNITY; SUBMISSION TO JURISDICTION AND
APPOINTMENT OF AGENT FOR SERVICE OF PROCESS
(a) To the extent that the Issuer or the Company or any of their
respective revenues, assets or properties has or hereafter may acquire any
immunity from jurisdiction of any court or from attachment in aid of execution,
execution, or any other legal process for enforcement of judgment in any action
or proceeding in any manner arising out of this Indenture, the Notes, the
Guarantee, the Collateral Agency Agreement or the Security Documents or the
transactions contemplated hereby or thereby, each of the Issuer and the Company
hereby irrevocably agrees not to claim, and irrevocably waives (to the extent it
lawfully may be so), any such immunity, and any defense based on such immunity,
in respect of its obligations arising out of this Indenture, the Notes, the
Guarantee, the Collateral Agency Agreement and the Security Documents and the
transactions contemplated here and thereby.
(b) Each of the Issuer and the Company agrees that any legal suit,
action or proceeding brought by the Trustee or any Holder arising out of or
based upon this Indenture the Notes or the Guarantee (including the Collateral
Agency Agreement or the Security Documents) may be instituted in any state or
Federal court located in New York City, waives any claim that such proceeding
has been brought in an inconvenient forum, irrevocably submits to and accepts
the nonexclusive jurisdiction of such courts in any such proceeding and
irrevocably hereby appoints CT Corporation System, 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, as its authorized agent (the "AUTHORIZED AGENT") upon which process
may be served in any such action which may be instituted any such court. Each of
the Issuer and the Company agrees to take any and all action, including the
filing of any and all documents and instruments and paying all such fees that
may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent and written notice of
such service to the Issuer or the Company (mailed or delivered to the Issuer or
the Company at its address set forth above) shall be deemed effective service of
process upon the Issuer or the Company, as the case may be. Notwithstanding the
foregoing, any action based on this Indenture, the Securities or the
transactions contemplated hereby or thereby may be instituted by the Trustee or
any Holder in any competent court, including courts in The Netherlands and
Indonesia.
SECTION 14.12 INDEMNIFICATION FOR JUDGMENT CURRENCY FLUCTUATIONS. The
obligations of the Issuer and the Company to any Holder under this Indenture or
the Notes shall, notwithstanding any judgment in a currency (the "JUDGMENT
CURRENCY") other than U.S. dollars (the "AGREEMENT CURRENCY"), be discharged
only to the extent that on the day following receipt by such Holder or the
Trustee, as the case may be, of any amount in the Judgment Currency, such Holder
may in accordance with normal banking procedures purchase the Agreement Currency
with the Judgment Currency. If the amount of the Agreement Currency so purchased
is less than the amount originally to be paid to such Holder or the Trustee, as
the case may be, in the Agreement Currency, each of the Issuer and the Company
agrees, as a separate obligation and notwithstanding such judgment, to pay the
79
difference, and if the amount of the Agreement Currency so purchased exceeds the
amount originally to be paid to such Holder or the Trustee, as the case may be,
such Holder or the Trustee, as the case may be, agrees to pay to or for the
account of the Issuer or the Company, as the case may be, such excess, PROVIDED
that such Holder or the Trustee, as the case may be, shall not have any
obligation to pay any such excess as long as a Default by the Issuer in its
respective obligations under the Securities or this Indenture, as the case may
be, has occurred and is continuing, in which case such excess may be applied by
such Holder to such obligations.
SECTION 14.13 NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Issuer or the Company shall not have
any liability for any obligations of the Issuer or the Company under the Notes,
the Guarantee or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Note, each
Noteholder shall waive and release all such liability. The waiver and release
shall be part of the consideration for the issue of the Notes and the Guarantee.
SECTION 14.14 SUCCESSORS. All agreements of each of the Issuer and the
Company in this Indenture, the Notes and the Guarantee shall bind any of its
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 14.15 MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 14.16 TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 14.17 TAX CONSIDERATIONS. It is the intention of the Issuer
and the Company that for U.S. Federal, state and local income tax purposes: (i)
neither the Holders nor the Trustee shall be at any time the owner of the
Collateral for U.S. Federal, state or local tax purposes and (ii) the trust
estate created hereby is intended solely to be a security arrangement and not a
trust and neither the Trustee nor the Holders shall file any returns, reports or
other documents or take any position inconsistent therewith for U.S. Federal,
state or local tax law purposes.
SECTION 14.18 SEVERABILITY. In case any provision in this Indenture,
in the Notes or in the Guarantee shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not, any
way, be affected or impaired thereby.
SECTION 14.19 ACTS OF HOLDERS
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor the Trustee, the Issuer and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The
80
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also b proved in any other
manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Notes shall be computed as of such record date;
PROVIDED that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after the record
date.
(Signatures on next page)
81
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
POLYTAMA INTERNATIONAL FINANCE
B.V., as Issuer,
By HB MANAGEMENT EUROPE B.V.
By
------------------
Authorized Signatory
By
------------------
Authorized Signatory
P.T. POLYTAMA PROPINDO, as Guarantor,
By
--------------------------------
Name:
Title: Director
THE BANK OF NEW YORK, as Trustee,
By
--------------------------------
Name:
Title:
EXHIBIT
[FORM OF FACE OF NOTE DUE 2017]
No._____ $_____
CUSIP No.
8% Guaranteed Secured Note Due 2017
[Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
This Note is in global form within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. Unless and until it is exchanged in whole or in part
for Notes in certificated form, this Note may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor depository or a nominee of such
successor depository.](1)
POLYTAMA INTERNATIONAL FINANCE B.V., a closed company with limited
liability duly organized and existing under the laws of The Netherlands, with
its statutory seat in Rotterdam, The Netherlands, promises to pay to CEDE & CO.,
or registered assigns, on each December 15 and June 15, commencing on June 15,
2003 (each a "Scheduled Payment Date") the principal sum corresponding to such
Scheduled Payment Date set forth on Schedule I to this Note, or on such earlier
date as the entire principal may become due in accordance with the provisions
hereof, and to pay interest thereon.
Interest Payment Dates: June 15 and December 15 of each year,
commencing June 15, 2003.
Record Dates: June 1 and December 1.
----------
(1) To be included in the Global Security.
Additional provisions of this Note are set forth on the other side of
this Note.
Dated: , 2002
POLYTAMA INTERNATIONAL FINANCE
B.V.,
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one of the Notes referred to in the
within-mentioned Indenture.
By:
----------------------------------
Authorized Signatory
(FORM OF REVERSE SIDE OF NOTE DUE 2017)
8% Guaranteed Secured Note Due 2017
1. PRINCIPAL AND INTEREST
POLYTAMA INTERNATIONAL FINANCE B.V., a closed company with limited
liability duly organized and existing under the laws of The Netherlands, with
its statutory seat in Rotterdam, The Netherlands (herein referred to as the
"Issuer," which term includes its successors and assigns under the Indenture
hereinafter referred to), for value received, hereby promises to pay (a)
interest (as set forth in the Indenture, such term includes Additional Amounts)
on the principal amount of this Note at the rate per annum shown above and (b)
principal due on the Notes in accordance with SCHEDULE I attached hereto. The
Issuer will pay principal and interest semiannually on June 15 and December 15
of each year. Interest on the Notes will accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid or duly provided for, from [ ], 2003. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. The Issuer shall pay interest
on overdue principal at the rate borne by this Note plus 1% per annum, and it
shall pay interest on overdue installments of interest at the same rate to the
extent lawful.
2. METHOD OF PAYMENT
The Issuer will pay principal and interest on the Notes (except
defaulted interest) to the Persons who are registered holders of Notes at the
close of business on the June 1 or December 1 next preceding the Scheduled
Payment Date and interest payment date even if Notes are cancelled after the
record date and on or before the interest payment date. The Issuer will pay
principal and interest in money of the United States of America that at the time
of payment is legal tender for payment of public and private debts. However, the
Issuer may pay principal and interest by check payable in such money. Payment on
this Note will be made upon surrender or presentation of this Note to a Paying
Agent. However, at the option of the Issuer, it may mail an interest check to a
Holder's registered address.
3. PAYING AGENT AND REGISTRAR
Initially, the Corporate Trust Department of the Trustee, at Floor 21
West, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, will act as Paying Agent and
Registrar. In the event definitive Notes are issued under the Indenture, the
Issuer shall also maintain a Paying Agent in Luxembourg and registered holders
shall be entitled to receive payment through such Paying Agent. The Issuer may
appoint and change any Paying Agent or Registrar without notice.
4. INDENTURE, SECURITY AND GUARANTEE
The Issuer issued this Note under an Indenture dated as of [ ],
2002, among the Issuer, P.T. Polytama Propindo, an Indonesian corporation (the
"Company") and Trustee (the "Indenture"). The terms of this Note include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on the
date of the Indenture (the "Act"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. This Note is
subject to all such terms of the Indenture, and the registered holder of this
Note is referred to the Indenture and the Act for a statement of those terms
those terms.
The Notes are an obligation of the Issuer limited to $120,000,000
aggregate principal amount (subject to Section 2.02 of the Indenture) and,
unless earlier redeemed under the circumstances described herein, will be paid
in amounts as set forth on Schedule I to the Indenture.
This Note is irrevocably and unconditionally guaranteed by the Company, as set
forth in the Guarantee endorsed on this Note.
EACH HOLDER, BY ITS ACCEPTANCE OF A NOTE, (I) CONSENTS AND AGREES TO
THE TERMS OF THE COLLATERAL AGENCY AGREEMENT AND THE SECURITY DOCUMENTS AND
AUTHORIZES AND APPROVES THE TRUSTEE'S EXECUTION THEREOF AND (II) AGREES THAT
SUCH HOLDER IS BOUND BY THE TERMS THEREOF AND THAT SUCH HOLDER MAY NOT TAKE ANY
ACTION CONTRARY THERETO.
The Indenture imposes certain limitations on the Company and its
Restricted Subsidiaries (which includes the Issuer), including limitations on
the Incurrence of Indebtedness, Restricted Payments (including payment of
dividends and other distributions on and retirements of the Capital Stock of the
Company and its Restricted Subsidiaries, redemption of Subordinated Obligations
of the Company and the making of certain Investments), Liens and Pari Passu
Indebtedness, Sale/Leaseback Transactions, Restrictions on Distributions from
Restricted Subsidiaries, Transactions with Affiliates, the Company's Business,
Sales of non-Collateral Assets and Restricted Subsidiary Stock and Sales of
Collateral. In addition, the Indenture limits the ability of the Issuer to,
among other things, engage in any business activities other than those relating
to the Notes.
5. OPTIONAL REDEMPTION
(a) At any time after the Issue Date, the Notes will be subject to
redemption at the option of the Issuer, in whole or in part, upon not less than
30 nor more than 60 days' notice, at a redemption price equal to the principal
amount of Notes to be redeemed, plus accrued and unpaid interest thereon to the
date fixed for redemption.
(b) If as a result of any change in or amendment to the laws,
treaties, regulations or rulings of the Republic of Indonesia or The Netherlands
(or of any political subdivision or taxing authority in the Republic of
Indonesia or The Netherlands), or any change in official position regarding the
application or interpretation of such laws, treaties, regulations or rulings
(including a holding, judgment or order by a court of competent jurisdiction),
which is proposed and becomes effective on or after the date of the Indenture,
in making any payment due or to become due under any Note, the Indenture, or
pursuant to the Guarantee, (i) the Issuer is or would be required on the next
succeeding interest payment date to pay Additional Amounts, (ii) the Company is,
or on the next interest payment date would be, unable, for reasons outside its
control, to cause the Issuer to pay amounts due under the Notes, and with
respect to any amount due under the Guarantee or the Indenture, the Company is,
or on the next interest payment date would be, required to deduct or withhold
(x) any tax of The Netherlands (or any political subdivision or taxing authority
thereof or therein) or (y) any tax of the Republic of Indonesia (or any
political subdivision or taxing authority thereof or therein) that is imposed at
a rate in excess of 20% or (iii) with respect to any payment to the Issuer to
enable the Issuer to make any payment of principal of, or interest on, the Notes
or the Additional Amounts, the Company is, or on the next interest payment date
would be, required to deduct or withhold any tax of the Republic of Indonesia
(or any political subdivision or taxing authority thereof or therein) at a rate
in excess of 10% (calculated after giving effect to any reduction of the rate of
withholding tax available under any tax treaty between The Netherlands and the
Republic of Indonesia), the Notes may be redeemed at the option of the Issuer,
in whole but not in part, upon not less than 30 nor more than 60 days' notice
given as provided in the Indenture, at any time, at a redemption price equal to
the principal amount thereof, plus accrued and unpaid interest to the date fixed
for redemption; PROVIDED that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the Issuer or the
Company, as the case may be, would be obligated to make such withholding if a
payment in respect of any Note or the Guarantee were then due. The Issuer will
also pay to holders of the Notes on the redemption date any Additional Amounts
then due and which will become due as a result of the redemption or otherwise.
Prior to the publication of any notice of redemption in accordance
with the foregoing, the Issuer shall deliver to the Trustee an Officer's
Certificate stating that the Issuer is entitled to effect such redemption based
on an Opinion of Counsel or written advice of a qualified tax expert, such
counsel or tax expert being reasonably acceptable to the Trustee, that the
Issuer or the Company has or will become obligated to pay Additional Amounts or
withhold, as described in the preceding paragraph, as the case may be, as a
result of such change or amendment. Such notice, once delivered by the Issuer to
the Trustee, will be irrevocable.
6. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each registered holder of Notes to be
redeemed at his registered address. If money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on the redemption date
is deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Notes called for redemption.
7. NOTE REPURCHASE
The Issuer may at any time purchase Notes by tender (available to all
Holders alike) or in the open market at any price. If the Issuer shall acquire
any Notes, such acquisition shall not operate as, or be deemed for any purpose
to be, a satisfaction of the indebtedness represented by such Notes unless and
until such Notes are delivered to the Trustee for cancellation and are cancelled
and retired by the Trustee.
8. CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder shall have the
right to require that the Issuer repurchase such Holder's Notes at a purchase
price in cash equal to 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of repurchase, (subject to the right of
holders of record on the relevant record date to receive interest on the
relevant interest payment date) plus any Additional Amounts then due or which
will become due as a result of the repurchase or otherwise, in accordance with
the terms of the Indenture.
9. ASSET AND COLLATERAL SALES
(a) MAJOR COLLATERAL DISPOSITIONS. Upon a Major Collateral Disposition, in
accordance with the terms of the Indenture, each Holder shall have the right to
require the Issuer to purchase such Holder's Notes at a purchase price in cash
equal to 100% of the principal amount thereof (or, in the case of a Major
Collateral Disposition resulting from an Involuntary Loss, 100% of the principal
amount thereof) plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of holders of record on the relevant record date
to receive interest on the relevant interest payment date) plus any Additional
Amounts then due or which will become due as a result of the repurchase or
otherwise.
(b) OTHER COLLATERAL SALES. If at any time the Exchangeable Notes are
outstanding, the Issuer shall apply any Excess Collateral Proceeds in accordance
with the Exchangeable Notes Indenture. If no Exchangeable Notes are outstanding
and if the aggregate amount of Excess Collateral Proceeds in the Collateral
Accounts at any time exceeds $10.0 million (i) the Issuer shall make a
Collateral Offer, in accordance with the terms of the Indenture, to purchase
Securities in an aggregate principal amount equal to the Excess Collateral
Proceeds in the Notes Collateral Account, on the date such threshold is
exceeded, at 100% of the principal amount thereof, plus accrued interest, if
any, plus any Additional Amounts then due or which will become due as a result
of the repurchase or otherwise, to the date of purchase and (ii) to the extent
the Company or any Restricted Subsidiary is required by the terms of any Secured
Indebtedness (other than the Notes), the Company or such
Restricted Subsidiary shall prepay, repay, redeem or repurchase such Secured
Indebtedness with Net Available Cash from the Additional Indebtedness Collateral
Account.
(c) OTHER ASSET SALES. If at any time the Exchangeable Notes are
outstanding, the Issuer shall apply any Excess Proceeds in accordance with the
Exchangeable Notes Indenture. If no Exchangeable Notes are outstanding and when
the aggregate amount of Excess Proceeds from all Asset Dispositions which are
not dispositions of Collateral exceeds the equivalent of $10.0 million, the
Issuer shall, within 30 days thereafter, make an Excess Proceeds Offer, in
accordance with the provisions of the Indenture, to purchase on a pro rata basis
Notes at 100% of the principal amount thereof plus accrued and unpaid interest,
if any, to the purchase date, plus any Additional Amounts due thereon (and any
other Secured Indebtedness, and any other unsubordinated Indebtedness of the
Issuer or the Company for which the Issuer or the Company is required to make a
similar offer pursuant to the terms of such unsubordinated Indebtedness, at a
price no greater than par), in an aggregate amount equal to the Excess Proceeds.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Notes are issued only in registered form without coupons in
denominations of $1.00 and whole multiples of $1.00. A registered holder may
transfer or exchange this Note in accordance with the Indenture. The Registrar
may require the registered holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture.
11. PERSONS DEEMED OWNERS
The registered Holder of this Note may be treated as the owner of it
for all purposes.
12. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Issuer at its request subject to any applicable abandoned property law
designating another Person. After such payment, Holders entitled to the money
must look only to the Issuer and not to the Trustee for payment.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Issuer or the Company at any time
may terminate some or all of their obligations under the Notes or the Guarantee
and the Indenture if the party exercising such option deposits with the Trustee
money or U.S. Government Obligations for the payment of principal and interest
on the Notes to redemption or maturity, as the case may be.
14. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Notes, the Guarantee, the Collateral Agency Agreement and the
Security Documents may be amended with the written consent of the Holders of at
least a majority in principal amount outstanding of Notes and (ii) any default
under the Notes or the Indenture may be waived with the written consent of the
Holders of a majority in principal amount outstanding of the Notes. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Holder, the Company and the Trustee may amend the Indenture the Notes or the
Guarantee to, among other things, cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to further secure the Securities or add guarantees with respect to the
Securities, or to add additional covenants or surrender rights and powers
conferred on the Company or the Issuer, or to comply with any requirement of the
SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Holder.
15. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default with respect to the Securities
include (i) a default in the payment of interest or any Additional Amounts on
the Notes when due, continued for 30 days, (ii) a default in the payment of
principal of any Security when due at each Scheduled Payment Date, upon optional
redemption, upon required repurchase, upon declaration or otherwise, (iii) the
failure by the Company or the Issuer to comply with its obligations under
Article 5 of the Indenture, (iv) failure by the Company or the Issuer to comply
with other covenants and agreements in the Indenture, in certain cases subject
to notice and lapse of time, (v) any Change of Control of the Company during
certain time periods, (vi) Indebtedness of the Company, the Issuer or any
Significant Subsidiary, other than the Exchangeable Notes (except the failure of
the Issuer or the Company to redeem the Exchangeable Notes at their Stated
Maturity or to exchange the Exchangeable Notes within 180 days after their
Stated Maturity), is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default and the
total amount such Indebtedness unpaid or accelerated exceeds $5.0 million, (vii)
certain events of bankruptcy, insolvency or reorganization of the Company, the
Issuer or a Significant Subsidiary, (viii) certain judgments or decrees for the
payment of money in excess of $5.0 million, (ix) the Guarantee ceases to be in
full force and effect (other than in accordance with the terms of the Guarantee)
or the Company denies or disaffirms its obligations under its Guarantee or (x)
certain Liens with respect to the Collateral cease to have the perfection and
priority contemplated by the Security Documents.
Holders may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes
unless it receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in principal amount of the Notes may direct
the Trustee in its exercise of any trust or power with respect to the Notes. The
Trustee may withhold from Holders notice of any continuing Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in the interest of the Holders.
16. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Issuer, the Company or their Affiliates and may otherwise deal with the
Issuer, the Company or their Affiliates with the same rights it would have if it
were not Trustee.
17. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Issuer,
the Company or the Trustee shall not have any liability for any obligations of
the Issuer or the Company under the Notes, the Guarantee or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Note, each registered holder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Notes.
18. AUTHENTICATION
This Note shall not be valid or become obligatory for any purpose
until an authorized officer of the Trustee (or an authenticating agent) manually
signs the certificate of authentication on the other side of this Note.
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (= tenant in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
20. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Issuer has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to the registered holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
21. CHOICE OF LAW
THIS NOTE (INCLUDING THE GUARANTEE ENDORSED UPON IT) SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
The Issuer will furnish to any registered holder upon written request
and without charge to the registered holder a copy of the Indenture which has in
it the text of this Note.
Requests may be made to:
Polytama International Finance B.V.
c/oHB Management Europe B.V.
World Trade Center Amsterdam Airport
Xxxxxxxx Xxxxxxxxx 000
0000 XX Xxxxxxxxx,
Xxx Xxxxxxxxxxx
(011)(31)(00) 000-0000
GUARANTEE
FOR VALUE RECEIVED, P.T. POLYTAMA PROPINDO (herein referred to as the
"Company"), as principal obligor and not merely as surety, has, pursuant to the
Indenture, irrevocably and unconditionally guaranteed to the registered holder
of this Note upon which this notation of such Guarantee is endorsed that: (i)
principal of, premium, if any, and interest on this Note, will be promptly paid
in full when due, subject to any applicable grace period, whether on the stated
maturity, on an interest payment date, by acceleration, by call for redemption,
upon repurchase or purchase pursuant to the Indenture referred to therein or
otherwise, and interest on the overdue principal and premium, if any, and
interest on any interest, to the extent lawful (in each case including interest
accruing on or after filing of any petition in bankruptcy or reorganization
relating to the Issuer or the Company, whether or not a claim for post filing
interest is allowed in such proceeding on said Note) and all other obligations
of the Issuer to the registered holder of this Note under this Note or the
Indenture, including any Additional Amounts payable, will be promptly paid in
full when due or performed, all in accordance with the terms of this Note and
the Indenture; and (ii) in case of any extension of time of payment or renewal
of said Note or of any such other obligations, that the same will be promptly
paid in full, when due or performed in accordance with the terms of the
extension or renewal, subject to any applicable grace period, whether at
maturity, on an interest payment date, by acceleration, required repurchase or
otherwise.
The obligations of the Company to the registered holder of this
Security and to the Trustee pursuant to the Guarantee and the Indenture are
expressly set forth in the Indenture to which reference is hereby made for the
precise terms of such obligations.
P.T. POLYTAMA PROPINDO,
by
--------------------------
Name:
Title:
by
--------------------------
Name:
Title:
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITY(2)
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Amount of Principal Amount Signature of
Amount of decrease increase in of this Global authorized
in Principal Principal Amount Security following officer of
Amount of this of this Global such decrease (or Trustee or
Date of Exchange Global Security Security increase) Security Custodian
--------------------------------------------------------------------------------------------------------
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========================================================================================================
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(2) This should be included only if the Note is issued in global form.
OPTION OF REGISTERED HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer
pursuant to Section 4.07, 4.08 or Section 4.10 of the Indenture, check the box:
/ / Section 4.07 / / Section 4.08 / / Section 4.10
If you want to elect to have only part of this Note purchased by
the Issuer pursuant to Section 4.07, 4.08 or 4.10 of the Indenture, state the
amount (such specified amount must be in an integral multiple of $1.00):
$_______________________________
Date: ___________
---------------------------
Signature
---------------------------
Signature Guaranteed
NOTICE: The signature must correspond to the name as written upon the face of
this Note in every particular without alteration or any change whatsoever.
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
ASSIGNMENT FORM
(To be executed by the registered holder if such holder
desires to transfer this Note)
FOR VALUE RECEIVED ____________________
hereby sells, assigns and transfers unto
PLEASE INSERT ASSIGNEE'S SOCIAL SECURITY
OR OTHER TAX IDENTIFYING NUMBER
-----------------------------------------
-----------------------------------------
____________________________________________________________________(Print or
type assignee's name, address and zip code)
this Note, together with all right, title and interest herein and does hereby
irrevocably constitute and appoint _______________ Agent to transfer this Note
on the Register relating to this Note. The Agent may substitute another to act
for him.
Date: ________________
-----------------------------
Signature
-----------------------------
Signature Guaranteed
NOTICE: The signature must correspond to the name as written upon the face of
this Note in every particular, without alternation or any change whatsoever.
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
SCHEDULE I
The principal of the New Senior Notes will be payable in semiannual
installments, commencing June 15, 2003, as follows:
PERCENTAGE OF
PRINCIPAL AMOUNT
PAYMENT DATE PAYABLE
---------------- ----------------
June 15, 2003..................................... 1.783009913%
December 15, 2003................................. 1.854330310%
June 15, 2004..................................... 1.928503522%
December 15, 2004................................. 2.005643663%
June 15, 2005..................................... 2.085869410%
December 15, 2005................................. 2.169304186%
June 15, 2006..................................... 2.256076354%
December 15, 2006................................. 2.346319408%
June 15, 2007..................................... 2.440172184%
December 15, 2007................................. 2.537779071%
June 15, 2008..................................... 2.639290234%
December 15, 2008................................. 2.744861844%
June 15, 2009..................................... 2.854656317%
December 15, 2009................................. 2.968842570%
June 15, 2010..................................... 3.087596273%
December 15, 2010................................. 3.211100124%
June 15, 2011..................................... 3.339544129%
December 15, 2011................................. 3.473125894%
June 15, 2012..................................... 3.612050930%
December 15, 2012................................. 3.756532967%
June 15, 2013..................................... 3.906794285%
December 15, 2013................................. 4.063066057%
June 15, 2014..................................... 4.225588699%
December 15, 2014................................. 4.394612247%
June 15, 2015..................................... 4.570396737%
December 15, 2015................................. 4.753212606%
June 15, 2016..................................... 4.943341111%
December 15, 2016................................. 5.141074755%
June 15, 2017..................................... 5.346717745%
December 15, 2017................................. 5.560586455%
================================================================================
INDENTURE
Dated as of December [ ], 2002
among
POLYTAMA INTERNATIONAL FINANCE B.V.
as Issuer,
P.T. POLYTAMA PROPINDO
as Guarantor,
and
THE BANK OF NEW YORK
as Trustee
---------------------------------------------
$120,000,000 8% Guaranteed Secured Notes Due 2017
---------------------------------------------
================================================================================
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
---------- ------------
310(a)(1) .......................................................... 7.10
(a)(2) .......................................................... 7.10
(a)(3) .......................................................... 7.12
(a)(4) .......................................................... N.A.
(b) .......................................................... 7.10
(c) .......................................................... N.A.
311(a) .......................................................... 7.11
(b) .......................................................... 7.11
(c) .......................................................... N.A.
312(a) .......................................................... 2.05
(b)(1) .......................................................... 14.03
(c)(2) .......................................................... 14.03
313 (a) .......................................................... 7.06
(b)(1) .......................................................... 7.06
(b)(2) .......................................................... 7.06
(c) .......................................................... 7.06; 14.02
(d) .......................................................... 7.06
314 (a) .......................................................... 4.02; 14.02
(b) .......................................................... 12.03
(c)(1) .......................................................... 14.04
(c)(2) .......................................................... 14.04
(c)(3) .......................................................... N.A.
(d) .......................................................... 12.09(ii)
(e) .......................................................... 14.05
(f) .......................................................... N.A.
315 (a) ......................................................... 7.01
(b) .......................................................... 7.05; 14.02
(c) .......................................................... 7.01
(d) .......................................................... 7.01
(e) .......................................................... 6.11
316 (a)(last sentence)......................................................... 2.08
(a)(1) (A) .......................................................... 6.05
(a)(1) (B) .......................................................... 6.04
(a)(2) .......................................................... N.A.
(b) .......................................................... 6.07
(c) .......................................................... 2.15
317 (a)(1) .......................................................... 6.08
(a)(2) .......................................................... 6.09
(b) .......................................................... 2.04
318 (a) .......................................................... 14.01
(b) .......................................................... N.A.
(c) .......................................................... 14.01
N.A. means Not Applicable
----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1 Definitions and Incorporation by Reference
SECTION 1.01 Definitions............................................................1
SECTION 1.02 Other Definitions.....................................................15
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.....................16
SECTION 1.04 Rules of Construction.................................................16
ARTICLE 2 The Securities
SECTION 2.01 Form and Dating.......................................................17
SECTION 2.02 Execution and Authentication..........................................17
SECTION 2.03 Registrar and Paying Agent............................................18
SECTION 2.04 Paying Agent To Hold Money in Trust...................................18
SECTION 2.05 Noteholder Lists......................................................18
SECTION 2.06 Transfer and Exchange.................................................19
SECTION 2.07 Replacement Notes.....................................................21
SECTION 2.08 Outstanding Notes.....................................................21
SECTION 2.09 Temporary Notes.......................................................21
SECTION 2.10 Cancellation..........................................................22
SECTION 2.11 Defaulted Interest....................................................22
SECTION 2.12 Persons Deemed Owners.................................................22
SECTION 2.13 Computation of Interest...............................................23
SECTION 2.14 Predecessor Securities................................................23
SECTION 2.15 Record Date...........................................................23
ARTICLE 3 Redemption
SECTION 3.01 Notices to Trustee....................................................23
SECTION 3.02 Selection of Notes To Be Redeemed.....................................23
SECTION 3.03 Notice of Redemption..................................................23
SECTION 3.04 Effect of Notice of Redemption........................................24
SECTION 3.05 Deposit of Redemption Price...........................................24
SECTION 3.06 Notes Redeemed in Part................................................24
ARTICLE 4 Covenants
SECTION 4.01 Payment of Notes; Payment of Additional Amounts.......................24
SECTION 4.02 Reports...............................................................27
SECTION 4.03 Limitation on Indebtedness............................................27
SECTION 4.04 Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries...............................................28
SECTION 4.05 Limitation on Restricted Payments.....................................28
SECTION 4.06 Limitation on Restrictions on Distributions from Restricted
Subsidiaries .........................................................29
SECTION 4.07 Limitation on Sales of Non-Collateral Assets and Subsidiary Stock.....30
SECTION 4.08 Limitation on Sales of Collateral.....................................32
SECTION 4.09 Limitation on Affiliate Transactions..................................36
SECTION 4.10 Change of Control.....................................................37
SECTION 4.11 Limitation on the Sale or Issuance of Capital Stock of Restricted
Subsidiaries .........................................................38
SECTION 4.12 Limitation on Liens and Pari Passu Indebtedness.......................38
SECTION 4.13 Limitation on Sale/Leaseback Transactions.............................39
SECTION 4.14 Limitation on Issuer Activities.......................................39
SECTION 4.15 Keepwell Commitment...................................................39
SECTION 4.16 Amendments to Security Documents......................................39
ii
iii
Page
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ARTICLE 14 Miscellaneous
SECTION 14.01 Trust Indenture Act Controls..........................................76
SECTION 14.02 Notices...............................................................76
SECTION 14.03 Communication by Holders with Other Holders...........................78
SECTION 14.04 Certificate and Opinion as to Conditions Precedent....................78
SECTION 14.05 Statements Required in Certificate or Opinion.........................78
SECTION 14.06 English Language......................................................78
SECTION 14.07 Rules by Trustee, Paying Agent and Registrar..........................78
SECTION 14.08 Meetings of Holders...................................................79
SECTION 14.09 Legal Holidays........................................................79
SECTION 14.10 Governing Law.........................................................79
SECTION 14.11 Waiver of Indemnity; Submission to Jurisdiction and Appointment of
Agent for Service of Process .........................................79
SECTION 14.12 Indemnification for Judgment Currency Fluctuations....................79
SECTION 14.13 No Recourse Against Others............................................80
SECTION 14.14 Successors............................................................80
SECTION 14.15 Multiple Originals....................................................80
SECTION 14.16 Table of Contents; Headings...........................................80
SECTION 14.17 Tax Considerations....................................................80
SECTION 14.18 Severability..........................................................80
SECTION 14.19 Acts of Holders.......................................................80
iv