EXHIBIT T3C
INDENTURE dated as of December [ ], 2002, among POLYTAMA INTERNATIONAL FINANCE
B.V., a private company with limited liability incorporated under the laws of
The Netherlands having its corporate seat in Rotterdam, The Netherlands (the
"Issuer"), as issuer, P.T. POLYTAMA PROPINDO, an Indonesian corporation (the
"Company"), as guarantor, and THE BANK OF NEW YORK, a New York banking
corporation (the "Trustee"), as trustee.
Each party agrees as follows for the benefit of the other parties and
for the benefit (except as otherwise provided in this Indenture) of the
Holders of the Issuer's 6% Guaranteed Secured Exchangeable Notes Due 2012:
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01 Definitions
"Accounts Receivable" means any and all rights to payment for
Inventory sold or services performed in the ordinary course of business,
whether due or to become due, whether or not earned by performance, whether
now in existence or arising from time to time hereafter, including, without
limitation, rights evidenced by or in the form of an account, note, draft,
letter of credit, contract right, security agreement, or other evidence of
Indebtedness or security.
"Actionable Default" means (i) any Event of Default or (ii) any event
of default under and as defined in any agreement pursuant to which Additional
Indebtedness is Incurred; provided that only those events which give the
Holders or the holders of Additional Indebtedness, as the case may be, the
right to accelerate Indebtedness or result in the automatic acceleration of
Indebtedness, including after notice or passage of time or both, shall be an
Actionable Default.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; (ii) the Capital Stock
of a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by the Company or another Restricted
Subsidiary or (iii) Capital Stock constituting a minority interest in any
Person that at such time is a Restricted Subsidiary; provided, however, that
any such Restricted Subsidiary described in clauses (ii) or (iii) above is
primarily engaged in a Related Business.
"Additional Indebtedness" means Indebtedness, including any
guarantees thereof, the holders of which become party to the Collateral Agency
Agreement in accordance with the terms of Section 4.12.
"Additional Indebtedness Agent" means any agent appointed by the
holders of Additional Indebtedness to represent such Persons in respect to the
Additional Indebtedness and the Collateral.
"Additional Indebtedness Collateral Account" has the meaning given in
Section 5.01 of the Collateral Agency Agreement.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of Sections 4.05, 4.07 and 4.09 only, "Affiliate"
shall also mean any beneficial owner of Capital Stock representing 5% or more
of the total voting power of the Voting Stock (on a fully diluted basis) of
the Company or of rights or warrants to purchase such Capital Stock (whether
or not currently exercisable) and any Person who would be an Affiliate of any
such beneficial owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease (including, without
limitation, any Sale/Leaseback Transaction), transfer or other disposition (or
series of related sales, leases, transfers or dispositions) by the
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Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction or any Involuntary Loss (each
referred to for the purposes of this definition as a "disposition"), of (i)
any shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares or shares required by applicable law to be held
by a Person other than the Company or a Restricted Subsidiary), (ii) all or
substantially all the assets of any division or line of business of the
Company or any Restricted Subsidiary or (iii) any other assets of the
Company or any Restricted Subsidiary outside of the ordinary course of
business of the Company or such Restricted Subsidiary (other than, in the
case of (i), (ii) and (iii) above, (y) a disposition by a Restricted
Subsidiary to the Company or by the Company or a Restricted Subsidiary to a
Wholly Owned Subsidiary and (z) for purposes of Section 4.07 only, a
disposition that constitutes a Restricted Payment permitted by Section 4.05.
"Assigned Rights" means all rights including the proceeds, meaning
all right, title and interest in and to all amounts now or in the future
payable to the assignor under or in connection with any Contract, arising from
contracts and leases relating to the Plant, its operation and the manufacture
therein of polypropylene, including, without limitation, (a) the Himont
License Agreement between Himont Incorporated ("Himont") and P.T. Tirtamas
Majutama ("PTTM") dated April 21, 1993 and April 15, 1993 novated by a
Novation Agreement dated July 7, 1994 among the Company, Himont and PTTM, (b)
the Propylene Supply Agreement; and (c) the Amended and Restated Polypropylene
Offtake Agreement between BP Asia Trading Pte. Ltd. and the Company dated June
2, 1997.
"Assignment of Rights" has the meaning given in the Collateral Agency
Agreement.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Notes, compounded annually) of the total obligations of the
lessee for rental payments during the remaining term of the lease included in
such Sale/Leaseback Transaction (including any period for which such lease has
been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i)
the sum of the products of numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness
or redemption or similar payment with respect to such Preferred Stock
multiplied by the amount of such payment by (ii) the sum of all such payments.
"Board of Directors" means (i) in relation to the Company, the Board
of Directors of the Company and (ii) in relation to the Issuer, the board of
Managing Directors of the Issuer and, in each case, any committee thereof duly
authorized to act on behalf of such Board of Directors. Any determination to
be made, or approval to be given, by a Board of Directors shall be made by a
majority of the members having no personal stake in such determination or
approval.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to
be classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented
by such obligation shall be the capitalized amount of such obligation
determined in accordance with GAAP; and the Stated Maturity thereof shall be
the date of the last payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be terminated by the lessee
without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of
or interests in (however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities convertible into such
equity.
"Casualty Event" shall mean any destruction or damage by flood, fire,
explosion, wind, storm, earthquake or any other casualty.
"Change of Control" means the occurrence of any of the following
events: (i) the Permitted Holders cease to be the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly
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or indirectly, of at least 51% in the aggregate of the total voting power of
the Voting Stock of the Company, whether as a result of issuance of
securities of the Company, any merger, consolidation, liquidation or
dissolution of the Company, any direct or indirect transfer of securities by
the Company or otherwise (for purposes of this clause (i) and clause (ii)
below, the Permitted Holders shall be deemed to beneficially own any Voting
Stock of a corporation (the "specified corporation") held by any other
corporation (the "parent corporation") so long as the Permitted Holders
beneficially own (as so defined), directly or indirectly, in the aggregate a
majority of the voting power of the Voting Stock of the parent corporation);
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board of Directors
or whose nomination for election by the shareholders of the Company was
approved by a vote of 66-2/3% of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of the Company
then in office; or (iii) the merger or consolidation of the Company with or
into another Person or the merger of another Person with or into the
Company, or the sale of all or substantially all the assets of the Company
to another Person (other than a Person that is controlled by the Permitted
Holders), and, in the case of any such merger or consolidation, the
securities of the Company that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power of the
Voting Stock of the Company are changed into or exchanged for cash,
securities or property, unless pursuant to such transaction such securities
are changed into or exchanged for, in addition to any other consideration,
securities of the surviving corporation that represent immediately after
such transaction, at least a majority of the aggregate voting power of the
Voting Stock of the surviving corporation.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Collateral" means the Real Property Collateral, the Moveable Assets
Collateral, the Proceeds Collateral and the Assigned Rights.
"Collateral Accounts" means the accounts established pursuant to the
Collateral Agency Agreement for holding cash and cash equivalents for the
benefit of the Secured Creditors and includes the Notes Collateral Account (as
described in the Collateral Agency Agreement) and the Additional Indebtedness
Collateral Account (as described in the Collateral Agency Agreement).
"Collateral Agency Agreement" means the Collateral Agency Agreement
dated the date hereof among the Issuer, the Company, the Trustee on behalf of
the Noteholders, the Senior Notes Trustee and PT Bank Mandiri (Persero) as
Collateral Agent for the Trustee and the representative of the other Secured
Creditors with respect to the Collateral.
"Collateral Agent" means PT Bank Mandiri (Persero).
"Collateral Disposition" means any Asset Disposition with respect to
any Collateral; provided, however, that a substitution of Moveable Assets
Collateral in compliance with Section 12.07 shall be excluded from the
definition of "Collateral Disposition."
"Commodity Agreement" means, with respect to any Person, any forward
contract, futures contract or option or other agreement, instrument or
arrangement or combination thereof entered into in the ordinary course of such
Person's business and designed to provide protection against fluctuations in
the price of any commodity used or produced in the business in which such
Person is engaged.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successors.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (ii) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that (1) if the Company or any Restricted
Subsidiary has Incurred any Indebtedness since the beginning of such period
that remains outstanding or if the transaction giving rise to the need to
calculate the Consolidated Coverage
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Ratio is an Incurrence of Indebtedness, or both, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving effect on
a pro forma basis to such Indebtedness as if such Indebtedness had been
Incurred on the first day of such period and the discharge of any other
Indebtedness repaid, repurchased, defeated or otherwise discharged with the
proceeds of such new Indebtedness as if such discharge had occurred on the
first day of such period, (2) if since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset Disposition,
the EBITDA for such period shall be reduced by an amount equal to the EBITDA
(if positive) directly attributable to the assets which are the subject of
such Asset Disposition for such period, or increased by an amount equal to
the EBITDA (if negative), directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeated or otherwise discharged with respect to the Company
and its continuing Restricted Subsidiaries in connection with such Asset
Disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary to
the extent the Company and is continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale), (3) if since the
beginning of such period the Company or any Restricted Subsidiary (by merger
or otherwise) shall have made an Investment in any Restricted Subsidiary (or
any person which becomes a Restricted Subsidiary) or an acquisition of
assets, including any acquisition of assets occurring in connection with a
transaction requiring a calculation to be made hereunder, which constitutes
all or substantially all of an operating unit of a business, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any
Indebtedness) as if such Investment or acquisition occurred on the first day
of such period and (4) if since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with or into
the Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (2) or (3)
above if made by the Company or a Restricted Subsidiary during such period,
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto as if such Asset Disposition,
Investment or acquisition occurred on the first day of such period. For
purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto in
the amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be
determined in good faith by a responsible financial or accounting Officer of
the Company. If any Indebtedness bears a floating rate of interest and is
being given pro forma effect, the interest of such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been
the applicable rate for the entire period (taking into account any Interest
Rate Agreement applicable to such Indebtedness if such Interest Rate
Agreement has a remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent Incurred by the Company or its Restricted Subsidiaries, (i) interest
expense attributable to capital leases and one-third of the rental expense
attributable to operating leases, (ii) amortization of debt discount and debt
issuance cost, (iii) capitalized interest, (iv) non cash interest expenses,
(v) commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, (vi) net costs associated
with Hedging Obligations (including amortization of fees), (vii) Preferred
Stock dividends in respect of all Preferred Stock held by Persons other than
the Company or a Wholly Owned Subsidiary, (viii) interest Incurred in
connection with Investments in discontinued operations, (ix) interest accruing
on any Indebtedness of any other Person to the extent such Indebtedness is
guaranteed by, or secured by the assets of, the Company or any Restricted
Subsidiary and (x) the cash contributions to any employee stock ownership plan
or similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period the net income of the
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income: (i) any net income of any
Person if such Person is not a Restricted Subsidiary, except that (A) subject
to the exclusion contained in clause (iv) below, the Company's equity in the
net income of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a
dividend or other distribution paid to a Restricted Subsidiary, to the
limitations contained in clause (iii) below) and (B) the Company's equity in a
net loss of any such Person for such period shall be included in determining
such
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Consolidated Net Income; (ii) any net income (or loss) of any Person
acquired by the Company or a Subsidiary in a pooling of interests transaction
for any period prior to the date of such acquisition; (iii) any net income of
any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the
making of distributions by such Restricted Subsidiary, directly or indirectly,
to the Company, except that (A) subject to the exclusion contained in clause
(iv) below, the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net Income
up to the aggregate amount of cash actually distributed by such Restricted
Subsidiary during such period to the Company or another Restricted Subsidiary
as a dividend or other distribution (subject, in the case of a dividend or
other distribution paid to another Restricted Subsidiary, to the limitation
contained in this clause) and (B) the Company's equity in a net loss of any
such Restricted Subsidiary for such period shall be included in determining
such Consolidated Net Income; (iv) any gain (but not loss) realized upon the
sale or other disposition of any assets of the Company or its consolidated
Subsidiaries (including pursuant to any sale-and-leaseback arrangement) which
is not sold or otherwise disposed of in the ordinary course of business and
any gain (but not loss) realized upon the sale or other disposition of any
Capital Stock of any Person; (v) extraordinary gains or losses; and (vi) the
cumulative effect of a change in accounting principles. Notwithstanding the
foregoing, for the purposes of Section 4.05 only, there shall be excluded from
Consolidated Net Income any dividends, repayments of loans or advances or
other transfers of assets from Unrestricted Subsidiaries to the Company or a
Restricted Subsidiary to the extent such dividends, repayments or transfers
increase the amount of Restricted Payments permitted under Section
4.05(a)(3)(D).
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on
a consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of
any action for the purpose of which the determination is being made, as (i)
the par or stated value of all outstanding Capital Stock of the Company plus
(ii) paid-in capital or capital surplus relating to such Capital Stock plus
(iii) any retained earnings or earned surplus less (A) any accumulated deficit
and (B) any amounts attributable to Disqualified Stock.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement to which
such Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Definitive Securities" means Securities that are in the form of
Exhibit A attached hereto that do not include the information called for by
footnote 1 thereof.
"Depositary" means The Depository Trust Company, a New York
corporation, or any successor thereto or any replacement depository.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness
or Disqualified Stock or (iii) is redeemable at the option of the holder
thereof, in whole or in part, in each case on or prior to the first
anniversary of the Stated Maturity of the Notes; provided, however, that any
Capital Stock that would not constitute Disqualified Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase
or redeem such Capital Stock upon the occurrence of an "asset sale" or "change
of control" occurring prior to the first anniversary of the Stated Maturity of
the Notes shall not constitute Disqualified Stock if the "asset sale" or
"change of control" provisions applicable to such Capital Stock are not more
favorable to the holders of such Capital Stock than the provisions of Sections
4.07, 4.08 and 4.10.
"EBITDA" for any period means the sum of Consolidated Net Income,
plus Consolidated Interest Expense plus the following to the extent deducted
in calculating such Consolidated Net Income: (a) all income tax 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
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in the same proportion) that the net income of such Subsidiary was included
in calculating Consolidated Net Income and only if a corresponding amount
would be permitted at the date of determination to be dividended to the
Company by such Subsidiary without prior approval (that has not been
obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and Governmental,
regulations applicable to such Subsidiary or its stockholders.
"Estimated Project Costs" means, with respect to a Qualified Project,
all costs and expenses reasonably estimated by the Company and set forth in a
written resolution for the Company's Board of Directors prior to the
commencement of such Qualified Project to be Incurred by the Company to
acquire, develop, design, construct, start up and finance such Qualified
Project, including the acquisition of the facility site, equipment and
supplies, and including interest during construction, sales and other taxes,
financing fees and reasonable advisory, legal and management fees and
expenses.
"Excess Cash Flow" means, with respect to the Company for any fiscal
year, the EBITDA of the Company and its consolidated Subsidiaries for such
period plus any Excess Proceeds and Excess Collateral Proceeds; minus (1)
Consolidated Interest Expense of the Company and its consolidated Subsidiaries
that is paid during such period; minus (2) capital expenditures of the Company
and its consolidated Subsidiaries that are actually paid during such period;
minus (3) an amount of US$500,000 to be used as working capital of the Company
and its consolidated Subsidiaries; minus (4) consolidated income tax expense
for such period, minus; (5) scheduled or required principal payments on
Indebtedness permitted to be incurred pursuant to the New Senior Indenture and
the Exchangeable Notes Indenture; minus (6) the aggregate principal amount,
premium paid in connection with an optional redemption of the Notes made
pursuant to Section 5 of the Notes during the fiscal year preceding such
Excess Cash Flow Offer; and minus (7) the aggregate principal amount, premium,
if any, paid by the Company during the fiscal year preceding such Excess Cash
Flow Offer in connection with New Exchangeable Notes repurchased pursuant to a
Change of Control Offer as described in Section 4.10.
"Exchange Shares" means the shares of common stock of the Company
into which the Notes are exchangeable.
"Fair Market Value" per security at any date of determination (i)
prior to an initial public offering, means (A) in connection with a sale to a
party that is not an Affiliate of ours in an arm's-length transaction (a
"Non-Affiliate Sale"), the price per security at which such security is sold
and (B) in connection with any sale to an Affiliate of ours, (1) the last
price per security at which such security was sold in a Non-Affiliate Sale
within the one-year period preceding such date of determination or (2) if
clause (1) is not applicable, the fair market value of such security
determined in good faith by (a) a majority of the Board of Directors of the
Company, including a majority of directors who are not officers, employees,
directors or Affiliates of the party to whom the sale of securities giving
rise to such determination is proposed to be made or (b) a nationally
recognized investment banking, appraisal or valuation firm and (ii) after an
Initial Public Offering, means the mean between the high and low selling
prices per share of the common stock of the Company on the immediately
preceding date (or, if the common stock of the Company was not traded on that
day, the next preceding day that the common stock of the Company was traded)
on the principal exchange or market system on which the common stock of the
Company is traded, as such prices are officially quoted on such exchange.
"Fiduciary Assignment of Accounts" has the meaning given in the
Collateral Agency Agreement.
"Fiduciary Transfer" has the meaning given in the Collateral Agency
Agreement.
"GAAP" means generally accepted accounting principles in the Republic
of Indonesia which are in effect on the date of determination.
"Global Security" means a Security that is in the form of Exhibit A
hereto that includes the information called for by footnote 1 thereof.
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"Governmental Authority" means any nation or government, any state or
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other obligation of such
Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services, to
take-or-pay or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the obligee
of such Indebtedness or other obligation of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part); provided,
however, that the term "guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "guarantee"
used as a verb has a corresponding meaning. The term "guarantor" shall mean
any Person guaranteeing any obligation.
"Guarantee" means the irrevocable and unconditional guarantee of the
Notes by the Company pursuant to Article 10.
"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
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maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the mandatory provisions of the TIA, which are incorporated by
reference in this Indenture pursuant to Section 1.03 and are deemed to be a
part of and govern this instrument, and any such supplemental indenture,
respectively.
"Independent Appraiser" means an internationally recognized
appraisal, accounting, investment banking, or other firm, as appropriate, that
(i) is in fact independent in respect of the transaction in question; (ii) is
an expert in respect of the relevant valuation or appraisal activity; (iii)
does not have any direct financial interest or any material indirect financial
interest in the Company or any Subsidiary, the Trustee, the Collateral Agent
or in any Affiliate of any of them; and (iv) is not connected with the Company
or a Subsidiary, the Trustee, the Collateral Agent or any such Affiliate as a
director, officer, employee or Affiliate.
"Insurance Assignment" has the meaning given in the Collateral Agency
Agreement.
"Insurance Collateral Account" means the account established for the
benefit of the parties to the Collateral Agency Agreement to hold certain
insurance proceeds pending repair or replacement of the Collateral subject to
an Involuntary Loss.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement
designed to protect the Company or any Restricted Subsidiary against
fluctuations in interest rates.
"Inventory" means all stocks of products and goods produced, all
extractions, all raw materials, all work in progress, stocks of spare parts,
fuels, lubricants, and all stocks and all assets of similar kind now existing
and hereafter acquired.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or
other similar instruments issued by such Person. For purposes of the
definition of "Unrestricted Subsidiary," the definition of "Restricted
Payment" and Section 4.05, (i) "Investment" shall include the portion
(proportionate to the Company's equity interest in such Subsidiary) of the
fair market value of the net assets of any Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary equal to an amount (if positive)
equal to (x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of
such Subsidiary at the time of such redesignation; and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors.
"Involuntary Loss" means a loss or disposition resulting from the
requisition by any Governmental entity of title to, seizure by any
Governmental entity of, or forfeiture to such Governmental entity of, any
property or assets, or any actual or constructive loss or an agreed or
compromised loss, including any Casualty Event.
"Issue Date" means the date on which the Notes are originally issued.
"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.
"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.
8
"Keepwell Commitment" means an agreement by any Person to maintain
working capital, equity capital or any other financial statement condition or
liquidity of any other Person.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Loan Facilities" means any facility utilized for working capital
purposes, not exceeding $50.0 million.
"Major Collateral Disposition" means any Asset Disposition, in one or
a series of related transactions, of Collateral with a book value of more than
25% of the aggregate book value of all Collateral, determined by reference to
the Company's most recent quarterly financial statements.
"Majority Shareholder" means either Tirtamas or Tuban Petro,
whichever owns the largest equity stake in the Company.
"Moveable Assets Collateral" means all moveable assets (other than
Inventory, goods in process and raw materials), whether now owned or hereafter
acquired, which form part of, or are used in connection with, the Plant.
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or
otherwise, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets or
received in any other noncash form) in each case net of (i) all legal, title
and recording tax expenses, commissions and other fees and expenses Incurred,
and all Federal, state, provincial, foreign (including Indonesian) and local
taxes due and payable at the time of such Asset Disposition or required to be
accrued as a liability under GAAP, as a consequence of such Asset Disposition,
(ii) all payments made on any Indebtedness which is secured by any assets
subject to such Asset Disposition, in accordance with the terms of any Lien
upon or other security agreement of any kind with respect to such assets, or
which must by its terms, or in order to obtain a necessary consent to such
Asset Disposition, or by applicable law be, repaid out of the proceeds from
such Asset Disposition, (iii) all distributions and other payments required to
be made to minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Disposition and (iv) the deduction of appropriate amounts
provided by the seller as a reserve, in accordance with GAAP, against any
liabilities associated with the property or other assets disposed in such
Asset Disposition and retained by the Company or any Restricted Subsidiary
after such Asset Disposition. In the case of an Asset Disposition that is a
disposition of Collateral, any amount of insurance or other proceeds received
in connection with an Involuntary Loss (excluding payments received for loss
of profits or excess costs in respect of business interruption insurance)
shall be included in the foregoing definition of "Net Available Cash;"
provided that, any such proceeds received by the Company or any Restricted
Subsidiary in connection with any assets sold or transferred to any Restricted
Subsidiary shall be excluded from the definition of Net Available Cash for the
purposes of Section 4.07.
"Net Cash Proceeds," with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Note Custodian" means The Bank of New York, as custodian of the
Notes in global form for the Depositary under a custody agreement or any
similar successor agreement.
"Notes" means the 6% Guaranteed Secured Exchangeable Notes due 2012
issued, authenticated and delivered under this Indenture, as amended or
supplemented from time to time pursuant to the terms of this Indenture.
9
"Notes Collateral Account" has the meaning given in Section 5.01 of
the Collateral Agency Agreement.
"Notice of Actionable Default" means a notice delivered to the
Collateral Agent stating that an Actionable Default has occurred, which
describes with reasonable particularity the nature of the Actionable Default,
and is delivered to the Collateral Agent by (i) the Trustee for the holders of
the Notes, acting pursuant to this Indenture, (ii) the Exchangeable Notes
Trustee, acting pursuant to the Exchange Notes Indenture, or (iii) the
Additional Indebtedness Agent, acting upon the instructions of the holders of
a majority of the Outstanding Additional Indebtedness Obligations (as defined
in the Collateral Agency Agreement). A Notice of Actionable Default shall be
deemed to have been given when the notice referred to in the preceding
sentence has actually been received by a Responsible Officer (as defined in
the Collateral Agency Agreement) of the Collateral Agent. A Notice of
Actionable Default shall be deemed to be outstanding at all times after such
notice has been given until the earlier of such time, if any, as (i) the
Collateral Agent has been notified by the Trustee or the Additional
Indebtedness Agent, as the case may be, which delivered such notice, that such
notice has been rescinded or waived or (ii) the Trustee and the Additional
Indebtedness Agent, if any, have determined, in accordance with Section 3.03
of the Collateral Agency Agreement, to rescind or waive such notice.
"Officer" means the Chairman of the Board, the President, any Vice
President, any Managing Director, the Treasurer or the Secretary of the
Company or the Issuer, as applicable.
"Officer's Certificate" means (i) in relation to the Issuer, a
certificate signed by one officer and (ii) in relation to the Company, a
certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.
"Permitted Holders" means each of Tirtamas, The British Petroleum
Company Plc, a corporation established under the laws of the United Kingdom or
any Wholly Owned Subsidiary of The British Petroleum Company Plc (each, a "BP
Company"), Nissho Iwai Corporation, a corporation established under the laws
of Japan ("NIC") and Tuban Petro.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) the Company or a Restricted Subsidiary or a
Person that will, upon the making of such Investment, become a Restricted
Subsidiary; provided, however, that the primary business of such Restricted
Subsidiary is a Related Business; (ii) another Person if as a result of such
Investment such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary; provided, however, that such Person's primary business
is a Related Business; (iii) Temporary Cash Investments; (iv) receivables
owing to the Company or any Restricted Subsidiary if created or acquired in
the ordinary course of business and payable or dischargeable in accordance
with customary trade terms; provided, however, that such trade terms may
include such concessionary trade terms as the Company or any such Restricted
Subsidiary deems reasonable under the circumstances; (v) payroll, travel and
similar advances to cover matters that are expected at the time of such
advances ultimately to be treated as expenses for accounting purposes and that
are made in the ordinary course of business; (vi) loans or advances to
employees made in the ordinary course of business consistent with past
practices of the Company or such Restricted Subsidiary; provided that if any
such loans or advances involve, in the aggregate, an amount in excess of
US$1.0 million, such loans or advances are set forth in writing and have been
approved by the Board of Directors of the Company; (vii) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments; and (viii) any Person to the extent such Investment
represents the non-cash portion of the consideration received for an Asset
Disposition as permitted pursuant to Section 4.07.
"Permitted Liens" means (i) Liens created pursuant to the Pledge
Agreement, the Collateral Agency Agreement or Security Documents; (ii) Liens
for taxes, assessments or Governmental charges or claims that 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
10
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; and (vii)
Liens securing Indebtedness represented by the Senior Notes (and any
Guarantees thereof), including under the Security Documents relating
thereto, Incurred in accordance with Section 4.03.
"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.
11
"Real Property Collateral" means the Plant Site and all buildings
(including, but not limited to, any pipelines), plant, machinery, fixtures,
fittings, equipment, improvements and additions now or hereafter affixed to
such buildings, constructions and pipelines which, according to prevailing
laws are regarded as immoveable property together with all other items which
permanently constitute one unit within the Plant Site.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, decease or retire, or to issue
other Indebtedness in exchange for or the substantially concurrent
replacement, refinancing or repayment of, such Indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with the Indenture including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or
if Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; provided further,
however, that Refinancing Indebtedness shall not include (x) Indebtedness of a
Subsidiary that Refinances Indebtedness of the Company or (y) Indebtedness of
the Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
"Related Business" means any business related, ancillary or
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock or similar payment to the direct or indirect
holders of its Capital Stock (other than dividends or distributions payable
solely in its Capital Stock (other than Disqualified Stock)) other than
dividends or distributions payable solely to the Company or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation)), (ii) the purchase, redemption or other acquisition
or retirement for value of any Capital Stock of the Company held by any Person
or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of
the Company (other than a Restricted Subsidiary), including the exercise of
any option to exchange any Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock), (iii) the purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment of
any Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of acquisition) or (iv) the
making of any Investment in any Person (other than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary; provided, however, that notwithstanding
anything to the contrary in the definition of "Unrestricted Subsidiary," the
Issuer (or any successor thereof as obligor under the Notes) shall always be a
Restricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Restricted
Subsidiary leases it from such Person.
"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.
12
"Secured Creditors" means the holders of the Notes represented by the
Trustee, holders of the Senior Notes represented by the Senior Notes Trustee
and the holders of Additional Indebtedness represented by the Additional
Indebtedness Agent, as the same may from time to time be reflected as parties
to the Security Documents.
"Secured Indebtedness" means the Notes, the Guarantee, the Senior
Notes, the Senior Notes Guarantee, the Additional Indebtedness and any other
Indebtedness secured by a Lien on Collateral.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the Global
Security (as appointed by the Depositary), or any successor entity thereto and
shall initially be the Trustee.
"Security Deed" has the meaning given in the Collateral Agency
Agreement.
"Security Documents" means, collectively, the Security Deed, the
Fiduciary Transfer, the Fiduciary Assignment of Accounts, the Assignment of
Rights and the Insurance Assignment.
"Senior Indebtedness" means, with respect to any Person on any date
of determination (without duplication), (i) Indebtedness of such Person,
whether outstanding on the Issue Date or thereafter Incurred and (ii) accrued
and unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to such Person to the
extent post-filing interest is allowed in such proceeding) in respect of (A)
Indebtedness of such Person for money borrowed and (B) Indebtedness evidenced
by notes, debentures, bonds or other similar instruments for the payment of
which such Person is responsible or liable unless, in the instrument creating
or evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are subordinate in right of payment to the
Notes; provided, however, that Senior Indebtedness shall not include (1) any
obligation of such Person to any Subsidiary of such Person, (2) any liability
for Federal, state, local or other taxes owed or owing by such Person, (3) any
accounts payable or other liability to trade creditors arising in the ordinary
course of business of such Person (including guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness of such Person (and any
accrued and unpaid interest in respect thereof) which is subordinate or junior
in any respect to any other Indebtedness or other obligation of such Person or
(5) that portion of any Indebtedness which at the time of Incurrence is
Incurred in violation of the Indenture.
"Senior Notes" means the Issuer's 8% Guaranteed Secured Notes due
2017, issued the date hereof.
"Senior Indenture" means the Indenture among the Issuer, the Company
and The Bank of New York, a New York banking corporation, as trustee,
governing the Senior Notes, dated the date hereof.
"Senior Notes Guarantee" means the guarantee of the Senior Notes by
the Company pursuant to the Senior Indenture.
"Senior Notes Trustee" means the then acting trustee under the Senior
Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"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.
13
"Subsequent Lien" means any Lien that (a) covers any or all of the
land on which the Plant is located and any or all fixtures thereon that is
subsequent in time and junior in priority to any Lien thereon granted to the
Collateral Agent pursuant to the Security Deed; (b) secures Indebtedness of
the Issuer or the Company; and (c) does not, together with all such other then
existing Subsequent Liens, secure Indebtedness in an amount which exceeds the
aggregate principal amount of Secured Indebtedness, if any, which has been
repaid, redeemed or repurchased by the Issuer or the Company, as applicable,
simultaneously with or prior to the creation of such Subsequent Lien.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of
the total voting power of shares of Capital Stock or other interests
(including partnership interests) entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i)
such Person, (ii) such Person and one or more Subsidiaries of such Person or
(iii) one or more Subsidiaries of such Person.
"Tangible Assets" means the net book value of property, plant and
equipment and other noncurrent and current assets held by the Company at the
date of determination, less any intangible assets.
"Temporary Cash Investments" means any of the following: (i) any
evidence of Indebtedness, maturing not more than one year after the date of
Investment by the Company, the Issuer or any other Restricted Subsidiary,
Issued by the United States of America or any instrumentality or agency
thereof, or by the Republic of Indonesia or any instrumentality or agency
thereof, or by the Asian Development Bank the World Bank or any other
supranational organization (collectively, "Government Entities") and
guaranteed or otherwise backed, directly or indirectly, fully as to principal,
premium, if any, and interest, by the Government Entity issuing such
Indebtedness, (ii) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States, and which bank or trust company has
capital, surplus and undivided profits aggregating in excess of US$50.0
million (or the foreign currency equivalent thereof) and has outstanding debt
which is rated "A" (or such similar equivalent rating) or higher by at least
one nationally recognized statistical rating organization (as defined in Rule
436 under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above, (iv) investments in commercial
paper, maturing not more than 90 days after the date of acquisition, issued by
a corporation (other than an Affiliate of the Company) organized and in
existence under the laws of the United States of America or any foreign
country recognized by the United States of America with a rating at the time
as of which any investment therein is made of "P-1" (or higher) according to
Xxxxx'x Investors Service, Inc. or "A-1" (or higher) according to Standard and
Poor's Ratings Group and (v) investments in securities with maturities of six
months or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States of America or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group or "A" by Xxxxx'x Investors Service, Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
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.
14
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of
its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien
on any property of, the Company or any other Subsidiary of the Company that is
not a Subsidiary of the Subsidiary to be so designated; provided, however,
that either (A) the Subsidiary to be so designated has total assets of
US$1,000 or less or (B) if such Subsidiary has assets greater than US$1,000,
such designation would be permitted under Section 4.05. The Board of Directors
may designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided, however, that immediately after giving effect to such designation
(x) the Company could Incur US$1.00 of additional Indebtedness under paragraph
(a) of Section 4.03 and (y) no Default shall have occurred and be continuing.
Any such designation by the Board of Directors shall be by the Company to the
Trustee by promptly filing with the Trustee a copy of the board resolution
giving effect to such designation and an Officer's Certificate certifying that
such designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the Issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares and shares
held by other Persons to the extent such shares are required by applicable law
to be held by a Person other than the Company or a Restricted Subsidiary) is
owned by the Company or one or more Wholly Owned Subsidiaries.
SECTION 1.02 Other Definitions.
Term Defined in Section
"Additional Amounts"............................. 4.01(b)
"Affiliate Transaction".......................... 4.09
"Agent Members................................... 2.01
"Agreement Currency"............................. 15.12
"Authorized Agent"............................... 15.11(b)
"Bankruptcy Law"................................. 6.01
"covenant defeasance option"..................... 8.01(b)
"Custodian"...................................... 6.01
"Date of Exchange"............................... 14.02
"Defaulted Interest"............................. 2.11
"Distribution Date".............................. 14.05
"Event of Default"............................... 6.01
"Excess Cash Flow Redemption".................... 3.07
"Excess Cash Flow Redemption Amount"............. 3.07
"Excess Cash Flow Redemption Price............... 3.07
"Excess Collateral Process"...................... 4.08(c)
"Excess Proceeds"................................ 4.07(b)
"Exchange Price"................................. 4.01(c)
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"Governmental Taking"............................ 12.08
"Incorporated Provision"......................... 13.01
"Indemnity"...................................... 10.02
"Judgment Currency".............................. 15.12
"Keepwell"....................................... 4.15
"legal defeasance option"........................ 8.01(b)
"Legal Holiday".................................. 15.09
"MCD Offer"...................................... 4.08(b)
"MCD Offer Amount"............................... 4.08(b)
"MCD Purchase Date".............................. 4.08(b)
"New Collateral Assets".......................... 4.08(c)
"PKLN Team"...................................... 4.20
"Paying Agent"................................... 2.03
"Registrar"...................................... 2.03
"Release Notice"................................. 12.05
"Restricted Payment"............................. 4.05
"Substitute Collateral".......................... 12.07
"Substitution Notice"............................ 12.07
"Successor Company".............................. 5.01
"Trigger Event".................................. 14.05
"Trust Monies"................................... 13.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04 Rules of Construction. Unless context otherwise
requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any non-interest bearing or other
discount security at any date shall be the principal amount thereof that would
be shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP and accretion of principal on such security shall be
deemed to be the Incurrence of Indebtedness; and
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE 2
The Securities
SECTION 2.01 Form and Dating. The Notes and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. Subject to
Section 2.06, the Notes shall be represented in global form. The Notes may
have notations, legends or endorsements required by law, stock exchange rule
or usage. The Issuer shall furnish any such legend not contained in Exhibit A
to the Trustee in writing. Each Note shall be dated the date of its
authentication. The terms of the Notes set forth in Exhibit A are part of the
terms of this Indenture.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary, or the Trustee as its custodian, or
under the Global Security, and the Depositary or its nominee, as the case may
be, may be treated by the Company, the Issuer, the Trustee and any agent of
the Company, the Issuer or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Issuer, the Trustee or any agent of the
Company, the Issuer or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of
a holder of a beneficial interest in any Global Security.
The Definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any
other manner permitted by the rules of any securities exchange on which such
Notes may then be listed, all as determined by the Officers of the Issuer
executing such Notes, as evidenced by their execution of such Notes in
accordance with Section 2.02.
Any Definitive Security which is issued shall be printed in a manner
which satisfies the Royal Decree No. H7 of January 8, 1947 of the law of The
Netherlands, if such decree remains in effect on the date of printing.
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.
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If an Officer of the Issuer whose signature is on a Note no longer
holds that office at the time the Trustee authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until an authorized officer of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate and deliver Notes for original issue
in the aggregate principal amount of not more than $40,000,000, pursuant to a
written order of the Issuer signed by an Officer of the Issuer. The order
shall specify the amount of Notes to be authenticated and the date on which
the original issue of the Notes is to be authenticated. The aggregate
principal amount of Notes which may be outstanding any time may not exceed
$72,250,000, except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Issuer to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar (as defined below), Paying Agent (as defined
below) or agent for service of notices demands.
SECTION 2.03 Registrar and Paying Agent. The Issuer shall maintain in
the City of New York an office or agency where Notes may be presented for
registration of transfer or for exchange (the "Registrar") and an office
agency where Notes may be presented for payment (the "Paying Agent") and the
Issuer and the Company shall maintain in the City of New York an office or
agency where notices or demands to or upon the Issuer and the Company in
respect of the Notes and this Indenture may be served. If the Notes are issued
in definitive form, the Issuer shall also maintain a Paying Agent and Holders
shall be entitled to receive payment and transfer Notes through such Paying
Agent. The Registrar shall keep a register for the Notes and of their transfer
and exchange. The Issuer may have one or more co-registrars and one or more
additional paying agents, which may be located within or outside the City of
New York. The term "Paying Agent" includes any additional paying agent and the
term "Registrar" includes any additional registrar.
Notwithstanding the foregoing, there shall be only one register for
the Notes.
The Issuer and the Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a party to this
Indenture, which shall incorporate the terms of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such agent. The
Issuer and the Company shall notify the Trustee of the name and address of any
such agent. If the Issuer fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07. The Issuer may appoint any Person regularly
providing corporate trust services as Registrar, co-registrar or Paying Agent.
The Issuer initially appoints the Trustee at the address specified in
Section 15.02 as Registrar and Paying Agent.
The Company initially appoints the Depository Trust Company to act as
Depositary with respect to the Global Securities.
SECTION 2.04 Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Note, the Issuer shall deposit with
the Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Issuer shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust or the
benefit of the Noteholders or the Trustee all money held by the Paying Agent
for the payment of principal of or interest on the Notes, shall notify the
Trustee of any default by 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
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funds disbursed by the Paying Agent. Upon payment to the Trustee, the Paying
Agent shall have no further liability for the money delivered to the
Trustee.
SECTION 2.05 Noteholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Noteholders. If the Trustee is not the
Registrar, the Issuer shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date for the Notes and at such
other times as the Trustee may request in writing, a list in such form and as
of such date as the Trustee may reasonably require of the names and addresses
of Noteholders.
SECTION 2.06 Transfer and Exchange.
(a) Subject to Section 2.06(g), when a Note is presented to the
Registrar or a co-registrar with a request to register a transfer, the
Registrar shall register the transfer as requested if the requirements of the
Registrar are met. Subject to Section 2.06(f), when Notes are presented to the
Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Definitive Securities of other authorized denominations,
the Registrar shall make the exchange as requested if the same requirements
are met. To permit registration of transfers and exchanges, the Issuer shall
execute and the Trustee shall authenticate Notes and the Company shall execute
the Guarantee endorsed thereon at the Registrar's or co-registrar's request,
subject to the limitations set forth Section 2.06(f).
(b) Prior to the due presentation for registration of transfer of any
Note, the Issuer, the Company, the Trustee, the Paying Agent, the Registrar or
a co-registrar may deem and treat the Person in whose name such Note is
registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Note and for all other purposes
whatsoever, whether or not such Note is overdue, and none of the Issuer, the
Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary.
(c) All Notes issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to
the same benefits under this Indenture as the Notes surrendered upon such
transfer or exchange.
(d) Transfer of a Definitive Security for a Beneficial Interest in a
Global Security. A Definitive Security may not be exchanged for a beneficial
interest in Global Security except upon satisfaction of the requirements set
forth below. Upon receipt by the Trustee of a Definitive Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with written instructions from the
Holder thereof directing the Trustee to make, or to direct the Note Custodian
to make, an endorsement on the Global Security to reflect an increase in the
aggregate principal amount of Notes represented by the Global Securities, the
Trustee shall cancel such Definitive Security in accordance with Section 2.10
and cause, or direct the Notes Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depositary and the
Notes Custodian, the aggregate principal amount of Notes represented by the
Global Security to be increased accordingly. If no Global Securities are then
outstanding, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.02, the Trustee shall authenticate a new
Global Security in the appropriate principal amount.
(e) Transfer and Exchange of Global Securities. The transfer and
exchange of beneficial interests in Global Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with the
procedures of the Depositary therefor.
(f) Transfer of a Beneficial Interest in a Global Security for a
Definitive Security.
(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
19
in lieu of all or a portion of the Global Securities (in which case
the Company will deliver Notes in definitive form within 30 days of
such request), any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Definitive Security. In any such event, upon receipt by the Trustee of
written instructions or such other form of instructions as is
customary for the Depositary, from the Depositary or its nominee on
behalf of any Person having a beneficial interest in a Global
Security, the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and
procedures existing between the Depositary and the Note Custodian,
cause the aggregate principal amount of the Global Security to be
reduced accordingly and, following such reduction, the Issuer shall
execute and, upon receipt of an authentication order in accordance
with Section 2.02, the Trustee shall authenticate and deliver to the
transferee a Definitive Security in the appropriate principal amount
and the Company shall execute the Guarantee endorsed thereon.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.06(f) and
2.06(h) shall be registered in such names and in such authorized
denominations as Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct Trustee. The Trustee
shall deliver such Definitive Securities to the Persons in whose names
such Notes are so registered.
(iii) If the Trustee has instituted or has been directed to institute
any judicial proceeding in a court to enforce the rights of the Holders
under the Notes, and the Trustee has been advised by counsel that in
connection with such proceeding it is necessary or appropriate for the
Trustee to obtain possession of the Notes, the Trustee may in its sole
discretion determine that the Notes represented by Global Securities
shall no longer be represented by such Global Securities. In such event,
the Issuer hereby agrees to execute and the Trustee will authenticate
deliver, in exchange for such Global Securities, individual Notes (and
if the Trustee has in its possession individual Notes previously
executed the Issuer, the Trustee will authenticate and deliver such
Notes), in authorized denominations, in an aggregate principal amount
equal to the principal amount of such Global Securities and registered
in such name or names as the Trustee deems appropriate.
(g) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (h) of this Section 2.06), a Global
Security may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.
(h) Authentication of Definitive Securities in Absence of Depositary.
If at any time:
(i) the Depositary for the Notes notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the
Global Securities and a successor Depositary for the Global Securities
is not appointed by the Issuer within 90 days after delivery of such
notice; or
(ii) the Issuer, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Securities
under this Indenture,
then the Issuer shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02, authenticate and deliver
and the Company shall execute the Guarantee endorsed thereon Definitive
Securities in an aggregate principal amount equal to the principal amount of
the Global Securities in exchange for such Global Securities.
(i) Legends. Each Note certificate evidencing Global Securities (and
all Notes issued in exchange therefor or substitution thereof), to the extent
required, shall bear such legends set forth in Exhibit A hereto.
(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
20
prior to such cancellation, if any beneficial interest in a Global Security
is exchanged for a Definitive Security, redeemed, repurchased or canceled,
the principal amount of Notes represented by such Global Security shall be
reduced accordingly and an endorsement shall be made on such Global
Security, by the Trustee or the Note Custodian, at the direction of the
Trustee, to reflect such reduction.
(k) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Issuer
shall execute and the Trustee shall (subject to Sections 2.06(f) and
(g)) authenticate Definitive Securities and Global Securities, and the
Company shall execute the Guarantee endorsed thereon, at the Registrar's
request.
(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Registrar may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith.
(iii) The Registrar may require a Holder to furnish appropriate
endorsements and transfer documents.
(iv) The Registrar shall not be required to register the transfer of
or exchange of any Security called for redemption, and the Registrar
shall not be required to register the transfer of or exchange of any
Security for a period of 15 days before the mailing of a notice of
redemption and ending at the close of business on the day of such
mailing.
(l) Payment of Principal and Interest. Payment of principal and
interest on any Global Security shall be made to the Depositary or its nominee
in accordance with the applicable procedures of the Depositary.
SECTION 2.07 Replacement Notes. If a mutilated Note is surrendered to
the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall,
at the Issuer's expense, authenticate a replacement Note if the requirements
of the Trustee and the Issuer are met. If required by the Trustee or the
Issuer, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Issuer and the Trustee to protect the Issuer, the Company, the Trustee,
the Paying Agent, the Registrar and any co-registrar from any loss which any
of them may suffer if a Note is replaced. The Issuer and the Trustee may
charge the Holder for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuer and
the Company and shall be entitled to the benefits of this Indenture.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement of mutilated, wrongfully taken, lost or destroyed Notes.
SECTION 2.08 Outstanding Notes. Notes outstanding at any time are all
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. A Note does not cease to be outstanding because the Issuer, the
Company or any Affiliate of the Issuer or the Company holds such Note.
If a Note is misplaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Issuer receive proof satisfactory to
them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, then on and
after that date the Notes (or portions thereof) cease to be outstanding and
interest on them ceases to accrue.
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
21
requiring the consent of the Noteholders, Notes owned by the Issuer or the
Company or any Affiliate of the Issuer or the Company shall be disregarded,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent or any
amendment, modification or other change to this Indenture, only Notes which
the Trustee actually knows are so owned shall be so disregarded. Notes so
owned which have been pledged in good faith shall not be disregarded if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to the Notes that the pledgee is not the Issuer, the
Company or any Affiliate of the Issuer or the Company.
SECTION 2.09 Temporary Notes. Until Definitive Securities are ready
for delivery, the Issuer may prepare and the Trustee shall authenticate
temporary Notes with the Guarantee endorsed thereon. Temporary Notes shall be
substantially in the form of Definitive Securities but may have variations
that the Issuer considers appropriate for temporary Notes. Without
unreasonable delay, the Issuer shall prepare and the Trustee shall
authenticate Definitive Securities, with the Guarantee and deliver them in
exchange for temporary Notes.
SECTION 2.10 Cancellation. The Issuer at any time may deliver Notes
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange, payment, repurchase, replacement, cancellation or payment.
The Trustee (and no one else) shall cancel and dispose of all Notes
surrendered for registration of transfer, exchange, payment or cancellation in
accordance with its policy of disposal and deliver a certificate of such
disposition to the Issuer unless the Issuer directs the Trustee to deliver
canceled Notes the Issuer. The Issuer may not issue new Notes to replace Notes
it has redeemed, purchased, paid or delivered to the Trustee for cancellation.
SECTION 2.11 Defaulted Interest. Any interest on any Note which is
payable, but is not punctually paid or duly provided for, on the dates and in
the manner provided in the Notes and this Indenture (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
record date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Issuer, at its election in each case, as provided in clause
(i) or (ii) below:
(i) The Issuer may elect to make payment of any Defaulted Interest to
the Persons in whose names the Notes are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Issuer shall
notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Note and the date of the proposed payment,
at the same time the Issuer shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the payment of
such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Issuer of such
special record date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the special record date therefor to be given to each Holder, not
less than 10 days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Notes are registered at the close of
business on such special record date.
(ii) The Issuer may make payment of any Default Interest on the Notes
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Issuer to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
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.
22
SECTION 2.12 Persons Deemed Owners. Prior to due presentment for
registration of transfer, the Issuer, the Company, the Trustee, the
authenticating agent, if any, and any Paying Agent, the Registrar or any
co-registrar may treat the Holder of a Note as the owner of such Note for the
purpose of receiving payment of principal of, premium (if any) and, subject to
Section 2.11, interest on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Issuer, the Company, the
Trustee, the authenticating agent, if any, or any Paying Agent, the Registrar
or any co-registrar shall be affected by notice to the contrary.
SECTION 2.13 Computation of Interest. Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.14 Predecessor Securities. All Definitive Securities and
Global Securities issued upon any registration of transfer or exchange of
Notes pursuant to Section 2.06 or in replacement of a lost, destroyed or
wrongfully taken Note pursuant to Section 2.07 shall evidence the same debt,
and be entitled to the same benefits under this Indenture, as the predecessor
Note or Notes surrendered upon such registration of transfer or exchange or
lost, destroyed or wrongfully taken, as the case may be.
SECTION 2.15 Record Date. The Issuer may set a record date for
purposes of determining the identity of Noteholders entitled to vote or to
consent to any action by vote of consent authorized or permitted by any
provision hereof. Unless this Indenture provides otherwise, such record date
shall be the later of 30 days prior to the first solicitation of such consent
or the date of the most recent list of Holders furnished to the Trustee
pursuant to Section 2.05 prior to such solicitation.
ARTICLE 3
Redemption
SECTION 3.01 Notices to Trustee. If the Issuer elects to redeem the
Notes pursuant to Section 5(a) or (b) of the Notes or if the Issuer is
required to redeem the Notes pursuant to Section 3.07 below, it shall notify
the Trustee in writing of the section and paragraph of the Notes pursuant to
which the redemption will occur, the redemption date, the redemption price,
and the principal amount of Notes to be redeemed.
The Issuer shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officer's
Certificate and an Opinion of Counsel from the Issuer to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02 Selection of Notes To Be Redeemed. If fewer than all the
Notes are to be redeemed, the Trustee shall select the Notes to be redeemed
pro rata or by lot or by a method that complies with applicable legal and
securities exchange requirements, if any, and that the Trustee considers fair
and appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances. The Trustee shall make the
selection from outstanding Notes not previously called for redemption. The
Trustee may select for redemption portions of the principal of Notes that have
denominations larger than $1.00. Notes and portions of them the Trustee
selects shall be in amounts of $1.00 or a whole multiple of $1.00. Provisions
of this Indenture that apply to Notes called for redemption also apply to
portions of Notes called for redemption. The Trustee shall notify the Company
and the Issuer promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.03 Notice of Redemption. At least 30 days but not more than
60 days before a date for redemption of Notes, the Issuer shall (i) mail a
notice of redemption by first-class mail to each Holder of Notes to be
redeemed and (ii) publish a notice of redemption as contemplated in Section
15.02.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
23
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that, unless the Issuer defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(6) the Section and paragraph of the Notes pursuant to which the
Notes called for redemption are being redeemed;
(7) that no representation is made as to the correctness or accuracy
of the CUSIP number or common code, if any, listed in such notice or printed
on the Notes;
(8) if fewer than all the outstanding Notes are to be redeemed, the
certificate numbers and principal amounts of the particular Notes to be
redeemed; and
(9) the CUSIP number, if any, printed on the Notes being redeemed.
At the Issuer's request, the Trustee shall give the notice of
redemption in the Issuer's name and at the Issuer's expense. In such event,
the Issuer shall provide the Trustee with the form of such notice containing
the information required by this Section.
SECTION 3.04 Effect of Notice of Redemption. Once notice of
redemption is mailed and published pursuant to Section 3.03, Notes called for
redemption become due and payable on the redemption date and at the redemption
price stated in the notice. Upon surrender to the Paying Agent, such Notes
shall be paid at the redemption price stated in the notice, plus accrued
interest to the redemption date (including all Additional Amounts owed in
respect of such Notes). Failure to give notice or any defect in the notice to
any Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05 Deposit of Redemption Price. Prior to 10:00 a.m. New
York City time on the redemption date, the Issuer shall deposit with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest (subject to the right of Holders of record on the relevant record
date to receive interest due on the related interest payment date) on all
Notes (without giving effect to any earnings which may accrue on such deposit
prior to the redemption date) to be redeemed on that date other than Notes or
portions of Notes called for redemption which have been delivered by the
Issuer to the Trustee for cancellation. The Paying Agent shall promptly return
to the Issuer any money so deposited which is not required for that purpose
upon the written request of the Issuer.
SECTION 3.06 Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Issuer shall issue and the Trustee shall authenticate
for the Holder (at the Company's expense) a new Note equal in principal amount
to the unredeemed portion of the Note surrendered.
SECTION 3.07 Mandatory Redemption; Mandatory Redemption of Notes From
Excess Cash Flow.Beginning on the fourth anniversary of the Issue Date, and
not later than 180 days following the end of each fiscal year thereafter, the
Issuer will redeem (the "Excess Cash Flow Redemption") the maximum principal
amount of Notes that is an integral multiple of $1.00 with 75% of the Excess
Cash Flow of the Company from such fiscal year (the "Excess Cash Flow
Redemption Amount"), at a redemption price in cash equal to 100% of the
principal amount of the Notes to be redeemed (the "Excess Cash Flow Redemption
Price"), together with accrued and unpaid interest, if any, thereon to the
date fixed for the redemption of the Notes pursuant to such Excess Cash Flow
Redemption. The Issuer shall not make an Excess Cash Flow Redemption to
purchase Notes pursuant to this Section 3.07 if the available cumulative
Excess Cash Flow is less than US$2.0 million; provided, that any such lesser
amount of Excess Cash Flow (if positive) will be added to the Excess Cash Flow
for each subsequent fiscal year until an Excess Cash Flow Redemption is made.
24
Interest shall cease to accrue on the Notes or portions called for
redemption on and after the redemption date.
Any redemption made pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
ARTICLE 4
Covenants
SECTION 4.01 Payment of Notes; Payment of Additional Amounts
(a) Subject to Section 4.01(b), the Issuer shall promptly pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes and in this Indenture. Principal and interest shall be considered
paid on the date due if on such date the Trustee or the Paying Agent holds in
accordance with this Indenture money sufficient to pay all principal and
interest then due. All payments shall be made in United States dollars.
Interest on the Notes shall accrue from the Issue date and shall be
paid semi-annually in arrears on each June 15 and December 15.
The Issuer shall pay interest on overdue principal on the Notes, and
on overdue installments of interest on Notes, at a rate specified in the
Notes, plus 1% per annum.
(b) All payments of principal of, premium, if any, and interest on
each Note or Guarantee will be made free and clear of, and without withholding
or deduction for, any present or future taxes, duties, assessments or
Governmental charges of whatever nature imposed, levied, collected, withheld
or assessed by or within the Republic of Indonesia or The Netherlands or any
political subdivision or taxing authority thereof or therein, unless such
withholding or deduction is required by law or by regulation or governmental
policy having the force of law. In the event that any such withholding or
deduction in respect of principal, premium or interest is so required, the
Issuer or the Company, as the case may be, will pay such additional amounts
("Additional Amounts") as will result in receipt by each holder of any Note of
such gross amount as would have been received by such Holder or the beneficial
owner with respect to such Note or the Guarantee, as applicable, had no such
withholding or deduction (including any withholding or deduction applicable to
Additional Amounts payable) been required, except that no Additional Amounts
will be payable:
(i) for or on account of:
(1) any tax, duty, assessment or other Governmental charge that
would not have been imposed but for:
(A) the existence of any present or former connection between
such Holder or the beneficial owner of such Note and the Republic
of Indonesia or The Netherlands, as the case may be, other than
the mere acquisition, holding or disposition of such Note or the
receipt of payments thereunder, including, without limitation,
such Holder or the beneficial owner of such Note being or having
been a national, domiciliary or resident of or treated as a
resident thereof, being or having been present or engaged in a
trade or business therein or having or having had a permanent
establishment therein; or
(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
25
to such Additional Amounts if it had presented such Note for
payment on any day within such period of 30 days;
(2) any estate, inheritance, gift, sale, transfer, personal
property or similar tax, duty, assessment or other Governmental
charge;
(3) any tax, duty, assessment or other Governmental charge that is
imposed or withheld by reason of the failure of such Holder or the
beneficial owner of such Note to comply with a request by the Issuer
or the Company addressed to such Holder (A) to provide information
concerning the nationality, residence or identity of such Holder or
such beneficial owner or (B) to make any declaration or other similar
claim or satisfy any information or reporting requirement, which, in
the case of (A) or (B), is required or imposed by a statute, treaty,
regulation or administrative practice of the taxing jurisdiction as a
precondition to exemption from all or part of such tax, duty,
assessment or other Governmental charge; or
(4) any combination of items (1), (2) and (3); or
(ii) with respect to any payment of the principal of, premium, if
any, or interest on such Note to such Holder (including a fiduciary or
partnership) to the extent that under the laws of the Republic of
Indonesia or The Netherlands, as the case may be, some person other than
such Holder is required to include such payment in income and such other
person would not have been entitled to such Additional Amounts had it
been the holder of the Note.
In the event the Issuer could redeem Notes pursuant to Section 5(b)
of the Notes but elects not to so redeem, the Issuer or the Company shall pay
such Additional Amounts to the Holders as will result in receipt by such
Holder of such amounts that would have been received by such Holder had no
withholding or deduction been required, except that no such Additional Amounts
shall be payable with respect to any Notes under the circumstances described
in clauses (a) or (b) above.
(c) The Issuer or the Company, as the case may be, will pay any
present or future stamp, court or documentary taxes, or any other excise or
property taxes, charges or similar levies which arise in any jurisdiction from
the execution, delivery or registration of the Notes or any other document or
instrument referred to therein, or the receipt of any payments with respect to
the Notes, excluding any such taxes, charges or similar levies imposed by any
jurisdiction outside of The Netherlands or the Republic of Indonesia or any
jurisdiction in which a Paying Agent is located, except those resulting from,
or required to be paid in connection with, the enforcement of the Notes or any
other such document or instrument following the occurrence of any Event of
Default.
(d) Whenever in this Indenture or the Notes there is mentioned, in
any context, the payment of principal, premium or interest in respect of any
Note or the Guarantee or the net proceeds received on the sale or exchange of
any Note, such mention shall be deemed to include the payment of Additional
Amounts provided for in this Indenture to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant
to this Indenture and express mention of the payment of Additional Amounts (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where express mention is not
made.
(e) The Issuer and the Company hereby covenant that if the Trustee or
any Paying Agent is required by law to make any deduction or withholding or
payments of principal of, premium or interest on the Notes or the Guarantee
for or on account of any tax, duty, assessment or other Governmental charge,
the Issuer, with respect to Additional Amounts payable in connection with the
Notes, or the Company, with respect to Additional Amounts payable in
connection with the Guarantee, shall:
(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
26
Paying Agent an Officer's Certificate (A) specifying by country
the amount so required to be deducted or withheld on such
payment to Holders and the Additional Amounts, if any, due to
Holders in connection with such payment, and (B) certifying that
the Issuer or the Company, as applicable, shall pay such
deduction or withholding;
(B) prior to the due date for the payment thereof, pay any such
tax, duty, assessment or other Governmental charge, together with
any penalties or interest applicable thereto;
(C) within 30 days after paying such tax, duty, assessment or
other Governmental charge, deliver to the Trustee and each Paying
Agent evidence of such payment and of the remittance thereof to
the relevant taxing or other authority; and
(D) pay any Additional Amounts due to Holders any interest
payment date, redemption date, purchase date or maturity date to
the Paying Agent in accordance with the provisions of this
Section.
The Trustee and each Paying Agent shall be entitled to rely
conclusively on the fact that no such Officer's Certificate is delivered to
them as evidence that, as the case may be, either no such withholding or
deduction is required or that the matters set forth in any prior Officer's
Certificate delivered pursuant to this subsection; have not changed.
Each of the Issuer and the Company, as applicable, hereby covenants
to indemnify the Trustee and each Paying Agent for, and to hold each harmless
against, any loss, liability or expense properly incurred without negligence,
bad faith or willful misconduct on such Person's part, arising out of or in
connection with actions taken or omitted by any of them in reliance on any
Officer's Certificate furnished pursuant to this Section or the failure of the
Trustee or any Paying Agent for any reason (other than its own negligence, bad
faith or willful misconduct) to receive on a timely basis any such Officer's
Certificate or any information or documentation requested by it or otherwise
required by applicable law or regulations to be obtained, furnished or filed
in respect of such tax, duty, assessment or other Governmental charge. Each of
the Issuer and the Company, as applicable, shall make available to any Holder
requesting the same, evidence that the applicable tax, duty, assessment or
other Governmental charge have been paid including furnishing receipts if so
requested.
Any Officer's Certificate required by this Section 4.01 to be
provided to the Trustee and each Paying Agent shall be deemed to be duly
provided if received by facsimile by the Trustee and each Paying Agent.
SECTION 4.02 Reports. The Company will provide to the Trustee, and,
upon request, the Holders of the Notes, annual financial statements for each
fiscal year audited by an internationally recognized independent public
accountant, within 180 days after the end of such fiscal year. All such
financial statements shall be in English. The Issuer and the Company will also
comply with the other provisions of TIA section 314(a).
SECTION 4.03 Limitation on Indebtedness
(a) Neither the Company nor the Issuer shall Incur, directly or
indirectly, any Indebtedness unless, on the date of such Incurrence, the
Consolidated Coverage Ratio exceeds 2.25 to 1.
(b) Notwithstanding Section 4.03(a), the Company or the Issuer may
Incur the following Indebtedness: (1) Indebtedness pursuant to the Loan
Facilities (or any other facility for working capital or general corporate
purposes); provided, however, that, after giving effect to any such
Incurrence, the aggregate principal amount of such Indebtedness under all such
Loan Facilities then outstanding does not exceed the US$50.0 million; (2)
Indebtedness owed to and held by a Wholly Owned Subsidiary; provided, however,
that any subsequent issuance 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
27
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 outstanding on
the Issue Date (other than Indebtedness described in clause (1), (2), (3) or
(4) of this paragraph (b)); (6) Refinancing Indebtedness in respect of
Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (3),
(4), (5) this clause (6) or Section 4.04(b)(v); (7) 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; (8) 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; (9)
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;
(10) 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 (10) to the
extent the principal amount thereof would, when taken together with all
other Indebtedness Incurred pursuant to this clause (10) and then
outstanding, exceed US$10.0 million; and (11) 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 (10) above or Section
4.03(a)), does not exceed US$20.0 million.
(c) Notwithstanding the foregoing, neither the Company nor the Issuer
shall Incur any Indebtedness pursuant to the foregoing paragraph (b) if the
proceeds thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations unless such Indebtedness shall be subordinated to the
Notes to at least the same extent as such Subordinated Obligations.
(d) For purposes of determining compliance with this Section 4.03,
(i) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify (and may later classify) such item of Indebtedness
and only be required to include the amount and type of such Indebtedness in
one of the above clauses and (ii) an item of Indebtedness may be divided and
classified in more than one of the types of Indebtedness described above.
SECTION 4.04 Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries
(a) Neither the Issuer nor the Company shall permit any Restricted
Subsidiary to Incur, directly or indirectly, any Indebtedness or Preferred
Stock; provided, however, that the Issuer may Incur Indebtedness permitted
pursuant to Section 4.03(a) or Section 4.03(b).
(b) Notwithstanding the foregoing Section 4.04 (a) any Restricted
Subsidiary other than the Issuer may Incur:
(i) Indebtedness or Preferred Stock issued to and held by the Company
or a Wholly Owned Subsidiary; provided, however, that any subsequent
issuance or transfer of any Capital Stock which results in any such
Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of such Indebtedness or Preferred Stock (other than
to the Company or a Wholly Owned Subsidiary) shall be deemed, in each
case, to constitute the issuance of such Indebtedness or Preferred Stock
by the issuer thereof;
(ii) Indebtedness or Preferred Stock of a Subsidiary Incurred and
outstanding on or prior to the date on which such Subsidiary was
acquired by the Company (other than Indebtedness or Preferred Stock
Incurred in connection with, or to provide all or any portion of the
funds or credit support utilized to consummate, the transaction or
series of related transactions pursuant to which such Subsidiary became
a Subsidiary or was acquired by the Company); provided, however, that on
the date of such 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);
28
(iv) Indebtedness under Commodity Agreements entered into in the
ordinary course of financial management of such Restricted Subsidiary
and not for speculative purposes; and
(v) Refinancing Indebtedness Incurred in respect of Indebtedness or
Preferred Stock referred to in clauses (ii) or (iii) or this clause (v)
of this Section 4.04(b); provided, however, that to the extent such
Refinancing Indebtedness directly or indirectly Refinances Indebtedness
or Preferred Stock of a Subsidiary described in Section 4.04(b)(ii),
such Refinancing Indebtedness shall be Incurred only by such Subsidiary.
SECTION 4.05 Limitation on Restricted Payments
(a) Neither the Company nor the Issuer shall, nor shall the Company
permit any Restricted Subsidiary, directly or indirectly, to, make a
Restricted Payment if at the time the Company, the Issuer or such other
Restricted Subsidiary makes such Restricted Payment: (1) a Default shall have
occurred and be continuing (or would result therefrom); (2) the Company or the
Issuer is not able to Incur an additional US$1.00 of Indebtedness pursuant to
Section 4.03(a) or (3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum of: (A)
50% of the Consolidated Net Income accrued during the period (treated as one
accounting period) from the beginning of the fiscal quarter immediately
following the fiscal quarter during which the Notes are originally issued to
the end of the most recent fiscal quarter ending at least 45 days prior to the
date of such Restricted Payment (or, in case such Consolidated Net Income
shall be a deficit, minus 100% of such deficit); (B) the aggregate Net Cash
Proceeds received by the Company from the issuance or sale of its Capital
Stock (other than Disqualified Stock) subsequent to the Issue Date (other than
an issuance or sale to a Subsidiary of the Company); (C) the amount by which
Indebtedness of the Company is reduced on the Company's balance sheet upon the
conversion or exchange (other than by a Subsidiary of the Company) subsequent
to the Issue Date, of any Indebtedness of the Company issued after the Issue
Date convertible or exchangeable for Capital Stock (other than Disqualified
Stock) of the Company (less the amount of any cash, or the fair market value
of any other property, distributed by the Company upon such conversion or
exchange); (D) an amount equal to the sum of (i) the net reduction in
Investments in Unrestricted Subsidiaries resulting from dividends, repayments
of loans or advances or other transfers of assets, in each case to the Company
or any Restricted Subsidiary from Unrestricted Subsidiaries, and (ii) the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of an Unrestricted Subsidiary at the
time such Unrestricted Subsidiary is designated a Restricted Subsidiary;
provided, however, that the foregoing sum shall not exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made (and
treated as a Restricted Payment) by the Company or any Restricted Subsidiary
in such Unrestricted Subsidiary; and (E) US$10.0 million.
(b) The provisions of Section 4.05(a) shall not prohibit: (i) any
purchase or redemption of Capital Stock or Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Disqualified
Stock and other than Capital Stock issued or sold to a Subsidiary of the
Company or an employee stock ownership plan or to a trust established by the
Company or any of its Subsidiaries for the benefit of their employees);
provided, however, that (A) such purchase or redemption shall be excluded in
the calculation of the amount of Restricted Payments and (B) the Net Cash
Proceeds from such sale shall be excluded from the calculation of amounts
under Section 4.05(a)(3)(B); (ii) any purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value of Subordinated
Obligations made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of the Company which is permitted to be
Incurred pursuant Section 4.03; provided, however, that such purchase,
repurchase, redemption, defeasance or other acquisition or retirement for
value shall be excluded in the calculation of the amount of Restricted
Payments; (iii) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied with
this Section 4.05; provided, however, that at the time of payment of such
dividend, no other Default shall have occurred and be continuing (or result
therefrom); provided further, however, that such dividend shall be included in
the calculation of the amount of Restricted 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
29
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.
SECTION 4.06 Limitation on Restrictions on Distributions from
Restricted Subsidiaries
Neither the Company nor the Issuer shall, nor shall the Company
permit any other Restricted Subsidiary to, create or otherwise cause or permit
to exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary (a) to pay dividends or make any other
distributions on its Capital Stock to the Company or a Restricted Subsidiary
or pay any Indebtedness owed to the Company or the Issuer, (b) to make any
loans or advances to the Company or the Issuer or (c) to transfer any of its
property or assets to the Company or the Issuer, except: (i) any encumbrance
or restriction pursuant to an agreement in effect at or entered into on the
Issue Date; (ii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by
such Restricted Subsidiary on or prior to the date on which such Restricted
Subsidiary was acquired by the Company (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company) and outstanding on such date; (iii)
any encumbrance or restriction pursuant to an agreement effecting a
Refinancing of Indebtedness Incurred pursuant to an agreement referred to in
clause (i) or (ii) of this covenant or this clause (iii) or contained in any
amendment to an agreement referred to in clause (i) or (ii) of this covenant
or this clause (iii); provided, however, that the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in any such
refinancing agreement or amendment are no less favorable to the Noteholders
than encumbrances and restrictions with respect to such Restricted Subsidiary
contained in such agreements; (iv) any such encumbrance or restriction
consisting of customary non-assignment provisions in leases governing
leasehold interests to the extent such provisions restrict the transfer of the
lease or the property leased thereunder; (v) in the case of clause (c) above,
restrictions contained in security agreements or mortgages securing
Indebtedness of a Restricted Subsidiary to the extent such restrictions
restrict the transfer of the property subject to such security agreements or
mortgages; and (vi) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or disposition of
all or substantially all the Capital Stock or assets of such Restricted
Subsidiary pending the closing of such sale or disposition.
SECTION 4.07 Limitation on Sales of Non-Collateral Assets and
Subsidiary Stock
(a) Neither the Company nor the Issuer shall, nor shall the Company
or the Issuer permit the Issuer or any other Restricted Subsidiary to, make
any Asset Disposition that is not a disposition of Collateral, in whole or in
part, unless (1) the Company, the Issuer or such other Restricted Subsidiary,
as the case may be, receives consideration at the time of such Asset
Disposition at least equal to the fair market value of the Capital Stock or
assets subject to such Asset Disposition (including the value of all non cash
consideration), as determined in good faith by an officer (having a title of
manager or more senior) of the Company, the Issuer or such other Restricted
Subsidiary, in the case of an Asset Disposition involving consideration not
greater than US$1.0 million, or by the Board of Directors, in the case of an
Asset Disposition involving consideration of more than US$1.0 million, (2)
except in the case of an Involuntary Loss, at least 75% of such consideration
is in the form of cash or cash equivalents and (3) the Company, the Issuer or
such other Restricted Subsidiary, as applicable, complies with the
requirements of Sections 4.07(b) below.
(b) In the case of any Asset Disposition which is not a disposition
of Collateral by the Company, the Issuer or any other Restricted Subsidiary,
the Company or such Restricted Subsidiary will apply the Net Available Cash
from such Asset Disposition (i) first, to the extent such Net Available Cash
is required to be so applied, to prepay, repay, redeem or purchase (A) Senior
Indebtedness of the Company or (B) unsubordinated 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
30
other Restricted Subsidiary may, within 90 days following such termination
or 270 days following such Asset Disposition or 270 days following the
receipt of such Net Available Cash, whichever is latest, acquire (or enter
into a single further legally binding commitment to acquire) other
Additional Assets, and (2) any legally binding commitment to acquire
Additional Assets shall be fully performed within 24 months following such
Asset Disposition or the receipt of such Net Available Cash, whichever is
later. Any Net Available Cash not applied as provided above shall constitute
"Excess Proceeds" and shall be applied in accordance with Section 3.07.
(c) For the purposes of this Section 4.07 and Section 4.08, the
assumption of Indebtedness of the Company or any Restricted Subsidiary and the
release of the Company or such Restricted Subsidiary from all liability on
such Indebtedness in connection with such Asset Disposition shall be deemed to
be cash or cash equivalents.
(d) Pending application of Net Available Cash pursuant to Sections
4.07(b), such Net Available Cash will be invested in Temporary Cash
Investments and will not be deposited with the Collateral Agent.
SECTION 4.08 Limitation on Sales of Collateral
(a) All Collateral Dispositions. Neither the Company nor the Issuer
shall, nor shall the Company permit any Restricted Subsidiary, directly or
indirectly, to, consummate any Collateral Disposition, in whole or in part,
unless: (i) other than in the case of an Involuntary Loss, the Company or such
Restricted Subsidiary receives consideration at the time of such Collateral
Disposition at least equal to the fair market value (including the value of
all noncash consideration) of the Collateral subject to such Collateral
Disposition, as determined in good faith (A) in the case of a Collateral
Disposition involving consideration of US$1.0 million or less, by an officer
of the Company having the title of manager or more senior, or (B) in the case
of a Collateral Disposition involving consideration of more than US$1.0
million, by the Board of Directors of the Company; (ii) other than in the case
of an Involuntary Loss, at least 75% of the consideration thereof received by
the Company or such Restricted Subsidiary is in the form of cash and cash
equivalents; (iii) any such Collateral Disposition is in compliance with the
provisions of Section 12; (iv) an amount equal to 100% of the Net Available
Cash from such Collateral Disposition shall promptly be delivered and pledged
by the Company (or such Restricted Subsidiary, as the case may be) to the
Collateral Agent for deposit in the Collateral Accounts or, in the case of an
Involuntary Loss that does not constitute a Major Collateral Disposition, the
Insurance Collateral Account, pending application in accordance with the
provisions of Sections 4.08(b), (c) or (d) below, as applicable, in each case
in the name and under the sole dominion and control of the Collateral Agent;
(v) the Liens of the Security Documents (which shall be first priority
perfected Liens) attach to all other property and assets received, and the
Company (or such Restricted Subsidiary, as the case may be) shall take such
other actions, at the sole expense of the Company or such Restricted
Subsidiary, to ensure that the Liens under the Security Documents so attach to
such property and assets; and (vi) in the event of a Collateral Disposition
that is: (A) a Major Collateral Disposition, the Company (or such Restricted
Subsidiary, as the case may be) shall comply with Section 4.08(b) below; (B) a
Collateral Disposition that does not constitute a Major Collateral Disposition
and does not result from an Involuntary Loss, the Company (or such Restricted
Subsidiary, as the case may be) shall comply with Section 4.08(c) below; or
(C) a Collateral Disposition that does not constitute a Major Collateral
Disposition but results from an Involuntary Loss, the Company (or such
Restricted Subsidiary, as the case may be) shall comply with Section 4.08(d)
below.
(b) Major Collateral Dispositions. Neither the Company nor the Issuer
shall, nor shall the Company permit any Restricted Subsidiary to, consummate a
Major Collateral Disposition unless, in addition to complying with the
provisions set forth in Section 4.08(a) above, (i) the Net Available Cash from
such Major Collateral Disposition, other than in the event of a Major
Collateral Disposition occurring as a result of an Involuntary Loss, shall be
sufficient to prepay all unpaid principal, interest and all other amounts
payable in respect of all Secured Indebtedness and (ii) an amount equal to
100% of the Net Available Cash from any such Major Collateral Disposition
(including as a result of an Involuntary Loss) is applied (A) first, (x) with
respect to Net Available Cash deposited in the Notes Collateral Account, to
make an offer to the holders of the Notes to purchase any and all of the
outstanding Notes at a purchase price in cash equal to 100% of the principal
amount thereof plus, in each case, accrued and unpaid interest, if any, plus
any Additional Amounts due thereon or which will become due as a result of the
repurchase or otherwise, to the date of purchase (subject to the right of
holders of record on the relevant record date to
31
receive interest on the relevant interest payment date), in accordance with
the procedures set forth in this Section 4.08(b) and (y) with respect to Net
Available Cash deposited in the Additional Indebtedness Collateral Account
to the extent the Company or any Restricted Subsidiary is so required by the
terms of any Secured Indebtedness (other than the Notes and the Guarantee),
to prepay, repay, redeem or repurchase such Secured Indebtedness; and (B)
second, to the extent of the balance of such Net Available Cash, after
application in accordance with clause (A) and, to the extent the Company
elects, to replace any assets or property or to purchase properties, assets
or rights to be used in the business of the Company and owned by the
Company, provided that such property, assets or rights shall become subject
to the Liens of the Security Documents (which shall be first priority
perfected Liens unless otherwise contemplated by the Security Documents) and
shall become Collateral governed by the Collateral Agency Agreement. Any Net
Available Cash not applied pursuant to clause (A) or (B) shall remain in the
Collateral Accounts except as provided in Section 4.08(c) below. The Issuer
will be required to purchase all Notes tendered pursuant to an offer by the
Issuer under this Section 4.08(b) other than in the event of an offer
resulting from an Involuntary Loss, in which case, the Issuer will be
required to purchase Notes from all holders that tender their Notes, in each
case in accordance with the procedures (including, in the event of an offer
resulting from an Involuntary Loss, prorating in the event of
oversubscription) set forth in this Section 4.08(b).
Within 30 days following any Major Collateral Disposition, unless
notice of redemption of the Notes has been given pursuant to Section 3 of the
Notes, the Issuer shall mail a notice to each Holder with a copy to the
Trustee stating: (1) that a Major Collateral Disposition has occurred and that
such Holder has the right to require the Issuer to purchase (the "MCD Offer")
such Holder's Notes at a purchase price in cash equal to 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of holders of record on the relevant record
date to receive interest on the relevant interest payment date) plus any
Additional Amounts then due or which will become due as a result of the
repurchase or otherwise; (2) the circumstances and relevant facts regarding
such Major Collateral Disposition (including information with respect to the
Collateral disposed of, the circumstances surrounding such disposal and the
intended use of the Net Available Cash (including the identification of any
Additional Assets to be purchased), if any, after repurchasing all Notes
tendered) in each case in reasonable detail; (3) the repurchase date (the "MCD
Purchase Date") which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed; and (4) the instructions, as set forth
below, determined by the Issuer, consistent with this Section 4.08(b), that a
Holder must follow in order to have its Notes purchased.
Not later than the date upon which written notice of a Major
Collateral Disposition is delivered to the Trustee, the Issuer shall deliver
to the Trustee an Officer's Certificate as to (i) the amount of Net Available
Cash from such Major Collateral Disposition available to purchase Notes,
including principal and interest (the "MCD Offer Amount") and (ii) the
compliance of the allocation of Net Available Cash from such Major Collateral
Disposition with the provisions of Sections 4.08(a) and (b). On such date, the
Issuer shall also irrevocably deposit with the Trustee cash and Temporary Cash
Investments maturing on or prior to the MCD Purchase Date (or direct the
Trustee to apply Trust Monies in accordance with Section 13.02) in an amount
equal to the MCD Offer Amount to be held for payment in accordance with the
provisions of this Section. Upon the expiration of the period for which the
MCD Offer remains open (the "MCD Offer Period"), the Issuer shall deliver to
the Trustee the Notes or portions thereof which have been properly tendered to
and are to be accepted by the Issuer. The Trustee shall, on the MCD Purchase
Date, mail or deliver payment to each tendering Holder in the amount of the
purchase price. Any unused funds deposited by the Issuer (but not Trust
Monies) shall be delivered by the Trustee to the Issuer immediately after
expiration of the MCD Offer Period. Any unused Trust Monies shall be
redeposited with the Collateral Agent in the Notes Collateral Account.
Holders electing to have a Note (or any portion thereof) purchased
will be required to surrender the Note, with an appropriate form duly
completed, to the Issuer at the address specified in the notice at least five
Business Days prior to the MCD Purchase Date. Holders will be entitled to
withdraw their election, in whole or in part, if the Trustee or the Issuer
receives, not later than three Business Days prior to the MCD Purchase Date, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note (or any portion thereof) which was delivered for
purchase by the Holder and a statement, as applicable, that (x) such Holder is
withdrawing, in its entirety, such Holder's election to have
32
such Note (or any portion thereof) purchased or (y) such Holder is
withdrawing, in part, such Holder's election to have such Note (or any
portion thereof) purchased and specifying the amount of such Note to be
purchased. If, at the expiration of the MCD Offer Period, the aggregate
principal amount of Notes surrendered by Holders exceeds the MCD Offer
Amount, the Issuer shall select the Notes to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the Issuer so
that only Notes in denominations of $1.00, or integral multiples thereof,
shall be purchased). Holders whose Notes are purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered.
At the time the Issuer delivers Notes to the Trustee which are to be
accepted for purchase, the Issuer will also deliver an Officer's Certificate
stating that such Notes are to be accepted by the Issuer pursuant to and in
accordance with the terms of this Section. A Note (or any portion thereof)
shall be deemed to have been accepted for purchase at the time the Trustee,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder. All Notes delivered to the Trustee shall be canceled upon
completion of the purchase.
Each of the Issuer and the Company will comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase or
redemption of Notes as described above. To the extent that the provisions of
any securities laws or regulations conflict with provisions relating to the
MCD Offer, each the Issuer and the Company will comply with the applicable
laws and regulations and will not be deemed to have breached its obligations
described above by virtue thereof.
(c) Voluntary Non-Major Collateral Dispositions. Neither the Company
nor the Issuer shall, nor shall the Company permit any Restricted Subsidiary
to, consummate a Collateral Disposition that does not constitute a Major
Collateral Disposition and that does not result from an Involuntary Loss
unless, in addition to complying with the provisions set forth in paragraph
(a) above, an amount equal to 100% of the Net Available Cash from such
Collateral Disposition shall be applied, to the extent the Company elects, to
replace any assets or property that were the subject of such Collateral
Disposition or to acquire properties, assets or rights to be used in the
business of the Company and owned by the Company (such replacement assets or
property and such properties, assets or rights to be acquired being
hereinafter referred to as the "New Collateral Assets") within 18 months from
the later of the date of such Collateral Disposition or the receipt of such
Net Available Cash, provided such New Collateral Assets shall become subject
to the Liens of the Security Documents (which shall be first priority
perfected Liens) and shall become Collateral governed by the Collateral Agency
Agreement; provided, however, that if the Net Available Cash from such
Collateral Disposition, when aggregated with all the Excess Collateral
Proceeds on deposit in the Collateral Accounts, exceeds US$10.0 million, the
Issuer shall be required to make an offer pursuant to paragraph (e) of this
covenant; provided further, however, that (A) such offer will not be required
to be made if the Issuer delivers to the Trustee and the holders of the Notes
an Officer's Certificate within 30 days after such Collateral Disposition
certifying: (1) that the Issuer has identified New Collateral Assets to be
acquired (together with a description thereof), (2) that delivery of such New
Collateral Assets will be taken, and completion of the purchase of such New
Collateral Assets will occur, within 180 days after the date of such Officer's
Certificate, (3) the amount of Net Available Cash to be used to purchase such
New Collateral Assets and (4) that such amount of Net Available Cash so to be
used would reduce the Excess Collateral Proceeds in the Collateral Accounts to
less than US$l0.0 million; and (B) the completion of the purchase of such New
Collateral Assets shall take place on or before the 180 day period specified
in such certification. Any Net Available Cash not applied as provided above in
this paragraph (c) shall constitute "Excess Collateral Proceeds" and shall be
applied in accordance with Section 3.07.
(d) Involuntary Non-Major Collateral Dispositions. In the event of a
Collateral Disposition that does not constitute a Major Collateral Disposition
but results from an Involuntary Loss, an amount equal to 100% of the Net
Available Cash from such Collateral Disposition shall be applied from the
Insurance Collateral Account to the extent the Company elects, to repair or
replace any assets or property that are the subject of such Involuntary Loss
within 18 months after the occurrence of such Involuntary Loss; provided,
however, that such 18 month period may be extended for an additional 365 days
upon delivery to the Trustee of an Officer's Certificate certifying that the
Company shall use such proceeds to
33
repair or replace such assets or property during such subsequent 365 day
period; provided further, however, that all other holders of Secured
Indebtedness permit such extension of time and permit such Net Available
Cash to be used for such purpose. Any Net Available Cash not applied as
provided above in this subsection (d) shall constitute Excess Collateral
Proceeds and shall be applied in accordance with Section 3.07.
The Collateral Agency Agreement provides that Net Available Cash in
the Insurance Collateral Account will constitute Excess Collateral Proceeds
upon the earliest of (i) receipt by the Collateral Agent of a Notice of
Actionable Default; (ii) the occurrence of a Foreclosure Event (as defined in
the Collateral Agency Agreement); and (iii) the last day of the period
permitting such Net Available Cash to be applied in the repair or replacement
of assets or property as such period is permitted to be extended.
(e) To the extent not otherwise applied pursuant to this Section
4.08, Net Available Cash on deposit in the Notes Collateral Account will be
released from the Liens of the Security Documents when all principal, interest
and other amounts, if any, due on the Notes has been paid in full or released
to the Trustee as set forth in Article 13.
SECTION 4.09 Limitation on Affiliate Transactions
(a) Neither the Company nor the Issuer shall, nor shall the Company
permit any Restricted Subsidiary to, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property,
employee compensation arrangements or the rendering of any service) with any
Affiliate of the Company, (an "Affiliate Transaction") unless the terms
thereof (1) are no less favorable to the Company or such Restricted Subsidiary
than those that could be obtained at the time of such transaction in
arm's-length dealings with a Person who is not such an Affiliate, (2) if such
Affiliate Transaction involves an amount in excess of US$1.0 million, (i) are
set forth in writing and (ii) have been approved by the Board of Directors of
the Company and (3) in addition, if such Affiliate Transaction involves as
amount in excess of US$5.0 million, have been determined by an internationally
recognized investment banking firm or, if pertaining to a matter for which
such investment banking firms do not customarily render such opinions, an
appraisal or valuation firm of international reputation, to be fair, from a
financial standpoint, to the Company and its Restricted Subsidiaries.
(b) The provisions of the foregoing paragraph (a) shall not prohibit
(i) any Restricted Payment permitted to be paid pursuant to Section 4.05, (ii)
any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board of
Directors, (iii) the grant of stock options or similar rights to employees and
directors of the Company pursuant to plans approved by the Board of Directors,
(iv) loans or advances to employees in the ordinary course of business in
accordance with the past practices of the Company or its Restricted
Subsidiaries, but in any event not to exceed US$l.0 million in the aggregate
outstanding at any one time, (v) the payment of reasonable fees to directors
of the Company and its Restricted Subsidiaries who are not employees of the
Company or its Restricted Subsidiaries, (vi) any Affiliate Transaction between
the Company and a Wholly Owned Subsidiary or between Wholly Owned
Subsidiaries, (vii) the payment of fees for management services provided in
the ordinary course of business in accordance with the past practices of the
Company or its Restricted Subsidiaries, but in any event not to exceed US$1.0
million in the aggregate in any calendar year, (viii) the Company from
performing its obligations under the Propylene Supply Agreement; provided that
any amendment to the Propylene Supply Contract complies with the provisions of
Section 4.09(a) (1) and (a) (2) (i) and (ii) above, and (ix) the Company from
entering into agreements to sell polypropylene in the ordinary course of
business and consistent with past practices; provided that any such agreement
complies with the provisions of clause (a) (1) above; provided further that if
a Change of Control has occurred, any such agreement complies also with the
provisions of Section 4.09(a) (2) (ii) above.
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
34
or which will become due as result of the repurchase or otherwise, in
accordance with the terms contemplated in Section 4.10(b) below.
(b) Within 30 days following any Change of Control, the Issuer shall
mail a notice to each Holder with a copy to the Trustee stating: (1) that a
Change of Control has occurred and that such Holder has the right to require
the Issuer to purchase such Holder's Notes at a purchase price in cash equal
to 100% of the principal amount thereof plus accrued and unpaid interest, if
any, to the date of purchase (subject to the right of holders of record on the
relevant record date to receive interest on the relevant interest payment
date) plus any Additional Amounts then due or which will become due as a
result of the repurchase or otherwise; (2) the circumstances and relevant
facts regarding such Change of Control (including information with respect to
pro forma historical income, cash flow and capitalization after giving effect
to such Change of Control); (3) the repurchase date (which shall be no earlier
than 30 days nor later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Issuer, consistent with this Section
4.10, that a Holder must follow in order to have its Notes purchased.
(c) On or before the purchase date, the Issuer shall irrevocably
deposit with the Trustee or with a paying agent in cash or Temporary Cash
Investments maturing on or prior to the purchase date in an amount equal to
the purchase price plus accrued and unpaid interest, if any, be held for
payment in accordance with the provisions of this Section 4.10. Holders
electing to have a Note purchased will be required to surrender the Note, with
an appropriate form duly completed, to the Issuer at the address specified in
the notice at least five Business Days prior to the purchase date. Holders
will be entitled to withdraw their election in whole or in part if the Trust
or the Issuer receives, not later than three Business Days prior to the
purchase date, a facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Note which was delivered for purchase
to the Holder, the certificate number of such Note and a statement that (x)
such Holder is withdrawing, in its entirety, such Holder's election to have
such Note (or any portion thereof) purchased or (y) such Holder is
withdrawing, in part, such Holder's election to have such Note (or any portion
thereof) purchased and specifying the amount of such Note to be purchased.
(d) On the purchase date, the Issuer shall deliver to the Trustee the
Notes or portions thereof which have been properly tendered to and are to be
accept by the Issuer. The Trustee shall, on the purchase date, mail or deliver
payment of the purchase price to each tendering Holder. Holders whose Notes
are purchased only in part shall be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered. In the event that the
aggregate purchase price of the Notes delivered by the Issuer to the Trustee
is less than the amount deposited with the Trustee, the Trustee shall deliver
the excess to the Issuer immediately after the end of the payment date.
(e) Each of the Company and the Issuer shall comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase of
Notes pursuant to this Section 4.10. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
4.10, each of the Company and Issuer shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.10 by virtue thereof.
SECTION 4.11 Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries. Neither the Company nor the Issuer shall sell or
otherwise dispose of any shares of Capital Stock of a Restricted Subsidiary,
and the Company shall not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell or otherwise dispose of any shares of its Capital
Stock except (i) to the Company or a Wholly Owned Subsidiary or (ii) if,
immediately after giving effect to such issuance, sale or other disposition,
the Company and its Restricted Subsidiaries would own less than 20% of the
Voting Stock of such Person that was a Restricted Subsidiary and have no
greater economic interest in such Restricted Subsidiary.
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.
35
(b) Notwithstanding Section 4.12(a), the Company and the Issuer will
have the right from time to time to Incur Liens on the Collateral to secure
Additional Indebtedness on an equal and ratable basis with the Notes and the
Guarantee provided that (i) the proceeds of such Additional Indebtedness are
promptly used to finance the acquisition of a Qualified Project by the Company
or a Restricted Subsidiary (or to Refinance Additional Indebtedness used for
such purpose), (ii) such Additional Indebtedness with respect to such
Qualified Project Incurred or to be Incurred does not exceed 75% of the lesser
of (x) the Estimated Project Costs with respect to such Qualified Project and
(y) the fair market value determined by an Independent Appraiser of the
additional Collateral provided by such Qualified Project (or, if greater, of
the increase in the fair market value of the Collateral taken as a whole as a
result of such Qualified Project), (iii) after giving pro forma effect to such
Incurrence, the Company or the Issuer would be permitted to Incur an
additional US$1.00 of Indebtedness pursuant to Section 4.03(a), (iv) such
Additional Indebtedness will state by its terms that it will be expressly
subordinated to the Notes and the Guarantee until such time as the existing
registered security deed shall be increased (but not decreased) by an amended
or substitute security deed in an amount that equals or exceeds (1) the
aggregate principal amount of Additional Indebtedness to be Incurred plus (2)
an amount representing 12 full months of interest payments with respect to the
Additional Indebtedness with respect to such Qualified Project (calculated on
the basis of then current applicable rates), provided that, to the extent such
Additional Indebtedness is being Incurred to Refinance a Qualified Project,
such amount shall be increased only to reflect any increased interest rates
applicable to such Additional Indebtedness, (v) the first priority perfected
Lien of the Security Deed shall continue in full force and effect
uninterrupted and continuously at all times, (vi) the real property rights,
improvements, moveable assets and other assets comprising the Qualified
Project, and rights relating to insurance proceeds with respect to the
Qualified Project, shall become a part of the Collateral and be subject to the
Liens of the Security Documents (which shall be first priority perfected
Liens), (vii) the conditions precedent to the Incurrence of such Indebtedness
in the Collateral Agency Agreement are satisfied, (viii) all other amendments
necessary, in the Opinion, of Counsel to be delivered pursuant to clause (x)
below, shall have been made to cause the Security Documents to continue to be
first priority perfected Liens, (ix) with respect to Indebtedness Refinanced,
the holders of the Indebtedness so Refinanced release their interest in the
Collateral to the extent of such Refinancing, (x) no Default or Event of
Default shall have occurred and be continuing or would result from such
Incurrence of Additional Indebtedness and the Company shall deliver to the
Trustee (A) a written Board of Directors' resolution authorizing the
Incurrence of the Additional Indebtedness, (B) an Officer's Certificate that
the conditions set forth in clauses (i) through (x) have been met and (C) an
Opinion of Counsel, in form and substance satisfactory to the Trustee with
respect to those matters referred to in clauses (v), (vi) and (vii) above.
SECTION 4.13 Limitation on Sale/Leaseback Transactions. Neither the
Company nor the Issuer shall, nor shall the Company permit any Restricted
Subsidiary to, enter into any Sale/Leaseback Transaction with respect to any
property unless (i) the Company or such Subsidiary would be entitled to (A)
Incur Indebtedness in an amount equal to the Attributable Debt with respect to
such Sale/Leaseback Transaction pursuant to Section 4.03 and (B) create a Lien
on such property securing such Attributable Debt pursuant to Section 4.12,
(ii) the net proceeds received by the Company or any Restricted Subsidiary in
connection with such Sale/Leaseback Transaction are at least equal to the fair
market value (as determined by the Board of Directors of the Company) of such
property and (iii) the Company applies the proceeds of such transaction in
compliance with Section 4.07. Notwithstanding anything contained in this
Section 4.13, neither the Company nor the Issuer will, nor will the Company or
the Issuer permit any other Restricted Subsidiary to, enter into, guarantee or
otherwise become liable with respect to, any Sale/Leaseback Transaction
involving Collateral.
SECTION 4.14 Limitation on Issuer Activities
The Issuer will, not engage in any business activity or undertake any
other activity, except any activity relating to the offering, sale or issuance
of Indebtedness or the lending or otherwise advancing the proceeds thereof to
the Company or any Restricted Subsidiary and any other activities reasonably
incidental thereto.
SECTION 4.15 Keepwell Commitment
The Company and the Issuer shall, prior to or on the Issue Date,
amend and restate the existing Keepwell Commitment (the "Keepwell") between
the Company and the Issuer, which shall remain in force for so long as any
Note or Senior Note remains outstanding under this Indenture or the Senior
Indenture, regarding which
36
agreement the Issuer shall, for the benefit of the Trustee and the
Noteholders, use its reasonable best efforts to enforce its rights against
the Company under the Keepwell.
SECTION 4.16 Amendments to Security Documents
Neither the Company nor the Issuer shall, nor shall the Company
permit any Restricted Subsidiary to, amend, modify or supplement, or permit or
consent to any amendment, modification or supplement of, the Security
Documents, the Pledge Agreement or the Collateral Agency Agreement in any way
that would be adverse to the holders of the Notes.
SECTION 4.17 Limitation on Company's Business
The Company will not, and will not permit any of its Restricted
Subsidiaries (other than the Issuer) to, directly or indirectly, engage in any
business other than the manufacture, production, processing, marketing,
distribution and sale (or activities or related processes reasonably incident
thereto) of petrochemical products or any material produced by or in
connection with such activities.
SECTION 4.18 Insurance
The Company will and will cause each of its Subsidiaries to maintain,
with financially sound and reputable insurance companies, insurance on the
Collateral and substantially all of its other insurable property, in such
amounts and against such risks as is normally carried by corporations engaged
in the same or similar businesses in the Republic of Indonesia as the Company.
All such policies shall only be subject to deductibles and exclusions which
are typical for similarly situated companies.
SECTION 4.19 Taxes
The Company and the Issuer will and the Company will cause its
Subsidiaries to pay and discharge when due and payable all taxes imposed on it
or on its income or profits or on any of its properties except such taxes as
are being contested in good faith in appropriate proceedings, and to remit to
the relevant authority any taxes required to be withheld or deducted from
payments made with respect to the Notes or the Guarantee.
SECTION 4.20 Businesses and Properties; Compliance with Laws
(a) The Company shall, and shall cause each of its Subsidiaries to,
do or cause to be done all things necessary to obtain, preserve, renew, extend
and keep in full force and effect the rights, licenses, concessions, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business
(including the Collateral) substantially in the manner proposed to be
conducted and operated; comply in all material respects with all material
applicable laws, rules, regulations and statutes (including environmental laws
and zoning and building ordinances, codes, approvals, any building permits or
any restrictions of record or agreement affecting the Real Property
Collateral) and decrees and orders of any Governmental Authority, whether now
in effect or hereafter enacted; and at all times maintain and preserve all
property material to the conduct of such business (including the Collateral)
and keep such property in good repair, working order and condition and from
time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements necessary in order that the
business carried on in connection therewith may be properly conducted at all
times.
(b) (i) The Company shall comply with all requirements to file
particulars of its offshore borrowings (including the Guarantee and the
borrowing by the Company of the proceeds of the sale of the Notes from the
Issuer) with initially the Minister of Finance, Bank Indonesia and the Team
for the Coordination of the 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.
37
(ii) In the event the Issuer or the Company does not make all
necessary filings with Bank Indonesia, the Ministry of Finance and the
PKLN Team with respect to the Guarantee or the borrowing from the
Issuer, the Company shall cause, and hereby irrevocably authorizes, the
Collateral Agent to make such filings on its behalf, and if at any time
the Collateral Agent is unwilling or unable to make such filings, the
Company shall promptly authorize and cause such other Person to make
such filings on its behalf. The Company shall deliver or cause to be
delivered all necessary information and evidence of due compliance with
the filing requirements described above to the Trustee.
(c) The Company shall, and shall cause any Restricted Subsidiary
which owns Collateral to, maintain good and marketable title to the Plant and
Qualified Projects, in all material respects. The Company shall, and shall
cause any Restricted Subsidiary which owns Collateral to refrain from
impairing the Collateral in any material respect.
SECTION 4.21 Corporate Existence. Subject to Article 5 hereof, each
of the Issuer and the Company will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents of the Company and its
Subsidiaries and the rights (charter and statutory), registrations, licenses
and franchises of the Company and its Subsidiaries; provided, however, that
the Company shall not be required to preserve any such right, license,
registration or franchise or the corporate, partnership or other existence of
any such Subsidiary (other than the Issuer), if the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and the loss thereof is not adverse in any
material respect to the Holders; provided further, that, if such Subsidiary
has more than a de minimus amount of assets, a majority of the Company's
directors shall be required to make a determination to the foregoing effect.
SECTION 4.22 Inspection
The Company shall, and shall cause each of its Subsidiaries to,
permit authorized representatives of the Collateral Agent and the Trustee (a)
to inspect and obtain copies of all records and documents relating to the
properties of the Company or its Subsidiaries constituting Collateral and
Moveable Assets (b) to visit and inspect the properties of the Company or its
Subsidiaries constituting Collateral and Moveable Assets, and any or all
books, records and documents in the possession of the Company relating to the
Collateral and Moveable Assets, and to make copies and take extracts therefrom
and to visit and inspect the Collateral, the Moveable Assets and the Plant,
all upon reasonable prior notice and at such reasonable times during normal
business hours and as often as may be reasonably requested.
SECTION 4.23 Compliance Certificate
The Issuer and the Company shall deliver to the Trustee, within 120
days after the end of each fiscal year of the Company, an Officer's
Certificate (at least one of the signers of which is the principal executive
officer, principal financial officer or principal accounting officer) stating
that, in the course of the performance by the signers of their duties as
Officers of the Issuer or the Company, as applicable, they would normally have
knowledge of any Default and whether or not the signers know of any Default
that occurred during such period and as to compliance with the conditions and
covenants of this Indenture (for purposes of this paragraph, compliance shall
be determined without regard any period of grace or requirement of notice
under this Indenture). The Issuer and the Company shall deliver to the
Trustee, within 30 days after the occurrence thereof, written notice of any
event which would constitute certain Defaults, their status and what action
the Issuer or the Company is taking or proposes to take in respect thereof.
SECTION 4.24 Further Instruments and Acts
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.
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SECTION 4.25 Management of the Company. The Company shall not change
any member on the Company's Board of Directors or Board of Commissioners who
was appointed by the Majority Shareholder without the consent of the holders
of a majority of the aggregate principal amount of the Notes and the Senior
Notes then outstanding, voting as a single class.
ARTICLE 5
Successor Company
SECTION 5.01 When Company May Merge or Transfer Assets
(a) Merger and Consolidation. The Company shall not consolidate with
or merge with or into, or convey, transfer or lease all or substantially all
its assets to, any Person at any time after December 15, 2005. In addition to
the restrictions imposed by the previous sentence, the Company shall not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless: (i) there has not been an
Event of Default at any time after December 15, 2005; (ii) the resulting,
surviving or transferee Person (the "Successor Company") shall be a
corporation organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia or the Republic of
Indonesia, and the Successor Company (if not the Company) shall expressly,
assume, by an indenture supplemental to this Indenture, executed and delivered
to the Trustee, in form satisfactory to the Trustee, all the obligations of
the Company, including the obligations under this Indenture, the Guarantee,
the Collateral Agency Agreement and the Security Documents; (iii) immediately
after giving effect to such transaction on a pro forma basis (and treating any
Indebtedness which becomes an obligation of the Successor Company or any
Restricted Subsidiary as a result of such transaction as having been Incurred
by the Successor Company or such Restricted Subsidiary at the time of such
transaction), no Default or Event of Default shall have occurred and be
continuing (or would result therefrom); (iv) immediately after giving effect
to such transaction on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the Successor Company or any Restricted Subsidiary as
a result of such transaction as having been Incurred by the Successor Company
or such Restricted Subsidiary at the time of such transaction), the Successor
Company would be able to Incur an additional US$1.00 of Indebtedness pursuant
to Section 4.03(a); (v) immediately after giving effect to such transaction on
a pro forma basis (and treating any Indebtedness which becomes an obligation
of the Successor Company or any Restricted Subsidiary as a result of such
transaction as having been Incurred by the Successor Company or such
Restricted Subsidiary at the time of such transaction), the Successor Company
shall have Consolidated Net Worth in an amount which is not less than the
Consolidated Net Worth of the Company immediately prior to such transaction;
(vi) the Successor Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the holders will not recognize income, gain, or
loss for United States Federal income tax purposes as a result of such
transaction, and will be subject to United States Federal income tax on the
same amounts and at the same times as would be the case as if the transaction
had not occurred and there will be no additional Indonesian Withholding Taxes
and no Withholding Taxes of any other jurisdiction imposed on any payments
made pursuant to the Notes or the Guarantee; and (vii) each of the Company and
the Issuer shall have delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel stating that such consolidation, merger or transfer and
such supplemental indenture comply with this Indenture, and this Indenture
(including the Guarantee), the Collateral Agency Agreement, the Security
Documents, and the Notes remain and will be in full force and effect against
all applicable parties and the Lien of the Security Documents (which shall be
a first priority perfected Lien unless otherwise contemplated by the Security
Documents) with respect to the Collateral continues in full force and effect.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power, of the Company under this Indenture, but
the predecessor Company in the case of a lease shall not be released from the
obligation to pay the principal of and interest on the Securities.
(b) The Issuer shall not consolidate or merge with or into any other
Person, or convey, transfer or lease all or substantially all its assets to
any other Person and all of its outstanding Capital Stock shall at all times
be 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
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(a) The Company may, at its option, assume the obligations of the
Issuer as obligor under the Notes and this Indenture, provided that:
(i) the Company expressly assumes such obligations by an indenture
supplemental hereto, in the form satisfactory to the Trustee, executed
and delivered to the Trustee;
(ii) the Company expressly agrees to pay in such supplemental
indenture the Additional Amounts pursuant to Section 4.01(b)
substituting, where applicable, "the Republic of Indonesia" for each
reference to "The Netherlands or the Republic of Indonesia";
(iii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing; and
(iv) the Company shall have delivered to the Trustee an Officer's
Certificate stating that such assumption and such supplemental indenture
comply with this Section 5.02 and that all conditions precedent herein
provided for relating to such transactions have been complied with and
an Opinion of Counsel or tax consultant of recognized standing to the
effect that Noteholders will not recognize income, gain or loss for
United States Federal income tax purposes as a result of such assumption
and will be subject to United States Federal income tax on the same
amounts and in the same manner and at the same times as would have been
the case if such assumption had not occurred. The Trustee shall accept
such Officer's Certificate Opinion of Counsel (and shall be held
harmless with respect thereto) as conclusive evidence of the
satisfaction of the conditions precedent described above, in which event
it shall be conclusive and binding on the Holders.
(b) In the event of such an assumption, in lieu of the Issuer's
redemption option set forth under Section 5(b) of the Notes, the Company shall
have the option to redeem the Notes outstanding as a whole but not in part, at
any time, upon giving not less than 30 nor more than 60 days' notice to the
Holders (which shall be irrevocable), at a redemption price equal to the
principal amount thereof, together with accrued interest to the date fixed by
the Company for redemption, and all Additional Amounts then due and which will
become due as a result of the redemption or otherwise, if the Company
determines and certifies to the Trustee in an Officer's Certificate
immediately prior to giving such notice that as a result of any change in, or
amendment to, the laws or treaties (or any regulations or rules promulgated
thereunder) of Indonesia (or any political subdivision or taxing authority of
Indonesia) affecting taxation, or any change in official position regarding
the application or interpretation of such laws, treaties, regulations or
rulings (including a holding judgment, or order by a court of competent
jurisdiction) which change, amendment, application or interpretation is
proposed and becomes effective on or after the date the Company assumes the
obligations of the Issuer pursuant to this Section 5.02, with respect to any
payment due or to become due under the Notes or this Indenture, the Company
is, or on the next interest payment date would be, required to deduct or
withhold any taxes, duties, assessments or other Governmental charges
whatsoever imposed of Indonesia (or any political subdivision or taxing
authority thereof or therein) at a rate in excess of the greater of 20% and
the rate in effect on the date of the assumption (calculated without giving
effect to any reduction of the rate of taxes, duties, assessments or other
Governmental charges available under any tax treaty which Indonesia is a
party) and such taxes in excess of greater of 20% and the rate in effect on
the date of the assumption cannot be avoided by the use of reasonable means
available to the Company. No such notice of redemption shall be given earlier
than 90 days prior to the earliest date on which the Company would be
obligated to make such payment or withholding if a payment with respect to any
Note were then due. The provisions of Article 3 shall be applicable to any
redemption hereunder and are incorporated mutatis mutandis herein. Any Notes
that are redeemed will be canceled.
(c) Upon any assumption pursuant to Section 5.02 (a), the Company
shall succeed to, and be substituted for, and may exercise every right and
power of the Issuer under this Indenture and the Issuer shall be released from
its liability as obligor under the Notes and this Indenture.
(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
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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) any Change of Control of the Company after December 15, 2005;
(d) the Company or the Issuer fails to comply with any of its
agreements in any Senior Note or the Senior Indenture and in each case such
failure continues for 60 days after notice is given as provided in the Senior
Indenture of the Issuer or the Company fails to give notice as provided in the
Senior Indenture;
(e) the Company or the Issuer fails to comply with the provisions of
Section 5.01;
(f) (A) the Company or the Issuer fails to comply with the provisions
of Section 4.02, 4.03, 4.04, 4.05, 4.06, 4.07 (other than a failure to
purchase Notes), 4.08 (other than a failure to purchase Notes), 4.09, 4.10
(other than a failure to purchase Notes), 4.11, 4.12, 4.13, 4.14, 4.15, 4.16,
4.17, 4.18 or 4.19 or (B) the Company or the Issuer fails to comply with the
provisions of Section 12.04, 12.05 or 12.07, and, in the case of clause (A) or
(B), such failure continues for 30 days after notice is given as provided
below or the Issuer or the Company fails to give the notice as provided below;
(g) the Company or the Issuer fails to comply with any of its
agreements in any Note or the Guarantee or this Indenture (other than those
referred to in (a), (b), (c), (e) or (f) above) and in each case such failure
continues for 60 days after notice is given as provided below or the Issuer or
the Company fails to give notice as provided below;
(h) Indebtedness of the Company, the Issuer or any Significant
Subsidiary, other than the Senior Notes is not paid within any applicable
grace period after final maturity or is accelerated by the holders thereof
because of a default and the total amount of such Indebtedness unpaid or
accelerated exceeds US$5.0 million or its foreign currency equivalent at the
time;
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(i) (1) the Company, the Issuer or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law (A) commences a
voluntary case, including seeking a moratorium on the payment of indebtedness;
(B) consents to the entry of an order relief against it in an involuntary
bankruptcy case; (C) consents to the appointment of a Custodian for it or for
any substantial part of its property; or (D) makes a general assignment for
the benefit of its creditors; or takes any comparable action under any foreign
laws relating to insolvency; or (2) a court competent jurisdiction enters an
order or decree under any Bankruptcy Law that (A) is for relief against the
Company, the Issuer or any Significant Subsidiary in involuntary case; (B)
appoints a Custodian of the Company, the Issuer or any Significant Subsidiary
or for any substantial part of the property of any of them; (C) orders the
winding up or liquidation of the Company, the Issuer or any Significant
Subsidiary; or (D) any similar relief is granted under any foreign laws and,
in the case of each of clauses (2)(A), (B), (C) or (D), the order or decree
remains unstayed and effect for 60 days;
(j) any judgment or decree for the payment of money in excess of
US$5.0 million, or its foreign currency equivalent at the time, is rendered
against the Company, the Issuer or a Significant Subsidiary, remains
outstanding for a period of 60 days following the entry of such judgment or
decree and such judgment or decree is not discharged, waived or stayed within
10 days after notice is given as provided below or the Issuer of the Company
fails to give notice as provided below;
(k) the Guarantee ceases to be in full force or effect (other than in
accordance with the terms of such Guarantee), or the Company denies or
disaffirms its obligations under its Guarantee; or
(l) (A) the security interests under the Security Documents or the
Collateral Agency Agreement shall, at any time, cease to be in full force and
effect for any reason other than the satisfaction in full of all obligations
under this Indenture and discharge of this Indenture or any security interest
created thereunder shall be declared invalid or unenforceable, or the Company
or the Issuer shall assert, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or unenforceable or
(B) the Collateral Agent ceases to have first priority perfected security
interests in the Moveable Assets Collateral, the Proceeds Collateral, the Real
Property Collateral (from and after the registry of the Security Deed) or the
Assigned Rights;
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar federal or state or Indonesia law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (e), (f), (g), or (j) will not constitute an
Event of Default until the Trustee or the Holders at least 25% in principal
amount of the Notes notify the Company of the Default and the Issuer or the
Company, as the case may be, does not cure such Default within the time
specified after receipt of such notice. Such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of
Default."
The Issuer and the Company shall deliver to the Trustee, within 30
days after the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (e), (f), (g), or (j), its
status and what action the Issuer and the Company are taking or propose to
take with respect thereto.
SECTION 6.02 Acceleration
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
42
Amounts on, all the Notes shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or
any Holders. Upon any acceleration pursuant to this paragraph (but not
otherwise) the Trustee may deliver a Notice of Actionable Default with
respect to the Notes to the Collateral Agent in accordance with the
Collateral Agency Agreement. The Holders of a majority in principal amount
of the Notes by notice to the Trustee may rescind an acceleration and its
consequences, including the delivery of the Notice of Actionable Default, if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived, except any Event of
Default with respect to nonpayment of principal or interest that has become
due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03 Other Remedies
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy (including without limitation, the giving of any
notice and the taking of any action contemplated be the Collateral Agency
Agreement) to collect the payment of principal of or interest on the Notes or
to enforce the performance of any provision of the Notes for this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative. The
exercise of any remedy by the Trustee and the Holders expressly limited by the
terms of the Collateral Agency Agreement.
SECTION 6.04 Waiver of Past Defaults
The Holders of a majority in principal amount of the Securities may
by notice to the Trustee waive an existing Default and its consequences with
respect to the Securities, except (i) a Default in the payment of the
principal of or interest on any Note or (ii) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of
each Noteholder affected. When a Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or impair any
consequent right.
SECTION 6.05 Control by Holders
The Holders of at least a majority in principal amount of the Notes
then outstanding may direct the time, method a place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust
or power conferred on the Trustee with respect to the Notes including
directing the Trustee to take any action or exercise any power permitted to
the Trustee under the Collateral Agency Agreement. However, the Trustee may
refuse to follow any direction that conflicts with applicable law, this
Indenture, the Security Documents or the Collateral Agency Agreement or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Holders of the Securities or would involve the Trustee in
personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action under this Section, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action, including
any necessary indemnity which must be provided to the Collateral Agent under
the Collateral Agency Agreement.
SECTION 6.06 Limitation on Suits
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;
43
(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;
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
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Trustee, and publish pursuant to Section 15.02, a notice that states the
record date, the payment date and amount to be paid.
SECTION 6.11 Undertaking for Costs
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as Trustee, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by
a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
principal amount of the Notes then outstanding.
SECTION 6.12 Waiver of Stay or Extension Laws
Each of the Company and the Issuer (to the extent they may lawfully
do so) shall not at any time insist upon, or plead or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which, as applicable may
affect the covenants or the performance of this Indenture, the Guarantee, the
Collateral Agency Agreement or any other Security Document; and each of the
Company and the Issuer (to the extent they may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and shall not
hinder, delay or impede the execution of any power herein or therein granted
to the Trustee or the Collateral Agent, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01 Duties of Trustee
(a) If an Event of Default has occurred and is continuing, the Trust
shall exercise the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default: (1) the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and (2) in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements this Indenture (but need not confirm or investigate the accuracy
of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that: (1) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01; (2) the Trustee shall not be liable for
any error of judgment made in good faith by a Trust Officer unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuer.
45
(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.
(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.
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(i) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture.
(j) The Trustee shall have no duty to determine whether to file,
perfect or record or maintain filed, perfected or recorded any document or
instrument hereunder.
SECTION 7.03 Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Issuer, the
Company or their Affiliates with the same rights it would have if it were not
Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent do the
same with like rights. However, the Trustee must comply with Sections 7.10 and
7.11.
SECTION 7.04 Trustee's Disclaimer
The Trustee shall not be responsible for and makes no representation
to the validity or adequacy of this Indenture, the Collateral, the Guarantee,
or the Notes, it shall not be accountable for the Issuer's or the Company's
use of the proceeds from the Notes, and it shall not be responsible for any
statement of the Issuer or the Company in this Indenture or in any document
issue in connection with the sale or issuance of the Notes or in the Notes
other than the Trustee's certificate of authentication. The Trustee shall not
be responsible for monitoring the compliance of the Collateral Agent with its
duties hereunder or under the Collateral Agency Agreement, and shall not be
liable for negligence or non-feasance by the Collateral Agent.
SECTION 7.05 Notice of Defaults
If a Default occurs and is continuing and if it is actually known to
a Trust Officer of the Trustee, the Trustee shall mail to each Holder and
publish in accordance with Section 15.02 notice of the Default within 90 days
after it occurs. Except in the case of a Default in the payment of principal
of, or interest or Additional Amounts on, any Note (including payments
pursuant to the mandatory redemption provisions of such Note, if any), the
Trustee may withhold notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is not opposed
to the interests of the Holders.
SECTION 7.06 Reports by Trustee to Holders
Within 60 days after each December 15, beginning with December 15,
2002, the Trustee shall mail to each Holder a brief report dated as of
December 15 that complies with TIA ss. 313(a) if and to the extent required be
such Section. The Trustee also shall comply with TIA ss. 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
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shall be jointly and severally liable therefor against any and all loss,
liability or expense (including attorneys' fees and expenses) incurred by it
in connection with the administration of this trust and the performance of
its duties hereunder or under the Collateral Agency Agreement. The Trustee
shall notify the Issuer and the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee so to notify the Issuer and the
Company shall not relieve the Issuer or the Company of their obligations
hereunder. The Issuer and the Company shall defend the claim and the Trustee
may have separate counsel and the Issuer and the Company shall pay the fees
and expenses of such counsel. The Issuer and the Company need not reimburse
the Trustee for any expense, or indemnify the Trustee against, any loss,
liability or expense incurred by the Trustee through the Trustee's own
willful misconduct, negligence or bad faith.
To secure the Issuer's and the Company's payment obligations in this
Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee other than money or property held in
trust to pay principal of and interest on particular Notes.
The Company's and the Issuer's payment obligations pursuant to this
Section 7.07 shall survive the discharge of this Indenture and the resignation
or removal of the Trustee. Without limiting any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(h) with respect to the
Company or the Issuer, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08 Replacement of Trustee
(a) The Trustee may at any time resign with respect to the Notes by
giving 30 days written notice of such resignation to the Issuer and the
Company and by mailing notice thereof to the Holders at their addresses as
they shall appear on the registry books of the Issuer. Upon receiving such
notice of resignation, the Issuer shall promptly appoint a successor trustee
or trustees with respect to Notes by written instrument, in duplicate,
executed by order of the director of the Issuer, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to each successor
trustee (provided that there shall be only one Trustee with respect to the
Notes except as provided in Section 7.12). If no successor trustee shall have
been so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation to the Noteholders, the resigning
Trustee may petition any court of competent jurisdiction for the appointment
of a successor trustee, or any Noteholder who has been a bona fide holder of a
Note or Notes for at least six months may, subject to the provisions of
Section 6.11, on behalf of himself and all others similarly situated, petition
any such court for the appointment of successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall have occurred:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting;
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.
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(c) The Holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and nominate
a successor trustee which shall be deemed appointed as successor trustee.
(d) Any resignation or removal of the Trustee and any appointment of
a successor trustee pursuant to any of the provisions of this Section 7.08
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 7.08(e).
(e) In the case of the appointment hereunder of a successor trustee,
any successor trustee so appointed as provided in this Section 7.08 shall
execute, acknowledge deliver to the Issuer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, duties and obligation of its predecessor
hereunder, with like effect as if originally named as trustee herein;
nevertheless, on the written request of the Issuer or of the successor
trustees the trustee ceasing to act shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor trustee all
the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Issuer shall execute any and all instruments in
writing in order to more fully and certainly vest in and confirm to such
successor trustee all such rights, powers and trusts referred to in the two
preceding sentences. Any trustee ceasing to act shall, nevertheless retain a
lien upon all property or funds held or collected by such trustee to secure
any amounts then due it pursuant to the provisions of Section 7.07.
No successor trustee shall accept appointment as provided in this
Section 7.08 unless at the time of such acceptance such successor trustee
shall be qualified and eligible under the provisions of Section 7.10.
Upon acceptance of appointment by a successor trustee as provided in
this Section 7.08, the Issuer shall mail notice of the succession of such
trustee hereunder to all Holders as the names and addresses of such Holders
appear on the registry books of the Issuer. If the Issuer fails to mail such
notice in the prescribed manner within ten days after the acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Issuer.
(f) Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Issuer's and Company's obligations under Section 7.07 shall
continue the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to
the Trustee; and in all such case such certificates shall have the full force
which it is anywhere in the Notes or in this Indenture provided that the
certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 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 ss. 310(b);
provided, however, that there shall be excluded from the operation of TIA ss.
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 ss.
310(b) (1) are met.
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SECTION 7.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311 (a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
SECTION 7.12 Appointment of Co-Trustee or Separate Trustee
(a) Notwithstanding any other provision of this Indenture, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Collateral may at the time be located, the Issuer and
the Trustee acting jointly shall have the power to execute and deliver and
shall execute and deliver all instruments necessary to appoint one or more
persons approved by the Trustee to act as co-trustee or co-trustees, jointly
with the Trustee, of all or any part of the Collateral, or separate trustee or
separate trustees of any part of the Collateral, to vest in such person or
persons, in such capacity and for the benefit of the Holders, such title to
the Collateral, or any part thereof, and, subject to the other provisions of
this Section 7.12, such powers, duties, obligations, rights and trusts as the
Issuer and the Trustee may consider necessary or desirable hereunder or under
the Collateral Agency Agreement or the Security Documents. If the Issuer shall
not have joined in such appointment within 15 days after the receipt by it of
a request to do so, or in case a Default or Event of Default shall have
occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility under Section 7.10 and no notice to
Holders of the appointment of any co-trustee or separate trustee shall be
required under Section 7.08.
(b) Every separate trustee and co-trustee shall to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee hereunder or under the Collateral Agency Agreement or
any Security Document shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Trustee joining in such
act), except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (whether as Trustee
hereunder, under the Collateral Agency Agreement or any Security
Document) the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Collateral or any
portion thereof in any such jurisdiction) shall be exercised and
performer singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Issuer and the Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture
and, to the extent applicable, the Collateral Agency Agreement and the
Security Documents. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture and, to the extent applicable, the Collateral Agency Agreement and
the Security Documents, specifically including every 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
50
the Trustee, to the extent permitted by law, without the appointment of a
new or successor trustee; provided, however, that the Trustee shall not be
obligated to act outside the United States.
SECTION 7.13 No Duty To Operate. Nothing in this Indenture or any
agreement, document, certificate or other instrument shall at any time be
deemed to constitute the Trustee as the owner or the operator of, or as being
responsible for, or as requiring the Trustee to build, or operate, manage or
control the Plant.
SECTION 7.14 Other Matters Related to the Collateral Agency Agreement
(a) The Trustee shall have no obligation (i) to instruct or direct
the Collateral Agent take any action under or in connection with the
Collateral Agency Agreement or any Security Document or (ii) to give any
consent or exercise any discretion under or in connection with the Collateral
Agency Agreement or any Security Document unless, in either case directed to
do in accordance with Section 6.05 or such instruction, direction or consent
is authorized or required to be given in accordance with the express terms of
this Indenture.
(b) The Trustee shall have no obligation to act any Actionable
Default under the Collateral Agency Agreement.
(c) The Trustee shall have no obligation to provide to the Collateral
Agent any indemnity or security under Section 2.03(e) of the Collateral Agency
Agreement unless such indemnity or security shall have been furnished to it by
the Holders of the Securities for the purpose of delivery thereof by the
Trustee to the Collateral Agent pursuant to said Section.
(d) The Trustee shall not be liable for the negligence or willful
misconduct of the Collateral Agent.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01 Discharge of Liability on Securities; Defeasance
(a) When (i) the Issuer or the Company delivers to the Trustee all
outstanding Notes (other than Notes replaced pursuant to Section 2.07) for
cancellation or (ii) all outstanding Notes have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 and the Issuer or the Company irrevocably deposits with
the Trustee funds sufficient to pay at maturity or permissible redemption all
outstanding Notes, including interest thereon (other than Notes replaced
pursuant Section 2.07), and if in either case the Issuer or the Company pays
all other sums payable hereunder with respect to the Notes, then this
Indenture shall, subject to Sections 8.01(c) and 8.06, cease to be of further
effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture upon satisfaction of the conditions set for in clause (i) or (ii)
above on demand of the Company accompanied by an Officer's Certificate and an
Opinion of Counsel.
(b) Subject to Sections 8.01(c), 8.02 and 8.06, the Issuer or the
Company at any time may terminate (i) all of the Issuer's and the Company's
obligations under the Notes and under this Indenture with respect thereto
("legal defeasance option") or (ii) the Issuer's and the Company's obligations
under Sections 4.03, 4.04, 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.
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If the Issuer or the Company exercises the legal defeasance option,
payment of Notes may not be accelerated because of an Event of Default. If the
Issuer or the Company exercises the covenant defeasance option, payment of
such Notes may not be accelerated because of an Event of Default specified in
Section 6.01(d), Section 6.01(f) (to the extent the Event of Default under
Sections 6.01(d) or (f) arises from a Default under a Section otherwise
subject to covenant defeasance), 6.01(g), 6.01(h) with respect only to
Significant Subsidiaries or Sections 6.01(i), 6.01(j) or 6.,01(k), or because
of a failure to comply with clauses (iii) or (iv) of Section 5.01, except, in
each case, to the extent covenants or agreements referenced in such Sections
remain applicable.
Upon satisfaction of the conditions set forth herein with respect to
the Notes, and upon request of the Issuer or the Company, the Trustee shall
acknowledge in writing the discharge of those obligations with respect to the
Notes that the Issuer or the Company terminated.
(c) Notwithstanding; clauses (a) and (b) above, the Issuer's and the
Company's obligations with respect to the Notes in Sections 2.03, 2.04, 2.05,
2.06, 2.07, 4.20(c), 7.07, 7.08, 8.03, 8.04, 8.05 and 8.06 shall survive until
such Notes have been paid in full. Thereafter the Issuer's and the Company's
obligations in Sections 7.07, 8.04 and 8.05 shall survive.
(d) Subject to Section 8.01(c), if the Issuer or the Company
exercises its legal defeasance option or its covenant defeasance option with
respect to the Securities, the Company will be released from all its
obligations with respect to the Guarantee and the Security Documents.
SECTION 8.02 Conditions to Defeasance
The Issuer or the Company may exercise the legal defeasance option or
the covenant defeasance option only if:
(1) the party exercising the defeasance option irrevocably
deposits in trust with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Notes to
maturity or redemption, as the case maybe:
(2) the party exercising the defeasance option delivers to the
Trustee a certificate from an internationally recognized firm of
independent accountants expressing their opinion that the payments of
principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money
without investment will provide cash at such times and in such
amounts as will be sufficient to pay principal and interest when due
all the Notes to maturity or redemption, as the case may be;
(3) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 6.01(h) with respect to the
Issuer or the Company occurs which is, continuing at the end of the
period;
(4) no Default or Event of Default has occurred and is continuing
on the date of such deposit and after giving effect thereto;
(5) the deposit does not result in a breach or violation of, or
constitute a default under, any material agreement or instrument
(other than this Indenture) binding on the Issuer or the Company;
(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
52
Revenue Service a ruling, or (ii) since the Issue Date,
there has been a change in applicable United States Federal income
tax law, in either case, to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Noteholders will not
recognize income, gain or loss for United States Federal income tax
purposes as a result of such defeasance and will be subject to United
States Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had
not occurred;
(8) in the case of the covenant defeasance option the party
exercising the defeasance option shall have delivered to the Trustee
an Opinion or Opinions of Counsel to the effect that the Noteholders
will not recognize income, gain or loss for United States Federal
income tax purposes as a result of such covenant defeasance and will
be subject to United States Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case
if such covenant defeasance had not occurred;
(9) the party exercising the defeasance option shall have
delivered to the Trustee an Opinion of Counsel to the effect that
under Indonesian and The Netherlands law Holders will not recognize
gain for Indonesian or The Netherlands tax purposes, as the case may
be, and payments from the defeasance trust in respect of such Note to
any such Holder will not be subject to withholding payments under
either Indonesian or The Netherlands law; and
(10) the party exercising the defeasance option shall have
delivered to the Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that all conditions precedent to the defeasance
and discharge of the Notes as contemplated by this Article 8 have
been complied with.
If the U.S. Government Obligations deposited under Section 8.02(1)
provide for payment of the Notes on a redemption date, then no legal or
covenant defeasance shall be effective until prior to or simultaneously with
such deposit, notice of such redemption shall have been given to the Holders
under Article 3 or the Trustee shall have received from the Issuer irrevocable
instructions to give such notice under arrangements satisfactory to the
Trustee.
SECTION 8.03 Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Notes.
SECTION 8.04 Repayment to Issuer. Upon the satisfaction and discharge
of this Indenture with respect to the Notes, the Trustee and the Paying Agent
shall promptly turn over to the Issuer upon request any excess money or Notes
in respect of the Notes held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Issuer upon request any money held by them for
the payment of principal or interest on any Notes that remains unclaimed for
two years, and, thereafter, the Trustee and the Paying Agent shall have no
liability with respect to such money and Noteholders entitled to the money
must look to the Issuer for payment as general creditors.
SECTION 8.05 Indemnity for Government Obligations. The Issuer and the
Company shall pay and shall indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
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
53
this Indenture with respect to such Notes shall be revived and reinstated as
though no deposit had occurred pursuant to this Article 8 until such time as
the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with this Article 8; provided, however,
that, if the Issuer has made any payment of interest on or principal of any
Notes because of the reinstatement of its obligations, the Issuer shall be
subrogated to the rights of the Holders of such Notes to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01 Without Consent of Holders
(a) Subject to the provisions of the Collateral Agency Agreement
limiting the ability of the Trustee to amend the Notes and this Indenture, the
Issuer, the Company and the Trustee may amend this Indenture or the Notes
without notice to or consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with and as allowed by the provisions related to
Article 5;
(3) to provide for uncertificated Notes in addition to or in place
of certificated Notes; provided, that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code
or in a manner such that the uncertificated Notes are described in
Section 163(f)(2)(B) of the Code;
(4) to further secure the Notes and to add additional guarantees
with respect thereto;
(5) to establish or maintain the Liens of the Security Documents
(including the perfection and priority contemplated by the Security
Documents) with respect to the Collateral or to correct or amplify
the description of the Collateral subject to the Liens of the
Security Documents or to subject additional property to the Liens of
the Security Documents;
(6) to add to the covenants of the Issuer or the Company for the
benefit of the Holders or to surrender any right or power conferred
upon the Issuer the Company;
(7) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(8) to make any change that does not adversely affect the rights
of any Holder.
(b) The Trustee may enter into amendments of the Collateral Agency
Agreement and enter into amendments or consent to amendments of the Pledge
Agreement and the Security Documents without notice to or the consent of any
Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(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;
54
(4) to add to the covenants of the Company or the Issuer for the
benefit of the holders of the Indebtedness, the representatives of
which are parties to the Collateral Agency Agreement;
(5) to establish or maintain the Liens of the Pledge Agreement and
the Security Documents (including the perfection and priority
contemplated by the Security Documents) with respect to the
Collateral or to correct or amplify the description of the Collateral
subject to the Liens of the Pledge Agreement, the Security Documents
or to subject additional property to the Liens of the Pledge
Agreement or the Security Documents;
(6) subject to the provisions of Section 4.12, to permit holders
of Additional Indebtedness and Secondary Indebtedness to become
parties to the Collateral Agency Agreement and receive the benefit of
the Security Documents and to otherwise effect transactions permitted
by Sections 4.12. 12.04, 12.05, 12.07, 12.08, 12.09 and 12.10; and
(7) to make any change that does not adversely affect the rights
of any Noteholder as evidenced by an Opinion of Counsel delivered to
the Trustee;
provided, that no such action shall be permitted if it causes any Lien to
cease to be a first priority perfected Lien (or such other perfection and
priority contemplated by the Security Documents) or diminishes the security
afforded the Liens of the Security Documents; provided, however, that if the
Trustee so requires, the Trustee shall have received an Opinion of Counsel
with respect to such matters.
Without limiting the generality of the foregoing, the Trustee, upon
request of the Company and subject to the following paragraph, may, and shall
at the direction of the majority of Holders, grant any consent not required to
be granted hereunder (which consents which are required to be granted include
those set forth in Article 12 and 13 hereof) with respect to the Collateral
Agency Agreement and the Security Documents that does not impair the rights of
the Holders or the security afforded the Holders through the Collateral Agency
Agreement and the Security Documents. Prior to requesting any such consent,
the Company shall provide the Trustee with an Officer's Certificate that no
Default or Event of Default has or will occur as a result of such extension,
renewal or replacement or other action taken or to be taken for which such
consent is requested.
(c) After an amendment under this Section 9.01 becomes effective
(except for any amendment prior to the issuance of the Notes) the Issuer shall
mail to Holders, and publish in accordance with Section 15.02, a notice
briefly describing such amendment. The failure to give such notice to all
Holders or to publish such notice, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 9.01.
(d) This Indenture may be amended without notice to any Noteholder,
by agreement between the Company, the Issuer and the Trustee, at any time
prior to the Issue Date.
SECTION 9.02 With Consent of Holders
(a) The Issuer, the Company and the Trustee may amend this Indenture
and enter into amendments of the Collateral Agency Agreement and enter into
amendments or consent to amendments of the Security Documents or the Notes
without notice to any Holder but with the written consent of the Holders of at
least a majority in principal amount of the outstanding Notes. However,
without the consent of each Holder affected, an amendment may not:
(1) reduce the rate of or extend the time for payment of interest
on any Note;
(2) reduce the principal of or extend the Stated Maturity of any
Note;
55
(3) reduce the premium payable upon the redemption of any Note or
change the time at which any Note may be redeemed or repurchased in
accordance with Article 3, or Sections 4.07, 4.08 or 4.10 of this
Indenture or Section 5 of the Notes;
(4) make any Note payable in money other than that stated in the
Note;
(5) impair the right of any Holder to receive payment of principal
of, and interest and Additional Amounts on, such Holder's Notes on or
after the due dates thereon or to institute suit for the enforcement
of any payment on or with respect to such Holder's Notes;
(6) make any change in Section 6.04, 9.01 or 9.02 (a) or the
provisions relating to amendments, modifications or waivers of the
Security Documents or the Collateral Agency Agreement;
(7) make any change in Section 6.07;
(8) modify any provisions of Articles 6 or 9, except to increase
the percentage of outstanding Notes required for such actions or to
provide that other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Note; or
(9) amend any provisions related to amendments, modifications or
waivers of the Security Documents or the Collateral Agency Agreement.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
(b) After an amendment under this Section becomes effective, the
Issuer shall mail to Noteholders, and publish in accordance with Section
15.02, a notice briefly describing such amendment. The failure to give such
notice to all Noteholders or to publish such notice, or any defect therein,
shall not impair or affect the validity of an amendment under this Section
9.02.
SECTION 9.03 Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Note shall comply with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder with respect to this Indenture, the
Notes, the Guarantee, the Collateral Agency Agreement or the Security
Documents shall bind the Holder and every subsequent Holder of that Note or
portion of the Note that evidences the same debt as the consenting Holder's
Note, even if notation of the consent or waiver is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent or waiver
as to such Holder's Note or portion of the Note if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes
effective. After an amendment or waiver becomes effective, it shall bind every
Noteholder.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture, the Notes, the Guarantee, the Collateral Agency
Agreement and the Security Documents. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Noteholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid
or effective for more than 120 days after such record date.
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
56
or the Trustee so determines, the Issuer in exchange for the Note shall
issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Failure to make the appropriate notation or to issue a new
Note shall not affect the validity of such amendment.
SECTION 9.06 Trustee To Sign Amendments. The Trustee shall sign any
amendment to this Indenture, the Collateral Agency Agreement or the Security
Documents or grant any consent authorized pursuant to this Article 9 if the
amendment or consent does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it
or grant such consent. In signing such amendment or granting such consent the
Trustee shall be entitled to receive indemnity satisfactory to it and to
receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officer's Certificate and an Opinion of Counsel (including, if the
Trustee so chooses, an Opinion of Counsel of the Company or the Issuer)
stating that such (i) amendment or consent is authorized or permitted by this
Indenture and that all conditions precedent to the execution, delivery and
performance of such amendment or consent have been satisfied; (ii) each of the
Issuer and the Company, as applicable, has all necessary corporate power and
authority to execute and deliver the amendment and that the execution,
delivery and performance of such amendment has been duly authorized by all
necessary corporate action; (iii) the execution, delivery and performance of
the amendment do not conflict with, or result in the breach of or constitute a
default under any of the terms, conditions or provisions of (a) this
Indenture, (b) the constitutive documents of the Issuer or the Company (c) any
law or regulation applicable to the Issuer or the Company (d) any material
order, writ, injunction or decree of any court or governmental instrumentality
applicable to the Issuer or Company or (e) any material agreement or
instrument to which the Issuer or the Company is subject; (iv) such amendment
has been duly and validly executed and delivered by each the Issuer and the
Company (where applicable) and this Indenture together with any such amendment
of the Security Documents constitutes a legal, valid and binding obligation of
each of the Issuer and the Company, as applicable, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles; and (v) this
Indenture together with such amendment complies with the TIA.
SECTION 9.07 Payment for Consent. Neither the Issuer, the Company,
nor any of their Affiliates shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise to any
Holder for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture, the Notes, the Guarantee, the
Collateral Agency Agreement or the Security Documents unless such
consideration is offered to be paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating
to such consent, waiver or agreement.
SECTION 9.08 Trustee Authorized To Execute Collateral Agency
Agreement and Take Actions Thereunder
The Trustee is hereby authorized to execute the Collateral Agency
Agreement and the Security Documents and to take actions necessary or
desirable to comply with the terms hereof and the Collateral Agency Agreement
and to preserve and protect the Collateral.
SECTION 9.09 Voting Under Collateral Agency Agreement. Unless
otherwise set forth herein, if the Trustee seeks the instruction of the
Holders of the Securities with respect to any amendment, waiver or consent
necessary or desirable under the Collateral Agency Agreement or the Security
Documents, the Trustee shall take such action as is directed by a majority in
principal amount of Securities then outstanding, subject to the conditions Set
forth in Section 6.05.
ARTICLE 10
Guarantee of Notes; Indemnity
SECTION 10.01 Guarantee. The Company, as principal obligor and not
merely as surety, irrevocably and unconditionally guarantees to each Holder of
a Note authenticated and delivered by the Trustee and 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,
57
by call for redemption or upon repurchase or purchase pursuant to Article 3
or Sections 4.07, 4.08 or 4.10 or otherwise and interest on the overdue
principal and premium, if any, and purchase price and interest on any
interest; to the extent lawful (in each case including interest accruing on
or after filing of any petition in bankruptcy or reorganization relating to
the Issuer or the Company, whether or not a claim for post filing interest
is allowed in such proceeding), on the Notes and all other amounts payable
under the Notes and obligations of the Issuer to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed when and
as the same shall become due and payable, whether on the relevant maturity
date, upon acceleration, by call for redemption, upon repurchase or purchase
as a result of a Change of Control Offer, Asset Disposition Offer or
otherwise, all in accordance with the terms hereof and thereof; and (ii) in
case of any extension of time of payment or renewal of any Notes or of any
such other obligations, that the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal,
subject to an applicable grace period, whether at maturity, on an interest
payment date, by acceleration, required repurchase or otherwise. All
payments under this Guarantee shall be made in U.S. dollars.
All payments made by the Company under the Guarantee with respect to
the Notes will be made in U.S. dollars free and clear of and without
withholding or deduction for or on account of any present or future tax, duty,
assessment or other Governmental charge imposed or levied by or on behalf of
The Netherlands or the Republic of Indonesia (or any political subdivision or
taxing authority of or in The Netherlands or the Republic of Indonesia),
unless the Company is required to withhold or deduct such tax, duty,
assessment or other Governmental charge by law or by the interpretation or
administration thereof. In the event that payments under the Guarantee are
subject to withholding or deduction for or on account of any present or future
tax, duty, assessment or other Governmental charge imposed by The Netherlands
or the Republic of Indonesia (or any political subdivision or taxing authority
of or in The Netherlands or the Republic of Indonesia), the Company shall pay
Additional Amounts in such amounts and to the extent set forth in Section
4.01(b).
The Company hereby agrees that its obligations hereunder shall be
unconditional and irrevocable, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture or the obligations of the Issuer
hereunder or thereunder, the absence of any action to enforce the same, any
waiver or consent by any Holder of Notes with respect to any provisions hereof
or thereof, the recovery of any judgment against the Issuer, any action to
enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor.
The Company hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Issuer, any right to require a proceeding first against the Issuer, any right
to pursue or exhaust its legal or equitable remedies against the Issuer
(including any right which the Company may have to require the seizure and
sale of the assets of the Issuer to satisfy the outstanding principal of,
interest on or any other amounts payable under each Note prior to recourse
against the Company or its assets), protest, notice and all demands whatsoever
and covenants that the Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture. If
any Noteholder or the Trustee is required by any court or otherwise to return
to the Issuer, the Company, or any custodian, trustee, liquidator or other
similar official acting in relation to the Issuer or the Company any amount
paid by the Issuer or the Company to the Trustee or such Noteholder, the
Guarantee to the extent theretofore discharged, shall be reinstated in full
force and effect.
The Company agrees that, as between the Company, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of the Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such
obligations as provided in Article 6, such obligations (whether or not then
due and payable) shall forthwith become due and payable by the Company for the
purposes of the Guarantee.
The Company also agrees, to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee or
any Holders in enforcing any rights under the Guarantee.
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,
58
1831, 1833, 1837, 1843 and 1847 through 1850 of the Indonesian Civil Code
(Kitab Undang-Undang Hukum Perdata) and:
(i) waives any right of set-off which the Company may have against
the registered Holder in respect of any amounts which are or may become
payable by the registered Holder to the Issuer;
(ii) agrees that the Company is still under an obligation to make
payment to the registered Holder or the Trustee under this Guarantee
upon demand by the registered Holder even though the registered Holder
has not made any demand upon the Issuer, the Trustee or the Collateral
Agent or taken any steps or proceedings against the issuer to seize and
sell its assets or property to recover the secured indebtedness or, if
such steps or proceedings are taken, the registered Holder is otherwise
unable to satisfy the Indebtedness under this Indenture from such assets
or property;
(iii) relinquishes any right or privilege which it may have to demand
from any court that the registered Holder or the Trustee should split or
apportion the Indebtedness under this Indenture either proportionately
or otherwise against the Company and any other person who has given any
Guarantee or other security to the registered Holder in respect of the
Indebtedness under this Indenture;
(iv) agrees that (subject to the other provisions of this Guarantee)
the Company shall not be entitled to claim from the issuer any
compensation or release in respect of the obligations and liabilities of
the Company under this Guarantee in circumstances where the Company has
not made any actual payment under this Guarantee;
(v) agrees that the Company shall not make use of any of the
exceptions or defenses against the registered Holder or the Trustee
which are or may be available to the Issuer and which concerns the
Indebtedness under this Indenture;
(vi) agrees that the Company shall still be bound by and liable under
this Guarantee even though due to the fault of the registered Holder of
a Security or the Trustee, the Company can no longer be subrogated to
the rights, security interests and other privileges of the registered
Holder against the Issuer;
(vii) agrees that the Company shall still be bound by and liable
under this Guarantee in circumstances where the registered Holder
voluntarily accepts certain moveable or any other goods as payment for
the Indebtedness under this Indenture, but subsequently such goods, by
reason of a judicial decision, have to be delivered to some other
person; and
(viii) agrees that the Company shall not have the right to demand the
Issuer to repay the Indebtedness under this Indenture to the registered
Holder of a Security, or to release the Company from its liability under
this Guarantee in circumstances where the registered Holder has granted
any time or other indulgence to the issuer.
SECTION 10.02 Indemnity
(a) The Company hereby irrevocably and unconditionally agrees as a
primary obligor to indemnify (the "Indemnity") fully the Holders and the
Trustee for and against any amounts owed by the Issuer in respect of the Notes
and this Indenture that otherwise would be payable under the Guarantee in the
event that the Guarantee is for any reason deemed to be unenforceable. Except
as otherwise indicated herein or as the context may otherwise require, all
references herein and in the Notes and the Guarantee shall be deemed to
constitute references to the Indemnity.
(b) The obligations of the Company assumed under this Indenture with
respect to the Indemnity are independent undertakings and constitute the
Company's own debt and obligation, as meant by or in accordance with Article
1316 of the Indonesian Civil Code, separate from the Guarantee contained in
Section 10.01, not
59
accessory to any of the Security Documents, and with respect to which
Indemnity Articles 1820 to 1850 of the Indonesian Civil Code do not
therefore apply.
SECTION 10.03 Representation and Warranty. The Company hereby
represents and warrants that all acts, conditions and things required to be
done and performed and to have happened precedent to the creation and issuance
of the Guarantee and the Indemnity, and to constitute the same legal, valid
and binding obligations of the Company enforceable in accordance with their
respective terms, have been done and performed and have happened in compliance
with all applicable laws.
SECTION 10.04 Waiver of Subrogation. The Company hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
the Issuer that arise from the existence, payment, performance or enforcement
of the Company's obligations under the Guarantee, the Indemnity and this
Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in
any claim or remedy of any Holder against the Issuer whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Issuer, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim or other
rights. If any amount shall be paid to the Company in violation of the
preceding sentence and the Notes shall not have been paid in full; such amount
shall have been deemed to have been paid to the Company for the benefit of,
and held in trust for the benefit of, the Holders of the Securities, and shall
forthwith be paid to the Trustee for the benefit of such Holders to be
credited and applied upon the Notes, whether matured or unmatured, in
accordance with the terms of this Indenture. The Company acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
10.04 is knowingly made in contemplation of such benefits.
SECTION 10.05 Execution of Guarantee. To evidence the Guarantee
specified in Section 10.01 to the Noteholders, the Company hereby agrees to
execute this Indenture and the endorsement on the Notes of a notation of such
Guarantee (the "Guarantee Endorsement") in substantially the form of the Notes
attached hereto as Exhibit A recited to be endorsed on each Security ordered
to be authenticated and delivered by the Trustee. The Company hereby agrees
that the Guarantee set forth in Section 10.01 shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such
Guarantee. Each Guarantee shall be signed on behalf of Company by two Officers
of the Company (each of whom shall have been duly authorized by all requisite
corporate actions) prior to the authentication of the Note on which it is
endorsed, and the delivery of such Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Guarantee on behalf of the Company. Such signatures upon the Guarantee
Endorsement may be by manual or facsimile signature of such Officers and may
be imprinted or otherwise reproduced on the Guarantee Endorsement. If an
officer whose signature is on a Guarantee Endorsement no longer holds his
office at the time the Note on which such Guarantee Endorsement is endorsed is
authenticated, such Guarantee Endorsement shall be valid nevertheless. The
Company shall execute the Guarantee Endorsement in the foregoing manner for
the initial issuance of Notes hereunder and for any other issuance of Notes
required or permitted hereunder, including pursuant to Section 2.06, 2.07 and
2.09.
SECTION 10.06 Ranking. The Guarantee is secured and ranks pari passu
in right of payment with all existing and future Senior Indebtedness of the
Company.
ARTICLE 11
[Intentionally Omitted]
ARTICLE 12
Security Documents
SECTION 12.01 Security Documents
(a) In order to secure the due and punctual payment of all amounts
payable under the Notes and this Indenture, the Company, the Issuer, the
Collateral Agent, the Trustee and the Secured Creditors have entered
60
into the Collateral Agency Agreement and the Security Documents to create
the Liens of the Security Documents and for related matters.
(b) The Company covenants and agrees that it has full right, power
and lawful authority to grant, bargain, sell, release, convey, hypothecate,
assign, mortgage, pledge and transfer the Collateral, in the manner and form
done, or intended to be done, in this Indenture, the Collateral Agency
Agreement and the Security Documents. The Company further covenants and agrees
that the Security Documents and the actions taken hereunder and thereunder
create a perfected first priority lien (subject, with respect to the Security
Deed, to statutory exceptions for taxes and enforcement costs) (or such other
perfection and priority contemplated by the Security Documents) on the
relevant portion of the Collateral which it purports to create prior to all
other Liens, other than Permitted Liens.
(c) As amongst the Holders, the Collateral as now or hereafter
constituted shall be held for the equal and ratable benefit of the Holders
without preference, priority or distinction of any thereof over any other by
reason of difference in time of issuance, sale or otherwise, as security for
the Issuer's and the Company's obligations under this Indenture.
SECTION 12.02 Holders' Consent
Each Holder, by its acceptance of a Note, (i) consents and agrees to
the terms of the Collateral Agency Agreement and the Security Documents and
authorizes and approves the Trustee's execution thereof, and (ii) agrees that
such Holder is bound by the terms thereof and that such Holder may not take
any action contrary thereto.
SECTION 12.03 Recording, Deposit of Pledged Assets, etc
(a) The Company shall, and shall cause any Restricted Subsidiary
which owns Collateral to, take or cause to be taken all action required or
desirable to maintain, preserve and protect the Lien on the Collateral granted
by the Collateral Agency Agreement and the Security Documents, including, but
not limited to, causing all instruments of further assurance requested by the
Trustee or the Collateral Agent to be promptly recorded, registered and filed,
and to keep the Security Documents and such instruments of further assurance
recorded, registered and filed at all times, and will execute and file such
instruments in such manner and in such places as may be required by law to
fully preserve and protect the rights of the holders and the Trustee under
this Indenture, the Collateral Agency Agreement and the Security Documents to
all property comprising the Collateral.
The Company and the Issuer will from time to time promptly pay and
discharge all hypothec and filing fees, charges and taxes relating to this
Indenture, the Collateral Agency Agreement, the Security Documents, any
amendments thereto and any other instruments of further assurance.
(b) Upon the cancellation and discharge of any prior Permitted Lien,
the Company will cause all cash, cash equivalents, obligations and securities
then held by the trustee, mortgagee or other holder of such prior Permitted
Lien, which were received by such trustee, mortgagee or other holder on
account of the release or the taking by eminent domain or the purchase by a
public authority or the sale by virtue of a designation or order of a public
authority or any other disposition of, or insurance on, the Collateral, or any
part thereof (including all proceeds of or substitutions for any thereof), to
be paid to or deposited and pledged with the Collateral Agent for distribution
in accordance with the Collateral Agency Agreement.
(c) The Issuer and the Company shall furnish to the Trustee:
(i) promptly after execution and delivery of the Note, an Opinion or
Opinions of Counsel to the effect that, in the opinion of such counsel
(subject customary exceptions), this Indenture and the assignment of the
Collateral intended to be made by each Security Document and all other
instruments of further assurance or assignment have been properly
recorded, registered and filed to the extent necessary to perfect the
Lien intended to be created by each such Security Document and reciting
the details of such
61
action or referring to prior Opinions of Counsel in which such details
are given, and stating that as to the Lien intended to be created
pursuant to each such Security Document, such recordings, registering
and filings are the only recordings, registering and filings
necessary, and further stating that all Security Documents have been
executed and filed that are necessary fully to preserve and protect
the rights of the Holders (except, with respect to the Security Deed,
registration thereof in the manner contemplated by Section 6.01(k) (B)
and the Trustee with respect to the Liens intended to be created by
each Security Document;
(ii) within 30 days after December 1 in each year beginning with
December 1, 2003, an Opinion or Opinions of Counsel, dated as of such
date, either (A) to the effect that, in the opinion of such counsel,
such actions have been taken with respect to the recordings,
registering, filings, recordings, re-registering and refilings of all
Security Documents or other instruments of further assurance as are
necessary to maintain and continue the perfection of the Liens of the
Security Documents and reciting with respect to such Liens the details
of such action or referring to prior Opinions of Counsel in which such
details are given, and stating that all Security Documents and
instruments have been executed and filed that are necessary fully to
preserve and protect the rights of the Holders and the Trustee with
respect to the Liens intended to be created by each Security Document or
(B) to the effect that, in the opinion of such counsel, no such action
is necessary to maintain such Liens.
SECTION 12.04 Disposition of Collateral Without Trustee Consent.(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.
(d) In the event that the Company has sold, exchanged, or otherwise
disposed of or proposes to sell, exchange or otherwise dispose of any portion
of the Collateral which under the provisions of this Section 12.04 may be
sold, exchanged or otherwise disposed of by the Company without any consent of
the Trustee, such Collateral shall be, upon such sale, exchange or other
disposition, automatically released from the Liens of the Security Documents
and the Company may request the Trustee to furnish a written disclaimer,
release or quitclaim of any interest in such property under this Indenture,
the Collateral Agency Agreement and any of the Security Documents (by
providing to the Trustee a counterpart of the instruments proposed to give
effect to such disclaimer, release or quitclaim fully executed and
acknowledged (if applicable) by all parties thereto other than the Trustee,
the other Secured Creditors and Secured Creditors' Representatives and in form
for execution by the Trustee). If the Company so requests, the Trustee shall
execute such an instrument upon delivery to the Trustee of (i) an Officer's
Certificate by the Company reciting the sale, exchange or other disposition
made or proposed to be made and describing in reasonable detail the property
affected thereby, and stating that such property is property which by the
provisions of this Section 12.04 may be sold, exchanged or otherwise disposed
of or dealt with by the Company without any release or consent of the Trustee,
(ii) an Opinion of Counsel stating that the sale, exchange or other
disposition made or proposed to be made was duly taken by the Company in
conformity with a designated
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subsection of Section 12.04(a) and (iii) an Officer's Certificate and
Opinion of Counsel complying with Sections 15.04 and 15.05.
Any disposition of Collateral made in strict compliance with the
provisions of this Section 12.04 shall be deemed not to impair the Liens of
the Security Documents in contravention of the provisions of this Indenture.
SECTION 12.05 Release of Collateral with Trustee Consent. In addition
to its rights under Sections 12.04 and 12.07, the Company shall have the
right, at any time and from time to time, to sell, exchange or otherwise
dispose of any of the Collateral (other than Trust Monies, which are subject
to release from the Liens of the Security Documents as provided under Article
13) upon compliance with the requirements and conditions of Sections 4.08,
12.11 and this Section 12.05, and the Trustee shall, subject to the terms of
the Collateral Agency Agreement, direct the Collateral Agent to release the
same from the Liens of any Security Document upon receipt by the Trustee of a
notice requesting such release and describing the property to be so released,
provided that:
(a) if the property to be released has a book value of more than
US$2.0 million, the Trustee is provided with a written resolution of a
majority of the Board of Directors requesting such release and authorizing an
application to the Trustee therefor;
(b) the security afforded by the Liens of the Security Documents will
not be impaired by such release (except with respect to the Collateral so
released) and the proceeds from the property to be released are deposited in
accordance with the provisions set forth under Section 4.08;
(c) the Company has disposed of or will dispose of the Collateral so
to be released for a consideration representing its fair market value;
(d) no Default or Event of Default shall have occurred and be
continuing (or shall result therefrom);
(e) if the Collateral to be released is real property, following such
release and the release of the Lien of any applicable Security Deed with
respect thereto, the non-released property has sufficient utility services and
sufficient access to public roads, rail spurs, harbors, canals, terminals and
other transportation structures for the continued use of such non-released
property in substantially the manner carried on by the Company and its
Subsidiaries prior to such release;
(f) if the Collateral to be released is real property, following such
release, the non-released property subject to the Security Deed will continue
to comply in all material respects with applicable laws rules, regulations and
ordinances relating to land use and building and work place safety;
(g) if the Collateral to be released is real property, following such
release, the fair market value of the non-released property (exclusive of the
fair market value of the released property) shall not be less than the fair
market value of such non-released property subject to the Security Deed prior
to such release;
(h) if the Collateral to be released is subject to a prior Permitted
Lien, there shall be delivered to the Trustee a certificate of the trustee,
fiduciary, transferee or other holder of such prior Permitted Lien that it has
received the Net Proceeds sufficient to discharge such prior Permitted Lien
and has been irrevocably authorized by the Company to pay over to the
Collateral Agent any balance of such Net Proceeds remaining after the
discharge of such Indebtedness secured by such prior Permitted Lien; and, if
any property other than cash or cash equivalents is included in the
consideration for any Collateral to be released, there shall be delivered to
the Trustee such instruments of conveyance, assignment and transfer, if any,
as may be reasonably necessary, in the Opinion of Counsel to be given pursuant
to paragraph (k), to subject to the Liens of the Security Documents all the
right, title and interest of the Company in and to such property;
(i) the first priority perfected security interest pursuant to the
Security Deed shall be in full force and effect continuously and uninterrupted
at all times with respect to the Collateral not to be released;
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(j) (A) the Company delivers an Officer's Certificate with respect to
the matters set forth in paragraphs (a) through (i) above and stating that all
conditions precedent relating to the release of such Collateral have been
complied with, provided that matters set forth in paragraphs (b), (c) and (d)
may be an opinion of the officer and (B) the Officer's Certificate shall also
be signed, in the case of clauses (b) (as to impairment of security), (c) and
(g) by an Independent Appraiser; and
(k) an Opinion of Counsel shall be delivered to the Trustee
substantially to the effect (subject to customary exceptions) (i) that any
obligation included in the consideration for any property so to be released
and to be received by the Trustee pursuant to Section 12.05(h) is a valid and
binding obligation enforceable in accordance with its terms and is effectively
pledged under the Security Documents, (ii) that any Lien granted by a
purchaser to secure Purchase Money Indebtedness is a first priority purchase
money Lien, or with respect to moveable assets is not subordinate to any other
Lien or security interest and such instrument granting such Lien is
enforceable in accordance with its terms, (iii) either (x) that such
instruments of conveyance, assignment and transfer as have been or are then
delivered to the Collateral Agent are sufficient to subject to the Liens of
the applicable Security Documents all the right, title and interest of the
Company in and to any property, other than cash, Temporary Cash Investments
and obligations, that is included in the consideration for the Collateral so
to be released, or (y) that no instruments of conveyance, assignment or
transfer are necessary for such purpose, (iv) that the Company has corporate
power to own all property included in the consideration for such release, (v)
in case any part of the money or obligations referred to in Section 12.05(h)
has been deposited with a trustee other holder of a prior Permitted Lien, that
the Collateral to be released, or a specified portion thereof, is or
immediately before such release was subject to such prior Permitted Lien and
that such deposit is required by such prior Permitted Lien and (vi) that all
conditions precedent herein relating to the release of such Collateral xxxx
been complied with.
In connection with any release, the Company shall (i) execute,
deliver and record or file and obtain such instruments as shall be necessary
to evidence, effect or give notice of such release or as the Trustee may
reasonably require for such purpose, including, without limitation, amendments
to the Security Documents, the Collateral Agency Agreement and this Indenture
and (ii) deliver to the Trustee such evidence of the satisfaction of the
requirements of this Indenture, the Collateral Agency Agreement and the other
Security Documents as the Trustee may reasonably require.
The Company shall exercise its rights under this Section 12.05 by
delivery to the Trustee of a notice (each, a "Release Notice"), which shall
refer to this Section, describe with particularity the items of property
proposed to be covered by the release and be accompanied by a counterpart of
the instruments proposed to give effect to the release fully executed and
acknowledged (if applicable) by all parties thereto other than the Trustee,
the other Secured Creditors and Secured Creditors' Representatives and in form
for execution by the Trustee. Upon such compliance, the Company shall direct
the Trustee to execute, acknowledge (if applicable) and deliver to the Company
such counterpart within 20 Business Days after receipt by the Trustee of the
Release Notice and the satisfaction of the requirements of this covenant.
In case a Default or an Event of Default shall have occurred and be
continuing, the Company, while in possession of the Collateral (other than
Trust Monies, cash, cash equivalents, securities and other personal property
held by or required to be deposited or pledged with the Collateral Agent
hereunder or with the trustee, fiduciary transferee or other holder of a prior
Permitted Lien), may do any of the things enumerated in this Section 12.05
with respect to such Collateral, if each of the Holders by appropriate action
of such Holder, shall consent to such action. In such event, any certificate
filed under this Section shall omit the statement to the effect that no
Default or Event of Default has occurred and is continuing (or would result
therefrom). This paragraph shall not apply, however, during the continuance of
an Event of Default of the type specified in Section 6.01(h).
All cash or cash equivalents allocable to Holders received by the
Collateral Agent pursuant to this Section 12.05 shall be held by the
Collateral Agent, for the benefit of the Holders, as Trust Monies subject to
application as provided in Article 13 or as provided in Section 4.08.
Any releases of Collateral made in strict compliance with the
provisions of this Section 12.05 shall be deemed not to impair the Liens of
the Security Documents in contravention of the provisions of this Indenture.
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SECTION 12.06 Possession and Use of Collateral. Unless an Event of
Default shall have occurred and be continuing, and subject to the terms of
this Indenture, the Security Documents and the Collateral Agency Agreement,
the Company shall have the right to remain in possession and retain control of
the Collateral (other than any cash, securities, obligations and cash
equivalents deposited with the Collateral Agent and other than as set forth in
the Collateral Agency Agreement or the Security Documents), to operate the
Collateral and to collect, invest and dispose any income thereon.
SECTION 12.07 Substitute Collateral
(a) The Company may, at its option, obtain a release of any of the
Moveable Assets Collateral and the Trustee shall release and direct the
Collateral Agent to release the related Collateral, provided that:
(i) the Company subjects other similar (that is performs the same
functions with like capabilities) moveable assets related to or used or
to be used in the Plant ("Substitute Collateral") to the Liens of the
Security Documents (which shall be a first priority perfected Lien
unless otherwise contemplated by the Security Documents);
(ii) such Substitute Collateral has a fair market value greater than
or equal to the fair market value of the Collateral to be released and
the Substitute Collateral is not subject to Permitted Liens securing
Indebtedness greater than any Permitted Liens with respect to the
Moveable Assets Collateral to be released;
(iii) the Company delivers to the Trustee (or in case of clause (4)
and (5) below, the Collateral Agent):
(1) an application of the Company requesting such substitution of
Substitute Collateral for any of the Moveable Assets Collateral and
describing the property to be so released and the property that is
related to or used or to be used in the Plant to be substituted
therefor;
(2) an Officer's Certificate (A) with respect to the matters set
forth in paragraphs (i) through (iii) above and stating that all
conditions precedent herein relating to the release and substitution
of Collateral have been complied with, provided that matters set
forth in paragraph (ii) may be an opinion of the Officer; provided
that the Officer's Certificate shall also be signed, in the case of
clause (ii) by an Independent Appraiser; and (B) stating that any
Lien on the Substitute Collateral prior to the Liens of the Security
Documents on the Substitute Collateral are Liens of the character
which, under the provisions of this Indenture, the Collateral Agency
Agreement and the Security Documents, are permitted to be prior to
the Liens of the Security Documents;
(3) an Opinion of Counsel substantially to the effect (subject to
customary exceptions) that (A) either (x) such instruments of
conveyance, assignment and transfer as have been or are then
delivered to the Collateral Agent are sufficient to subject all the
right, title and interest of the Company in and to the Substitute
Collateral to the Liens of the applicable Security Documents (y) no
instruments of conveyance, assignment or transfer are necessary for
such purpose, (B) the Company has corporate power to own all
Substitute Collateral, (C) the property so released is Moveable
Assets Collateral, (D) each of Liens of the Security Documents
constitutes a Lien which is not subordinate to any other Lien or
security interest other than a Permitted Lien on such Substitute
Collateral, and (E) all conditions precedent herein relating to the
release of such Collateral have been complied with;
(4) any instrument required by the Opinion of Counsel to be
rendered pursuant to clause (iii) (3) of this Section 12.07 for the
Lien of any other applicable Security Document to cover the
Substitute Collateral and any other property received in connection
with such transaction;
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(5) original title documents and other evidence of ownership with
respect to the Substitute Collateral are delivered to the Collateral
Agent; and
(6) evidence of payment or a closing statement indicating payments
have been made (or will be made concurrently with the release and
substitution of Collateral) by the Company of all filing fees,
recording charges, transfer taxes a other costs and expenses,
including reasonable legal fees and disbursements of counsel for the
Trustee (and any local counsel) that may be incurred to validly and
effectively subject the Substitute Collateral to the Lien of any
Security Document.
(e) 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.
(f) 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.
(g) 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).
(h) 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.
(i) 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.
(j) 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:
66
(a) an Officer's Certificate stating that (i) such property has been
taken pursuant to a lawful right vested in the government of the Republic of
Indonesia or any political subdivision thereof to purchase, or to designate a
purchaser or order a sale of, such property and the amount of the proceeds of
such sale, and that all conditions precedent herein provided for relating to
such release have been complied with and (ii) that the amount of the proceeds
of the property so sold is not less than the amount to which the Company is
entitled under the terms of such Governmental Taking;
(b) acknowledgment by the Collateral Agent that the award for such
property or the proceeds of such sale, has been deposited in the Collateral
Accounts subject to the disposition thereof pursuant to Section 4.08 hereof;
provided, however, that, in lieu of all or any part of such award or proceeds,
the Company shall have the right to deliver to the Trustee a certificate of
the trustee, mortgagee or other holder of a prior Permitted Lien on all or any
part of the property to be released, stating that such award or proceeds, or a
specified portion thereof, has been deposited with such trustee, mortgagee or
other holder pursuant to the requirements of such prior Lien, in which case
the balance of the award, if any, shall be delivered to the Collateral Agent
for deposit in the Notes Collateral Account;
(c) an Opinion of Counsel substantially to the effect that:
(1) such Governmental Taking was a lawful exercise of a right
vested in the government of Indonesia or any political subdivision
thereof;
(2) the award for the property so taken has become final or that,
to the best of such counsel's knowledge, no appeal is contemplated or
pending.
(3) if, pursuant to Section 12.08(b), the award for such property
or the proceeds of such sale, or a specified portion thereof, shall
be certified to have been deposited with the trustee, mortgagee or
other holder of a prior Permitted Lien, that the property to be
released, or a specified portion thereof, is or immediately before
such taking or purchase was subject to such prior Permitted Lien, and
that such deposit is required by such prior Permitted Lien; and
(4) that the instrument or the instruments and the award or
proceeds of such sale which have been or are therewith delivered to
and deposited with the Collateral Agent conform to the requirements
of this Indenture, the Collateral Agency Agreement and the Security
Documents and that, upon the basis of such application, the Trustee
is permitted by the terms hereof to execute and deliver the release
requested, and that all conditions precedent herein provided for
relating to such release have been complied with; and
(d) a counterpart of the instruments proposed to give effect to such
release fully executed and acknowledged (if applicable) by all parties thereto
other than any applicable governmental entity, the Trustee, the other Secured
Creditors and Secured Creditors' Representatives and in form for execution by
the Trustee.
In any proceedings for any Governmental Taking of any part of the
Collateral, by virtue of any such right to purchase or designate a purchaser
or to order a sale, the Trustee may be represented by counsel who may be
counsel for the Company.
The Company shall cause all cash and Temporary Cash Investments
received pursuant to this Section 12.08 to be deposited with and held by the
Collateral Agent upon the terms set forth herein and in the Collateral Agency
Agreement. The Company shall cause all purchase money and other obligations
received to be deposited with and held by Collateral Agent upon the terms set
forth herein and in the Collateral Agency Agreement.
SECTION 12.09 TIA Requirements
(a) The release of any Collateral from the terms hereof, the
Collateral Agency Agreement and of the Security Documents
67
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 ss. 314(d) relating
to the release of property or securities from the Liens of the Security
Documents.
SECTION 12.10 Suits To Protect the Collateral. The Trustee shall have
power to instruct the Collateral Agent to institute and to maintain such suits
and proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts which may be unlawful or in violation of the terms
hereof or any of the Security Documents, and to instruct the Collateral Agent
to institute and maintain such suits and proceedings as the Trustee may deem
expedient to preserve or protect its interests and the interests of the
Holders in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be invalid if the
enforcement of, or compliance with, such enactment, rule or order would impair
the Liens of the Security Documents or be prejudicial to the interests of the
Holders or the Trustee). The Trustee shall also have the power to institute
and to maintain suits against the Collateral Agent, the Company, the Issuer,
the Secured Creditor's Representatives and the Secured Creditors to the extent
the Collateral Agent does not follow the foregoing instructions or as
otherwise necessary to cause the Collateral Agent, the Company, the Issuer,
the Secured Creditor's Representatives and the Secured Creditors to fulfill
their obligations under the Collateral Agency Agreement or the Security
Documents.
SECTION 12.11 Purchaser Protected. In no ever shall any purchaser in
good faith of any property purported to be released hereunder be bound to
ascertain the authority of the Trustee to execute the release or to inquire as
to the satisfaction of any conditions required by the provisions hereof for
the exercise of such authority or to see to the application of any
consideration given by such purchaser or other transferee; nor shall any
purchaser or other transferee of any property or rights permitted by this
Article 12 to be sold be under obligation to ascertain or inquire into the
authority of the Company to make any such sale or other transfer.
SECTION 12.12 Powers Exercisable by Receiver or Trustee. In case the
Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Article 12 upon the Company with
respect to the release, sale or other disposition of such property may be
exercised by such receiver or trustee, and an instrument signed by such
receiver or trustee shall be deemed the equivalent of any similar instrument
of the Company or of any officer or officers thereof required by the
provisions of this Article 12.
SECTION 12.13 Disposition of Obligations Received
(a) The Company shall cause all obligations permitted to be received
under this Article 12 or the other provisions of this Indenture (including,
without limitation, securities, notes, receivables and the like received in
connection with an Asset Disposition) to be deposited with the Collateral
Agent to be held by the Collateral Agent as part of the Collateral.
(b) The Trustee shall direct the Collateral Agent to release any such
obligation referred to in the foregoing paragraph (a) upon (i) payment by or
on behalf of the Company in cash or Temporary Cash Investments to the
Collateral Agent for deposit in the Collateral Accounts in accordance with the
provisions of the Collateral Agency Agreement of the entire unpaid principal
amount of such obligation and (ii) upon receipt of an Officer's Certificate
and an Opinion of Counsel that the foregoing condition has been satisfied.
(c) The Company shall cause the cash or Temporary Cash Investments
received by the Collateral Agent in respect of principal of any such
obligations referred to in subsection (a) above to be deposited in the
Collateral Accounts in accordance with the provisions of the Collateral Agency
Agreement. The Company may use any such funds on deposit, or funds deposited
pursuant to subsection (b) above, to purchase Additional Assets as permitted
by Section 4.08 (with relevant time periods being calculated based upon the
date of deposit in the Notes Collateral Account) or as set forth in Section
13.02. If such funds are not so used within the time period permitted by
Section 4.08, such amounts shall become Excess Proceeds, and shall become
subject to disposition as set forth in
68
Section 4.08, including if the Excess Proceeds Offer is not fully
subscribed, to purchase New Collateral Assets as set forth in Section
4.08(c).
(d) Until the Notes are accelerated pursuant to Section 6.02, all
interest and other income on any obligations referred to in paragraph (a),
when received by the Collateral Agent shall be paid to the Company from time
to time to the extent allocable to the Trustee as a Secured Creditor. If the
Notes have been accelerated pursuant to Section 6.02, any such interest or
other income not theretofore paid, when collected by the Collateral Agent, and
distributed to the Trustee in accordance with the Collateral Agency Agreement,
shall be applied by the Trustee in accordance with Section 6.10.
(e) Any release of any portion of the Collateral made strictly in
compliance with the provisions of this Section 12.13 shall not be deemed to
impair the Liens created by the Security Documents in contravention of the
provisions of this Indenture.
SECTION 12.14 Limitation on Duty of Trustee in Respect of Collateral;
Indemnification
(a) Beyond the exercise of reasonable care in the custody thereof,
the Trustee shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to preservation of rights against prior parties or any other
rights pertaining thereto and the Trustee shall not be responsible for filing
any financing or continuation statements or recording any documents or
instruments in any public office at any time or times or otherwise perfecting
or maintaining the perfection of any security interest in the Collateral. The
Trustee shall be deemed to have exercised reasonable care in the custody of
the Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which other Trustees under similar circumstances
would accord similar Collateral, and shall not be liable or responsible for
any loss or diminution in the value of any of the Collateral, by reason of the
act or omission of any carrier, forwarding agency or other agent or bailee
selected by the Trustee in good faith.
(b) The Trustee shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Liens in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder, except to the extent such action or omission constitutes
negligence, bad faith or willful misconduct on the part of the Trustee, for
the validity or sufficiency of the Collateral or any agreement or assignment
contained therein, for the validity of the title of the Company to the
Collateral, for insuring the Collateral or for the payment of taxes, charges,
assessments or Liens upon the Collateral or otherwise as to the maintenance of
the Collateral. The Trustee shall have no duty to ascertain or inquire as to
the performance or observance of any of the terms of this Indenture, the
Collateral Agency Agreement or the Security Documents by the Company, the
Issuer, the Secured Creditors' Representatives, the Secured Creditors or the
Collateral Agent.
SECTION 12.15 Release upon Termination of the Company's and Issuer's
Obligations
(a) In the event that the Company and the Issuer deliver an Officer's
Certificate certifying that the Company and the Issuer have complied with
Section 8.01 and, if applicable, Section 8.02 with respect to all the
Securities, or that all obligations under this Indenture have been satisfied
and discharged in accordance with this Indenture, the Trustee shall deliver
the Company and the Collateral Agent on behalf of the Holders, a notice
disclaiming, relinquishing and releasing (without recourse or warranty) any
and all rights it has in respect of the Collateral and any other instruments
or documents evidencing or effecting such release in such form as the Company
may reasonably request.
(b) Any release of any portion of the Collateral made strictly in
compliance with the provisions of this Section 12.15 shall not be deemed to
impair the Liens created by the Security Documents in contravention of the
provisions of this Indenture.
ARTICLE 13
Application of Trust Monies
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SECTION 13.01 "Trust Monies" Defined. The Company and the Issuer
agree that all funds on deposit in the Notes Collateral Account and the
Insurance Collateral Account pursuant to the terms of this Indenture, the
Collateral Agency Agreement and the Security Documents, including all Net
Available Cash consisting of cash and cash equivalents and Temporary Cash
Investments required to be deposited with the Collateral Agent (Trust Monies)
shall be held by the Collateral Agent as a part of the security for the Notes,
and, long as no Default or Event of Default shall have occurred and be
continuing or no Notice of Actionable Default is outstanding, may, at the
direction of the Company, be applied from time to time in accordance with
Sections 3.07, 4.08 or 4.10 or to the payment of the principal on any Notes,
at maturity, in each case in accordance with the terms of this Indenture. Upon
any entry upon or sale of the Collateral or any part thereof pursuant to
Article 6 or any exercise of remedies pursuant to the Collateral Agency
Agreement, the Trust Monies allocable to the Holders of the Securities shall
be applied in accordance with Section 6.10 hereof at the time released to the
Trustee under the Collateral Agency Agreement; but prior to any such entry or
sale, all or any part of the Trust Monies may be withdrawn, and shall be
released, paid or applied by the Trustee, from time to time as provided in
Sections 13.02 to 13.06, inclusive.
SECTION 13.02 Retirement of Securities. The Trustee shall direct the
Collateral Agent to release to the Trustee Trust Monies and the Trustee shall
hold and apply such Trust Monies from time to time to the payment of the
principal on the applicable Notes, at Stated Maturity or to the purchase
thereof pursuant to Sections 4.08 or 4.10, as the Company shall request, upon
receipt by the Trustee of the following:
(i) resolution of a majority of the Company's Board of Directors
directing the application pursuant to this Section 13.02 of a specified
amount of Trust Monies and, in any case any such monies are to be
applied to payment, designating Notes so to be paid and prescribing the
method of purchase, the price or prices to be paid and the maximum
principal amount of Notes to be purchased and any other provisions of
this Indenture governing such purchase;
(ii) cash which equals or exceeds in the aggregate the maximum amount
of the accrued interest (including Additional Amounts), if any, required
to be paid in connection with any such purchase or payment at Stated
Maturity, which cash shall be held by the Trustee in trust for such
purpose;
(iii) an Officer's Certificate, dated not more than five days prior
to the date of the relevant application, stating that all conditions
precedent covenants herein provided for relating to such application of
Trust Monies have been complied with;
(iv) an Opinion of Counsel stating that the documents and the cash or
Temporary Cash Investments, if any, which have been or are therewith
delivered to and deposited with the Collateral Agent for the purposes of
payment of the principal and interest on the Notes, at Stated Maturity
or to purchase thereof pursuant to Sections 4.08 or 4.10, conform to the
requirements of this Indenture and that all conditions precedent herein
provided for relating to such application of Trust Monies have been
complied with.
Upon compliance with the foregoing provisions this Section 13.02, the
Trustee shall apply funds released from the Notes Collateral Account as
directed and specified by such resolution up to, but not exceeding, the
principal amount of the Notes so paid or purchased and shall apply any other
funds received pursuant to Section 13.02 (ii) to pay accrued and unpaid
interest.
A resolution of a majority of the Company's Board of Directors
expressed to be irrevocable directing the application of funds from the Notes
Collateral Account under this Section 13.02 to the payment of the principal
and any other funds received pursuant to Section 13.02(ii) to the payment of
accrued interest and unpaid interest on the Notes shall, for all purposes of
this Indenture, be deemed the equivalent of the deposit of money with the
Trustee in trust for such purpose. Such funds from the Notes Collateral
Account and any cash deposited with the Trustee, pursuant to clause (ii) of
this Section 13.02 for the payment of accrued interest (including Additional
Amounts) shall not, after compliance with the foregoing provisions of this
Section, be deemed to be part of the Collateral or Trust Monies.
SECTION 13.03 Withdrawals of Asset Disposition Proceeds, Insurance
Proceeds and Proceeds from Government Takings
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(a) The Trustee shall consent to the release of funds on deposit in
the Insurance Collateral Account to the Company or the Restricted Subsidiary
which owned the related Collateral upon compliance with the conditions set
forth herein; provided that (x) no Major Collateral Disposition shall have
occurred and (y) Section 13.04 shall control with respect to business
interruption insurance. The Company shall request the Trustee to consent to
such release by request to the Trustee by an Officer of the Company to
reimburse the Company or the Restricted Subsidiary which owned the related
Collateral for expenditures made by the Company in connection with the repair,
rebuilding or replacement of the property destroyed, damaged or taken,
providing the Trustee with the following:
(i) an Officer's Certificate, dated not more than 30 days prior to
the date of the application for the withdrawal and payment of such funds
on deposit in the Insurance Collateral Account setting forth:
(A) that expenditures have been made, or costs incurred, by the
Company or the Restricted Subsidiary which owned the related
Collateral in a specified amount in connection with certain
repairs, rebuildings and replacements of the Collateral, which
shall be briefly described, stating the fair market value thereof
to the Company or such Restricted Subsidiary at the date of the
acquisition thereof by the Company or such Restricted Subsidiary;
(B) that no part of such expenditures or costs, in any previous
or then pending application, has been or is being made the basis
for the withdrawal of any Trust Monies pursuant to this Section
13.03;
(C) that no part of such expenditures or costs has been paid
out of either the proceeds insurance upon any part of the
Collateral not required to be deposited with the Collateral Agent
under the Security Documents or any award for or the proceeds from
any of the Collateral being taken not required to be deposited
with the Collateral Agent under the Security Documents, as the
case may be;
(D) that there is no outstanding indebtedness, other than costs
for which payment is being requested, known to the Company, after
due inquiry, for the purchase price or construction of such
repairs, rebuildings or replacements, or for labor, wages,
materials or supplies in connection with the making thereof,
which, if unpaid, might become the basis of a vendor's,
mechanics', laborers', materialmen's, statutory or other similar
Lien upon any of such repairs, rebuildings or replacement, which
Lien might, in the opinions of the signers of such certificate,
materially impair the security afforded by such repairs,
rebuildings or replacement;
(E) that the property to be repaired, rebuilt or replaced is
necessary or desirable in the conduct of the Company's or such
Restricted Subsidiary's business;
(F) that the title to any assets subject to such repairs,
rebuildings and replacements is substantially similar to the title
to the property destroyed, damaged or taken;
(G) that no Notice of Actionable Default is outstanding;
(H) that no Event of Default shall have occurred and be
continuing (or would result therefrom); and
(I) that all conditions precedent herein provided for relating
to such withdrawal and payment have been complied with.
(ii) An Opinion of Counsel substantially stating: (A) that the
instruments that have been or are therewith delivered to the Trustee
conform to the requirements of this Indenture and that, upon the basis
of such Company request and the accompanying documents specified in this
Section 13.03, all conditions precedent herein provided for relating to
such withdrawal and payment have been complied
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with, and the Trust Monies of which withdrawal is then requested may
be lawfully paid over under this Section 13.03(a); and (B) that all
the Company's or such Restricted Subsidiary's right, title and
interest in and to said repairs, rebuilding or replacements, or
combination thereof, are then subject to the Lien of the Security
Documents (which shall be a first priority perfected Lien unless
otherwise contemplated by the Security Documents).
Upon compliance with the foregoing provisions of this Section
13.03(a), the Trustee shall direct the Collateral Agent upon receipt of the
foregoing Officer's Certificate to pay to the Company or the Restricted
Subsidiary which owned the Collateral an amount of Trust Monies of the
character aforesaid equal to the amount of expenditures or costs stated in the
Officer's Certificate required by Section 13.03(a)(i)(A), or the fair market
value to the Company or such Restricted Subsidiary of such repairs,
rebuildings and replacements stated in such Officer's Certificate, whichever
is less.
The Trustee may provide its preliminary consent (as opposed to final
release) to the use of funds on deposit in the Insurance Collateral Account
upon application and evidence that such funds will be used in the manner
provided herein; provided that no such funds shall be released to the Company
until the documentation set forth above is provided.
(b) The Trustee shall consent to the release of funds on deposit in
the Notes Collateral Account to the Company or the Restricted Subsidiary which
owned the related Collateral from any Asset Disposition that was not an
Involuntary Loss or a Major Collateral Disposition to purchase New Collateral
Assets when permitted by Section 4.08. The Company shall request the Trustee
to consent to such release by request to the Trustee by an Officer of the
Company to reimburse the Company or the Restricted Subsidiary which owned the
related Collateral for expenditures made to purchase New Collateral Assets by
providing the Trustee with the following:
(i) an Officer's Certificate, dated not more than 30 days prior to
the date of the application for the withdrawal and payment of such funds
from the Notes Collateral Account setting forth:
(A) that expenditures have been made, or costs incurred, by the
Company or the Restricted Subsidiary which owned the Collateral in
a specified amount in connection the acquisition of New Collateral
Assets by the Company or such Restricted Subsidiary which shall be
briefly described, and stating the fair value thereof to the
Company or such Restricted Subsidiary at the date of the
acquisition thereof by the Company or such Restricted Subsidiary;
(B) that no part of such expenditures or costs, in any previous
or then pending application, has been or is being made the basis
for the withdrawal of any Trust Monies pursuant to this Section
13.03;
(C) that no part of such expenditures or costs has been paid
out of either the proceeds insurance upon any part of the
Collateral not required to be deposited with the Collateral Agent
under the Security Documents or any award for the proceeds from
any of the Collateral being taken not required to be deposited
with the Collateral Agent under the Security Documents, as the
case may be;
(D) that there is no outstanding indebtedness, other than costs
for which payment is being requested, known to the Company, after
due inquiry, for the purchase price or construction of such New
Collateral Assets, which if unpaid, might become the basis of a
vendor's, mechanics', laborers', materialmen's, statutory or other
similar Lien upon any of such New Collateral Assets, which Lien
might, in the opinions of the signers of such certificate,
materially impair the security afforded by such repairs,
rebuildings or replacement;
(E) that the property is a New Collateral Asset for which such
application may be properly made under Section 4.08 and such New
Collateral Asset is necessary or desirable in the conduct of the
Company's or such Restricted Subsidiary's business;
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(F) that the Company has title to such New Collateral Assets;
(G) that no Notice of Actionable Default is outstanding;
(H) that no Event of Default shall have occurred and be
continuing; and
(I) that all conditions precedent herein provided for relating
to such withdrawal and payment have been complied with.
(ii) An Opinion of Counsel substantially stating:
(A) that the instruments that have been or are therewith
delivered to the Trustee conform to the requirements of this
Indenture and that, upon the basis of such Company request and the
accompanying documents specified in this Section 13.03(b), all
conditions precedent herein provided for relating to such
withdrawal and payment have been complied with, and the Trust
Monies whose withdrawal is then requested may be lawfully paid
over under this Section 13.03(b); and
(B) that all the Company's or such Restricted Subsidiary's
right, title and interest in and to said New Collateral Assets are
then subject to the Lien of the Security Documents (which shall be
first priority perfected Lien unless otherwise contemplated by the
Security Documents).
Upon compliance with the foregoing provisions of this Section
13.03(b), the Trustee shall direct the Collateral Agent upon receipt of the
foregoing Officer's Certificate to pay to the Company or the Restricted
Subsidiary which owned the Collateral an amount of funds on deposit in the
Notes Collateral Account of the character aforesaid equal to the amount of the
expenditures or costs stated in the Officer's Certificate required by Section
13.03(b)(i)(A), or the fair value to the Company or such Restricted Subsidiary
of such New Collateral Assets stated in such Officer's Certificate, whichever
is less.
(c) Notwithstanding anything to the contrary in this Section, no
funds may be withdrawn and paid to the Company from and after any Major
Collateral Disposition.
SECTION 13.04 Business Interruption Insurance. So long as no Notice
of Actionable Default is outstanding, the Company may use the proceeds of
business interruption insurance associated with any event or Involuntary Loss
that is not a Major Collateral Disposition provided that such insurance
proceeds are used in the ordinary course of the Company's business. The fair
value of such business interruption insurance so used shall not be considered
in determining whether the aggregate fair value of Collateral released from
the Lien of the Security Documents in any calendar year exceeds the 10%
threshold specified in TIA ss. 314 (d). The Trustee need not consent to any
such release but shall confirm any such release of proceeds upon receipt by
the Trustee of an Officer's Certificate stating (i) the event which gave rise
to the receipt of proceeds of such business interruption insurance was not a
Major Collateral Disposition and (ii) there is no Notice of Actionable Default
outstanding.
Any releases of Collateral made in strict compliance with the
provisions of this Section 13.04 shall be deemed not to impair the Liens
created by this Indenture the Collateral Agency Agreement and the Security
Documents in contravention of the provisions of this Indenture.
Notwithstanding anything to the contrary in this Section, no funds
may be withdrawn and paid to the Company from and after any Major Collateral
Disposition.
SECTION 13.05 Powers Exercisable Notwithstanding Event of Default. In
case a Default or Event of Default shall have occurred and shall be
continuing, the Company may do any of the things enumerated in Sections 13.02,
13.03 and 13.04, if the Trustee in its discretion, or the Holders of 66 2/3%
in aggregate principal amount of the Notes outstanding, by appropriate action
of such Holders, shall consent to such action, in which event any certificate
filed under any of such Sections shall omit the statement to the effect that
no Event of Default has
73
occurred and is continuing; provided that, without the consent of the
Trustee, no consent pursuant to this Section shall deprive the Trustee of
its rights under paragraph FIRST of Section 6.10. This Section 13.05 shall
not apply, however, during the continuance of an Event of Default of the
type specified in Section 6.01(h) with respect to the Notes.
SECTION 13.06 Powers Exercisable by Trustee or Receiver. In case the
Collateral (other than any cash, Temporary Cash Investments, securities and
other personal property held by, or required to be deposited or pledged with,
the Collateral Agent hereunder or under the Collateral Agency Agreement
(including all amounts on deposit in the Notes Collateral Account) or under
the other Security Documents or with the trustee, mortgagee or other holder a
prior Permitted Lien) shall be in the possession of a receiver or trustee
lawfully appointed, the powers hereinbefore in this Article 13 conferred upon
the Company with respect to the withdrawal or application of Trust Monies may
be exercised by such receiver or trustee, in which case a certificate signed
by such receiver or trustee shall be deemed the equivalent of any Officer's
Certificate required by this Article 13.
SECTION 13.07 Disposition of Notes Retired. All Notes received by the
Trustee and for whose purchase Trust Monies are applied under this Article 13,
may, but shall not be required to, be promptly canceled and disposed of by the
Trustee in accordance with its customary procedures unless the Trustee shall
be otherwise directed by the Company or the Issuer; provided that the Trustee
shall not be required to destroy any Notes. Upon such disposition of any
Notes, the Trustee shall issue a certificate of disposition to the Company and
the Issuer.
SECTION 13.08 Investment of Trust Monies
All or any part of any Trust Monies held by the Collateral Agent
shall from time to time be invested or reinvested as set forth in the
Collateral Agency Agreement. Unless an Event of Default occurs and is
continuing, or so long as any Notice of Actionable Default remains outstanding
and unrescinded, any interest on cash or such Temporary Cash Investments (in
excess of any accrued interest paid at the time of purchase) which may be
received by the Collateral Agent with respect to the Notes Collateral Account
shall be forthwith paid to the Company. The Trustee shall not be liable or
responsible for any loss resulting from such investments or sales.
Notwithstanding anything to the contrary in this Section, no funds
may be withdrawn and paid to the Company from and after any Major Collateral
Disposition.
ARTICLE 14
Exchange
SECTION 14.01 Exchange. Upon any failure of the Issuer to redeem the
Notes at their Stated Maturity, the Issuer and the Company will each have the
right, at its option, to exchange any portion of the principal amount of the
Notes that is $1.00 or an integral multiple thereof at any time thereafter.
SECTION 14.02 Exercise of Exchange. Upon delivery of notice from the
Issuer that it shall redeem the Notes pursuant to Section 14.01, each of the
Holders of the Note to be exchanged shall surrender such Note to the Issuer at
any time during usual business hours at its office or agency maintained for
the purpose as provided in this Indenture, accompanied by a fully executed
written notice, in substantially the form set forth on the reverse of the
Note, that the Holder is exchanging its Notes pursuant to this Article 14.
Such notice of exchange shall also state the name or names (with
address) in which the certificate or certificates for Exchange Shares shall be
issued. Notes surrendered for exchange shall (if reasonably required by the
Issuer or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Issuer duly
executed by, the Holder or his attorney duly authorized in writing, with
appropriate signature guarantee. As promptly as practicable after the receipt
of such notice and the surrender of such Note as aforesaid, the Issuer shall,
subject to the provisions of Section 14.08 hereof, issue and deliver at such
office or agency to such Holder, or on his written order, a certificate or
certificates for the number of full shares of Exchange Shares issuable on such
exchange of Notes in accordance with the provisions of this Article 14 and any
cash, as provided in Section 14.03 hereof.
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Such exchange shall be deemed to have been effected immediately prior
to the close of business on the date (herein called the "Date of Exchange") on
which such Note shall have been surrendered as aforesaid, and the person or
persons in whose name or names any certificate or certificates for Exchange
Shares shall be issuable upon such exchange shall be deemed to have become on
the Date of Exchange the holder or holders of record of the shares represented
thereby; provided, however, that any such surrender on any date when the stock
transfer books of the Company shall be closed shall cause the person or
persons in whose name or names the certificate or certificates for such shares
are to be issued to be deemed to have become the record holder or holders
thereof for all purposes at the opening of business on the next succeeding day
on which such stock transfer books are open but such exchange shall
nevertheless be at the Exchange Price in effect at the close of business on
the date when such Note shall have been so surrendered with the exchange
notice. Except as otherwise expressly provided in this Indenture, no payment
or adjustment shall be made for interest accrued on any Note (or portion
thereof) exchanged or for dividends or distributions on any Exchange Share
issued upon exchange of any Note.
The exchange right shall terminate at the Date of Exchange.
SECTION 14.03 Cash Payment for Unpaid Interest; Fractional Interests
(a) In the event any Note has been exchanged into Exchange Shares
after any interest payment record date, but on or before the next interest
payment date, interest shall be payable on the interest payment date
notwithstanding the exchange, and the interest shall be paid to the Holder of
the Note who was a Holder on the applicable record date. Notes submitted for
exchange after any record date but before the next interest payment date
(other than Notes called for redemption or delivered for repurchase during
such period) must include payment of an amount equal to the interest payable
on the interest payment date on the principal amount of Notes being
surrendered for exchange. As a result of the foregoing provisions, Holders who
surrender Notes for exchange on a date that is not an interest payment date
shall not receive any interest for the period from the interest payment date
next preceding the date of exchange to the date of exchange or for any later
period. A Holder shall not be required to make that payment if it is
exchanging a Note, or a portion thereof, that the Issuer has called for
redemption, or that it is entitled to require the Issuer to repurchase, if the
exchange right would terminate because of the redemption or repurchase between
such record date and the applicable interest payment date.
(b) The Company shall not issue any fractional shares of its common
stock upon exchange. Instead, the Company shall pay holders who exchange their
Notes an appropriate amount in cash based on the Exchange Price, as adjusted,
of the common stock at the close of business on the Business Day immediately
prior to the day of exchange (subject to a minimum of US$10.00).
SECTION 14.04 Exchange Price. The exchange rate is equal to 0. 75
Exchange Shares per $1.00 principal amount at maturity of Notes, determined as
provided in Section 14.05 below, which is equivalent to an initial exchange
price of US$1.33 per Exchange Share (the "Exchange Price"); provided that, if
the aggregate principal amount of Notes to be exchanged at their Stated
Maturity exceeds US$40.0 million, the Exchange Price shall be adjusted to
equal the price determined by dividing 1 by (x) the product of the total
number of shares of common stock of the Company outstanding immediately prior
to such exchange and 0.66667, divided by (y) the aggregate principal amount of
Notes to be exchanged.
SECTION 14.05 Adjustment of Exchange Price. The Exchange Price shall
be subject to adjustment following the issuance of the Notes upon the
following events:
(a) In case there shall be made or paid a dividend or made a
distribution in shares of common stock on any class of Capital Stock of the
Company, the Exchange Price in effect immediately following the record date
fixed for the determination of shareholders entitled to receive such dividend
or other distribution shall be reduced by multiplying such Exchange Price by a
fraction of which the numerator shall be the number of shares of common stock
outstanding at the close of business on such date and the denominator shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution. An adjustment made pursuant to this
subsection (a) shall become effective immediately, except as provided in
subsection (i) and (j) below, after such record date.
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(b) In case the Company shall (1) subdivide or reclassify its
outstanding shares of common stock into a greater number of shares or (2)
combine or reclassify its outstanding shares of common stock into a smaller
number of shares, the Exchange Price in effect immediately following the
effectiveness of such action shall be adjusted by multiplying such Exchange
Price by a fraction of which the numerator shall be the number of shares of
common stock outstanding immediately prior to such subdivision or combination
and the denominator shall be the number of shares outstanding immediately
after giving effect to such subdivision, combination or reclassification. An
adjustment made pursuant to this subsection (b) shall become effective
immediately, except as provided in subsection (i) and (j) below, after the
effective date of a subdivision, combination or reclassification.
(c) In case there shall be an issuance of rights, options or warrants
to all or substantially all holders of common stock entitling them to
subscribe for or purchase shares of common stock at a price per share less
than the then Fair Market Value per share of the common stock on the record
date fixed for determination of the shareholders entitled to receive such
rights, option or warrants, the Exchange Price in effect immediately following
such record date shall be adjusted to a price, computed to the nearest cent,
so that the same shall equal the price determined by multiplying:
(i) such Exchange Price by a fraction, of which
(ii) the numerator shall be (A) the number of shares of common stock
outstanding on such record date plus (B) the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such Fair Market Value
(determined by multiplying such total number of shares by the exercise
price of such rights, options or warrants and dividing the product so
obtained by such Fair Market Value), and of which
(iii) the denominator shall be (A) the number of shares of common
stock outstanding on such record date plus (B) the number of additional
shares of common stock which are so offered for subscription or
purchase.
Such adjustment shall become effective immediately, except as
provided in subsection (i) and (j) below, after the record date for the
determination of holders entitled to receive such rights, options or warrants;
provided, however, that if any such rights, options or warrants issued by the
Company as described in this subsection (c) are only exercisable upon the
occurrence of certain triggering events, then the Exchange Price will not be
adjusted as provided in this subsection (c) until such triggering events
occur. Upon the expiration or termination of any rights, options or warrants
without the exercise of such rights, options or warrants, the Exchange Price
then in effect shall be adjusted immediately to the Exchange Price which would
have been in effect at the time of such expiration or termination had such
rights, options or warrants, to the extent outstanding immediately prior to
such expiration or termination, never been issued.
(d) In case there shall be a distribution to all or substantially all
holders of common stock, of any assets, evidences of indebtedness, cash or
securities (other than (x) dividends or distributions exclusively in cash, (y)
any dividend or distribution for which an adjustment is required to be made in
accordance with subsection (a) or (c) above and in mergers and consolidations
to which Section 14.06 applies, or (z) any distribution of rights or warrants
subject to subsection (1) below or any distribution in connection with a
liquidation, dissolution or winding up of the Company) then in each such case
the Exchange Price in effect immediately following the record date fixed for
the determination of the shareholders entitled to such distribution shall be
adjusted so that the same shall equal the price determined by multiplying such
Exchange Price by a fraction of which the numerator shall be the then Fair
Market Value per share of the common stock on such record date less the then
fair market value (as reasonably determined in good faith by the Board of
Directors of the Company) of the portion of the assets so distributed
applicable to one share of common stock, and of which the denominator shall be
such Fair Market Value per share of the common stock. Such adjustment shall
become effective immediately, except as provided in subsection (i) and (j)
below, after the record date for the determination of shareholders entitled to
receive such distribution.
(e) Rights or warrants distributed by the Company to all holders of
its shares of common stock entitling them to subscribe for or purchase shares
of the Company's Capital Stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Trigger Event"), (i) are deemed to be transferred with such
shares of common stock, (ii) are not exercisable and (iii) are also issued in
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respect of future issuances of shares of common stock shall be deemed not to
have been distributed for purposes of Section 14.05(c) (and no adjustment to
the Exchange Price under Section 14.05(c) will be required) until the
occurrence of the earliest Trigger Event. If such right or warrant is subject
to subsequent events, upon the occurrence of which such right or warrant shall
become exercisable to purchase different distributed assets, evidences of
indebtedness or other assets, or entitle the holder to purchase a different
number or amount of the foregoing or to purchase any of the foregoing at a
different purchase price, then the occurrence of each such event shall be
deemed to be the date of issuance and record date with respect to a new right
or warrant (and a termination or expiration of the existing right or warrant
without exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Exchange Price under
Section 14.05(c).
(f) In addition to the foregoing adjustments in subsections (a), (b),
(c) and (d) above, the Company, from time to time and to the extent permitted
by law, may reduce the Exchange Price by any amount for at least 20 Business
Days, if the Board of Directors has made a determination, which determination
shall be conclusive, that such reduction would be in the best interests of the
Company. The Company shall give notice to the Trustee and cause notice of such
reduction to be mailed to each Holder of Notes at such Holder's address as the
same appears on the registry books of the Registrar, at least 15 days prior to
the date on which such reduction commences. The Company may, at its option,
also make such reductions in the Exchange Price in addition to those set forth
above, as the Board of Directors deems advisable to avoid or diminish any
income tax to holders of shares of common stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated
as such for United States Federal income tax purposes.
(g) In any case in which this Section 14.05 shall require that an
adjustment be made immediately following a record date, the Company may elect
to defer the effectiveness of such adjustment (but in no event until a date
later than the effective time of the event giving rise to such adjustment), in
which case the Company shall, with respect to any Note exchanged after such
record date and on and before such adjustment shall have become effective (i)
defer paying any Cash payment pursuant to Section 14.03 hereof or issuing to
the Holder of such Note the number of shares of common stock and other capital
stock of the Company (or other assets or securities) issuable upon such
exchange in excess of the number of shares of common stock and other Capital
Stock of the Company issuable thereupon only on the basis of the Exchange
Price prior to adjustment, and (ii) not later than five Business Days after
such adjustment shall have become effective, pay to such Holder the
appropriate Cash payment pursuant to Section 14.03 hereof and issue to such
Holder the additional shares of common stock and other Capital Stock of the
Company issuable on such exchange. Notwithstanding the foregoing, no
adjustment of the Exchange Price shall be made if the event giving rise to
such adjustment does not occur.
(h) No adjustment in the Exchange Price shall be required unless such
adjustment would require an increase or decrease of at least 1.0% of the
Exchange Price; provided that any adjustments which by reason of this
subsection (i) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
14 shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. In no event shall the Exchange Price be less than
the par value of a share of the Company's common stock.
(i) Whenever the Exchange Price is adjusted as herein provided, the
Company shall promptly (i) file with the Trustee and each exchange agent an
Officers' Certificate setting forth the Exchange Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment and
showing in reasonable detail the facts upon which such adjustment is based,
which certificate shall be conclusive evidence of the correctness of such
adjustment, and (ii) mail or cause to be mailed a notice of such adjustment to
each Holder of Notes at such Holder's address as the same appears on the
registry books of the Registrar. Unless and until a Trust Officer has received
an Officers' Certificate setting forth an adjustment of the Exchange Price,
the Trustee may assume that no such adjustment has been made and that the last
Exchange Price for which the Trustee has received an Officers' Certificate is
the current Exchange Price. Neither the Trustee nor any exchange agent shall
be under any duty or responsibility with respect to any such Officer's
Certificate or the information and calculation contained therein, except to
exhibit the same to any Holder deserving inspection thereof, at its office
during normal business hours.
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(j) In the event that the Company distributes rights or warrants
(other than those referred to in subsection (c) above) pro rata to holders of
common stock, so long as any such rights or warrants have not expired or been
redeemed by the Company, instead of making an adjustment in the Exchange
Price, the Company may make proper provision so that the Holder of any Note
surrendered for exchange shall be entitled to receive upon such exchange, in
addition to the Exchange Shares, a number of rights or warrants to be
determined as follows: (i) if such exchange occurs on or prior to the date for
the distribution to the holders of rights or warrants of separate certificates
evidencing such rights or warrants (the "Distribution Date"), the same number
of rights or warrants to which a holder of a number of shares of common stock
equal to the number of Exchange Shares is entitled at the time of such
exchange in accordance with the terms and provisions of and applicable to the
rights or warrants, and (ii) if such exchange occurs after such Distribution
Date, the same number of rights or warrants to which a holder of the number of
shares of common stock into which the principal amount of such Note so
exchanged was exchangeable immediately prior to such Distribution Date would
have been entitled on such Distribution Date in accordance with the terms and
provisions of and applicable to the rights or warrants.
No adjustment need be made for any of the foregoing transactions if
Holders of the Notes are to participate in the transaction on a basis and with
notice that the Board of Directors of the Company has determined to be fair
and appropriate in light of the basis on which other holders of common stock
of the Company participate in the transaction. In addition, no adjustments
will be required upon the adoption of a stockholder rights plan, and the
issuance of rights thereunder.
SECTION 14.06 Continuation of Exchange Privilege in Case of
Reclassification, Change, Merger, Consolidation or Sale of Assets. If there
shall occur: (a) any reclassification or change of outstanding shares of
common stock issuable upon exchange of the Notes (other than a change in par
value, or from par value to no par value, or from no par value, to par value,
or as a result of a subdivision or combination), (b) any consolidation or
merger of the Company with or into any other Person, or the consolidation or
merger of any other Person with or into the Company (other than a merger which
does not result in any reclassification, change, conversion, exchange or
cancellation of outstanding shares of common stock) or (c) any sale, transfer
or conveyance of all or substantially all of the assets of the Company
(computed on a consolidated basis), then the Company, or such successor or
purchasing entity, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, sale or conveyance, execute
and deliver to the Trustee a supplemental indenture providing that the Holder
of each Note then outstanding shall have the right to exchange such Note only
into the kind and amount of shares of stock and other securities and property
(including cash) receivable upon such reclassification, change, consolidation,
merger, sale, transfer or conveyance by a holder of the number of shares of
common stock issuable upon exchange of such Note immediately prior to such
reclassification, change, consolidation, merger, sale, transfer or conveyance
assuming such holder of common stock of the Company failed to exercise his
rights of an election, if any, as to the kind or amount of securities, cash
and other property receivable upon such reclassification, change,
consolidation, merger, sale, transfer or conveyance (provided that if the kind
or amount of securities, cash, and other property receivable upon such
reclassification, change, consolidation, merger, sale, transfer or conveyance
is not the same for each share of common stock of the Company held immediately
prior to such reclassification, change, consolidation, merger, sale, transfer
or conveyance in respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purpose of this Section 14.06
the kind and amount of securities, cash and other property receivable upon
such reclassification, change, consolidation, merger, sale, transfer or
conveyance by each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares).
Such supplemental indenture shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in
this Article 14. If, in the case of any such consolidation, merger, sale or
conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of shares of common stock includes shares of
stock or other securities and property (including cash) of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of the
securities as the Board of Directors of the Company shall reasonably consider
necessary by reason of the foregoing. The provisions of this Section 14.06
shall similarly apply to successive consolidations, mergers, sales or
conveyances. Notice of the execution of each such supplemental indenture shall
be mailed to each Holder of Notes at such Holder's address as the same appears
on the registry books of the Registrar. Neither the Trustee nor any exchange
agent shall be under any responsibility to determine the correctness of any
provisions contained in any such supplemental indenture relating either to the
kind or amount of shares of stock or securities or property (including cash)
receivable by Holders of Notes upon the
78
exchange of their Notes after any such reclassification, change,
consolidation, merger, sale or conveyance or to any adjustment to be made
with respect thereto, but, subject to the provisions of Article 7 hereof,
may accept as conclusive evidence of the correctness of any such provisions,
and shall be protected in relying upon, the Officers' Certificate (which the
Company shall be obligated to file with the Trustee prior to the execution
of any such supplemental indenture) with respect thereto.
SECTION 14.07 Notice of Certain Events
In case:
(a) the Company shall declare a dividend (or any other distribution)
payable to the holders of common stock (other than cash dividends);
(b) the Company shall authorize the granting to all or substantially
all the holders of common stock of rights, warrants or options to subscribe
for or purchase any shares of stock of any class or of any other rights;
(c) the Company shall authorize any reclassification or change of the
common stock (including a subdivision or combination of its outstanding shares
of common stock), or any consolidation or merger to which the Company is a
party and for which approval of any shareholders of the Company is required,
or the sale or conveyance of all or substantially all the property or business
of the Company; or
(d) there shall be proposed any voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, the Company shall cause to be filed at the office or agency maintained
for the purpose of exchange of the Notes as provided in Section 14.02 hereof,
and shall cause to be mailed to each Holder of Notes, at such Holder's address
as it shall appear on the registry books of the Registrar, at least 10 days
before the date hereinafter specified (or the earlier of the dates hereinafter
specified, in the event that more than one date is specified), a notice
stating the date on which (1) a record is expected to be taken for the purpose
of such dividend, distribution, rights, warrants or options, or if a record is
not to be taken, the date as of which the holders of common stock of record to
be entitled to such dividend, distribution, rights, warrants or options are to
be determined, or (2) such reclassification, change, consolidation, merger,
sale, conveyance, dissolution, liquidation or winding-up is expected to become
effective and the date, if any is to be fixed, as of which it is expected that
holders of common stock of record shall be entitled to exchange their shares
of common stock for securities or other property deliverable upon such
reclassification, change, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding-up.
SECTION 14.08 Taxes on Exchange. The Company shall pay any and all
documentary, stamp or similar taxes payable to the United States of America [,
the Republic of Indonesia or The Netherlands] or any political subdivision or
taxing authority thereof or therein in respect of the issue or delivery of
shares of common stock on exchange of Notes pursuant thereto; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of common stock in a name other than that of the Holder of the Notes to be
exchanged and no such issue or delivery shall be made unless and until the
person requesting such issue or delivery has paid to the Company the amount of
any such tax or has established, to the satisfaction of the Company, that such
tax has been paid. The Company extends no protection with respect to any other
taxes imposed in connection with the exchange of Notes.
SECTION 14.09 Company to Provide Stock. The Company shall reserve,
free from preemptive rights, out of its authorized but unissued shares,
sufficient shares to provide for the exchange of the Notes from time to time
as such Notes are presented for exchange, provided that nothing contained in
this Section 14.09 shall be construed to preclude the Company from satisfying
its obligations in respect of the exchange of Notes by delivery of repurchased
shares of common stock which are held in the treasury of the Company.
If any shares of common stock to be reserved for the purpose of
exchange of Notes hereunder require registration with or approval of any
governmental authority under any applicable law before such shares may
79
be validly issued or delivered upon exchange, then the Company covenants
that it will in good faith and as expeditiously as possible use its
reasonable efforts to secure such registration or approval, as the case may
be, provided, however, that nothing in this Section 14.09 shall be deemed to
limit in any way the obligations of the Company provided in this Article 14.
Before taking any action which would cause an adjustment reducing the
Exchange Price below the then par value, if any, of the common stock, the
Company will take all corporate action which may, in the Opinion of Counsel,
be necessary in order that the Company may validly and legally issue fully
paid and non-assessable shares of common stock at such adjusted Exchange
Price.
The Company covenants that all shares of common stock which may be
issued upon exchange of Notes will upon issue be fully paid and non-
assessable by the Company and free of preemptive rights.
SECTION 14.10 Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor any agent of the Trustee shall at any time be under
any duty or responsibility to any Holder of Notes to determine whether any
facts exist which may require any adjustment of the Exchange Price, or with
respect to the Officers' Certificate referred to in Section 14.05 hereof, or
with respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee nor any agent
of the Trustee shall be accountable with respect to the validity or value (or
the kind or amount) of any shares of common stock, or of any securities or
property (including cash), which may at any time be issued or delivered upon
the exchange of any Note; and neither the Trustee nor any exchange agent makes
any representation with respect thereto. Neither the Trustee nor any agent of
the Trustee shall be responsible for any failure of the Company to issue,
register the transfer of or deliver any shares of common stock or stock
certificates or other securities or property (including cash) upon the
surrender of any Note for the purpose of exchange or, subject to Article 8
hereof, to comply with any of the covenants of the Company contained in this
Article 14.
SECTION 14.11 Return of Funds Deposited for Redemption of Exchanged
Notes. Any funds which at any time shall have been deposited by the Issuer or
on its behalf with the Trustee or any other Paying Agent for the purpose of
paying the principal of and interest on any of the Notes and which shall not
be required for such purposes because of the exchange of such Notes, as
provided in this Article 14, shall promptly after such exchange be repaid to
the Company by the Trustee or such other Paying Agent in accordance with the
Issuer's written instructions.
ARTICLE 15
Miscellaneous
SECTION 15.01 Trust Indenture Act Controls. If and to the extent that
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included
in this Indenture by operation of, Sections 310 to 318, inclusive, of the TIA,
such imposed duties or incorporated provision shall control.
SECTION 15.02 Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service or sent by facsimile, telex, graphic scanning or other telegraphic
communications equipment of the sending party (or with respect with
communications to Noteholders, mailed) to the address set forth below. Notices
must purport to be signed by a duly authorized representative of the party
giving notice. All notices shall be in the English language.
if to the Issuer:
Polytama International Finance B.V.
c/o HB Management Europe B.V.
World Trade Center Amsterdam Airport
Schiphol Xxxxxxxxx 000
00
0000 XX Xxxxxxxxx,
Xxx Xxxxxxxxxxx
Tel. No.: 00-00-000-0000
Fax. No.: 00-00-000-0000
Attention of:
HB Management Europe B.V.
Managing Director,
with a copy to the Company.
if to the Company:
P.T. Polytama Propindo
Xxx Xxxxx 0 Xxxxxxxx, 00xx Xxxxx
Xx. Xxxx. Xxxxxxxx Xxx. 00-00
Xxxxxxx, Xxxxxxxxx 10220
Tel. No. 00-00-000-0000
Fax. No. 00-00-000-0000
Attention of:
Xxxxxxx X. Xxxxxxxxx
Finance Director
with a copy to the Issuer.
if to the Trustee:
The Bank of New York
Corporate Trust Administration
Floor 21 West
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax. No. 0-000-000-0000/5803
Attention of: Global Trust Services
with copies to:
The Bank of New York
Xxx Xxxxxxx Xxxxxx
#00-00 Xxxxxxxx Xxxxx
Xxxxxxxxx 000000
Fax. No. 00-00000000
Attention of: Global Trust Services
81
The Issuer, the Company or the Trustee by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
sent by facsimile, telex, graphic scanning or other telegraphic communications
equipment of the sender, or with respect to communications mailed to
Noteholders, five business days after mailing, in each case delivered or sent
(properly addressed) to such party as provided in this Section 15.02 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 15.02.
All notices to Holders shall be published in English in a leading
English language newspaper, such as the Wall Street Journal, being published
on each day in morning editions, whether or not it shall be published on
Saturday, Sunday or holiday editions. Notices shall be deemed to have been
given on the date of publication as aforesaid or if published on different
dates, on the date of the first such publication. In addition, notices shall
be mailed to the Holder at Holder's address as it appears on the registration
books of the Registrar.
SECTION 15.03 Communication by Holders with Other Holders. Holders
may communicate pursuant to TIA ss. 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 ss.
312(c).
SECTION 15.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuer or the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Issuer or the
Company, as the case may be, shall furnish to the Trustee:
(1) an Officer's Certificate in form satisfactory to the Trustee
stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of Counsel in form satisfactory to the Trustee
stating that, in the opinion Of such counsel, all such conditions
precedent have been complied with.
SECTION 15.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 15.06 English Language. All communications to the Trustee
hereunder all requests the Trustee to take any action and Officer's
Certificates and Opinions of Counsel and reports, financial statements
financial information, certificates, opinions, records, registers, agreements
with Registrars, Paying Agents, co-registrars and information required by the
TIA or hereunder shall be in the English language. The Company shall furnish
the Trustee with certified and sworn English translations of any documents
provided pursuant to the terms hereof in conjunction with any request that the
Trustee take any action hereunder and such other documents as the Trustee
shall reasonably request in order to perform its duties hereunder.
82
SECTION 15.07 Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 15.08 Meetings of Holders. A meeting of Holders to consider
matters affecting such Holders' interests, including the approval of
amendments and modifications as provided for under Section 9.02, may be
convened by Holders holding not less than 10% of the principal amount of the
outstanding Notes. The quorum at such meeting shall be two or more persons
entitled to vote a majority in principal amount of the outstanding Notes, or
at an adjourned meeting, two or more persons entitled to vote 50% in principal
amount of the outstanding Notes.
SECTION 15.09 Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in
the State of New York. If a payment date is a Legal Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period. If a regular record date is a Legal
Holiday, the record date shall not be affected.
SECTION 15.10 GOVERNING LAW
THIS INDENTURE, THE NOTES AND THE GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 15.11 Waiver of Indemnity; Submission to Jurisdiction and
Appointment of Agent for Service of Process
(a) To the extent that the Issuer or the Company or any of their
respective revenues, assets or properties has or hereafter may acquire any
immunity from jurisdiction of any court or from attachment in aid of
execution, execution, or any other legal process for enforcement of judgment
in any action or proceeding in any manner arising out of this Indenture, the
Notes, the Guarantee, the Collateral Agency Agreement or the Security
Documents or the transactions contemplated hereby or thereby, each of the
Issuer and the Company hereby irrevocably agrees not to claim, and irrevocably
waives (to the extent it lawfully may be so), any such immunity, and any
defense based on such immunity, in respect of its obligations arising out of
this Indenture, the Notes, the Guarantee, the Collateral Agency Agreement and
the Security Documents and the transactions contemplated here and thereby.
(b) Each of the Issuer and the Company agrees that any legal suit,
action or proceeding brought by the Trustee or any Holder arising out of or
based upon this Indenture the Notes or the Guarantee (including the Collateral
Agency Agreement or the Security Documents) may be instituted in any state or
Federal court located in New York City, waives any claim that such proceeding
has been brought in an inconvenient forum, irrevocably submits to and accepts
the nonexclusive jurisdiction of such courts in any such proceeding and
irrevocably hereby appoints CT Corporation System, 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, as its authorized agent (the "Authorized Agent") upon which
process may be served in any such action which may be instituted any such
court. Each of the Issuer and the Company agrees to take any and all action,
including the filing of any and all documents and instruments and paying all
such fees that may be necessary to continue such appointment in full force and
effect as aforesaid. Service of process upon the Authorized Agent and written
notice of such service to the Issuer or the Company (mailed or delivered to
the Issuer or the Company at its address set forth above) shall be deemed
effective service of process upon the Issuer or the Company, as the case may
be. Notwithstanding the foregoing, any action based on this Indenture, the
Securities or the transactions contemplated hereby or thereby may be
instituted by the Trustee or any Holder in any competent court, including
courts in The Netherlands and Indonesia.
SECTION 15.12 Indemnification for Judgment Currency Fluctuations. The
obligations of the Issuer and the Company to any Holder under this Indenture
or the Notes shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than U.S. dollars (the "Agreement Currency"), be discharged
only to the extent that on the day following receipt by such Holder or the
Trustee, as the case may be, of any amount in the Judgment Currency, such
Holder may in accordance with normal banking procedures purchase the Agreement
Currency with the Judgment Currency. If the amount of the Agreement Currency
so purchased is less than the
83
amount originally to be paid to such Holder or the Trustee, as the case may
be, in the Agreement Currency, each of the Issuer and the Company agrees, as
a separate obligation and notwithstanding such judgment, to pay the
difference, and if the amount of the Agreement Currency so purchased exceeds
the amount originally to be paid to such Holder or the Trustee, as the case
may be, such Holder or the Trustee, as the case may be, agrees to pay to or
for the account of the Issuer or the Company, as the case may be, such
excess, provided that such Holder or the Trustee, as the case may be, shall
not have any obligation to pay any such excess as long as a Default by the
Issuer in its respective obligations under the Securities or this Indenture,
as the case may be, has occurred and is continuing, in which case such
excess may be applied by such Holder to such obligations.
SECTION 15.13 No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Issuer or the Company shall not have
any liability for any obligations of the Issuer or the Company under the
Notes, the Guarantee or this Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. By accepting a Note,
each Noteholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Notes and the
Guarantee.
SECTION 15.14 Successors. All agreements of each of the Issuer and
the Company in this Indenture, the Notes and the Guarantee shall bind any of
its successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 15.15 Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 15.16 Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any
of the terms or provisions hereof;
SECTION 15.17 Tax Considerations. It is the intention of the Issuer
and the Company that for U.S. Federal, state and local income tax purposes:
(i) neither the Holders nor the Trustee shall be at any time the owner of the
Collateral for U.S. Federal, state or local tax purposes and (ii) the trust
estate created hereby is intended solely to be a security arrangement and not
a trust and neither the Trustee nor the Holders shall file any returns,
reports or other documents or take any position inconsistent therewith for
U.S. Federal, state or local tax law purposes.
SECTION 15.18 Severability. In case any provision in this Indenture,
in the Notes or in the Guarantee shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall
not, any way, be affected or impaired thereby.
SECTION 15.19 Acts of Holders
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and conclusive in favor the Trustee, the Issuer
and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The
84
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also proved in any other
manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder
of the same Note and the holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Note.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. If such a record date
is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only
the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of outstanding Notes have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the outstanding Notes shall be
computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
(Signatures on next page)
85
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
POLYTAMA INTERNATIONAL FINANCE
B.V., as Issuer,
By HB Management Europe B.V.
----------------------------
By
------------------------
Authorized Signatory
By
-----------------------
Authorized Signatory
P.T. POLYTAMA PROPINDO, as
Guarantor,
By
------------------------------
Name:
Title: Director
THE BANK OF NEW YORK, as
Trustee,
By
----------------------------
Name:
Title:
EXHIBIT
[FORM OF FACE OF NOTE DUE 2012]
No._____ $_____
CUSIP No.
6% Guaranteed Secured Exchangeable Note Due 2012
[Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
This Note is in global form within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. Unless and until it is exchanged in whole or in part
for Notes in certificated form, this Note may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor depository or a nominee of such
successor depository.]1
POLYTAMA INTERNATIONAL FINANCE B.V., a closed company with limited
liability duly organized and existing under the laws of The Netherlands, with
its statutory seat in Rotterdam, The Netherlands, promises to pay to CEDE &
CO., or registered assigns, the principal sum of US$______, and to pay
interest thereon.
Interest Payment Dates: June 15 and December 15 of each year,
commencing June 15, 2003.
Record Dates: June 1 and December 1.
_____________________
1 To be included in the Global Security.
Additional provisions of this Note are set forth on the other side of
this Note.
Dated: , 2002
POLYTAMA INTERNATIONAL FINANCE
B.V.,
By:
Name:
Title:
By:
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one of the Notes referred to in the
within-mentioned Indenture.
By: ___________________________________
Authorized Signatory
(FORM OF REVERSE SIDE OF NOTE DUE 2012)
6% Guaranteed Secured Exchangeable Note Due 2012
ARTICLE 1 Interest
POLYTAMA INTERNATIONAL FINANCE B.V., a closed company with
limited liability duly organized and existing under the laws of The
Netherlands, with its statutory seat in Rotterdam, The Netherlands (herein
referred to as the "Issuer," which term includes its successors and assigns
under the Indenture hereinafter referred to), for value received, hereby
promises to pay interest (as set forth in the Indenture, such term includes
Additional Amounts) on the principal amount of this Note at the rate per annum
shown above. The Issuer will pay interest semiannually on June 15 and December
15 of each year. Interest on the Notes will accrue from the most recent date
to which interest has been paid or duly provided for or, if no interest has
been paid or duly provided for, from [ ], 2003. Interest on the Notes,
including interest on overdue principal or installments of interest, if any,
shall be paid in cash or, at the option of the Issuer, through the issuance of
additional Notes, the principal amount of which is equal to all or a portion
of the interest then due, as determined by the Issuer. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Issuer
shall pay interest on overdue principal at the rate borne by this Note plus 1%
per annum, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
ARTICLE 2 Method of Payment
The Issuer will pay principal and interest on the Notes
(except defaulted interest) to the Persons who are registered holders of Notes
at the close of business on the June 1 or December 1 next preceding the
interest payment date even if Notes are cancelled after the record date and on
or before the interest payment date. The Issuer will pay principal and
interest in money of the United States of America that at the time of payment
is legal tender for payment of public and private debts. However, the Issuer
may pay principal and interest by check payable in such money. Payment on this
Note will be made upon surrender or presentation of this Note to a Paying
Agent. However, at the option of the Issuer, it may mail an interest check to
a Holder's registered address.
ARTICLE 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.
ARTICLE 4 Indenture, Security and Guarantee
The Issuer issued this Note under an Indenture dated as of
December [ ], 2002, among the Issuer, P.T. Polytama Propindo, an Indonesian
corporation (the "Company") and Trustee (the "Indenture"). The terms of this
Note include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. This Note is subject to all such terms of the
Indenture, and the registered holder of this Note is referred to the Indenture
and the Act for a statement of those terms those terms.
The Notes are an obligation of the Issuer limited to
$72,250,000 aggregate principal amount (subject to Section 2.02 of the
Indenture) and, unless earlier redeemed under the circumstances described
herein, will be paid at maturity at 100% of the principal amount thereof.
This Note is irrevocably and unconditionally guaranteed by the Company, as
set forth in the Guarantee endorsed on this Note.
EACH HOLDER, BY ITS ACCEPTANCE OF A NOTE, (I) CONSENTS AND
AGREES TO THE TERMS OF THE COLLATERAL AGENCY AGREEMENT AND THE SECURITY
DOCUMENTS AND AUTHORIZES AND APPROVES THE TRUSTEE'S EXECUTION THEREOF AND (II)
AGREES THAT SUCH HOLDER IS BOUND BY THE TERMS THEREOF AND THAT SUCH HOLDER MAY
NOT TAKE ANY ACTION CONTRARY THERETO.
The Indenture imposes certain limitations on the Company and
its Restricted Subsidiaries (which includes the Issuer), including limitations
on the Incurrence of Indebtedness, Restricted Payments (including payment of
dividends and other distributions on and retirements of the Capital Stock of
the Company and its Restricted Subsidiaries, redemption of Subordinated
Obligations of the Company and the making of certain Investments), Liens and
Pari Passu Indebtedness, Sale/Leaseback Transactions, Restrictions on
Distributions from Restricted Subsidiaries, Transactions with Affiliates, the
Company's Business, Sales of non-Collateral Assets and Restricted Subsidiary
Stock and Sales of Collateral. In addition, the Indenture limits the ability
of the Issuer to, among other things, engage in any business activities other
than those relating to the Notes.
ARTICLE 5 Optional Redemption
SECTION 5.01 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.
SECTION 5.02 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.
ARTICLE 6 Mandatory Redemption; Mandatory Redemption of Notes From
Excess Cash Flow
Beginning on the fourth anniversary of the Issue Date, and
not later than 180 days following the end of each fiscal year thereafter, the
Issuer will redeem the maximum principal amount of Notes that is an integral
multiple of $1.00 with 75% of the Excess Cash Flow of the Company from such
fiscal year, at a redemption price in cash equal to 100% of the principal
amount of the Notes to be redeemed, together with any accrued and unpaid
interest, if any, thereon to the date of redemption.
ARTICLE 7 Notice of Redemption
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each registered holder of
Notes to be redeemed at his registered address. If money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date
interest ceases to accrue on such Notes called for redemption.
ARTICLE 8 Note Repurchase
The Issuer may at any time purchase Notes by tender
(available to all Holders alike) or in the open market at any price. If the
Issuer shall acquire any Notes, such acquisition shall not operate as, or be
deemed for any purpose to be, a satisfaction of the indebtedness represented
by such Notes unless and until such Notes are delivered to the Trustee for
cancellation and are cancelled and retired by the Trustee.
ARTICLE 9 Change of Control
Upon the occurrence of a Change of Control, each Holder
shall have the right to require that the Issuer repurchase such Holder's Notes
at a purchase price in cash equal to 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of repurchase, (subject to
the right of holders of record on the relevant record date to receive interest
on the relevant interest payment date) plus any Additional Amounts then due or
which will become due as a result of the repurchase or otherwise, in
accordance with the terms of the Indenture.
ARTICLE 10 Asset and Collateral Sales
SECTION 10.01 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.
SECTION 10.02 Other Collateral Sales. The Issuer shall apply
any Excess Collateral Proceeds in accordance with the Mandatory Redemption
provision.
SECTION 10.03 Other Asset Sales. The Issuer shall apply any
Excess Proceeds in accordance with the Mandatory Redemption provision.
ARTICLE 11 Denominations; Transfer; Exchange
The Notes are issued only in registered form without coupons
in denominations of $1.00 and whole multiples of $1.00. A registered holder
may transfer or exchange this Note in accordance with the Indenture. The
Registrar may require the registered holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture.
ARTICLE 12 Persons Deemed Owners
The registered Holder of this Note may be treated as the
owner of it for all purposes.
ARTICLE 13 Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Issuer at its request subject to any applicable abandoned property law
designating another Person. After such payment, Holders entitled to the money
must look only to the Issuer and not to the Trustee for payment.
ARTICLE 14 Discharge and Defeasance
Subject to certain conditions, the Issuer or the Company at
any time may terminate some or all of their obligations under the Notes or the
Guarantee and the Indenture if the party exercising such option deposits with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Notes to redemption or maturity, as the case may be.
ARTICLE 15 Amendment, Waiver
Subject to certain exceptions set forth in the Indenture,
(i) the Indenture, the Notes, the Guarantee, the Collateral Agency Agreement
and the Security Documents may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of Notes and
(ii) any default under the Notes or the Indenture may be waived with the
written consent of the Holders of a majority in principal amount outstanding
of the Notes. Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder, the Company and the Trustee may amend the
Indenture the Notes or the Guarantee to, among other things, cure any
ambiguity, omission, defect or inconsistency, or to comply with Article 5 of
the Indenture, or to provide for uncertificated Securities in addition to or
in place of certificated Securities, or to further secure the Securities or
add guarantees with respect to the Securities, or to add additional covenants
or surrender rights and powers conferred on the Company or the Issuer, or to
comply with any requirement of the SEC in connection with qualifying the
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Holder.
ARTICLE 16 Defaults and Remedies
Under the Indenture, Events of Default with respect to the
Securities include (i) a default in the payment of interest or any Additional
Amounts on the Notes when due, continued for 30 days, (ii) a default in the
payment of principal of any Security when due at each Scheduled Payment Date,
upon optional redemption, upon required repurchase, upon declaration or
otherwise, (iii) any Change of Control of the Company during certain time
periods, (iv) the failure by the Company or the Issuer to comply for 60 days
after notice with its other agreements contained in the Senior Indenture, (v)
the failure by the Company or the Issuer to comply with its obligations under
Article 5 of the Indenture, (vi) failure by the Company or the Issuer to
comply with other covenants and agreements
in the Indenture, in certain cases subject to notice and lapse of time,
(vii) Indebtedness of the Company, the Issuer or any Significant Subsidiary,
other than the Senior Notes is not paid within any applicable grace period
after final maturity or is accelerated by the holders thereof because of a
default and the total amount such Indebtedness unpaid or accelerated exceeds
$5.0 million, (viii) certain events of bankruptcy, insolvency or
reorganization of the Company, the Issuer or a Significant Subsidiary, (ix)
certain judgments or decrees for the payment of money in excess of $5.0
million, (x) the Guarantee ceases to be in full force and effect (other than
in accordance with the terms of the Guarantee) or the Company denies or
disaffirms its obligations under its Guarantee or (xi) certain Liens with
respect to the Collateral cease to have the perfection and priority
contemplated by the Security Documents.
Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes
may direct the Trustee in its exercise of any trust or power with respect to
the Notes. The Trustee may withhold from Holders notice of any continuing
Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.
ARTICLE 17 Exchange
Upon the failure of the Issuer to redeem the Notes at their
Stated Maturity the Issuer will have the right, at its option, to exchange any
portion of the principal amount of the Notes that is $1.00 or an integral
multiple thereof at any time thereafter. The Exchange Price is equal to 0.75
Exchange Shares per $1.00 principal amount at maturity of Notes; provided
that, if the aggregate principal amount of Notes to be exchanged at their
Stated Maturity exceeds $40 million, the Exchange Price shall be adjusted to
equal a price determined by dividing 1 by (x) the product of the total number
of shares of common stock of the Company outstanding immediately prior to such
exchange and 0.66667, divided by (y) the aggregate principal amount of Notes
to be exchanged.
The Exchange Prince shall be subject to adjustment upon
certain events, including: (i) the payment by the Company or dividends and
other distributions on its common stock in shares of its common stock, (ii)
subdivision, combinations, and reclassifications or the Company's common
stock, (iii) the issuance to all holders of common stock of the Company of
rights, options or warrants entitling them to subscribe for shares of its
common stock or securities convertible into, or exchangeable or exercisable
for, its common stock at a price which is less than the Fair Market Value per
share thereof, (iv) certain distributions to all holders of common stock of
the Company of any of the Company's assets, debt securities or other
securities or any rights or warrants to purchase such securities (excluding
those rights and warrants referred to in (iii)), (v) the issuance of share of
the Company's common stock for consideration per share less than the then Fair
Market Value per share thereof (excluding securities issue in transactions
referred to in (i), (ii), (iii), (iv) and (vi)), and (vi) the issuance of
securities convertible into or exchangeable for shares of the Company's common
stock for a conversion or exchange price plus consideration received upon
issuance less than the then Fair Market Value per share at the time of
issuance of such convertible or exchangeable security (excluding securities
issued in transactions referred to in (i), (ii), (iii) or (iv)).
Any Notes surrendered for exchange shall include a fully
executed exchange notice substantially in the form attached hereto as Exhibit
I.
ARTICLE 18 Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Issuer, the Company or their Affiliates and may
otherwise deal with the Issuer, the Company or their Affiliates with the same
rights it would have if it were not Trustee.
ARTICLE 19 No Recourse Against Others
A director, officer, employee or stockholder, as such, of
the Issuer, the Company or the Trustee shall not have any liability for any
obligations of the Issuer or the Company under the Notes, the Guarantee or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each registered holder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
ARTICLE 20 Authentication
This Note shall not be valid or become obligatory for any
purpose until an authorized officer of the Trustee (or an authenticating
agent) manually signs the certificate of authentication on the other side of
this Note.
ARTICLE 21 Abbreviations
Customary abbreviations may be used in the name of a Holder
or an assignee, such as TEN COM (= tenant in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with rights of survivorship and not
as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to
Minors Act).
ARTICLE 22 CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Issuer has caused CUSIP numbers
to be printed on the Notes and has directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to the registered holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
ARTICLE 23 Choice of Law
THIS NOTE (INCLUDING THE GUARANTEE ENDORSED UPON IT) SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
The Issuer will furnish to any registered holder upon
written request and without charge to the registered holder a copy of the
Indenture which has in it the text of this Note.
Requests may be made to:
Polytama International Finance B.V.
c/oHB Management Europe B.V.
World Trade Center Amsterdam Airport
Xxxxxxxx Xxxxxxxxx 000
0000 XX Xxxxxxxxx,
Xxx Xxxxxxxxxxx
(011)(31)(00) 000-0000
Guarantee
FOR VALUE RECEIVED, P.T. POLYTAMA PROPINDO (herein referred
to as the "Company"), as principal obligor and not merely as surety, has,
pursuant to the Indenture, irrevocably and unconditionally guaranteed to the
registered holder of this Note upon which this notation of such Guarantee is
endorsed that: (i) principal of, premium, if any, and interest on this Note,
will be promptly paid in full when due, subject to any applicable grace
period, whether on the stated maturity, on an interest payment date, by
acceleration, by call for redemption, upon repurchase or purchase pursuant to
the Indenture referred to therein or otherwise, and interest on the overdue
principal and premium, if any, and interest on any interest, to the extent
lawful (in each case including interest accruing on or after filing of any
petition in bankruptcy or reorganization relating to the Issuer or the
Company, whether or not a claim for post filing interest is allowed in such
proceeding on said Note) and all other obligations of the Issuer to the
registered holder of this Note under this Note or the Indenture, including any
Additional Amounts payable, will be promptly paid in full when due or
performed, all in accordance with the terms of this Note and the Indenture;
and (ii) in case of any extension of time of payment or renewal of said Note
or of any such other obligations, that the same will be promptly paid in full,
when due or performed in accordance with the terms of the extension or
renewal, subject to any applicable grace period, whether at maturity, on an
interest payment date, by acceleration, required repurchase or otherwise.
The obligations of the Company to the registered holder of
this Security and to the Trustee pursuant to the Guarantee and the Indenture
are expressly set forth in the Indenture to which reference is hereby made for
the precise terms of such obligations.
P.T. POLYTAMA PROPINDO,
By:
__________________________
Name:
Title:
By:
__________________________
Name:
Title:
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITY2
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
---------------------- -------------------- ------------------- -------------------- -------------------
====================== ==================== =================== ==================== ===================
2 This should be included only if the Note is issued in global form.
OPTION OF REGISTERED HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Issuer pursuant to Section 4.10 of the Indenture, check the box:
Section 4.10
If you want to elect to have only part of this Note
purchased by the Issuer pursuant to Section 4.10 of the Indenture, state the
amount (such specified amount must be in an integral multiple of $1.00):
$________________________________
Date: ________________
_____________________________
Signature
_____________________________
Signature Guaranteed
NOTICE: The signature must correspond to the name as written upon the face of
this Note in every particular without alteration or any change whatsoever.
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
ASSIGNMENT FORM
(To be executed by the registered holder if such holder
desires to transfer this Note)
FOR VALUE RECEIVED ____________________
hereby sells, assigns and transfers unto
PLEASE INSERT ASSIGNEE'S SOCIAL SECURITY
OR OTHER TAX IDENTIFYING NUMBER
____________________________________________________________________
(Print or type assignee's name, address and zip code)
this Note, together with all right, title and interest herein and does hereby
irrevocably constitute and appoint _______________ Agent to transfer this Note
on the Register relating to this Note. The Agent may substitute another to act
for him.
Date: ________________
_____________________________
Signature
_____________________________
Signature Guaranteed
NOTICE: The signature must correspond to the name as written upon the face of
this Note in every particular, without alternation or any change whatsoever.
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT 1
[FORM OF EXCHANGE NOTICE]
TO: POLYTAMA INTERNATIONAL FINANCE B.V.
The undersigned owner of this Note hereby: (i) irrevocably
exchanges this Note, for shares of common stock of P.T. Polytama Propindo in
accordance with the terms of the Indenture referred to in this Note and (ii)
directs that such shares of common stock deliverable upon the conversion,
together with any check in cash payment for any fractional shares, be
delivered to the registered holder hereof unless a different name has been
indicated below. The undersigned acknowledges that is such shares of common
stock have not yet been registered with the Securities and Exchanges
Commission, such shares may be required to bear a restrictive legend. If
shares are to be delivered registered in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
Dated:_______
________________________________
Signature
Fill in for registration of shares if to be delivered, and of Notes if to be
issued, otherwise that to and in the name of the registered holder.
----------------------------------------------------------
Social Security or other Taxpayer Identifying Number
----------------------------------------------------------
----------------------------------------------------------
(Name)
----------------------------------------------------------
----------------------------------------------------------
(Street Address)
----------------------------------------------------------
----------------------------------------------------------
(City, State and Zip Code)
----------------------------------------------------------
INDENTURE
Dated as of December [ ], 2002
among
POLYTAMA INTERNATIONAL FINANCE B.V.
as Issuer,
P.T. POLYTAMA PROPINDO
as Guarantor,
and
THE BANK OF NEW YORK
as Trustee
$40,000,000 6% Guaranteed Secured Exchangeable Notes Due 2012
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310 (a) (1) .................................... 7.10
(a) (2) .................................... 7.10
(a) (3) .................................... 7.12
(a) (4) .................................... N.A.
(b) .................................... 7.10
(c) .................................... N.A.
311 (a) .................................... 7.11
(b) .................................... 7.11
(c) .................................... N.A
312 (a) .................................... 2.05.
(b) (1) .................................... 15.03
(c) (2) .................................... 15.03
313 (a) .................................... 7.06
(b) (1) .................................... 7.06
(b) (2) .................................... 7.06
(c) .................................... 7.06; 15.02
(d) .................................... 7.06
314 (a) .................................... 4.02; 15.02
(b) .................................... N.A.
(c) (1) .................................... 15.04
(c) (2) .................................... 15.04
(c) (3) .................................... N.A.
(d) .................................... 12.09(ii)
(e) .................................... 15.05
(f) .................................... N.A.
315 (a) .................................... 7.01
(b) .................................... 7.05; 15.02
(c) .................................... 7.01
(d) .................................... 7.01
(e) .................................... 6.11
316 (a) (last sentence)................................... 2.08
(a) (1) (A) .................................... 6.05
(a) (1) (B) .................................... 6.04
(a) (2) .................................... N.A.
(b) .................................... 6.07
(c) .................................... 2.15
317 (a) (1) .................................... 6.08
(a) (2) .................................... 6.09
(b) .................................... 2.04
318 (a) .................................... 15.01
(b) .................................... N.A.
(c) .................................... 15.01
N.A. means Not Applicable
______________
Note: This Cross-Reference Table shall not, for any purpose, be deemed
to be part of the Indenture.
TABLE OF CONTENTS
Page
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..................................................... 19
SECTION 2.06 Transfer and Exchange.................................................19
SECTION 2.07 Replacement Notes.....................................................21
SECTION 2.08 Outstanding Notes.....................................................21
SECTION 2.09 Temporary Notes.......................................................22
SECTION 2.10 Cancellation..........................................................22
SECTION 2.11 Defaulted Interest....................................................22
SECTION 2.12 Persons Deemed Owners.................................................23
SECTION 2.13 Computation of Interest...............................................23
SECTION 2.14 Predecessor Securities................................................23
SECTION 2.15 Record Date...........................................................23
ARTICLE 3 Redemption
SECTION 3.01 Notices to Trustee....................................................23
SECTION 3.02 Selection of Notes To Be Redeemed.....................................23
SECTION 3.03 Notice of Redemption..................................................23
SECTION 3.04 Effect of Notice of Redemption........................................24
SECTION 3.05 Deposit of Redemption Price...........................................24
SECTION 3.06 Notes Redeemed in Part................................................24
SECTION 3.07 Mandatory Redemption; Mandatory Redemption of Notes From
Excess Cash Flow......................................................24
ARTICLE 4 Covenants
SECTION 4.01 Payment of Notes; Payment of Additional Amounts;
Exchange Feature......................................................25
SECTION 4.02 Reports...............................................................27
SECTION 4.03 Limitation on Indebtedness............................................27
SECTION 4.04 Limitation on Indebtedness and Preferred Stock
of Restricted Subsidiaries............................................28
SECTION 4.05 Limitation on Restricted Payments.....................................29
SECTION 4.06 Limitation on Restrictions on Distributions from
Restricted Subsidiaries...............................................30
SECTION 4.07 Limitation on Sales of Non-Collateral Assets and Subsidiary Stock.....30
SECTION 4.08 Limitation on Sales of Collateral.....................................31
SECTION 4.09 Limitation on Affiliate Transactions..................................34
SECTION 4.10 Change of Control.....................................................34
SECTION 4.11 Limitation on the Sale or Issuance of Capital
Stock of Restricted Subsidiaries.................................35
SECTION 4.12 Limitation on Liens and Pari Passu Indebtedness.......................35
SECTION 4.13 Limitation on Sale/Leaseback Transactions.............................36
SECTION 4.14 Limitation on Issuer Activities.......................................36
SECTION 4.15 Keepwell Commitment...................................................36
SECTION 4.16 Amendments to Security Documents......................................37
SECTION 4.17 Limitation on Company's Business......................................37
SECTION 4.18 Insurance.............................................................37
SECTION 4.19 Taxes.................................................................37
SECTION 4.20 Businesses and Properties; Compliance with Laws.......................37
SECTION 4.21 Corporate Existence...................................................38
SECTION 4.22 Inspection............................................................38
SECTION 4.23 Compliance Certificate................................................38
SECTION 4.24 Further Instruments and Acts..........................................38
SECTION 4.25 Management of the Company.............................................39
ARTICLE 5 Successor Company
SECTION 5.01 When Company May Merge or Transfer Assets.............................39
SECTION 5.02 Assumption by Company of Issuer's Obligations.........................39
SECTION 5.03 Issuer Reincorporation and Other Actions..............................40
ARTICLE 6 Defaults and Remedies
SECTION 6.01 Events of Default.....................................................41
SECTION 6.02 Acceleration..........................................................42
SECTION 6.03 Other Remedies........................................................43
SECTION 6.04 Waiver of Past Defaults...............................................43
SECTION 6.05 Control by Holders....................................................43
SECTION 6.06 Limitation on Suits...................................................43
SECTION 6.07 Rights of Holders To Receive Payment..................................44
SECTION 6.08 Collection Suit by Trustee............................................44
SECTION 6.09 Trustee May File Proofs of Claim......................................44
SECTION 6.10 Priorities............................................................44
SECTION 6.11 Undertaking for Costs.................................................45
SECTION 6.12 Waiver of Stay or Extension Laws......................................45
ARTICLE 7 Trustee
SECTION 7.01 Duties of Trustee.....................................................45
SECTION 7.02 Rights of Trustee.....................................................46
SECTION 7.03 Individual Rights of Trustee..........................................47
SECTION 7.04 Trustee's Disclaimer..................................................47
SECTION 7.05 Notice of Defaults....................................................47
SECTION 7.06 Reports by Trustee to Holders.........................................47
SECTION 7.07 Compensation and Indemnity............................................47
SECTION 7.08 Replacement of Trustee................................................48
SECTION 7.09 Successor Trustee by Merger...........................................49
SECTION 7.10 Eligibility; Disqualification.........................................49
SECTION 7.11 Preferential Collection of Claims Against Company.....................50
SECTION 7.12 Appointment of Co-Trustee or Separate Trustee.........................50
SECTION 7.13 No Duty To Operate....................................................51
SECTION 7.14 Other Matters Related to the Collateral Agency Agreement..............51
ARTICLE 8 Discharge of Indenture; Defeasance
SECTION 8.01 Discharge of Liability on Securities; Defeasance......................51
SECTION 8.02 Conditions to Defeasance..............................................52
SECTION 8.03 Application of Trust Money............................................53
SECTION 8.04 Repayment to Issuer...................................................53
SECTION 8.05 Indemnity for Government Obligations..................................53
SECTION 8.06 Reinstatement.........................................................53
ARTICLE 9 Amendments
SECTION 9.01 Without Consent of Holders............................................54
SECTION 9.02 With Consent of Holders...............................................55
SECTION 9.03 Compliance with Trust Indenture Act...................................56
SECTION 9.04 Revocation and Effect of Consents and Waivers.........................56
SECTION 9.05 Notation on or Exchange of Securities.................................56
SECTION 9.06 Trustee To Sign Amendments............................................57
SECTION 9.07 Payment for Consent...................................................57
SECTION 9.08 Trustee Authorized To Execute Collateral Agency
Agreement and Take Actions Thereunder.................................57
SECTION 9.09 Voting Under Collateral Agency Agreement..............................57
ARTICLE 10 Guarantee of Notes; Indemnity
SECTION 10.01 Guarantee.............................................................57
SECTION 10.02 Indemnity.............................................................59
SECTION 10.03 Representation and Warranty...........................................60
SECTION 10.04 Waiver of Subrogation.................................................60
SECTION 10.05 Execution of Guarantee................................................60
SECTION 10.06 Ranking...............................................................60
ARTICLE 11 [Intentionally Omitted]
ARTICLE 12 Security Documents
SECTION 12.01 Security Documents....................................................60
SECTION 12.02 Holders' Consent......................................................61
SECTION 12.03 Recording, Deposit of Pledged Assets, etc.............................61
SECTION 12.04 Disposition of Collateral Without Trustee Consent.....................62
SECTION 12.05 Release of Collateral with Trustee Consent............................63
SECTION 12.06 Possession and Use of Collateral......................................65
SECTION 12.07 Substitute Collateral.................................................65
SECTION 12.08 Governmental Takings..................................................66
SECTION 12.09 TIA Requirements......................................................67
SECTION 12.10 Suits To Protect the Collateral.......................................68
SECTION 12.11 Purchaser Protected...................................................68
SECTION 12.12 Powers Exercisable by Receiver or Trustee.............................68
SECTION 12.13 Disposition of Obligations Received...................................68
SECTION 12.14 Limitation on Duty of Trustee in Respect of Collateral;
Indemnification.......................................................69
SECTION 12.15 Release upon Termination of the Company's and
Issuer's Obligations..................................................69
ARTICLE 13 Application of Trust Monies
SECTION 13.01 "Trust Monies" Defined................................................70
SECTION 13.02 Retirement of Securities..............................................70
SECTION 13.03 Withdrawals of Asset Disposition Proceeds, Insurance Proceeds
and Proceeds from Government Takings.............................70
SECTION 13.04 Business Interruption Insurance.......................................73
SECTION 13.05 Powers Exercisable Notwithstanding Event of Default...................73
SECTION 13.06 Powers Exercisable by Trustee or Receiver.............................74
SECTION 13.07 Disposition of Notes Retired..........................................74
SECTION 13.08 Investment of Trust Monies............................................74
ARTICLE 14 Exchange
SECTION 14.01 Exchange..............................................................74
SECTION 14.02 Exercise of Exchange..................................................74
SECTION 14.03 Cash Payment for Unpaid Interest; Fractional Interests................75
SECTION 14.04 Exchange Price........................................................75
SECTION 14.05 Adjustment of Exchange Price..........................................75
SECTION 14.06 Continuation of Exchange Privilege in Case of Reclassification,
Change, Merger, Consolidationor Sale of Assets.......................78
SECTION 14.07 Notice of Certain Events..............................................79
SECTION 14.08 Taxes on Exchange.....................................................79
SECTION 14.09 Company to Provide Stock..............................................79
SECTION 14.10 Disclaimer of Responsibility for Certain Matters......................80
SECTION 14.11 Return of Funds Deposited for Redemption of Exchanged Notes...........80
ARTICLE 15 Miscellaneous
SECTION 15.01 Trust Indenture Act Controls..........................................80
SECTION 15.02 Notices...............................................................80
SECTION 15.03 Communication by Holders with Other Holders...........................82
SECTION 15.04 Certificate and Opinion as to Conditions Precedent....................82
SECTION 15.05 Statements Required in Certificate or Opinion.........................82
SECTION 15.06 English Language......................................................82
SECTION 15.07 Rules by Trustee, Paying Agent and Registrar..........................83
SECTION 15.08 Meetings of Holders...................................................83
SECTION 15.09 Legal Holidays........................................................83
SECTION 15.10 Governing Law.........................................................83
SECTION 15.11 Waiver of Indemnity; Submission to Jurisdiction and Appointment
of Agent for Service of Process......................................83
SECTION 15.12 Indemnification for Judgment Currency Fluctuations....................83
SECTION 15.13 No Recourse Against Others............................................84
SECTION 15.14 Successors............................................................84
SECTION 15.15 Multiple Originals....................................................84
SECTION 15.16 Table of Contents; Headings...........................................84
SECTION 15.17 Tax Considerations....................................................84
SECTION 15.18 Severability..........................................................84
SECTION 15.19 Acts of Holders.......................................................84
