<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 1, 1996
REGISTRATION NO. 333-11987
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 4812 94-3248701
(State or other (Primary Standard Industrial (IRS Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
DOUGLAS S. SINCLAIR
EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
400 SOUTH EL CAMINO REAL, SUITE 1275 400 SOUTH EL CAMINO REAL, SUITE 1275
SAN MATEO, CALIFORNIA 94402 SAN MATEO, CALIFORNIA 94402
(415) 548-0808 (415) 548-0808
(Address, including zip code, and (Name, address, including zip code, and
telephone number, including area code, telephone number, including area code,
of registrant's principal executive of agent for service)
offices)
---------------
COPY TO:
Brooks Stough, Esq.
Gunderson Dettmer Stough
Villeneuve Franklin and Hachigian, LLP
600 Hansen Way, Second Floor
Palo Alto, California 94304
(415) 843-0500
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration number for
the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
The purpose of this Amendment No. 1 is solely to file certain exhibits to
the Registration Statement, as set forth below in Item 16(a) of Part II.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all fees and expenses payable by the
Registrant in connection with the issuance and distribution of the securities
being registered hereby. All of such expenses, except the SEC filing fee, are
estimated.
<TABLE>
<S> <C>
SEC filing fee.................................................. $ 22,612
Legal fees and expenses......................................... 75,000
Accounting fees and expenses.................................... 75,000
Printing and engraving.......................................... 45,000
Trustee and exchange agent fees and expenses.................... 7,000
Blue Sky fees and expenses...................................... 5,000
Miscellaneous................................................... 5,388
--------
Total......................................................... $235,000
========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As authorized by Section 145 of the General Corporation Law of Delaware (the
"Delaware Corporation Law"), each director and officer of the Registrant may
be indemnified by the respective Registrant against expenses (including
attorney's fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred in connection with the defense or settlement of any
threatened, pending or completed legal proceedings in which he is involved by
reason of the fact that he is or was a director or officer of that Registrant
if he acted in good faith and in a manner that he reasonably believed to be in
or not opposed to the best interests of that Registrant, and, with respect to
any criminal action or proceeding, if he had no reasonable cause to believe
that his conduct was unlawful. If the legal proceeding, however, is by or in
the right of the respective Registrant, the director or officer may not be
indemnified in respect to any claim, issue or matters as to which he shall
have been adjudged to be liable for negligence or misconduct in the
performance of his duty to that Registrant unless a court determines
otherwise.
Article IX of the Certificate of Incorporation of the Company, a copy of
which is filed as Exhibit 3.1 to this Registration Statement, provides that no
director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for any breach of his fiduciary duty as a
director to the fullest extent permitted by Delaware Law. In addition, Article
VII of the By-Laws of the Company, a copy of which is filed as Exhibit 3.2
hereto, provides for the indemnification of the Registrant's officers and
directors.
In addition, the Registrant has entered into an Indemnification Agreement
with each of its directors and officers which provides for indemnification to
the fullest extent available under Delaware Corporation Law.
Section 7 of the Purchase Agreement, a copy of which is filed as Exhibit 1.1
hereto, provides for indemnification by the Initial Purchasers of directors
and officers of the Company against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the "Securities Act"), under
certain circumstances.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On August 15, 1996, the Company sold 196,720 Units (the "Units"), each
consisting of a $1,000 principal amount 14% Senior Secured Discount Note due
2001 (collectively, the "Old Notes") and one Warrant (collectively, the
Warrants) to purchase 11.638 shares of Common Stock to BT Securities
Corporation, Toronto Dominion Securities (USA) Inc. and Salomon Brothers Inc
(the "Initial Purchasers") at 35.43% of the principal amount thereof. Each
Warrant provides that if the Company does not complete a Threshold Initial
Public Offering (as defined) or a Qualified Reorganization (as defined) on or
prior to May 15, 1997, each unexercised Warrant will entitle the holder
thereof to purchase an additional 2.645 shares of Common Stock. Such
transaction
II-1
<PAGE>
was exempt from the registration requirements of the Securities Act in
reliance on Section 4(2) of the Securities Act and Rule 144A promulgated under
the Securities Act on the basis that such transaction did not involve a public
offering. In accordance with the agreement pursuant to which the Initial
Purchasers purchased the Units, the Initial Purchasers agreed to offer and
sell the Units only to "qualified institutional buyers" (as defined in
Rule 144A under the Securities Act) or a limited number of institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act) or outside the United States in
compliance with Regulation S under the Securities Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
------- -------
<C> <S>
1.1* Purchase Agreement dated August 9, 1996, among Registrant, BT
Securities Corporation, Toronto Dominion Securities (USA) Inc. and
Salomon Brothers Inc
2.1* Agreement and Plan of Merger dated as of August 8, 1996 by and among
Registrant, International Wireless Communications Acquisition
Corporation and International Wireless Communications, Inc.
3.1* Amended and Restated Certificate of Incorporation of Registrant, as
currently in effect
3.2* Bylaws of Registrant
4.1* Indenture dated as of August 15, 1996 between Registrant, as issuer,
and Marine Midland Bank, as Trustee
4.2* Pledge Agreement dated as of August 15, 1996 by Registrant and
International Wireless Communications, Inc. in favor of Bankers Trust
Company, as Collateral Agent
4.3* Unit Agreement dated as of August 15, 1996 among Registrant and
Bankers Trust Company, as Unit Agent and Warrant Agent and Marine
Midland Bank, as Trustee
4.4* Registration Rights Agreement dated as of August 15, 1996 among
Registrant, BT Securities Corporation, Toronto Dominion Securities
(USA) Inc. and Salomon Brothers Inc
5.1** Opinion of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian,
LLP
10.1* Warrant Agreement dated August 15, 1996 between Registrant and Bankers
Trust Company, as Warrant Agent
10.2* Securities Purchase Agreement dated as of December 6, 1995 among
Registrant and the Investors named therein
10.3* Fifth Amended and Restated Investor Rights Agreement dated as of
December 18, 1995 among Registrant and the Investors named therein
10.4* Registration Rights Agreement dated as of December 18, 1995 among
Registrant and the Investors named therein
10.5* Stock Purchase Agreement dated as of December 18, 1995 among
Registrant, John D. Lockton and Hugh B.L. McClung
10.6* Assignment and Assumption Agreement dated as of August 7, 1996 between
Registrant and International Wireless Communications, Inc.
10.7* Consent, Waiver, Amendment, Assignment and Assumption Agreement
effective as of August 7, 1996 among Registrant and the other parties
named therein
10.8* Consent, Waiver, Amendment, Assignment and Assumption Agreement
effective as of August 7, 1996 among International Wireless
Communications, Inc. and the parties named therein
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
------- -------
<C> <S>
10.9* 1996 Stock Option/Stock Issuance Plan
10.10* Form of Indemnification Agreement
10.11 Real Property Lease between Registrant and PM Realty Group, dated May
5, 1994.
10.12A+* Shareholders Agreement by and among Shubila Holding Sdn Bhd, the
Registrant and Laranda Sdn Bhd, dated March 26, 1996.
10.12B License granted to Syarikat Telefon Wireless (Malaysia) Sdn Bhd
("STW"), dated November 16, 1994.
10.12C+ Access and Interconnect Agreement between Telekom Malaysia Berhad and
STW, dated August 16, 1994.
10.12D+ Loan Agreement among STW, Permata Merchant Bank Berhad ("Permata")
and certain financial institutions listed therein, dated August 18,
1995; Option Agreement between Permata and the Registrant, dated
October 2, 1995; Collateral Agreement among the Registrant, Shubila
Holding Sdn. Bhd., Laranda Sdn. Bhd, STW and Permata, dated October
2, 1995; Agreement to Allocate Responsibility among the Registrant,
Shubila Holding Sdn. Bhd. and Laranda Sdn. Bhd, dated November 1995.
10.13A** Cooperation Agreement on Network Interconnection of Mobisel STBS with
Telkom PSTN between PT. (Persero) Telekomunikasi Indonesia ("Telekom
Indonesia") and PT Mobile Selular Indonesia, dated August 21, 1996.
10.13B Sale and Termination Agreement among PT Rajasa Hazanah Perkasa
("RHP"), PT Deltona Satya Dinamika ("DSD"), PT Bina Reksa Perdana
("BRP"), the Registrant and Bell Atlantic Indonesia, Inc. ("BA"),
dated October 11, 1995; Promissory Note executed by RHP, DSD, BRP and
the Registrant in favor of BA, dated October 11, 1995.
10.13C Shareholders' Agreement among BRP, the Registrant, DSD and RHP, dated
November 9, 1995.
10.13D Cooperative Agreement among Telekom Indonesia, Yayasan Dana Pensiun
Pegawai PT Telkom and RHP, dated November 30, 1995.
10.13E License granted to RHP, dated April 28, 1995.
10.13F Facility Agreement between PT Mobile Selular Indonesia ("Mobisel")
and Nissho Iwai International (Singapore) Pte., Ltd. ("Nissho Iwai"),
dated March 12, 1996; Share Pledge Agreement between RHP and Nissho
Iwai, dated March 12, 1996.
10.14 Stockholder Agreement between Teleparbs Participacoes Ltda. (RBS) and
the Registrant, dated August 31, 1995.
10.15* Shareholders' Agreement among Mainstream Limited, the Registrant and
Star Telecom Holding Limited, dated August 30, 1996.
23.1** Consent of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian,
LLP (included in Exhibit 5.1)
23.3* Consent of KPMG Peat Marwick LLP
23.4* Consent of KPMG Peat Marwick
23.5* Consent of Prasetio Utomo & Co.
24.1* Power of Attorney (page II-5)
25.1* Form T-1 for Marine Midland Bank, as Trustee
27.1* Financial Data Schedule
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<C> <S>
99.3* Form of Letter to Securities Dealers, Commercial Banks, Trust
Companies and Other Nominees
99.4* Form of Letters to Clients
99.5* Guidelines for Certification of Taxpayer Identification Number on
Form W-9
</TABLE>
* Previously filed.
** To be filed by Amendment.
+ Confidential treatment has been requested as to certain portions of these
exhibits.
(b) Financial Statement Schedule
[Included in accompanying Financial Statements]
ITEM 17. UNDERTAKINGS
1. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by them is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
2. The undersigned Registrant hereby undertakes that:
(a) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be a part of this
Registration Statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT TO REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF SAN
MATEO, STATE OF CALIFORNIA, ON SEPTEMBER 30, 1996.
INTERNATIONAL WIRELESS
COMMUNICATIONS HOLDINGS, INC.
/s/ John D. Lockton
By: _________________________________
JOHN D. LOCKTON PRESIDENT, CHIEF
EXECUTIVE OFFICER AND DIRECTOR
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ John D. Lockton President, Chief September 30,
- ------------------------------------- Executive Officer 1996
JOHN D. LOCKTON and Director
Douglas S. Sinclair* Chief Financial September 30,
- ------------------------------------- Officer (Principal 1996
DOUGLAS S. SINCLAIR Financial Officer)
Keith D. Taylor* Controller September 30,
- ------------------------------------- (Principal 1996
KEITH D. TAYLOR Accounting Officer)
Haynes G. Griffin* Chairman of the September 30,
- ------------------------------------- Board 1996
HAYNES G. GRIFFIN
Stephen R. Leeolou* Director September 30,
- ------------------------------------- 1996
STEPHEN R. LEEOLOU
II-5
<PAGE>
SIGNATURE TITLE DATE
Piers Playfair* Director September 30,
- ------------------------------------- 1996
PIERS PLAYFAIR
John S. McCarthy* Director September 30,
- ------------------------------------- 1996
JOHN S. MCCARTHY
Carl C. Cordova* Director September 30,
- ------------------------------------- 1996
CARL C. CORDOVA
Brian Rich* Director September 30,
- ------------------------------------- 1996
BRIAN RICH
Van Snowdon* Director September 30,
- ------------------------------------- 1996
VAN SNOWDON
Carl F. Pascarella* Director September 30,
- ------------------------------------- 1996
CARL F. PASCARELLA
Stanley Wen* Director September 30,
- ------------------------------------- 1996
STANLEY WEN
Hugh B. L. McClung* Director September 30,
- ------------------------------------- 1996
HUGH B. L. MCCLUNG
*By: /s/ John D. Lockton
---------------------------------
JOHN D. LOCKTON
ATTORNEY-IN-FACT
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
------- -------
<C> <S>
1.1* Purchase Agreement dated August 9, 1996, among Registrant, BT
Securities Corporation, Toronto Dominion Securities (USA) Inc. and
Salomon Brothers Inc
2.1* Agreement and Plan of Merger dated as of August 8, 1996 by and among
Registrant, International Wireless Communications Acquisition
Corporation and International Wireless Communications, Inc.
3.1* Amended and Restated Certificate of Incorporation of Registrant, as
currently in effect
3.2* Bylaws of Registrant
4.1* Indenture dated as of August 15, 1996 between Registrant, as issuer,
and Marine Midland Bank, as Trustee
4.2* Pledge Agreement dated as of August 15, 1996 by Registrant and
International Wireless Communications, Inc. in favor of Bankers Trust
Company, as Collateral Agent
4.3* Unit Agreement dated as of August 15, 1996 among Registrant and
Bankers Trust Company, as Unit Agent and Warrant Agent and Marine
Midland Bank, as Trustee
4.4* Registration Rights Agreement dated as of August 15, 1996 among
Registrant, BT Securities Corporation, Toronto Dominion Securities
(USA) Inc. and Salomon Brothers Inc
5.1** Opinion of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian,
LLP
10.1* Warrant Agreement dated August 15, 1996 between Registrant and
Bankers Trust Company, as Warrant Agent
10.2* Securities Purchase Agreement dated as of December 6, 1995 among
Registrant and the Investors named therein
10.3* Fifth Amended and Restated Investor Rights Agreement dated as of
December 18, 1995 among Registrant and the Investors named therein
10.4* Registration Rights Agreement dated as of December 18, 1995 among
Registrant and the Investors named therein
10.5* Stock Purchase Agreement dated as of December 18, 1995 among
Registrant, John D. Lockton and Hugh B.L. McClung
10.6* Assignment and Assumption Agreement dated as of August 7, 1996
between Registrant and International Wireless Communications, Inc.
10.7* Consent, Waiver, Amendment, Assignment and Assumption Agreement
effective as of August 7, 1996 among Registrant and the other parties
named therein
10.8* Consent, Waiver, Amendment, Assignment and Assumption Agreement
effective as of August 7, 1996 among International Wireless
Communications, Inc. and the parties named therein
10.9* 1996 Stock Option/Stock Issuance Plan
10.10* Form of Indemnification Agreement
10.11 Real Property Lease between Registrant and PM Realty Group, dated May
5, 1994.
10.12A+* Shareholders Agreement by and among Shubila Holding Sdn Bhd, the
Registrant and Laranda Sdn Bhd, dated March 26, 1996.
10.12B License granted to Syarikat Telefon Wireless (Malaysia) Sdn Bhd
("STW"), dated November 16, 1994.
10.12C+ Access and Interconnect Agreement between Telekom Malaysia Berhad and
STW, dated August 16, 1994.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
------- -------
<C> <S>
10.12D+ Loan Agreement among STW, Permata Merchant Bank Berhad ("Permata")
and certain financial institutions listed therein, dated August 18,
1995; Option Agreement between Permata and the Registrant, dated
October 2, 1995; Collateral Agreement among the Registrant, Shubila
Holding Sdn. Bhd., Laranda Sdn. Bhd, STW and Permata, dated October
2, 1995; Agreement to Allocate Responsibility among the Registrant,
Shubila Holding Sdn. Bhd. and Laranda Sdn. Bhd, dated November 1995.
10.13A** Cooperation Agreement on Network Interconnection of Mobisel STBS with
Telkom PSTN between PT. (Persero) Telekomunikasi Indonesia ("Telekom
Indonesia") and PT Mobile Selular Indonesia, dated August 21, 1996.
10.13B Sale and Termination Agreement among PT Rajasa Hazanah Perkasa
("RHP"), PT Deltona Satya Dinamika ("DSD"), PT Bina Reksa Perdana
("BRP"), the Registrant and Bell Atlantic Indonesia, Inc. ("BA"),
dated October 11, 1995; Promissory Note executed by RHP, DSD, BRP and
the Registrant in favor of BA, dated October 11, 1995.
10.13C Shareholders' Agreement among BRP, the Registrant, DSD and RHP, dated
November 9, 1995.
10.13D Cooperative Agreement among Telekom Indonesia, Yayasan Dana Pensiun
Pegawai PT Telkom and RHP, dated November 30, 1995.
10.13E License granted to RHP, dated April 28, 1995.
10.13F Facility Agreement between PT Mobile Selular Indonesia ("Mobisel")
and Nissho Iwai International (Singapore) Pte., Ltd. ("Nissho Iwai"),
dated March 12, 1996; Share Pledge Agreement between RHP and Nissho
Iwai, dated March 12, 1996.
10.14 Stockholder Agreement between Teleparbs Participacoes Ltda. (RBS) and
the Registrant, dated August 31, 1995.
10.15* Shareholders' Agreement among Mainstream Limited, the Registrant and
Star Telecom Holding Limited, dated August 30, 1996.
23.1** Consent of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian,
LLP (included in Exhibit 5.1)
23.3* Consent of KPMG Peat Marwick LLP
23.4* Consent of KPMG Peat Marwick
23.5* Consent of Prasetio Utomo & Co.
24.1* Power of Attorney (page II-5)
25.1* Form T-1 for Marine Midland Bank, as Trustee
27.1* Financial Data Schedule
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Letter to Securities Dealers, Commercial Banks, Trust
Companies and Other Nominees
99.4* Form of Letters to Clients
99.5* Guidelines for Certification of Taxpayer Identification Number on
Form W-9
</TABLE>
* Previously filed.
** To be filed by Amendment.
+ Confidential treatment has been requested as to certain portions of these
exhibits.
<PAGE>
EXHIBIT 10.11
400 SOUTH EL CAMINO REAL
SAN MATEO, CALIFORNIA 94402
BASIC LEASE INFORMATION
-----------------------
<TABLE>
<S> <C> <C>
DATE: April 14, 1994
LANDLORD: PM REALTY GROUP, as managing agent for The Prudential
Insurance Company of America
TENANT: INTERNATIONAL WIRELESS COMMUNICATIONS
Lease References
----------------
PREMISES: Suite 1275
Net Rentable Square Footage: Approximately 2,817 Paragraph 1
TERM: Sixty (60) Months Paragraph 2
COMMENCEMENT DATE: June 1, 1994, provided that the Tenant Improvements to be Paragraph 2(c)
constructed by Landlord pursuant to Section 8 of this Lease
are substantially complete, with only standard punchlist items
to be completed
Paragraph 4
</TABLE>
<TABLE>
<CAPTION>
BASE RENT: MONTHS MONTHLY RENT ANNUAL RENT
------ ------------ -----------
<S> <C> <C>
1-12 $4,929.75 $59,157.00
13-24 $5,070.60 $60,847.20
25-60 $5,211.45 $62,537.40
</TABLE>
<TABLE>
<S> <C> <C>
BASE YEAR: 1995 Paragraph 5/6
TENANT'S
PERCENTAGE Paragraph 5/6
SHARE: 2.1%
Paragraph 9
USE: General Office Purposes
Paragraph 18
SECURITY DEPOSIT: $5,211.45
ALLOWANCE FOR
TENANT IMPROVEMENTS: $15,548.00 /s/ JDL /s/ DGF
BROKERS: Landlord: _______________________________________
_______________________________________
_______________________________________
ADDRESS FOR
NOTICES: Landlord: PM Realty Group
400 S. El Camino Real, Suite 650
San Mateo, CA 94402
Attn: Property Manager
Tenant: 400 S. El Camino Real, Suite 1275
San Mateo, California 94402
EXHIBITS: Exhibits A, B, C and D
INITIALS: /s/ DGF /s/ JDL
-------------------- --------------------
Landlord Tenant
</TABLE>
<PAGE>
THIS LEASE, which is effective as of the date set forth in the Basic
Lease Information, is entered into by Landlord and Tenant, as set forth in the
Basic Lease Information. Terms which are capitalized in this Lease and are not
expressly defined herein shall have the meanings set forth in the Basic Lease
Information.
1. PREMISES. Landlord leases to Tenant, and Tenant leases from Landlord, the
--------
Premises described in the Basic Lease Information and shown in Exhibit A
---------
attached hereto, together with the right in common to use the Common Areas of
the Building. The Building shall mean the land and other real property in the
parcel bounded by Fourth Avenue and El Camino Real, in San Mateo, California,
the fifteen-story office building constructed thereon known as "400 South El
Camino" (the "Office Building") and other improvements on or appurtenance to
said parcel, including, without limitation, a parking structure of six levels.
The Common Areas shall mean the areas and facilities within the Building
provided and designated by Landlord for the general use, convenience or benefit
of Tenant and other tenants and occupants of the Building (e.g., common
----
entrances and hallways; restrooms; trash disposal facilities; janitorial,
telephone and electrical closets) but excluding the Building's parking
structure.
2. TERM.
----
(a) The Term of this Lease shall commence on the Commencement Date and,
unless terminated on an earlier date in accordance with the terms of this
Lease, shall extend for the period (i.e., Term) specified in the Basic
----
Lease Information. If, for any reason, Landlord cannot deliver possession
of the Premises to Tenant by the Commencement Date, (i) Tenant shall not be
obligated to pay Rent until the possession of the Premises is provided to
Tenant; (ii) the Term shall not be extended; (iii) such failure shall not
affect the validity of this Lease, or the obligations of Tenant under this
Lease; and (iv) Landlord shall not be subject to any liability.
(b) Tenant may enter the Premises as of May 15, 1994 for the sole purpose
of installing furniture, fixtures and equipment and to prepare the Premises
for occupancy, provided that (i) Tenant shall not unreasonably interfere
with construction of tenant improvements by Landlord, and (ii) the entry
shall be subject to all the terms and provisions of this Lease, except that
the payment of Rent shall commence as of the Commencement Date.
3. RENT.
----
(a) As used in this Lease, the term "Rent" shall include: (i) the Base
Rent; (ii) Tenant's Percentage Share of the total dollar increase, if any,
in the Operating Expenses paid or incurred by Landlord during each calendar
year over the Operating Expenses incurred in the Base Year ("Base Operating
Expenses"); (iii) Tenant's Percentage Share of the total dollar increase,
if any, in the Real Property Taxes paid or incurred by Landlord in each
calendar year over the Real Property Taxes incurred in the Base Year ("Base
Real Property Taxes"); and (iv) all other amounts which Tenant is obligated
to pay under the terms of this Lease.
(b) Tenant hereby acknowledges that late payment by Tenant to Landlord of
Rent and any other sums to be paid to Landlord hereunder after the
expiration of any applicable grace period will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited
to, processing and accounting charges, and late charges which may be
imposed on Landlord by the terms of any trust deed covering the Premises.
Accordingly, if any installment of Rent or any other sums due from Tenant
shall not be received by Landlord within five (5) days of the date due,
Tenant shall pay to Landlord a late charge equal to six percent (6%) of
such overdue amount. The parties hereby agree that such late charges
represents a fair and reasonable estimate of the cost Landlord will incur
by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default with
respect to such overdue amount, nor prevent Landlord from exercising any of
the other rights and remedies granted hereunder.
(c) Any amount due to Landlord, if not paid when due, shall bear interest
from the date due until paid at the rate of ten percent (10%) annum or, if
a higher rate is legally permissible, at the highest rate legally permitted
(the "Interest Rate"), provided that interest shall not be payable on late
charges incurred by Tenant nor on any amount upon which late charges are
paid by Tenant to the extent such interest would cause the total interest
to be in excess of that legally permitted. Payment of interest shall not
excuse or cure any default hereunder by Tenant.
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(d) All payments due from Tenant to Landlord shall be paid to Landlord,
without prior demand or notice, deduction or offset, in lawful money of the
United States of America at Landlord's address for notices hereunder or to
such other person at such other place as Landlord may from time to time
designate by notice to Tenant.
4. BASE RENT. Tenant shall pay Base Rent to Contract Manager (or such other
---------
entity designated by Landlord), in advance, on the first day of each calendar
month of the Term, at Contract Manager's address for notices (as set forth in
the Basic Lease Information) or at such other address as Landlord may designate.
The Base Rent shall be the amount set forth in the Basic Lease Information.
5. ADDITIONAL RENT - ANNUAL RENT ADJUSTMENTS/OPERATING EXPENSES.
------------------------------------------------------------
(a) Tenant shall pay, as Rent, Tenant's Percentage Share of the total
dollar increase, if any, in the Operating Expenses paid or incurred by
Landlord during each calendar year over the Base Operating Expenses.
(b) The term "Operating Expenses" shall mean (i) all of Landlord's costs
and expenses of management, operation, repair and maintenance of the
Building (including the Building's parking structure) as determined by
Landlord in accordance with generally accepted accounting principles or
other recognized accounting principles, consistently applied, including,
without limitation, (1) wages, salaries and payroll burden of employees,
(2) management fees, (3) janitorial, maintenance, guard and other services,
(4) Building office rent or rental value, (5) power, water, waste disposal
and other utilities; (6) materials and supplies, (7) maintenance and
repairs, (8) insurance premiums and the deductible portion of any insured
loss, and (9) depreciation on personal property; (ii) costs, or a portion
thereof, properly allocable to the Building of any capital improvements
made to the Building by Landlord which comprise labor-saving devices or
other equipment intended to improve the operating efficiency of any system
within the Building (such as an energy management computer system); and
(iii) costs properly allocable to the Building of any capital improvements
made to the Building by Landlord that are required under any governmental
law or regulation that was not applicable to the Building at the
Commencement Date, or that are reasonably required for the health and
safety of tenants in the Building, the costs, or allocable portion thereof,
to be amortized over such reasonable period as Landlord shall determine,
together with interest upon the unamortized balance at the Interest Rate or
such higher rate as may have been paid by Landlord on funds borrowed for
the purpose of constructing the capital improvements. If Landlord elects to
self-insure or includes the Building under blanket insurance policies
covering multiple properties, then the term "Operating Expenses" shall
include the portion of the cost of such self-insurance or blanket insurance
allocated by Landlord to this Building. If less than ninety five percent
(95%) of the rentable area of the Building is occupied, Operating Expenses
shall be adjusted to equal Landlord's reasonable estimate of Operating
Expenses if ninety five percent (95%) of the total rentable area of the
Building were occupied. Operating Expenses shall not include: Real Property
Taxes; depreciation on the Building other than depreciation on exterior
window draperies provided by Landlord and carpeting in the Common Areas;
costs of tenant improvements; real estate brokers' commissions; capital
items other than those referred to in clauses (ii) and (iii) above; costs
incurred to correct construction defects; costs incurred to clean up any
Hazardous Substances on the Property; costs incurred as a result of the
negligence or breach of contract of Landlord, its agents, employees or
contractors; costs for which Landlord is actually reimbursed by third
parties, including warranties and guaranties, provided that Landlord shall
use all reasonable efforts to obtain such reimbursement; Landlord's general
overhead, or any costs for the operation of the parking structure or to
furnish parking services.
(c) During December of each calendar year during the Term, or as soon
thereafter as practicable, Landlord shall give Tenant written notice of
Landlord's estimate of any amount of Operating Expenses in excess of the
Base Operating Expenses and the amount of the increase which will be
payable for the ensuing calendar year. On or before the first day of each
month during the ensuing calendar year, Tenant shall pay to Landlord one-
twelfth (1/12) of the estimated amount; provided, however, that if notice
is not given in December, Tenant shall continue to pay on the basis of the
then applicable Rent until the month after the notice is given. If at any
time it appears to Landlord that the increased amount payable for the
current calendar year will vary from Landlord's estimate by more than five
percent (5%), Landlord may give notice to Tenant of Landlord's revised
estimate for the year, and subsequent payments by Tenant for the year shall
be based on the revised estimate; provided, however, that Landlord shall
not give notice of a revised estimate for any year more frequently than
once a calendar quarter.
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(d) Within one hundred twenty (120) days after the close of each calendar
year of the Term, or as soon after the one hundred twenty (120) day period
as practicable, Landlord shall deliver to Tenant a statement of the
adjustment to the Operating Expenses for the prior calendar year. If, on
the basis of the statement, Tenant owes an amount that is less than the
estimated payments for the calendar year previously made by Tenant,
Landlord shall apply the excess to the next payment of increased Operating
Expenses due. If, on the basis of the statement, Tenant owes an amount
that is more than the estimated payments for the calendar year previously
made by the Tenant, Tenant shall pay the deficiency to Landlord within
thirty (30) days after delivery of the statement. The statement of
Operating Expenses shall be presumed correct and shall be deemed final and
binding upon Tenant unless (i) Tenant in good faith objects in writing
thereto within sixty (60) days after delivery of the statement to Tenant
(which writing shall state, in reasonable detail, all of the reasons for
the objection); and (ii) Tenant pays in full, within thirty (30) days after
delivery of the statement to Tenant, any amount owed by Tenant with respect
to the statement which is not in dispute. If Tenant objects to Landlord's
allocation to this Property of the cost of self-insurance or blanket
insurance, such allocation shall nonetheless be presumed correct and shall
be deemed final and binding upon Tenant unless Tenant's timely written
objection includes credible evidence that Landlord could have obtained
substantially comparable insurance coverage for this Property alone at
lower cost.
6. ADDITIONAL RENT - ANNUAL RENT ADJUSTMENTS/REAL PROPERTY TAXES.
-------------------------------------------------------------
(a) Tenant shall pay, as Rent, Tenant's Percentage Share of the total
dollar increase, if any, in the Real Property Taxes paid or incurred by
Landlord in each calendar year over the Base Real Property Taxes.
(b) The term "Real Property Taxes" shall mean any ordinary or
extraordinary form of assessment or special assessment, license fee, rent
tax, levy, penalty (if a result of Tenant's delinquency), or tax, other
than net income, premium, estate, succession, inheritance, transfer or
franchise taxes, imposed by any private or public authority having the
direct or indirect power to tax, assess or levy, or by any city, county,
state or federal government for any maintenance or improvement or other
district or division thereof which becomes payable during the term of this
Lease. The term shall include all transit charges, housing fund
assessments, association charges, real estate taxes and all other taxes
relating to the Premises and/or Building, all other taxes which may be
levied in lieu of real estate taxes, all assessments, assessment bonds,
levies, fees, and other governmental charges (including, but not limited
to, charges for traffic facilities, improvements, child care, water
services studies and improvements, and fire services studies and
improvements) for amounts necessary to be expended because of governmental
orders, whether general or special, ordinary or extraordinary, unforeseen
as well as foreseen, of any kind and nature for public improvement,
services, benefits or any other purposes which are assessed, levied,
confirmed, imposed or become a lien upon the Premises or Building or become
payable during the Term.
(c) It is acknowledged by Landlord and Tenant that Proposition 13 was
adopted by the voters of the State of California in the June, 1978
election, and that assessments, taxes, fees, levies and charges may be
imposed by governmental agencies for such purposes as fire protection,
street, sidewalk, road, utility construction and maintenance, refuse
removal and for other governmental services which formerly may have been
provided without charge to property owners or occupants. It is the
intention of the parties that all new and increased assessments, taxes,
fees, levies and charges due to Proposition 13 or any other cause are to be
included within the definition of Real Property Taxes for purposes of this
Lease.
(d) During December of each calendar year during the Term, or as soon
thereafter as practicable, Landlord shall give Tenant written notice if
Landlord estimates that the Real Property Taxes will exceed the Base Real
Property Taxes, and the amount of the increase which will be payable for
the ensuing calendar year. On or before the first day of each month during
the ensuing calendar year, Tenant shall pay to Landlord one-twelfth
(1/12th) of the estimated amount; provided, however, that if notice is not
given in December, Tenant shall continue to pay on the basis of the then
applicable Rent until the month after the notice is given. If at any time
it appears to Landlord that the increased amount payable for the current
calendar year will vary from Landlord's estimate by more than five percent
(5%), Landlord may give notice to Tenant of Landlord's revised estimate for
the year, and subsequent payments by Tenant for the year shall be based on
the revised estimate; provided, however, that Landlord shall not give
notice of a
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revised estimate for any year more frequently than once a calendar quarter.
(e) Within one hundred twenty (120) days after the close of each calendar
year of the Term, or as soon after the one hundred twenty (120) day period
as practicable, Landlord shall deliver to Tenant a statement of the
adjustment to the Real Property Taxes for the prior calendar year; the
statement shall be final and binding upon Landlord and Tenant. If, on the
basis of the statement, Tenant owes an amount that is less than the
estimated payments for the calendar year previously made by Tenant,
Landlord shall apply the excess to the next payment of increased Real
Property Taxes due. If, on the basis of the statement, Tenant owes an
amount that is more than the estimated payments for the calendar year
previously made by Tenant, Tenant shall pay the deficiency to Landlord
within thirty (30) days after delivery of the statement.
(f) Notwithstanding any other provision hereof, Tenant shall pay the full
amount of any increase in Real Property Taxes during the Term resulting
from any and all alterations and tenant improvements of any kind whatsoever
placed in, on or about the Premises for the benefit of, at the request of,
or by Tenant. Tenant shall pay, prior to delinquency, all taxes assessed
or levied against Tenant's personal property in, on or about the Premises.
When possible, Tenant shall cause its personal property to be assessed and
billed separately from the real or personal property of Landlord.
7. PRORATION OF RENT. If the Commencement Date is not the first day of the
-----------------
month, or if the end of the Term is not the last day of the month, Rent shall be
prorated on a monthly basis (based upon a thirty (30) day month) for the
fractional month during the month which this Lease commences or terminates. The
termination of this Lease shall not affect the obligations of Landlord and
Tenant pursuant to subsections 5(d) and 6(e) which are to be performed after the
termination.
8. TENANT IMPROVEMENTS. Landlord agrees to construct within the Premises
-------------------
certain improvements ("Tenant Improvements") pursuant to the terms of Exhibit B.
---------
9. USE OF PREMISES. Tenant shall use the Premises solely for the use set
---------------
forth in the Basic Lease Information, and Tenant shall not use the premises for
any other purpose without obtaining the prior written consent of Landlord, which
consent shall be given or withheld in the sole and absolute discretion of
Landlord without any requirement of reasonableness in the exercise of that
discretion. Tenant shall, at its own cost and expense, comply with all
governmental laws, rules, regulations, orders, permits, licenses and ordinances
which relate to the condition, use or occupancy of the Premises during the term
of this Lease. Tenant shall not use the Premises in any manner that will
constitute waste, nuisance, or unreasonable annoyance (including, without
limitation, use of loudspeakers or sound or light apparatus that can be heard or
seen outside the Premises) to other tenants in the Building. Nothing in this
Section 9 shall require Tenant (i) to perform or pay the cost of any item which
would properly be capitalized under generally accepted accounting principles,
unless required by Tenant's particular use of the Premises (as opposed to office
uses generally), or (ii) to correct any condition which violates laws applicable
to the Building as such laws are constructed or implemented as of the
Commencement Date, all of which shall be performed by Landlord at its cost.
10. ALTERATIONS.
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(a) Tenant shall not make or suffer to be made any alterations, additions
or improvements to the Premises or any part thereof (collectively, the
"Alterations"), without Landlord's prior written consent, which consent
shall not be unreasonably withheld. All Alterations shall be made by
Landlord for Tenant's account in accordance with the procedures set forth
in this Section and shall immediately become Landlord's property. At the
end of the Term hereof, all Alterations shall remain on the Premises
without compensation to Tenant unless Landlord elects by notice to Tenant
to have Tenant remove any Alterations made subsequent to the Commencement
Date, in which event Tenant shall be responsible for the cost of restoring
the Premises to their condition prior to the installment of such subsequent
Alterations.
(b) Plans and specifications for the Alterations shall be prepared at
Tenant's expense by its architect, or by Landlord's architect if Tenant so
elects, and by engineers designated by Landlord where mechanical or
electrical engineering services are required by the nature of the
Alterations. Tenant shall cause any architect retained by it to follow the
standard construction administration procedures and to utilize the standard
specifications and details promulgated by Landlord for the Building. The
plans and specifications shall be subject to approval by Landlord and
Tenant, which
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approval shall not be unreasonably withheld by either party. Following such
approval Landlord shall obtain quotations of the cost of the Alterations as
reflected by the approved plans and specifications from one or more general
contractors approved by Landlord for construction in the Building. Landlord
shall submit the quotations to Tenant, shall accept the quotation approved
by Tenant, and shall proceed to enter into a contract for the construction
or installation of the Alterations with the contractor whose quotation was
approved by Tenant. Landlord itself does not warrant the cost of the
Alterations, the timeliness of performance or the quality of the
contractor's work but Landlord shall use reasonable efforts to secure
performance of the construction contract for Tenant's benefit.
(c) In the event Landlord or the contractor is instructed by Tenant to
proceed with any changes to the Alterations without a prior determination
of any increased costs resulting from such changes and without approval of
such increases by Tenant, or in the event Tenant is responsible for
increased costs attributable to a delay or acceleration in the time for
construction, the amount of any increased costs shall be as reasonably
determined by Landlord upon completion of the Alterations, subject only to
Landlord's reasonable efforts in causing the contractor to furnish Tenant
appropriate back-up information concerning increased costs, if any.
(d) The cost of the Alterations to be paid by Tenant shall include a
reasonable charge for he administration by Landlord or its agent of the
construction or installation of the Alterations.
(e) Tenant shall pay to Landlord all amounts payable by Tenant pursuant to
this Section within fifteen (15) days after billing by Landlord. Bills may
be rendered during the progress of the Alterations so as to enable Landlord
to pay the contractor, architect or engineer without advancing Landlord's
own funds.
(f) If, because of any act or omission of Tenant or anyone claiming by,
through, or under Tenant, any mechanics' lien or other lien is filed
against the Premises or the Building or against other property of Landlord
(whether or not the lien is valid or enforceable), Tenant shall, at its own
expense, cause it to be discharged of record within a reasonable time, not
to exceed thirty (30) days, after the date of the filing. In addition,
Tenant shall defend and indemnify Landlord and hold it harmless from any
and all claims, losses, damages, judgments, settlements, costs and
expenses, including attorneys' fees, resulting from the lien.
11. REPAIRS. Tenant, at all times during the Term and at Tenant's sole cost
-------
and expense, shall keep the Premises and every part thereof in good condition
and repair, ordinary wear and tear, damage thereto not caused by Tenant, by
fire, earthquake, acts of God or the elements excepted. Tenant hereby waives
all right to make repairs at the expense of Landlord or in lieu thereof to
vacate the Premises as provided in California Civil Code Section 1942 or any
other law, statute or ordinance now or hereafter in effect. Landlord has no
obligation and has made no promise to alter, remodel, improve, repair, decorate
or paint the Premises or the Building or any part thereof. No representations
respecting the condition of the Premises or the Building or any part thereof or
otherwise have been made by Landlord to Tenant. Nothing in this Section 11
shall require Tenant (i) to perform or pay the cost of any item which would
properly be capitalized under generally accepted accounting principles, unless
required by Tenant's particular use of the Premises (as opposed to office uses
generally), (ii) to correct any construction defect, or (iii) to repair any item
above the ceiling of the Premises, and Landlord shall be responsible for the
costs of items (i) and (ii) above, except as provided to the contrary in (i).
12. DAMAGE OR DESTRUCTION.
---------------------
(a) If the Premises are damaged or destroyed, Landlord shall promptly and
diligently repair the Premises and any Tenant Improvements installed
therein by Landlord unless Landlord has the option to terminate this Lease
as provided herein, and Landlord elects to terminate.
(b) Landlord and Tenant each shall have the option to terminate this Lease
if the Premises or the Building is destroyed or damaged by fire or other
casualty, regardless of whether the casualty is insured against under this
Lease, if Landlord reasonably determines that the repair of the Premises or
the Building, as the case may be, cannot be completed within one hundred
eighty (180) days after the commencement of restoration. Landlord shall
give notice to Tenant of its determination within thirty (30) days after
the occurrence of the casualty. If a party desires to exercise the right
to terminate this Lease as a result of a casualty, the party shall exercise
the right by giving the other party written notice of its election to
terminate within thirty (30) days after the Landlord has given to Tenant
the aforementioned notice of determination, in which event this
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Lease shall terminate fifteen (15) days after the date of the notice of
termination. If neither Landlord nor Tenant exercises the right to
terminate this Lease, Landlord shall promptly commence the process of
obtaining necessary permits and approvals, and shall commence repair of the
Premises or the Building as soon as practicable and thereafter prosecute
the repair diligently to completion, in which event this Lease shall
continue in full force and effect.
(c) Landlord's obligation, should Landlord elect or be obligated to repair
or rebuild, shall be limited to the Building shell and any tenant
improvements which are constructed and paid for by Landlord. Tenant, at
its option and expense, shall replace or fully repair all trade fixtures,
equipment and other improvements installed by Tenant and existing at the
time of the damage or destruction.
(d) In the event of any damage or destruction to the Premises which does
not result in termination of this Lease, the Base Rent shall be temporarily
abated proportionately to the degree the Premises are untenantable as a
result of the damage or destruction, commencing from the date of the damage
or destruction and continuing during the period required by Landlord to
substantially complete its repair and restoration of the Premises;
provided, however, that nothing herein shall preclude Landlord from being
entitled to collect the full amount of any rent loss insurance proceeds.
Tenant shall not be entitled to any compensation or damages from Landlord
for loss of the use of the Premises, damage to Tenant's personal property
or any inconvenience occasioned by any damage, repair or restoration.
Tenant hereby waives the provisions of Section 1932, Subdivision 2, and
Section 1933, Subdivision 4, of the California Civil Code, and the
provisions of any similar law hereafter enacted.
(e) In addition to the rights to termination under subsection 12(b),
Landlord shall have the right to cancel and terminate this Lease as of the
date of the occurrence of destruction or damage to the Premises or the
Building in the case of a casualty that occurs during the last twelve (12)
months of the Term if Landlord determines it would require more than ninety
(90) days to repair. Landlord shall give notice of its election to
terminate this Lease under this subsection 12(e) within thirty (30) days
after Landlord has determined that the damage or destruction would require
more than ninety (90) days to repair. If Landlord does not elect to
terminate this Lease, the repair of the damage shall be governed by
subsection 12(a) or 12(b), as the case may be.
(f) If this Lease is terminated, Landlord may keep all the insurance
proceeds resulting from the damage, except for those proceeds which
specifically insured Tenant's personal property and trade fixtures.
13. EMINENT DOMAIN. If all or any part of the Premises is taken for public or
--------------
quasi-public use by a governmental authority under the power of eminent domain
or is conveyed to a governmental authority in lieu of such taking, and if the
taking or conveyance causes the remaining part of the Premises to be
untenantable and inadequate for use by Tenant for the purpose for which they
were leased, then Tenant, at its option and by giving notice within fifteen (15)
days after the taking, may terminate this Lease as of the date Tenant is
required to surrender possession of the Premises. If a part of the Premises is
taken or conveyed but the remaining part is tenantable and adequate for Tenant's
use, then (i) this Lease shall be terminated as to the part taken or conveyed as
of the date Tenant surrenders possession; (ii) Landlord shall make such repairs,
alterations and improvements as may be necessary to render the part not taken or
conveyed tenantable; and (iii) the Rent shall be reduced in proportion to the
part of the Premises taken or conveyed. All compensation awarded for the taking
or conveyance shall be the property of Landlord without any deduction therefrom
for any estate of Tenant, and Tenant hereby assigns to Landlord all its right,
title and interest in and to the award. Tenant shall have the right, however,
to recover from the governmental authority, but not from Landlord, such
compensation as may be awarded to Tenant on account of the interruption of
Tenant's business, moving and relocation expenses and removal of Tenant's trade
fixtures and personal property.
14. INDEMNITY AND INSURANCE.
-----------------------
(a) Landlord shall obtain and keep in force during the Term of this Lease
an all-risk policy of insurance insuring the Building, but not Tenant's
furniture, fixtures, or equipment or any tenant improvements, against loss
or damage by fire and extended coverage hazards. Landlord may, but shall
not be required to, obtain and keep in force during the Term of this Lease
an insurance policy providing earthquake coverage for the Building.
Landlord may, but shall not be required to, carry similar insurance
policies on any tenant improvements or on any Alterations upon the Premises
in accordance with the provisions of this Lease. If the annual premiums
for any such
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insurance exceed the standard premium rates due to the nature of Tenant's
operations, Tenant shall, upon receipt of appropriate premium invoices,
promptly reimburse Landlord for such excess premium.
(b) Tenant shall, at Tenant's sole cost and expense, obtain and keep in
force during the Term of this Lease: (i) a policy of comprehensive general
liability insurance (including contractual liability coverage) insuring
Tenant against any liability arising out of its use, occupancy, or
maintenance of the Premises and all areas appurtenant thereto with a
combined single limit of not less than Two Million Dollars ($2,000,000) for
property damage or injury to or death of one or more than one person n any
one accident or occurrence, (ii) workers' compensation insurance as
required by law; and (iii) an all-risk policy of insurance insuring the
personal property of Tenant in the Premises against loss or damage by fire
and extended coverage hazards, for full replacement value. The limits of
said insurance shall, however, not limit the liability of the Tenant
hereunder.
(c) All policies of insurance required to be carried by Tenant under this
Section shall be written by companies rated A+ or better in "Best's
Insurance Guide" and authorized to do business in California. A copy of
the paid-up policy evidencing such insurance (appropriately authenticated
by the insurer) or a certificate of the insurer certifying (i) that such
insurance policies have been issued, (ii) the limits of such policies, and
(iii) that the policies contain the provisions required hereunder, shall be
delivered to Landlord not less than five (5) business days prior to the
Commencement Date or such earlier date as Tenant or Tenant's contractors,
agents or employees first enter the Premises to commence work on any tenant
improvements required hereunder and, upon renewals, not less than thirty
(30) days prior to the expiration of such coverage.
(d) Each insurance policy required to be carried by Tenant hereunder shall
contain the following provisions: (i) a cross-liability clause, (ii) a
provision that such policy and the coverage evidenced thereby shall be
primary and non-contributing with respect to any policies carried by
Landlord and that any coverage carried by Landlord shall be excess
insurance; (iii) a provision including The Prudential Insurance Company of
America, PM Realty Group and any other parties in interest designated by
Landlord as additional insureds; and (iv) a provision requiring the insurer
to give Landlord thirty (30) days prior written notice before cancelling or
changing the coverage provided by any such policy.
(e) Tenant hereby waives all claims against Landlord for damages to any
property or injury or death of any person occurring in, upon or about the
Premises arising at any time and from any cause other than by reason of
gross negligence or intentionally wrongful act of Landlord, its employees
or contractors, and Tenant shall hold Landlord harmless from any damage to
any property or injury to or death of any person occurring in, on or about
the Premises except such as is caused by gross negligence or intentionally
wrongful act or Landlord, its contractors or employees. The foregoing
indemnity obligation of Tenant shall include reasonable costs and expenses
incurred by Landlord from the first notice that any claim or demand is to
be made or may be made. The provisions of this Section shall survive the
termination of this Lease with respect to any damage, injury or death
occurring prior to such termination.
15. ASSIGNMENT AND SUBLETTING.
-------------------------
(a) Tenant shall not, without the prior consent of Landlord, which consent
shall not be unreasonably withheld by Landlord, assign or hypothecate this
Lease or any interest herein, sublet the Premises or any part thereof, or
permit the use of Premises by any party other than Tenant. This Lease
shall not, nor shall any interest herein, be assignable as to the interest
of Tenant by operation of law without the consent of Landlord, which
consent shall not be unreasonably withheld. Any of the foregoing acts
without such consent shall be void and shall, at the option of Landlord,
terminate this Lease. In connection with each consent requested by Tenant,
Tenant shall submit to Landlord the terms of the proposed transaction, the
identity of the parties to the transaction, the proposed documentation for
the transaction and all other information reasonably requested by Landlord
concerning the proposed transaction and the parties involved therein.
(b) Without limiting the other instances in which it may be reasonable for
Landlord to withhold its consent to an assignment or subletting, Landlord
and Tenant acknowledge that it shall be reasonable for Landlord to withhold
its consent in the following instances:
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(i) if at the time consent is requested or at any time prior to the
granting of consent, Tenant is in default under this Lease or would be
in default under this Lease but for the pendency of any grace or cure
period granted hereunder;
(ii) if the proposed assignee or sublessee is a governmental agency;
(iii) if, in Landlord's reasonable judgment, the use of the Premises
by the proposed assignee or sublessee would not be comparable to the
types of office use by other tenants in the Building, would entail any
alterations which would lessen the value of the leasehold improvements
in the Premises, would result in more than a reasonable number of
occupants per floor, or would require increased services by Landlord;
(iv) if, in Landlord's reasonable judgment, the financial worth of
the proposed assignee or sublessee does not meet the credit standards
applied by Landlord for other tenants under leases with comparable
terms, or the character, reputation, or business of the proposed
assignee or sublessee is not consistent with the quality of the other
tenancies in the Building; and
(v) in the case of a subletting of less than the entire Premises,
if the subletting would result in the division of the Premises into
more than a total of three parcels, would result in the area of each
parcel being less than one-half of the net rentable area of the
Premises, would create a parcel the configuration of which would
adversely affect the marketability of the remaining space in the
Premises, or would require access to be provided through space leased
or held for lease to another tenant or improvements to be made outside
of the Premises.
(c) If any time or from time to time during the Term of this Lease Tenant
desires to sublet all or any part of the Premises, Tenant shall give notice
to Landlord setting forth the terms of the proposed subletting and the
space so proposed to be sublet. Landlord shall have the option, exercisable
by notice given to Tenant within ten (10) business days after Tenant's
notice is given, to sublet from Tenant such space at the rental and other
terms set forth in Tenant's notice, or, if the proposed subletting is for
the entire Premises for a sublet term ending within the last year of this
Lease, to terminate this Lease. If Landlord does not exercise such option,
Tenant shall be free to sublet such space to any third party on the same
terms set forth in the notice given to Landlord, subject to obtaining
Landlord's prior consent as hereinabove provided.
(d) Notwithstanding the provisions of subsections 15(a) and 15(b) above,
Lessee may assign this Lease or sublet the Premises or any portion thereof,
with notice to Landlord but without the necessity of Landlord's consent and
without extending any option to Landlord pursuant to subsection 15(c)
above, to any corporation which controls, is controlled by or is under
common control with Tenant, to any corporation resulting from the merger or
consolidation with Tenant, or to any person or entity which acquires all
the assets of Tenant as a going concern of the business that is being
conducted on the Premises.
(e) No sublessee (other than Landlord if it exercises its option pursuant
to subsection 15(c) above) shall have a right further to sublet without
Landlord's prior consent, which Tenant acknowledges may be withheld in
Landlord's absolute discretion, and any assignment by a sublessee of its
sublease shall be subject to Landlord's prior consent in the same manner as
if Tenant were entering into a new sublease.
(f) In the case of an assignment, one-half of any sums or other economic
consideration received by Tenant as a result of such assignment shall be
paid to Landlord after first deducting the unamortized cost of leasehold
improvements paid for by Tenant, and the cost of any real estate
commissions incurred by Tenant in connection with such assignment.
(g) In the case of subletting, one-half of any sums or economic
consideration received by Tenant as a result of such subletting shall be
paid to Landlord after first deducting (i) the Rent due hereunder, prorated
to reflect only Rent allocable to the sublet portion of the Premises, (ii)
the cost of tenant improvements made to the sublet portion of the Premises
at Tenant's cost, amortized over the term of this Lease except for tenant
improvements made for the specific benefit of the sublessee, which shall be
amortized over the term of the sublease, and (iii) the cost of any real
estate commissions incurred by Tenant in connection with such subletting,
amortized over the term of the sublease.
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(h) Regardless of Landlord's consent, no subletting or assignment shall
release Tenant of Tenant's obligation or alter the primary liability of
Tenant to pay the Rent and to perform all other obligations to be performed
by Tenant hereunder. The acceptance of Rent by Landlord from any other
person shall not be deemed a waiver by Landlord of any provision hereof.
Consent to one assignment or subletting shall not be deemed consent to any
subsequent assignment or subletting. In the event of default by any
assignee of Tenant or any successor of Tenant in the performance of any of
the terms hereof, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against such assignee or successor.
Landlord may consent to subsequent assignments or subletting of this Lease
or amendments or modifications to this Lease with assignees of Tenant,
without notifying Tenant, or any successor of Tenant, and without obtaining
its or their consent thereto, and such action shall not relieve Tenant of
liability under this Lease.
(i) In the event Tenant shall assign or sublet the Premises or request the
consent of Landlord to any assignment, subletting, hypothecation or other
action requiring Landlord's consent hereunder, then Tenant shall pay
Landlord's reasonable attorneys' fees incurred in connection therewith.
16. DEFAULT.
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(a) At the option of Landlord, a material breach of this Lease by Tenant
shall exist if any of the following events (severally, "Event of Default";
collectively, "Events of Default") shall occur: (i) if Tenant shall have
failed to pay Rent, including Tenant's Percentage Share of increased
Operating Expenses, Tenant's Percentage Share of increased Real Property
Taxes, or any other sum required to be paid hereunder when due, together
with interest at the Interest Rate, from the date the amount became due
through the date of payment, inclusive; (ii) if Tenant shall have failed to
perform any term, covenant or condition of this Lease except those
requiring the payment of money, and Tenant shall have failed to cure the
breach within fifteen (15) days after written notice from Landlord if the
breach could reasonably be cured within the fifteen (15) day period;
provided, however, if the failure could not reasonably be cured within the
fifteen (15) day period, then Tenant shall not be in default unless it has
failed to promptly commence and thereafter continue to make diligent and
reasonable efforts to cure the failure as soon as practicable as reasonably
determined by Landlord; (iii) if Tenant shall have assigned its assets for
the benefit of its creditors; (iv) if the sequestration of, attachment of,
or execution on, any material part of the property of Tenant or on any
property essential to the conduct of Tenant's business shall have occurred,
and Tenant shall have failed to obtain a return or release of the property
within thirty (30) days thereafter, or prior to sale pursuant to any
sequestration, attachment or levy, whichever is earlier; (v) if Tenant
shall have failed to continuously and uninterruptedly conduct its business
in the Premises, or shall have abandoned or vacated the Premises; (vi) if a
court shall have made or entered any decree or order adjudging Tenant to be
insolvent, or approving as properly filed a petition seeking reorganization
of Tenant, or directing the winding up or liquidation of Tenant, and the
decree or order shall have continued for a period of thirty (30) days;
(vii) if Tenant shall make or suffer any transfer which constitutes a
fraudulent or otherwise avoidable transfer under any provision of the
federal Bankruptcy Laws or any applicable state law; or (viii) if Tenant
shall have failed to comply with the provisions of Section 24 or 26. An
Event of Default shall constitute a default under this Lease.
(b) Upon an Event of Default, Landlord shall have the following remedies,
in addition to all other rights and remedies provided by law, equity,
statute or otherwise provided in this Lease, to which Landlord may resort
cumulatively or in the alternative:
(i) Landlord may continue this Lease in full force and effect, and
this Lease shall continue in full force and effect as long as Landlord
does not terminate Tenant's right to possession, and Landlord shall
have the right to collect Rent when due. During the period Tenant is
in default, Landlord may enter the Premises and relet it, or any part
of it, to third parties for Tenant's account, provided that any Rent
in excess of the Rent due hereunder shall be payable to Landlord.
Tenant shall be liable immediately to Landlord for all costs Landlord
incurs in reletting the Premises, including, without limitation,
brokers' commissions, expenses of cleaning and redecorating the
Premises required by the reletting and like costs. Reletting may be
for a period shorter or longer than the remaining Term of this Lease.
Tenant shall pay to Landlord the Rent and other sums due under this
Lease on the dates the Rent is due, less the Rent and other sums
Landlord receives from any reletting. No act by Landlord allowed by
this subsection 16(b)(i) shall terminate this
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Lease unless Landlord notifies Tenant in writing that Landlord elects
to terminate this Lease.
(ii) Landlord may terminate Tenant's right to possession of the
Premises at any time by giving written notice to that effect. No act
by Landlord other than giving written notice to Tenant shall terminate
this Lease. Acts of maintenance, efforts to relet the Premises or the
appointment of a receiver on Landlord's initiative to protect
Landlord's interest under this Lease shall not constitute a
termination of Tenant's right to possession. On termination, Landlord
shall have the right to remove all personal property of Tenant and
store it at Tenant's cost and to recover from Tenant as damages: (1)
the worth at the time of award of unpaid Rent and other sums due and
payable which had been earned at the time of termination; plus (2) the
worth at the time of award of the amount by which the unpaid Rent and
other sums due and payable which would have been payable after
termination until the time of award exceeds the amount of the Rent
loss that Tenant proves could have been reasonably avoided; plus (3)
the worth at the time of award of the amount by which the unpaid Rent
and other sums due and payable for the balance of the Term after the
time of award exceeds the amount of the Rent loss that Tenant proves
could be reasonably avoided; plus (4) any other amount necessary to
compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform Tenant's obligations under this Lease, or
which, in the ordinary course of things, would be likely to result
therefrom, including, without limitation, any costs or expenses
incurred by Landlord: (a) in retaking possession of the Premises,
including reasonable attorneys' fees and costs therefor; (b)
maintaining or preserving the Premises for reletting to a new tenant,
including repairs or alterations to the Premises for the reletting;
(c) leasing commissions; (d) any other costs necessary or appropriate
to relet the Premises; and (e) at Landlord's election, such other
amounts in addition to or in lieu of the foregoing as may be permitted
from time to time by the laws of the State of California.
The "worth at the time of award" of the amounts referred to in subsections
16(b)(ii)(1) and 16(b)(ii)(2) is computed by allowing interest at the
lesser of twelve percent (12%) per annum or the maximum rate permitted by
law, on the unpaid Rent and other sums due and payable from the termination
date through the date of award. The "worth at the time of award" of the
amount referred to in subsection 16(b)(ii)(3) is computed by discounting
the amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award, plus one percent (1%). Tenant waives
redemption or relief from forfeiture under California Code of Civil
Procedure Sections 1174 and 1179, or under any other present or future law,
if Tenant is evicted or Landlord takes possession of the Premises by reason
of any default of Tenant hereunder.
(c) Landlord shall not be deemed to be in default in the performance of
any obligation required to be performed by Landlord hereunder unless and
until Landlord has failed to perform the obligation within thirty (30) days
after receipt of written notice by Tenant to Landlord specifying wherein
Landlord has failed to perform the obligation; provided, however, that if
the nature of Landlord's obligation is such that more than thirty (30) days
are required for its performance, then Landlord shall not be deemed to be
in default if Landlord shall commence the performance within the thirty
(30) day period and thereafter shall diligently prosecute the same to
completion.
17. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS. If Tenant shall at any
----------------------------------------------
time commit an Event of Default, Landlord may, but shall not be obligated to,
make the payment or perform any other act to the extent Landlord may deem
desirable and, in connection therewith, pay expenses and employ counsel. Any
payment or performance by Landlord shall not waive or release Tenant from any
obligations of Tenant under this Lease. All sums so paid by Landlord, and all
penalties, interest and costs in connection therewith, shall be due and payable
by Tenant on the next day after any payment by Landlord, together with interest
thereon at the Interest Rate, from that date to the date of payment thereof by
Tenant to Landlord, plus collection costs and attorneys' fees. Landlord shall
have the same rights and remedies for the nonpayment thereof as in the case of
default in the payment of Rent.
18. SECURITY DEPOSIT. Tenant has deposited with Landlord the Security Deposit,
----------------
in the amount specified in the Basic Lease Information, as security for the full
and faithful performance of every provision of this Lease to be performed by
Tenant. If Tenant defaults with respect to any provision of this Lease, Landlord
may use, apply or retain all or any part of the Security Deposit for the payment
of any Rent or other sum in default, for the payment of any amount which
Landlord may expend or become obligated to expend by reason of Tenant's default,
or to compensate Landlord for any loss or damage which Landlord may suffer by
reason of Tenant's default. If any portion of the Security Deposit is used or
applied, Tenant
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shall deposit with Landlord, within ten (10) days after written demand therefor,
cash in an amount sufficient to restore the Security Deposit to its original
amount. Landlord shall not be required to keep the Security Deposit separate
from its general funds, and Tenant shall not be entitled to interest on the
Security Deposit.
19. SURRENDER OF PREMISES. By taking possession of the Premises, Tenant
---------------------
shall be deemed to have accepted the Premises and the Common Areas in good,
clean and completed condition and repair, subject to all applicable laws, codes
and ordinances. On the expiration or early termination of this Lease, Tenant
shall surrender the Premises to Landlord in its condition as of the Commencement
Date, normal wear and tear and casualty damage excepted. Tenant shall remove
from the Premises all of Tenant's personal property, trade fixtures and any
alterations required to be removed pursuant to Section 10. Tenant shall repair
damage or perform any restoration work required by the removal. If Tenant fails
to remove any personal property, trade fixtures or alterations after the end of
the Term, Landlord may remove the property and store it at Tenant's expense,
including interest at the Interest Rate. If the Premises are not so surrendered
at the termination of this Lease, Tenant shall indemnify Landlord against all
loss or liability resulting from delay by Tenant in so surrendering the
Premises, including, without limitation, any claims made by any succeeding
tenant, losses to Landlord due to lost opportunities to lease to succeeding
tenants, and attorneys' fees and costs.
20. HOLDING OVER. If Tenant remains in possession of all or any part of the
------------
Premises after the expiration of the Term or the termination of this Lease, the
tenancy shall be month-to-month only and shall not constitute a renewal or
extension for any further term. In such event, Base Rent shall be increased in
an amount equal to one hundred fifty percent (150%) of the Base Rent during the
last month of the Term (including any extensions), and any other sums due under
this Lease shall be payable in the amount, and at the times, specified in this
Lease. The month-to-month tenancy shall be subject to every other term,
condition, covenant and agreement contained in this Lease and Tenant shall
vacate the Premises immediately upon Landlord's request.
21. ACCESS TO PREMISES. Tenant shall permit Landlord and its agents to enter
------------------
the Premises at all reasonable times upon reasonable notice, except in the case
of an emergency (in which event no notice shall be necessary), to inspect the
Premises; to post Notices of Nonresponsibility and similar notices and to show
the Premises to interested parties such as prospective mortgagors, purchasers
and tenants; to make necessary alterations, additions, improvements or repairs
either to the Premises, the Building, or other premises within the Building; and
to discharge Tenant's obligations hereunder when Tenant has failed to do so
within a reasonable time after written notice from Landlord. The above rights
are subject to reasonable security regulations of Tenant, and to the requirement
that Landlord shall at all times act in a manner to cause the least possible
interference with Tenant's operations.
22. SIGNS. Tenant shall install no sign in or on the Building or Premises
-----
without Landlord's approval prior to installation, which approval may be
withheld in Landlord's sole discretion. The costs of any permitted sign, and
the costs of its installation, maintenance and removal, shall be at Tenant's
sole expense and shall be paid within ten (10) days of Tenant's receipt of a
bill from Landlord for the costs.
23. WAIVER OF SUBROGATION. Anything in this Lease to the contrary
---------------------
notwithstanding, Landlord and Tenant each hereby waives and releases the other
of and from any and all rights of recovery, claim, action or cause of action
against the other, its subsidiaries, directors, agents, officers and employees,
for any loss or damage that may occur in the Premises or the Building; to
improvements to the Building or personal property (building contents) within the
Building; or to any furniture, equipment, machinery, goods and supplies not
covered by this Lease which Tenant may bring or obtain upon the Premises or any
additional improvements which Tenant may construct on the Premises by reason of
fire, the elements or any other cause which is required to be insured against
under this Lease, regardless of cause or origin, including negligence of
Landlord or Tenant and their agents, subsidiaries, directors, officers and
employees, to the extent insured against under the terms of any insurance
policies carried by Landlord or Tenant and in force at the time of any such
damage or which would be covered by a standard form "all risk" insurance policy
for the full replacement value of the property in question, but only if the
insurance in question permits such a partial release in connection with
obtaining a waiver of subrogation from the insurer. Because this Section will
preclude the assignment of any claim mentioned in it by way of subrogation or
otherwise to an insurance company or any other person, each party to this Lease
agrees immediately to give to each insurance company written notice of the terms
of the mutual waivers contained in this Section and to have the insurance
policies properly endorsed, if necessary, to prevent the invalidation of the
insurance coverages by reason of the mutual waivers contained in this Section.
The parties acknowledge that the preceding terms are acceptable to their
respective insurance carriers as of
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the date hereof, and each party agrees to give the other advance written notice
if its insurance carrier will no longer allow such a waiver.
24. SUBORDINATION.
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(a) Except as provided in subsection 24(b), this Lease is subject and
subordinate to all ground and underlying leases, mortgages and deeds of
trust which now or may hereafter affect the Building or the Premises, to
any CC&R's, and to all renewals, modifications, consolidations,
replacements and extensions thereof. Within ten (10) days after Landlord's
written request therefor, Tenant shall execute any and all documents
required by Landlord, the lessor under any ground or underlying lease
("Lessor"), or the holder or holders of any mortgage or deed of trust
("Holder") to make this Lease subordinate to the lien of any lease,
mortgage or deed of trust, as the case may be.
(b) If a Lessor or a Holder advises Landlord that it desires or requires
this Lease to be prior and superior to a lease, mortgage or deed of trust,
Landlord may notify Tenant. Within seven (7) days of Landlord's notice,
Tenant shall execute, have acknowledged and deliver to Landlord any and all
documents or instruments, in the form presented to Tenant, which Landlord,
Lessor or Holder deems necessary or desirable to make this Lease prior and
superior to the lease, mortgage or deed of trust.
(c) If Landlord or Holder requests Tenant to execute a document
subordinating this Lease, the document shall provide that, so long as
Tenant is not in default, Lessor or Holder shall agree to enter into either
a recognition or attornment agreement with Tenant, or a new lease with
Tenant upon the same terms and conditions as to possession of the Premises,
which shall provide that Tenant may continue to occupy the Premises so long
as Tenant shall pay the Rent and observe and perform all the provisions of
this Lease to be observed and performed by Tenant. Subject to the
foregoing, Tenant shall attorn to any Lessor or Holder or any successors in
interest or assigns of either in the event of a foreclosure, deed in lieu
or other transfer of the Building.
25. TRANSFER OF THE PROPERTY. Upon transfer of the Building and assignment of
------------------------
this Lease, Landlord shall be entirely freed and relieved of all liability under
any and all of its covenants and obligations contained in or derived from this
Lease occurring after the consummation of the transfer and assignment, and from
all liability for the Security Deposit. Tenant shall attorn to any entity
purchasing or otherwise acquiring the Premises at any sale or other proceeding.
26. ESTOPPEL CERTIFICATES. Within ten (10) days following written request by
---------------------
Landlord, Tenant shall execute and deliver to Landlord an estoppel certificate,
in the form prepared by Landlord. The certificate shall: (a) certify that this
Lease is unmodified and in full force and effect or, if modified, state the
nature of the modification and certify that this Lease, as so modified, is in
full force and effect, and the date to which the Rent and other charges are paid
in advance, if any; (b) acknowledge that there are not, to Tenant's knowledge,
any uncured defaults on the part of Landlord hereunder, or if there are uncured
defaults on the part of the Landlord, state the nature of the uncured defaults;
and (c) evidence the status of the Lease as may be required either by a lender
making a loan to Landlord to be secured by deed of trust or mortgage covering
the Premises or a purchaser of the Building from Landlord.
27. MORTGAGEE PROTECTION. In the event of any default on the part of
--------------------
Landlord, Tenant will give notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage covering the Building
and shall offer the beneficiary or mortgagee a reasonable opportunity to cure
the default, including time to obtain possession of the Building or the Premises
by power of sale or a judicial foreclosure, if such should prove necessary to
effect a cure.
28. ATTORNEYS' FEES. If either party shall bring any action or legal
---------------
proceeding for damages for an alleged breach of any provision of this Lease, to
recover rent or other sums due, to terminate the tenancy of the Premises or to
enforce, protect or establish any term, condition or covenant of this Lease or
right of either party, the prevailing party shall be entitled to recover, as a
part of the action or proceedings, or in a separate action brought for that
purpose, such attorneys' fees and court costs as may be fixed by the court or
jury.
29. BROKERS. Tenant warrants and represents that it has had no dealings with
-------
any real estate broker or agent in connection with the negotiation of this
Lease, except for any brokers(s) specified in the Basic Lease Information, and
that it knows of no other real estate broker or agent who is or might be
entitled to a
12
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commission in connection with this Lease. Tenant shall indemnify and hold
harmless Landlord from and against any and all liabilities or expenses arising
out of claims made by any other broker or individual for commissions or fees
resulting from this Lease. Landlord shall pay the commission due to the
broker(s) specified in the Basic Lease Information.
30. PARKING. During the Term of this Lease, at no additional cost to Tenant,
-------
Tenant shall have the non-exclusive right to the use of five (5) parking spaces
in the Building's parking garage. In addition, in consideration of the monthly
sum of Twenty-Five Dollars ($25.00) per space used by Tenant (which amount shall
be paid by Tenant as additional rent at the same time and in the same manner as
Base Rent is due hereunder), Tenant shall have the right during the Term of this
Lease to use five (5) parking spaces in the offsite parking lot servicing the
Building. Unless otherwise expressly provided herein, Tenant shall not have the
right to park in the Building's parking structure. If Tenant has been expressly
granted the right to park in the Building's parking structure, at Landlord's
sole discretion, such parking may be performed by a valet service. Landlord
shall not be liable to Tenant, nor shall this Lease be affected, if any parking
is impaired by moratorium, initiative, referendum, law, ordinance, regulation or
order passed, issued or made by any governmental or quasi-governmental body.
31. UTILITIES AND SERVICES.
----------------------
(a) Landlord shall maintain the Common Areas of the Building (including
lobbies, stairs, elevators, corridors and restrooms), the exteriors of the
windows in the Building, the mechanical, plumbing and electrical equipment
serving the Building and the structure of the Building itself in reasonably
good order and condition except for damage occasioned by the acts of
Tenant, its agents, employees or contractors, which damage shall be
repaired by Landlord at Tenant's sole expense.
(b) Provided that Tenant is not then in default under this Lease, Landlord
shall furnish the Premises with (i) electricity for lighting and the
operation of office machines, (ii) heat and air conditioning to the extent
reasonably required for the comfortable occupancy by Tenant in its use of
the Premises during the period from 8:00 a.m. to 6:00 p.m. on weekdays and
from 8:00 a.m. to noon on Saturdays (except holidays), or such shorter
period as may be prescribed by any applicable policies or regulations
adopted by any utility or governmental agency, (iii) elevator service, (iv)
lighting replacement (for building standard lights), (v) restroom supplies,
(vi) window washing with reasonable frequency, and (vii) security guards
and services and daily janitor service during the times and in the manner
that such services are customarily furnished in comparable office buildings
in the area. Landlord shall not be in default hereunder or be liable for
any damages directly or indirectly resulting from, nor shall the Rent be
abated by reason of (1) the installation, use or interruption of use of any
equipment in connection with the furnishing of any of the foregoing
services, (2) failure to furnish or interruption or delay in furnishing any
such services when such failure, interruption or delay is caused by
accident, breakage, labor disputes, or any condition beyond the reasonable
control of Landlord or by the making of necessary repairs or improvements
to the Premises or to the Building, or (3) the limitation, curtailment,
rationing or restrictions on use of water, electricity, gas or any other
form of energy serving the Premises or the Building. Landlord shall use
reasonable efforts diligently to remedy any interruption in the furnishing
of such services. Landlord reserves the right to stop services of the
elevator, ventilation, air conditioning, electric and other Building
systems when necessary by reason of accident or emergency, or for repairs,
alterations or improvements which Landlord determines are desirable or
necessary, until the repairs, alterations or improvements are completed.
(c) Whenever heat-generating equipment or lighting other than building
standard lights are used in the Premises by Tenant which affect the
temperature otherwise maintained by the air conditioning system, Landlord
shall have the right, after notice to Tenant, to install supplementary air
conditioning facilities in the Premises or otherwise modify the ventilating
and air conditioning system serving the Premises, and the cost of such
facilities and modifications shall be borne by Tenant. Tenant shall also
pay the cost of providing all cooling energy to the Premises in excess of
that required for normal office use or during hours requested by Tenant
when air conditioning is not otherwise furnished by Landlord. If Landlord
installs lighting requiring power in excess of that required for normal
office use in the Building or if Tenant installs equipment requiring power
in excess of that required for normal desk-top office equipment or normal
copying equipment, Tenant shall pay for the cost of such excess power,
together with the cost of installing any additional risers or other
facilities that may be necessary to furnish such excess power to the
Premises.
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(d) In the event that Landlord, at Tenant's request, provides services to
Tenant that are not otherwise provided for in this Lease, Tenant shall pay
Landlord's reasonable charges for such services upon billing therefor.
32. INTENTIONALLY DELETED.
---------------------
33. ACCEPTANCE. Delivery of this Lease, duly executed by Tenant, constitutes
----------
an offer to lease the Premises as set forth herein, and under no circumstances
shall such delivery be deemed to create an option or reservation to lease the
Premises for the benefit of Tenant. This Lease shall become effective and
binding only upon execution hereof by Landlord and delivery of a signed copy to
Tenant. Upon acceptance of Tenant's offer to lease under the terms hereof and
receipt by Landlord of the Rent for the first month of the Term and the Security
Deposit in connection with Tenant's submission of the offer, Landlord shall be
entitled to retain the sums and apply them to damages, costs and expenses
incurred by Landlord if Tenant fails to occupy the Premises. If Landlord
rejects the offer, the sums shall be returned to Tenant.
34. USE OF BUILDING NAME. Tenant shall not employ the name of the Building
--------------------
nor the name of the business in which the Building is located in the name or
title of its business or occupation without Landlord's prior written consent,
which consent Landlord may withhold in its sole discretion. Landlord reserves
the right to change the name of the Building without Tenant's consent and
without any liability to Landlord.
35. RECORDING. Neither Landlord nor Tenant shall record this Lease, nor a
---------
short form memorandum of this Lease, without the prior written consent of the
other.
36. QUITCLAIM. Upon any termination of this Lease pursuant to its terms,
---------
Tenant, at Landlord's request, shall execute, have acknowledged and deliver to
Landlord a quitclaim deed of all Tenant's interest in the Premises and Building
created by this Lease.
37. NOTICES. Any notice or demand required or desired to be given under this
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Lease shall be in writing and shall be given by hand delivery, electronic
mail (e.g., telecopy) or the United States mail. Notices which are sent by
----
electronic mail shall be deemed to have been given upon receipt. Notices which
are mailed shall be deemed to have been given when seventy-two (72) hours have
elapsed after the notice was deposited in the United States mail, registered or
certified, the postage prepaid, addressed to the party to be served. As of the
date of execution of this Lease, the addresses of Landlord and Tenant are as
specified in the Basic Lease Information. Either party may change its address
by giving notice of the change in accordance with this Section.
38. LANDLORD'S EXCULPATION. In the event of default, breach or violation by
----------------------
Landlord (which term includes Landlord's partners, co-venturers and co-tenants,
and officers, directors, employees, agents and representatives of Landlord and
Landlord's partners, co-venturers and co-tenants) of any of Landlord's
obligations under this Lease, Landlord's liability to Tenant shall be limited to
its ownership interest in the Building or the proceeds of a public sale of the
ownership interest pursuant to the foreclosure of a judgment against Landlord.
Landlord shall not be personally liable, or liable in any event, for any
deficiency beyond its ownership interest in the Building.
39. ADDITIONAL STRUCTURES. Any diminution or interference with light, air or
---------------------
view by any structure which may be erected on land adjacent to the Building
shall in no way alter this Lease or impose any liability on Landlord.
40. HAZARDOUS SUBSTANCES AND MATERIALS.
----------------------------------
(a) "Hazardous Substance" shall mean the substances included within the
definitions of the term "Hazardous Substance" under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
42 U.S.C. Section 9601 et. seq., and the California Carpenter-Presley-
--------
Tanner Hazardous Substance Account Act, California Health & Safety Code
Section 25300 et. seq., and regulations promulgated thereunder, as amended.
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"Hazardous Waste" shall mean (i) any waste listed as or meeting the
identified characteristics of a "Hazardous Waste" under the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et. seq., and
--------
regulations promulgated pursuant thereto, collectively "RCRA," or (ii) any
waste meeting the identified characteristics of "Hazardous Waste" under
California Hazardous Waste Control
14
<PAGE>
Law, California Health and Safety Code Section 25100 et. seq., and
--------
regulations promulgated pursuant thereto, collectively "CHWCL." "Hazardous
Waste Facility" shall mean a hazardous waste facility as defined under
CHWCL.
(b) Tenant covenants that, at its sole cost and expense, it will comply
with all applicable laws, rules, regulations, orders, permits, licenses and
operating plans of any governmental authority with respect to the use,
handling, generation, transportation, storage, treatment, release and/or
disposal of Hazardous Substances or Hazardous Wastes by Tenant, and Tenant
will provide Landlord with copies of all permits, registrations or other
similar documents that authorize Tenant to conduct any such activities in
connection with its authorized use of the Premises. Additionally, Tenant
agrees to comply with any the Rules and Regulations attached hereto as
Exhibit B, the requirements of the Board of Fire Underwriters or Landlord's
---------
insurance carrier, and to comply with any covenants, conditions and
restrictions ("CC&Rs") now or hereafter applicable to the Building with
respect to the activities of Tenant, its agents, employees or contractors.
(c) Tenant agrees that it shall not operate on the Premises any facility
required to be permitted or licensed as a Hazardous Waste Facility or for
which interim status as such is required. Nor shall Tenant store any
Hazardous Substance or Hazardous Wastes on the Premises for ninety (90)
days or more.
(d) Tenant agrees to comply with all applicable laws, rules, regulations,
orders, and permits relating to underground storage, tanks (including any
installation, monitoring, maintenance, closure and/or removal of such
tanks) as such tanks are defined in California Health and Safety Code,
Section 25281(u), including, without limitation, complying with California
Health and Safety Code Sections 25280-25299.6 and the regulations
promulgated thereunder. Tenant shall furnish to Landlord copies of all
registrations and permits for all underground storage tanks.
(e) If applicable, Tenant shall provide to Landlord in writing the
following information and/or documentation at the Commencement Date and
within sixty (60) days of any change in the required information and/or
documentation:
(i) A list of all Hazardous Substances and/or Hazardous Wastes that
Tenant uses, handles, generates, transports, stores, treats or
disposes in connection with its operations on the Premises.
(ii) Copies of all Material Safety Data Sheets ("MSDSs") required to
be completed with respect to operations of Tenant at the Premises in
accordance with Title 8, California Code of Regulations Section 5194
or 42 U.S.C. Section 11021, or any amendments thereto. In lieu of this
requirement, Tenant may provide a Hazardous Materials Inventory Sheet
that details the MSDSs.
(iii) Copies of all hazardous waste manifests, as defined in Title 22,
California Code of Regulations Section 66481, that Tenant is required
to complete in all connections with its operations at the Premises.
(iv) A copy of any Hazardous Materials Management Plans required with
respect to Tenant's operations.
(v) Copies of any Contingency Plans and Emergency Procedures
required of Tenant due to its operations in accordance with Title 22,
Chapter 30, Article 20, of the California Code of Regulations, and any
amendments thereto.
(vi) Copies of any biennial reports to be furnished to California
Department of Health Services relating to hazardous substances or
wastes.
(vii) Copies of all industrial waste water discharge permits.
(f) Tenant shall secure Landlord's prior written approval for any proposed
receipt, storage, possession, use, transfer or disposal of "Radioactive
Materials" or "Radiation", as such materials are defined in Title 17,
California Code of Regulations Sections 30100(w) and (z) or possessing the
characteristics of the materials so defined, which approval Landlord may
withhold in its sole and absolute discretion. The Tenant in connection with
any authorized receipt, storage, possession, use, transfer or disposal of
Radioactive Materials or Radiation shall:
15
<PAGE>
(i) Comply with all federal, state and local laws, rules,
regulations, orders, licenses and permits;
(ii) Furnish Landlord with a list of all Radioactive Materials or
Radiation received, stored, possessed, used, transferred or disposed;
and
(iii) Furnish Landlord with all licenses, registration materials,
inspection reports, orders and permits in connection with the receipt,
storage, possession, use, transfer or disposal or Radioactive
Materials or Radiation.
(g) Tenant shall comply with any and all applicable laws, rules,
regulations, and orders with respect to the release into the environment of
any Radiation or Radioactive Materials. Tenant shall notify Landlord in
writing of any unauthorized release of Hazardous Wastes or Hazardous
Substances or Radiation or Radioactive Materials into the environment
within twenty-four hours of the time at which Tenant becomes aware of such
release.
(h) Tenant shall indemnify, defend, and hold Landlord harmless from any
and all claims, losses (including, but not limited to, loss of rental
income and loss due to business interruption), damages, (including
diminution in value or loss of rental value following expiration or earlier
termination of the Term) liabilities, costs, legal fees, and expenses of
any sort arising out of or relating to any unauthorized release into the
environment of Hazardous Substances, Hazardous Wastes, Radioactive
Materials or Radiation by Tenant or any of Tenant's agents, contractors or
invitees, or Tenant's failure to comply with subparagraphs (a)-(g) of this
section of the Lease.
(i) Tenant agrees to cooperate with Landlord in furnishing Landlord with
complete information regarding Tenant's receipt, handling, use, storage,
transportation, generation, treatment and/or disposal of Hazardous
Substances or Wastes or Radiation or Radioactive Materials. Upon request,
Tenant agrees to grant Landlord reasonable access at reasonable times to
the Premises to inspect Tenant's receipt, handling, use, storage,
transportation, generation, treatment and/or disposal of Hazardous
Substances or Hazardous Wastes or Radiation or Radioactive Materials
without being deemed guilty of any disturbance of Tenant's use or
possession and without being liable to Tenant in any manner.
(j) Notwithstanding Landlord's rights of inspection and review under this
section, Landlord shall have no obligation or duty to so inspect or review,
and no third party shall be entitled to rely on Landlord to conduct any
sort of inspection or review by reason of the provisions of this Section.
(k) This Section shall survive termination of the Lease.
41. GENERAL.
-------
(a) The captions and headings used in this Lease are for the purpose of
convenience only and shall not be construed to limit or extend the meaning
of any part of this Lease.
(b) Time is of the essence for the performance of each term, condition and
covenant of this Lease.
(c) If any provision of this Lease is held to be invalid, illegal or
unenforceable, the invalidity, illegality, or unenforceability shall not
affect any other provision of this Lease, but this Lease shall be construed
as if the invalid, illegal or unenforceable provision had not been
contained herein.
(d) This Lease shall be construed and enforced in accordance with the laws
of the State of California. The language in all parts of this Lease shall
in all cases be construed as a whole according to its fair meaning and not
strictly for or against either Landlord or Tenant.
(e) When the context of this Lease requires, the neuter gender includes
the masculine, the feminine, a partnership or corporation or joint venture,
and the singular includes the plural.
(f) The covenants and agreements contained in this Lease shall be binding
on the parties hereto and on their respective successors and assigns (to
the extent this Lease is assignable).
(g) The waiver of Landlord of any breach of any term, condition or
covenant of this Lease
16
<PAGE>
shall not be deemed to be a waiver of the provision or any subsequent
breach of the same or any other term, condition or covenant of this Lease.
The subsequent acceptance of Rent hereunder by Landlord shall not be deemed
to be a waiver of any preceding breach at the time of acceptance of the
payment. No covenant, term or condition of this Lease shall be deemed to
have been waived by Landlord unless the waiver is in writing signed by
Landlord.
(h) This Lease is the entire agreement between the parties, and there are
no agreements or representations between the parties except as expressed
herein. Except as otherwise provided herein, no subsequent change or
addition to this Lease shall be binding unless in writing and signed by the
parties hereto.
(i) This Lease may be executed in counterparts, each of which shall be an
original, but all counterparts shall constitute one (1) instrument.
(j) The Basic Lease Information and all exhibits attached hereto are
hereby incorporated herein and made an integral part hereof.
(k) The Addendum, if any, attached hereto is hereby incorporated herein
and made an integral part hereof.
(l) TO THE EXTENT PERMITTED BY LAW, TENANT HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO A JURY TRIAL IN THE EVENT OF LITIGATION BETWEEN TENANT AND LANDLORD
PERTAINING TO THIS LEASE.
42. CONDITION PRECEDENT. Notwithstanding anything to the contrary in this
-------------------
Lease, it shall be a condition precedent to the effectiveness of this Lease and
the obligations of the parties hereunder that Landlord shall have received from
Standard Register Company a termination agreement in form and content
satisfactory to Landlord whereby Standard Register Company terminates all of its
rights to the Premises pursuant to that certain lease dated April 26, 1991
between Landlord, as landlord, and Standard Register, as tenant.
43. OPTION TO EXTEND. Provided (i) Tenant is not in default under the terms of
----------------
this Lease at the time this renewal is exercised or at the commencement of any
Renewal Term (as defined below), (ii) Tenant is occupying at least ninety
percent (90%) of the Premises, including any expansion space, and (iii) Landlord
has not given more than two (2) notices of default in any twelve (12) month
period for nonpayment of monetary obligations, Tenant shall have the option to
renew this Lease for one (1) period of three (3) years (the "Renewal Term").
The Renewal Term shall be on all the terms and conditions of this Lease, except
that (i) Base Rent for the Renewal Term shall be the Market Rent for the
Premises (as defined below). Tenant must exercise its option to renew this
Lease by giving Landlord written notice (an "Extension Notice") of its election
to do so no later than one hundred eighty (180) nor earlier than two hundred ten
(210) days prior to the end of the initial Term. Any notice not given in a
timely manner shall be void; and Tenant shall be deemed to have waived its
renewal rights. The renewal option set forth herein is personal to Tenant and
shall not be included in any assignment of this Lease, except for any assignment
or subletting to an entity described in Section 15(d) of this Lease.
43.1 Fair Market Rent. The term "Market Rent" shall mean the monthly
----------------
amount per rentable square foot in the Premises in question that a willing, non-
equity, non-renewal, non-expansion new tenant would pay and a willing landlord
would accept at arm's length for space in a comparable building or buildings,
with comparable tenant improvements, in a comparable location, giving
appropriate consideration to monthly rental rates per rentable square foot, the
presence or absence of rent escalation clauses such as operating expense and tax
pass-throughs, length of lease term, size and location of premises being leased,
if any, and other generally applicable terms and conditions of tenancy for a
similar building or buildings.
A. Landlord and Tenant shall have a period of thirty (30) days from
Landlord's receipt of the Extension Notice in which to agree on the Market Rent.
If they agree within that period, they shall immediately execute an amendment to
this Lease stating the Base Rent for such period.
B. If Landlord and Tenant are unable to agree upon the Market Rent
within such thirty (30) day period, then the dispute shall proceed to
arbitration conducted pursuant to the provisions of the laws of the state in
which the Premises is located and the Real Estate Arbitration Rules of the
American Arbitration Association or its successor insofar as said rules do not
conflict with said laws or this section.
17
<PAGE>
Within ten (10) days of the expiration of the aforesaid thirty (30) day period,
Landlord and Tenant shall select one joint arbitrator or, if they cannot agree
on one joint arbitrator, then each shall select an arbitrator within fifteen
(15) days of the expiration of the aforesaid thirty (30) day period and notify
the other party of its selection. The two arbitrators selected shall designate
the third arbitrator forthwith. Each arbitrator selected shall be a real estate
appraiser with an MAI certification or a real estate broker, with at least five
(5) years of experience appraising or leasing building space comparable to the
Premises in the city and county where the Premises is located. The arbitrators
shall convene in the city or county in which the Premises are located as soon as
practicable and offer Landlord and Tenant the opportunity to present their
cases. If any party fails to appear, participate or produce evidence in an
arbitration proceeding, the arbitrators may make their decision based solely on
the evidence actually presented. The arbitrators shall, by majority vote, make
their determinations of Market Rent based on the factors referenced above; and
such decision shall be binding upon Landlord and Tenant and enforceable in a
court of law. Each party shall be responsible for the costs, charges and fees of
its appointee; and the parties shall share equally in the costs, charges and
fees of the third arbitrator. In the event either party fails to appoint an
arbitrator or the two arbitrators fail to select a third arbitrator within the
time required by this section, upon application of either party, the arbitrator
shall be appointed by the American Arbitration Association, or if there is no
American Arbitration Association or it shall refuse to perform this function,
then by the then Presiding Judge of the Superior Court and/or presiding trial
court of the State and County in which the Premises is located.
44. RIGHT OF FIRST OFFER.
--------------------
44.1 Grant. Subject to the terms of this Section 44, Landlord grants to
-----
Tenant a right of first offer ("Right of First Offer") to lease approximately
1373 rentable square feet of space in the Building known as Suite 1225
("Available Space").
44.2 Term. [Manually struck through.] /s/ JDL /s/ DGF
----
44.3 Covenants of Landlord. Subject to the conditions precedent
---------------------
established by Section 2.5 below, if at any time during the Right of First Offer
Term Landlord decides to offer any Available Space for lease to a bona fide
third party, Landlord shall first provide Tenant with a written notice ("Offer
Notice") detailing (a) the rent at which said Available Space is being offered
to the third party, (b) the rentable square footage and location thereof, (c)
the date the Available Space will become available and (d) all other terms upon
which Landlord proposes to lease the Available Space to Tenant.
44.4 Exercise of Tenant's Right of First Offer. Subject to the conditions
-----------------------------------------
precedent established by Section 44.5 below, Tenant may exercise Tenant's Right
of First Offer to lease all (but not less than all) of the Available Space
described in the Offer Notice by providing Landlord with written notice
("Acceptance Notice") thereof within five (5) business days of Landlord's
delivery to Tenant of the Offer Notice. If Tenant does not exercise its Right
of First Offer within said five (5) business day period, Landlord shall be
relieved of Landlord's obligation to lease the Available Space mentioned in the
First Offer Availability Notice to Tenant and the provisions of this Section 2
shall not apply to Landlord.
44.5 Conditions to Right of First Offer. Notwithstanding anything to the
----------------------------------
contrary in this Section 44, Landlord shall have no obligation to provide Tenant
with an Offer Notice, and Tenant shall have no right to exercise Tenant's Right
of First Offer, if: (i) Tenant is in default either: (a) at the time Landlord
seeks to lease the Available Space in question, or at the time Tenant seeks to
give Landlord an Acceptance Notice, whichever, is relevant, or (b) upon the date
Tenant seeks to take possession of the Available Space referenced in the Offer
Notice, (ii) Tenant has sublet more than twenty percent (20%) of the rentable
space located in the Premises, or (iii) Tenant has received more than three (3)
notices of default from Tenant during the Term of this Lease. Tenant's Right of
First Offer shall be personal to Tenant and shall not be transferable with any
assignment of this Lease or subletting of the Premises, except to any of the
parties described in Section 15(d) of this Lease.
44.6 Terms for Right of First Offer. In the event that Tenant exercises
-------------------------------
Tenant's Right of First Offer, Tenant's occupancy of the Available Space taken
shall be on all of the same terms and conditions described in the Offer Notice,
except that: (i) the term of Tenant's occupancy of the Available Space shall be
the longer of: (a) the remaining Term of this Lease, or (b) three (3) years, and
(ii) the Base Rent due for the Available Space taken shall be the Market Rent
therefor.
44.6.1 Fair Market Rent. The term "Market Rent" shall mean the
----------------
monthly amount per rentable square foot in the Available Space in question that
a willing, non-equity, non-renewal,
18
<PAGE>
non-expansion new tenant would pay and a willing landlord would accept at arm's
length for space in a comparable building or buildings, with comparable tenant
improvements, in a comparable location, giving appropriate consideration to
monthly rental rates per rentable square foot, the presence or absence of rent
escalation clauses such as operating expense and tax pass-throughs, length of
lease term, size and location of premises being leased, if any, and other
generally applicable terms and conditions of tenancy for a similar building or
buildings.
44.6.1.1 Landlord and Tenant shall have a period of thirty (30) days
from Landlord's receipt of the Acceptance Notice in which to agree on the Market
Rent. If they agree within that period, they shall immediately execute an
amendment to this Lease stating the Base Rent for such period.
44.6.1.2 If Landlord and Tenant are unable to agree upon the Market
Rent within such thirty (30) day period, then the dispute shall proceed to
arbitration conducted pursuant to the provisions of the laws of the state in
which the Premises is located and the Real Estate Arbitration Rules of the
American Arbitration Association or its successor insofar as said rules do not
conflict with said laws or this section. Within ten (10) days of the expiration
of the aforesaid thirty (30) day period, Landlord and Tenant shall select one
joint arbitrator or, if they cannot agree on one joint arbitrator, then each
shall select an arbitrator within fifteen (15) days of the expiration of the
aforesaid thirty (30) day period and notify the other party of its selection.
The two arbitrators selected shall designate the third arbitrator forthwith.
Each arbitrator selected shall be a real estate appraiser with an MAI
certification or a real estate broker, with at least five (5) years of
experience appraising or leasing building space comparable to the Premises in
the city and county where the Premises is located. The arbitrators shall
convene in the city or county in which the Premises are located as soon as
practicable and offer Landlord and Tenant the opportunity to present their
cases. If any party fails to appear, participate or produce evidence in an
arbitration proceeding, the arbitrators may make their decision based solely on
the evidence actually presented. The arbitrators shall, by majority vote, make
their determinations of Market Rent based on the factors referenced above; and
such decision shall be binding upon Landlord and Tenant and enforceable in a
court of law. Each party shall be responsible for the costs, charges and fees
of its appointee; and the parties shall share equally in the costs, charges and
fees of the third arbitrator. In the event either party fails to appoint an
arbitrator or the two arbitrators fail to select a third arbitrator within the
time required by this section, upon application of either party, the arbitrator
shall be appointed by the American Arbitration Association, or if there is no
American Arbitration Association or it shall refuse to perform this function,
then by the then Presiding Judge of the Superior Court and/or presiding trial
court of the State and County in which the Premises is located.
44.7 One-Time Right. [Manually struck through.] /s/ JDL /s/ DGF
--------------
44.8 Exceptions to Offer. Notwithstanding anything to the contrary in this
-------------------
Section 2, Landlord shall not be obligated to provide Tenant an Offer Notice in
the event that Landlord is merely offering to extend the term of any lease or
expand the square footage leased by any existing tenant of the Building pursuant
to the terms of any lease between Landlord and said party. Tenant's Right of
First Offer is subordinate and subject to the right of Mallette and Libonati to
lease the Available Space.
44.9 Amendment to Lease. Landlord and Tenant hereby agree to execute an
------------------
amendment to this Lease ("Lease Amendment") prior to Tenant's occupancy of the
Available Space in question. The Lease Amendment shall specify, among other
things, the Rent, date of occupancy, increase in Tenant's pro rata share and
square footage of the Available Space taken in connection with Tenant's exercise
of Tenant's Right of First Offer.
19
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Lease effective as of
the date first above written.
"LANDLORD"
Date of Execution: 5/5/94 PM REALTY GROUP, as managing agent for The
------
Prudential Insurance Company of America
By /s/ David G. Ford
------------------------------------
Its Vice President
-------------------------------
"TENANT"
Date of Execution: 4/22/94 INTERNATIONAL WIRELESS COMMUNICATIONS
By /s/ John Lockton
------------------------------------
Its President
-------------------------------
By ____________________________________
Its _______________________________
20
<PAGE>
EXHIBIT A
---------
PREMISES
--------
[Architect's drawing of premises including build-out specifications]
<TABLE>
<S> <C> <C>
USABLE: 2,494 Note FINISH SCHEDULE
RENTABLE: 2818 1. Furniture shown is not in this Carpet: Designable Palisades
contract unless otherwise noted. 729-776, Blue Thunder
Furniture arrangement and size is
for reference only. Each tenant Base: 4" rubber base
is responsible for final size 701 P. Burke
verification and placement of
furniture.
2. Lockset to be provide at suite
</TABLE>
21
<PAGE>
EXHIBIT B
---------
TENANT IMPROVEMENTS CONSTRUCTION AGREEMENT
------------------------------------------
This Tenant Improvements Construction Agreement ("Agreement") is part of the
Lease ("Lease") relating to certain premises ("Premises") which are more
particularly described in Exhibit A of this Lease. Landlord and Tenant agree as
---------
follows with respect to the Tenant Improvements to be installed in the Premises:
1. PLANS AND SPECIFICATIONS
------------------------
A. Preliminary Plans. Preliminary plans and specifications for
-----------------
construction of the Tenant Improvements to be installed in the
Premises are hereby approved by Landlord and Tenant. A schedule of
the approved preliminary plans and specifications is attached hereto
as Exhibit B-1.
-----------
B. Working Drawings. Within five (5) days after any request by Landlord,
----------------
Tenant shall furnish the additional information requested by Landlord
for the preparation by Landlord's architect, engineer or space planner
of working drawings and specifications. If Tenant fails to furnish
the information within the five (5) day period, Landlord shall have
the right to terminate this Agreement and the Lease. Within three (3)
working days after working drawings and specifications which have been
prepared by Landlord's architect, engineer or space planner are
submitted to Tenant, Tenant shall reasonably approve or disapprove the
working drawings and specifications. The working drawings and
specifications shall be deemed approved if Tenant fails to disapprove
them within the three (3) business day period.
If Tenant disapproves the working drawings and specifications, Tenant
shall have three (3) business days after the date of disapproval to
provide sufficient information to Landlord's architect, engineer or
space planner so that revised working drawings and specifications may
be prepared. If Tenant fails to submit the required information to
revise the plans within the three (3) business day period or if the
working drawings and specifications, as revised, are not approved by
Tenant within three (3) business days after submission to Tenant,
Landlord shall have the right to terminate this Agreement and the
Lease.
The working drawings and specifications which have been approved by
Landlord and Tenant are hereinafter referred to as the "Approved
Working Drawings."
C. Cost Estimates. Landlord shall obtain a cost estimate from its
--------------
contractor based on the approved preliminary plans and specifications
and Approved Working Drawings, respectively, and Tenant shall have
three (3) business days after the date of submission to Tenant of each
cost estimate to approve or disapprove it. A cost estimate shall be
deemed approved if Tenant fails to disapprove it within the three (3)
business day period. If Tenant disapproves a cost estimate, Tenant
shall have five (5) business days after the date of disapproval to
reduce the cost estimate by agreeing to modifications to the plans and
specifications or to the Approved Working Drawings, which
modifications shall be subject to the prior written approval of
Landlord. If Tenant disapproves a cost estimate but fails to approve
modifications which will reduce the cost estimate within the five (5)
business day period, Landlord may either terminate this Agreement and
the Lease or proceed with construction on the basis of the last cost
estimate submitted to Tenant.
D. Tenant's Approval. Whenever Tenant's approval is required pursuant to
-----------------
the terms of this Agreement, the approval shall not be unreasonably
withheld or delayed. Tenant's approvals or disapprovals shall be in
writing.
E. Termination. If this Agreement and the Lease are terminated by
-----------
Landlord pursuant to any of the provisions of this Agreement, the
parties' rights and obligations hereunder shall be discharged;
provided, however, Tenant shall pay Landlord, within ten (10) days
after the
Exhibit B - Page 1
<PAGE>
date of Tenant's receipt of a statement for the same, the costs
incurred by Landlord through the date of termination in connection
with the preparation of any plans, drawings, and specifications and
all costs incurred by Landlord in applying for any governmental
approvals, including a building permit, required for construction of
the Tenant Improvements.
2. CONSTRUCTION OF TENANT IMPROVEMENTS.
-----------------------------------
A. Construction by Landlord. Landlord shall cause construction of the
------------------------
Tenant Improvements to be completed in a good and workmanlike manner
with the costs to be expended by Landlord not to exceed the Base
Allowance set forth in the Basic Lease Information.
B. Tenant Improvements Cost. The Tenant Improvements cost ("Tenant
------------------------
Improvements Cost") to be paid by Landlord shall include, but not be
limited to:
(i) All costs of preliminary and final architectural and engineering
plans, drawings and specifications for the Tenant Improvements, and
engineering costs associated with completion of the State of
California energy utilization calculations under Title 24 legislation;
(ii) All costs of obtaining building permits and other necessary
authorizations from the applicable governmental authority (e.g., the
----
City in which the Building is located);
(iii) All costs of interior design and finish schedule plans, drawings
and specifications including as-built drawings;
(iv) All direct and indirect costs of procuring and installing Tenant
Improvements in the Premises, including the contractor's fee for
overhead and profit, the cost of all of contractor's on-site
supervisory and administrative staff, office, equipment and temporary
services provided in connection with construction of the Tenant
Improvements;
(v) All fees payable to Landlord's architect, engineer or space
planner if they are required to redesign any portion of the Tenant
Improvements following Tenant's approval of the preliminary or working
drawings;
(vi) Sewer connection fees, if any;
(vii) The fee charged by any construction cost consultant and/or
construction manager employed in connection with the Tenant
Improvement; and
(viii) Fire and Builder's All-Risk insurance and public liability
insurance premiums and fees.
3. EXCESS TENANT IMPROVEMENTS COST. If the total Tenant Improvements Cost is
-------------------------------
more than the Base Allowance, then the excess Tenant Improvements Cost
shall be paid by Tenant to Landlord, in cash, within ten (10) days after
receipt of a statement from Landlord.
4. CHANGE REQUESTS.
---------------
(i) No changes to the Approved Working Drawings requested by Tenant shall
be made without Landlord's prior approval, which approval shall not be
unreasonably withheld; provided, however, that no change request shall
affect the structure of the Building. Any changes to the Approved
Working Drawings shall be in writing and shall be signed by both
Landlord and Tenant prior to the change being made. Tenant shall not
instruct or direct Contractor workmen, subcontractors, material
suppliers, or others performing the Tenant Improvements construction.
Tenant shall direct all inquiries and requests relating to the
construction work to Landlord or Landlord's designated agent. Tenant
shall be responsible for any added costs or delays resulting from
Tenant's actions which are contrary to this Paragraph 4.
(ii) (a) Tenant shall pay Landlord in cash, within thirty (30) days after
receipt of an itemized written bill from Landlord, any additional
costs for changes requested by Tenant, including, without limitation,
architectural fees and increases in construction costs caused
Exhibit B - Page 2
<PAGE>
by the delay; (b) a change request shall constitute an agreement by
Tenant to any reasonable delay in substantial completion caused by
reviewing, processing and implementing the change; and (c) the Lease,
at Landlord's option, shall commence on the date it would have
otherwise commenced but for any such delays.
(iii) As soon as reasonably possible after receipt of a written change
request from Tenant, Landlord shall notify Tenant of Landlord's
approval or disapproval of the request; and, if the request is
approved, of an estimated increase or decrease in costs and an
estimate of the effect the change shall have on the projected date for
substantial completion of the Tenant Improvements.
(iv) Landlord shall have the authority, without the consent of Tenant, to
order minor changes in the Tenant Improvements not involving an
increase in cost to Tenant or a delay in the Commencement Date and not
inconsistent with the intent of the Approved Working Drawings.
5. COOPERATION. Landlord and Tenant shall cooperate and diligently assist the
-----------
architect, engineer or space planner in completing the Approved Working
Drawings and specifications and the Contractor in completing construction
of the Tenant Improvements.
6. CONDITION OF TENANT IMPROVEMENTS. Within seven (7) days after the
--------------------------------
Commencement Date, Tenant shall "walk-through" the Premises with Landlord
and they shall complete a punch-list of items needing additional work by
Landlord. Other than the items specified in the punch-list, by taking
possession of the Premises, Tenant shall be deemed to have accepted the
Premises and the Building in good, clean and completed condition and
repair, subject to all applicable laws, codes and ordinances. The punch-
list shall not include any damage to the Premises or the Building caused by
Tenant's move-in, which damage shall be promptly repaired or corrected by
Tenant at its sole expense. If Tenant fails to complete a punch-list with
Landlord's cooperation within the seven (7) day period specified above, it
shall be deemed that there are no items needing additional work or repair.
Contractor shall complete all reasonable punch-list items within thirty
(30) days after the walk-through inspection or as soon as practicable
thereafter and upon notification of completion of the punch-list items,
Tenant shall approve or state its reasons for disapproval of the completed
items in writing to Landlord within seven (7) days or such items shall be
deemed approved by Tenant.
7. TENANT DELAYS. If the Commencement Date of this Lease has not occurred on
-------------
or before the date specified in the Basic Lease Information, and if the
cause of the delay in the occurrence of the Commencement Date is
attributable to Tenant, then the Commencement Date shall be the date the
Commencement would have occurred but for such delay. Payments for any
partial month shall be prorated on the basis of a thirty (30) day month.
Delays attributable to Tenant shall include those caused by:
(i) Tenant's failure to furnish information to Landlord for the
preparation of plans and drawings for the Tenant Improvements in
accordance with this Exhibit B;
---------
(ii) Tenant's request for special materials, finishes or installations
which are not readily available;
(iii)Tenant's failure to reasonably approve plans and working drawings in
accordance with this Exhibit B;
---------
(iv) Tenant's change requests pursuant to this Exhibit B that result in
---------
delays;
(v) Tenant's failure to approve cost estimates if any approvals are
required pursuant to this Exhibit B; and
---------
(vi) Interference with Landlord's work caused by Tenant or by Tenant's
agents.
8. TENANT IMPROVEMENTS COST AND RENT ADJUSTMENT STATEMENT. Within one hundred
------------------------------------------------------
twenty (120) days after the Commencement Date, Landlord shall provide
Tenant with a statement of the Tenant Improvements Cost. The statement
shall include the amount of excess Tenant Improvement Costs, if any, due
Landlord (which shall be paid within ten (10) days).
Exhibit B - Page 3
<PAGE>
EXHIBIT C
---------
COMMENCEMENT DATE MEMORANDUM
----------------------------
LANDLORD: PM REALTY GROUP, as managing agent for The Prudential Insurance
Company of America
TENANT: INTERNATIONAL WIRELESS COMMUNICATIONS
LEASE DATE: April __, 1994
PREMISES: Suite 1275 of 400 S. El Camino Real
Pursuant to subsection 2(d) of the above-referenced Lease, the Commencement Date
hereby is established as ________________, 19__, and the Expiration Date is
hereby established as _______________________, 19__.
LANDLORD
PM REALTY GROUP, as managing agent for The
Prudential Insurance Company of America
By: __________________________________
Its: ____________________________
TENANT
INTERNATIONAL WIRELESS COMMUNICATIONS
By:__________________________________
Its: ___________________________
Exhibit C
<PAGE>
EXHIBIT D
---------
RULES AND REGULATIONS
---------------------
1. No sign, placard, picture, advertisement, name or notice shall be installed
or displayed on any part of the outside or inside of the Building without
the prior written consent of Landlord. Landlord shall have the right to
remove, at Tenant's expense and without notice, any sign installed or
displayed in violation of this rule. All approved signs or lettering on
doors and walls shall be printed, painted, affixed or inscribed at the
expense of Tenant by a person chosen by Landlord.
2. The directory of the Building will be provided exclusively for the display
of the name and location of tenants, and Landlord reserves the right to
exclude any other names therefrom. Tenant shall pay Landlord's standard
charge for Tenant's listing thereon and for any changes by Tenant.
3. Except as consented to in writing by Landlord or in accordance with
Building standard improvements, no draperies, curtains, blinds, shades,
screens or other devices shall be hung at or used in connection with any
window or exterior door or doors of the Premises. No awning shall be
permitted on any part of the Premises. Tenant shall not place anything
against or near glass partitions or doors or windows which may appear
unsightly from outside the Premises.
4. Tenant shall not obstruct any sidewalks, halls, lobbies, passages, exits,
entrances, elevators or stairways of the Building. No tenant and no
employee or invitee of any tenant shall go upon the roof of the Building or
make any roof or terrace penetrations. Tenant shall not allow anything to
be placed on the outside terraces or balconies without the prior written
consent of Landlord.
5. All cleaning and janitorial services for the Building shall be provided
exclusively through Landlord, and, except with the written consent of
Landlord, no person or persons other than those approved by Landlord shall
be employed by Tenant or permitted to enter the Building for the purpose of
cleaning. Tenant shall not cause any unnecessary labor by carelessness or
indifference to the good order and cleanliness of the Premises. Landlord
shall not in any way be responsible to any Tenant for any loss of property
on the Premises, however occurring, or for any damage to any Tenant's
property by the janitor or any other employee or person.
6. Landlord will furnish Tenant, free of charge, with two keys to Tenant's
suite entrance. Landlord may make a reasonable charge for any additional
keys and for having any locks changed. Tenant shall not make or have made
additional keys without Landlord's prior written consent, and Tenant shall
not alter any lock or install a new additional lock or bolt on any door of
its Premises without Landlord's prior written consent. Tenant shall
deliver to Landlord, upon the termination of its tenancy, the keys to all
locks for doors on the Premises, and in the event of loss of any keys
furnished by Landlord, shall pay Landlord therefor.
7. If Tenant requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with, Landlord's instructions
for their installation.
8. The elevators shall be available for use by all tenants in the Building,
subject to reasonable scheduling as Landlord in its discretion shall deem
appropriate. No equipment, materials, furniture, packages, supplies,
merchandise or other property will be received in the Building or carried
in the elevators except between the hours, in the manner and in the
elevators as may be designated by Landlord.
9. Tenant shall not place a load upon any floor of the Premises which exceeds
the maximum load per square foot which the floor was designed to carry and
which is allowed by law. Tenant's business machines and mechanical
equipment which cause noise or vibration which may be transmitted to the
structure of the Building or to any space therein, and which is
objectionable to Landlord or to any tenants in the Building, shall be
placed and maintained by Tenant, at Tenant's expense, on vibration
eliminators or other devices sufficient to eliminate noise or vibration.
10. Tenant shall not use or keep in the Premises any toxic or hazardous
materials or any kerosene, gasoline or inflammable or combustible fluid or
material other than those limited quantities necessary for the operation or
maintenance of office equipment. Tenant shall not use or permit to be used
in the Premises any foul or noxious gas or substance, or permit or allow
the Premises to be occupied or used in a manner offensive or objectionable
to Landlord or other occupants of the Building by reason of noise, odors or
vibrations. No animal, except seeing eye dogs when in the
Exhibit D - Page 1
<PAGE>
company of their masters, may be brought into or kept in the Building.
11. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord, unless Tenant receives the prior written consent
of Landlord.
12. Tenant shall cooperate fully with Landlord to assure the most effective
operation of the Building's heating and air-conditioning and to comply with
any governmental energy-saving rules, laws or regulations of which Tenant
has actual notice. Tenant shall refrain from attempting to adjust controls
other than room thermostats installed for Tenant's use. Tenant shall keep
corridor doors and sliding glass doors closed, and shall close window
coverings at the end of each business day.
13. Landlord reserves the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the Building.
14. Landlord reserves the right to exclude any person from the Building between
the hours of 6:00 p.m. and 8:00 a.m. the following day, or any other hours
as may be established from time to time by Landlord, and on Saturdays,
Sundays and legal holidays, unless that person is known to the person or
employee in charge of the Building and has a pass or is properly
identified. Tenant shall be responsible for all persons for whom it
requests passes and shall be liable to Landlord for all acts of those
persons. Landlord shall not be liable for damages for any error in
admitting or excluding any person from the Building. Landlord reserves the
right to prevent access to the Building by closing the doors or by other
appropriate action in case of invasion, mob, riot, public excitement or
other commotion.
15. Tenant shall close and lock the doors of its Premises, shut off all water
faucets or other water apparatus and turn off all lights and other
equipment which is not required to be continuously run. Tenant shall be
responsible for any damage or injuries sustained by other tenants or
occupants of the Building or Landlord for noncompliance with this Rule.
16. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were
constructed, and no foreign substance of any kind whatsoever shall be
placed therein. The expense of any breakage, stoppage or damage resulting
from any violation of this rule shall be borne by the tenant who, or whose
employees or invitees, shall have caused it.
17. Tenant shall not install any radio or television antenna, loudspeaker or
other device on the roof or exterior walls of the Building. Tenant shall
not interfere with radio or television broadcasting or reception from or in
the Building or elsewhere.
18. Tenant shall not cut or bore holes for wires in the partitions, woodwork or
plaster of the Premises. Tenant shall not affix any floor covering to the
floor of the Premises in any manner except as approved by Landlord. Tenant
shall repair, or be responsible for the cost of repair of any damage
resulting from noncompliance with this Rule.
19. Tenant shall not install, maintain or operate upon the Premises any vending
machine without the prior written consent of Landlord.
20. Canvassing, soliciting and distributing handbills or any other written
material and peddling in the Building are prohibited, and each tenant shall
cooperate to prevent these activities.
21. Landlord reserves the right to exclude or expel from the Building any
person who, in Landlord's judgment, is intoxicated or under the influence
of liquor or drugs, or who is in violation of any of the Rules and
Regulations of the Building.
22. Tenant shall store all its trash and garbage within its Premises. Tenant
shall not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of trash and garbage
disposal within the Building. All garbage and refuse disposal shall be
made in accordance with directions issued from time to time by Landlord.
23. Use by Tenant of Underwriters' Laboratory approved equipment for brewing
coffee, tea, hot chocolate and similar beverages and microwaving food shall
be permitted, provided that the equipment and use is in accordance with all
applicable federal, state, county and city laws, codes, ordinances, rules
and regulations.
<PAGE>
24. Tenant shall not use the name of the Building in connection with or in
promoting or advertising the business of Tenant, except as Tenant's
address, without the written consent of Landlord.
25. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency. Tenant shall be responsible for any increased insurance premiums
attributable to Tenant's use of the Premises, Building or Property.
26. Tenant assumes any and all responsibility for protecting its Premises from
theft and robbery, which responsibility includes keeping doors locked and
other means of entry to the Premises closed.
27. Tenant shall not use the Premises, or suffer or permit anything to be done
on, in or about the Premises, which may result in an increase to Landlord
in the cost of insurance maintained by Landlord on the Building and Common
Areas.
28. Tenant's requests for assistance will be attended to only upon appropriate
application to the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside of
their regular duties unless under special instructions from Landlord, and
no employee of Landlord will admit any person (Tenant or otherwise) to any
office without specific instructions from Landlord.
29. To the extent Tenant has been granted any parking privileges in the Lease,
Tenant shall not park its vehicles in any parking areas designated by
Landlord as areas for parking by visitors to the Building or other reserved
parking spaces. Tenant shall not leave vehicles in the Building parking
structure overnight, nor park any vehicles in the Building parking
structure, other than automobiles, motorcycles, motor driven or non-motor
driven bicycles or four-wheeled trucks. Tenant, its agents, employees and
invitees shall not park any one (1) vehicle in more than one (1) parking
space.
30. The scheduling and manner of all Tenant move-ins and move-outs shall be
subject to the discretion and approval of Landlord, and move-ins and move-
outs shall take place only after 6:00 p.m. on weekdays, on weekends, or at
other times as Landlord may designate. Landlord shall have the right to
approve or disapprove the movers or moving company employed by Tenant, and
Tenant shall cause the movers to use only the entry doors and elevators
designated by Landlord. If Tenant's movers damage the elevator or any
other part of the Property, Tenant shall pay to Landlord the amount
required to repair the damage.
31. Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no waiver by Landlord shall be
construed as a waiver of the Rules and Regulations in favor of Tenant or
any other tenant, nor prevent Landlord from thereafter enforcing the Rules
and Regulations against any or all of the tenants of the Building.
32. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Building.
33. Landlord reserves the right to make other reasonable Rules and Regulations
as, in its judgment, may from time to time be needed for safety and
security, for care and cleanliness of the Building and for the preservation
of good order therein. Tenant agrees to abide by all Rules and Regulations
hereinabove stated and any additional rules and regulations which are
adopted.
34. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees and
guests.
<PAGE>
<TABLE>
<C> <S> <C>
1. Premises.......................................................... 1
2. Term.............................................................. 1
3. Rent.............................................................. 1
4. Base Rent......................................................... 2
5. Additional Rent - Annual Rent Adjustments/Operating Expenses...... 2
6. Additional Rent - Annual Rent Adjustments/Real Property Taxes..... 3
7. Proration of Rent................................................. 5
8. Tenant Improvements............................................... 5
9. Use of Premises................................................... 5
10. Alterations....................................................... 5
11. Repairs........................................................... 6
12. Damage or Destruction............................................. 6
13. Eminent Domain.................................................... 7
14. Indemnity and Insurance........................................... 8
15. Assignment and Subletting......................................... 9
16. Default........................................................... 11
17. Landlord's Right to Perform Tenant's Covenants.................... 13
18. Security Deposit.................................................. 13
19. Surrender of Premises............................................. 13
20. Holding Over...................................................... 13
21. Access to Premises................................................ 14
22. Signs............................................................. 14
23. Waiver of Subrogation............................................. 14
24. Subordination..................................................... 14
25. Transfer of the Property.......................................... 15
26. Estoppel Certificates............................................. 15
27. Mortgagee Protection.............................................. 15
</TABLE>
(i)
<PAGE>
<TABLE>
<C> <S> <C>
28. Attorneys' Fees................................................... 15
29. Brokers........................................................... 15
30. Parking........................................................... 16
31. Utilities and Services............................................ 16
32. INTENTIONALLY DELETED............................................. 17
33. Acceptance........................................................ 17
34. Use of Building Name.............................................. 17
35. Recording......................................................... 17
36. Quitclaim......................................................... 17
37. Notices........................................................... 17
38. Landlord's Exculpation............................................ 17
39. Additional Structures............................................. 18
40. Hazardous Substances and Materials................................ 18
41. General........................................................... 20
42. Condition Precedent............................................... 21
</TABLE>
(ii)
<PAGE>
EXHIBIT 10.12B
[Seal]
MALASIA
DOMESTIC WIRELESS TELECOMMUNICATIONS LICENSE
LICENSE GRANTED TO
SYARIKAT TELEFON WIRELESS (MALAYSIA) SDN. BHD.
UNDER THE TELECOMMUNICATIONS ACT, 1950
--------------------------------------
LICENSE
-------
1. The Minister of Energy, Telecommunications and Post in exercise of the
powers conferred on him by Section 3 of the Telecommunications Act, 1950
(hereinafter referred to as "the Act") and of all other powers exercisable
by him for that purpose, hereby grants to SYARIKAT TELEFON WIRELESS
(MALAYSIA) SDN. BHD. (hereinafter referred to as "the Licensee") a license,
for the period specified in paragraph 3, subject to the Conditions set out
in Part I hereinafter, to any regulations made or which may be made under
the Act and to revocation as provided for in paragraph 3 and in Part 2, to
establish, maintain, operate and work a telecommunication system specified
in Annex A (hereinafter referred to as "the Licensee's Networks") and
authorizes the Licensee to do all or any of the acts specified hereinafter.
2. This License extends to authorizing the Licensee to place, lay, carry or
maintain any posts, cables or wires for the purpose of erecting and
installing telecommunication equipment on, along, through, under or across
any land, in accordance with the provisions of the Act, once approval from
the Land Authority is obtained by the Licensee.
3. This License shall enter into force on 24th December, 1994, and shall be of
twenty (20) years duration and on expiry shall accordingly be subject to
Government approval to renew the license.
4. The granting of this License does not remove any need by the Licensee to
comply with any provision of any other license issued under the Act or to
obtain any other licenses that are required under the Act or any other Act.
_____________/s/____________
DATO' SERI S.SAMY VELLU
16 NOV 1994 Minister of Energy, Telecommunications
and Post, Malaysia
<PAGE>
LESEN TELEKOMUNIKASI
(WIRELESS TELECOMMUNICATIONS)
SYARIKAT TELEFON WIRELESS (MALAYSIA) SDN. BHD.
DIKELUARKAN OLEH
MENTERI TENAGA, TELEKOM DAN POS, MALAYSIA
<PAGE>
TABLE OF CONTENTS
PAGE NO.
--------
LICENSE
PART ONE: INTERPRETATION 1
PART TWO: CONDITIONS OF LICENSE 5
Condition 1 PROVISION AND MAINTENANCE OF
TELECOMMUNICATION SYSTEMS AND SERVICES 5
Condition 2 LICENSED AREA 6
Condition 3 CONFIGURATION OF NETWORK 7
Condition 4 DOMESTIC AND INTERNATIONAL ARRANGEMENT
AND INTERCONNECTION 8
Condition 5 PUBLICATION OF CHARGES, TERMS AND CONDITIONS TO
BE APPLIED 9
Condition 6 PROHIBITION ON CROSS-SUBSIDIES 11
Condition 7 ALTERATIONS TO THE LICENSEE'S NETWORK 12
Condition 8 RESTRICTION ON INCREASE IN RATES 13
Condition 9 CODE OF PRACTICE FOR CONSUMER AFFAIRS 14
Condition 10 NUMBERING ARRANGEMENTS 15
Condition 11 PRE-NOTIFICATION OF CHANGES IN SHAREHOLDINGS 18
Condition 12 PRE-NOTIFICATION OF JOINT VENTURES 20
Condition 13 REQUIREMENT TO FURNISH INFORMATION TO THE
DIRECTOR GENERAL 22
Condition 14 STANDARDS AND OTHER TECHNICAL SPECIFICATIONS 23
Condition 15 PAYMENT OF FEES 24
Condition 16 ENFORCEMENT OF LICENSE 25
PART THREE: REVOCATION 26
Annex A 13
<PAGE>
PART ONE: INTERPRETATION
1. In these Conditions unless the context otherwise requires:
(a) "Apparatus Supply Business" means the supply of any telecommunication
apparatus for sale to the public;
(b) "bringing into service" means the process of connecting by means
requiring the use of a tool telecommunication apparatus (including
apparatus comprised in a telecommunication system) or a
telecommunication system to another telecommunication system, or the
process of disconnecting by such means such apparatus or such system
from another such system; and includes such testing or inspection of
that apparatus or system and any other apparatus or system to which it
is or is to be connected as is necessary for the purpose of ensuring
that the apparatus or the system in which it is or is to be comprised,
or the system authorized to be connected to any of the Licensee's
Networks; and expressions cognate with "Bringing into Service" shall be
construed accordingly;
(c) "Connectable System" means a telecommunication system which is
authorized to be run under a License which authorizes connection of
that system to the Licensee's Network;
(d) "cost" includes a reasonable profit;
(e) "to dial" includes any equivalent operation;
(f) "Emergency" means an emergency of any kind, including any circumstance
whatever resulting from major accidents, natural disasters and
incidents involving toxic or radioactive materials and civil disorder;
(g) "Emergency Call Service" means a telecommunication service by means of
which any member of the public, using the Licensed Network, may, at any
time and without incurring any charge, communicate by means of any
telecommunication apparatus, as swiftly as practicable with an
appropriate Emergency Organization for the purpose of notifying them of
an Emergency;
(h) "Exchange Line" means and includes any apparatus, including telephones,
instruments, wire, posts, cables, tubes, radio links or other works
provided for the purpose of establishing voice telephony services
between any premises and any exchange;
1
<PAGE>
(i) "Integrated Telecommunication" means the communication in any form or
any combination of forms of speech, data, text, imaging whether
stationary or moving and signals compressed or otherwise;
(j) "International Connection Service" means a telecommunication service
consisting in the conveyance of any message which has been conveyed or
which is to be conveyed by means of any telecommunication system
outside Malaysia the connection of which to the system by means of
which that service is provided is authorized by a License;
(k) "Licensed Area" means Malaysia;
(l) "Licensee's Group" means the Licensee and all of its subsidiaries taken
together;
(m) "Limited Maintenance Telecommunication System" means any
telecommunication system or telecommunication apparatus as the case may
be which is, or is to be run under a License which requires maintenance
services to be provided in respect of it, if it is, or is to be
connected to any of the Licensee's Networks, by either the Licensee or
the person running any other public telecommunication system to which
it is, or is to be, connected;
(n) "PSWN" Public Switched Wireless Network means a switched
telecommunications system providing a network of one way and two way
switched services to the subscribing public.
(o) "telecommunication service" means
(i) a service consisting in the conveyance of Messages by means of a
telecommunication system;
(ii) a directory information service, that is to say, a service
consisting in the provision by means of a telecommunication for
the purpose of facilitating the use of a service falling within
paragraph (i) above and provided by means of that system; and
(iii) a service consisting in the installation, maintenance,
adjustment, repair, alteration, moving, removal or replacement of
apparatus which is or is to be connected to a telecommunication
service.
(p) "Telephone" means and includes any transmitting and receiving
instrument designed for the sole purpose of
2
<PAGE>
transmitting and reproducing spoken communications by means of
electricity.
(q) "Wholly Owned Subsidiary" means a body corporate all the issued
shares in which are held by or on behalf of the Licensee.
(r) "Wireless Local Loop" means the provision of a telecommunications
service to a subscriber by means of radio transmission.
2. Any word or expression used in these Conditions shall unless the context
otherwise requires have the same meaning as it has in the Act, provided that
in the event of any conflict or inconsistency arising between any word or
expression defined in the Act and defined in this License, the definition in
this License shall prevail and be applied.
3. For the purposes of interpreting these Conditions, headings and titles to
any Condition shall be disregarded.
4. Words importing any gender shall include all other genders, words importing
persons shall include bodies corporate and unincorporate and vice versa, and
words importing the singular number shall include the plural number and vice
versa.
5. If any provision of this License is held by any court or competent authority
to be invalid or unenforceable in whole or in part, this License shall
continue to be valid and enforceable as to the other provisions thereof and
the remainder of the affected provision.
3
<PAGE>
PART TWO
--------
CONDITIONS OF LICENSE
4
<PAGE>
Condition 1
PROVISION AND MAINTENANCE OF TELECOMMUNICATION
SYSTEMS AND SERVICES
1.1 The License shall provide to every person who requests the provision of
such services at any practical place in the Licensed Area as specified in
Condition 2.1 and maintain such services:
(a) voice telephony and digital services; and
(b) integrated telecommunication as technology may allow; and
(c) other telecommunication services as are authorized or to be
authorized in writing by the Director General that consist in the
conveyance of messages by means of the Licensee's Network except to
the extent that the Director General is satisfied that any reasonable
demand is met or is to be met by other means and that accordingly it
would not be reasonable in the circumstances to require the Licensee
to provide the service so required; and the Licensee shall ensure that
the Network is installed, kept installed and maintained and worked for
those purposes.
5
<PAGE>
Condition 2
LICENSED AREA
2.1 The licensed area shall be the Kingdom of Malaysia, including Peninsula
Malaysia and East Malaysia.
6
<PAGE>
Condition 3
CONFIGURATION OF NETWORK
3.1 The configuration of the network, the individual proposed system to be
established and the proposed list of equipment to be used shall be
submitted to the Director General of Telecommunication for his approval in
writing. This will include all equipment involved in the provision of the
telecommunications services inclusive of transmission, and interconnect
with other operators.
7
<PAGE>
Condition 4
DOMESTIC AND INTERNATIONAL ARRANGEMENT AND INTERCONNECTION
4.1 All domestic and international arrangements and interconnections shall be
allowed via the existing facilities if available. If such facilities are
not available and/or not made available or if available and made available
but does not meet or satisfy the Licensee in any way, the Licensee shall
then submit the proposed arrangements to the Director General for his
approval.
4.2 The interconnection of the Licensees network with other licensed Network
Operators must comply with the policy, regulations and rules of the
FRAMEWORK AND RULES FOR INTERCONNECTION, EQUAL ACCESS AND GATEWAY
FACILITIES as determined by the Director General.
8
<PAGE>
Condition 5
PUBLICATION OF CHARGES, TERMS AND CONDITONS TO BE APPLIED
5.1 The Licensee shall, except insofar as the Director General may otherwise
consent in writing, and except in respect of any existing rates prescribed
under any regulations made under Section 7 of the Act and rates which the
Minister may make regulations for under Section 7 of the Act.
(a) Publish in the manner and at the times specified in paragraph 5.2, a
notice specifying, or specifying the method that is to be adopted for
determining the charges and other terms and conditions on which it
offers:
(i) to provide each description of telecommunication services by
means of the Licensee's Network in accordance with an
obligation imposed by or under this License ;
(ii) to maintain, adjust or repair any apparatus comprised in the
Licensee's network in accordance with an obligation imposed by
or under this License;
(iii) to connect to the Licensee's Network any other system which,
in either case, is not and is not to be comprised in the
Licensee's Network in accordance with an obligation imposed by
or under this License;
(iv) to grant permission to connect such systems or apparatus to,
or to provide services by means of, the Licensee's Network in
accordance with an obligation imposed by or under this License;
or
(v) to Bring into Service any apparatus or system which, in either
case, is or is to be connected to but not comprised or to be
comprised in the Licensee's Network where only the Licensee is
permitted to provide such service; and
(b) where it does any of the things mentioned in paragraph 5.1(a)(i) to
( v), do those things at the charges and on the terms and conditions
so published and not depart therefrom.
5.2 Publication of the notice shall be effected by:
9
<PAGE>
(a) sending a copy thereof in the Director General not more than 28 days
after the date on which this License enters into force and thereafter
not less than 28 days before any proposal to amend any charge, term or
condition or the method of determining the same is to become
effective, provided however that if the Director General consents in
writing to any variation in a proposal to amend these charges, terms,
conditions or methods in the said period of 28 days the Licensee shall
not be prevented from making the amendments with variation 28 days
after the date when the notice was first sent to the Director General
in accordance with this sub-paragraph;
(b) placing as soon as practicable thereafter a copy thereof in a publicly
accessible part of every public office of the Licensee in such manner
and such place that it is readily available for inspection free of
charge by members of the general public during Business Hours; and
(c) sending a copy thereof or such part or parts thereof as are
appropriate to any person who may request such a copy.
5.3 In this Condition, "Business Hours" means any hours during any day on which
the Licensee is lawfully open for business.
10
<PAGE>
Condition 6
PROHIBITION ON CROSS-SUBSIDIES
6.1 Where the Director General, determines that the Licensee is unfairly cross-
subsidising any of the following activities carried out by another member
of the Licensee's Group within the Licensed Area:
(a) the Apparatus Supply Business; or
(b) the provision of Value Added Services by means of the Licensee's
Network;
it shall take such steps as the Director General may direct for the purpose
of remedying the situation.
6.2 The Licensee shall secure that any subsidiary of the Licensee engaged in
any of the activities specified in sub-paragraphs 6.1(i) does not engage in
the business of running a telecommunication system.
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Condition 7
ALTERATIONS TO THE LICENSEE'S NETWORK
7.1 The Licensee shall from time to time inform the Director General and
provide him with such additional information as he may reasonably require
about any proposals for changes to the Licensee's Network or to any
apparatus comprised therein or to any stored commands or protocol which the
Licensee might reasonably anticipate from the facts known to it would have
the effect of requiring any person:
(a) running any Connectable System which is or is to be connected to the
Licensee's network,
(b) producing or supplying telecommunication apparatus or
telecommunication systems for connection to the Licensee's Network
without becoming comprised in them
materially to modify or to replace or cease to produce or supply any item
of telecommunication apparatus connected or to be connected to the
Licensee's Network.
7.2 The Licensee shall prepare and publish in consultation with the Director
General, a statement of its procedures for consulting, and giving advance
notice to those persons likely to be affected by such changes, and shall
adhere to those procedures.
7.3 In this Condition:
"to modify" in relation to any Other Apparatus or System means to make any
alteration to that Other Apparatus or System which may be necessary to
ensure that any Message which has been or is to be conveyed by means of the
Licensee's Network connected or to be connected to that Other Apparatus or
System is capable of being properly conveyed by that Other Apparatus or
System or by that Licensee's Network as the case may be; and
"Other Apparatus or System" means any telecommunication apparatus or
telecommunication system together with any protocol, message format or
stored command in such apparatus or system connected or to be connected to
but not comprised in the Licensee's Network.
12
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Condition 8
RESTRICTION ON INCREASE IN RATES
8.1 The Licensee shall not increase any rates in respect of:
(a) telecommunication services provided solely by the Licensee; or
(b) access to the Licensee's Network by
(i) telecommunication systems not operated by the Licensee; or
(ii) telecommunication apparatus not owned by the Licensee;
unless the Licensee has applied to the Minister of any such change in
accordance with Section 7A and 7B of the Act.
13
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Condition 9
CODE OF PRACTICE FOR CONSUMER AFFAIRS
9.1 The Licensee shall, in consultation with the Director General prepare and
not later than twelve (12) months after the date on which this License
enters into force, publish in accordance with Condition 5.2, a Code of
Practice giving guidance in respect of any disputes and complaints relating
to the provision by the Licensee of telecommunication services by means of
or in relation to the Licensee's Network.
14
<PAGE>
Condition 10
NUMBERING ARRANGEMENTS
10.1 The Licensee shall from the date on which this License enters into force
adopt a numbering plan common with the national numbering plan, and shall
not later than six (6) months thereafter, furnish details thereof to the
Director General.
10.2 The numbering plan shall describe the method adopted and to be adopted for
allocating and re-allocating in respect of each Connectable System in
respect of which telecommunication services are provided such number or
numbers as may be necessary for each such System.
10.3 The Licensee shall install, maintain or adjust the Licensee's Network so
that it conveys Messages to such Connectable Systems in respect of which
numbers have been allocated in accordance with the numbering plan.
10.4 The numbering plan on the date on which this License enters into force
shall be the numbering arrangement applied immediately before that date,
but the Licensee shall from time to time thereafter, consult the Director
General about the arrangements for the allocation and reallocation of
numbers within the numbering plan.
10.5 The Licensee shall from time to time prepare and furnish to the Director
General, proposals for developing, adding to or replacing the numbering
plan and changing the Licensee's Network to the extent necessary to secure
that:
(a) sufficient numbers are made available, having regard to the
anticipated growth in demand for telecommunication services, for a
number or numbers to be allocated without undue delay
(b) the cost of changing the Licensee's Network or any Connectable
System in order to accommodate the revised numbering plan is
reasonable, and
(c) inconvenience caused by the alteration of the numbering plan to the
Licensee and to persons using Connectable Systems in respect of which
numbers have previously been allocated is minimized.
10.6 If the Director General determines that the numbering plan with any
developments, additions and replacements submitted in
15
<PAGE>
accordance with paragraph 10.5 is sufficient to meet the objectives
specified in paragraph 10.5, the Licensee shall adopt the numbering plan
but, if the Director General determines that it will not be sufficient to
achieve the objectives specified in paragraph 10.5, then the Licensee
shall adopt the numbering plan with such developments, additions or
replacements as the Director General may determine are best calculated to
secure the objectives specified in paragraph 10.5 that the Licensee shall
adopt the numbering plan with such developments, additions or replacements
as the Director General may determine are best calculated to secure the
objectives specified in paragraph 10.5.
10.7 The Director General shall not exercise his powers under paragraph 10.6
before 31st December, 1998, so as to require the Licensee to change the
Licensee's Network; provided that it does not develop, add to or replace
the numbering plan before that date except with the consent of the
Director General.
10.8 Before making a determination under paragraph 10.6 above, the Director
General shall take account of:
(a) the state of technical development of the Licensee's Network and the
Licensee's plans for its commercial development;
(b) the balance of advantage between:
(i) making developments of additions to or replacements of numbering
arrangements applied or to be applied, or making changes to
systems run by others; and
(ii) making any requirement of the Licensee;
(c) the cost to the Licensee and to those to whom the Licensee provides
telecommunication services arising from any determination;
(d) any obligations and recommendations of the International
Telecommunication Union which apply to the Malaysian Government and
are accepted by them and any other standard to which the Director
General consents for the purpose from time to time; and
(e) the views of the Licensee and such other persons as appear to the
Director General to have an interest in the matter.
10.9 If the Director General determines that the numbering plan shall be
developed, added to or replaced in accordance with paragraph 10.6, nothing
in paragraph 10.6 shall preclude the Licensee from submitting to the
Director General proposals for
16
<PAGE>
further developments of, additions to or replacements of the numbering
plan or from subsequently changing the Licensee's Network if the Director
General does not object to the further developments, additions or
replacements proposed by the Licensee.
10.10 The Licensee shall not charge any person for a number which is allocated
to him (other than a coveted number allocated to a person who is not a
public telecommunications operator at the request of such a person) but
the Licensee shall be entitled to recover the reasonable cost of
allocating a number and of carrying out any change to the Licensee's
Network necessary for the purpose of permitting Messages to be sent to a
number allocated to that person and any reasonable continuing costs
arising from such a change from that person.
10.11 For the purposes of this Condition, "to change" includes to make any
alteration to the telecommunication apparatus or telecommunication
systems or to the protocols (including message formats) or stored
commands in such apparatus or systems.
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Condition 11
PRE-NOTIFICATION OF CHANGES IN SHAREHOLDINGS
11.1 Except as specified in Condition 11.2, the Licensee shall notify the
Minister:
(a) of any change in the proportion of shares held by any shareholder
in the Licensee;
(b) if any person acquires any shares in the Licensee who does not
already hold any shares in the Licensee, and of the proportion of the
shares to be held by such person;
in either case, such notification to be given as soon as practicable after
any change, or acquisition, as the case may be, is proposed.
11.2 The Licensee shall not be obliged to notify the Minster of any such change
or acquisition where:
(a) such change or acquisition does not result in a change in control
of the Licensee; and
(b) the proportion of such shares, the holding of which it is proposed to
change, or which it is proposed to acquire, as the case may be, then
aggregated to the proportion of such shares the holding of which has
been changed at anytime after the granting of this License (whether
or not the change has previously been notified to the Minister in
accordance with this paragraph) does not exceed 15% of the total
number of shares in the Licensee to which this condition applied.
11.3 The Licensee shall notify the Minister not later than thirty (30) days
before the taking effect of any of the arrangements of the descriptions
mentioned in paragraph 11.4.
11.4 Those descriptions of arrangements are:
(a) any arrangement for obtaining a listing of any shares in the
Licensee on any Stock Exchange in Malaysia or elsewhere; and
(b) any arrangement for dealings in any shares in the Licensee on an
unlisted or over-the-counter market in Malaysia or elsewhere.
18
<PAGE>
11.5 This condition applies to all shares in the Licensee the holder which for
the time being is entitled to vote on any matter at a general meeting of
the Licensee.
11.6 For the purpose of this Condition, any shares held by nominee for any
person shall be treated as held by that person.
11.7 In this Condition, "control" means the power of a person to secure:
(a) by means of the holding of shares or the possession of voting power
in or in relation to that or any other body corporate, or
(b) by virtue of any powers conferred by the articles of association or
other document regulating that or any other body corporate
that the affairs of the first-mentioned body corporate are conducted in
accordance with the wishes of that person.
19
<PAGE>
Condition 12
PRE-NOTIFICATION OF JOINT VENTURES
12.1 Unless the Director General otherwise agrees, the Licensee shall notify
the Director General not later than sixty (60) days before the taking
effect of any of the agreements or arrangements to which this Condition
applies, giving particulars of those agreements or arrangements.
12.2 Those agreements and arrangements are:
(a) an agreement with any person for the establishment or control of
any body corporate for the purpose of:
(i) the running of a telecommunication system which requires a
License; or
(ii) providing telecommunication services in the Licensee Area
which necessarily involve the running of such a system; or
(iii) the production of telecommunication apparatus for supply in
the Licensed Area where the production would lead to a monopoly
situation which would not otherwise exist in relation to the
supply of telecommunication apparatus of any description in the
Licensed Area;
(b) an agreement for establishment of a partnership for any of those
purposes and in those circumstances;
(c) any other agreement or arrangement in the nature of a joint venture f
or the purpose of running a telecommunication system which requires a
License or for the purpose of providing telecommunication services in
the licensed area which necessarily involve the running of such a
system.
12.3 Sub-paragraphs 12.2(a) and (b) apply in relation to an agreement or
arrangement for the establishment or control of any body corporate or
partnership where the Licensee has or is to have not less than twenty
percent (20%) of the voting power in any organ controlling that body.
12.4 In any case where circumstances beyond the Licensee's control require it
to enter into an agreement or arrangement, without having made a
notification in accordance with paragraph 12.2, it
20
<PAGE>
shall notify the Director General as soon as is reasonably practicable,
but otherwise in accordance with the provisions of this Condition.
21
<PAGE>
Condition 13
REQUIREMENT TO FURNISH INFORMATION TO THE DIRECTOR GENERAL
13.1 Subject to paragraph 13.2, the Licensee shall furnish to the Director
General, in such manner and at such times as the Director General may
request, such documents, accounts, estimates, returns or other information
and procure and furnish to him such reports as he may reasonably require
for the purpose of exercising the functions assigned or transferred to him
by the Minister under the Act.
13.2 In making any such request, the Director General shall ensure that no
undue burden is imposed on the Licensee in procuring or furnishing such
information and, in particular that the Licensee is not required to
procure or furnish a report which would not normally be available to it,
unless the Director General considers the particular report essential to
enable him to exercise his functions.
22
<PAGE>
Condition 14
STANDARDS AND OTHER TECHNICAL SPECIFICATIONS
14.1 If the General Director, having consulted the Licensee, reasonably directs
the Licensee to ensure that:
(a) there is incorporated, or there ceases to be incorporated, as the
case may be, any apparatus in the Licensee's Network; or
(b) the Licensee's Network confirms or ceases to conform, as the case
may be, to any standard or any other technical specifications
specified in the direction;
then the Licensee shall use its best endeavors to comply with the
direction within the reasonable period specified in the direction for such
compliance.
23
<PAGE>
Condition 15
PAYMENT OF FEES
15.1 The Licensee shall pay the following amounts to the Director General at
the time stated:
(a) on the grant of this License the sum of three hundred thousand
Ringgit (RM300,000) and;
(b) annually thereafter a renewal fee in the amount of 0.08% of gross
annual turnover of the Licensee's business in the financial year,
before the last complete financial year of the licensee, before the
fee is payable or the sum of thirty thousand Ringgit (RM30,000)
whichever is greater.
24
<PAGE>
Condition 16
ENFORCEMENT OF LICENSE
16.1 Where the Director General is satisfied that the Licensee is breaching or
has breached any of the Conditions, he shall serve a notice in writing on
the Licensee requiring him to remedy the breach within a reasonable period
of time to be specified in the notice but not exceeding six (6) months
from the date of the service of the notice.
25
<PAGE>
PART THREE
----------
REVOCATION
Notwithstanding paragraph 3 of the License, the Minister may at any time revoke
this License by thirty (30) days notice in writing given to the Licenseee at
its registered office in any of the following circumstances:
(a) if the Licensee agrees in writing with the Minister that this License
should be revoked;
(b) if any amount payable under Condition 15 is unpaid thirty (30) days after
the date of the Licensee's receipt of a notice of demand for payment of the
amount from the Director General.
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ANNEX A
THE LICENSEE'S NETWORK
The Licensee's network comprises all installed, planned or proposed operations
for the purpose of providing Wireless Telecommunications.
Within the licensed area the Licensee's network shall include two way,
transmission and reception of terrestrial telecommunications.
The network shall consist of:
(a) Wireless local loop subscriber systems
(b) Cabling systems to extend the range of Wireless services
(c) Network Switching Systems
(d) Network Transmission Systems
(e) Any other system as determined by the Director General
The Licensee shall use technologies that are best suited to those frequencies
allocated by the Director General.
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Confidential Treatment Requested
EXHIBIT 10.12C
The Company has requested confidential treatment of certain portions of
this exhibit on pages 9 and 10 of the Access and Interconnect Agreement and
pages S-2 through S-14 of the Schedules attached thereto.
ACCESS AND INTERCONNECT AGREEMENT
BETWEEN
TELEKOM MALAYSIA BERHAD
AND
SYARIKAT TELEFON WIRELESS (M) SDN BHD
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. DURATION OF AGREEMENT........................... 1
2. SCOPE OF AGREEMENT.............................. 2
3. INTERPRETATIONS................................. 2
4. AMENDMENT TO AGREEMENT.......................... 3
5. TECHNICAL FRAMEWORK............................. 3
6. OPERATIONAL FRAMEWORK........................... 6
7. COMMERCIAL FRAMEWORK............................ 7
8. LIABILITIES AND INDEMNITIES..................... 10
9. TERMINATION OF AGREEMENT........................ 11
10. FORCE MAJEURE.................................. 11
11. ASSIGNMENT..................................... 12
12. LIQUIDATION.................................... 12
13. ARBITRATION.................................... 12
14. LAW............................................ 13
15. NOTICES........................................ 13
16. STAMP DUTY..................................... 13
17. MISCELLANEOUS.................................. 14
ATTACHMENTS:
SCHEDULE 1: LIST OF ACCESS NODES.............. 1
Schedule 2: OUTGOING CALL RATES............... 2
Schedule 3:.................................... 3
</TABLE>
<PAGE>
ACCESS AND INTERCONNECT AGREEMENT
AN AGREEMENT made this 16th day of August 1994
BETWEEN
TELEKOM MALAYSIA BERHAD
a company incorporated under the laws of Malaysia and having its registered
office at Ibu Pejabat Telekom Malaysia, Jalan Pantai Baharu, 59200 Kuala Lumpur
(hereinafter referred to as "TELEKOM MALAYSIA") of the one part AND
SYARIKAT TELEFON WIRELESS (M) SDN BHD [STAMP INDICATING
STAMP DUTIES PAID]
a company incorporated under the laws of Malaysia and having its place of
business at 1ST FLOOR (LOBBY A), WISMA SEGAR, JALAN TUN SAMBATHAN 50470 KUALA
LUMPUR (hereinafter referred to as "STW") of the other part.
WHEREAS, STW is desirous of accessing and interconnection of the Wireless Local
Loop Network (hereinafter referred to as "WLLN") to TELEKOM MALAYSIA's Public
Switched Telephone Network (hereinafter referred to as "PSTN") AND TELEKOM
MALAYSIA is desirous of accessing and interconnection of the PSTN to the WLLN
(hereinafter collectively referred to as the "Access and Interconnection")
WHEREAS, STW is desirous of obtaining TELEKOM MALAYSIA's other services (herein
referred to as the "Services") as may be required by STW.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. DURATION OF AGREEMENT
1.1 This Agreement shall be for a period of three (3) years commencing from
the 16th day of August 1994 until 15th day of August 1997 (both dates
inclusive) and shall endure from year to year until or unless either
party gives the other party a thirty (30) day written notice to
terminate this
<PAGE>
Agreement, subject always to prior termination as hereinafter
specified.
1.2 The parties hereby may review the terms of this Agreement after the
period of the Agreement and the Agreement shall continue to be in force
during the review period.
2. SCOPE OF AGREEMENT
This Agreement establishes a framework for the provision of Access and
Interconnection service between TELEKOM MALAYSIA and STW and such other
Services as may be required by STW.
3. INTERPRETATIONS
In this Agreement, except where the context otherwise requires the following
terms shall have the meanings hereby respectively assigned to them:
(a) "Access Charge" the charge levied by a network operator to
another network operator for allowing Access
and Interconnection into its network.
(b) "Interconnection" the connection of independent networks to
enable customers of one network to communicate
with customers of the other network(s).
(c) "Access Node" any node allocated by each network operator,
in accordance with the Access and
Interconnection concept agreed by both
parties, which is meant to be the point of
delivery of call intended to be delivered form
one network to another.
(d) "DTS" means Digital Trunk Switch installed in
Telekom Malaysia's Public Switched Telephone
Network.
(e) "Circuits" any analogue or digital transmission channel
owned by TELEKOM MALAYSIA.
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(f) "Call" means a signal or series of signals intended
by one network operator to be conveyed to
another network operator.
(g) "CCITT" means International Telegraph and Telephone
Consultative Committee.
(h) "POI" the point of interconnection (POI) shall be
the physical access point of the outgoing
access circuit from one operator's network to
the other operator's network and shall be as
close as possible to the designated Access
Node.
(i) "RBS" means a Radio Base Station operated by STW.
(j) "RM" means Ringgit Malaysia which shall be the
monetary currency used for transactions in
this Agreement.
4. AMENDMENT TO AGREEMENT
4.1 Whenever it becomes necessary and as mutually agreed by both parties,
the provisions of this Agreement shall be amended, modified or
supplemented in writing and executed by the duly authorized
representative of the parties.
4.2 Notwithstanding to Clause 4.1 above mentioned, the provisions of this
Agreement to be entered by both parties shall be subject to any law,
legislation and regulations passed by the Government of Malaysia. In
the event of any conflict or inconsistency between the provisions
hereof and such law, legislation and regulations, the latter shall
prevail and both parties shall immediately amend the provisions of
this Agreement and such amendments shall take effect from the date of
such law, legislation and regulations coming into force.
5. TECHNICAL FRAMEWORK
5.1 NETWORK ACCESS
5.1.1 Interconnection of networks to enable customers subscribing to
those networks to communicate shall
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<PAGE>
be made in accordance with the terms and conditions set forth
in this Agreement.
5.1.2 Interconnection between WLLN and PSTN shall be made through
Access Nodes in the following manner:
5.1.2.1. STW shall access PSTN at nodes predetermined by
TELEKOM MALAYSIA as set out in SCHEDULE 1 hereto
subject always to changes to facilitate STW accessing
and interconnecting its WLLN to TELEKOM MALAYSIA's
PSTN nationwide.
5.1.2.2 TELEKOM MALAYSIA shall access WLLN at nodes
predetermined by STW as set out in SCHEDULE 1 hereto
subject always to changes to facilitate TELEKOM
MALAYSIA accessing and interconnecting its PSTN to
STW's WLLN nationwide.
5.1.2.3 In the event there is only one (1) Access Node set out
in SCHEDULE 1, then either party may request
connection to one other Access Node for diversity
purposes where it is feasible and justifiable.
5.1.2.4 The responsibility for the provision of Circuits to
access the other operator's network shall be with the
network operator originating the calls. The quantity
of Circuits shall be justified and mutually agreed by
both parties. The receiving network operator shall be
responsible to provide sufficient interface equipment
which shall conform to CCITT recommendations or the
prevalent specifications whichever is the earlier at
the point beyond the POI to facilitate Access and
Interconnection.
5.2 ACCESS NODES
5.2.1. STW shall interconnect its WLLN to PSTN at the nearest
switching node as specified in SCHEDULE 1 in the following
manner:
5.2.1.1 Calls from STW's switch connected directly to a local
PSTN switch shall terminate to
4
<PAGE>
subscribers connected to the local switch only.
5.2.1.2 Other calls from STW's network into PSTN shall be
routed through designated Access Nodes as specified in
Clause 5.1.2.1
5.3 SYNCHRONIZATION
For purposes of synchronization, the master clock shall reside in the
PSTN and will drive the slave clock in the WLLN.
5.4 SIGNALING
For successful Access and Interconnection, all signaling methods
adopted by STW must be compatible to TELEKOM MALAYSIA's signaling
methods if STW were to Access and Interconnect with TELEKOM MALAYSIA's
PSTN.
5.5 NETWORK CONNECTIBILITY
5.5.1 STW shall use its best endeavor to comply to TELEKOM MALAYSIA's
technical requirements in view of PSTN being the universal
telecommunication network in the country and its commitment to
allow interconnection with other operators' networks.
5.5.2 STW shall use its best endeavor to comply that the WLLN is
connectable and compatible to PSTN and shall comply to TELEKOM
MALAYSIA's technical requirements.
5.6 MODIFICATION AFFECTING CONNECTIBILITY
TELEKOM MALAYSIA shall notify STW in writing within a reasonable time
of any modification to be made in the PSTN which will affect the
connectibility of the two networks and vice versa.
5.7 TRAFFIC ROUTING
5.7.1 The routing of traffic into WLLN shall be made at the nearest
STW's Access Nodes as specified in SCHEDULE 1 subject always to
the provisions of Clauses 5.1.2.1 and 5.2.1.1 respectively.
5.7.2 Alternative routing of traffic through PSTN shall not be
allowed.
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<PAGE>
5.7.3 The routing of traffic which has accessed the other operator's
network are to be managed solely by the network operator which
owns the call receiving network.
6. OPERATIONAL FRAMEWORK
6.1 FAULT HANDLING
In the case of a breakdown in the services provided by either party
involving the interconnect traffic, the network operator shall:
6.1.1 Inform the other party details of the breakdown.
6.1.2 Arrange alternative facilities if available.
6.1.3 All planned outages that will affect the termination of calls
from the other operator's network shall be notified to the
other network operator 24 hours in advance.
6.1.4 Unplanned outages should be advised to the other network
operator as soon as practicable.
6.2 NETWORK PERFORMANCE
6.2.1 The parties to this Agreement shall be responsible to provide
sufficient interconnection circuits to accommodate the
requirements of the interconnect traffic in accordance with
this Agreement.
6.2.2 The parties to this Agreement shall periodically provide their
respective current and forecasted interconnect call traffic
dispersion to enable both parties to plan the interconnect
requirements.
6.2.3 Neither party is obliged to resolve call traffic problems
within the network of the other party unless such problem(s)
arises directly from the interconnection arrangements between
the two networks in accordance with this Agreement.
6.3 PROVISION OF LEASED CIRCUITS
6.3.1 STW shall indicate its required leased circuits nine (9) months
prior to the commissioning of the circuits. These requirements
shall include the following details:
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<PAGE>
6.3.1.1 The source and destination location complete with the
exact addresses.
6.3.1.2 Type and capacity of the required circuit.
6.3.1.3 The required availability date and termination date.
6.3.2 In the event where TELEKOM MALAYSIA is not able to provide STW
with the Circuits by the required date, TELEKOM MALAYSIA shall
propose an alternative delivery date within one (1) month from
the date of application.
6.3.3 Where provision of Circuits is specifically for STW's use then
the terms and conditions of provision will have to be
negotiated by both parties.
6.3.4 STW shall indicate to TELEKOM MALAYSIA its five-year circuit
requirement on a year-by-year basis to enable TELEKOM MALAYSIA
to incorporate it into its five years infrastructure planning
programme.
7. COMMERCIAL FRAMEWORK
7.1 ACCESS AND INTERCONNECTION CHARGES
7.1.1 The parties to this Agreement shall levy an Access and
Interconnection charge for accessing into each other's network.
7.1.1.1 STW shall pay TELEKOM MALAYSIA for its outgoing local,
trunk and international calls through the PSTN
respectively.
7.1.1.2 TELEKOM MALAYSIA shall pay STW for its outgoing calls
to the WLLN.
7.1.1.3 The Access and Interconnection charges applicable are
as listed in SCHEDULE 2 and SCHEDULE 3 respectively.
7.1.2 The Access and Interconnection rates have been packaged as an
integrated service and are to be applied wholly and severally.
This means that calls from WLLN which access the PSTN will be
carried totally by the PSTN including its international portion
until they reach their designated subscribers in the PSTN or
exit the PSTN to another
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operator's network and subscribers, or exit the international
network to a foreign administrator's network.
7.1.3 The rates for Access and Interconnection as stipulated in
SCHEDULE 2 and SCHEDULE 3 include volume discount and therefore
no further discount for volume considerations is applicable.
Either party shall therefor bear the full cost of any discount
given to its customers.
7.1.4 STW shall not under any circumstances bypass TELEKOM MALAYSIA's
switched trunk network.
7.2 SCOPE OF CHARGES
7.2.1 Local Call Access and Interconnection Charge
Each party to this Agreement shall pay the other party when
accessing the other party's network in the manner specified by
Clause 5.2.1.1 according to rates as specified in SCHEDULE 2.
7.2.2 Subscriber Trunk Dialing Access and Interconnection Charge
Each party to this Agreement shall pay the other party at the
rates as specified in SCHEDULE 2 when accessing the other
party's network.
7.2.3 International Direct Dial Call Access and Interconnection
Charge
7.2.3.1 International Outbound Calls
STW shall pay TELEKOM MALAYSIA at the rates as
specified in SCHEDULE 3 for any STW outbound
international call through the PSTN.
7.2.3.2 International Inbound Calls
The settlement for the International Inbound Calls
revenue is subject to negotiation between the parties.
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Confidential Treatment Requested
7.2.4 Operator Services Charge
7.2.4.1 Domestic Services
STW shall pay TELEKOM MALAYSIA a handling charge of
[*] for every operator assisted call made by STW's
subscribers to or through the PSTN. This is over and
above the published PSTN rates charged for operator
assisted calls which is payable by STW to TELEKOM
MALAYSIA.
7.2.4.2 International Services
STW shall pay TELEKOM MALAYSIA a handling charge of
[*] for every operator assisted call made by STW's
subscribers through the PSTN. This is over and above
the published PSTN rates charged for operator assisted
calls which is payable by STW to TELEKOM MALAYSIA.
7.2.4.3 Notwithstanding to Clause 7.2.4.1 and Clause 7.2.4.2
above mentioned similar charges shall be payable by
TELEKOM MALAYSIA to STW for every operator assisted
call service handled by STW.
7.2.4.4 Phonogram Services
Telegrams sent by telephone to Telekom Malaysia's
Phonogram Centre(s) are called Phonogram Services and
will be charged at the published rates as well as a
handling charge.
7.2.4.4.1 Domestic Phonogram Services
STW will pay TELEKOM MALAYSIA a handling
charge of [*] for every call made through
the Phonogram Centre(s).
7.2.4.4.2 International Phonogram Services
STW will pay TELEKOM MALAYSIA a handling
charge of [*] for every
- ---------------------
* Confidential portion has been omitted and filed separately with the Commission
9
<PAGE>
Confidential Treatment Requested
call made through the Phonogram Centre(s).
7.2.5 Other Services
7.2.5.1 STW may request other services from TELEKOM MALAYSIA
wherever available and TELEKOM MALAYSIA shall offer
these services wherever it is in a position to do so
e.g. leased circuits, Premium rate services,
information/database services etc.
7.2.5.2 The purchase of such Services shall be covered in
separate agreements which are to be mutually agreed by
both parties.
7.3 TERMS OF PAYMENT
7.3.1 Payment of Charges
7.3.1.1 The Payment of Charges to TELEKOM MALAYSIA shall be
made by cheques payable to Telekom Malaysia Berhad in
Malaysian Ringgit.
7.3.1.2 The Payment of Charges to STW shall be made by cheques
payable to Syarikat Telefon Wireless (M) Sdn Bhd in
Malaysian Ringgit.
7.3.1.3 All amounts payable to either party shall be paid
within thirty (30) days upon presentation of bills.
7.3.1.4 A penalty charge of [*] per annum shall be levied on
any late payment on the outstanding amount after the
credit period of thirty (30) days compounded on a
daily basis.
7.3.1.5 Billing data for each bill shall be made available to
both parties for the purpose of verification within a
period of six (6) months after bills are issued.
8. LIABILITIES AND INDEMNITIES
TELEKOM MALAYSIA shall not be liable and shall not indemnify STW for any
claim made by a third party arising from or through the
- --------------------------
* Confidential portion has been omitted and filed separately with the Commission
10
<PAGE>
Access and Interconnection for any damage, loss or injury, whether to
persons or properties, howsoever arising from or occasioned by the Access
and Interconnection or loss or interruption thereof and in the event of any
loss or injury or damage which may be occasioned through the interruption
or loss of Access or Interconnection or from any case whatsoever.
9. TERMINATION OF AGREEMENT
9.1 DEFAULT
If one party defaults as follows:
9.1.1 Without reasonable cause, wholly fails to fulfill the
obligations under this Agreement, or a breach of any
stipulations herein contained.
9.1.2 Refuses, or to a substantial degree, persistently neglects,
after notices in writing from either party, to fulfill the
obligations under this Agreement.
THEN, if any such default shall continue for THIRTY (30) days after a
notice has been sent by registered post from one party to the other
specifying the same, the former may, without prejudice to any other
rights herein contained thereupon by notice sent by registered post,
terminate this Agreement.
10. FORCE MAJEURE
10.1 Neither party shall be liable for any failure to fulfill any
obligations under this Agreement if fulfillment has been delayed,
hindered or interfered with or prevented by reason of "Force Majeure"
of which the term shall mean and include interalia policies,
restrictions or regulations imposed by the Government, Acts of God,
war, rebellion, strikes, lockouts or labour disputes, sabotage or
riots, floods, fire, explosions or other catastrophes, or other
similar occurrences which are not within the reasonable control of the
party affected and which by the exercise of reasonable diligence, the
said party is unable to prevent or provide against.
10.2 Either party claiming to be affected by an event of force majeure
shall give immediate notice of such claim to the other party of this
Agreement, giving full particulars thereof and shall take all
necessary steps to remove such
11
<PAGE>
cause and resume performance hereunder as soon as such cause is
removed.
10.3 Either party is entitled to conduct investigation into any delay or
hindrance or interference and upon satisfying itself that such delay
or hindrance was due to a genuine force majeure event shall take
necessary steps to resume the performance hereunder after the cause
has been removed. However, if the result of the investigations reveals
that any of the aforementioned events are selfinflicted then the
provisions of this clause shall not apply.
10.4 Neither party shall be considered in default in the performance of its
obligations under this Agreement to the extent that performance of
such obligations, or any of them, is delayed by force majeure.
11. ASSIGNMENT
Neither party shall without the written consent of the other first
obtained, assign this Agreement nor sub let all of or any portion of this
Agreement provided that such consent shall not be unreasonably withheld to
the prejudice of the other.
12. LIQUIDATION
If either party passes a resolution to wind-up other than for the purpose
of amalgamation or reconstruction, or a lawfully constituted court of
competent jurisdiction in Malaysia should make an order that either party
shall wind-up, or if a receiver or manager on behalf of a creditor should
be appointed, or if circumstances should arise which entitle such court or
a creditor to appoint a receiver or manager or entitle such court to make a
winding-up order, either party shall have the right to determine this
Agreement forthwith.
13. ARBITRATION
Any dispute, controversy or claim arising out of or relating to this
Agreement, or the breach, or termination or invalidity thereof, shall be
settled by arbitration in accordance with the Rules of the Kuala Lumpur
Regional Arbitration Centre. There shall be a single arbitrator who shall
be nominated by the parties in accordance with the Rules of the Centre. In
the event that the parties cannot agree on the appointment of an
arbitrator, then the arbitrator shall be appointed by the Centre. The
arbitration proceedings including the making of the award
12
<PAGE>
shall take place at Kuala Lumpur and the award of the arbitrator shall be
final and binding upon the parties.
14. LAW
This Agreement shall be governed by and construed according to the Laws of
Malaysia.
15. NOTICES
15.1 Any notice, request, requirement, approval, permission, consent or
other communication required, authorized, permitted or contemplated to
be given hereunder by either party to the other shall be signed by an
authorized signatory of the issuing party and be deemed to have been
given if delivered by hand, registered post or sent by facsimile
(later confirmed by letter) to the following addresses:
Ketua Bahagian
Khidmat Rangkaian Khas
Pemasaran Perniagaan
Telekom Malaysia Berhad
Tingkat 16, Wisma Telekom
Jalan Pantal Baharu
59200 KUALA LUMPUR
MALAYSIA
Facsimile: 03-7564098
Executive Director
Syarikat Telefon Wireless (M) Sdn Bhd
1st Floor (Lobby A), Wisma Segar
Jalan Tun Sambanthan
50470 KUALA LUMPUR
MALAYSIA
Facsimile: 03-2625800
or to such other address or facsimile number as the recipient may have
duly notified to the other party hereto.
16. STAMP DUTY
The stamp duty if any of this Agreement shall be equally borne by both
parties.
13
<PAGE>
17. MISCELLANEOUS
The titles to the clauses in this Agreement are for the convenience of
reference only, and are not part of this Agreement and shall not in any way
affect the interpretation thereof. Words importing the singular only shall
include the plural and vice versa where the context requires.
14
<PAGE>
IN WITNESS WHEREOF the parties have hereunto set their hands on the day and year
hereinafter mentioned.
SIGNED by for
and on behalf of
TELEKOM MALAYSIA
/s/
-----------------------------------------
Name:
Designation:
Date: 16 AUG 1994
In the presence of: /s/
-----------------------------------------
(Witness Signature)
Name: Hanafi Hai Washim
Designation: Division Head
Specialized Network Services
Business Marketing
Date: 16 AUG 1994
SIGNED by for
and on behalf of
SYARIKAT TELEFON
WIRELESS (M) SDN BHD /s/
-----------------------------------------
Name: Ibrahim Bin Othman [SEAL of STW]
Designation: Director
Date: 16 Aug 1994
In the presence of /s/
------------------------------------------
(Witness Signature)
Name:
Designation:
Date:
<PAGE>
Confidential Treatment Requested
SCHEDULE 1
LIST OF ACCESS NODES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
NO TELEKOM MALAYSIA STW
ACCESS NODES ACCESS NODES
- -------------------------------------------------------------------
<S> <C> <C>
Northern Region
1 Alor Setar, DTS Langkawi Island
Resort
2 Kuah Exchange
- -------------------------------------------------------------------
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-1
<PAGE>
Confidential Treatment Requested
SCHEDULE 2
1. STW shall pay TELEKOM MALAYSIA for its outgoing calls to TELEKOM MALAYSIA
PSTN at the following rates:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Type of Calls Band Rate Sen/Min
- -----------------------------------------------------------------------
<S> <C> <C> <C>
A Standard [*]
Reduced [*]
---------------------------------------------
STD B Standard [*]
Reduced [*]
---------------------------------------------
C Standard [*]
Reduced [*]
---------------------------------------------
D Standard [*]
Reduced [*]
- -----------------------------------------------------------------------
Sen/Call
-------------
LOCAL [*]
- -----------------------------------------------------------------------
</TABLE>
2. TELEKOM MALAYSIA shall pay STW for its outgoing calls to STW WTTN at the
following rates:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Band Rate Sen/Min
- -----------------------------------------------------------------------
<S> <C> <C> <C>
A Standard [*]
Reduced [*]
---------------------------------------------
STD B Standard [*]
Reduced [*]
---------------------------------------------
C Standard [*]
Reduced [*]
---------------------------------------------
D Standard [*]
Reduced [*]
- -----------------------------------------------------------------------
Sen/Call
-----------
LOCAL [*]
- -----------------------------------------------------------------------
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-2
<PAGE>
Confidential Treatment Requested
SCHEDULE 3
STW shall pay TELEKOM MALAYSIA for its international outgoing calls through the
TELEKOM MALAYSIA PSTN at the following rates:
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
1 Alaska Standard [*]
Reduced [*]
2 Albania Standard [*]
Reduced [*]
3 Algeria Standard [*]
Reduced [*]
4 Angola Standard [*]
Reduced [*]
5 Anguilla Standard [*]
Reduced [*]
6 Antigua Standard [*]
Reduced [*]
7 Argentina Standard [*]
Reduced [*]
8 Aruba Standard [*]
Reduced [*]
9 Ascension Island Standard [*]
Reduced [*]
10 Australia Standard [*]
Reduced [*]
11 Austria Standard [*]
Reduced [*]
12 Azores Standard [*]
Reduced [*]
13 Bahamas Standard [*]
Reduced [*]
14 Bahrain Standard [*]
Reduced [*]
15 Bangladesh Standard [*]
Reduced [*]
16 Barbados Standard [*]
Reduced [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-3
<PAGE>
Confidential Treatment Requested
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
17 Belgium Standard [*]
Reduced [*]
18 Belize Standard [*]
Reduced [*]
19 Benin Standard [*]
Reduced [*]
20 Bermuda Standard [*]
Reduced [*]
21 Bhutan Standard [*]
Reduced [*]
22 Bolivia Standard [*]
Reduced [*]
23 Botswana Standard [*]
Reduced [*]
24 Br Virgin Islands Standard [*]
Reduced [*]
25 Brazil Standard [*]
Reduced [*]
26 Brunei Standard [*]
Reduced [*]
27 Bulgaria Standard [*]
Reduced [*]
28 Burkina Faso Standard [*]
Reduced [*]
29 Burundi Standard [*]
Reduced [*]
30 Cameroon Standard [*]
Reduced [*]
31 Canada Standard [*]
Reduced [*]
32 Canary Islands Standard [*]
Reduced [*]
33 Cape Verde Standard [*]
Reduced [*]
34 Cayman Islands Standard [*]
Reduced [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-4
<PAGE>
Confidential Treatment Requested
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
35 Central Africa Republic Standard [*]
Reduced [*]
36 Chad Standard [*]
Reduced [*]
37 Chile Standard [*]
Reduced [*]
38 China Standard [*]
Reduced [*]
39 Christmas Island Standard [*]
Reduced [*]
40 Cocos Island Standard [*]
Reduced [*]
41 Colombia Standard [*]
Reduced [*]
42 Congo Standard [*]
Reduced [*]
43 Cook Island Standard [*]
Reduced [*]
44 Costa Rica Standard [*]
Reduced [*]
45 Cuba Standard [*]
Reduced [*]
46 Cyprus Standard [*]
Reduced [*]
47 Czech Republic Standard [*]
Reduced [*]
48 Diego Garcia Standard [*]
Reduced [*]
49 Denmark Standard [*]
Reduced [*]
50 Djibouti Standard [*]
Reduced [*]
51 Dominia Republic Standard [*]
Reduced [*]
52 Dominican Island Standard [*]
Reduced [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-5
<PAGE>
Confidential Treatment Requested
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
53 Ecuador Standard [*]
Reduced [*]
54 Egypt Standard [*]
Reduced [*]
55 El Salvador Standard [*]
Reduced [*]
56 Ethiopia Standard [*]
Reduced [*]
57 French Guyana Standard [*]
Reduced [*]
58 French Polynesia Standard [*]
Reduced [*]
59 Falkland Island Standard [*]
Reduced [*]
60 Faro Island Standard [*]
Reduced [*]
61 Fiji Standard [*]
Reduced [*]
62 Finland Standard [*]
Reduced [*]
63 France Standard [*]
Reduced [*]
64 Gabon Standard [*]
Reduced [*]
65 Gambia Standard [*]
Reduced [*]
66 Germany Fed. Republic Standard [*]
Reduced [*]
67 Ghana Standard [*]
Reduced [*]
68 Gibraltar Standard [*]
Reduced [*]
69 Greece Standard [*]
Reduced [*]
70 Grenada Standard [*]
Reduced [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-6
<PAGE>
Confidential Treatment Requested
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
71 Guadeloupe Standard [*]
Reduced [*]
72 Guam Standard [*]
Reduced [*]
73 Guatemala Standard [*]
Reduced [*]
74 Guinea Bissau Standard [*]
Reduced [*]
75 Guinea Equatorial Standard [*]
Reduced [*]
76 Guinea Republic Standard [*]
Reduced [*]
77 Guyana Standard [*]
Reduced [*]
78 Haiti Standard [*]
Reduced [*]
79 Hawaii Standard [*]
Reduced [*]
80 Honduras Standard [*]
Reduced [*]
81 Hong Kong Standard [*]
Reduced [*]
82 Hungary Standard [*]
Reduced [*]
83 Iceland Standard [*]
Reduced [*]
84 India Standard [*]
Reduced [*]
85 Indonesia Standard [*]
Reduced [*]
86 Iran Standard [*]
Reduced [*]
87 Iraq Standard [*]
Reduced [*]
88 Ireland Standard [*]
Reduced [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-7
<PAGE>
Confidential Treatment Requested
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
89 Israel Standard [*]
Reduced [*]
90 Italy Standard [*]
Reduced [*]
91 Ivory Coast Standard [*]
Reduced [*]
92 Jamaica Standard [*]
Reduced [*]
93 Japan Standard [*]
Reduced [*]
94 Jordan Standard [*]
Reduced [*]
95 Kampuchea Standard [*]
Reduced [*]
96 Kenya Standard [*]
Reduced [*]
97 Kiribati Standard [*]
Reduced [*]
98 Korean PDR Standard [*]
Reduced [*]
99 Korea South Standard [*]
Reduced [*]
100 Kuwait Standard [*]
Reduced [*]
101 Laos Standard [*]
Reduced [*]
102 Lebanon Standard [*]
Reduced [*]
103 Lesotho Standard [*]
Reduced [*]
104 Liberia Standard [*]
Reduced [*]
105 Libya Standard [*]
Reduced [*]
106 Luxembourg Standard [*]
Reduced [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-8
<PAGE>
Confidential Treatment Requested
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
107 Macao Standard [*]
Reduced [*]
108 Madagascar Standard [*]
Reduced [*]
109 Madeira Standard [*]
Reduced [*]
110 Malawi Standard [*]
Reduced [*]
111 Maldive Island Standard [*]
Reduced [*]
112 Mali Standard [*]
Reduced [*]
113 Malta Standard [*]
Reduced [*]
114 Marshall island Standard [*]
Reduced [*]
115 Martinique Standard [*]
Reduced [*]
116 Mauritania Standard [*]
Reduced [*]
117 Mauritius Standard [*]
Reduced [*]
118 Mayotte Standard [*]
Reduced [*]
119 Mexico Standard [*]
Reduced [*]
120 Micronesia Standard [*]
Reduced [*]
121 Monaco Standard [*]
Reduced [*]
122 Montserrat Standard [*]
Reduced [*]
123 Morocco Standard [*]
Reduced [*]
124 Mozambique Standard [*]
Reduced [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-9
<PAGE>
Confidential Treatment Requested
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
125 Myanmar Standard [*]
Reduced [*]
126 Netherland Antilles Standard [*]
Reduced [*]
127 Namibia Standard [*]
Reduced [*]
128 Nauru Republic Standard [*]
Reduced [*]
129 Nepal Standard [*]
Reduced [*]
130 Netherlands Standard [*]
Reduced [*]
131 New Caledonia Standard [*]
Reduced [*]
132 New Zealand Standard [*]
Reduced [*]
133 Nicaragua Standard [*]
Reduced [*]
134 Niger Standard [*]
Reduced [*]
135 Nigeria Standard [*]
Reduced [*]
136 Niue Standard [*]
Reduced [*]
137 Norfolk Island Standard [*]
Reduced [*]
138 Norway Standard [*]
Reduced [*]
139 Oman Standard [*]
Reduced [*]
140 Papua New Guinea Standard [*]
Reduced [*]
141 Puerto Rico Standard [*]
Reduced [*]
142 Pakistan Standard [*]
Reduced [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-10
<PAGE>
Confidential Treatment Requested
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
143 Palau Standard [*]
Reduced [*]
144 Panama Standard [*]
Reduced [*]
145 Paraguay Standard [*]
Reduced [*]
146 Peru Standard [*]
Reduced [*]
147 Philippines Standard [*]
Reduced [*]
148 Poland Standard [*]
Reduced [*]
149 Portugal Standard [*]
Reduced [*]
150 Qatar Standard [*]
Reduced [*]
151 Reunion Island Standard [*]
Reduced [*]
152 Romania Standard [*]
Reduced [*]
153 Russia Standard [*]
Reduced [*]
154 Rwanda Republic Standard [*]
Reduced [*]
155 S Leone Standard [*]
Reduced [*]
156 Saipan Standard [*]
Reduced [*]
157 San Marino Standard [*]
Reduced [*]
158 Saothome Standard [*]
Reduced [*]
159 Saudi Arabia Standard [*]
Reduced [*]
160 Senegal Standard [*]
Reduced [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-11
<PAGE>
Confidential Treatment Requested
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
161 Seychelles Standard [*]
Reduced [*]
162 Solomon Island Standard [*]
Reduced [*]
163 South Africa Standard [*]
Reduced [*]
164 Spain Standard [*]
Reduced [*]
165 Spanish North Africa Standard [*]
Reduced [*]
166 Sri Lanka Standard [*]
Reduced [*]
167 St. Kitts Standard [*]
Reduced [*]
168 St. Lucia Standard [*]
Reduced [*]
169 St. Vincent Standard [*]
Reduced [*]
170 Sudan Standard [*]
Reduced [*]
171 Surinam Standard [*]
Reduced [*]
172 Swaziland Standard [*]
Reduced [*]
173 Sweden Standard [*]
Reduced [*]
174 Switzerland Standard [*]
Reduced [*]
175 Syria Standard [*]
Reduced [*]
176 Taiwan Standard [*]
Reduced [*]
177 Tanzania Standard [*]
Reduced [*]
178 Thailand Standard [*]
Reduced [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-12
<PAGE>
Confidential Treatment Requested
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
179 Togo Republic Standard [*]
Reduced [*]
180 Tonga Standard [*]
Reduced [*]
181 Trinidad Standard [*]
Reduced [*]
182 Tunisia Standard [*]
Reduced [*]
183 Turkey Standard [*]
Reduced [*]
184 Turks Island Standard [*]
Reduced [*]
185 Tuvalu Standard [*]
Reduced [*]
186 United Arab Emirates Standard [*]
Reduced [*]
187 United Kingdom Standard [*]
Reduced [*]
188 USA Standard [*]
Reduced [*]
189 Uganda Standard [*]
Reduced [*]
190 Uruguay Standard [*]
Reduced [*]
191 US Samoa Standard [*]
Reduced [*]
192 US Virgin Islands Standard [*]
Reduced [*]
193 Vanuatu Standard [*]
Reduced [*]
194 Vatican City Standard [*]
Reduced [*]
195 Venezuela Standard [*]
Reduced [*]
196 Vietnam Standard [*]
Reduced [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-13
<PAGE>
Confidential Treatment Requested
<TABLE>
<CAPTION>
- --------------------------------------------------------------
No. Countries Rate RM per
minute
- --------------------------------------------------------------
<S> <C> <C> <C>
197 Western Samoa Standard [*]
Reduced [*]
198 Yemen AR Standard [*]
Reduced [*]
199 Yemen FDR Standard [*]
Reduced [*]
200 Yugoslavia Standard [*]
Reduced [*]
201 Zambia Standard [*]
Reduced [*]
202 Zimbabwe Standard [*]
Reduced [*]
203 Inmar3AT A
Atlantic & Pacific Ocean [*]
Region [*]
Indian Ocean Region [*]
Aeronautical [*]
</TABLE>
* Confidential portion has been omitted and filed separately with the Commission
S-14
<PAGE>
EXHIBIT 10.12D
Confidential Treatment Requested
The Company has requested confidential treatment of certain portions of
this exhibit on page 8 of the Loan Agreement and pages 61, 154, 167 and 170 of
the Schedules attached thereto.
LOAN AGREEMENT
DATED THIS 18/TH/ DAY OF AUGUST 1995,
RELATING TO A TERM LOAN FACILITY OF
RM91,000,000
BETWEEN
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
AS BORROWER
AND
PERMATA MERCHANT BANK BERHAD
AS ARRANGER
AND
PERMATA MERCHANT BANK BERHAD
AS AGENT
AND
A SYNDICATE OF FINANCIAL INSTITUTIONS
AS LENDERS
ADNAN SUNDRA & LOW
ADVOCATES & SOLICITORS
KUALA LUMPUR
PMB/00503.95/JC/EK/AC
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Clause Page
<C> <S> <C>
1. INTERPRETATION 1
2. THE FACILITY 12
3. SYNDICATE 12
4. CONDITIONS PRECEDENT 13
5. DRAWINGS 14
6. INTEREST 16
7. REPAYMENT 17
8. PREPAYMENT 18
9. REPRESENTATIONS AND WARRANTIES 19
10. UNDERTAKINGS 23
11. CHANGES IN CIRCUMSTANCES 29
12. PAYMENTS 31
13. DEFAULT 34
14. ENFORCEMENT OF SECURITY 39
15. INDEMNITY 40
16. THE AGENT AND THE ARRANGER 40
17. FEES AND EXPENSES 45
18. SET OFF AND PRO RATA SHARING 47
19. ASSIGNMENT AND TRANSFER 49
20. FURTHER PROVISIONS 51
SCHEDULE
1 LIST OF LENDERS 56
2 CONDITIONS PRECEDENT 57
3A CERTIFICATE OF BORROWER 61
3B CERTIFICATE OF SEGAR KASTURI 63
3C CERTIFICATE OF SHUBILA 65
4A DRAWING NOTICE 67
4B DRAWING NOTICE 68
5 CHARGE 70
6 DEBENTURE A 90
7 DEBENTURE B 112
8 CORPORATE GUARANTEE 139
9 PERSONAL GUARANTEE 154
10 ASSIGNMENT 171
11 DECLARATION BY DIRECTORS 184
12 COLLATERAL AGREEMENT 185
13 TRANSFER CERTIFICATE 229
14 MEMORANDUM OF PLEDGE 233
</TABLE>
<PAGE>
A LOAN AGREEMENT made on the 18th day of August 1995 BETWEEN:-
(1) SYARIKAT TELEFON WIRELESS (M) SDN. BHD. (the "Borrower");
(2) PERMATA MERCHANT BANK BERHAD (the "Arranger");
(3) PERMATA MERCHANT BANK BERHAD (the "Agent").
AND
(4) THE FINANCIAL INSTITUTIONS (the "Lenders") whose names are set out in
Schedule 1.
WHEREBY IT IS AGREED:-
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement each of the following expressions has, except where the
context otherwise requires, the meaning shown opposite it:-
Agent PERMATA MERCHANT BANK BERHAD, a company incorporated in
Malaysia and having its registered office at 27th Floor,
Menara Boustead, No. 69 Jalan Raja Chulan, 50200 Kuala
Lumpur or any successor as agent of the Lenders under
this Agreement;
Arranger PERMATA MERCHANT BANK BERHAD, a company incorporated in
Malaysia and registered office at 27th Floor, Menara
Boustead. No. 69 Jalan Raja Chulan, 50200 Kuala Lumpur or
any successor as arranger of the Facility under this
Agreement;
Assignment the assignment by the Borrower of all its rights interest
and title in and to the Project Proceeds credited and
maintained in the Project Account from time to time in
favor of the Agent as security for the Facility and
substantially in the form set out in Schedule 10 hereof;
Availability Period the period commencing on the date of this Agreement and
ending on the close of business
<PAGE>
2
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
in Kuala Lumpur on the Business Day falling twelve (12)
months after that date; on the Business Day falling
twelve (12) months after that date;
BAFIA the Banking and Financial Institutions Act, 1989;
Base Lending Rate the rate of interest per annum from time to time
prescribed by a Participant Commercial Bank (and as
varied from time to time by such Participant Commercial
Bank as an indicator rate against which rates of interest
for loans made in Ringgit Malaysia in Malaysia to
customers of Participant Commercial Bank (other than
customers in priority sectors of lending from time to
time prescribed by Bank Negara Malaysia or any other
relevant monetary or fiscal authority in Malaysia) is
determined by the addition or otherwise of margins, which
rate is presently called the Base Lending Rate and shall
mean any such indicator rate by whatever other name
called by such Participant Commercial Bank from time to
time;
Beneficiaries the Arranger, the Agent and the Lenders;
BOC BANK OF COMMERCE (M) BERHAD;
Borrowed Money includes:-
(i) the principal amount outstanding in respect of any
debentures of the Borrower;
(ii) the principal amount outstanding under any
acceptance credit (not being an acceptance in
relation to the purchase or sale of goods in the
ordinary course of trading) opened by any bank or
accepting house on behalf of or in favor of the
Borrower;
(iii) the nominal amount of any share capital and the
principal amount of any
<PAGE>
3
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
debentures or other Borrowed Money of any person
not being the Borrower, the redemption or repayment
whereof is guaranteed or secured by the Borrower;
(iv) any fixed or minimum premium payable on final
redemption or repayment of any debentures, share
capital or other Borrowed Money falling to be taken
into account; and
(v) any obligation to pay money under any guarantee,
financial lease, hire purchase or conditional sale
agreement;
Borrower SYARIKAT TELEFON WIRELESS (M) SDN. BHD., a private
company with limited liability incorporated under the
laws of Malaysia and having its registered office at 2nd
Floor, Wisma Tai Yoon, 9B Lorong Medan Tuanku Satu, Medan
Tuanku, 50300 Kuala Lumpur;
Business Day a day (other than a Saturday) on which banks are open in
Kuala Lumpur for the transaction of business of the
nature required by this Agreement;
Charge a charge under the National Land Code, 1965, over the
Land, to be given by SEGAR KASTURI in favor of the Agent,
substantially in the form set out in Schedule 5;
Collateral Agreement the agreement entered into between (1) the shareholders
of the Borrower, (2) the Borrower and (3) the Agent
substantially in the form set out in Schedule 12.
Commitment in relation to each Lender means the amount which it is
for the time being committed to lend under the Facility
being (subject to reduction and cancellation pursuant to
this Agreement) the amount in Ringgit Malaysia set out
opposite the name of such Lender in the third column of
Schedule 1 or, as the case may be, arising pursuant to
any Transfer Certificate, as adjusted at any time in
<PAGE>
4
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
accordance with the terms hereof or any Transfer
Certificate;
Corporate Guarantee the corporate guarantee and indemnity substantially in
the form set out in Schedule 8 duly executed by SHUBILA
in favor of the Agent;
Debenture A a debenture to be given by the Borrower in favor of the
Agent as security to the Facility, substantially in the
form set out in Schedule 6;
Debenture B a debenture to be given by SHUBILA in favor of the Agent
as security for the Facility, substantially in the form
set out in Schedule 7;
Debentures Debenture A and Debenture B;
Drawing the amount of a drawing under the Facility made or to be
made in accordance with the provisions of this Agreement;
Drawing Notice a notice of drawing duly completed and signed on behalf
of the Borrower which:-
(a) in the case of the Drawing under Tranche I of the
Facility, is substantially in the form set out in
Schedule 4A; and
(b) in the case of a Drawing under Tranche II of the
Facility, is substantially in the form set out in
Schedule 4B;
Effective Cost of in relation to a Participant Merchant Bank and any
Funds Interest Period, the rate per annum which is the cost to
that Participant Merchant Bank of funding its
participation in the relevant Drawing or the Loan or the
relevant part of it for that Interest Period, being the
aggregate of the rate at which Ringgit Malaysia deposits
are offered for the same period as that Interest Period
to that Participant Merchant Bank and the amount
(expressed as a percentage rate per annum)
<PAGE>
5
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
required to compensate that Participant Merchant Bank for
the cost to it of complying with, in respect of the
relevant Drawing or the Loan or the relevant part of it,
reserve, liquidity or other requirements imposed by Bank
Negara Malaysia or any law;
Ericsson Contract the contract awarded on the 15th day of September, 1994
by the Borrower to the Project Contractor for the design,
supply and installation of a Public Switched Wireless
Network (as defined in the License);
Event of Default any of the events mentioned in Clause 13.1 or any event
which with the giving of notice and/or the lapse of time
and/or a determination being made under the relevant
paragraph, would constitute any of the events mentioned
in Clause 13.1;
Existing Charge the charge created vide Presentation No. 605/95 by SEGAR
KASTURI in favor of BOC over the Land and security for
the Existing Facility;
Existing Facility the term loan facility for Ringgit Malaysia Six Million
(RM6,000,000.00) made available by BOC to SEGAR KASTURI;
Existing Loan all amounts owing by SEGAR KASTURI to BOC under the
Existing Facility;
Facility the term loan facility referred to in Clause 2, the terms
and conditions of which are set out in this Agreement;
Fixed Deposit the fixed deposit(s) held under the certificate(s) more
particularly described in Schedule A of the MOP and any
renewal(s) thereof up to the principal sum of Ringgit
Malaysia One Million (RM1,000,000.00);
Fixed Deposit Bank the bank in which the Borrower shall be placing the Fixed
Deposit;
Guarantors Personal Guarantors and SHUBILA;
<PAGE>
6
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Guarantees Personal Guarantee and Corporate Guarantee;
Instructing Group a Lender or group of Lenders whose aggregate Commitments
exceeds sixty per cent (60%) of the total Commitments;
Interconnect the agreement dated 16th day of August, 1994 between
Agreement TELEKOM and the Borrower in respect of the access of and
the interconnection between the wireless local loop
network to TELEKOM's public switch telephone network;
Interest Payment Date the last day of an Interest Period save and except if a
six (6) month Interest Period is selected by the Borrower
pursuant to Clause 6.1, Interest Payment Date shall be
the last day of every quarter thereof,
Interest Period the period determined in accordance with Clause 6.1 but
so that:
(a) the first Interest Period:-
(i) in respect of the first Drawing shall commence
on the date of that Drawing and expire on the
date falling one (1) three (3) or six (6) months
as the case may be after the date of that
Drawing; and
(ii)in respect of any Drawing other than the first
Drawing shall commence on the date of that
Drawing and shall expire at the end of the
Interest Period current at the time of that
Drawing;
(b) each subsequent Interest Period shall commence on
the last day of the previous one;
(c) an Interest Period which would otherwise end on a
day which is not a Business Day shall end on the
next succeeding Business Day or, if that Business
Day
<PAGE>
7
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
falls in the following month, on the preceding
Business Day;
(d) if an Interest Period is extended or shortened by
the application of (c) above, the following Interest
Period shall (without prejudice to the application
of (c) above) end on the day on which it would have
ended if the preceding Interest Period had not been
so extended or shortened;
(e) any amount to be repaid under Clause 7.1 shall have
a final Interest Period expiring on the relevant
date for repayment;
Land all that piece of land held under Pajakan Negeri No.
Pendaftaran 2784, Lot No. 331 Seksyen 95, Daerah Wilayah
Persekutuan Negeri Wilayah Persekutuan;
Lenders those of the financial institutions listed in Schedule 1
of this Agreement and any subsequent successors,
Transferees and assigns which are for the time being
participating in the Facility or the Loan; and where the
context so requires or admits, references to the Lenders
shall be construed as references to any one or more of
them;
License the domestic wireless telecommunications license
effective from the 24th day of December, 1994 granted to
the Borrower under the Telecommunications Act 1950 by the
Minister of Energy, Telecommunications and Post, Malaysia
upon terms and conditions as set out in the License;
Loan the aggregate principal amount of all drawings made on
the Facility and for the time being outstanding;
Loan Documents this Agreement, the Collateral Agreement and the Security
Documents;
<PAGE>
8
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Margin two point five per cent (2.5%) per annum;
MOP the memorandum of pledge over the Fixed Deposit to be
given by the Borrower in favor of the Agent as security
for the Facility, substantially in the form set out in
Schedule 14;
Participant Commercial
Bank a Lender which is licensed under BAFIA to carry on
banking business;
Participant Merchant
Bank a Lender which is licensed under BAFIA to carry on
merchant banking business;
Personal Guarantee the guarantee and indemnity substantially in the form set
out in Schedule 9, duly executed by the Personal
Guarantors in favor of the Agent;
Personal Guarantors the following parties:-
(1) [*];
(2) [*]; and
(3) [*];
Project the project comprising a network of installed planned or
proposed operations to be undertaken by the Borrower in
accordance with the provisions of the License for the
purpose of providing wireless telecommunication services
to subscribers of the network within Malaysia and shall
include two way, transmission and reception of
terrestrial telecommunications and the network shall
consist of..-
(a) wireless local loop subscriber systems;
______________
*Confidential portion has been omitted and filed separately with the Commission.
<PAGE>
9
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loan Facility of RM91,000,000.00
(b) cabling systems to extend the range of wireless
services;
(c) network switching systems; and
(d) network transmission systems, which are more clearly
specified in the License.
Project Account the account of the Borrower opened and maintained or to
be opened and maintained with the Project Account Bank to
receive the Project Proceeds;
Project Account Bank PERWIRA AFFIN BANK BERHAD or such other licensed bank
acceptable to the Agent and appointed by the Borrower
with whom the Project Account is to be opened and
maintained;
Project Accountant COOPERS & LYBRAND or such other firm of accountants
acceptable to the Agent to be appointed by the Borrower
as accountant for the Project to monitor all incoming and
outgoing funds in relation to the Project Account;
Project Contractor ERICSSON TELECOMMUNICATIONS SDN. BHD. and having its
principal place of business at Jalan Spanner 15/3, 40000
Shah Alam, Selangor Darul Ehsan;
Project Proceeds such monies payable to the Borrower including but not
limited to equity, shareholders' advances, loan drawings
and revenue proceeds received by the Borrower in respect
of the Project;
RM & Ringgit Malaysia the lawful currency of Malaysia and, in relation to all
payments to be made under this Agreement, same day funds;
Security Documents the Assignment, the Charge, the Debentures, the
Guarantees, the MOP and any other documents for the time
being or from time to time constituting security for the
obligations and liabilities of the Borrower
<PAGE>
10
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loan Facility of RM91,000,000.00
under this Agreement; and references to the Security
Documents shall include references to any one or more of
them;
Security Interest any mortgage, charge, pledge, lien, right of set off or
any security interest whatsoever, howsoever created or
arising;
SEGAR KASTURI SEGAR KASTURI SDN. BHD., a company incorporated under the
laws of Malaysia and having its registered office at 2nd
Floor, Wisma Tai Yoon, 9B Lorong Medan Tuanku Satu, Medan
Tuanku, 50300 Kuala Lumpur;
SHUBILA SHUBILA HOLDINGS SDN. BHD., a company incorporated under
the laws of Malaysia and having its registered office at
Suite 4015A, 4th Floor, President House, Jalan Sultan
Ismail, 50250 Kuala Lumpur;
TELEKOM TELEKOM MALAYSIA BERHAD;
Third Parties SHUBILA, SEGAR KASTURI, the Personal Guarantors and the
shareholders of the Borrower;
Tranche I an amount not exceeding Ringgit Malaysia Six Million out
of the Facility and which is to be utilized only for the
purpose stated in clause 2.2(a);
Tranche II the Facility amount of Ringgit Malaysia Ninety One
Million (RM91,000,000.00) less the amount actually
drawndown under Tranche I and which is to be utilized for
the purpose stated in clause 2.2(b);
Transferee a bank or other financial institution to which a Lender
seeks to transfer all or part of such Lender's rights and
obligations under the Loan Documents;
Transfer Certificate a certificate substantially in the form set out in
Schedule 13 signed by a Lender and a Transferee whereby:-
<PAGE>
11
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loan Facility of RM91,000,000.00
(i) the Lender seeks to procure the transfer to such
Transferee of all or part of the Lender's rights and
obligations under the Loan Documents upon and
subject to the terms and conditions set out in
Clause 19 of this Agreement; and
(ii) such Transferee undertakes to perform the
obligations it will assume as a result of delivery
of such certificate to the Lender as is contemplated
in clause 19.3 of this Agreement;
Transfer Date in relation to any Transfer Certificate, the date for the
making of the transfer as specified in schedule to such
Transfer Certificate;
1.2 CONSTRUCTION
Except where the context otherwise requires, any reference in this
Agreement to:-
(a) an "agreement" also includes a concession, contract, deed, franchise,
license, treaty or undertaking (in each case, whether oral or written);
(b) the "assets" of any person shall be construed as a reference to the whole
or any part of its business, undertaking, property, assets and revenues
(including any right to receive revenues);
(c) "equity share" shall be construed in accordance with Section 4 of the
Companies Act, 1965;
(d) a "guarantee" also includes any other obligation (whatever called) of any
person to pay, purchase, provide funds (whether by way of the advance of
money, the purchase of or subscription for shares or other securities, the
purchase of assets or services, or otherwise) for the payment of, indemnify
against the consequences of default in the payment of, or otherwise be
responsible for, any indebtedness of any other person;
(e) "indebtedness" includes any obligation (whether present or future, actual
or contingent, secured or unsecured, as principal or surety or otherwise)
for the payment or repayment of money;
<PAGE>
12
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loan Facility of RM91,000,000.00
(f) a "law" includes common or customary law and any constitution, decree,
judgment, legislation, order, ordinance, regulation, statute, treaty or
other legislative measure in any jurisdiction or any present or future
directive, regulation, request or requirement (in each case, whether or not
having the force of law but, if not having the force of law, the compliance
with which is in accordance with the general practice of persons to whom
the directive, regulation, request or requirement is addressed);
(g) "related companies" or "related company" shall be construed in accordance
with section 6 of the Companies Act 1965;
(h) "subsidiaries" or "subsidiary" shall be construed in accordance with
Section 5 of the Companies Act, 1965.
1.3 HEADINGS
Headings and the table of contents are for ease of reference only.
2. THE FACILITY
2.1 FACILITY
Subject to the provisions of this Agreement, the Lenders will make
available to the Borrower a term loan facility in the maximum aggregate
principal amount of Ringgit Malaysia Ninety One Million (RM91,000,000.00) only.
2.2 PURPOSE
(a) Tranche I of the Facility may be used by the Borrower only for the purpose
of providing funds for repayment of the Existing Loan.
(b) Tranche II of the Facility may be used by the Borrower only for payment of
development cost including the cost of equipment, fixtures and other
incidental cost relating to the implementation of the Project and which are
acceptable to the Agent.
3. SYNDICATE
3.1 PARTICIPATION
<PAGE>
13
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loan Facility of RM91,000,000.00
Each of the Lenders shall, subject to the provisions of this Agreement,
participate in a Drawing on the Facility in the proportion which its commitment
bears to the aggregate amount of the maximum liability of the Lenders
participating in that Drawing on the Facility.
3.2 OBLIGATIONS SEVERAL
The rights and obligations of each of the Lenders under this Agreement are
several. Failure of a Lender to perform its obligations under this Agreement
shall neither:-
(a) result in any of the Beneficiaries incurring any liability whatsoever; nor
(b) relieve the Borrower or any of the Beneficiaries from their respective
obligations under this Agreement.
4. CONDITIONS PRECEDENT
4.1 CONDITIONS
(a) Tranche I of the Facility shall become available to the Borrower on the
date two (2) Business Days after the Agent has received the documents or
evidence set out in Part A of Schedule 2 in each case in form and content
satisfactory to the Agent.
(b) Tranche II of the Facility shall become available to the Borrower on the
date two (2) Business Days after the Agent has received the documents or
evidence set out in both Part A and Part B of Schedule 2 in each case in
the form and content satisfactory to the Agent.
4.2 NOTICE
The Agent shall notify the Lenders and the Borrower after the Facility has
become available to the Borrower in accordance with Clause 4.1.
4.3 WAIVER OF CONDITION PRECEDENT
The terms and conditions set out in Schedule 2 are inserted for the sole
benefit of the Lenders and may be waived by the Instructing Group through the
Agent in whole or in part with or without terms or conditions without
prejudicing the right of the Lenders to assert such
<PAGE>
14
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loan Facility of RM91,000,000.00
terms and conditions in whole or in part with regard to subsequent Drawings on
the Facility.
5. DRAWINGS
5.1 CONDITIONS FOR DRAWING UNDER TRANCHE I
If:-
(a) no Event of Default has occurred or would occur as a result of the making
of the Drawing;
(b) the Agent has received the relevant Drawing Notice by the fifth (5th)
Business Day or such lesser number of Business Days acceptable to the Agent
before the date of the proposed Drawing;
(c) there has been no material adverse change in the financial conditions of
the Borrower since the date referred to in Clause 9.1(h);
(d) each of the representations and warranties mentioned in Clause 9.1 remains
accurate at the date of the proposed Drawing as if given on that date by
reference to the facts and circumstances then existing;
(e) all fees and expenses due and payable under Clause 17 have been paid in
full by the Borrower,
then subject to the provisions of this Agreement, the Borrower may on a Business
Day during the Availability Period, but not thereafter make one (1) Drawing
under Tranche I of the Facility. Any amount undrawn shall be cancelled after
the Availability Period unless otherwise agreed between the Borrower and the
Instructing Group.
5.2 CONDITIONS FOR DRAWING UNDER TRANCHE II OF THE FACILITY
If:-
(a) no Event of Default has occurred or would occur as a result of the making
of the Drawing;
(b) the Agent has received the relevant Drawing Notice by the fifth (5th)
Business Day or such lesser number of Business Days acceptable to the Agent
before the date of the proposed Drawing;
<PAGE>
15
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loan Facility of RM91,000,000.00
(c) there has been no material adverse change in the financial conditions of
the Borrower since the date referred to in Clause 9.1(h);
(d) each of the representations and warranties mentioned in Clause 9.1 remains
accurate at the date of the proposed Drawing as if given on that date by
reference to the facts and circumstances then existing;
(e) all fees and expenses due and payable under Clause 17 have been paid in
full by the Borrower,
then, subject to the provisions of this Agreement, the Borrower may on Business
Days during the Availability Period, but not thereafter, make Drawings under
Tranche II of the Facility provided that every Drawing shall be supported by
relevant invoice(s) acceptable to the Agent or such other document(s) acceptable
to the Agent none of which shall have been the subject of any previous request
for Drawings. Any amount undrawn shall be cancelled after the Availability
Period unless otherwise agreed between the Borrower and the Instructing Group.
5.3 AMOUNT
The amount of each Drawing on Tranche II shall be in a minimum of Ringgit
Malaysia Five Hundred Thousand (RM500,000.00) and in an integral multiple of
Ringgit Malaysia One Hundred Thousand (RM100,000.00).
5.4 NOTICE TO LENDERS
Subject to Clause 5.1 or Clause 5.2 as the case may be when the Agent
receives a Drawing Notice on the Facility it shall, at least two (2) Business
Days before the proposed date of issue of the Drawing notify each of the Lenders
of the amount and terms of the proposed Drawing, and each Lender shall, subject
to the provisions of this Agreement, make available to the Agent its
participation in each such Drawing.
5.5 IRREVOCABILITY
A Drawing Notice shall be irrevocable and, subject to Clause 11, the
Borrower shall borrow the stated amount on the stated date.
5.6 CANCELLATION
<PAGE>
16
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loan Facility of RM91,000,000.00
The Facility may be cancelled in part or in whole during the Availability
Period by the Borrower upon the Borrower giving thirty (30) days prior written
notice to the Agent.
6. INTEREST
6.1 INTEREST PERIOD
Subject to the provisions in the definition of "Interest Period" and to the
availability of funds for the Interest Period determined pursuant to this
Clause, each Interest Period shall be three (3) months unless not later than
10:30 am (Kuala Lumpur time ) by the fifth (5th) Business Day before the first
day of an Interest Period the Agent has received from the Borrower a notice
selecting a period of one (1) or six (6) months PROVIDED THAT where any Lender
gives the Agent notice on the first day of an Interest Period that funds are not
available to it for the forthcoming Interest Period determined pursuant to this
Clause then the Interest Period for the participation of that Lender in the Loan
shall be such period as is selected by such Lender and notified to the Agent.
6.2 RATE
The rate of interest payable on the Loan or any part of it for each
Interest Period in relation to the participation of the Lenders shall be the
rate determined by the Agent to be:-
(a) in the case of a Participant Commercial Bank, the aggregate of the Margin
and the rate notified to the Agent by such Participant Commercial Bank as
its Base Lending Rate; and
(b) in the case of a Participant Merchant Bank, the aggregate of the Margin and
the rate notified to the Agent by such Participant Merchant Bank as its
Effective Cost of Funds.
6.3 OPTION
Notwithstanding clause 6.2, subject to the availability of fixed rate funds
and to the prior consent of each of the Lenders or the relevant Lenders as the
case may be, the Borrower may elect to convert the rate(s) of interest
prescribed in clause 6.2 above into fixed rates of interest to be payable in
respect of the whole of the Loan or any part thereof to which the relevant
Lenders have consented PROVIDED THAT:-
<PAGE>
17
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loan Facility of RM91,000,000.00
(a) the Agent shall have received from the Borrower not less than forty five
(45) days prior written notice of the proposed Conversion such notice to be
accompanied by the written consent of the relevant Lenders; and
(b) the conversion takes place on an Interest Payment Date falling after the
expiry of the Availability Period.
6.4 PAYMENT
Interest under this Agreement shall be calculated on the basis of actual
days elapsed and a year of 365 days and shall be paid by the Borrower to the
Agent for the account of the Lenders in arrear on each Interest Payment Date.
6.5 AGENT'S CERTIFICATE
The Agent shall notify the Borrower and the Lenders of each rate of
interest for the Loan as soon as it is determined under this Agreement. The
certificate of the Agent as to a rate of interest shall, in the absence of
manifest error, be conclusive.
6.6 VARIATION
Notwithstanding the provisions relating to the rate or rates of interest
payable in respect of the Loan as hereinbefore provided save and except for the
rate of interest converted pursuant to Clause 6.3, each Lender shall be entitled
to vary at its discretion such rate or rates of interest payable on the Loan by
varying the Margin or otherwise. A Lender intending to vary the rate of
interest payable to it shall give written notice of such intention to the Agent
who shall in turn notify the Borrower. The new rate of interest shall be
payable as from the date specified in the notice from the Agent to the Borrower.
Service of such notice shall be effected in the same manner as a notice
demanding payment of the balance due as hereinafter provided.
7. REPAYMENT
7.1 LOAN
(a) Subject to the terms of this Agreement the amount of the Loan at the end of
the Availability Period shall be repaid by eleven (11) installments. In
the event the principal sum of the Facility is fully drawn to its principal
limit, the installments shall be made by the Borrower at the times and in
the amounts set out
<PAGE>
18
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loan Facility of RM91,000,000.00
hereunder, the first installment being made on the date which shall be
twenty four (24) months from the date of first Drawing and the other ten
(10) installments on dates falling at successive six (6) monthly intervals
thereafter.
MONTHS FROM DATE OF FIRST DRAWING AMOUNT
(RM)
24 6,500,000
30 6,500,000
36 6,500,000
42 8,000,000
48 8,000,000
54 8,000,000
60 9,000,000
66 9,000,000
72 9,000,000
78 10,000,000
84 10,500,000
TOTAL 91,000,000
(b) If the amount of the Loan at the end of the Availability Period is less
than Ringgit Malaysia Ninety One Million (RM91,000,000.00) the amount of
each installment shall be proportionately reduced so that the rate of
amortization of the Loan is maintained.
8. PREPAYMENT
8.1 PREPAYMENT
Subject to the terms of this Agreement the Borrower may after the expiry of
the Availability Period upon payment of all accrued interest and other fees
payable under the terms of this Agreement prepay the Loan in whole or in part by
a minimum sum of Ringgit Malaysia One Million (RM1,000,000.00) or integral
multiples thereof on any Interest Payment Date provided that it has given the
Agent not less than thirty (30) Business Days' notice stating the principal
amount to be prepaid or otherwise by paying to the Agent a prepayment premium
equivalent to a sum which is the higher of one per cent (1%) flat of the amount
to be prepaid and the funding loss of each Lender on the amount to be prepaid in
lieu of notice. Such prepayment fee shall be paid to the Agent on the date of
prepayment for the pro rata account of the Lenders.
<PAGE>
19
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
8.2 IRREVOCABILITY
Any notice under Clause 8.1 shall be irrevocable. The amount of any
prepayment shall become due and payable on the applicable Interest Payment Date.
8.3 NO REDRAWING
Any amount of the Loan which is prepaid may not be redrawn and shall be
applied towards the Borrower's payment obligations under Clause 7.1 in inverse
order of maturity.
8.4 LIMITATION
The Borrower shall not be entitled to prepay the Loan or any part thereof
or cancel the Facility in whole or in part otherwise than as specifically
provided in this Agreement.
9. REPRESENTATIONS AND WARRANTIES
9.1 REPRESENTATIONS AND WARRANTIES
The Borrower acknowledges that each of the Beneficiaries have entered into
this Agreement and participated in the Facility in full reliance on
representations by the Borrower in the following terms; and the Borrower now
warrants to each of them that:-
(a) STATUS
the Borrower is duly incorporated with limited liability under the laws of
Malaysia;
(b) POWERS AND AUTHORIZATIONS
the memorandum and articles of association of the Borrower include
provisions which give power, and all necessary corporate authority has been
obtained and action taken, for the Borrower to own its assets, carry on its
business and operations as they are now being conducted, and execute and
deliver, and perform the transactions contemplated in, this Agreement and
the other Loan Documents to which it is a party and this Agreement and the
other Loan Documents to which it is a party constitute valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms;
<PAGE>
20
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(c) NON-VIOLATION
neither the signing and delivery of this Agreement or the other Loan
Documents to which it is a party nor the performance of any of the
transactions contemplated herein or therein does or will contravene or
constitute a default under, or cause to be exceeded any limitation on it or
the powers of its directors imposed by or contained in, (i) any law by
which it or any of its assets is bound or affected, (ii) its memorandum or
articles of association or (iii) any agreement to which it is a party or by
which any of its assets is bound;
(d) CONSENTS
no authorization, approval, consent, license, exemption, registration,
recording, filing or notarization and no payment of any duty or tax and no
other action whatsoever is necessary or desirable to ensure the validity,
enforceability or priority of the liabilities and obligations of the
Borrower or the rights of the Beneficiaries under this Agreement or the
other Loan Documents save for payment of stamp duty in Malaysia, the
registration of the Charge with the Registry of Titles, Wilayah
Persekutuan, pursuant to the National Land Code, 1965, the lodgment of this
Agreement, the Assignment, the Debentures and the Charge with the Registrar
of Companies in accordance with section 108 of the Companies Act 1965 and
the lodgment of the Debentures with the Registry of the High Court of
Malaya for registration of the power of attorney contained therein;
(e) NO DEFAULT
no event has occurred which constitutes, or which with the giving of notice
and/or the lapse of time and/or a relevant determination would constitute,
a contravention of, or default under, any agreement or instrument by which
the Borrower or any of its assets is bound or affected, being a
contravention or default which might either have an adverse effect on the
business, assets or condition of the Borrower or adversely affect its
ability to observe or perform its obligations under this Agreement or the
other Loan Documents to which it is a party;
<PAGE>
21
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(f) LITIGATION
no litigation, arbitration or administrative proceeding or claim which
might by itself or together with any other such proceedings or claims
either have an adverse effect on its business, assets or condition or
adversely affect its ability to observe or perform its obligations under
this Agreement or the Loan Documents to which it is a party, is presently
in progress or pending or, to the best of the knowledge, information and
belief of the Borrower, threatened against the Borrower or any of its
assets;
(g) TAX LIABILITIES
all necessary returns have been delivered by or on behalf of the Borrower
to the relevant taxation authorities and the Borrower is not in default in
the payment of any taxes, and no claim is being asserted with respect to
taxes which is not disclosed in the financial statements referred to in
paragraph (h) below;
(h) ACCOUNTS
the audited financial statements (including the income statement and
balance sheet) of the Borrower for the year ended 31st December, 1994 have
been prepared on a basis consistently applied in accordance with generally
accepted accounting principles in Malaysia and give a true and fair view of
the results of its operations for that year and the state of its affairs at
that date, and in particular accurately disclose or reserve against all the
liabilities (actual or contingent) of the Borrower;
(i) ASSETS
the Borrower is the beneficial owner and has title to all its properties
and assets;
(j) NO SECURITY INTEREST
none of the assets of the Borrower is affected by any Security Interest,
and the Borrower is not a party to, nor is it or any of its assets bound
by, any order, agreement or instrument under which the Borrower is, or in
certain events may be, required to create, assume or permit to arise any
Security Interest, other than those created pursuant to this Agreement and
any permitted under clause 10.1(a);
<PAGE>
22
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(k) CHANGE IN BORROWER
since the date the Borrower applied for the Facility there has been no
material alterations or changes in the constitution, condition and business
or other affairs of the Borrower which could or might adversely affect the
ability of the Borrower to perform its obligations under this Agreement and
the other Loan Documents to which it is a party;
(l) CHANGE IN LAW
no extraordinary circumstances or change of law or other government action
has occurred which shall make it improbable that the business of the
Borrower can be carried out or that the Borrower will be able to observe
and perform the covenants and obligations on its part to be performed and
observed under this Agreement and the other Loan Documents to which it is a
party;
(m) INFORMATION
the information furnished by the Borrower in connection with the Land and
the Project do not contain any untrue statement or omit to state any fact
the omission of which makes the statements therein, in the light of the
circumstances under which they were made, misleading, and all expressions
of expectation, intention, belief and opinion contained therein were
honestly made on reasonable grounds after due and careful inquiry by the
Borrower;
(n) HOLDING COMPANY
SHUBILA is the holding company of the Borrower with the meaning of the
Companies Act, 1965.
(o) LICENSE THE ERICCSSON CONTRACT AND THE INTERCONNECT AGREEMENT
(i) the License is subsisting and has not been revoked or amended in whole
or in part;
(ii) the Ericcsson Contract is subsisting and has not been varied in whole
or in part and there is no default under the Ericcsson Contract by any
of the parties thereto; and
(iii)the Interconnect Agreement is subsisting and has not been varied in
whole or in part and there is no default under the Interconnect
Agreement by any of the parties thereto.
<PAGE>
23
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(p) DISCLOSURE
the Borrower has fully disclosed in writing to the Agent all facts relating
to the Borrower which the Borrower knows or should reasonably know and
which are material for disclosure to the Beneficiaries in the context of
the Facility.
9.2 REPETITION
Each of the above representations and warranties will be correct and
complied with in all respects on each date on which a Drawing is requested or to
be made and on each Interest Payment Date as if repeated then by reference to
the then existing circumstances, except that each reference to financial
statements in paragraph (h) above shall be construed as a reference to the then
latest available audited financial statements.
10. UNDERTAKINGS
10.1 The Borrower undertakes with each of the Beneficiaries that, from the date
of this Agreement until all its liabilities under this Agreement have been
discharged:
(a) RANKING AND NEGATIVE PLEDGE
The liabilities of the Borrower under this Agreement rank and will rank
(and would rank if the Security Documents to which it is a party were
neither executed nor required) at least equally and ratably (pari passu) in
point of priority and security with all its other liabilities (both actual
and contingent) except:
(i) liabilities which are subject to liens or rights of set off arising
in the normal course of trading and the aggregate amount of which is
not material;
(ii) liabilities which are preferred solely by Malaysian law and not by
reason of any Security Interest; and
(iii) any other security created or outstanding with the prior consent of
the Instructing Group,
and the Borrower will not create or permit to exist over all or any part of
its business or assets any Security Interest (other than those created
pursuant to this Agreement or any permitted under sub-paragraphs (i) and
(iii) above);
<PAGE>
24
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(b) PREPARATION OF ACCOUNTS
The Borrower will prepare the financial statements referred to in Clause
10.1 (c) on a basis consistently applied in accordance with generally
accepted accounting principles in Malaysia and those financial statement
shall give a true and fair view of the results of the operations of the
Borrower for the period in question and the state of its affairs for the
period to which the financial statements are made up and shall disclose or
reserve against all the liabilities (actual or contingent) of the Borrower;
(c) INFORMATION
The Borrower will deliver to the Agent in sufficient numbers for each of
the Lenders:
(i) as soon as they become available (and in any event within ninety (90)
days after the end of each of its financial periods) copies of its
financial statements for that period which shall contain an income
statement and a balance sheet and be audited by a firm of independent
accountants;
(ii) within sixty (60) days after the end of each half year of its
financial year copies of a full report on its business for that
period which shall contain full particulars of its business and an
income statement and a balance sheet and also a full report on all
construction and installation works done on the Project for that
period and for that purpose shall maintain comprehensive records of
all such works and shall allow the Agent and consultants appointed by
the Agent to inspect such records from time to time as and when the
Agent so requests; all costs of and incidental to such inspection and
the fees of the consultants shall be borne and paid for by the
Borrower and until payment shall be a debt due under the terms of
this Agreement;
(iii) within thirty (30) days after the end of each of its financial year,
information on the Borrower's cashflow projections for the next
financial year;
(iv) within fifteen (15) days from the end of each month furnish to the
Agent information regarding the Borrower's management account and
monthly progress report on subscriber base, revenue proceeds and
expenditure statements;
<PAGE>
25
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(v) promptly, such other financial or other information relating to the
Borrower and available to the Borrower as the Agent may reasonably
require from time to time, in addition to that expressly provided for
herein;
(d) CONSENTS
The Borrower will obtain and promptly renew from time to time, and will
promptly deliver to the Agent certified copies of, any authorization,
approval, consent, license, exemption, registration, recording, filing or
notarization as may be necessary or desirable to ensure the validity,
enforceability or priority of the liabilities and obligations of the
Borrower or the rights of the Beneficiaries under this Agreement and the
other Loan Documents to which it is a party and the Borrower shall comply
with the terms of the same;
(e) DEFAULT
If the Borrower becomes aware of the occurrence of an Event of Default it
will forthwith notify the Agent and provide the Agent with full details of
any steps which it is taking, or is considering taking, in order to remedy
or mitigate the effect of the Event of Default or the delay or suspension
or otherwise in connection therewith;
(f) INSURANCES
The Borrower shall maintain or cause the Project Contractor (as the case
maybe) to maintain such insurances up to their full insurable value as are
required by the terms of the Security Documents and such additional
insurances in respect of its assets and business against all risks
(including third party risks, contractor's all risks, workmen's
compensation and public liability insurance) which a prudent company
carrying on a similar business would normally insure and all such
insurances shall be in amounts, on terms and policies and with insurers
approved by the Agent and will not do or omit to do or suffer anything to
be done which might render any such insurance policies to be void or
voidable;
(g) BUSINESS
The Borrower will carry out and operate its business and affairs with due
diligence and efficiency and in accordance with sound
<PAGE>
26
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
financial and industrial standards and practices and shall in particular
procure:-
(i) that at all times installation and construction works in respect of
the Project are carried out by duly qualified and experienced
personnel; and
(ii) all necessary licenses and comply with all regulations relating to
the Project and the carrying on of its business generally;
(h) LOANS TO OTHERS
The Borrower will not make any loans to any persons except with the prior
written consent of the Instructing Group;
(i) DIVIDENDS
The Borrower will not, except with the prior written consent of the
Instructing Group, declare, make or pay any dividend or other distribution
to its shareholders;
(j) INDEBTEDNESS TO OTHERS
Apart from indebtedness arising out of the provisions of this Agreement and
existing hire purchase and leasing financing obtained by the Borrower,
details of which have been made known to the Agent, the Borrower will not,
except with the prior written consent of the Instructing Group, incur any
indebtedness for Borrowed Money, or enter into any guarantee in respect of
any indebtedness of any person, unless such indebtedness is:-
(i) a short-term debt owing to a non-financial institution and payable on
demand or maturing by its terms within twelve (12) months after the
date on which it is originally incurred; and
(ii) regarded by the Borrower to be necessary for the normal course and
conduct of its operations and the Borrower shall have evidenced the
necessity thereof to the satisfaction of the Lenders;
(k) SUBORDINATION OF LOANS BY DIRECTORS, SHAREHOLDERS
OR RELATED COMPANIES
<PAGE>
27
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
The Borrower will procure and ensure that all present and future loans
granted to it by any of its directors, shareholders or related companies
will be subordinated to the Loan and will not be repaid in whole or in part
without the prior written consent of the Instructing Group;
(l) ALTERATION TO MEMORANDUM OR ARTICLES
The Borrower will not alter its memorandum or articles of association
without the prior written consent of the Instructing Group;
(m) CHANGE IN SHAREHOLDERS AND SHAREHOLDINGS
Save and except for (i) changes in the shareholdings of the Borrower not
exceeding seven point five per cent (7.5%) of the Borrower's total paid up
capital and (ii) changes in the Borrower's shareholders which result in the
aggregate change in the shareholdings in the Borrower not exceeding seven
point five per cent (7.5%) of the Borrower's total paid up capital, the
Borrower will not allow any change in its shareholders or their
shareholdings in the Borrower as set out in clause 9.1(n) hereof without
the prior written consent of the Instructing Group;
(n) CHANGE IN DIRECTORS
The Borrower will not allow any change in the composition of its board of
directors without the prior written consent of the Instructing Group;
(o) NOTIFICATION OF DISPUTES
The Borrower will, by written notice, inform the Agent of:-
(i) any legal proceeding, litigation or claim, involving the Borrower;
(ii) any dispute between the Borrower and any Government or statutory body
in respect of any of the Borrower's lands and other assets;
(iii) any labor controversy which might result in a strike against the
Borrower;
(iv) any matter which has adversely affected or may adversely affect the
Borrower's ability to fulfill its obligations
<PAGE>
28
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
under this Agreement, its financial position or its ability to repay
the Loan;
(p) PAYMENT OF OUTGOINGS
The Borrower will punctually pay all quit rents, assessments, rates,
license fees, taxes, utility charges, premia and all other outgoings
whatsoever payable from time to time in respect of its business and assets
as and when the same shall become due and payable and produce the receipt
therefor to the Agent as and when so requested.
(q) ADDITIONAL SECURITY
(i) The Borrower shall at any time if and when required by the
Instructing Group so to do execute in favor of the Agent or as the
Agent shall direct such legal or other mortgages charges assignments
transfers or agreements as the Instructing Group shall require of and
on all the Borrower's estate right title and interest in any property
or assets or business now belonging to or which may hereafter be
acquired by or belong to the Borrower (including any vendor's lien)
and the benefit of all licenses held in connection therewith to
secure all moneys and liabilities hereby agreed to be paid or
intended to be hereby secured, such mortgages charges assignments
transfers or agreements to be prepared by or on behalf of the Agent
at the cost of the Borrower and to contain all such terms and
conditions for the benefit of the Lenders as the Instructing Group
may reasonably require.
(ii) The Borrower shall at any time if and when required by the
Instructing Group so to do deposit with the Agent the documents of
title of any or all immovable properties vested in the Borrower for
any tenure and all or any debentures shares stocks or other
investments or securities registered in the name of the Borrower or
otherwise belonging to the Borrower. Such deposit may be by way of
collateral security for the repayment of moneys and liabilities
hereby secured and may also or otherwise be for the purpose of
securing any other moneys owing to the Lenders by the Borrower and
not secured thereby.
(r) PROJECT ACCOUNT
The Borrower shall forthwith open and maintain the Project Account with the
Project Account Bank to receive all the Project
<PAGE>
29
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91, 000,000.00
Proceeds and save and expect with written consent of the Agent,
the Borrower shall not open and/or maintain any bank account in
respect of the Project Proceeds other than the Projcet Account.
(s) PROJECT ACCOUNTANT AND AUDITORS
The Borrower shall appoint the Project Accountant and auditors acceptable
to the Agent at the expense of the Borrower and the Borrower shall ensure
that the Project Accountant is accountable to the Agent in respect of the
Project and the auditors so appointed shall provide the Agent with copies
of all requisite correspondence in respect of the Borrower.
(t) PROJECT SITE
The Borrower shall permit any of the Beneficiaries to enter and visit the
site of the Project at any time.
(u) VALUATION
The Borrower shall forthwith provide the Agent with an update valuation
report by a valuer on the Agent's panel of valuer in respect of the Land as
and when notified by the Agent to do provided that the Agent may not
request for more than one (1) update valuation in each calendar year.
(v) LICENSE THE ERICCSSON CONTRACT AND THE INTERCONNECT AGREEMENT
The Borrower shall comply with the requirements of the License and the
terms and conditions of the Ericcsson Contract and the Interconnect
Agreement.
(w) PARTNERSHIP
The Borrower shall not enter into any partnership, profit-sharing or
royalty agreement or other similar arrangement whereby the Borrower's
income and profits are, or might be, shared with any other person, firm or
company, or enter into any management contract or similar arrangement
whereby the Borrower's business or operations are managed by any other
person, firm or company without the written consent of the Instructing
Group.
11. CHANGES IN CIRCUMSTANCES
11.1 ILLEGALITY
<PAGE>
30
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91, 000,000.00
Where the introduction, imposition or variation of any law or any change in
the interpretation or application of any law or any change in circumstances in
relation to compliance with existing laws (such as those set out in Section
62(1)(b) of BAFIA) makes it unlawful or impractical without breaching such law
for any Lender to allow all or part of its participation in the Facility or the
Loan to remain outstanding or to fund all or part of its participation in a
Drawing or the Loan or to carry out all or any of its other obligations under
this Agreement or to charge or receive interest at the rate applicable, upon
that Lender notifying the Agent:
(a) the Agent shall notify the Borrower and that Lender's obligation to
participate in any future Drawings shall forthwith be suspended and the
Facility shall be suspended to such extent;
(b) the Borrower shall, upon being so notified, prepay to the Agent for the
account of that Lender all of that Lender's participation in the Loan in
accordance with Clause 11.4 on such date as that Lender shall certify to be
necessary to comply with the relevant law and that Lender's obligation to
participate in any future Drawings shall terminate and the Facility shall
be cancelled to the extent of that Lender's participation;
11.2 INCREASED COSTS
Where any Lender determines that, as a result of the introduction or
variation of any law or any change in the interpretation or application of any
law, or compliance with any request (whether or not having the force of law)
from any central bank or other fiscal, monetary or other authority or agency,
the cost to that Lender of making or maintaining or funding its participation in
the Facility or the Loan is increased or the amount of any sum received or
receivable by it in respect of its participation in the Facility or the Loan or
the effective return to it under this Agreement is reduced or it is obliged to
make any payment (except in respect of tax on its overall net income) or
foregoes any interest or other return on, or calculated by reference to, the
amount of any sum received or receivable by it from the Borrower under this
Agreement, then:
(a) that Lender shall notify the Borrower through the Agent of such event
promptly upon its becoming aware of such event;
(b) the Borrower shall on demand pay to the Agent for the account of that
Lender such amounts as that Lender from time to time and at any time
(including after a prepayment of that Lender's participation) notifies the
Agent to be necessary to compensate
<PAGE>
31
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91, 000,000.00
it for such increased cost, reduction, payment or foregone interest or
return; and
(c) at any time thereafter, so long as the circumstances giving rise to the
obligation to make the compensating payment continue:
(i) at the Borrower's irrevocable election (by notice to the Agent), that
Lender's obligation to participate in any future Drawings shall
terminate and the Facility shall be cancelled to such extent; and
(ii) the Borrower may, upon giving the Agent not less than 30 days' notice
which shall be irrevocable, prepay to the Agent for the account of
that Lender all of that Lender's participation in the Loan subject to
and in accordance with Clauses 11.3 and 11.4.
11.3 PREPAYMENT
Where the Borrower has given notice under Clause 11.2 to prepay a Lender's
participation in the Loan:
(a) the Borrower shall provide the Agent with satisfactory evidence that all
authorizations necessary to the prepayment have been unconditionally
obtained;
(b) the amount of the prepayment shall become due and payable on expiry of the
period specified in the notice to the Agent; and
(c) that Lender's obligations to participate in further Drawings shall
terminate and the Facility shall be cancelled to the extent of that
Lender's participation.
11.4 AMOUNT
On prepaying a Loan or a Lender's participation in the Loan under this
Clause 11, the Borrower shall pay to the Agent for the account of that Lender
accrued interest on that participation together with all other amounts due to
that Lender (including any sum payable under the indemnity contained in Clause
15.1) and, subject to such amounts having been paid, the amount of each
subsequent repayment installment shall be proportionately reduced.
11.5 CERTIFICATES
<PAGE>
32
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91, 000,000.00
Any determination or notification by the Agent or any Lender concerning any
matter referred to in this Clause 11 shall, in the absence of manifest error, be
conclusive evidence as to that matter and shall be binding on the Borrower, the
Lenders and the Agent.
12. PAYMENTS
12.1 BY THE BORROWER
All payments to be made by the Borrower:
(a) for the account of any of the Lenders shall be made in Ringgit Malaysia in
immediately available funds not later than 11:30 a.m. (Kuala Lumpur time)
on the relevant day and shall be made to the Agent's account with Bank
Negara Malaysia or such other account as the Agent may have notified to the
Borrower for the account of the Agent who shall, before the close of
business in Kuala Lumpur on the date of receipt, remit to each Lender in
Ringgit Malaysia its portion of the payment so made by remitting it to any
account of that Lender which that Lender may have previously notified to
the Agent.
(b) to the Agent or the Arranger shall be made in Ringgit Malaysia to such
account as they may specify by notice to the Borrower.
12.2 BY THE LENDERS
All amounts to be advanced by the Lenders to the Borrower under the
Facility shall be remitted in Ringgit Malaysia in immediately available
funds not later than 11:30 am. (Kuala Lumpur time) on the relevant day to
the Agent's account with Bank Negara Malaysia or such other account as the
Agent may have notified to the Lenders and the Agent shall make such
amounts available for the Borrower's benefit on the same day. If the Agent
makes available to the Borrower any amount which has not been made
unconditionally available to the Agent the Borrower shall forthwith on
notice from the Agent repay such amount to the Agent together with interest
on such amount until its repayment at a rate determined by the Agent to
reflect its cost of funds.
12.3 WITHHOLDINGS
All payments by the Borrower under this Agreement, whether in respect of
principal, interest, fees, commission or any other item, shall be made in full
without any deduction or withholding (whether in respect of set off,
counterclaim, duties, taxes, charges or otherwise
<PAGE>
33
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91, 000,000.00
whatsoever) unless the deduction or withholding is required by law, in which
event the Borrower shall:
(a) ensure that the deduction or withholding does not exceed the minimum amount
legally required;
(b) forthwith pay to the Agent for the account of each Lender such additional
amount so that the net amount received by that Lender will equal the full
amount which would have been received by it had no such deduction or
withholding been made;
(c) pay to the relevant taxation or other authorities within the period for
payment permitted by applicable law the full amount of the deduction or
withholding (including, but without prejudice to the generality of the
foregoing, the full amount of any deduction or withholding from any
additional amount paid pursuant to this Clause 12.3); and
(d) furnish to the Agent on behalf of the Lender concerned, within the period
for payment permitted by the relevant law, either:
(i) an official receipt of the relevant taxation authorities involved in
respect of all amounts so deducted or withheld; or
(ii) if such receipts are not issued by the taxation authorities concerned
on payment to them of amounts so deducted or withheld, a certificate
of deduction or equivalent evidence of the relevant deduction or
withholding.
12.4 JUDGMENT CURRENCY
If, under any applicable law, whether as a result of a judgment against
the Borrower or the liquidation of the Borrower or for any other reason, any
payment under or in connection with this Agreement is made or is recovered in a
currency (the "other currency") other than that in which it is required to be
paid hereunder (the "original currency") then, to the extent that the payment to
the relevant payee (when converted at the rate of exchange on the date of
payment or, in the case of a liquidation, the latest date for the determination
of liabilities permitted by the applicable law) falls short of the amount unpaid
under this Agreement, the Borrower shall as a separate and independent
obligation, fully indemnify that payee against the amount of the shortfall; and
for the purposes of this sub-Clause "rate of exchange" means the rate at which
the relevant payee is able on the
<PAGE>
34
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91, 000,000.00
relevant date to purchase the original currency in Kuala Lumpur with the other
currency.
12.5 DEFAULT INTEREST
(a) If the Borrower fails to pay any amount in accordance with this Agreement,
the Borrower shall pay interest in Ringgit Malaysia on that amount from the
time of default up to the time of actual payment (as well after as before
judgment) at the rates per annum which are one per cent (1%) per annum
above the rates payable under Clause 6.2 or such other rate or rates as
prescribed by the relevant Lender for such period as the relevant Lender
may from time to time select and notify the Borrower through the Agent.
For this purpose the Agent and the Arranger shall each be deemed to be a
Participant Merchant Bank.
(b) Interest under this Clause shall accrue daily on the basis of a year of 365
days from and including the first day to the last day of each period
selected by the relevant Lender under Clause 12.5(a) and shall be due and
payable by the Borrower at the end of each such period. So long as the
default continues, the rate referred to in Clause 12.5(a) shall be
calculated on a similar basis at the end of each period selected by the
relevant Lender and notified to the Borrower through the Agent and interest
payable under Clause 12.5(a) which is unpaid at the end of each period
selected shall thereafter itself bear interest at the rate provided in
Clause 12.5(a).
(c) Interest as set out in Clause 12.5(a) and (b) shall continue to be payable
notwithstanding that the relationship of banker/financier and customer
between the Lenders and the Borrower may cease for any reason whatsoever.
12.6 DATE
If any payment would otherwise be due on a day which is not a Business Day,
it shall be due on the next succeeding Business Day or, if that Business Day
falls in the following month, on the preceding Business Day.
13. DEFAULT
13.1 EVENTS
If:
<PAGE>
35
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91, 000,000.00
(a) NON-PAYMENT
The Borrower fails to pay any amount due under this Agreement on the due
date or on demand, if so payable;
(b) BREACH OF OBLIGATIONS
The Borrower or any of the Third Parties fails to observe or perform any of
their respective obligations under this Agreement or the other Loan
Documents or under any other undertaking or arrangement entered into in
connection herewith or therewith, other than an obligation of the type
referred to in Clause 13.1(a) and, in the case of a failure capable of
being remedied, the Instructing Group do not determine, within fourteen
(14) days after the Borrower became aware of the failure, that it has been
remedied to the Instructing Group's' satisfaction;
(c) MISREPRESENTATION
Any representation, warranty or statement which is made (or acknowledged to
have been made) by the Borrower or any of the Third Parties in this
Agreement or the other Loan Documents or which is contained in any
certificate, statement, legal opinion or notice provided under or in
connection herewith or therewith proves to be incorrect in any material
respect, or if repeated at any time with reference to the facts and
circumstances subsisting at such time would not be accurate in all material
respects;
(d) INVALIDITY
Any provision of this Agreement or the other Loan Documents is or becomes,
for any reason, invalid or unenforceable;
(e) DISPOSAL OF ASSETS
The Borrower or any of its subsidiaries or related companies or any of the
Third Parties transfers or disposes of, or threatens to transfer or dispose
of, a substantial part of its, his or her business or assets and the result
of any of the foregoing is, in the determination of the Instructing Group,
adversely to affect the financial condition or ability of either the
Borrower or such Third Party to observe or perform its or his respective
obligations under this Agreement or the other Loan Documents;
(f) CESSATION OF BUSINESS
<PAGE>
36
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91, 000,000.00
The Borrower or any of its subsidiaries or related companies or any of the
Third Parties changes or threatens to change the nature or scope of its or
his business, suspends or threatens to suspend a substantial part of the
present business operations which it or he now conducts directly or
indirectly, or any governmental authority expropriates or threatens to
expropriate all or part of its or his assets and the result of any of the
foregoing is, in the determination of the Instructing Group, adversely to
affect the respective financial condition or ability of either the Borrower
or such Third Party to observe or perform its or his obligations under this
Agreement or the other Loan Documents;
(g) CROSS-DEFAULT
Any indebtedness of the Borrower or any of its subsidiaries or related
companies or any of the Third Parties becomes due, any guarantee of the
Borrower or any of its subsidiaries or related companies or any of the
Third Parties is not discharged at maturity or when called or the Borrower
or any of its subsidiaries or related companies or any of the Third Parties
goes into default under, or commits a breach of, any instrument or
agreement relating to any such indebtedness or guarantee;
(h) APPOINTMENT OF RECEIVER, LEGAL PROCESS
An encumbrancer takes possession of, or a trustee or administrative or
other receiver or similar officer is appointed in respect of, all or any
part of the business or assets of the Borrower or any of its subsidiaries
or related companies or any of the Third Parties or distress or any form of
execution is levied or enforced upon or sued out against any such assets or
any Security Interest which may for the time being affect any of such
assets becomes enforceable;
(i) INSOLVENCY
The Borrower or any of its subsidiaries or related companies or any of the
Third Parties is deemed unable to pay its or his debts or becomes unable to
pay its or his debts as they fall due;
(j) SUSPENSION OF PAYMENTS
The Borrower or any of its subsidiaries or related companies or any of the
Third Parties suspends or threatens to suspend making payments (whether of
principal or interest) with respect to all
<PAGE>
37
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91, 000,000.00
or any class of its or his debts and the result of any of the foregoing is,
in the determination of the Instructing Group, adversely to affect the
financial condition or ability of either the Borrower or such Third Party
to observe or perform its or his respective obligations under this
Agreement or the other Loan Documents;
(k) COMPOSITION, WINDING-UP
The Borrower or any of its subsidiaries or related companies or any of the
Third Parties convenes a meeting of its or his creditors or proposes or
makes any arrangement or composition with, or any assignment for the
benefit of, its or his creditors or a petition is presented or a meeting is
convened for the purpose of considering a resolution or other steps are
taken for making an administration order against or for winding up of the
Borrower or any of its subsidiaries or related companies (other than for
the purposes of and followed by a reconstruction previously approved in
writing by the Lenders, unless during or following such reconstruction the
Borrower or the relevant subsidiary or related company, or such Third Party
(as the case may be) becomes or is declared to be insolvent);
(l) ANALOGOUS PROCEEDINGS
Anything analogous to any of the events specified in paragraphs (h), (i),
(j) or (k) occurs under the laws of any applicable jurisdiction;
(m) LEGAL PROCEEDINGS
Any legal proceedings suit or action shall be instituted against the
Borrower or any of its subsidiaries or related companies or any of the
Third Parties and if after the Instruction Group have reviewed the matter
with the Borrower and that Third Party (where relevant), the Instructing
Group are of the opinion that this will affect the Borrower's or that Third
Party's ability to observe or perform its or his obligations under this
Agreement or the other Loan Documents;
(n) JUDGMENT OUTSTANDING
A judgment by a court of competent jurisdiction is obtained against the
Borrower or any of its subsidiaries or related companies or any of the
Third Parties;
<PAGE>
38
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91, 000,000.00
(o) CHANGE IN LAW
Any law is brought into effect which purports to render ineffective or
invalid any provision of this Agreement or any of the other Loan Documents
or which would prevent the Borrower or a Third Party from performing any of
their respective obligations hereunder or thereunder;
(P) DAMAGE TO LAND ETC.
Any part of the Land or any structures thereon or any assets of the
Borrower or SHUBILA is damaged or destroyed and the result, whether by
reason of the insurance over the Land or structure or such assets proving
to be invalid or unenforceable or for any other reason is, in the
determination of the Instructing Group, adversely to affect the financial
condition of the Borrower or the Borrower's SEGAR KASTURI's and/or
SHUBILA's ability to observe or perform its respective obligations under
this Agreement or any of the Security Documents as the case may be;
(q) INCAPACITY
A Personal Guarantor is declared bankrupt, dies, becomes insane or of
unsound mind or becomes incapacitated in any other way;
(r) NON-COMPLETION OF PROJECT
The Project should be abandoned by the Borrower and/or there should be any
stoppage of work for a continuous period exceeding thirty (30) days;
(s) BREACH AND/OR REVOCATION OF LICENSE
Any terms of the License has been breached by the Borrower and/or the
License has been revoked for any reasons whatsoever; or
(t) ADVERSE EVENTS
Any event or events has or have occurred or a situation exists which could
or might, in the opinion of the Instructing Group, prejudice the ability of
the Borrower or a Third Party to perform any of their respective
obligations under this Agreement or the other Loan Documents or under any
other undertaking or arrangement entered into in connection herewith or
therewith in accordance with the terms hereof or thereof,
<PAGE>
39
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000
then, at once or at any time thereafter, the Agent may (and, if so directed by
the Instructing Group, shall) by notice to the Borrower, declare the Loan to be
immediately due and payable whereupon:
(i) the Loan shall become so due and payable together with accrued interest
thereon and any other amounts then payable under this Agreement; and
(ii) no further Drawings shall be made and the Facility shall be cancelled.
13.2 NOTICE
(a) If the Agent is notified under this Agreement of the occurrence of an Event
of Default it shall inform each of the Lenders.
(b) If the Borrower defaults in payment of any amount due and payable to the
Agent for the account of the Lenders the Agent shall inform each of the
Lenders of such default within seven (7) Business Days from the date of
such default.
14. ENFORCEMENT OF SECURITY
14.1 ENFORCEMENT
Upon default by the Borrower in the manner provided in Clause 13.1 the
Agent may and upon the request of the Instructing Group, shall, forthwith
enforce the rights of the Lenders under this Agreement and the Security
Documents to recover all sums payable under this Agreement and the Security
Documents. Enforcement may, at the absolute discretion of the Agent, be against
the person of the Borrower and its assets concurrently or consecutively and if
consecutively in such order as the Agent deems fit.
14.2 APPLICATION OF PROCEEDS
All moneys received from the sale of any assets shall, subject to Clause
20.2 and also to the claims of all secured or unsecured creditors (if any)
ranking in priority to the Security Documents, be applied as follows:-
First, in or towards the payment of all costs expended or incurred by the
Agent in the enforcement of the Security Documents or any thereof or
part thereof (including court costs and solicitors' fees);
<PAGE>
40
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Second, in or towards the payment of all amounts payable under the Security
Documents other than principal and interest PROVIDED, HOWEVER, that if
such proceeds are insufficient to pay all such amounts, the Agent
shall apply such proceeds pro-rata based on the respective
entitlements to such amounts of the Beneficiaries;
Third, in or towards the payment in full of the aggregate accrued but unpaid
interest pursuant to this Agreement PROVIDED, HOWEVER, that if such
proceeds are insufficient to pay all such interest, the Agent shall
apply such proceeds pro-rata based on the interest then due to the
Lenders;
Fourth, in or towards the payment of the principal outstanding to the Lenders
PROVIDED, HOWEVER, that if such proceeds are insufficient to pay all
such amounts, the Agent shall apply such proceeds pro-rata based on
the then outstanding principal due to each Lender;
Fifth, the balance to the Borrower or to such other person(s) as may be
lawfully entitled thereto.
14.3 In the event of any pro-rata application of proceeds hereunder, the
Agent's determination of the amount of each party's claim and the pro-rata
amount to be applied against such claim shall be prima facie evidence of such
amounts.
14.4 If the amount realized by the Agent on behalf of the Beneficiaries on any
sale of the properties and assets secured under the Security Documents, after
the deduction and payment from the proceeds of such sale of all fees dues costs
rates taxes and other outgoings is less than the amount due to the Beneficiaries
and whether at such sale they or any of them are or is the purchasers or
purchaser or otherwise the Borrower shall pay to the Beneficiaries the
difference between the amount due and the amount so realized and until payment
will also pay interest on such balances at the rate as aforesaid Provided Always
that such personal liability of the Borrower to pay the aforesaid differential
sum shall not in any way prejudice, reduce, affect or limit the right of the
Beneficiaries to sue and recover from the Borrower all amounts payable under the
Security Documents nor shall this Clause be construed to preclude or prevent the
Beneficiaries from suing the Borrower or to postpone the right of the
Beneficiaries to sue the Borrower until after the assets secured under this
Agreement have been sold.
15. INDEMNITY
<PAGE>
41
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000
15.1 GENERAL INDEMNITY
The Borrower shall fully indemnify each of the Beneficiaries from and
against any expense, loss, damage or liability (as to the amount of which the
certificate of the Agent shall, in the absence of manifest error, be conclusive)
which any of them may incur as a consequence of the occurrence of any Event of
Default, of any failure to borrow in accordance with a Drawing Notice or of any
prepayment under this Agreement or otherwise in connection with this Agreement.
Without prejudice to its generality, the foregoing indemnity shall extend to any
interest, fees or other sums whatsoever paid or payable on account of any funds
borrowed in order to carry any unpaid amount and to any loss (including loss of
profit), premium, penalty or expense which may be incurred in liquidating or
employing deposits from third parties acquired to make, maintain or fund the
Loan (or any part thereof) or any other amount due or to become due under this
Agreement.
16. THE AGENT AND THE ARRANGER
16.1 APPOINTMENT
Each Lender irrevocably authorizes the Agent, subject to Clause 16.13, to
enter into and execute each of the Loan Documents, and to hold the security
thereby created, as security agent for the Beneficiaries, and to take such
action on its behalf and to exercise and carry out such powers, discretions,
authorities and duties as are specifically delegated to it by this Agreement and
the other Loan Documents and such powers as the Agent reasonably considers are
incidental thereto. The Agent shall have only those powers, discretions,
authorities and duties which are expressly specified in this Agreement and the
other Loan Documents.
16.2 RELATIONSHIP
(a) In connection with its powers, discretions, authorities and duties under
this Agreement and the other Loan Documents, the Agent shall act solely as
the agent of each of the Lenders, and neither the Agent nor the Arranger
shall assume, and shall not be deemed to have assumed, any obligations to,
or fiduciary relationship with, the Lenders other than those for which
specific provision is made by this Agreement or the other Loan Documents or
any obligations to, or fiduciary relationship with, the Borrower.
<PAGE>
42
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000
(b) The Agent shall not be liable for any failure of any of the parties to this
Agreement duly and punctually to observe and perform any of their
respective obligations under this Agreement and the other Loan Documents.
(c) The Agent shall not be liable for any action taken or omitted by it under
or in connection with this Agreement or the other Loan Documents in good
faith.
(d) The Agent may act under this Agreement or the other Loan Documents through
its authorized personnel and agents.
16.3 INSTRUCTING GROUP'S DIRECTIONS
In the exercise of any power, right, authority or discretion vested in the
Agent under this Agreement or the other Loan Documents and as to any matter not
expressly provided for in this Agreement or the other Loan Documents or where a
decision of the Instructing Group is provided for, the Agent shall act or
refrain from acting in accordance with the instructions of the Instructing
Group. In the absence of any such instructions, the Agent may act or refrain
from acting as it shall see fit. Any such instructions of the Instructing Group
or any such decision of the Agent shall be binding on the Arranger and all the
Lenders and the Agent shall not be liable to any of the Borrower, the Arranger
and the Lenders for the consequences of any such instructions or decision.
16.4 CREDIT APPROVAL
In favor of the Agent and the Arranger, each Lender acknowledges in
connection with this Agreement and the other Loan Documents:
(a) that it has made such inquiries on its own behalf and taken such care as
would have been the case had its participation in the Loan been a loan made
directly by that Lender to the Borrower without the intervention of the
Agent, the Arranger or any other Lender and that it has not relied, and
does not rely, upon any information or advice provided, or any appraisal
of, or investigation into the financial condition, credit worthiness,
affairs, status or nature of the Borrower effected, by the Agent or the
Arranger in such capacity; and
(b) that, subject to Clause 16.8, neither the Agent nor the Arranger was or
will be obliged either before or at any time after the signing of this
Agreement to provide that Lender with any
<PAGE>
43
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
information or advice or to make any such investigation or appraisal.
16.5 DOCUMENTATION
Neither the Agent nor the Arranger or any of their respective directors,
officers, employees or agents shall be liable:
(i) for the execution, validity, enforceability or effectiveness of this
Agreement, the other Loan Documents or any document delivered pursuant
hereto or thereto or connected herewith or therewith; or
(ii) for any statements, representations or warranties made or referred to in
this Agreement or the other Loan Documents or any information given in
connection with this Agreement or the other Loan Documents.
16.6 RELIANCE
The Agent shall not be liable:-
(a) for the consequences of relying on any communication or document believed
by it to be genuine and correct and to have been communicated or signed by
the person by whom it purports to be communicated or signed; or
(b) for the consequences of relying on the advice of any professional advisers
selected by it in connection with this Agreement or the other Loan
Documents.
16.7 DEFAULT
(a) Neither the Agent nor the Arranger shall be obliged to take any steps to
ascertain whether any Event of Default has occurred and until the Agent or
the Arranger has received express notice to the contrary from the Borrower
or a Lender, it shall be entitled to assume that no such event has
occurred.
(b) The Agent shall not be obliged to take any proceedings against the Borrower
for the recovery of any sum due under this Agreement or the other Loan
Documents or otherwise in connection herewith or therewith unless it has
been fully indemnified to its satisfaction by each of the Lenders in
proportion to its aggregate participation in the Loan (or, if no Drawing
has been made, in the Facility).
<PAGE>
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
16.8 INFORMATION
(a) The Agent shall send a copy of all notices served by the Borrower under
this Agreement or the other Loan Documents and of all other documents
delivered to it under this Agreement or the other Loan Documents to each of
the Lenders affected by such notice or document.
(b) Neither the Agent nor the Arranger shall be obliged to transmit to the
Lenders any information in any way relating to any of the parties to this
Agreement which the Agent or the Arranger may have acquired otherwise than
in connection with this Agreement or the other Loan Documents.
16.9 THE AGENT AND THE ARRANGER AS LENDER
Each of the Arranger and the Agent shall, with respect to their own
participations in the Facility, have the same rights under this Agreement and
the other Loan Documents as any other Lender and may exercise them as though it
were not also acting as a Arranger or as agent for the Lenders (as the case may
be). Each of the Agent and the Arranger and its related companies, associates
and affiliates may, without liability to disclose or account, engage in any kind
of financial, trust or commercial business with, or acquire or dispose of any
kind of security of, the Borrower or any of its related companies, associates or
affiliates and none of the Agent, the Arranger and their respective related
companies associates or affiliates shall have any obligation to disclose or
account for any dealings with the Borrower and its related companies, associates
or affiliates prior to the date of this Agreement.
16.10 INDEMNITY
Each of the Lenders shall fully indemnify the Agent and the Arranger
ratably according to its aggregate participation in the Loan (or if no Drawing
has been made, the Facility), from and against all claims, proceedings,
expenses, losses, damages and liabilities of every description (except in
respect of any agency fee due to the Agent and any arrangement fee due to the
Arranger) which may be incurred by the Agent or the Arranger in such capacity in
good faith and which in any way relate to or arise out of this Agreement, the
other Loan Documents or any related documents or any action taken or omitted by
the Agent or the Arranger in enforcing or preserving, or in attempting to
enforce or preserve, any of the rights of the Lenders under this Agreement, the
other Loan Documents or any related
<PAGE>
45
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
documents. If the Agent in good faith makes available to the Borrower an amount
which has not been made unconditionally available to the Agent by a Lender, then
that Lender shall indemnify the Agent against any loss which the Agent suffers
or incurs as a result.
Unless the Borrower notifies the Agent before the date a payment is due
hereunder that it does not intend to make the payment, the Agent may assume that
the Borrower has made that payment when so due and the Agent may make available
to each Lender on that payment date an amount equal to that Lender's share of
the assumed payment. If the Borrower has not made payment to the Agent, each
Lender shall on demand repay to the Agent, for value on the date of payment to
the Lender, the amount made available to that Lender.
16.11 MODIFICATIONS AND AMENDMENTS TO THIS AGREEMENT
The Agent may grant waivers or approvals under, or modify or amend, this
Agreement if authorized by the Instructing Group. Any such waiver, approval,
modification or amendment so authorized and effected by the Agent shall be
binding on all the Lenders and the Agent shall be under no liability whatsoever
in respect of any such waiver, approval, modification or amendment. This Clause
16.11 shall not authorize except with the approval of all the Lenders:-
(a) any increase in any Lender's participation in the Facility or the Loan;
(b) any extension of the Availability Period; or
(c) any variation of the definition of the Instructing Group or this Clause
16.11.
16.12 MODIFICATIONS AND AMENDMENTS TO THE LOAN DOCUMENTS
The Agent may approve modifications or amendments to the Loan Documents or
release of any one or more assets secured under any of the Security Documents if
authorized by the Instructing Group. The Agent in such capacity shall be under
no liability whatsoever in respect of any such approval.
16.13 TERMINATION
The Agent or the Instructing Group may at any time notify the Borrower,
the Agent and the Instructing Group of the proposed termination of the agency.
After the giving of any notice of proposed termination, the Instructing Group
may in writing appoint a successor
<PAGE>
46
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
as Agent. If such successor has not accepted in writing the appointment within
thirty (30) days after the notice of proposed termination, the Agent may within
a further thirty (30) days appoint, on behalf of the Instructing Group, a
successor which shall be a bank or merchant bank with an office in Kuala Lumpur.
Upon the written acceptance (in such form as the Instructing Group may approve)
by the successor of its appointment as Agent:
(a) as regards the Borrower and each of the Lenders, such successor shall
become bound by all the obligations of the Agent and become entitled to all
the rights, privileges, powers, authorities and discretions of the Agent
hereunder;
(b) the agency of the retiring Agent shall terminate but without prejudice to
any liabilities which the retiring Agent may have incurred prior to the
termination of its agency;
(c) the retiring Agent shall be discharged from any further liability or
obligation under this Agreement (save that the retiring Agent shall pay to
the successor a pro rata proportion of the agency fee paid under Clause
17.4),
and the provisions of this Agreement shall continue in effect for the benefit of
any retiring Agent in respect of any actions taken or omitted to be taken by it
or any event occurring before the termination of its agency.
17. FEES AND EXPENSES
17.1 COMMITMENT FEE
The Borrower shall pay a commitment fee which shall be charged on the
cumulative undrawn and uncancelled portion of the Facility and shall be
calculated on the basis of actual days elapsed and a three hundred and sixty
five (365) day year at the rate of zero point one two five per cent (0. 125%)
per annum upon the daily amount for the time being undrawn for the period
commencing on the date which is ninety (90) days from the date of this Agreement
and ending on the last day of the Availability Period and shall be paid to the
Agent for the account of the Lenders monthly in arrear and on the last day of
the Availability Period or any earlier day when the Facility is fully drawndown
or cancelled.
17.2 PARTICIPATION FEE
<PAGE>
47
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
The Borrower shall on the date of execution of this Agreement pay to the
Agent for the pro rata account of the Lenders a participation fee of zero point
twenty five per cent (0.25%) flat on the amount of the Facility.
17.3 ARRANGEMENT FEE
The Borrower shall pay to the Arranger from its own account an arrangement
fee at such rate and time in accordance with the terms as stated in the letter
dated 11th May, 1995 exchanged between the Borrower and the Arranger.
17.4 AGENCY FEE
The Borrower shall pay to the Agent for its own account an agency fee at
such rate and time in accordance with the terms as stated in the letter dated
11th May, 1995 exchanged between the Borrower and the Agent.
17.5 FACILITY FEE
The Borrower shall pay to each of the Lender from its own account a
facility fee at such rate and time and in accordance with the terms stated in
the letter dated 11th May, 1995 exchanged between the Borrower and the Agent.
17.6 EXPENSES
The Borrower shall on demand pay, in each case on the basis of a full
indemnity:-
(a) to the Agent and the Arranger all expenses (including legal, printing,
publicity and out-of-pocket expenses) incurred in connection with the
negotiation, preparation or completion of this Agreement, the other Loan
Documents and any related documents and the syndication of the Facility
PROVIDED THAT the out of-pocket expenses shall not exceed the maximum sum
of Ringgit Malaysia Fifty Thousand (RM50,000);
(b) to the Agent (for its own account or (as the case may require) for the
account of the other Beneficiaries) all expenses (including legal and out-
of-pocket expenses) incurred in connection with any variation, assignment,
transfer consent or approval relating to this Agreement, the other Loan
Documents or any related documents or in connection with the preservation
or enforcement or the attempted preservation or enforcement of any
<PAGE>
48
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000
of their respective rights under this Agreement, the other Loan Documents
or any related documents; and
(c) to the Agent (for the account of the Lenders) all expenses pertaining to
insuring the Land and the assets of the Borrower or SHUBILA as the case may
be pursuant to the terms of the Security Documents and all expenses
pertaining to the valuation of the Land and abovementioned assets as may be
required by the Lenders from time to time.
17.7 STAMP DUTY
The Borrower shall pay any stamp, documentary and other similar duties and
taxes to which this Agreement, the other Loan Documents or any related documents
may be subject or give rise and shall fully indemnify each of the Beneficiaries
from and against any losses or liabilities which any of them may incur as a
result of any delay or omission by the Borrower to pay any such duties or taxes.
18. SET OFF AND PRO RATA SHARING
18.1 SET-OFF
Following an Event of Default, any Lender may without notice to the
Borrower combine, consolidate or merge all or any of the Borrower's accounts
with, and liabilities to, that Lender and may set off or transfer any sum
standing to the credit of any such accounts in or towards satisfaction of any of
the Borrower's liabilities to that Lender under this Agreement, and may do so
notwithstanding that the balances on such accounts and the liabilities may not
be expressed in the same currency and each Lender is hereby authorized to effect
any necessary conversions at the Lender's own rate of exchange then prevailing.
18.2 PRO RATA SHARING
(a) If a Lender receives or recovers any amount (other than from the Agent) in
respect of sums due from the Borrower under this Agreement or the Security
Documents (whether by set off or otherwise) it shall promptly notify the
Agent of such amount and the manner of its receipt or recovery.
(b) Following receipt of notice under Clause 18.2(a) the Agent shall, as soon
as practicable, having regard to the circumstances, consult with the
Lenders to establish the aggregate amount of sums received or recovered by
the Lenders and what payments are
<PAGE>
49
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loans Facility of RM91,000,000.00
necessary amongst the Lenders for such aggregate amount to be divided
amongst the Lenders in proportion to their participations.
(c) The Lenders shall promptly make such payments to each other, through the
Agent, as the Agent shall direct to effect the proportionate division
referred to in Clause 18.2(b).
(d) If a Lender makes a payment or payments pursuant to Clause 18.2(c), any
payment previously received by that Lender as described in Clause 18.2(a)
shall, subject to Clause 18.2(e), be deemed to have been made by the
Borrower on the understanding that it was received by that Lender as agent
for the Lenders and that the payments described in Clause 18.2(c) would be
made and the liabilities of the Borrower to each of the Lenders shall
accordingly be determined on the basis that such payment or payments
pursuant to Clause 18.2(c) would be made.
(e) If a Lender makes a payment or payments pursuant to Clause 18.2(c), Clause
18.2(d) shall not apply if, as a result, the indebtedness of the Borrower
to the Lender has been extinguished, discharged or satisfied by the amount
received or recovered (for example because of set off). In this event, for
the purpose only of determining the liabilities of the Borrower to the
Lenders (other than the Lender making the said payment or payments) and the
liabilities of the Lenders to each other, the said payment or payments by
the Lender shall be deemed to have been made on behalf of the Borrower in
respect of its obligations under this Agreement or the other Loan Documents
(as the case may be) and to the extent the Loans are thereby discharged the
Borrower shall fully indemnify the Lender for such payment or payments.
(f) Any moneys payable by the Borrower under Clause 18.2(e) by way of indemnity
shall be payable from the date the Lender makes the payment or payments
under Clause 18.2(c), shall carry interest from such date and for such
purpose and all other purposes of this Agreement be treated in the same way
as other amounts payable under this Agreement as though such moneys were
payable in respect of the participation of the Lender which has the benefit
of the indemnity contained in Clause 18.2(e) (whether or not the
indebtedness attributable to such participation has been extinguished,
discharged or satisfied in whole or in part).
(g) The parties shall make such payments and take such steps as may be just and
equitable to re-adjust the position of the parties if a Lender, having
followed the procedures required above, is
<PAGE>
50
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
required to return any sum to the Borrower as referred to in Clause
18.2(a).
18.3 NOTIFICATION
Each Lender shall promptly give notice to the Agent of:
(a) the institution by such Lender of any legal action or proceedings hereunder
or in connection herewith prior to such institution; and
(b) the receipt or recovery by such Lender of any amount due and payable to
such Lender hereunder and received or recovered by it otherwise than
through the Agent.
Upon receipt of any such notice the Agent will as soon as practicable thereafter
notify the other Lender.
19. ASSIGNMENT AND TRANSFER
19.1 BENEFIT OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of each party
hereto and its or any subsequent successors, Transferees and assigns.
19.2 ASSIGNMENTS AND TRANSFERS BY THE BORROWER
The Borrower shall not, without the prior written consent of the
Instructing Group obtained through the Agent, be entitled to assign or transfer
all or any of its rights, benefits and obligations hereunder.
19.3 ASSIGNMENTS AND TRANSFERS BY LENDERS
(a) Any Lender may, at any time, assign all or any of its rights and benefits
hereunder or transfer in accordance with Clause 19.3(c) all or any of its
rights, benefits and obligations to any bank or financial institution
provided that at the same time it assigns or, as the case may be, transfers
an equal portion of its rights, benefits and obligations under the other
Loan Documents to the same bank or financial institution.
(b) If any Lender assigns all or any of its rights and benefits hereunder in
accordance with Clause 19.3(a) then, unless and until the assignee has
agreed with the Beneficiaries that it shall be under the same obligations
towards each of them as it
<PAGE>
51
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loans Facility of RM91,000,000.00
would have been under if it had been an original party hereto as a Lender,
the Beneficiaries shall not be obliged to recognize such assignee as having
the rights against each of them which it would have had if it had been such
a party hereto.
(c) If any Lender wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 19.3(a) then such transfer
may be effected by the delivery to the Agent of a duly completed and duly
executed Transfer Certificate in which event, on the later of the Transfer
Date specified in such Transfer Certificate and the fifth (5th) Business
Day after (or such earlier Business Day endorsed by the Agent on such
Transfer Certificate falling on or after) the date of delivery of such
Transfer Certificate to the Agent:-
(i) to the extent that in such Transfer Certificate the Lender party
thereto seeks to transfer its rights, benefits and obligations
hereunder, the Borrower and such Lender shall be released from further
obligations towards one another hereunder and their respective rights
against one another shall be cancelled (such rights, benefits and
obligations being referred to in this Clause 19.3(c) as "discharged
rights and obligations");
(ii) the Borrower and the Transferee party thereto shall assume obligations
towards one another and/or acquire rights against one another which
differ from such discharged rights and obligations only insofar as the
Borrower and such Transferee have assumed and/or acquired the same in
place of the Borrower and such Lender; and
(iii)the Agent, the Arranger, such Transferee and the other Lenders shall
acquire the same rights and benefits and assume the same obligations
between themselves as they would have acquired and assumed had such
Transferee been an original party hereto as a Lender with the rights,
benefits and/or obligations acquired or assumed by it as a result of
such transfer.
(d) On the date upon which a transfer takes effect pursuant to Clause 19.3(c),
the Transferee in respect of such transfer shall pay to the Agent for its
own account a transfer fee of Ringgit Malaysia Five Hundred (RM500.00).
(e) Notwithstanding any other provisions herein contained a Lender may only
assign its rights and benefits and/or for its rights,
<PAGE>
52
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loans Facility of RM91,000,000.00
benefits and obligations under this Agreement to a Transferee falling
within the description of Section 38(1B)(c) of the Companies Act, 1965, and
being either (a) an office in Malaysia of a company or other body corporate
or a fund incorporated or established in Malaysia or (b) the Malaysian
branch of a company incorporated or established outside Malaysia.
19.4 DISCLOSURE OF INFORMATION
Any Lender may disclose to any actual or potential assignee or Transferee
or to any person who may otherwise enter into contractual relations with such
Lender in relation to this Agreement or to any governmental agency or authority
requiring the same such information about the Borrower and/or any of the Third
Parties as such Lender shall consider appropriate.
20. FURTHER PROVISIONS
20.1 EVIDENCE OF INDEBTEDNESS
In any proceedings relating to this Agreement:
(a) a statement as to any amount due to the Lenders under this Agreement which
is certified as being correct by an officer of the Agent; and
(b) a statement as to any amount due to a Lender under this Agreement which is
certified as being correct by an officer of the Lender;
shall, unless otherwise provided in this Agreement, be conclusive evidence (in
the absence of manifest error) that such amount is in fact due and payable.
20.2 APPLICATION OF MONEYS
If any sum paid or recovered in respect of the liabilities of the Borrower
under this Agreement is less than the amount then due, the Agent may apply that
sum to principal, interest, fees or any other amount due under this Agreement in
such proportions and order and generally in such manner as the Instructing Group
shall determine.
20.3 MODIFICATION AND INDULGENCE
The Agent and the Lenders may at any time without in any way affecting this
Agreement or any of the other Loan Documents:-
<PAGE>
53
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loans Facility of RM91,000,000.00
(a) determine, vary or increase the amounts of the Facility or any credit or
other facility granted to the Borrower and may open and/or continue any
accounts with the Borrower at any branch or branches of the Agent and/or
the Lenders under the Loan Agreement; and/or
(b) grant to the Borrower, any Third Party or any other person any time or
indulgence; and/or
(c) renew any bill, notes or other negotiable securities; and/or
(d) deal with, exchange, release or modify or abstain from perfecting or
enforcing any securities or other guarantees or rights it may now or at any
time hereafter or from time to time have from or against the Borrower, any
Third Party or any other person; and/or
(e) compound with the Borrower, any Third Party or any other person or
guarantor.
20.4 RIGHTS CUMULATIVE, WAIVERS
The respective rights of each of the Beneficiaries under this Agreement are
cumulative, may be exercised as often as they consider appropriate and are in
addition to their respective rights under the general law. The respective
rights of each of the Beneficiaries in relation to the Facility and/or the Loan
(whether arising under this Agreement or under the general law) shall not be
capable of being waived or varied otherwise than by an express waiver or
variation in writing; and in particular any failure to exercise or any delay in
exercising any of such rights shall not operate as a waiver or variation of that
or any other such right; any defective or partial exercise of any of such rights
shall not preclude any other or further exercise of that or any other such
right; and no act or course of conduct or negotiation on their part or on their
behalf shall in any way preclude them from exercising any such right or
constitute a suspension or any variation of any such right.
20.5 FURTHER ASSURANCES
The Borrower shall promptly, upon the request of the Agent, execute,
acknowledge, deliver, file and register at its own expense all such additional
agreements, amendments, instruments, certificates, documents and assurances and
perform such other acts, as shall be necessary or appropriate to effectuate the
purposes of this Agreement or any of the other agreements, instruments or
documents delivered hereunder or in correction herewith. The Borrower hereby
irrevocably
<PAGE>
54
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loans Facility of RM91,000,000.00
authorizes the Agent to act and sign any agreement, instrument or
document in the name of and on behalf of the Borrower in order to carry out the
provisions of this Clause 20.5 save that notwithstanding such authorization the
Agent shall not be obliged to so act but shall have the absolute discretion to
decide whether or not to so act.
20.6 DISCHARGE OF PERSONAL GUARANTORS
The parties hereto agree that in the event the number of subscribers of the
wireless local loop network which network is installed and implemented under the
Project and operated by the Borrower exceeds the figure of thirty seven thousand
(37,000), then the Personal Guarantors shall be discharged from the Personal
Guarantee with immediate effect (the "Discharge") PROVIDED THAT:-
(i) the evidence prescribed and provided by the Borrower to ascertain the
thirty seven thousand (37,000) subscribers is acceptable to the Agent at
its absolute discretion;
(ii) the Instructing Group having evaluated the feasibility of the Discharge has
given its consent at its absolute discretion through the Agent for the
Discharge;
(iii)the Borrower has complied with such conditions (if any) to the satisfaction
of the Agent as may be prescribed by the Agent in consideration of the
Discharge.
20.7 NOTICES
(a) Notices to be given or served under the provisions of this Agreement shall
be deemed properly given or served if given in writing delivered personally
or by post by prepaid letter, telex or facsimile transmission addressed to
the relevant party at its address stated above or to any telex number or
facsimile number which is published as belonging to it (or such other
addressor telex or facsimile number as is notified by any party to the
other party hereunder). Every notice or other communication shall be
deemed to have been received in the case of a telex message or facsimile
transmission the next working day after the date of dispatch, subject to
such telex message or facsimile transmission being confirmed forthwith
thereafter by written notice delivered by post to the party entitled to
receive the same as aforesaid, and in the case of a letter the next working
day after the date of delivery when delivered personally or forty-eight
(48) hours after it has been put into post.
<PAGE>
55
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loans Facility of RM91,000,000.00
(b) In proving the giving of a notice hereunder it shall be sufficient to prove
that the notice was left or that the envelope containing such notice was
properly addressed and posted or that the telex bears the correct
answerback or that the facsimile transmission report bears the correct
transmission receipt confirmation of the party to whom the notice was sent.
20.8 INVALIDITY OF ANY PROVISION
If any of the provisions of this Agreement becomes invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
20.9 GOVERNING LAW
This Agreement is governed by, and shall be construed in accordance with,
the laws of Malaysia.
<PAGE>
56
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loans Facility of RM91,000,000.00
IN WITNESS WHEREOF this Agreement is executed by the parties hereto.
The execution of this Agreement by )
the Borrower, SYARIKAT TELEFON )
WIRELESS (M) SDN. BHD. is duly )
effected in a manner authorized ) [Seal]
by its constitution under the Seal )
of the Borrower, SYARIKAT TELEFON )
WIRELESS (M) SDN. BHD. which said )
Seal is hereunto duly affixed on )
this 18th day of August, 1995 )
in the presence of:- )
/s/................................. Director
NAME:
/s/................................. Director
NAME:
SIGNED by )
)
Hassan Hussain )
)
for and on behalf of ) /s/..........................
PERMATA MERCHANT BANK )
BERHAD, as Arranger and Agent )
on the 18th day of August, )
1995 )
............................
/s/
LOO YEN N
Advocate & Solicitor
Kuala Lumpur
<PAGE>
57
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loans Facility of RM91,000,000.00
SIGNED by )
)
Hassan Hussain )
)
for and on behalf of ) /s/..........................
PERMATA MERCHANT BANK )
BERHAD, as Lender on the 18th )
day of August, 1995 )
............................
/s/
LOO YEN N
Advocate & Solicitor
Kuala Lumpur
SIGNED by )
)
Jalil Haji Said )
)
for and on behalf of ) /s/
PERWIRA AFFIN BANK )
BERHAD, as Lender on the )
18th day of August, )
1995 )
/s/
LOO YEN N
Advocate & Solicitor
Kuala Lumpur
<PAGE>
58
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd
Facility : Term Loans Facility of RM91,000,000.00
SCHEDULE 1
LENDERS
A. PARTICIPANT COMMERCIAL BANK
INITIAL
NAME LENDING OFFICE COMMITMENT
1. Perwira Affin
Bank Berhad RM47,000,600
B. PARTICIPANT MERCHANT BANK
1. Permata Merchant RM44,000,000
Bank Berhad
Total
---------------
RM 91,000,000
---------------
Schedule 1 -
<PAGE>
59
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 2
CONDITIONS PRECEDENT
(referred to in Clause 4.1)
PART A
1. A certificate signed by two (2) directors and the company secretary of the
Borrower substantially in the form set out in Schedule 3A and the documents
therein referred to.
2. A certificate signed by two (2) directors and the company secretary of
SEGAR KASTURI substantially in the form set out in Schedule 3B and the
documents therein referred to.
3. A certificate signed by two (2) directors and the company secretary of S
ILA substantially in the form set out in Schedule 3C and the documents
therein referred to.
4. This Agreement and the other Loan Documents which shall have been duly
executed by or on behalf of all the parties hereto and thereto and stamped.
5. Evidence that the relevant prescribed forms in respect of each of this
Agreement, the Assignment, the MOP, the Debentures and the Charge have been
lodged with the Registrar of Companies for registration pursuant to Section
108 of the Companies Act, 1965 and that a search has been made by the
Agent's solicitors on the Borrower, SHUBILA and SEGAR KASTURI at the time
of such lodgment confirming that no charges or other encumbrances have been
registered in the Companies Registry prior to such lodgment which would
adversely affect the security of the Lenders.
6. Evidence that each of the power of attorney granted by the Borrower to the
Agent under the terms of Debenture A and the MOP, and the power of attorney
granted by S ILA to the Agent under the terms of Debenture B has been
lodged for registration with the High Court of the States of Malaya.
7. The receipt for payment of quit rent for the current year in respect of the
Land.
8. Evidence that the consent from the relevant State Authority has been
obtained in respect of the creation of the Charge in favor of the Agent on
the Land.
Schedule 2 -
<PAGE>
60
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
9. A valuation report on the Land made not earlier then three (3) months by a
valuer on the Agent's panel of valuers stating that the open market value
of the Land on an "as is" basis is not less than Ringgit Malaysia Fifteen
Million (RM15,000,000.00).
10. Evidence that a private caveat over the Land in favor of the Agent has been
presented for registration with the relevant land office/registry and a
search has been conducted by the Agent's solicitors confirming that
immediately prior to the presentation of the private caveat for
registration SEGAR KASTURI is the registered proprietor of the Land and
that save for the Existing Charge, the Land is free from all encumbrances
which could or might adversely affect the security of the Lenders.
11. A letter from BOC addressed directly to the Agent in respect of.-
(i) the amount of the Existing Loan due and payable to it;
(ii) BOC's irrevocable undertaking to forthwith forward the following
documents to the Agent or the Agent's solicitors upon receipt of the
Existing Loan:-
(a) the original issue document of title to the Land;
(b) the duplicate Existing Charge;
(c) the duly executed valid and registrable discharge of the
Existing Charge;
(d) the duly executed Form 42B in respect of the discharge of the
Existing Charge; and
(iii) BOC's irrevocable undertaking to refund the amount of the Existing
Loan received from the Agent in the event the discharge of the
Existing Charge is not registered to any reason whatsoever.
12. Confirmation from the Agent's solicitors that they are in receipt of an
amount equivalent to the difference between the Existing Loan and the
principal limit of Tranche I (if any) from the Borrower.
13. A certified copy of each of the following:-
(i) the License;
Schedule 2 -
<PAGE>
61
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(ii) the Ericsson Contract; and
(iii) the Interconnect Agreement.
14. Evidence that all statutory and other necessary approvals permits, licenses
and consents (if any) for the implementation of the Project (including but
not limited to those set out in paragraph 13 above) have been obtained and
have not been revoked or amended.
15. A certificate from a firm of auditors acceptable to the Agent confirming
that the Borrower's issued and paid-up capital is not less than Ringgit
Malaysia Forty Five Million (RM45,000,000).
16. A favorable legal opinion from [*] counsel in respect of the enforceability
and validity of the Personal Guarantee given or to be given by the Personal
Guarantor, [*].
17. A letter addressed to the Agent from the party appointed by the Personal
Guarantor, [*] confirming its appointment to accept the service of process
in Malaysia on its behalf.
18. A declaration of each and every director of the Borrower in the form set
out in Schedule 11.
19. Evidence that each and every shareholder of the Borrower have deposited
with the Agent the following:-
(a) the share certificates of all the shares of which represent the entire
paid up share capital of the Borrower (the "STW Shares");
(b) the duly executed valid and registrable blank transfers in respect of
the STW Shares.
20. The latest Forms 24 and 49 of each of the Borrower, SHUBILA, SEGAR KASTURI
and the corporate shareholders of the Borrower.
21. A written undertaking from the Registrar of the Borrower together with a
certified extract of the resolution of the board of directors of the
Borrower:-
(i) acknowledging the contents of the Collateral Agreement;
_________
*Confidential portion has been omitted and filed separately with the Commission.
Schedule 2 -
<PAGE>
62
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(ii) irrevocably approving the registration of the transfer of the STW Shares in
the name of the Agent or its nominee; and
(iii) irrevocably approving the registration of the transfer of the STW
Shares or any parts thereof in the name of such third party(ies)
nominated by the Agent to accept the transfer in the event of a
force sale of the STW Shares or any parts thereof by the Agent under
such memoranda of deposit in respect of the STW Shares if so
executed by the shareholders of the Borrower in favor of the Agent
as security for the Facility.
22. Evidence that the Borrower has opened the Project Account and has appointed
the Project Accountant.
23. The following documents:-
(i) a certified copy of the notice substantially in the form set out in
Schedule B 1 of the MOP addressed to the Fixed Deposit Bank; and
(ii) the acknowledgment from the Fixed Deposit Bank addressed to the
Agent substantially in the form set out in Schedule B2 of the MOP.
PART B
1. Evidence that the Charge has been presented for registration at the
relevant land official registry and a search has been conducted by the
Agent's solicitors at the time of the presentation of the Charge for
registration confirming that no charge or other encumbrances have been
registered over the Land prior to such presentation which would adversely
affect the security of the Lenders.
Schedule 2 -
<PAGE>
63
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
CERTIFICATE
(to be given by the Borrower)
[Letterhead of the Borrower]
To: PERMATA NMRCHANT BANK BERHAD
(as Agent)
We, [name] and [name], both directors of SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
of [ ] (the "Company")
HEREBY CERTIFY that:
(a) attached hereto, marked "A", are true, correct and up to date copies of the
certificate of incorporation and the memorandum and articles of association
of the Company;
(b) attached hereto, marked "B", is a true and correct copy of resolution duly
passed by the directors of the Company on * , 199 approving (i) a loan
agreement (the "Loan Agreement") between (1) the Company, (2) yourselves
(as Arranger and Agent) and (3) the lenders listed therein relating to a
term loan facility aggregating Ringgit Malaysia Ninety One Million
(RM91,000,000.00) for principal to the Company (ii) Debenture A (iii) the
Assignment (iv) the MOP and (v) Collateral Agreement (all as defined in the
Loan Agreement) and authorizing their execution, delivery and performance;
and such resolution has not been amended, modified or revoked and are in
full force and effect.
We hereby confirm that all consents and approvals for the implementation of the
Project (as defined in the Loan Agreement) have been obtained and have not been
varied or amended.
The following signatures are the true signatures of the persons any two of whom
have been authorized to witness the affixing of the common seal of the Company
to the Loan Agreement, Debenture A, the Assignment, the MOP and the Collateral
Agreement:-
Schedule 3A -
<PAGE>
64
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Name Position Signature
* * *
* * *
* * *
The following signatures are the true signatures of the persons any [state
number] of whom have been authorized to issue any requests and give any notices
and other communications under or in connection with the Loan Agreement,
Debenture A, the Assignment, the MOP and the Collateral Agreement:-
Name Position Signature
* * *
* * *
* * *
Signed:
____________________ _____________________
Director Director
Date:
I, [name], the secretary of SYARIKAT TELEFON WIRELESS (M) SDN. BHD. (the
"Company") hereby certify that [names of two directors giving above certificate]
are duly appointed directors of the Company and that the signatures above are
the true signatures of such directors.
Signed: ____________________
Secretary
Date:
Schedule 3A -
<PAGE>
65
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 3B
CERTIFICATE
(to be given by SEGAR KASTURI)
[Letterhead of SEGAR KASTURI]
To: PERMATA MERCHANT BANK BERHAD
(as Agent)
We, [name] and [name], both directors of SEGAR KASTURI SDN. BHI). of
[ ](the "Company")
HEREBY CERTIFY that:
(a) attached hereto, marked "A", are true, correct and up to date copies of the
certificate of incorporation and the memorandum and articles of association
of the Company;
(b) attached hereto, marked "B", is a true and correct copy of resolution duly
passed at a meeting of the Board of Directors of the Company duly convened
and held on [ ], 1995 approving the execution of a charge
(the "Charge") in relation to a loan agreement (the "Loan Agreement") dated
[ ] made between (1) SYARIKAT TELEFON NWRELESS (M) SDN. BHD.
as borrower, (2) PERMATA MERCHANT BANK BERHAD as arranger and agent and (3)
the institutions listed in Schedule 1 thereto as lenders for a term loan
facility aggregating not more than Ringgit Malaysia Ninety One Million
(RM91,000,000.00) and authorizing the execution of the Charge under the
Common Seal of the Company and its delivery and performance, and such
resolution has not been amended, modified or revoked and is in full force
and effect.
The following signatures are the true signatures of the persons any two of whom
have been authorized to witness the affixing of the Common Seal of the Company
on the Charge:-
Schedule 3B -
<PAGE>
66
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Name Position Signature
* * *
* * *
* * *
The following signatures are the true signatures of the persons any [state
number] of whom have been authorized to give any notices and other
communications under or in connection with the Charge:-
Name Position Signature
* * *
* * *
* * *
Signed:
__________________ ___________________
Director Director
Date:
I, [name], the company secretary of SEGAR KASTURI SDN. BHD. (the
"Company") hereby certify that [names of directors giving above certificates]
are duly appointed directors of the Company and that the signatures above are
the true signatures of such directors.
Signed:
_______________
Secretary
Date:
Schedule 3B -
<PAGE>
67
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 3C
CERTIFICATE
(to be given by SHUBILA)
[Letterhead of SHUBILA]
To: PERMATA MIERCHANT BANK BERHAD
(as Agent)
We, [name] and [name], both directors of SE"ILA HOLDINGS SDN. BHD. of
[ ] (the "Company")
HEREBY CERTIFY that:
(a) attached hereto, marked "A", are true, correct and up to date copies of the
certificate of incorporation and the memorandum and articles of association
of the Company;
(b) attached hereto, marked "B", is a true and correct copy of resolution duly
passed at a meeting of the Board of Directors of the Company duly convened
and held on [ ], 1995 approving the execution of a
guarantee (the "Corporate Guarantee"), a debenture ("Debenture B") and the
collateral agreement (the "Collateral Agreement") in relation to a loan
agreement (the "Loan Agreement") dated [ ] made between
(1) SYARIKAT TELEFON WIRELESS (M) SDN. BHD. as borrower, (2) PERMATA
MIERCHANT BANK BERHAD as arranger and agent and (3) the institutions listed
in Schedule 1 thereto as lenders for a term loan facility aggregating not
more than Ringgit Malaysia Ninety One Million (RM91,000,000.00) and
authorizing the execution of the Corporate Guarantee, Debenture B and the
Collateral Agreement under the Common Seal of the Company and its delivery
and performance, and such resolution has not been amended, modified or
revoked and is in full force and effect.
The following signatures are the true signatures of the persons any two of whom
have been authorized to witness the affixing of the Common Seal of the Company
on the Corporate Guarantee, Debenture B and the Collateral Agreement:-
Schedule 3C -
<PAGE>
68
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Name Position Signature
* * *
* * *
* * *
The following signatures are the true signatures of the persons any [state
number] of whom have been authorized to give any notices and other
communications under or in connection with the Corporate Guarantee, Debenture B
and the Collateral Agreement:-
Name Position Signature
* * *
* * *
* * *
Signed:
_________________ ____________________
Director Director
Date:
I, [name], the company secretary of SHUBILA HOLDINGS SDN. BHD. (the
"Company") hereby certify that [names of directors giving above certificate] are
duly appointed directors of the Company and that the signatures above are the
true signatures of such directors.
Signed:
_______________
Secretary
Date:
<PAGE>
69
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 4A
DRAWING NOTICE
(TRANCHEI)
To: PERMATA NMRCHANT BANK BERRAD
as Agent
[Date]
Attention:
TERM LOAN FACILITY OF RM91,000,000
DRAWING NUMBER [ ]
We refer to the term loan facility made available by a loan agreement dated 199_
(the "Loan Agreement") between (l) this Company, (2) yourselves(as arranger and
agent) and (3) the lenders listed therein. Terms defined in the Loan Agreement
have the same meanings herein.
WHEREBY:-
(a) give you notice that we wish to make a Drawing of Ringgit Malaysia [specify
amount] on Tranche I of the Facility on [Date];
(b) request you to remit the Drawing to Bank of Commerce (specify account
number);
(c) confirm that each of the conditions contained in Clause 5.1(a),(c),(d) and
(e) is satisfied as at the date hereof and we know of no reason why it
should not be satisfied as at the date referred to in (a) above;
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
By _______________________
Schedule 4A -
<PAGE>
70
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 4B
DRAWING NOTICE
(TRANCHE II)
To: PERMATA MERCHANT BANK BERHAD
as Agent
[Date]
Attention:
TERM LOAN FACILITY OF RM91,000,000
DRAWING NUMBER [ ]
We refer to the term loan facility made available by a loan agreement dated 199
(the "Loan Agreement") between (1) this Company, (2) yourselves (as Arranger and
Agent) and (3) the lenders listed therein. Terms defined in the Loan Agreement
have the same meanings herein.
WHEREBY:-
(a) give you notice that we wish to make a Drawing of Ringgit Malaysia [specify
amount] on Tranche II of the Facility on [Date];
(b) request you to remit the Drawing to (specify name of bank and account
number);
(c) confirms that each of the conditions contained in Clause 5.2(a),(c),(d) and
(e) is satisfied as at the date hereof and we know of no reason why it
should not be satisfied as at the date referred to in (a) above;
(d) enclose herewith the *invoice(s) of [specify particulars]/document(s)
relating to [specify particulars] and we confirm that these
*invoice(s)/document(s) have not been the subject of any previous request
for Drawings.
(e) enclose herewith the Project Accountant's certificate certifying the
authenticity and validity of the *invoice/documents enclosed under item (d)
above.
Schedule 4B -
<PAGE>
71
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
By _____________________
*Delete as appropriate
<PAGE>
72
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE5
LAMPIRAN
(ANNEXURE)
We, SEGAR KASTURI SDN. BHD., a company incorporated in Malaysia and having
its registered office at 2nd Floor, Wisma Tai Yoon, 9B Lorong Medan Tuanku Satu,
Medan Tuanku, 50300 Kuala Lumpur (the "Chargor"), the proprietor of the land
described in the Schedule hereinbefore appearing (the "Said Land") HEREBY CHARGE
the Said Land to PERMATA MERCHANT BANK BERHAD, a company incorporated in
Malaysia and having its registered office at 27th Floor, Menara Boustead, No. 69
Jalan Raja Chulan, 50200 Kuala Lumpur (the "Agent"), as agent for the
Beneficiaries (as hereinafter defined) of the other part upon the terms and
conditions hereinafter appearing.
WHEREAS:-
(i) By a loan agreement to be entered into simultaneously with this Charge or
shortly hereafter between (1) SYARIKAT TELEFON WIRELESS (M) SDN. BHD. (the
"Borrower") of the one part and (2) the Agent of the second part and (3)
PERMATA MERCHANT BANK BERHAD and PERWIRA AFFIN BANK BERHAD, (the "Lenders")
of the third part, the Lenders agree to make available a term loan facility
in the maximum principal sum of Ringgit Malaysia -Ninety One Million
(RM91,000,000.00) (the "Facility") to the Borrower upon the terms and
conditions contained therein.
(ii) It is a condition precedent to the availability of the Facility that inter
alia the Chargor charges the Said Land in favor of the Agent as security
for the Facility.
In consideration of the premises, the Chargor HEREBY AGREES, COVENANTS AND
UNDERTAKES with the Agent as follows:-
1. DEFINITIONS
1.1 Except where the context otherwise requires, terms and expressions defined
in the Loan Agreement and not otherwise defined herein bear the same meanings
where used in this Charge, and the following terms and expressions where used in
this Charge bear the meanings respectively set opposite them:
Schedule 5 -
<PAGE>
73
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Additional Interest the additional interest payable by the Borrower pursuant to
Clause 12.5(a) of the Loan Agreement due to failure to pay
any Indebtedness when so payable;
Beneficiaries the Arranger, the Agent and the Lenders;
Code the National Land Code No. 56 of 1965 and includes any
amendment, re-enactment or re-certification thereof;
Indebtedness at any time, the aggregate of all sums advanced from time
to time by the Lenders to the Borrower and outstanding
pursuant to the Loan Agreement together with interest
thereon and all other monies payable to the Beneficiaries
or any of them pursuant to, upon and under the Loan
Documents (whether in respect of principal, interest,
Additional Interest, fees, prepayment premium, costs,
expenses, indemnity or otherwise);
Loan Documents the Loan Agreement, the Collateral Agreement, this Charge,
the other Security Documents and any other documents for
the time being constituting security for the Facility or
any parts thereof;
Prescribed Rates the rates of interest chargeable on the Loan or any parts
thereof stipulated in the Loan Agreement or such other rate
or rates which the Lenders may at their discretion
stipulate from time to time or at any time in the manner
provided for therein.
1.2 The headings in this Charge Annexure are inserted for convenience only and
shall not be taken read and construed as essential parts of this Charge.
References to Clauses are to be construed as references to Clauses of this
Charge Annexure. All references to provisions of statutes include such
provisions as modified, re-certified or re-enacted. Words applicable to natural
persons include any body of persons, company, corporation, firm or partnership
corporate or incorporate and vice versa. Words importing the masculine gender
shall include the feminine and neuter genders and vice versa. Words importing
the singular number shall include the plural number and vice
Schedule 5 -
<PAGE>
74
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
versa. Where two or more persons or parties are included or comprised in any
expressions, agreements, covenants, terms, stipulation and undertakings
expressed to be made to such persons or parties shall, unless expressly stated
to the contrary, be enforceable by them jointly and severally and agreements,
covenants, terms, stipulations and undertakings expressed to be made by or on
the part of such persons or parties shall be deemed to be made by and binding
upon such persons or parties jointly and severally.
2. UNDERTAKIING TO PAY
2.1 The Chargor hereby covenants with the Agent that as and when the
Indebtedness or any part thereof is due for payment in accordance with the
provisions of the Loan Documents or on such earlier date as the security
constituted by this Charge becomes enforceable and the Agent becomes entitled to
exercise the rights and powers upon default provided under this Charge and by
law the Chargor shall pay to the Agent in the manner specified in the Loan
Agreement, the Indebtedness or, as the case may be, the part thereof due to be
paid and, in the meantime will pay to the Agent interest and Additional
Interest, (as well after as before any judgment), at the rates and calculated in
the manner prescribed in the Loan Agreement on the Indebtedness from time to
time outstanding.
3. USE OF THE SAID LAND
3.1 The Chargor will not store or bring upon the Said Land articles of a
specially combustible, inflammable or dangerous nature other than those required
for the normal course of the Chargor's business or do or permit to occur any
act, thing or event whereby the insurance effected pursuant to Clause 1 1. 1
and/or Clause 1 1. 3 may be or become avoided, vitiated, discharged or
unenforceable.
3.2 The Chargor shall forthwith upon receipt of notice from the Agent,
discontinue any user of the Said Land or any part thereof for any reason which,
in the opinion of the Agent, would adversely affect the interest of the Agent
and the other Beneficiaries under this Charge.
4. COMPLIANCE WITH LAND CONDITIONS
4.1 The Chargor shall comply with and observe all the conditions, restrictions
and category of land use, express or implied, imposed upon, relating to or
affecting the Said Land or to which the Said Land
Schedule 5 -
<PAGE>
75
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
are subject as well as the provisions of any law for the time being in force and
affecting the Said Land.
5. PAYMENT OF OUTGOINGS
5.1 The Chargor shall punctually pay all quit rents, assessments, rates, taxes
and all other outgoings whatsoever payable from time to time in respect of the
Said Land as and when the same shall become due and payable and deliver the
receipt therefor to the Agent.
5.2 In the event of failure by the Chargor to make any of the payments
mentioned in Clause 5. 1, it shall be lawful but not obligatory upon the Agent
to make such payments or any of them.
6. INFORMATION OF MATTERS AFFECTING SECURITY
6.1 The Chargor shall inform the Agent forthwith upon its issue, publication,
service or occurrence (time being of the essence in this respect) of any
application, demand, notice, order, proposal or transaction in any way
affecting, concerning or touching the Said Land or any part thereof and produce
the same to the Agent if called upon to, do so.
6.2 The Chargor shall do all acts and take all steps necessary or expedient to
safeguard and preserve the Said Land or any part thereof or the title or
ownership thereto.
6.3 The Agent may, if it thinks fit, and on the Chargor's failure so to do, on
behalf or in the name and the expense of the Chargor, do all such acts and
employ all such persons as the Agent deems necessary or expedient, for the
purpose of safeguarding and preserving the Said Land or any part thereof or the
Beneficiaries' rights and interests thereon.
7. GOVERNMENT ACQUISITION
7.1 In the event that the Said Land or any part thereof shall at any time
become the subject matter of or be included in any notice, notification or
declaration concerning or relating to acquisition by any government or
government authority or any inquiry or proceedings in respect thereof or if any
government or government authority shall condemn, nationalize, seize or
otherwise expropriate all or any substantial part of the property or other
assets of the Chargor or shall have assumed custody or control of such property
or other assets
Schedule 5 -
<PAGE>
76
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
or of the business and operations of the Chargor or shall have taken any action
for the winding up of the Chargor or any action that would prevent the Chargor
or its officers to carry on the operations of its business or a substantial part
thereof the Chargor shall forthwith inform the Agent of the same and shall
forward to the Agent, a copy or copies of any such notice, notification or
declaration as soon as the same is delivered to or served on the Chargor.
7.2 The Agent shall be entitled at the expense of the Chargor, to engage such
advisers and agents (including solicitors and valuers) as it may think fit for
the purpose of appearing or attending at or advising upon any inquiry or
proceedings affecting, concerning or relating to any such acquisition
expropriation or any of the matters referred to in clause 7.1 hereof at the
expense of the Chargor.
7.3 All monies received as or by way of compensation in respect of any of the
matters referred to in clause 7.1 shall be applied in or towards the discharge
or repayment of the Indebtedness and the Chargor shall, and hereby declares that
it will, hold monies so received in trust for the Agent and the Chargor agrees
and confirms that the Agent may receive and give a good discharge for all such
monies.
8. DEALINGS WITH SECURITY
8.1 The Chargor shall not transfer, sell, charge or otherwise howsoever deal
with the Said Land or any part thereof or any interest therein or make the same'
subject to any burden, charge, encumbrance, liability or lien whatsoever or make
any application for the alteration of the category of land use or for the
imposition of any fresh category of land use in respect of the Said Land or for
the rescission, removal or amendment of any condition or restriction affecting
the Said Land without the prior written consent of the Agent. Provided,
however, that if any change will, in the opinion of a valuer appointed by the
Agent, enhance the value of the said Land then the consent of the Agent shall
not be required.
9. LEASING AND POSSESSION
9.1 The Chargor shall not lease or let out or grant any license or otherwise
howsoever part with the possession of the Said Land except in the ordinary
course of business or make or accept the surrender of any lease whatsoever of or
in respect of the Said Land or any part thereof to any person firms or companies
without the prior written consent in writing of the Agent.
Schedule 5 -
<PAGE>
77
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
9.2 The consent of the Agent referred to in Clause 9.1 may be refused without
assigning any reason therefor or given either absolutely or on such terms and
conditions as the Agent deems fit and the decision of the Agent shall be final
and conclusive.
9.3 It is hereby expressly agreed and declared that the provisions of Section
251 of the Code shall not apply to this Charge.
10. REPAIRS AND RIGHT OF INSPECTION
10.1 The Chargor shall keep all buildings and structures now or at any time
hereafter erected on the Said Land in good repair and working condition and
shall keep the Said Land clean, weeded and free from undergrowth in default
whereof it shall be lawful for but not obligatory upon the Agent to carry out,
at the cost and expense of the Chargor, such repairs and acts for the purpose of
keeping the Said Land and structures thereon clean and in good repair and
working condition and free from undergrowth as the Agent may deem necessary or
expedient.
10.2 The Agent by its officers, servants, agents and/or workmen shall be at
liberty at all reasonable times and after having given prior notice to enter
into the Said Land and to view and inspect the state and condition thereof.
10.3 If the Agent should enter the Said Land and carry out the repairs and acts
mentioned in Clause 10.1, it shall not be liable as a chargee in possession.
11. INSURANCE
11.1 The Chargor shall insure and keep insured any buildings and structures now
or at any time hereafter erected on the Said Land against loss or damage by
fire, lightning, tempest, flood, landslide, riot, civil commotion, strike,
theft, burglary, malicious acts collapse of any structure constructed thereon
and such other risks as the Agent may require from time to time, in the full
amount of its insurable value, with such insurers as may be acceptable to the
Agent and the Lenders, under a policy or policies of insurance and shall
forthwith have the Agent as trustee for the Beneficiaries endorsed thereon as
loss payee.
11.2 The Chargor shall pay all premia for the insurance effected pursuant to
Clause 11.1 on the first day on which the same ought to be paid and, if required
by the Agent, deliver to the Agent on demand,
Schedule 5 -
<PAGE>
78
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
the policy or policies of insurance effected and the receipt for every premium
payable under such policy or policies.
11.3 If the Chargor shall fail to effect, maintain or renew the insurance
referred to in Clause 11.1, it shall be lawful for but not obligatory upon the
Agent, at the cost and expense of the Chargor, to effect, maintain or renew any
such insurance as the Agent may think fit.
11.4 Save and except at the request and with the prior written consent of the
Agent, the Chargor shall not effect or keep on foot any insurance against any
risk in respect of any buildings and structures now or at any time hereafter
erected on the Said Land if the Agent has effected or kept on foot any such
insurance.
11.5 The Agent may, at its discretion, require any money received on any
insurance of any buildings and structures now or at any time hereafter erected
on the Said Land, whether effected by the Agent or the Chargor, to be applied in
or towards making good the loss or damage in respect of which the money is
received or, as the Agent may decide, in or towards the discharge of the
Indebtedness and the Chargor shall hold all such money, in the meantime, in
trust for the Agent.
11.6 Upon its exercise of its powers in clause 11.5 above the Agent shall be
entitle to receive and give a good discharge for any money received on any
insurance of any buildings and structures now or at any time hereafter erected
on the Said Land.
12. CONTINUING SECURITY
12.1 The security created by this Charge is expressly intended to be and shall
be a continuing security for all moneys whatsoever now or hereafter from time to
time owing by the Borrower or the Chargor whether alone or jointly and severally
with another or others to the Beneficiaries under the Loan Documents or
otherwise and whether as principal or surety notwithstanding that the Borrower
or the Chargor may at any time or times, cease to be indebted to any of the
Beneficiaries under the Loan Documents for any period or periods.
13. DOCUMENTS OF TITLE
13.1 The Agent shall have the custody or possession of the issue document of
title in respect of the Said Land.
Schedule 5 -
<PAGE>
79
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
13.2 Insofar as the law shall permit, the application of Section 244(2) of the
Code shall be restricted to instances where the production of any document is
required for purposes of any action or matter initiated or instituted by any
government or government authority, department or officer and not where such
document is required for any purpose or to effect any transaction conducted or
initiated by the Chargor and nothing contained or expressed in Section 244(2) of
the Code shall be construed as or deemed to be consent by the Agent (whether
express or implied) to any act or transaction requiring the consent of the
Agent.
14. CONSOLIDATION
14.1 Section 245 of the Code (restricting the right of consolidation) shall not
apply to the security created by this Charge and it is hereby expressly agreed
and declared that unless the Agent otherwise agrees, this Charge shall not be
discharged except on payment by the Chargor of not only the Indebtedness but
also all monies secured by any other charge created by the Chargor in favor of
or vested in the Agent or any of the other Beneficiaries.
15. REPRESENTATION AND WARRANTIES AND UNDERTAKINGS
15.1 The Chargor acknowledges that each of the Agent and the other Beneficiaries
has entered into the Loan Documents and agreed to accept this Charge as security
on the basis of, and in full reliance on, representations in the following
terms; and the Chargor now warrants to each of them as follows:-
(a) the Chargor is duly incorporated as a private company with limited
liability and validly existing under the laws of Malaysia;
(b) the Chargor is the subsidiary of the Borrower and the creation of this
Charge will not contravene Section 133A of the Companies Act 1965;
(c) the documents which contain or establish the Chargor's constitution
incorporate provisions which authorize, and all necessary corporate action
has been taken to authorize, and all authorizations of any governmental or
other authority have been duly and unconditionally obtained and are in full
force and effect which are required to authorize, the Chargor to own its
assets, carry on its business as it is now being conducted, and sign and
deliver, and perform the transactions contemplated in, this Charge and to
enable the Agent and the other Beneficiaries
Schedule 5 -
<PAGE>
80
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
to exercise the rights, powers and authorities hereby vested in them or any
of them;
(d) neither the signing and delivery of this Charge nor the performance of any
of the transactions contemplated in it will:-
(i) contravene or constitute a default under any provision contained in
any agreement, instrument, law, judgment, order, license, permit or
consent by which the Chargor or any of its assets is bound or
affected; or
(ii) cause any limitation on it or the powers of its directors, whether
imposed by or contained in any document which contains or establishes
its constitution or in any law, order, judgment, agreement, instrument
or otherwise, to be exceeded;
(e) no event has occurred which constitutes, or which with the giving of notice
and/or the lapse of time and/or a relevant determination would constitute,
a contravention of, or default under, any agreement or instrument by which
the Chargor or any of its assets is bound or affected, being a
contravention or default which might either have an adverse effect on the
business, assets or condition of the Chargor or adversely affect its
ability to observe or perform its obligations under this Charge;
(f) no litigation, arbitration or administrative proceeding or claim which
might by itself or together with any other such proceedings or claims
either have an adverse effect on the business, assets or condition of the
Chargor or adversely affect its ability to observe or perform its
obligations under this Charge is presently in progress or pending or, to
the best of the knowledge, information and belief of the Chargor,
threatened against the Chargor, or any of its assets;
(g) all necessary returns have been delivered by or on behalf of the Chargor to
the relevant taxation authorities and the Chargor is not in default in the
payment of any taxes and no claim is being asserted with respect to taxes
which is not disclosed in the financial statements referred to in paragraph
(h) below;
(h) the audited financial statements (including the income statement and
balance sheet) of the Chargor for the year ended 31st day of December, 1994
have been prepared on a basis consistently applied and give a true and fair
view of the results of its operations for that year and the state of its
affairs at the date, and in
Schedule 5 -
<PAGE>
81
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
particular accurately disclose all the
liabilities (actual or contingent) of the Chargor;
(i) the Chargor is the beneficial owner and has title to the Said Land;
(j) otherwise than has been disclosed in writing to the Agent the Said Land is
affected by any Security Interest, and the Chargor is not a party to, nor
is it or the Said Land bound by, any order, agreement or instrument under
which the Chargor is, or in certain events may be, required to create,
assume or permit to arise any Security Interest;
(k) the Chargor has fully disclosed in writing to the Agent all facts relating
to the Borrower and the Chargor which the Chargor knows or should
reasonably know and which are material for disclosure to the Beneficiaries
(or any of them) in the context of the Facility and this Charge.
15.2 The Chargor undertakes that, from the date of this Charge until all its
liabilities under this Charge have been discharged:-
(a) the Chargor will prepare the financial statements referred to in clause
15.2(b) on a basis consistently applied in accordance with generally
accepted accounting principles in Malaysia and those financial statements
shall give a true and fair view of the results of the operations of the
Chargor for the period in question and the state of its affairs for the
period to which the financial statements are made up and shall disclose or
reserve against all the liabilities (actual or contingent) of the Chargor;
(b) the Chargor will deliver to the Agent in sufficient numbers for each of the
Beneficiaries:-
(i) as soon as they become available (and in any event within ninety (90)
days after the end of each of its financial periods) copies of its
financial statements for that period which shall contain an income
statement and abalance sheet and be audited and certified without
adverse qualification by a firm of independent accountants;
(ii) within sixty (60) days after the end of each half year of its
financial year copies of a full report on its business for that period
which shall contain full particulars of its business and an income
statement and a balance sheet; and
Schedule 5 -
<PAGE>
82
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(iii) promptly, such additional financial or other information and records
as the Agent may from time to time reasonably request;
(c) the Chargor will maintain in full force and effect all relevant
authorizations (governmental and otherwise) and will promptly obtain any
further authorization which may become necessary to enable it to carry on
its business and to perform any of the transactions contemplated by this
Charge;
(d) the Chargor will immediately notify the Agent upon becoming aware of the
revocation or variation of any authorization;
(e) if the Chargor becomes aware of the occurrence of an Event of Default it
will forthwith notify the Agent and provide the Agent with full details of
any steps which it is taking, or is considering taking, in order to remedy
or mitigate the effect of the Event of Default or otherwise in connection
with it;
(f) the Chargor will carry out and operate its business and affairs with due
diligence and efficiency and in accordance with sound financial and
industrial standards and practices;
(g) the Chargor will, by written notice, inform the Agent of:-
(i) any legal proceedings, litigation or claim involving the Said Land;
(ii) any dispute between the Chargor and any Government or statutory body
in respect of the Said Land;
(iii) any labor controversy which might result in a strike against the
Chargor in relation to the Said Land; and
(iv) any matter which has adversely affected or may adversely affect the
Chargor's ability to fulfill its obligations under this Charge or its
financial position;
(h) in relation to the Indebtedness the Chargor shall not take or accept any
encumbrance or other security from the Borrower or any other third party,
without first obtaining the Agent's written consent;
(i) after the occurrence of an Event of Default, the Chargor shall not, without
first obtaining the Agent's written consent, seek to
Schedule 5 -
<PAGE>
83
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
recover, whether directly or by set off, lien, counterclaim or otherwise,
nor accept any moneys or other property, nor exercise any rights in respect
of, any sum which may be or become due to the Chargor on any account by the
Borrower or, in relation to the Indebtedness, from any third party, nor
claim, prove for or accept any payment in any composition by, or any
winding up of, the Borrower or, in relation to the Indebtedness, any third
party;
(j) if, notwithstanding paragraphs (h) and (i) above, the Chargor holds or
receives any such security, moneys or property, it shall forthwith pay or
transfer the same to the Agent;
(k) if so requested by the Agent, the Chargor will cause an update valuation on
the Said Land to be made at the Chargor's cost provided that the Agent may
not request for more than one (1) update valuation in each calendar year.
16. DEFAULT
If:-
16.1 the Chargor shall fail to observe or perform any of its agreements,
covenants, stipulations, terms and conditions contained in this Charge; or
16.2 an Event of Default as defined in Clause 13.1 of the Loan Agreement shall
occur;
then and in either of such cases, the amount of the Indebtedness outstanding for
the time being shall immediately become payable by the Chargor to the Agent on
demand and the Agent shall forthwith be entitled to exercise the rights and
powers upon default provided by law and this Charge without any previous notice
to or concurrence on the part of the Chargor.
17. DEMANDS
17.1 Any demand for payment of the amount of the Indebtedness for the time being
outstanding may be made by a notice in writing requiring payment within seven
(7) days from the date thereof and may be signed on behalf of the Agent by a
director, general manager, manager, assistant manager or any other officer of
the Agent or by any solicitor or firm of solicitors purporting to act for the
Agent and such notice shall be deemed to have been sufficiently served on the
Chargor if it is left at the registered office for the time being of
Schedule 5 -
<PAGE>
84
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
the Chargor or, at the usual or last known place of business of the Chargor or,
at such address as the Chargor may notify to the Agent or sent by prepaid
registered letter to any of such addresses and, in the last mentioned case, the
service shall be deemed to be made at the time when the registered letter would
in the ordinary course of post be delivered.
18. BREACH OF COVENANT
18.1 In the event of a default committed by the Chargor as provided in clause 16
above occurring and continuing for a period of not less than SEVEN (7) DAYS, it
shall be lawful for the Agent forthwith to give the statutory notice pursuant to
the provisions of the Code requiring the Chargor to remedy the said breach
within a period of SEVEN (7) DAYS and service of such notice shall be effected
in the same manner as a notice demanding payment as provided in Clause 17 or as
may be prescribed by the Code.
19. PERSONAL LIABILITY OF CHARGOR AND CONCURRENT ACTION
19.1 If the amount realized by the Agent on a sale of the Said Land under the
provisions of the Code after deduction and payment from the proceeds of such
sale of all fees, dues, costs, rents, rates, taxes and other outgoings on the
Said Land is less than the amount of the Indebtedness for the time being
outstanding and due to the Beneficiaries under the Loan Documents and whether at
such sale the Agent or any of the other Beneficiaries is the purchaser or
otherwise, the Chargor shall pay to the Agent the difference between the amount
due and the amount so realized and until such payment will also pay interest on
such balance at the rates in the manner prescribed in clause 12.5(a) of the Loan
Agreement Provided Always that such personal liability of the Chargor to pay the
aforesaid differential sum shall not in any way prejudice, reduce, affect or
limit the right of the Beneficiaries or any of them to sue and recover the
Indebtedness from the Chargor nor shall this clause be construed to preclude or
prevent the Beneficiaries or any of them from suing the Chargor or to postpone
the right of any of the Beneficiaries to sue the Chargor until after the Said
Land has been sold.
19.2 It is hereby expressly agreed that notwithstanding any other provisions
contained herein and in the other Loan Documents each of the Beneficiaries shall
at all times be entitled, whether individually or together with each other, to
exercise all its rights, powers and privileges and, in the event of any breach
of default, to pursue all remedies concurrently, whether by way of sale,
possession, receivership, civil suit or otherwise.
Schedule 5 -
<PAGE>
85
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
20. LIENS AND OTHER SECURITIES NOT AFFECTED
20.1 Nothing contained in this Charge shall prejudice or affect any lien to
which each of the Agent and the other Beneficiaries is entitled or any other
securities (whether taken as additional or collateral security or otherwise
howsoever) which the Agent and/or the Lenders may, at any time or from time to
time hold for or on account of the Indebtedness hereby secured and no provision
in this Charge shall operate so as to merge or otherwise prejudice or affect any
bill, note, guarantee, mortgage or other security which the Agent and/or any of
the other Beneficiaries may for the time being have of the Indebtedness intended
to be hereby or otherwise secured or any right or remedy under such bill, note,
guarantee, mortgage or other security of the Agent and/or the other
Beneficiaries.
21. INTEREST RATE IN OTHER SECURITIES
21.1 When the payment of the Indebtedness hereby secured or intended so to be
shall be further secured to the Agent and/or the other Beneficiaries by any bill
of exchange, promissory note, draft, receipt or other instrument reserving a
higher rate of interest to be paid in respect thereof than those prescribed in
the Loan Documents, such higher rate of interest shall be payable in respect of
the Indebtedness and nothing contained in or to be implied from this Charge
shall affect the right of the Agent to enforce and recover payment of such
higher rate of interest or as the case may be the difference between such higher
rate of interest and the rates payable under the Loan Documents.
22. MODIFICATION AND INDULGENCE
22.1 The Agent and any other Beneficiary may at any time and without in any way
affecting the security hereby created:-
(a) grant to the Borrower or to any other surety or guarantor any time or
indulgence; and/or
(b) renew any bill, notes or other negotiable securities; and/or
(c) compound with the Borrower or the Chargor or any other person or guarantor.
23. SUSPENSE ACCOUNT
Schedule 5 -
<PAGE>
86
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
23.1 For the purpose of enabling the Agent and the Beneficiaries to prove in the
bankruptcy, liquidation or insolvency of the Chargor for the Indebtedness, or to
preserve intact the liability of any other party, the Agent may on behalf of
itself and the other Beneficiaries at any time place and keep, for such time as
the Agent thinks prudent, any moneys received, recovered or realized under this
Charge or under any other security or guarantee to the credit of an account of
the Chargor or of such other person (if any) as the Agent shall think fit,
without any obligation on the part of the Agent to apply the same or any part
thereof in or towards the discharge of the Indebtedness. Notwithstanding any
such payment in the event of any proceedings in or analogous to liquidation,
composition or arrangement, the Agent may prove for and agree to accept any
dividend or composition in respect of the whole or any part of the amount of the
Indebtedness for the time being outstanding and due to the Beneficiaries under
the Loan Documents in the -same manner as if this security had not been created.
24. PROCEDURE ON NOTICE OF FURTHER CHARGE
24.1 It is hereby agreed that if the Chargor shall execute or create any further
or subsequent charge, mortgage or encumbrance over the Said Land hereby charged
or any part or parts thereof in favor of any other corporation, person or
persons of which the Agent or the Lenders shall receive notice either actual or
constructive, the Agent may, on receiving such notice, forthwith open a new or
separate account with the Chargor in its books and if the Agent does not in fact
open such new or separate account the Agent shall nevertheless be deemed to have
done so as at the time when the Agent received or was deemed to have received
such notice and as from and after such time, all payments in account made by the
Chargor to the Agent shall (notwithstanding any legal or equitable rule of
presumption to the contrary) be placed or deemed to have been placed to the
credit of the new or separate account so opened or deemed to have been opened
and shall not go in reduction of the amount due by the Chargor to the Agent and
the Lenders at the time when the Agent received or was deemed to have received
the aforesaid notice. Provided always that the provisions of this Clause shall
not prejudice the security which the Agent and the Lenders otherwise would have
had under this Charge for the payment of the amount of the Indebtedness for the
time being outstanding and due to the Agent and the Lenders under the Loan
Agreement notwithstanding that the same may become due or owing or be incurred
after the time when the Agent received or was deemed to have received the
aforesaid notice.
25. NO OBLIGATION TO MAKE FURTHER ADVANCES
Schedule 5 -
<PAGE>
87
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
25.1 Nothing contained in this Charge shall be deemed to render it obligatory
upon the Lenders either at law or in equity to make or continue to make any
advances or to afford any other accommodation or facilities whatsoever to the
Borrower save and except for the Facility upon terms set out in the Loan
Agreement.
26. PAYMENTS BY THE AGENT
26.1 All costs, charges and expenses incurred under this Charge by the Agent
(including any expenditure incurred in the creation, enforcement and/or
preparation of this Charge or, in the giving of any notice or, in the making of
any demand under, pursuant to or in respect of this Charge or the amount of the
Indebtedness for the time being outstanding and due to the Agent and secured by
this Charge) and all other monies whatsoever paid by the Agent in respect of the
said costs, charges expenses and expenditure otherwise howsoever and all or any
other sums and moneys paid or expended by the Agent under or pursuant to the
provisions of the Code and this Charge, express or implied, and in particular
the provisions of Clauses 5.2, 6.3, 7.2, 10.1 and 11.3 shall be payable by the
Chargor to the Agent on demand.
26.2 Until payment to the Agent, the costs, charges, expenses, monies and sums
referred to in Clause 26.1 shall bear interest calculated on the basis of actual
days elapsed and a three hundred and sixty-five (365) day year (inclusive of the
first day but excluding the last day of the period in respect of which interest
shall be payable) at the rates and in the manner prescribed in the Loan
Agreement from the date of the same having been paid or expended and such sums
and interest shall on demand be paid to the Agent by the Chargor and, until
payment, shall form part of the Indebtedness and be charged on the Said Land.
27. CHANGE IN THE AGENT
27.1 The security, liabilities and or obligations created by this Charge shall
continue to be valid and binding for all purposes whatsoever notwithstanding any
change by amalgamation, reconstruction or otherwise which may be made in the
constitution of the Agent or of any company by which the business of the Agent
may, for the time being, be carried on and shall be available to the company
carrying on that business for the time being.
28. CHANGE IN CHARGOR AND BORROWER
Schedule 5 -
<PAGE>
88
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
28.1 The security, liabilities and or obligations created by this Charge shall
continue to be valid and binding for all purposes whatsoever notwithstanding any
change whether by amalgamation, reconstruction or otherwise howsoever in the
constitution of the Chargor or the Borrower and it is expressly declared that no
change of any sort whatsoever in, relating to or affecting the Chargor or the
Borrower shall in any way, affect the security, liabilities and or obligations
created by this Charge in relation to any transaction whatsoever whether past,
present or future.
29. ASSIGNMENT/TRANSFER OF CHARGE
29.1 The Agent shall be at liberty to assign and transfer this Charge and the
costs and expenses of the Agent and incidental to such assignment or transfer
shall be paid by the Chargor and any statement therein of the amount due to the
Agent under or by virtue of this Charge shall be conclusive and binding for all
purposes against the Chargor save for manifest error.
29.2 The Chargor shall not be entitled to assign or transfer all or any of its
rights, benefits and obligations hereunder without the prior written consent of
the Instructing Group obtained through the Agent.
29.3 Any Lender may, at any time, assign all or any of its rights and benefits
hereunder or transfer in accordance with Clause 29.5 all or any of its rights,
benefits and obligations hereunder to any financial institution provided that at
the same time it assigns or, as the case may be, transfers an equal portion of
its rights, benefits and obligations under the other Loan Documents to the same
financial institution.
29.4 If any Lender assigns all or any of its rights and benefits hereunder in
accordance with Clause 29.3, then, unless and until the assignee has agreed with
the Agent and the other Beneficiaries that it shall be under the same
obligations towards each of them as it would have been under if it had been an
original party hereto as a Lender, the Agent and the other Beneficiaries shall
not be obliged to recognize such assignee as having the rights against each of
them which it would have had if it had been such a party hereto.
29.5 If any Lender wishes to transfer all or any of its rights, benefits and/or,
obligations hereunder as contemplated in Clause 29.3, then such transfer may be
effected by the delivery to the Agent of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date specified
in such Transfer
Schedule 5 -
<PAGE>
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Certificate and the fifth business day after (or such earlier
business day endorsed by the Agent on such Transfer Certificate falling on or
after) the date of delivery of such Transfer Certificate to the Agent:
(i) to the extent that in such Transfer Certificate the Lender party thereto
seeks to transfer its rights, benefits and obligations hereunder, the
Chargor and such Lender shall be released from further obligations towards
one another hereunder and their respective rights against one another shall
be cancelled (such rights, benefits and obligations being referred to in
this Clause 29.5 as "discharged rights and obligations");
(ii) the Chargor and the Transferee party thereto shall assume obligations
towards one another and/or acquire rights against one another which differ
from such discharged rights and obligations only insofar as the Chargor and
such Transferee have assumed and/or acquired the same in place of the
Chargor and such Lender; and
(iii)the Agent such Transferee and the other Beneficiaries shall acquire the
same rights and benefits and assume the same obligations between themselves
as they would have acquired and assumed had such Transferee been an
original party hereto as a Lender with the rights, benefits and/or
obligations acquired or assumed by it as a result of such transfer.
30. SUCCESSORS BOUND
30.1 This Charge shall be binding upon the liquidators, receivers,
representatives, assigns and successors-in-title of the Chargor and on the
successors-in-title of the Agent.
31. INCORPORATION OF LOAN AGREEMENT
31.1 The Chargor hereby covenants and agrees that all the provisions, covenants,
stipulations, conditions, undertakings and agreements contained in the Loan
Agreement shall unless repugnant to any of the provisions contained herein, be
read as forming part of this Charge and shall be applicable with full force and
effect as if the same were set out hereunder. @ere relevant, references therein
to the "Agreement" shall for the purposes hereof be references to this Charge
and references therein to the "Borrower" shall for purpose hereof be references
to the Chargor.
32. PRINCIPAL SUPPLEMENTAL INSTRUMENTS
Schedule 5 -
<PAGE>
90
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
32.1 It is hereby agreed and declared that this Charge and the Loan Documents
are instruments employed in one transaction namely to secure the Facility in an
aggregate sum of Ringgit Malaysia Ninety One Million (RM91,000,000.00) for
principal only together with interest thereon and all other monies payable by
the Chargor to the Agent and the Lenders under the Loan Documents and for the
purpose of Section 4(3) of the Stamp Act 1949, the Loan Agreement shall be
deemed to be the principal instrument and this charge shall be deemed to be the
subsidiary instrument.
Schedule 5 -
<PAGE>
91
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
IN WITNESS WHEREOF the Chargor hereto has hereunto affixed its Common Seal
in the presence of its officers and the Agent hereto has hereunto by its
Attorneys duly authorized the day and year first above written.
The execution of this instrument )
by SEGAR KASTURI SDN. BHD. )
is duly effected in a manner )
authorized by its constitution under )
the Common Seal of SEGAR KASTURI )
SDN. BHD. Which said seal is )
hereunto DULY affixed )
on this day of )
,199 in )
the presence of:- )
______________________________ Director
NAME:
______________________________ Director/Secretary
NAME:
SIGNED by )
)
and )
)
for and on behalf of ) ________________
PERMATA MERCHANT BANK )
BERHAD as Agent on the )
day of ,199_ )
________________
Schedule 5 -
<PAGE>
92
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 6
(FIRST PARTY)
DEBENTURE
Issued pursuant to Clause of the Borrower's Memorandum of Association and
Article of the Borrower's Articles of Association and a Resolution of the
Directors passed on the day of ,199 .
THIS DEED OF DEBENTURE is made the day of 199 Between SYARIKAT TELEFON
WIRELESS (M) SDN. BHD., a company incorporated in Malaysia and having its
registered office at 2nd Floor, Wisma Tai Yoon, 9B Lorong Medan Tuanku Satu,
Medan Tuanku, 50300 Kuala Lumpur (the "Borrower"), of the one part And PERMATA
MERCHANT BANK BERHAD, a company incorporated in Malaysia and licensed to carry
on banking business and having its registered office at 27th Floor, Menara
Boustead, No. 69, Jalan Raja Chulan, 50200 Kuala Lumpur (the "Agent") as agent
for the Beneficiaries (as hereinafter defined) of the other part.
WHEREAS:-
(i) By a loan agreement (the "Loan Agreement") to be entered into
simultaneously with this Debenture or shortly hereafter between (1) the
Borrower (2) the Agent and (3) PERMATA MERCHANT BANK BERHAD and PERWIRA
AFFIN BANK BERHAD (the "Lenders"), the Lenders agree to make available a
term loan facility in the maximum aggregate principal amount of Ringgit
Malaysia Ninety One Million (RM91,000,000.00) only ("the Facility") to the
Borrower upon the terms and conditions contained therein.
(ii) It is a condition precedent to the availability of the Facility that inter
alia, the Borrower charges all its assets in favor of the Agent as security
for the Facility.
IN PURSUANCE of the Loan Agreement and in consideration of the premises the
Borrower HEREBY AGREES, COVENANTS ANI) UNDERTAKES with the Agent as follows:-
1. DEFINITIONS
1.1 Except where the context otherwise requires, terms and expressions defined
in the Loan Agreement and not otherwise defined herein bear the same
meanings where used in this Debenture, and the following terms and
expressions where used in this
Schedule 6 -
<PAGE>
93
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Debenture, and the following terms and expressions where used in this
Debenture bear the meanings respectively set opposite them:
Additional Interest the additional interest payable by the Borrower pursuant
to Clause 12.5 (a) of the Loan Agreement and pursuant to
the other Loan Documents due to failure to pay any
Indebtedness when due and payable thereunder;
Beneficiaries the Arranger, the Agent and the Lenders;
Indebtedness at any time the aggregate of all sums advanced from time
to time by the Lenders to the Borrower pursuant to the
Loan Agreement together with interest thereon and all
other monies payable to the Beneficiaries or any of them
pursuant to, upon and under the Loan Documents (whether in
respect of principal, interest, Additional Interest, fees,
prepayment premium, costs, expenses, indemnity or
otherwise);
Loan Documents the Loan Agreement, the Collateral Agreement, this
Debenture and the other Security Documents and any other
documents for the time being constituting security for the
Facility or any part thereof,
Prescribed Rates the respective rates of interest (including Additional
Interest) chargeable on the Indebtedness or any part
thereof stipulated in the Loan Agreement or such other
rate or rates which the Lenders may at their discretion
stipulate from time to time or at any time in the manner
provided for therein.
1.2 The headings in this Debenture are inserted for convenience only and shall
not be taken read and construed as essential parts of this Debenture.
References to Clauses are to 'be construed as references to Clauses of this
Debenture. All references to provisions of statutes include such provisions as
modified, re-certified or re-enacted. Words applicable to natural persons
include any body of persons, company, corporation, firm or partnership corporate
or incorporate and vice versa. Words importing the masculine gender shall
include the feminine and neuter genders and vice versa. Words importing the
singular number shall include the plural number and vice versa. Where two or
more persons or parties are included or comprised
Schedule 6 -
<PAGE>
94
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
in any expressions, agreements, covenants, terms, stipulations and undertakings
expressed to be made to such persons or parties shall, unless expressly stated
to the contrary, be enforceable by them jointly and severally and agreements,
covenants, terms, stipulations and undertakings expressed to be made by or on
the part of such persons or parties shall be deemed to be made by and binding
upon such persons or parties jointly and severally.
2. UNDERTAKING TO PAY
2.1 The Borrower hereby covenants with the Agent that as and when the
Indebtedness for any part thereof is due for payment in accordance with the
provisions of the Loan Documents or on such earlier date as the security
constituted by this Debenture becomes enforceable and the Agent becomes entitled
to exercise the rights and powers upon default provided under this Debenture and
by law the Borrower shall pay to the Agent in the manner specified in the Loan
Agreement, the Indebtedness or, as the case may be, the part thereof due to be
paid and, in the meantime will pay to the Agent interest and Additional
Interest, (as well after as before any judgment), at the rates and calculated in
the manner prescribed in the Loan Agreement on the Indebtedness from time to
time outstanding.
3. FIXED AND FLOATING CHARGES
3.1 For better securing the payment of the Indebtedness and discharge of the
obligations of the Borrower under the Loan Documents the Borrower as beneficial
owner hereby charges to the Agent as trustee for itself and the other
Beneficiaries and so that the charge hereby created shall be a continuing
security:-
(a) by way of a fixed charge over the Project Proceeds standing in the Project
Account, all its uncalled capital, goodwill, patents, trademarks, licenses
and concessions and all its plant, equipment and machinery, motor vehicles,
furniture and fittings wheresoever they may be and all patents, trademarks,
licenses, concessions, plant equipment machinery motor vehicles furniture
and fittings hereafter acquired together with all accessories and parts
pertaining thereto;
(b) by way of a floating charge over all the lands, undertakings and other
properties and assets of the Borrower movable and immovable whatsoever and
wheresoever situate both present and future (including without limitation
the Borrower's uncalled capital, goodwill, book debts, accounts receivable,
stock-in-trade and
Schedule 6 -
<PAGE>
95
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
materials (including raw materials and partly finished and finished
products), shares, stocks, securities, options and other rights in
securities) not otherwise charged under clause 3.1 (a).
4. CONVERSION OF FLOATING CHARGE INTO FIXED CHARGE AND VICE VERSA
4.1 (a) Where the Borrower should, in breach of clause 5, create or attempt to
create any Security Interest over or in respect of any of the assets
of the Borrower covered by this Debenture such act of creating or
attempting to create any such Security Interest shall forthwith
convert the floating charge over the properties and assets described
in clause 3.1(b) hereof into a fixed charge over all such properties
and assets.
(b) The Agent may at any time by notice in writing to the Borrower
forthwith convert the floating charge over the properties and assets
described in Clause 3.1(b) hereof into a fixed charge as regards any
properties and assets specified in the said notice which the Agent
shall in its absolute discretion consider to be in jeopardy or in
danger of being seized or sold under any form of distress or execution
levied or threatened and may appoint a receiver therefor.
4.2 The Agent may at any time and from time to time agree with the Borrower
that all or part of the assets for the time being subject to a fixed charge
under this Debenture, whether by virtue of clause 3.1(a), 4.1(a) or 4.1(b) or
otherwise, shall in the future be subject to a floating charge within clause
3.1(b) until such time as such floating charge crystallizes.
5. RESTRICTION AGAINST OTHER SECURITY INTEREST
5.1 The Borrower hereby declares that there is no mortgage charge or debenture
upon any of its assets secured by this Debenture having priority to this
Debenture and-
(a) the Borrower shall not during the subsistence of this Debenture without the
consent in writing of the Agent execute any Security Interest (including
without limitation, any form of charge mortgage debenture (whether fixed or
floating) pledge or lien) over or in respect of any of the assets of the
Borrower covered by this Debenture;
Schedule 6 -
<PAGE>
96
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(b) this Debenture shall be without prejudice to any securities already given
by the Borrower to any of the Beneficiaries or any security which may
hereafter be given to any of the Beneficiaries whether the same be for
securing repayment of the Indebtedness or any part thereof or any other
money covenanted to be paid under the Loan Documents and whether such
security is taken as additional or collateral security or otherwise
howsoever.
6. INFORMATION OF MATTERS AFFECTING SECURITY
6.1 The Borrower will inform the Agent forthwith upon its issue, publication,
service or occurrence (time being of the essence in this respect) of any
application, demand, notice, order, proposal or transaction in any way
affecting, concerning or touching its assets herein secured or any part
thereof and produce the same to the Agent if called upon to do so.
6.2 The Borrower will do all acts and take all steps necessary or expedient to
safeguard and preserve its assets and each part thereof or the title or
ownership thereto.
6.3 The Agent may, if it thinks fit, and on behalf or in the name and the
expense of the Borrower, do all such acts and employ all such persons as
the Agent deems necessary or expedient, for the purpose of safeguarding and
preserving the assets herein secured or any part thereof or the
Beneficiaries' rights and interests thereon.
7. INSURANCE
7.1 The Borrower shall insure and keep insured the properties and assets
covered by this Debenture wheresoever situate against loss or damage by
fire, lightning, tempest, flood, landslide, riot, civil commotion, strike,
theft, burglary, malicious acts, collapse of any structure constructed
thereon and such other risks as the Agent may require from time to time, in
the full amount of their insurable value, with such insurers as may be
acceptable to the Agent, under a policy or policies of insurance and shall
forthwith have the Agent, as trustee for the Beneficiaries, endorsed
thereon as loss payee.
7.2 The Borrower will pay all premia for the insurance effected pursuant to
Clause 7.1 on the first day on which the same ought to be paid and, if
required by the Agent, deliver to the Agent on demand the receipt for every
premium payable under such policy or policies.
Schedule 6 -
<PAGE>
97
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
7.3 If the Borrower shall fail to effect, maintain or renew the insurance
referred to in Clause 7.1, it shall be lawful for but not obligatory upon
the Agent, at the cost and expense of the Borrower, to effect, maintain or
renew any such insurance as the Agent may think fit.
7.4 Save and except at the request and with the prior written consent of the
Agent, the Borrower shall not effect or keep on foot any insurance against
any risk in respect of any assets if the Agent has effected or kept on foot
any such insurance.
7.5 The Agent shall be entitled to receive and give a good discharge for any
money received on any insurance.
8. CONTINUIING SECURITY
8.1 The security created by this Debenture is expressly intended to be and
shall be a continuing security for all moneys whatsoever now or hereafter
from time to time owing by the Borrower whether alone or jointly and
severally with another or others to. the Beneficiaries under the Loan
Documents or otherwise and whether as principal or surety notwithstanding
that the Borrower may at any time or times, cease to be indebted to any of
the Beneficiaries under the Loan Documents for any period or periods.
9. UNDERTAKINGS
9.1 The Borrower undertakes in favor of the Agent and the other Beneficiaries:-
(a) to inform the Agent in writing forthwith if it acquires or agrees to
acquire any land buildings or structures;
(b) to deposit with the Agent (which the Agent shall be entitled to retain so
long as any Indebtedness remains unpaid) all documents of title relating to
any land, buildings or structures, all log-books of any motor vehicles and
any documents of title to plant and machinery owned by the Borrower from
time to time;
(c) without the prior written consent of the Agent, not to transfer, factor,
discount, sell, release, compound, subordinate, defer or vary the terms of
any book or other debt or moneys due, owing or payable whether on demand,
at a future time or on a contingency or otherwise to deal with the same
except by getting in the same in the normal course of business, and if so
required by the Agent
Schedule 6 -
<PAGE>
98
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
to execute in relation thereto a legal assignment to the Agent in terms
specified by the Agent;
(d) not to transfer, sell, lease or otherwise dispose of any land, buildings or
structures subject to this Debenture (and in particular not to exercise any
statutory or other powers of making leases, taking surrenders of leases,
nor to part with possession of nor grant any license or right to occupy any
such land, buildings or structures) without the prior written consent of
the Agent;
(e) not to transfer, sell, lease or otherwise dispose of any property or assets
subject to this Debenture (other than the property referred to in sub-
clause. (d) above) otherwise than by way of sale on arm's length terms in
the ordinary course of the Borrower's day-to-day trading or in the case of
property which is spent, consumed or has otherwise outlived its useful
life, by way of disposal provided that such property has been replaced
prior to such disposal with new and unused property of the same original
quality and type;
(f) to keep in good state of repair and in proper working order and to renew
and replace, when necessary, all buildings, structures, fixtures, plant,
machinery and equipment belonging to or used by the Borrower;
(g) to permit the Agent (and any persons appointed in writing by the Agent)
full access to the property and assets subject to this Debenture wherever
situated to inspect or survey the same;
(h) punctually to pay all rents, hires, royalties and other sums reserved by
and to comply with all other obligations under any lease, hiring or license
under which the Borrower has the use or possession of any property or
assets; and
(i) punctually to pay all governmental, municipal and other taxes, duties,
rates and outgoings assessed upon or payable with reference to any property
or assets subject to this Debenture.
10. DEFAULT
If:-
10.1 the Borrower shall fail to observe or perform any of its agreements,
covenants, stipulations, terms and conditions contained in this Debenture;
or
Schedule 6 -
<PAGE>
99
Borrower : Syrikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
10.2 an Event of Default as defined in Clause 13.1 of the Loan Agreement shall
occur;
then and in either of such cases, the amount of the Indebtedness outstanding for
the time being shall immediately become payable by the Borrower to the Agent on
demand and the Agent shall forthwith be entitled to exercise the rights and
powers upon default provided by law and this Debenture without any previous
notice to or concurrence on the part of the Borrower.
11. DEMANDS
11.1 Any demand for payment of the amount of the Indebtedness or any part
thereof for the time being outstanding may be made by a notice in writing
requiring payment within seven (7) days from the date thereof and may be
signed on behalf of the Agent by its general manager, manager, assistant
manager, sub-manager, accountant or any other officer of the Agent or by
any solicitor or firm of solicitors purporting to act for the Agent and
shall be served in accordance with the provisions of the Loan Agreement.
12. APPOINTMENT OF RECEIVER AND MANAGER
12.1 At any time after the moneys hereby secured shall have become immediately
repayable or upon the Borrower's request:
(a) the Agent or any person authorized by the Agent may enter into and upon any
land or premises where the properties or assets of the Borrower hereby
charged or any of them may be without any notice and may take possession
and control of such land and premises and all such properties and assets
hereby charged and all books of accounts and documents relating to such
properties and assets;
(b) the Agent may at its discretion be at liberty to give any notice which may
be deemed necessary by the Agent to any person or persons owing money to
the Borrower that all such moneys be paid to the Agent alone and the
Borrower hereby irrevocably appoints the manager of the Agent or the
officer in charge for the time being of the Agent and each of them jointly
and severally to be its attorneys and attorney for it and in its name and
on its behalf to demand sue for and take all appropriate legal proceedings
to recover such moneys and to give a good receipt for the same and to give
such notices to the debtors of the Borrower
Schedule 6 -
<PAGE>
100
Borrower : Syrikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
and take all necessary steps to complete the assignment of such moneys to
the Agent as may be necessary;
(c) the Agent may appoint in writing under the hand of the manager or the
officer in charge for the time being of the Agent any person to be Receiver
and or Manager of all or any of the properties hereby charged and may in
like manner from time to time remove or accept the resignation of any
Receiver and or Manager so appointed and appoint another in his stead
and/or extend the appointment to relate to any other such properties.
12.2 A Receiver and Manager or Receivers and Managers so appointed shall be the
agent of the Borrower and the Borrower shall be solely responsible for his or
their acts and defaults and remuneration. Such Receiver and Manager or
Receivers and Managers shall have power:-
(a) to take possession or collect and get in any property hereby charged and
for that purpose to take any proceedings in the name of the Borrower or
otherwise as may seem expedient;
(b) to carry on manage or concur in carrying on and managing and to continue
the business of the Borrower or any part thereof as agent or agents for the
Borrower and for any of those purposes to raise and borrow any money that
may be required upon the security of the whole or any part of the property
hereby charged and to apply or petition for, seek and otherwise howsoever
certificates consents licenses leases permission and title convenient,
expedient or necessary for all or any such purposes;
(c) subject when applicable to the provisions of any and all relevant
legislation (including, but so that this provision shall be in
amplification but not in derogation of the generality of the foregoing
legislation relating to land and mines or mining) forthwith (obtaining when
and where necessary the leave of the Court) to or to agree to sell,
license, exchange, lease or otherwise dispose of or deal with the assets
comprised in this security and to carry the same into effect by conveying
or executing in the name or on behalf of the Borrower any deed or document
whatsoever for such consideration (if any) (including cash debentures or
other obligations shares stock or other valuable consideration) payable in
a lump sum or by installments spread over such period as the Agent shall
think fit; plant machinery and other fixtures may be recovered and sold
separately from the premises containing them without the consent of the
Borrower being obtained thereto;
Schedule 6 -
<PAGE>
101
Borrower : Syrikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(d) to make any arrangements or enter into any compromise which he or they
shall think expedient; bring take defend discontinue any actions suits or
proceedings whatsoever civil or criminal in relation to the assets charged
hereunder;
(e) to make and effect all or any repairs and improvements to the Borrower's
plant machinery property and effects and to maintain and renew all
insurance in respect of the Borrower's property against loss or damage by
fire or any other risk in such sums as he or they shall think fit;
(f) to employ and dismiss such managers agents officers servants clerks
accountants and workmen and others in respect of the Borrower's property
and upon such terms and with such salaries wages or remuneration and for
such purposes as he or they shall think proper;
(g) to allow time for payment of any debts either with or without security;
(h) for such consideration and on such terms as he may think fit, to purchase
outright or acquire by leasing, hiring, licensing or otherwise, any land,
buildings, plant, equipment, vehicles or materials or any other property,
assets or rights of any description which he considers necessary or
desirable for the carrying on, improvement or realization of any business
of the Borrower or otherwise for the benefit of the property and assets
subject to this Debenture;
(i) in connection with the exercise, or the proposed exercise, of any of his
powers or in order to obtain payment of his remuneration (whether or not it
is already due) to borrow or raise money from any person, including any of
the Banks, without security or on the security of the property and assets
of the Borrower whether subject to this Debenture or not, and generally in
such manner and on such terms as he may think fit;
(j) to bring, defend, submit to arbitration, negotiate, compromise, abandon and
settle any claims and proceedings concerning any of the property or assets
of the Borrower;
(k) to transfer all or any of the property or assets of the Borrower and/or any
of the liabilities of the Borrower to any other company or body corporate,
whether or not formed or acquired for the purpose;
Schedule 6 -
<PAGE>
102
Borrower : Syrikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(l) to call up all or any portion of the uncalled capital for the time being
(if any) of the Borrower;
(m) generally to carry out, or cause or authorize to be carried out, any
transaction, scheme or arrangement whatsoever, whether similar or not to
any of the foregoing, in relation to the property and assets of the
Borrower which he may consider expedient as effectually as if he were
solely and absolutely entitled to the property and assets of the Borrower;
(n) to repair and keep in repair the works machinery plants and other property
of the Borrower comprised in the security hereby made and for this purpose
to apply in the name of the Borrower for any certificate license permission
or consent required under any Act Ordinance other regulations or by-law
made by any competent authority;
(o) to execute and do all such other acts deeds and things as to him or them or
the Agent may appear necessary or proper for or in relation to any of the
purposes aforesaid and which he or they lawfully may or can do as agent or
agents for the Borrower;
(p) generally to do and cause to be done such acts and things which the
Borrower may have done in the ordinary conduct of its business as well as
for the protection and/or for the improvement of the property hereby
charged.
12.3 The powers of appointment of a Receiver and Manager or Receivers and
Managers hereunder shall be in addition to and without prejudice to any
statutory and other powers of the Agent whether under the Companies Act or any
other legislation and so that such powers shall be and remain exercisable by the
Agent in respect of any property hereby charged and of which no appointment of a
Receiver and Manager or Receivers and Managers by the Agent shall from time to
time be subsisting and that that an appointment under the powers of clauses 12.1
and 12.2 hereof shall have subsisted and been withdrawn in respect of that
property or shall be subsisting in respect of any other property hereby charged.
12.4 The Agent may at any time after the moneys hereby secured shall have become
repayable effect the sale of the properties of which it has taken possession
under the provisions of Clause 12.1(a) hereof upon giving not less than twenty-
four (24) hours' notice of the intended sale to the Borrower in such manner as
the Agent shall deem proper with liberty to bid buy in and resell the same and
the Agent shall not be liable for any loss caused to the Borrower thereby and
Schedule 6 -
<PAGE>
103
Borrower : Syrikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
the Borrower shall do all things necessary to enable the Agent to complete any
sale by the Agent of any part of the properties included in this security. The
Agent shall be liable only for loss caused by its willful default.
12.5(a) For the purpose of giving effect to the Borrower's obligations under
this Debenture, the Borrower hereby irrevocably appoints the Agent
and/or the manager and/or the officer in charge for the time being of
the Agent and/or the Receiver and/or Manager and his substitute(s) the
attorney(s) of the Borrower for the Borrower and in the attorney's own
name(s) or in the name of the Borrower or in the joint names of the
attorney and the Borrower and on behalf of the Borrower as its act and
deed to do and execute any deed assurance or act which may be required
or may be deemed proper on any sale or disposition by the Agent or by
any Receiver and/or Manager as aforesaid of any properties or assets of
the Borrower under any power of sale or other disposition applicable
thereto and to execute, seal complete, sign, transfer and deliver or
otherwise perfect and do any transfer, deed, assurance, agreement,
instrument, assignment, act or thing and to bring, take, defend,
prosecute, compromise, submit to arbitration and/or discontinue any
actions, suits or proceedings whatsoever which may be required or may
be deemed proper for any of the purposes of this Debenture or which the
Borrower ought to execute, seal, complete sign, transfer and deliver or
otherwise perfect and do pursuant to its obligations under this
Debenture with power for such attorney(s) to appoint and remove any
substitute(s).
(b) The Borrower hereby undertakes that it will ratify and confirm whatsoever
the attorney or attorneys appointed pursuant to clause 12.5(a) shall
lawfully do or cause to be done and hereby expressly agrees that all acts
done or caused to be done by such attorney(s) shall be as good and
effectual to all intents and purposes whatsoever as if the same has been
done by the Borrower in its own person.
12.6 Notwithstanding the provisions hereinbefore contained the Agent shall have
the full right and power at its sole and absolute discretion to appoint a
Receiver or Receivers who is or are not also to be Manager or Managers and such
Receiver or Receivers shall have all the powers enumerated in Clauses 12.2 and
12.3 hereof save and excluding the power to carry on or manage or continue the
business of the Borrower or such other powers applicable to Managers only.
Schedule 6 -
<PAGE>
104
Borrower : Syrikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
13. ADDITIONAL POWERS OF AGENT
13.1 To the extent permitted by law, the terms of the statutory powers of sale
and leasing available to a chargee are hereby extended to authorize the Agent at
its absolute discretion:-
(a) to sell all the title to and interest in any property or assets subject to
this Debenture or any interest in the same, and to do so in consideration
of shares, debentures or any other securities whatsoever, or of an
agreement to pay all or part of the purchase price at a later date or
dates, or an agreement to make periodical payments, whether or not the
agreement is secured by a Security Interest or a guarantee, or for such
other consideration whatsoever as the Agent may think fit, and also to
grant any option to purchase, and to effect exchanges;
(b) with a view to selling any property or assets subject to this Debenture (or
offering it for sale) to repair, replace and develop such property or
assets and to apply for any appropriate permission, license or approval;
(c) to severe any fixtures and to sell them apart from the land or buildings on
or to which they are affixed, and also to apportion any rent affecting the
property sold, to charge such rent upon the property sold or retained and
to agree to indemnify any purchaser in respect of such rent or any
covenants by the limitation of a new rent, by granting powers of entry or
otherwise, or to reserve any such indemnity or powers of entry;
(d) with a view to, or in connection with, the sale of any property or assets
subject to this Debenture to carry out any transaction, scheme or
arrangement which the Agent may, in its absolute discretion, consider
appropriate;
(e) to insure any property or assets subject to this Debenture against such
risks (in addition to loss or damage by fire) and for such amounts as the
Agent may consider prudent; and
(f) to do all or any of the things or exercise all or any of the powers
(mutatis mutandis) which are mentioned or referred to in Clause 12
(receiver's powers) and which may not be included in paragraphs (a) to (e)
above.
14. PERSONAL LIABILITY OF BORROVER AND CONCURRENT ACTION
Schedule 6 -
<PAGE>
105
Borrower : Syrikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
14.1 If the amount realized by the Agent on a sale of the assets herein secured
after deduction and payment from the proceeds of such sale of all fees, dues and
other costs is less than the amount of the Indebtedness for the time being
outstanding and due to the Beneficiaries under the Loan Documents and whether at
such sale the Agent or any of the Beneficiaries is the purchaser or otherwise,
the Borrower shall pay to the Agent the difference between the amount due and
the amount so realized and until such payment will also pay interest on such
balance at the rates and in the manner prescribed in the Loan Agreement Provided
Always that such personal liability of the Borrower to pay the aforesaid
differential sum shall not in any way prejudice, reduce, affect or limit the
right of any of the Beneficiaries to sue and recover the Indebtedness from the
Borrower nor shall this clause be construed to preclude or prevent any of the
Beneficiaries from suing the Borrower or to postpone the right of any of the
Beneficiaries to sue the Borrower until after the assets secured by this
Debenture have been sold.
14.2 It is hereby expressly agreed that notwithstanding any other provisions
contained herein and in the other Loan Documents each of the Beneficiaries shall
at all times be entitled, whether individually or together with each other, to
exercise all its rights, powers and privileges and, in the event of any breach
or default, to pursue all remedies concurrently, whether by way of sale,
possession, receivership, civil suit or otherwise.
15. LIENS AND OTHER SECURITIES NOT AFFECTED
15.1 Nothing contained in this Debenture shall prejudice or affect any lien to
which each of the Agent and the other Beneficiaries is entitled or any other
securities (whether taken as additional or collateral security or otherwise
howsoever) which any of the Agent and the other Beneficiaries may, at any time
or from time to time hold for or on account of the Indebtedness hereby secured
and no provision in this Debenture shall operate so as to merge or otherwise
prejudice or affect any bill, note, guarantee, mortgage or other security which
the Agent and/or the other Beneficiaries may for the time being have of the
Indebtedness intended to be hereby or otherwise secured or any right or remedy
under such bill, note, guarantee, mortgage or other security of the Agent and/or
any of the other Beneficiaries.
16. INTEREST RATE IN OTHER SECURITIES
16.1 When the payment of the Indebtedness hereby secured or intended so to be
shall be further secured to any Beneficiary by any bill of exchange, promissory
note, draft, receipt or other instrument
Schedule 6 -
<PAGE>
106
Borrower : Syrikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
reserving a higher rate of interest to be paid in respect thereof than those
prescribed in the Loan Documents, such higher rate of interest shall be payable
in respect of the Indebtedness and nothing contained in or to be implied from
this Debenture shall affect the right of the Agent to enforce and recover
payment of such higher rate of interest or as the case may be the difference
between such higher rate of interest and the rates payable under the Loan
Documents.
17. PROTECTION OF THIRD PARTIES
17.1 No purchaser from, or other person dealing with, the Agent and/or the
Receiver and Manager shall be concerned to inquire whether any of the powers
which they have exercised or purported to exercise has arisen or become
exercisable, or whether the whole or any part of the Indebtedness remain
outstanding, or whether any case has happened to authorize the Receiver and
Manager to act or as to the propriety or validity of the exercise or purported
exercise of any such power; and the title of such a purchaser and the position
of such a person shall not be impeachable by reference to any of those matters.
17.2 The receipt of the Agent or the Receiver and Manager shall be an absolute
and a conclusive discharge to a purchaser and shall relieve him of any
obligation to see to the application of any moneys paid to or by the direction
of the Agent or the Receiver and Manager.
17.3 In clauses 17.1 and 17.2 hereof, "purchaser" includes any person acquiring,
for money or money's worth, any lease of, or security interest over, or any
other interest or right whatsoever in relation to, any of the property or assets
subject to this Debenture.
18. PROTECTION OF AGENT, RECEIVER AND MANAGER
18.1 Neither the Agent nor the Receiver and Manager shall be liable in respect
of any loss or damage which arises out of the exercise, or the attempted or
purported exercise of, or the failure to exercise any of their respective
powers, unless such loss or damage is caused by its or his gross negligence or
willful default.
18.2 Without prejudice to the generality of clause 18.1, entry into possession
of any property or assets subject to this Debenture shall not render the Agent
or the Receiver and Manager liable to account as mortgage in possession; and if
and whenever the Agent enters into possession of any such property or assets, it
shall be entitled at any time at its pleasure to go out of such possession.
19. INDEMNITY
Schedule 6 -
<PAGE>
107
Borrower : Syrikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
19.1 The Borrower further covenants with the Agent fully to indemnify the Agent
and each of the other Beneficiaries and the Receiver and Manager against all
claims, proceedings, liabilities, costs, charges and expenses which the Agent,
that other Beneficiaries or the Receiver and Manager may incur at any time:-
(a) in consequence of anything done or purported to be done by the Agent, that
Lender or the Receiver and Manager under this Debenture and/or any of the
Loan Documents or any other document relating thereto or of any failure by
the Borrower to comply with its obligations to the Beneficiaries thereunder
or otherwise in connection therewith; or
(b) in consequence of any payment in respect of the Indebtedness (whether made
by the Borrower or a third person) being impeached or declared void for any
reason whatsoever.
19.2 The amounts payable under clause 19.1 shall carry interest (as well after
as before judgment) in accordance with the provisions of the Loan Agreement from
the date on which they were paid or incurred by the Agent, that Lender or the
Receiver and Manager (as the case may require) and such amounts and interest may
be debited by the Agent or that Lender to any account of the Borrower, but
shall, in any event, form part of the Indebtedness and accordingly be secured on
the property and assets subject to this Debenture under the charges contained in
this Debenture.
20. MODIFICATION AND INDULGENCE
20.1 The Agent and any other Beneficiary may at any time and without in any way
effecting the security hereby created:-
(a) grant to the Borrower or to any other surety or guarantor any time or
indulgence; and/or
(b) renew any bill, notes or other negotiable securities; and/or
(c) compound with the Borrower or any other person or guarantor.
21. SUSPENSE ACCOUNT
21.1 Any money received under this Debenture may be placed and kept to the
credit of a suspense account for so long as the Agent thinks fit without any
obligation in the meantime to apply the same or any part thereof in or towards
discharge of the amount of the Indebtedness for
Schedule 6 -
<PAGE>
108
Borrower : Syrikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
the time being outstanding and due to the Agent. Notwithstanding any such
payment in the event of any proceedings in or analogous to liquidation,
composition or arrangement, the Agent may prove for and agree to accept any
dividend or composition in respect of the whole or any part of the amount of the
Indebtedness for the time being outstanding and due to the Beneficiaries under
the Loan Documents in the same manner as if this security had not been created.
22. NO OBLIGATION TO MAKE FURTHER ADVANCES
22.1 Nothing contained in this Debenture shall be deemed to render it
obligatory upon the Lenders either at law or in equity to make or continue to
make any advances or to afford any other accommodation or facilities whatsoever
to the Borrower save and except for the Facility.
23. PAYMENTS BY THE AGENT
23.1 All costs, charges and expenses incurred under this Debenture by the Agent
(including any expenditure incurred in the creation, enforcement and/or
preparation of this Debenture or, in the giving of any notice or, in the making
of any demand under, pursuant to or in respect of this Debenture or the amount
of the Indebtedness for the time being outstanding and due to the Agent and
secured by this Debenture) and all other monies whatsoever paid by the Agent in
respect of the said costs, charges expenses and expenditure otherwise howsoever
and all or any other sums and moneys paid or expended by the Agent under or
pursuant to the provisions of this Debenture, express or implied, and in
particular the provisions of Clauses 6.3, and 7.3 shall be payable by the
Borrower to the Agent on demand.
23.2 Until payment to the Agent, the costs, charges, expenses, monies and sums
referred to in Clause 23.1 shall bear interest calculated on the basis of actual
days elapsed and a three hundred and sixty-five (365) day year (inclusive of the
first day but excluding the last day of the period in respect of which interest
shall be payable) and at the Prescribed Pates from the date of the same having
been paid or expended until payment (as well after as before judgment) and such
sums and interest shall on demand be paid to the Agent by the Borrower and,
until payment, shall form part of the Indebtedness and be secured hereunder. In
the event of default in payment by the Borrower after demand from the Agent the
Borrower shall pay Additional Interest on the defaulted amounts.
24. NOTICE OF FURTHER SECURITY INTEREST
Schedule 6 -
<PAGE>
109
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
24.1 Without prejudice to clause 5 (restriction against Security Interest), if
the Agent receives notice of any Security Interest or any other interest (other
than an interest arising out of a sale in the usual course of trading which is
permitted by the terms hereof) affecting the property or assets subject to this
Debenture:
(a) the Agent may open a new account for the Borrower and, if it does not, it
shall nevertheless be deemed to have done so at the time the Agent received
such notice; and
(b) all payments made by the Borrower to the Agent or that Lender after the
Agent receives such notice shall be credited or deemed to have been
credited to the new account, and in no circumstances whatsoever shall
operate to reduce the indebtedness as at the time the Agent received such
notice.
25. POWERS CUMULATIVE
25.1 The powers which this Debenture confers on the Agent, each of the other
Beneficiaries and the Receiver and Manager are cumulative, without prejudice to
their respective powers under the general law, and may be exercised as often as
the Agent, that other Beneficiary or the Receiver and Manager thinks
appropriate, the Agent, each of the Beneficiaries or the Receiver and Manager
may, in connection with the exercise of their powers, join or concur with any
person in any transaction, scheme or arrangement whatsoever, and the Borrower
acknowledges that the respective powers of the Agent, the other Beneficiaries
and the Receiver and Manager shall in no circumstances whatsoever be suspended,
waived or otherwise prejudiced by anything other than an express waiver or
variation in writing.
26. CHANGE IN THE AGENT
26.1 The security, liabilities and or obligations created by this Debenture
shall continue to be valid and binding for all purposes whatsoever
notwithstanding any change by amalgamation, reconstruction or otherwise which
may be made in the constitution of the Agent or of any company by which the
business of the Agent may, for the time being, be carried on and shall be
available to the company carrying on that business for the time being.
27. CHANGE IN BORROWER
27.1 The security, liabilities and or obligations created by this Debenture
shall continue to be valid and binding for all purposes
Schedule 6 -
<PAGE>
110
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
whatsoever notwithstanding any change whether by amalgamation, reconstruction or
otherwise howsoever in the constitution of the Borrower and it is expressly
declared that no change of any sort whatsoever in, relating to or affecting the
Borrower shall in any way, affect the security, liabilities and or obligations
created by this Debenture in relation to any transaction whatsoever whether
past, present or future.
28. ASSIGNMENTITRANSFER OF DEBENTURE
28.1 The Agent shall be at liberty to assign and transfer this Debenture and the
costs and expenses of the Agent and incidental to such assignment or transfer
shall be paid by the Borrower and any statement therein of the amount due to the
Agent under or by virtue of this Debenture shall be conclusive and binding for
all purposes against the Borrower save for manifest error.
28.2 The Borrower shall not be entitled to assign or transfer all or any of its
rights, benefits and obligations hereunder without the prior written consent of
the Instructing Group obtained through the Agent.
28.3 Any Lender may, at any time, assign all or any of its rights and benefits
hereunder or transfer in accordance with Clause 28.5 all or any of its rights,
benefits and obligations hereunder to any financial institution provided that at
the same time it assigns or, as the case may be, transfers an equal portion of
its rights, benefits and obligations under the other Loan Documents to the same
financial institution.
28.4 If any Lender assigns all or any of its rights and benefits hereunder in
accordance with Clause 28.3, then, unless and until the assignee has agreed with
the Agent and the other Beneficiaries that it shall be under the same
obligations towards each of them as it would have been under if it had been an
original party hereto as a Lender, the Agent and the other Beneficiaries shall
not be obliged to recognize such assignee as having the rights against each of
them which it would have had if it had been such a party hereto.
28.5 If any Lender wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 28.3, then such transfer may be
effected by the delivery to the Agent of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date specified
in such Transfer Certificate and the fifth (5th) Business Day after (or such
earlier Business Day endorsed by the Agent on such Transfer Certificate
Schedule 6 -
<PAGE>
111
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
falling on or after) the date of delivery of such Transfer Certificate to the
Agent:
(i) to the extent that in such Transfer Certificate the Lender party thereto
seeks to transfer its rights, benefits and obligations hereunder, the
Borrower and such Lender shall be released from further obligations towards
one another hereunder and their respective rights against one another shall
be cancelled (such rights, benefits and obligations being referred to in
this Clause 28.5 as "discharged rights and obligations");
(ii) the Borrower and the Transferee party thereto shall assume obligations
towards one another and/or acquire rights against one another which differ
from such discharged rights and obligations only insofar as the Borrower
and such Transferee have assumed and/or acquired the same in place of the
Borrower and such Lender; and
(iii)the Agent such Transferee and the other Beneficiaries shall acquire the
same rights and benefits and assume the same obligations between themselves
as they would have acquired and assumed had such Transferee been an
original party hereto as a Lender with the rights, benefits and/or
obligations acquired or assumed by it as a result of such transfer.
29. SUCCESSORS BOUND
29.1 This Debenture shall be binding upon the liquidators, receivers,
representatives, and successors-in-title of the Borrower and on the successors-
in-title and assign of the Agent.
30. INCORPORATION OF LOAN AGREEMENT
30.1 . The Borrower hereby covenants and agrees that all the provisions,
covenants, stipulations, conditions, undertakings and agreements contained in
the Loan Agreement shall unless repugnant to any of the provisions contained
herein, be read as forming part of this Debenture and shall be applicable with
full force and effect as if the same were set out hereunder.
31. PRINCIPAL/SUPPLEMENTAL INSTRUMENTS
31.1 It is hereby agreed and declared that this Debenture and the Loan Documents
are instruments employed in one transaction namely to secure the Facility in an
aggregate sum of Ringgit Malaysia Ninety One Million (RM91,000,000.00) for
principal only together with interest
Schedule 6 -
<PAGE>
112
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
thereon and all other monies payable by the Borrower to the Agent and the
Lenders under the Loan Documents and for the purpose of Section 4(3) of the
Stamp Act 1949, the Loan Agreement shall be deemed to be the principal
instrument and this Debenture shall be deemed to be the subsidiary instrument.
IN WITNESS WHEREOF the Borrower hereto has hereunto affixed its Common Seal
in the presence of its officers duly authorized and the Agent hereto has
hereunto by its Attorney set its hands.
The execution of this instrument )
by the Borrower SYARIKAT TELEFON )
WIRELESS(M)SDN. BHD. is duly )
effected in a manner authorized )
by its constitution under the )
Seal the Borrower which said )
Seal is hereunto duly affixed on )
this day of 199 )
in the presence of:- )
_________________________________ Director
_________________________________ Director/Secretary
Schedule 6 -
<PAGE>
113
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
I, an Advocate and Solicitor
of the High Court in Malaya practicing at Kuala Lumpur hereby certify that on
this day of , 199 the Common Seal of SYARIKAT TELEFON
WIRELESS (M) SDN. BHD., was duly affixed to the above written instrument in my
presence in accordance with the regulations of the said Company.
Witness my hand
________________
SIGNED by )
)
and )
)
for and on behalf of PERMATA )
MERCHANT BANK BERHAD, )
as Agent on the day of ) ________________
199 )
________________
Schedule 6 -
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114
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 7
(THIRD PARTY)
DEBENTURE
Issued pursuant to Clause of the Chargor's Memorandum of Association
and Article of the Chargor's Articles of Association and a Resolution of the
Directors passed on the day of , 199 .
THIS DEED OF DEBENTURE is made the day of 199 Between SHUBILA HOLDINGS
SDN. BHD., a company incorporated in Malaysia and having its registered office
at Suite 4015A, 4th Floor, President House, Jalan Sultan Ismail, 50250 Kuala
Lumpur (the "Chargor"), of the one part And PERMATA MERCHANT BANK BERHAD, a
company incorporated in Malaysia and having its business address at 27th Floor,
Menara Boustead, No. 69 Jalan Paja Chulan, 50200 Kuala Lumpur (the "Agent") as
agent for the Beneficiaries (as hereinafter defined) of the other part.
WHEREAS:-
(i) By a loan agreement (the "Loan Agreement") to be entered into
simultaneously with this Debenture or shortly hereafter between (1)
SYARIKAT TELEFON WIRELESS (M) SDN. BHD. (the "Borrower"), (2) the Agent and
(3) BERHAD (the "Lenders"), the Lenders agree to make available a term loan
facility in the maximum aggregate principal amount of Ringgit Malaysia
Ninety One Million (RM91,000,000.00) (the "Facility") to the Borrower upon
the terms and conditions contained therein.
(ii) It is a condition precedent to the availability of the Facility that inter-
alia the Chargor charges all its asset in favor of the Agent as security
for the Facility.
IN PURSUANCE of the Loan Agreement and in consideration of the premises the
Chargor HEREBY AGREES, COVENANTS AND UNDERTAKES with the Agent as follows:-
1. DEFINITIONS
1.1 Except where the context otherwise requires, terms and expressions defused
in the Loan Agreement and not otherwise defined herein bear the same
meanings where used in this Debenture, and the following terms and
expressions where used in this Debenture bear the meanings respectively set
opposite them:-
Additional Interest the additional interest payable by the Borrower pursuant
to Clause 12.5(a) of the
Schedule 7 -
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115
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Loan Agreement due to failure to pay any Indebtedness
when so payable;
Beneficiaries the Arranger, the Agent and the Lenders;
Indebtedness at any time, the aggregate of all sums advanced from time
to time by the Lenders to the Borrower together with
interest thereon and all other monies payable to the
Beneficiaries or any of them pursuant to, upon and under
the Loan Documents (whether in respect of principal,
interest, Additional Interest, fees, commission, costs,
expenses, indemnity or otherwise);
Loan Documents the Loan Agreement, the Collateral Agreement, this
Debenture and the other Security Documents and any other
documents for the time being constituting security for
the Indebtedness of any part thereof;
Prescribed Rates the respective rates of interest (including Additional
Interest) chargeable on the Indebtedness or any part
thereof stipulated in the Loan Agreement or such other
rate or rates which the Lenders may at their discretion
stipulate from time to time or at any time in the manner
provided for therein.
1.2 The headings in this Debenture are inserted for convenience only and shall
not be taken read and construed as essential parts of this Debenture. References
to Clauses are to be construed as references to Clauses of this Debenture. All
references to provisions of statutes include such provisions as modified, re-
certified or re-enacted. Words applicable to natural persons include any body of
persons, company, corporation, firm or partnership corporate or incorporate and
vice versa. Words importing the masculine gender shall include the feminine and
neuter genders and vice versa. Words importing the singular number shall include
the plural number and vice versa. Where two or more persons or parties are
included or comprised in any expressions, agreements, covenants, terms,
stipulations and undertakings expressed to be made to such persons or parties
shall, unless expressly stated to the contrary, be enforceable by them jointly
and severally and agreements, covenants, terms, stipulations and undertakings
expressed to be made by or on the part of such
Schedule 7 -
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116
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
persons or parties shall be deemed to be made by and binding upon such persons
or parties jointly and severally.
2. UNDERTAKING TO PAY
2.1 The Chargor hereby covenants with the Agent that as and when the
Indebtedness or any part thereof is due for payment in accordance with the
provisions of the Loan Documents or on such earlier date as the security
constituted by this Debenture becomes enforceable and the Agent becomes entitled
to exercise the rights and powers upon default provided under this Debenture and
by law the Chargor shall pay to the Agent in the manner specified in the Loan
Agreement, the Indebtedness or, as the case may be, the part thereof due to be
paid and, in the meantime will pay to the Agent interest and Additional Interest
at the rates and calculated in the manner prescribed in the Loan Agreement on
the Indebtedness from time to time outstanding.
3. FIXED AND FLOATING CHARGES
3.1 For better securing the payment of the Indebtedness and discharge of the
obligations of the Borrower and the Chargor under the relevant Loan Documents
the Chargor as beneficial owner hereby charges to the Agent as trustee for
itself as agent and for the other Beneficiaries and so that the charge hereby
created shall be a continuing security:-
(a) by way of a fixed charge over all its uncalled capital, goodwill,
patents, trademarks, licenses and concessions and all its plant,
equipment and machinery, motor vehicles, furniture and fittings
wheresoever they may be including but not limited to all those listed in
the Schedule hereto and including all patents, trademarks, licenses,
concessions, plant equipment machinery motor vehicles furniture and
fittings hereafter acquired together with all accessories and parts
pertaining thereto;
(b) by way of a floating charge over all the lands undertakings and other
properties and assets of the Chargor movable and immovable whatsoever
and wheresoever situate both present and future (including without
limitation the Chargor's uncalled capital, goodwill, book debts,
accounts receivable, stock-in-trade and materials (including raw
materials and partly finished and finished products), shares, stocks,
securities, options and other rights in securities) not otherwise
charged under clause 3.1 (a).
Schedule 7 -
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
4. CONVERSION OF FLOATING CHARGE INTO FIXED CHARGE AND VICE VERSA
4.1(a) Where the Chargor should, in breach of clause 5, create or attempt to
create any Security Interest over or in respect of any of the assets of
the Chargor covered by :this Debenture such act of creating or
attempting to create any such Security Interest shall forthwith convert
the floating Charge over the properties and assets described in clause
3.1(b) hereof into a fixed charge over all such properties and assets.
(b) The Agent may at any time by notice in writing to the Chargor forthwith
convert the floating charge over the properties and assets described in
Clause 3. 1 (b) hereof into a fixed charge as regards any properties and
assets specified in the said notice which the Agent shall in its
absolute discretion consider to be in jeopardy or in danger of being
seized or sold under any form of distress or execution levied or
threatened and may appoint a receiver therefor.
5. RESTRICTION AGAINST OTHER SECURITY INTERESTS
5.1 The Chargor hereby declares that there is no mortgage charge or debenture
upon any of its assets secured by this Debenture having priority to this
Debenture and-
(a) the Chargor shall not during the subsistence of this Debenture without the
consent in writing of the Agent permit any Security Interest to exist or
arise over or in respect of any of the assets of the Chargor covered by
this Debenture;
(b) this Debenture shall be without prejudice to any securities already given
by the Borrower or the Chargor to any of the Beneficiaries or any security
which may hereafter be given to any of the Beneficiaries whether the same
be for securing repayment of the Indebtedness or any part thereof or any
other money covenanted to be paid under the Loan Documents and whether such
security is taken as additional or collateral security or otherwise
howsoever.
6. INFORMATION OF MATTERS AFFECTING SECURITY
6.1 The Chargor shall inform the Agent forthwith upon its issue, publication,
service or occurrence (time being of the essence in this respect) of any
application, demand, notice, order, proposal or transaction in any way
affecting, concerning or touching its assets
Schedule 7 -
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
herein secured or any part thereof and produce the same to the Agent if called
upon to do so.
6.2 The Chargor shall do all acts and take all steps necessary or expedient to
,safeguard and preserve its assets and each part thereof or the title or
ownership thereto.
6.3 The Agent may, if it thinks fit, and on behalf or in the name and at the
expense of the Chargor, do all such acts and employ all such persons as the
Agent deems necessary or expedient, for the purpose of safeguarding and
preserving the assets herein secured or any part thereof or the Beneficiaries'
rights and interests thereon.
7. INSURANCE
7.1 The Chargor shall insure and keep insured the properties and assets covered
by this Debenture wheresoever situate against loss or damage by fire, lightning,
tempest, flood, riot, civil commotion, strike, theft, burglary, malicious acts
and such other risks as the Agent may require from time to time, in the full
amount of their insurable value, with such insurers as may be acceptable to the
Agent, under a policy or policies of insurance and shall forthwith have the
Agent, as trustee for the Beneficiaries endorsed thereon as loss payee.
7.2 The Chargor shall pay all premia for the insurance effected pursuant to
Clause 7.1 on the first day on which the same ought to be paid and, if required
by the Agent, deliver to the Agent on demand the receipt for every premium
payable under such policy or policies.
7.3 If the Chargor shall fail to effect, maintain or renew the insurance
referred to in Clause 7.1, it shall be lawful for but not obligatory upon the
Agent, at the cost and expense of the Chargor, to effect, maintain or renew any
such insurance as the Agent may think fit.
7.4 Save and except at the request and with the prior written consent of the
Agent, the Chargor shall not effect or keep on foot any insurance against any
risk in respect of any assets if the Agent has effected or kept on foot any such
insurance.
7.5 The Agent shall be entitled to receive and give a good discharge for any
money received on any insurance.
8. CONTINUING SECURITY
Schedule 7 -
<PAGE>
119
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
8.1 The security created by this Debenture is expressly intended to be and
shall be a continuing security for all moneys whatsoever now or hereafter from
time to time owing by the Borrower or the Chargor whether alone or jointly and
severally with another or others to any of the Beneficiaries under the Loan
Documents or otherwise and whether as principal or surety notwithstanding that
the Borrower or the Chargor may at any time or times, cease to be indebted to
any of the Beneficiaries under the Loan Documents for any period or periods.
9. REPRESENTATIONS AND WARRANTIES
9.1 The Chargor acknowledges that each of the Agent and the other Beneficiaries
has entered into the Loan Documents and agreed to accept this Debenture as
security on the basis of, and in full reliance on, representations in the
following terms; and the Chargor now warrants to each of them as follows:-
(a) the Chargor is duly incorporated as a private company with limited
liability and validly existing under the laws of Malaysia;
(b) the Chargor is the holding company of the Borrower and the creation of
this Debenture will not contravene Section 133A of the Companies Act
1965;
(c) the documents which contain or establish the Chargor's constitution
incorporate provisions which authorize, and all necessary corporate
action has been taken to authorize, and all authorizations of any
governmental or other authority have been duly and unconditionally
obtained and are in full force and effect which are required to
authorize, the Chargor to own its assets, carry on its business as it is
now being conducted, and sign and deliver, and perform the transactions
contemplated in, this Debenture and to enable the Agent and each of the
other Beneficiaries to exercise the rights, powers and authorities hereby
vested in them or any of them;
(d) neither the signing and delivery of this Debenture nor the performance of
any of the transactions contemplated in it will:-
(i) contravene or constitute a default under any provision contained in
any agreement, instrument, law, judgment, order, license, permit or
consent by which the Chargor or any of its assets is bound or
affected; or
Schedule 7 -
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(ii) cause any limitation on it or the powers of its directors, whether
imposed by or contained in any document which contains or establishes
its constitution or in any law, order, judgment, agreement, instrument
or otherwise, to be exceeded;
(e) no event has occurred which constitutes, or which with the giving of notice
and/or the lapse of time and/or a relevant determination would constitute,
a contravention of, or default under, any agreement or instrument by which
the Chargor or any of its assets is bound or affected, being a
contravention or default which might either have an adverse effect on the
business, assets or condition of the Chargor or adversely affect its
ability to observe or perform its obligations under this Debenture;
(f) no litigation, arbitration or administrative proceeding or claim which
might by itself or together with any other such proceedings or claims
either have an adverse effect on the business, assets or condition of the
Chargor or adversely affect its ability to observe or perform its
obligations under this Debenture is presently in progress or pending or, to
the best of the knowledge, information and belief of the Chargor,
threatened against the Chargor, or any of its assets;
(g) all necessary returns have been delivered by or on behalf of the Chargor to
the relevant taxation authorities and the Chargor is not in default in the
payment of any taxes and no claim is being asserted with respect to taxes
which is not disclosed in the financial statements referred to in paragraph
(h) below;
(h) the audited financial statements (including the income statement and
balance sheet) of the Chargor for the year ended the 31st December, 1994
have been prepared on a basis consistently applied and give a true and fair
view of the results of its operations for that year and the state of its
affairs at the date, and in particular accurately disclose all the
liabilities (actual or contingent) of the Chargor;
(i) the Chargor is the beneficial owner and has title to all its assets;
(j) otherwise than has been disclosed in writing to the Agent none of the
assets of the Chargor is affected by any Security Interest, and the Chargor
is not a party to, nor is it or any to its assets bound by, any order,
agreement or instrument under which the
Schedule 7 -
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121
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Chargor is, or in certain events may be, required to create, assume or
permit to arise any Security Interest;
(k) the Chargor has fully disclosed in writing to the Agent all facts relating
to the Borrower and the Chargor which the Chargor knows or should
reasonably know and which are material for disclosure to the Beneficiaries
(or any of them) in the context of the Facility and this Debenture.
10. UNDERTAKINGS
10.1 The Chargor undertakes with the Agent and the other Beneficiaries from
the date of this Debenture until all its liabilities under this Debenture have
been discharged:-
(a) to inform the Agent in writing forthwith if it acquires or agrees to
acquire -any land buildings or structures;
(b) to deposit with the Agent (which the Agent shall be entitled to retain so
long as this Debenture shall be in force) all documents of title relating
to all assets charged under Clause 3.1 (a) herein;
(c) without the prior written consent of the Agent, not to transfer, - factor,
discount, sell, release, compound, subordinate, defer or vary the terms of
any book or other debt or moneys due, owing or payable whether on demand,
at a future time or on a contingency or otherwise to deal with the same
except by getting in the same in the normal course of business, and if so
required by the Agent to execute in relation thereto a legal assignment to
the Agent in terms specified by the Agent;
(d) not to transfer, sell, lease or otherwise dispose of any land, buildings or
structures subject to a fixed charge under this Debenture (and in
particular not to exercise any statutory or other powers of making leases,
taking surrenders of leases, nor to part with possession of nor grant any
license or right to occupy any such land, buildings or structures) without
the prior written consent of the Agent;
(e) not to transfer, sell, lease or otherwise dispose of any property or assets
subject to this Debenture (other than the property referred to in sub-
clause (d) above) otherwise than by way of sale on arm's length terms in
the ordinary course of the Chargor's day-to-day trading or in the case of
property which is
Schedule 7 -
<PAGE>
122
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
spent, consumed or has otherwise outlived its useful
life, by way of disposal provided that such property has been replaced
prior to such disposal with new and unused property of the same original
quality and type;
(f) to keep in good state of repair and in proper working order and to renew
and replace, when necessary, all buildings, structures, fixtures, plant,
machinery and equipment belonging to or used by the Chargor;
(g) to permit the Agent (and any persons appointed in writing by the Agent)
full access to the assets subject to this Debenture wherever situated to
inspect and survey the same;
(h) punctually to pay all rents, hires, royalties and other sums reserved by
and to comply with all other obligations under any lease, hiring or license
under which the Chargor has the use or possession of any property or,
assets;
(i) punctually to pay all governmental, municipal and other taxes, duties,
rates and outgoings assessed upon or payable with reference to any assets
subject to this Debenture;
(j) the Chargor will prepare the financial statements referred to in clause
10.1(k) on a basis consistently applied in accordance with generally
accepted accounting principles in Malaysia and those financial statements
shall give a true and fair view of the results of the operations of the
Chargor for the period in question and the state of its affairs for the
period to which the financial statements are made up and shall disclose or
reserve against all the liabilities (actual or contingent) of the Chargor;
(k) the Chargor will deliver to the Agent in sufficient numbers for each of the
Lenders:-
(i) as soon as they become available (and in any event within ninety (90)
days after the end of each of its financial periods) copies of its
financial statements for that period which shall contain an income
statement and a balance sheet and be audited and certified without
adverse qualification by a firm of independent accountants;
(ii) within sixty (60) days after the end of each half year of its
financial year copies of a full report on its business
Schedule 7 -
<PAGE>
123
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
for that period which shall contain full particulars of its business
and an income statement and a balance sheet; and
(iii)promptly, such additional financial or other information and records
as the Agent may from time to time reasonably request;
(l) the Chargor will maintain in full force and effect all relevant
authorizations (governmental and otherwise) and will promptly obtain any
further authorization which may become necessary to enable it to carry on
its business and to perform any of the transactions contemplated by this
Debenture;
(m) the Chargor will immediately notify the Agent upon becoming aware of the
revocation or variation of any authorization;
(n) if the Chargor becomes aware of the occurrence of an Event of Default it
will forthwith notify the Agent and provide the Agent with full details of
any steps which it is taking, or is considering taking, in order to remedy
or mitigate the effect of the Event of Default or otherwise in connection
with it;
(o) the Chargor will carry out and operate its business and affairs with due
diligence and efficiency and in accordance with sound financial and
industrial standards and practices;
(p) the Chargor will not make any loans to any persons except with the prior
written consent of the Instructing Group;
(q) the Chargor will not, except with the prior written consent of the
Instructing Group, declare, make or pay any dividend or other distribution
to its shareholders (such consent not to be unreasonably withheld)';
(r) apart from indebtedness arising out of the provisions of this Debenture the
Chargor will not, except with the prior written consent of the Instructing
Group, incur any indebtedness for Borrowed Money, or enter into any
guarantee in respect of any indebtedness of any person, unless such
indebtedness is regarded by the Chargor to be necessary for the normal
course and conduct of its operations and the Chargor shall have evidenced
the necessity thereof to the satisfaction of the Instructing Group;
(s) the Chargor will punctually pay all its indebtedness when due and owing;
Schedule 7 -
<PAGE>
124
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(t) the Chargor will, by written notice, inform the Agent of.-
(i) any legal proceedings, litigation or claim involving the Chargor;
(ii) any dispute between the Chargor and any Government or statutory body
in respect of any of the Chargor's lands and other assets;
(iii) any labor controversy which might result in a strike against the
Chargor; and
(iv) any matter which has adversely affected or may adversely affect the
Chargor's ability to fulfill its obligations under this Debenture or
its financial position;
(u) the Chargor will not divest in whole or in part its shareholding in the
Borrower without the prior written consent of the Instructing Group being
obtained through the Agent;
(v) in relation to the Indebtedness the Chargor shall not take or accept any
Security Interest or other security from the Borrower or any other third
party, without first obtaining the Instructing Group consent being obtained
through the Agent;
(w) after the occurrence of an Event of Default, the Chargor shall not, without
first obtaining the Agent's written consent, seek to recover, whether
directly or by set off, lien, counterclaim or otherwise, nor accept any
moneys or other property, nor exercise any rights in respect of, any sum
which may be or become due to the Chargor on any account by the Borrower
or, in relation to the Indebtedness, from any third party, nor claim, prove
for or accept any payment in any composition by, or any winding up of, the
Borrower or, in relation to the Indebtedness, any third party;
(x) if, notwithstanding paragraphs (v) and (w) above, the Chargor holds or
receives any such security, moneys or property, it shall forthwith pay or
transfer the same to the Agent.
11. DEFAULT
11.1 If:-
Schedule 7 -
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125
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(a) the Chargor shall fail to observe or perform any of its agreements,
covenants, stipulations, terms and conditions contained in this Debenture;
or
(b) an Event of Default as defined in the Loan Agreement shall occur;
then and in either of such cases, the amount of the Indebtedness outstanding for
the time being shall immediately become payable by the Chargor to the Agent on
demand and the Agent shall forthwith be entitled to exercise the rights and
powers upon default provided by law and this Debenture without any previous
notice to or concurrence on the part of the Chargor.
12. DEMANDS
12.1 Any demand for payment of the amount of the Indebtedness or any part
thereof for the time being outstanding may be made by a notice in writing
requiring payment within seven (7) days from the date thereof and may be
signed on behalf of the Agent by its general manager, manager, assistant
manager, sub-manager, accountant or any other officer of the Agent or by
any solicitor or firm of solicitors purporting to act for the Agent and
shall be served in accordance with the provisions of the Loan Agreement.
13. APPOINTMENT OF RECEIVER AND MANAGER
13.1 At any time after the moneys hereby secured shall have become immediately
repayable:
(a) the Agent or any person authorized by the Agent may enter into and upon any
land or premises where the properties or assets of the Chargor hereby
charged or any of them may be without any notice and may take possession
and control of such assets hereby charged and all documents relating to
such properties and assets;
(b) the Agent may at its discretion be at liberty to give any notice which may
be deemed necessary by the Agent to any person or persons owing money to
the Chargor that all such moneys be paid to the Agent alone and the Chargor
hereby irrevocably appoints the manager of the Agent or the officer in
charge for the time being of the Agent and each of them jointly and
severally to be its attorneys and attorney for it and in its name and on
its behalf to demand sue for and take all appropriate legal proceedings to
recover such moneys and to give a good receipt for the same and to give
such notices to the debtors of the Chargor
Schedule 7 -
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126
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
and take all necessary steps to complete the assignment of such moneys to
the Agent as may be necessary;
(c) the Agent may appoint in writing under the hand of the manager or the
officer in charge for the time being of the Agent any person to be receiver
and or manager of the assets hereby charged and may in like manner from
time to time remove any receiver and or manager so appointed and appoint
another in his stead and/or extend the appointment to relate to any other
such properties.
13.2 A Receiver and/or Manager or Receivers and/or Managers so appointed shall
be the agent of the Chargor and the Chargor shall be solely responsible for his
or their
acts and defaults and remuneration. Such Receiver and/or Manager or Receivers
and/or Managers shall have power:-
(a) to take possession or collect and get in any assets hereby charged and for
that purpose to take any proceedings in the name of the Chargor or
otherwise as may seem expedient;
(b) to carry on manage or concur in carrying on and managing and to continue
the business of the Chargor or any part thereof as agent or agents for the
Chargor and for any of those purposes to raise and borrow any money that
may be required upon the security of the whole or any part of the property
hereby charged and to apply or petition for, seek and otherwise howsoever
certificates consents licenses leases permission and title convenient,
expedient or necessary for all or any such purposes;
(c) subject when applicable to the provisions of any and all relevant
legislation (including, but so that this provision shall be in
amplification but not in derogation of the generality of the foregoing
legislation relating to land) forthwith (obtaining when and where necessary
the leave of the Court) to or to agree to sell, license, exchange, lease or
otherwise dispose of or deal with the assets comprised in this security and
to carry the same into effect by conveying or executing in the name or on
behalf of the Chargor any deed or document whatsoever for such
consideration (if any) (including cash debentures or other obligations
shares stock or other valuable consideration) payable in a lump sum or by
installments spread over such period as the Agent shall think fit; plant
machinery and other fixtures may be recovered and sold separately from the
premises containing them without the consent of the Chargor being obtained
thereto;
Schedule 7 -
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(d) to make any arrangements or enter into any compromise which he or they
shall think expedient; bring take defend discontinue any actions suits or
proceedings whatsoever civil or criminal in relation to the assets charged
herein;
(e) to make and effect all or any repairs and improvements to the assets
charged herein and to maintain and renew all insurance in respect of such
assets against loss or damage by fire or any other risk in such sums as he
or they shall think fit;
(f) to employ and dismiss such managers agents officers servants clerks
accountants and workmen and others in respect of the assets charged herein
and upon such terms and with such salaries wages or remuneration and for
such purposes as he or they shall think proper;
(g) to allow time for payment of any debts either with or without security;
(h) for such consideration and on such terms as he may think fit, to purchase
outright or acquire by leasing, hiring, licensing or otherwise, any land,
buildings, plant, equipment, vehicles or materials or any other property,
assets or rights of any description which he considers necessary or
desirable for the carrying on, improvement or realization of any business
of the Chargor or otherwise for the benefit of the property and assets
subject to this Debenture;
(i) in connection with the exercise, or the proposed exercise, of any of his
powers or in order to obtain payment of his remuneration (whether or not it
is already due) to borrow or raise money from any person, including any of
the Banks, without security or on the security of the property and assets
of the Chargor whether subject to this Debenture or not, and generally in
such manner and on such terms as he may think fit;
(j) to bring, defend, submit to arbitration, negotiate, compromise, abandon and
settle any claims and proceedings concerning any of the assets charged
herein;
(k) to transfer all or any of the assets charged herein to any other company or
body corporate, whether or not formed or acquired for the purpose;
(1) to call up all or any portion of the uncalled capital for the time being
(if any) of the Chargor;
Schedule 7 -
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128
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(m) generally to carry out, or cause or authorize to be carried out, any
action, scheme or arrangement whatsoever, whether similar or not to any of
the foregoing, in relation to the assets charged herein which he may
consider expedient as effectually as if he were solely and absolutely
entitled to such assets;
(n) to repair and keep in repair the assets comprised in the security hereby
made and for this purpose to apply in the name of the Chargor for any
certificate license permission or consent required under any Act Ordinance
other regulations or by-law made by any competent authority;
(o) to execute and do all such other acts deeds and things as to him or them or
the Agent may appear necessary or proper for or in relation to any of the
purposes aforesaid and which he or they lawfully may or can do as agent or
agents for the Chargor;
(p) generally to do and cause to be done such acts and things which the Chargor
may have done for the protection and/or for the improvement of the property
hereby charged.
13.3 The powers of appointment of a Receiver and/or Manager or Receivers
and/or Managers hereunder shall be in addition to and without prejudice to any
statutory and other powers of the Agent whether under the Companies Act or any
other legislation and so that such powers shall be and remain exercisable by the
Agent in respect of any property hereby charged and of which no appointment of a
Receiver and/or Manager or Receivers and/or Managers by the Agent shall from
time to time be subsisting and that notwithstanding that an appointment under
the powers of clauses 13.1 and 13.2 hereof shall have subsisted and been
withdrawn in respect of that property or shall be subsisting in respect of any
other property hereby charged.
13.4 The Agent may at any time after the moneys hereby secured shall have
become repayable effect the sale of the properties of which it has taken
possession under the rovisionsofClausel3.1(a)hereof upon giving not less than
twenty-four (24) hours notice of the intended sale to the Chargor in such manner
as the Agent shall deem proper with liberty to bid buy in and resell the same
and the Agent shall not be liable for any loss caused to the Chargor thereby and
the Chargor shall do all things necessary to enable the Agent to complete any
sale by the Agent of any part of the properties included in this security. The
Agent shall be liable only for loss caused by its willful default.
Schedule 7 -
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129
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
13.5 For the purpose of giving effect to the Chargor's obligations under this
Debenture, the Chargor hereby irrevocably appoints the Agent and/or the manager
and/or the officer in charge for the time being of the Agent and/or the Receiver
and/or Manager and his substitute(s) the attorney(s) of the Chargor for the
Chargor and in the Chargor's attorney's own name(s) or in the name of the
Chargor or in the joint names of the attorney and the Chargor and on behalf of
the Chargor as its act and deed to execute, seal complete, sign, transfer and
deliver or otherwise perfect and do any transfer, deed, assurance, agreement,
instrument, assignment, act or thing and to bring, take, defend, prosecute,
compromise, submit to arbitration and/or discontinue any actions, suits or
proceedings whatsoever which may be required or may be deemed proper for any of
the purposes of this Debenture or which the Chargor ought to execute, seal,
complete, sign, transfer and deliver or otherwise perfect and do pursuant to its
obligations under this Debenture with power for such attorney(s) to appoint and
remove any substitute(s).
13.6 Notwithstanding the provisions hereinbefore contained the Agent shall
have the full right and power at its sole and absolute discretion to appoint a
Receiver or Receivers who is or are not also to be Manager or Managers and such
Receiver or Receivers shall have all the powers enumerated in Clauses 13.2, 13.3
and 13.5 hereof save and excluding the power to carry or manage or continue the
business of the Chargor or such other powers applicable to Managers only.
13.7 The Chargor hereby undertakes at all times to ratify and confirm
whatsoever the attorney or attorneys appointed pursuant to Clause 13.5 shall
lawfully do or caused to be done and the Borrower further declares that all acts
done or caused to be done for the purposes herein contained shall be as good,
valid and effectual to all intents and purposes whatsoever as if the same has
been done by the Borrower itself.
14. ADDITIONAL POWERS OF AGENT
14.1 To the extent permitted by law, the terms of the powers of sale and
leasing available to a chargee are hereby extended to authorize the Agent at its
absolute discretion:-
(a) to sell all the title to and interest in any property or assets subject
to this Debenture or any interest in the same, and to do so in
consideration of shares, debentures or any other securities whatsoever,
or of an agreement to pay all or part of the purchase price at a later
date or dates, or an agreement to make periodical payments, whether or
not the agreement is secured by
Schedule 7 -
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130
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
an Encumbrance or a guarantee, or for such other consideration whatsoever
as the Agent may fit, and also to grant any option to purchase, and to
effect exchanges;
(b) with a view to selling any property or assets subject to this Debenture (or
offering it for sale) to repair, replace and develop such property or
assets and to apply for any appropriate permission, license or approval;
(c) to sever any fixtures and to sell them apart from the land or buildings on
or to which they are affixed, and also to apportion any rent affecting the
property sold, to charge such rent upon the property sold or retained and
to agree to indemnify any purchaser in respect of such rent or any
covenants by the limitation of a new rent, by granting powers of entry or
otherwise, or to reserve any such indemnity or powers of entry;
(d) with a view to, or in connection with, the sale of any property or assets
subject to this Debenture to carry out any action, scheme or arrangement
which the Agent may, in its absolute discretion, consider appropriate;
(e) to insure any property or assets subject to this Debenture against such
risks (in addition to loss or damage by fire) and for such amounts as the
Agent may consider prudent; and
(f) to do all or any of the things or exercise all or any of the powers
(mutatis mutandis) which are mentioned or referred to in Clause 13
(receiver's powers) and which may not be included in paragraphs (a) to (e)
above.
15. PERSONAL LIABILITY AND CONCURIRENT ACTION
15.1 If the amount realized by the Agent on a sale of the assets herein
secured after deduction and payment from the proceeds of such sale of all fees,
dues and other costs is less than the amount of the Indebtedness for the time
being outstanding and due to the Beneficiaries under the Loan Documents and
whether at such sale the Agent or any of the other Beneficiaries is the
purchaser or otherwise, the Chargor shall pay to the Agent the difference
between the amount due and the amount so realized and until such payment will
also pay interest on such balance at the rates and in the manner prescribed in
the Loan Agreement Provided Always that such personal liability of the Chargor
to pay the aforesaid differential sum shall not in any way prejudice, reduce,
affect or limit the right of the Agent to sue and recover the Indebtedness from
the Chargor nor shall this clause be
Schedule 7 -
<PAGE>
131
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
construed to preclude or prevent the Agent and/or any of the Beneficiaries from
suing the Chargor or to postpone the right of the Agent and/or any of the
Beneficiaries to sue the Chargor until after the assets secured by this
Debenture has been sold.
15.2 It is hereby expressly agreed that notwithstanding any other provisions
contained herein and in the other Loan Documents each of the Beneficiaries shall
at all times be entitled, whether individually or together with each other, to
exercise all its rights, powers and privileges and, in the event of any breach
or default, to pursue all remedies concurrently, whether by way of sale,
possession, receivership, civil suit or otherwise.
16. LIENS AND OTHER SECURITIES NOT AFFECTED
16.1 Nothing contained in this Debenture shall prejudice or affect any lien to
which each of the Agent and/or the other Beneficiaries are entitled or any other
securities (whether taken as additional or collateral security or otherwise
howsoever) which the Agent and/or any of the Beneficiaries may, at any time or
from time to time hold for or on account of the Indebtedness hereby secured and
no provision in this Debenture shall operate so as to merge or otherwise
prejudice or affect any bill, note, guarantee, mortgage or other security which
the Agent and/or the other Beneficiaries may for the time being have of the
Indebtedness intended to be hereby or otherwise secured or any right or remedy
under such bill, note, guarantee, mortgage or other security of the Agent and/or
any of the other Beneficiaries.
17. INTEREST RATE IN OTHER SECURITIES
17.1 When the payment of the Indebtedness hereby secured or intended so to
be shall be further secured to any of the Beneficiaries by any bill of exchange,
promissory note, draft, receipt or other instrument reserving a higher rate of
interest to be paid in respect thereof than those prescribed in the Loan
Documents, such higher rate of interest shall be payable in respect of the
Indebtedness and nothing contained in or to be implied from this Debenture shall
affect the right of the Agent to enforce and recover payment of such higher rate
of interest or as the case may be the difference between such higher rate of
interest and the rates payable under the Loan Documents.
18. PROTECTION OF THIRD PARTIES
18.1 No purchaser from, or other person dealing with, the Agent and/or the
Receiver shall be concerned to inquire whether any of the powers which they have
exercised or purported to exercise has arisen or
Schedule 7 -
<PAGE>
132
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
become exercisable, or whether the whole or any part of the Indebtedness remain
outstanding, or whether any case has happened to authorize the Receiver to act
or as to the propriety or validity of the exercise or purported exercise of any
such power; and the title of such a purchaser and the position of such a person
shall not be impeachable by reference to any of those matters.
18.2 The receipt of the Agent or the Receiver shall be an absolute and a
conclusive discharge to a purchaser and shall relieve him of any obligation to
see to the application of any moneys paid to or by the direction of the Agent or
the Receiver.
18.3 In clauses 18.1 and 18.2 hereof, "purchaser" includes any person
acquiring, .for money or money's worth, any lease of, or Security Interest over,
or any other interest or right whatsoever in relation to, any of the property or
assets subject to this Debenture.
19. PROTECTION OF AGENT AND RECEIVER AND MANAGER
19.1 Neither the Agent nor the Receiver shall be liable in respect of any loss
or damage which arises out of the exercise, or the attempted or purported
exercise of, or the failure to exercise any of their respective powers unless
such loss or damage is caused by its or his gross negligence or willful default.
19.2 Without prejudice to the generality of clause 19. 1, entry into
possession of any property or assets subject to this Debenture shall not render
the Agent or the Receiver liable to account as mortgagee in possession; and if
and whenever the Agent enters into possession of any such property or assets, it
shall be entitled at any time at its pleasure to go out of such possession.
20. INDEMNITY
20.1 The Chargor further covenants with the Agent fully to indemnify the Agent
and each of the other Beneficiaries and the Receiver and the Manager against all
claims, proceedings, liabilities, costs, charges and expenses which the Agent,
that Lender or the Receiver may incur at any time:-
(a) in consequence of anything done or purported to be done by the Agent,
that Lender or the Receiver under this Debenture or any of the Loan
Documents or any other document relating thereto or of any failure by the
Borrower or the Chargor to comply with its or their obligations to the
Beneficiaries hereunder or thereunder or otherwise in connection herewith
or therewith; or
Schedule 7 -
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133
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(b) in consequence of any payment in respect of the Indebtedness (whether
made by the Borrower, the Chargor or a third person) being impeached or
declared void for any reason whatsoever.
20.2 The amounts payable under clause 20.1 shall carry interest in accordance
with the provisions of the Loan Agreement from the date on which they were paid
or incurred by the Agent, that Lender or the Receiver (as the case may require)
and such amounts and interest may be debited by the Agent or that Lender to any
account of the Borrower or the Chargor but shall, in any event, form part of the
Indebtedness and accordingly be secured on the property and assets subject to
this Debenture under the charges contained in this Debenture.
21. MODIFICATION AND INDULGENCE
21.1 Agent and/or any of the Beneficiaries may at any time and without in any
way affecting the security hereby created:-
(a) grant to the Borrower or the Chargor or to any other surety or guarantor
any time or indulgence; and/or
(b) renew any bill, notes or other negotiable securities; and/or
(c) compound with the Borrower or the Chargor or any other person or
guarantor.
22. SUSPENSE ACCOUNT
22.1 Any money received under this Debenture may be placed and kept to the
credit of a suspense account for so long as the Agent thinks fit without any
obligation in the meantime to apply the same or any part thereof in or towards
discharge of the amount of the Indebtedness for the time being outstanding and
due to the Agent. Notwithstanding any such payment in the event of any
proceedings in or analogous to liquidation, composition or arrangement, the
Agent may prove for and agree to accept any dividend or composition in respect
of the whole or any part of the amount of the Indebtedness for the time being
outstanding and due to the Beneficiaries under the Loan Documents in the same
manner as if this security had not been created.
23. NO OBLIGATION TO MAKE FURTHER ADVANCES
23.1 Nothing contained in this Debenture shall be deemed to render it
obligatory upon the Lenders either at law or in equity to make or continue to
make any advances or to afford any other accommodation or
Schedule 7 -
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134
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
facilities whatsoever to the Borrower save and except for the Facilities.
24. PAYMENTS BY THE AGENT
24.1 All costs, charges and expenses incurred under this Debenture by the
Agent (including any expenditure incurred in the creation, enforcement and/or
preparation of this Debenture or, in the giving of any notice or, in the making
of any demand under, pursuant to or in respect of this Debenture or the amount
of the Indebtedness for the time being outstanding and due to the Agent and
secured by this Debenture) and all other monies whatsoever paid by the Agent in
respect of the said costs, charge ' s expenses and expenditure otherwise
howsoever and all or any other sums and moneys paid or expended by the Agent
under or pursuant to the provisions of this Debenture, express or implied, and
in particular the provisions of Clauses 6.3, and 7.3 shall be payable by the
Chargor to the Agent on demand.
24.2 Until payment to the Agent, the costs, charges, expenses, monies and sums
referred to in Clause 24.1 shall bear interest calculated on the basis of actual
days elapsed and a three hundred and sixty-five (365) day year (inclusive of the
first day but excluding the last day of the period in respect of which interest
shall be payable) and at the Prescribed Rates from the date of the same having
been paid or expended until payment (as well after as before judgment) and such
sums and interest shall on demand be paid to the Agent by the Chargor and, until
payment, shall form part of the Indebtedness and be secured hereunder. In the
event of default in payment by the Chargor after demand from the Agent the
Chargor shall pay Additional Interest on the defaulted amounts.
25. NOTICE OF FURTHER SECURITY INTEREST
25.1 Without prejudice to clause 5 (restriction on Security Interest), if the
Agent receives notice of any Security Interest or any other interest affecting
the property or assets subject to this Debenture:
(a) the Agent may open a new account for the Borrower and/or the Chargor and,
if it does not, it shall nevertheless be deemed to have done so at the
time the Agent received such notice; and
(b) all payments made by the Borrower and/or the Chargor to the Agent or that
Lender after the Agent receives such notice shall be credited or deemed
to have been credited to the new account, and
Schedule 7 -
<PAGE>
135
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
in no circumstances whatsoever shall operate to reduce the indebtedness
as at the time the Agent received such notice.
26. POWERS CUMULATIVE
26.1 The powers which this Debenture confers on the Agent, each of the other
Beneficiaries and the Receiver are cumulative, without prejudice to their
respective powers under the general law, and may be exercised as often as the
Agent, that Lender or the Receiver thinks appropriate, the Agent, each of the
other Beneficiaries or the Receiver may, in connection with the exercise of
their powers, join or concur with any person in any transaction, scheme or
arrangement whatsoever, and' the Borrower acknowledges that the respective
powers of the Agent, the other Beneficiaries and the Receiver shall in no
circumstances whatsoever be suspended, waived or otherwise prejudiced by
anything other than an express waiver or variation in writing.
27. CHANGE IN THE AGENT
27.1 The security, liabilities and or obligations created by this Debenture
shall continue to be valid and binding for all purposes whatsoever
notwithstanding any change by amalgamation, reconstruction or otherwise which
may be made in the constitution of the Agent or of any company by which the
business of the Agent may, for the time being, be carried on and shall be
available to the company carrying on that business for the time being.
28. CHANGE IN BORROWER OR CHARGOR
28.1 The security, liabilities and or obligations created by this Debenture
shall continue to be valid and binding for all purposes whatsoever
notwithstanding any change whether by amalgamation, reconstruction or otherwise
howsoever in the constitution of either the Borrower or the Chargor and it is
expressly declared that no change of any sort whatsoever in, relating to or
affecting the Borrower or the Chargor shall in any way, affect the security,
liabilities and or obligations created by this Debenture in relation to any
transaction whatsoever whether past, present or future.
29. ASSIGNMENT/TRANSFER OF DEBENTURE
29.1 The Agent shall be at liberty to assign and transfer this Debenture and
the costs and expenses of the Agent and incidental to such assignment or
transfer shall be paid by the Chargor and any statement therein of the amount
due to the Agent under or by virtue of
Schedule 7 -
<PAGE>
136
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
this Debenture shall be conclusive and binding for all purposes against the
Chargor save for manifest error.
29.2 The Chargor shall not be entitled to assign or transfer all or any of its
rights, benefits and obligations hereunder without the prior written consent of
the Instructing Group obtained through the Agent.
29.3 Any Lender may, at any time, assign all or any of its rights and benefits
hereunder or transfer in accordance with Clause 29.5 all or any of its rights,
benefits and obligations hereunder to any financial institution provided that at
the same time it assigns or, as the case may be, transfers an equal portion of
its rights, benefits and obligations under the other Loan Documents to the same
financial institution.
29.4 If any Lender assigns all or any of its rights and benefits hereunder in
accordance with Clause 29.3, then, unless and until the assignee has agreed with
the Agent and the other Beneficiaries that it shall be under the same
obligations towards each of them as it would have been under if it had been an
original party hereto as a Lender, the Agent and the other Beneficiaries shall
not be obliged to recognize such assignee as having the rights against each of
them which it would have had if it had been such a party hereto.
29.5 If any Lender wishes to transfer all or any of its rights, benefits
and/or obligations hereunder as contemplated in Clause 29.3, then such transfer
may be effected by the delivery to the Agent of a duly completed and duly
executed Transfer Certificate in which event, on the later of the Transfer Date
specified in such Transfer Certificate and the fifth business day after (or such
earlier business day endorsed by the Agent on such Transfer Certificate falling
on or after) the date of delivery of such Transfer Certificate to the Agent:
(i) to the extent that in such Transfer Certificate the Lender party thereto
seeks to transfer its rights, benefits and obligations hereunder, the
Chargor and such Lender shall be released from further obligations
towards one another hereunder and their respective rights against one
another shall be cancelled (such rights, benefits and obligations being
referred to in this Clause 29.5 as "discharged rights and obligations");
(ii) the Chargor and the Transferee party thereto shall assume obligations
towards one another and/or acquire rights against one another which
differ from such discharged rights and obligations only insofar as the
Chargor and such Transferee have assumed
Schedule 7 -
<PAGE>
137
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
and/or acquired the same in place of the Chargor and such Lender; and
(iii) the Agent such Transferee and the other Beneficiaries shall acquire the
same rights and benefits and assume the same obligations between
themselves as they would have acquired and assumed had such Transferee
been an original party hereto as a Lender with the rights, benefits
and/or obligations acquired or assumed by it as a result of such
transfer.
30. SUCCESSORS BOUND
30.1 This Debenture shall be binding upon the liquidators, receivers,
representatives and successors-in-title of the Chargor and on the successors-in-
title and assigns of the Agent.
31. INCORPORATION OF LOAN AGREEMENT
31.1 The Chargor hereby covenants and agrees that during the continuance of
the Loan Agreement, all the provisions, covenants, stipulations, conditions,
undertakings and agreements contained in the Loan Agreement shall unless
repugnant to any of the provisions contained herein, be read as forming part of
this Debenture and shall be applicable with full force and effect as if the same
were set out hereunder with the references therein to the "Loan Agreement" and
the "Borrower" being replaced respectively by references to this "Debenture" and
to the "Chargor".
32. PRINCIPAL/SUPPLEMENTAL INSTRUMENTS
32.1 It is hereby agreed and declared that this Debenture and the other Loan
Documents are instruments employed in one transaction namely to secure the
Facility in an aggregate sum of Ringgit Malaysia Ninety One Million
(RM91,000,000.00) for principal only together with interest thereon and all
other monies payable under the Loan Documents by the Borrower and the Chargor to
the Agent and the Lenders and for the purpose of Section 4(3) of the Stamp Act
1949, the Loan Agreement shall be deemed to be the principal instrument.
Schedule 7 -
<PAGE>
138
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
IN WITNESS WHEREOF the Chargor hereto has hereunto affixed its Common
Seal in the presence of its officers duly authorized and the Agent hereto has
hereunto by its Attorney set its hands.
The execution of this instrument )
by the Chargor, SHUBILA )
HOLDINGS SDN. BHD. Was )
duly effected in a manner )
authorized by its constitution )
under the Seal of SHUBILA )
HOLDINGS SDN. BHD. Which )
said seal was hereunto duly )
affixed on the day of )
1995 in the )
presence of:- )
____________________ Director
____________________ Director/Secretary
I, an Advocate and Solicitor of the High Court in
Malaya practicing at Kuala Lumpur hereby certify that on this day of
, 1995 the Common Seal of SHUBILA HOLDINGS SDN. BHD., was duly affixed to the
above written instrument in my presence in accordance with the regulations of
the said Company.
Witness my hand,
____________________
Schedule 7 -
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139
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Faciltiy : Term Loan Facility of RM91,000,000.00
SIGNED by )
)
as Attorney for and on behalf of )
PERMATA MERCHANT BANK BERHAD )
as trustee for itself as Agent )
and for the Lenders on the )
day of , 1995 )
in the presence of:- )
Schedule 7 -
<PAGE>
140
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Faciltiy : Term Loan Facility of RM91,000,000.00
SCHEDULE8
CORPORATE GUARANTEE
THIS GUARANTEE AND INDEMNITY is issued the day of
,1995 by:-
(1) SHUBILA HOLDINGS SDN. BHD., a company incorporated under the laws of
Malaysia and having its registered office at Suite 4015A, 4th Floor,
President House, Jalan Sultan Ismail, 50250 Kuala Lumpur (the "Guarantor")
of the first part in favor of:-
(2) PERMATA MERCHANT BANK BERHAD, a company incorporated under the laws of
Malaysia and having its registered office at 27th Floor, Menara Boustead,
No. 69, Jalan Paja Chulan, 50200 Kuala Lumpur (the "Agent") as agent for
the Beneficiaries (as hereinafter defined) of the second part.
WHEREAS:-
(A) Pursuant to a loan agreement (the "Loan Agreement") to be entered into
simultaneously with this Guarantee and Indemnity or shortly hereafter
between (1) SYARIKAT TELEFON WIRELESS (M) SDN. BHD. as borrower (the
"Borrower"), (2) the Agent as arranger and agent and (3) PERMATA MERCHANT
BANK BERHAD and PERWIRA AFFIN BANK BERHAD, (the "Lenders) as lenders agree
to provide a Ringgit Malaysia Ninety One Million (RM91,000,000.00) term
loan facility (the "Facility") to the Borrower.
(B) It is a condition precedent to availability of the Facility that the
Guarantor issues this Guarantee and Indemnity in favor of the Agent.
NOW THIS GUARANTEE AND INDEMNITY WITNESSETH AND IT IS
HEREBY AGREED as follows:-
1. DEFINITIONS
1.1 Except where the context otherwise requires, terms and expressions defused
in the Loan Agreement and not otherwise defined herein bear the same meanings
where used in this Guarantee and Indemnity, and the following terms and
expressions where used in this Guarantee and Indemnity bear the meanings
respectively set opposite them:-
Schedule 8 -
<PAGE>
141
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Faciltiy : Term Loan Facility of RM91,000,000.00
Additional Interest the additional interest payment by the Borrower pursuant to
clause 12.5(a) of the Loan Agreement and pursuant to the
other Loan Documents due to failure to pay any Indebtedness
when due and payable thereunder;
Beneficiaries the Arranger, the Agent and the Lenders;
Indebtedness at any time, the aggregate of all sums advanced from time
to time by the Lenders to the Borrower together with
interest thereon and all other monies payable to the
Beneficiaries or any of them pursuant to, upon and under
the Loan Documents (whether in respect of principal,
interest, Additional Interest, fees, prepayment premium,
costs, expenses, indemnity or otherwise);
Loan Agreement the agreement described in paragraph (i) of the Retital
hereto and includes modifications thereto as the parties to
the Loan Agreement may agree upon in writing;
Loan Documents the Loan Agreement, the Collateral Agreement, this
Guarantee and Indemnity, the other Security Documents and
any other documents for the time being or from time to time
constituting security for the obligations of the Borrower
under the Loan Agreement; and references to the Loan
Documents shall include references to any one or more of
them.
2. GUARANTEE AND INDEMNITY
2.1 In consideration of the Agent and the other Beneficiaries acting under or
in connection with the Loan Documents (unexecuted copies whereof the Guarantor
acknowledges having received), the Guarantor UNCONDITIONALLY AND IRREVOCABLY
GUARANTEES, as a continuing obligation, the proper and punctual payment by the
Borrower of the Indebtedness and UNCONDITIONALLY AND IRREVOCABLY UNDERTAKES, as
a continuing obligation, with the Agent that, if for any reason and at any time
and from time to time the Borrower does not make payment of any amount of the
Indebtedness, the Guarantor shall pay the amounts not so paid upon first written
demand by the Agent.
3. LIABILITY AS PRINCIPAL DEBTOR
Schedule 8 -
<PAGE>
142
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Faciltiy : Term Loan Facility of RM91,000,000.00
3.1 The Guarantor shall be deemed to be liable for the Indebtedness as sole or
principal debtor.
4. LIABILITY TO SUBSIST UNTIL FULL PAYMENT
4.1 The liabilities and obligations of the Guarantor under this Guarantee and
Indemnity shall remain in force notwithstanding any act, omission, neglect,
event or matter whatsoever, except the proper and valid payment of all the
Indebtedness and, subject to Clause 5 below, an absolute discharge or release of
the Guarantor signed by the Agent and without prejudice to its generality, the
foregoing shall apply in relation to anything which would have discharged the
Guarantor (wholly or in part) or which would have afforded the Guarantor any
legal or equitable defense, and in relation to any winding up or dissolution of,
or any change in constitution or corporate identity or loss of corporate
identity by, the Borrower or any other person.
5. DISCHARGE TO BE VOID IF PAYMENT IS NOT VALID
5.1 Any such discharge or release referred to in Clause 4, and any composition
or arrangement which the Guarantor may effect with the Agent and/or the other
Beneficiaries shall be deemed to be made subject to the condition that it will
be void, if any payment or security which the Agent may previously have received
or may thereafter receive from any person in respect of the Indebtedness, is set
aside under any applicable law or proves to have been for any reason invalid.
6. GUARANTEE NOT TO BE IMPAIRED
6.1 Without prejudice to the generality of Clauses 3 and 4 hereof, none of the
liabilities or obligations of the Guarantor under this Guarantee and Indemnity
shall be impaired by the Agent or the other Beneficiaries:-
(a) agreeing with the Borrower any variation or departure (howsoever
substantial) of or from any of the Loan Documents so that any such
variation or departure (including any which may have been made before the
signing of this Guarantee and Indemnity) shall, whatever its nature, be
binding upon the Guarantor in all circumstances, notwithstanding that it
may increase or otherwise affect the liability of the Guarantor provided
however that if any such variation is made without the Guarantor's prior
written consent increasing the amount of the Facility, the amount of the
Guarantor's liability under this paragraph shall be limited to
Schedule 8 -
<PAGE>
143
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Faciltiy : Term Loan Facility of RM91,000,000.00
the amount for which it would have been liable had such variation not been
made;
(b) releasing or granting any time or any indulgence whatsoever to the Borrower
or any other guarantor or other third party and, in particular, waiving any
of the conditions precedent for Drawing(s) under the Loan Agreement or any
contravention by the Borrower of the Loan Documents to which it is a party
or entering into any transaction or arrangement whatsoever with or in
relation to the Borrower and/or any third party;
(c) taking, accepting, varying, dealing with, enforcing, abstaining from
enforcing, surrendering or releasing any security for the Indebtedness in
such manner as it thinks fit, or claiming, proving for, accepting or
transferring any payment in respect of the Indebtedness in any composition
by, or winding up of, the Borrower and/or any third party or abstaining
from so claiming, proving, accepting or transferring.
7. GUARANTEE ENFORCEABLE WHETHER OTHER SECURITY IS ENFORCED OR NOT
7.1 Demands under this Guarantee and Indemnity may be made from time to time,
and the liabilities and obligations of the Guarantor under this Guarantee and
Indemnity may be enforced, irrespective of.-
(a) whether any steps or proceedings are being or have been taken against the
Borrower and/or any third party; or
(b) whether or in what order any security to which the Agent and the other
Beneficiaries may be entitled in respect of the Indebtedness is enforced.
8. WARRANTIES OF GUARANTOR
8.1 The Guarantor acknowledges that the Agent and the other Beneficiaries have
entered into the Loan Documents on the basis of, and in full reliance on,
representations in the following terms; and the Guarantor now warrants as
follows:-
(a) the Guarantor is a corporation duly incorporated and validly existing under
the laws of Malaysia;
(b) the documents which contain or establish the Guarantor's constitution
incorporate provisions which authorize, and all necessary corporate action
has been taken to authorize, and all authorizations of any governmental or
other authority have been
Schedule 8 -
<PAGE>
144
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Faciltiy : Term Loan Facility of RM91,000,000.00
duly and unconditionally obtained and are in full force and effect which
are required to authorize, the Guarantor to own its assets, carry on its
business as it is now being conducted, and sign and deliver, and perform
the transactions contemplated in, this Guarantee and Indemnity and to
enable the Agent and the other Beneficiaries to exercise the rights, powers
and authorities thereby vested in them;
(c) neither the signing and delivery of this Guarantee and Indemnity nor the
performance of any of the transactions contemplated in it will:-
(i) contravene or constitute a default under any provision contained in
any agreement, instrument, law, judgment, order, license, permit or
con -sent by which the Guarantor or any of its assets is bound or
affected; or
(ii) cause any limitation on it or the powers of its directors, whether
imposed by or contained in any document which contains or establishes
its
constitution or in any law, order, judgment, agreement, instrument or
otherwise, to be exceeded;
(d) no registration, recording, filing or notarization of this Guarantee and
Indemnity and no payment of any duty or tax (save stamp duty in Malaysia)
and no other action whatsoever is necessary or desirable to ensure the
validity, enforceability or priority in Malaysia of the liabilities and
obligations of the Guarantor or the rights of the Agent and the other
Beneficiaries under this Guarantee and Indemnity;
(e) no event has occurred which constitutes, or which with the giving of notice
and/or the lapse of time and/or a relevant determination would constitute,
a contravention of, or default under, any agreement or instrument by which
the Guarantor or any of its assets is bound or affected, being a
contravention or default which might either have an adverse effect on the
business, assets or condition of the Guarantor or adversely affect its
ability to observe or perform its obligations under this Guarantee and
Indemnity;
(f) no litigation, arbitration or administrative proceeding or claim which
might by itself or together with any other such proceedings or claims
either have an adverse effect on the business, assets or condition of the
Guarantor or adversely affect its ability to observe or perform its
obligations under this Guarantee and
Schedule 8 -
<PAGE>
145
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Faciltiy : Term Loan Facility of RM91,000,000.00
Indemnity is presently in progress or pending or, to the best of the
knowledge, information and belief of the Guarantor threatened against the
Guarantor, or any of its assets;
(g) all necessary returns have been delivered by or on behalf of the Guarantor
to the relevant taxation authorities and the Guarantor is not in default in
the payment of any taxes of a material amount, and no material claim is
being asserted with respect to taxes which is not disclosed in the
financial statements referred to in paragraph (h) below;
(h) the financial statements (including the income statement and balance sheet)
of the Guarantor submitted to the Agent have been prepared on a basis
consistently applied and give a true and fair view of the results of its
operations for that year and the state of its affairs at the date, and in
particular accurately disclose all the liabilities (actual or contingent)
of the Guarantor;
(i) the Guarantor has fully disclosed in writing to the Agent and the other
Beneficiaries all facts relating to the Borrower and the Guarantor which
the Guarantor knows or should reasonably know and which are material for
disclosure to the Agent and the other Beneficiaries in the context of the
Facility and the Loan Documents;
(j) the transactions on the part of the Guarantor which are contemplated in
this Guarantee and Indemnity represent transactions of a purely commercial
nature by the Guarantor and are not, in any sense, public or governmental
acts;
(k) the Guarantor will derive commercial benefit in issuing this Guarantee and
Indemnity in favor of the Agent; and
(l) the Guarantor is the holding company of the Borrower and the issuance and
execution of the Guarantee will not contravene section 133A of the
Companies Act 1965.
9. UNDERTAKINGS OF GUARANTOR
9.1 The Guarantor undertakes with the Agent, from the date of this Guarantee
and Indemnity until all its liabilities under this Guarantee and Indemnity have
been discharged:-
(a) the liabilities of the Guarantor under this Guarantee and Indemnity will
rank at least equally and ratably (pari passu) in
Schedule 8 -
<PAGE>
146
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Faciltiy : Term Loan Facility of RM91,000,000.00
point of priority and security with all its other liabilities (both actual
and contingent) except:-
(i) liabilities which are subject to liens or rights of set off arising
in the normal course of trading and the aggregate amount of which is
not material; and
(ii) liabilities which are preferred solely by Malaysian law and not by
reason of any Security Interest,
and the Guarantor shall not create or permit to exist over all or any part
of its business or assets any Security Interests other than those permitted
under this Clause 9. 1 (a) without the prior written consent of the Agent
and the Lenders;
(b) the Guarantor will send to the Agent (in sufficient copies) as soon as they
become available, but in any event within ninety (90) days of the end of
each of its financial year, copies of its financial statements for that
period, which shall contain an income statement and a balance sheet,
accurately disclose all its liabilities (actual or contingent), be prepared
on a basis consistently applied, be audited and certified without material
adverse qualification by a firm of independent accountants of recognized
international standing in Malaysia and give a true and fair view, in
accordance with accounting principles for the time being generally accepted
in Malaysia, of the results of the operations and the state of affairs of
the Guarantor, and the Guarantor will promptly supply the Agent with such
additional financial or other information as it may from time to time
reasonably request;
(c) the Guarantor will maintain in full force and effect all relevant
authorizations (governmental and otherwise) and will promptly obtain any
further authorization which may become necessary to enable it to perform
any of the transactions contemplated by this Guarantee and Indemnity;
(d) the Guarantor will immediately notify the Agent upon becoming aware of the
revocation or variation of any authorization;
(e) if the Guarantor becomes aware of the occurrence of an Event of Default it
will forthwith notify the Agent and provide the Agent with full details of
any steps which it is taking, or is considering taking, in order to remedy
or mitigate the effect of the Event of Default or otherwise in connection
with it;
Schedule 8 -
<PAGE>
147
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Faciltiy : Term Loan Facility of RM91,000,000.00
(f) the Guarantor will punctually pay all its indebtedness when due and owing
except for indebtedness which the Guarantor contests in good faith;
(g) the Guarantor will carry out and operate its business and affairs with due
diligence and efficiency and in accordance with sound financial and
industrial standards and practices and take out/maintain valid insurances
in respect of all its assets and business against all risks which are
normally insured by other companies carrying on similar business for such
amounts as would in the circumstances be considered prudent by such other
companies and will not do or omit to do or suffer anything to be done which
might render any policies of insurance taken out by it void or voidable;
(h) the Guarantor will, by written notice, inform the Agent of:-
(i) any legal proceedings, litigation or claim, involving the Guarantor;
(ii) any dispute between the Guarantor and any Government or statutory
body in respect of any of the Guarantor's lands and other assets;
(iii) any matter which has adversely affected or may adversely affect the
Guarantor's ability to fulfill its obligations under this Guarantee
and Indemnity or its financial position;
(i) the Guarantor shall not take or accept any Security Interest or other
security from the Borrower or, in relation to the Indebtedness, from any
third party, without first obtaining the Instructing Group's written
consent through the Agent;
(j) after the occurrence of an Event of Default the Guarantor shall not,
without first obtaining the Instructing Group's written consent through the
Agent, seek to recover, whether directly or by set off, lien, counterclaim
or otherwise, nor accept any moneys or other property, nor exercise any
rights in respect of, any sum which may be or become due to the Guarantor
on any account by the Borrower or, in relation to the Indebtedness, from
any third party, nor claim, prove for or accept any payment in any
composition by, or any winding up of, the Borrower or, in relation to the
Indebtedness, any third party; and
Schedule 8 -
<PAGE>
148
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Faciltiy : Term Loan Facility of RM91,000,000.00
(k) if, notwithstanding Clauses (i) and (j) above, the Guarantor holds or
receives any such security, moneys or property, it shall forthwith pay or
transfer the same to the Agent.
10. INDEMNITY OF GUARANTOR
10.1 As a separate, additional and continuing obligation, the Guarantor
unconditionally and irrevocably undertakes with the Agent that, should the
Indebtedness not be recoverable from the Guarantor under Clause 2 for any reason
whatsoever (including, but without prejudice to the generality of the foregoing,
by reason of any provision of the Loan Documents being or becoming void,
unenforceable or otherwise invalid under applicable law) then, notwithstanding
that that may have been known to the Agent or the other Beneficiaries, the
Guarantor will, as a sole, original independent obligor, upon first written
demand by the Agent under Clause 2, make payment of the Indebtedness by way of a
full indemnity in such currency and otherwise in such manner as is provided for
under the Loan Agreement or this Guarantee and Indemnity.
11. CURRENCY INDEMNITY
11.1 If, under any applicable law, regulation or guideline whether as a result
of a judgment against the Borrower and/or the Guarantor or the liquidation of
the Borrower and/or the Guarantor or for any other reason, any payment under or
in connection with this Guarantee and Indemnity is made or is recovered in a
currency ("the other currency") other than that in which it is required to be
paid hereunder ("the original currency") then, to the extent that the payment to
the Agent and the other Beneficiaries (when converted at the rate of exchange on
the date of payment or, in the case of a liquidation, the latest date for the
determination of liabilities permitted by the applicable law) falls short of the
amount unpaid under this Guarantee and Indemnity, the Guarantor shall as a
separate and independent obligation, fully indemnify the Agent and the other
Beneficiaries against the amount of the shortfall; and for the purposes of this
subclause "rate of exchange" means the rate at which the Agent or the other
Beneficiaries is able on the relevant date to purchase the original currency in
Kuala Lumpur with the other currency.
12. SUSPENSE ACCOUNT
12.1 Any money received hereunder may be placed and kept to the credit of a
suspense account for so long as the Agent thinks fit without any obligation in
the meantime to apply the same or any part thereof in or towards discharge of
Indebtedness or any party thereof.
Schedule 8 -
<PAGE>
149
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Notwithstanding any such payment in the event of any proceedings in or analogous
to bankruptcy, liquidation, composition or arrangement the Agent may prove for
and agree to accept any dividend or composition in respect of the whole or any
part of such money and liabilities in the same manner as if this Guarantee and
Indemnity had not been created.
13. CONTINUING GUARANTEE
13.1 The guarantee and indemnity of the Guarantor herein shall be a continuing
guarantee and security for all monies whatsoever now or hereafter from time to
time owing to the Agent and the other Beneficiaries by the Borrower whether
alone or jointly and severally with another or others and whether as principal
or surety notwithstanding that the Borrower may at any time or times cease to be
indebted to the Agent and the other Beneficiaries for any period or periods and
notwithstanding any settlement of account or accounts or otherwise.
14. CHANGE IN GUARANTOR
14.1 The security, liabilities and/or obligations created by this Guarantee and
Indemnity shall continue to be valid and binding for all purpose whatsoever
notwithstanding any change whether by amalgamation, reconstruction or otherwise
howsoever in the constitution of the Guarantor and it is expressly declared that
no change of any sort whatsoever in, relating to or affecting the Guarantor
shall in any way affect the security, liabilities and/or obligations created by
this Guarantee and Indemnity in relation to any transaction whatsoever whether
past, present or future.
15. AMENDMENTS AND SEVERABILITY
15.1 No provision of this Guarantee and Indemnity may be amended, waived,
discharged or terminated orally nor may any breach of any provision of this
Guarantee and Indemnity be waived or discharged orally.
15.2 If at any time any provision of this Guarantee and Indemnity is or becomes
illegal, invalid or unenforceable in any respect the remaining provisions of
this Guarantee and Indemnity shall in no way be affected or impaired thereby.
16. WAIVERS
16.1 No failure or delay by any party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor
Schedule 8 -
<PAGE>
150
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
shall any single or partial execution of any right, power or privilege preclude
any further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided are cumulative and not
exclusive of any rights and remedies provided by law.
17. JURISDICTION
17.1 This Guarantee and Indemnity is governed by, and shall be construed in
accordance with, the laws of Malaysia.
18. COSTS
18.1 All costs and disbursements of and incidental to this Guarantee and
Indemnity and the collection of any money due or to become due hereunder
including the Agent's and the other Beneficiaries' legal costs on a full
indemnity basis shall be born by the Guarantor.
19. PAYMENTS
19.1 All payments to be made by the Guarantor for the account of the Agent and
the other Beneficiaries shall be made in Ringgit Malaysia in immediately
available funds not later than 11:30 a.m. on the day in question to such account
as the Agent may have notified to the Guarantor.
19.2 All payments by the Guarantor under this Guarantee and Indemnity whether in
respect of principal, interest, fees or any other item, shall be made in full
without any deduction or withholding (whether in respect of set-off,
counterclaim, duties, taxes, charges or otherwise whatsoever) unless the
deduction or withholding is required by law, in which event the Guarantor shall:
(i) ensure that the deduction or withholding does not exceed the minimum
amount legally required;
(ii) forthwith pay to the Agent such additional amount so that the net amount
received by the Agent will equal the full amount which would have been
received by it had no such deduction or withholding been made;
(iii) pay to the relevant taxation or other authorities within the period for
payment permitted by applicable law the full amount of the deduction or
withholding (including, but without prejudice to the generality of the
foregoing, the full amount of any deduction
Schedule 8 -
<PAGE>
151
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
or withholding from any additional amount paid pursuant to this sub-
clause); and
(iv) furnish to the Agent within the period for payment permitted by applicable
law, an official receipt of the relevant taxation or other authorities
involved for all amounts deducted or withheld as aforesaid.
20. ASSIGNMENT/TRANSFER
20.1 This Guarantee and Indemnity shall be binding upon and enure to the benefit
of each party hereto and its successors, Transferees and assigns.
20.2 The Guarantor shall not be entitled to assign or transfer all or any of its
rights, benefits and obligations hereunder without the prior written consent of
the Instructing Group being obtained through the Agent.
20.3 Any Lender may, at any time, assign all or any of its rights and benefits
hereunder or transfer in accordance with Clause 20.5 all or any of its rights,
benefits and obligations hereunder to any financial institution provided that at
the same time it assigns or, as the case may be, transfers an equal portion of
its rights, benefits and obligations under the other Loan Documents to the same
financial institution.
20.4 If any Lender assigns all or any of its rights and benefits hereunder in
accordance with Clause 20.3, then, unless and until the assignee has agreed with
the Agent and the other Beneficiaries that it shall be under the same
obligations towards each of them as it would have been under if it had been an
original party hereto as a Lender, the Agent and the other Beneficiaries shall
not be obliged to recognize such assignee as having the rights against each of
them which it would have had if it had been such a party hereto.
20.5 If any Lender wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 20.3, then such transfer may be
effected by the delivery to the Agent of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date specified
in such Transfer Certificate and the fifth business day after (or such earlier
business day endorsed by the Agent on such Transfer Certificate falling on or
after) the date of delivery of such Transfer Certificate to the Agent:
Schedule 8 -
<PAGE>
152
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(i) to the extent that in such Transfer Certificate the Lender party thereto
seeks to transfer its rights, benefits and obligations hereunder, the
Guarantor and such Lender shall be released from further obligations
towards one another hereunder and their respective rights against one
another shall be cancelled (such rights, benefits and obligations being
referred to in this Clause 20.5 as "discharged rights and obligations");
(ii) the Guarantor and the Transferee party thereto shall assume obligations
towards one another and/or acquire rights against one another which differ
from such discharged rights and obligations only insofar as the Guarantor
and such Transferee have assumed and/or acquired the same in place of the
Guarantor and such Lender; and
(iii) the Agent, such Transferee and the other Beneficiaries shall acquire the
same rights and benefits and assume the same obligations between
themselves as they would have acquired and assumed had such Transferee
been an original party hereto as a Lender with the rights, benefits and/or
obligations acquired or assumed by it as a result of such transfer.
21. INDEPENDENT LEGAL ADVICE
21.1 The Guarantor hereby declares that it has been advised to seek independent
legal advice on the effect and consequence of the Guarantor signing this
Guarantee and Indemnity and the Guarantor hereby agrees that the provisions
contained in this Guarantee and Indemnity shall be binding on the Guarantor
regardless of whether the Guarantor has resorted to any such advice.
22. SUCCESSORS BOUND
22.1 This Guarantee and Indemnity shall be binding upon the successors-in-title
of the Guarantor and the respective successors-in-title and assigns of the Agent
and the Lenders.
23. PRINCIPAL AND SUBSIDIARY INSTRUMENTS
23.1 It Is Hereby Agreed And Declared that this Guarantee and Indemnity and the
Loan Documents are instruments employed in one transaction to secure the sum of
Ringgit Malaysia Ninety One Million (RM91,000,000.00) for principal only and
interest thereon within the meaning of Section 4(3) of the Stamp Act, 1949 of
the States of Malaya and for the purpose of the said Section, the Loan Agreement
shall be
Schedule 8 -
<PAGE>
153
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
deemed to be the principal instrument and this Guarantee and Indemnity shall be
deemed to be the subsidiary instrument.
IN WITNESS WHEREOF this Guarantee and Indemnity is executed by the parties
hereto.
THE GUARANTOR
The execution of this instrument )
by the Guarantor, SHUBILA )
HOLDINGS SDN. BHD. was duly effected )
in a manner authorized by its )
constitution under the Seal of )
the Guarantor, SHUBILA HOLDINGS SDN. )
BHD. which said Seal was hereunto duly )
affixed on the day of ,1995 )
in the presence of.- )
_______________ Director
_______________ Director/Secretary
THE AGENT )
)
SIGNED by )
)
and )
)
for and on behalf of ________________________
PERMATA MERCHANT BANK )
BERHAD as Agent on the )
day of , 1995 )
________________________
Scheudle 8 -
<PAGE>
154
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 9
GUARANTEE AND INDEMNITY
THIS GUARANTEE AND INDEMNITY is issued this day of ,1995.
by
(1) (i) [*] of [*];
(ii) [*] of [*];
(iii) [*] of [*],
(together the "Guarantors") of the first part in favor of:-
(2) PERMATA MERCHANT BANK BERHAD of 27th Floor, Menara Boustead, No. 69, Jalan
Raja Chulan, 50200 Kuala Lumpur (the "Agent") as agent for the
Beneficiaries (as hereinafter defined) of the second part.
RECITALS
(i) By a loan agreement(the "Loan Agreement") to be entered into simultaneously
with this Guarantee and Indemnity or shortly hereafter between (1) SYARIKAT
TELEFON WIRELESS (M) SDN. BHD. ("the Borrower") (2) the Agent and (3)
PERMATA MERCHANT BANK BERHAD; and PERWIRA AFFIN BANK BERHAD) (the
"Lenders"), the Lenders agree subject to the conditions therein appearing,
to make available to the Borrower a term loan facility in a maximum
aggregate principal amount of Ringgit Malaysia Ninety One Million
(RM91,000,000.00) (the "Facility").
(ii) One of the conditions precedent to availability of the Facility that the
Guarantors issue this Guarantee and Indenmity in favor of the Agent.
NOW THIS GUARANTEE AND INDEMNITY WITNESSETH AND IT IS
_________
*Confidential portion has been omitted and filed separately with the Commission.
Schedule 9 -
<PAGE>
155
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
HEREBY AGREED as follows:-
1. DEFINITIONS
1.1 Except where the context otherwise requires, terms and expressions defined
in the Loan Agreement and not otherwise defined herein bear the same meanings
where used in this Guarantee and Indemnity, and the following terms and
expressions where used in this Guarantee and Indemnity bear the meanings
respectively set opposite them:-
Additional Interest the additional interest payment by the Borrower pursuant
to clause 12.5(a) of the Loan Agreement and pursuant to
the other Loan Documents due to failure to pay any
Indebtedness when due and payable thereunder;
Beneficiaries the Arranger, the Agent and the Lenders;
Loan Agreement the agreement described in paragraph (i) of the Recital
hereto and includes such modifications thereto as the
parties to the Loan Agreement may agree upon in writing;
Indebtedness at any time, the aggregate of all sums advanced from time
to time by the Lenders to the Borrower together with
interest thereon and all other monies payable to the
Beneficiaries or any of them pursuant to, upon and under
the Loan Documents (whether in respect of principal,
interest, Additional Interest, fees, prepayment premium,
costs, expenses, indemnity or otherwise);
Loan Documents the Loan Agreement, the Collateral Agreement, this
Guarantee and Indemnity, the other Security Documents and
any other documents for the time being or from time to
time constituting security for the obligations of the
Borrower under the Loan Agreement; and references to the
Loan Documents shall include references to any one or more
of them;
1.2 The headings in this Guarantee and Indemnity are inserted for convenience
only and shall not be taken read and construed as essential parts of this
Guarantee and Indemnity. References to
Schedule 9 -
<PAGE>
156
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
clauses are to be construed as references to clauses of this Guarantee and
Indemnity. All references to provisions of statutes include such provisions as
modified, re-certified or re-enacted. Words applicable to natural persons
include any body of persons, company, corporation, firm or partnership corporate
or incorporate and vice versa. Words importing the masculine gender shall
include the feminine and neuter genders and vice versa. Words importing the
singular number shall include the plural number and vice versa.
2. GUARANTEE AND INDEMNITY AND UNDERTAKIING
2.1 GUARANTEE AND INDEMNITY
In consideration of the Agent and the other Beneficiaries acting under or
in connection with the Loan Documents (the receipt of unexecuted copies whereof,
each of the Guarantors hereby acknowledges) the Guarantors HEREBY JOINTLY AND
SEVERALLY GUARANTEE, AGREE, UNDERTAKE AND COVENANT with the Agent and its
respective successors-in-title and assigns and each of them that the Guarantors
will ensure due and punctual payment of all Indebtedness by the Borrower and
that the Guarantors will pay to the Agent and other Beneficiaries the
Indebtedness or any part thereof forthwith upon default of such payment by the
Borrower and without any demand by the Agent on any of the Guarantors AND the
Guarantors HEREBY JOINTLY AND SEVERALLY UNDERTAKE to indemnify the Agent and the
other Beneficiaries against all losses and expenses, including legal costs on a
full indemnity basis, charges and damages incurred or suffered by the Agent and
other Beneficiaries or any of them in consequence of any failure by the Borrower
to pay the Indebtedness aforesaid or resulting from any breach, non-performance
or non-observance by the Borrower of the obligations, terms, covenants and
agreements to be performed or observed by the Borrower and contained in the Loan
Documents.
3. GUARANTORS' COVENANTS
3.1 Each Guarantor hereby agrees, undertakes and covenants with the Agent and
their respective successors-in-title and assigns and each of them as follows:-
(a) that the guarantee, indemnity and undertaking herein shall not in any way
be discharged, diminished or affected by the granting of time or indulgence
to the Borrower or the effecting of any compromise between the Agent and
the other Beneficiaries or any of them and the Borrower or any agreement
between the Borrower and the Agent and the Beneficiaries or any of them not
to sue the Borrower;
Schedule 9 -
<PAGE>
157
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(b) that the liability of the Guarantors under the guarantee, indemnity and
undertaking herein shall subsist whether or not the Agent and the other
Beneficiaries or any of them has or have a legal right to claim against the
Borrower or any other surety or against any security which the Agent and
the other Beneficiaries or any of them may now or at any time hereafter or
from time to time have from or against the Borrower or any other person for
any sums, loss or damage and whether or not the Agent and the other
Beneficiaries or any of them has or have availed itself or themselves of
its or their legal remedies against the Borrower or any other surety or
against any security as aforesaid;
(c) that all sums payable by the Guarantors or any one of them under the
guarantee and indemnity herein shall be paid in full without set-off,
counter-claim, condition or qualification of any nature whatsoever;
(d) that the liability of the Guarantors under the guarantee, indemnity and
undertaking herein shall not be affected by the Agent and the other
Beneficiaries or any of them granting any relaxation, forbearance or
indulgence to the Guarantors or any of them;
(e) that the Agent or the other Beneficiaries or any of them may, at any time
or times, agree not to sue any of the Guarantors or release any of the
Guarantors from their liability under the guarantee and indemnity herein
without affecting the liability of the remaining Guarantors under the
guarantee and indemnity herein and whether or not the remaining Guarantors
shall have notice of or assented to such agreement or release and whether
or not the Agent and the other Beneficiaries or any of them shall have
reserved its or their remedies against the remaining Guarantors;
(f) that the Agent and the other Beneficiaries or any of them may, at any time
or times, at its or their absolute discretion, without discharging,
impairing or affecting the liability of the Guarantors or any of them under
their guarantees, indemnities and undertakings herein and without giving
notice to the Guarantors or any of them and without obtaining the assent of
the Guarantors or any of them, vary, add to, or alter the obligations
undertaken by the Borrower or refuse further credit to the Borrower;
(g) that the guarantee and indemnity of the Guarantors herein shall be in
addition to any other guarantee and other security held by the Agent and
the other Beneficiaries or any of them in respect
Schedule 9 -
<PAGE>
158
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
of the repayment of the monies and liabilities from time to time at any
time due and owing by the Borrower under the Loan Documents to the Agent
and the other Beneficiaries and the due performance and observance by the
Borrower of the terms, provisions, covenants, agreements and obligations on
the part of the Borrower to be performed and observed and contained in the
Loan Documents and whether such guarantee or other security shall be given
to the Agent and the other Beneficiaries by the Guarantors or any of them
or otherwise and no renewal, variation, exchange, release, modification of
or other dealing with or forbearance from perfecting or enforcing any such
other guarantee or other security by the Agent and the other Beneficiaries
or any of them shall affect the liability of the Guarantors or any of them
under their guarantees and indemnities herein and whether or not the
Guarantors or any of them shall have notice of or given their assent to
such renewal, variation, exchange, release, modification of or other
dealing with or forbearance from perfecting or enforcing such other
guarantee or other security;
(h) that the guarantee and indemnity herein shall not be considered as
satisfied by any intermediate payment or satisfaction of the whole or any
part of any sum or sums of money owing as aforesaid but shall be continuing
security and shall extend to cover any sum or sums of money which shall for
the time being constitute the balance due from the Borrower to the Agent
and the other Beneficiaries upon any such account or accounts as herein
mentioned;
(i) that the guarantee and indemnity of the Guarantors herein shall be a
continuing guarantee and security for all monies whatsoever now or
hereafter from time to time owing to the Agent and the other Beneficiaries
by the Borrower pursuant to and under the Loan Documents notwithstanding
that the Borrower may at any time or times cease to be indebted to the
Agent and the other Beneficiaries or any of them for any period or periods
and notwithstanding any settlement of account or accounts or otherwise;
(j) that the guarantee and indemnity of the Guarantors herein shall be binding
on the Guarantors and each of them and on their respective successors-in-
title for all purposes and no change whatsoever in the constitution of the
Agent and the other Beneficiaries or any of them or the Borrower whether by
amalgamation, reconstruction or otherwise shall affect or impair the
liability of the Guarantors or any of them under the guarantee and
indemnity herein;
Schedule 9 -
<PAGE>
159
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(k) that all sums of monies not recovered or recoverable from the Guarantors or
any of them on the basis of a guarantee whether by reason of any legal
limitation, disability or incapacity on or of the Borrower or any other
fact and circumstance and, whether known or not to the Agent and the other
Beneficiaries or any of them shall nevertheless be recoverable from the
Guarantors or any of them as principal debtors in respect thereof and shall
be repaid by the Guarantors and each of them upon demand made by the Agent
or the other Beneficiaries or on the Agent's or Beneficiaries' behalf;
(l) that the death or disability or determination of liability of any one of
the Guarantors shall not prejudice or affect the liability of the other
Guarantors or of the liability in respect of the monies due and owing by
the Borrower to the Agent and the other Beneficiaries or losses, actions,
proceedings, claims, demands, costs, damages and expenses sustained or
incurred by the Agent and the other Beneficiaries or any of them prior to
the date of determination of the liability of that one of the Guarantors
who shall have died or be under disability or whose liability hereunder
shall have been determined and the Agent and the other Beneficiaries and
each of them shall be at liberty without affecting its or their rights
hereunder to open fresh accounts with the Borrower and, unless the person
or persons paying specifically direct the Agent or the other Beneficiaries
otherwise in writing, no money paid from time to time into any such account
or accounts by or on behalf of the Borrower shall be appropriated towards
or have the effect of payment of any part of the monies due and owing from
the Borrower to the Agent and the other Beneficiaries or losses, actions,
proceedings, claims, demands, costs, damages and expenses sustained or
incurred by the Agent and the other Beneficiaries prior to or at the time
of the cesser of liability of that one of the Guarantors who shall have
died or be under disability or whose liability hereunder shall have been
determined;
(m) that any accounts settled or stated by or between the Agent and the other
Beneficiaries or any of them and the Borrower or admitted by or on behalf
of the Borrower and duly certified by one of the officers of the Agent may
be adduced by the Agent and the other Beneficiaries or any of them and
shall, in that case and in the absence of manifest error, be accepted by
the Guarantors and each of them as conclusive evidence that the balance or
amount thereby appearing is due from the Borrower to the Agent and the
other Beneficiaries and payable on demand to
Schedule 9 -
<PAGE>
160
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
the Agent and the other Beneficiaries by the Guarantors or any of them;
(n) that if the Borrower becomes insolvent or if an order is made or
legislation enacted or an effective resolution passed for winding up the
Borrower or a receiver is appointed for the debenture or debenture holders
of the Borrower, the Agent and the other Beneficiaries and each of them may
prove in the winding up of the Borrower for the whole amount owing or
remaining due and unpaid by the Borrower to the Agent and the other
Beneficiaries and each of them and no money or dividend received by the
Agent and the other Beneficiaries or any of them shall be treated as
received in respect of the Guarantors' guarantee, indemnity and undertaking
herein or otherwise in relation to the Guarantors or any of them but the
full amount hereby guaranteed shall be payable by the Guarantors until the
Agent and the other Beneficiaries and each of them shall have received from
all sources one hundred (100) sen to a ringgit on the ultimate balance
owing and remaining due and unpaid to the Agent and the other
Beneficiaries;
(o) that if the Agent and the other Beneficiaries have received such ultimate
balance in full, any claim on the part of the Guarantors or any of them to
any excess or any securities remaining in the hands of the Agent or any of
the Beneficiaries shall be a matter of adjustment between the Agent or that
Beneficiary and the Guarantors or any of them and any other person or
persons laying claim thereto;
(p) that all payments received by the Agent and the other Beneficiaries from
the Borrower or from its liquidators or otherwise shall be taken and
applied by the Agent and the other Beneficiaries as payments in gross and
the right of the Guarantors or any of them to be subrogated to the Agent
and the other Beneficiaries in respect thereto shall not arise until the
Agent and the other Beneficiaries shall have received the full amount of
all claims of the Agent and the other Beneficiaries against the Borrower;
(q) that the Guarantors have not taken and shall not take, without the prior
consent in writing of the Agent and the other Beneficiaries, whether
directly or indirectly, in respect of the liability undertaken pursuant to
the guarantee, indemnity and undertaking herein by the Guarantors or any of
them on behalf of the Borrower, any counter security, whether involving a
charge on any property whatsoever of the Borrower or otherwise, whereby the
Schedule 9 -
<PAGE>
161
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Guarantors or any of them or any person or persons claiming through the
Guarantors or any of them would, or might, on the insolvency or liquidation
of the Borrower and to the prejudice of the Agent and the other
Beneficiaries or any of them increase the proof in such insolvency or
liquidation or diminish the property distributable among the creditors of
the Borrower and, as regards any such counter security taken by the
Guarantors or any of them with the consent of the Agent and the other
Beneficiaries as aforesaid, the same shall be a security to the Agent and
the other Beneficiaries for the fulfillment of the Guarantors' obligations
under their guarantee, indemnity and undertaking herein;
(r) that the Agent and the other Beneficiaries shall, so long as any money
remains owing under the guarantee, indemnity and undertaking herein have a
lien therefor on all money now or hereafter standing to the credit of the
Guarantors or any of them with the Agent and the other Beneficiaries or any
of them;
(s) that a certificate by an officer of the Agent as to the money and
liabilities for the time being due or incurred from or by the Borrower to
the Agent and the other Beneficiaries shall, in the absence of manifest
error, be conclusive evidence in any legal proceedings against the
Guarantors or any of them;
(t) that any sums or security paid or given to the Agent and the other
Beneficiaries by or on behalf of the Borrower or the Guarantors or any of
them shall not constitute a valid settlement or discharge of the liability
of the Guarantors or any of them under their guarantee and indemnity herein
or any part thereof if the payment of such sums or the giving of such
security shall be avoided or reduced under the provisions of any law
relating to insolvency or liquidation for the time being in force and the
Agent and the other Beneficiaries shall be entitled to claim against the
Guarantors and each of them in the case of avoidance, the full amount or
value of the aforesaid sums or security and, in the case of reduction, the
amount or value by which the aforesaid sums or security shall be reduced;
(u) that the Agent and the other Beneficiaries shall be entitled to recover
from the Guarantors and each of them, all sums payable by the Guarantors
hereunder without first availing themselves of their legal remedies against
the Borrower or any other surety or against any security the Agent and the
other Beneficiaries or any of them may now or at any time hereafter or from
time to time have from or against the Borrower or any other person; and
Schedule 9 -
<PAGE>
162
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(v) that any notice, demand or request required or permitted to be given or
made under the guarantee indemnity herein shall be in writing and shall be
sufficiently made or given to the Guarantors if left by hand or sent by
telegram, telex or post addressed to the Guarantors at their respective
addresses above written or their respective last known places of business
or residence as the case may be or at such other addresses as the
Guarantors shall notify the Agent and shall, in the case of a notice,
demand or request sent by telegram, telex or post be deemed to have been
served on and duly received by the Guarantors at the time when the same
would, in the ordinary course of transmission or post, be received.
4. WARRANTIES BY THE GUARANTORS
4.1 The Guarantors acknowledge that each of the Agent and the other
Beneficiaries has entered into the Loan Agreement on the basis of, and in full
reliance on, representations in the following terms; and each of the Guarantors
now warrants as follows:-
(a) neither the signing and delivery of this Guarantee and Indemnity nor the
performance of any of the transactions contemplated in it will contravene
or constitute a default under any provision contained in any agreement,
instrument, law, judgment, order, license, permit or consent by which the
Guarantor or any of his assets is bound or affected;
(b) no event has occurred which constitutes, or which with the giving of notice
and/or the lapse of time and/or a relevant determination would constitute,
a contravention of, or default under, any agreement or instrument by which
the Guarantor or any of his assets is bound or affected, being a
contravention or default which might either have an adverse effect on the
business or assets of the Guarantor or adversely affect his ability to
observe or perform his obligations under this Guarantee and Indemnity;
(c) no litigation, arbitration or administrative proceeding or claim which
might by itself or together with any other such proceedings or claims
either have an adverse effect on the business or assets of the Guarantor or
adversely affect his ability to observe or perform his obligations under
this Guarantee and Indemnity is presently in progress or pending or, to the
best of the knowledge, information and belief of the Guarantor, threatened
against the Guarantor, or any of his assets;
Schedule 9 -
<PAGE>
163
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(d) all necessary returns have been delivered by or on behalf of the Guarantor
to the relevant taxation authorities and the Guarantor is not in default in
the payment of any taxes of a material amount, and no material claim is
being asserted with respect to taxes which has not been disclosed to the
Agent' and the other Beneficiaries; and
(e) the Guarantor has fully disclosed in writing to the Agent and the other
Beneficiaries all facts relating to the Borrower and the Guarantor which
the Guarantor knows or should reasonably know and which are material for
disclosure to the Agent and the other Beneficiaries in the context of the
Loan Documents and this Guarantee and Indemnity.
5. UNDERTAKING BY THE GUARANTORS
5.1 Each of the Guarantors undertakes with the Agent, from the date of this
Guarantee and Indemnity until all his liabilities under this Guarantee and
Indemnity have been discharged:-
(a) the Guarantor will ensure that the Borrower pays the Indebtedness and each
and every part thereof as it falls due;
(b) the liabilities of the Guarantor under this Guarantee and Indemnity will
rank at least equally and ratably (pari passu) in point of priority and
security with all his other unsecured liabilities (both actual and
contingent);
(c) the Guarantor will maintain in full force and effect all relevant
authorizations (governmental and otherwise) and will promptly obtain any
further authorization which may become necessary to enable him to perform
any of the transactions contemplated by this Guarantee and Indemnity;
(d) the Guarantor will immediately notify the Agent upon becoming aware of the
revocation or variation of any authorization;
(e) if the Guarantor becomes aware of the occurrence of an Event of Default he
or she will forthwith notify the Agent and provide the Agent with full
details of any steps which he or she is taking, or is considering taking,
in order to remedy or mitigate the effect of the Event of Default or
otherwise in connection with it;
Schedule 9 -
<PAGE>
164
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(f) the Guarantor will punctually pay all his indebtedness when due and owing
except for indebtedness which the Guarantor contests in good faith;
(g) the Guarantor will, by written notice, inform the Agent of any dispute or
matter which has adversely affected or may adversely affect the Guarantor's
ability to fulfill his obligations under this Guarantee and Indemnity of
his financial position;
(h) the Guarantor will not take or accept any Security Interest or other
security from the Borrower or, in relation to the Indebtedness, from any
third party, without first obtaining the written consent of the Instructing
Group through the Agent;
(i) after the occurrence of an Event of Default, the Guarantor will not,
without first obtaining the written consent of the Instructing Group
through the Agent, seek to recover, whether directly or by set-off, lien,
counterclaim or otherwise, nor accept any moneys or other property, nor
exercise any rights in respect of, any sum which may be or become due to
the Guarantor on any account by the Borrower or, in relation to the
Indebtedness, from any third party, nor claim, prove for or accept any
payment in any composition by, or any winding up of, the Borrower or, in
relation to the Indebtedness, any third party;
(j) if, notwithstanding paragraphs (h) and (i) above, the Guarantor holds or
receives any such security, moneys or property, it or he shall forthwith
pay or transfer the same to the Agent for the account of the Beneficiaries;
(k) the Guarantor will maintain the Borrower's solvency and provide the
Borrower (by way of fully subordinated loans or contribution of further
share capital or by way of any other means acceptable to the Agent and the
other Beneficiaries) with sufficient funds to meet its obligations and
ensure that the Project is completed according to the schedule made known
to and accepted by the Agent and the other Beneficiaries.
6. INDEMNITY
6.1 As a separate, additional and continuing obligation each of the Guarantors
unconditionally and irrevocably undertakes with the Agent that, should the
Indebtedness not be recoverable from any Guarantor under paragraph 2 for any
reason whatsoever (including, but without prejudice to the generality of the
foregoing, by reason of any
Schedule 9 -
<PAGE>
165
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
provision of the Loan Documents being or becoming void, unenforceable or
otherwise invalid under any applicable law) then, notwithstanding that that may
have been, known to the Agent and the other Beneficiaries or any of them, each
Guarantor will, as a sole, original and independent obligor, upon first written
demand by the Agent under paragraph 2.1, make payment of the Indebtedness by way
of a full indemnity in such currency and otherwise in such manner as is provided
for in the Loan Agreement.
7. PAYMENTS
7.1 All payments to be made by the Guarantors for the account of the Lenders
shall be made in Ringgit Malaysia in immediately available funds not later than
11.30 a.m. on the day in question to such account as the Agent may have notified
to the Guarantors.
7.2 All payments by the Guarantors under this Guarantee and Indemnity whether
in respect of principal, interest, fees or any other item, shall be made in full
without any deduction or withholding (whether in respect of set-off,
counterclaim, duties, taxes, charges or otherwise whatsoever) unless the
deduction or withholding is required by law, in which event the Guarantors
shall:
(i) ensure that the deduction or withholding does not exceed the minimum amount
legally required;
(ii) forthwith pay to the Agent such additional amount so that the net amount
received by the Beneficiaries will equal the full amount which would have
been received by it had no such deduction or withholding been made;
(iii)pay to the relevant taxation or other authorities within the period for
payment permitted by applicable law the full amount of the deduction or
withholding (including, but without prejudice to the generality of the
foregoing, the full amount of any deduction or withholding from any
additional amount paid pursuant to this sub-clause); and
(iv) furnish to the Agent within the period for payment permitted by applicable
law, an official receipt of the relevant taxation or other authorities
involved for all amounts deducted or withheld as aforesaid.
7.3 If, under any applicable law, regulation or guideline, whether as a
result of a judgment against the Guarantors or the bankruptcy of the Guarantors
or for any other reason, any payment under or in connection
Schedule 9 -
<PAGE>
166
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
with this Guarantee and Indemnity is made or is recovered in a currency (the
"foreign currency") other than that in which it is required to be paid hereunder
(the "original currency") then, to the extent that the payment to the
Beneficiaries (when converted at the rate of exchange on the date of payment or,
in the case of a bankruptcy, the latest date for the determination of
liabilities permitted by the applicable law) falls short of the amount unpaid
under this Guarantee and Indemnity, the Guarantors shall as a separate and
independent obligation, fully indemnify the Beneficiaries against the amount of
the shortfall; and for the purposes of this sub-clause "rate of exchange" means
the rate at which the Agent is able on the relevant date to purchase the
original currency in Kuala Lumpur with the foreign currency.
8. AMENDMENTS AND SEVERABILITY
8.1 No provision of this Guarantee and Indemnity may be amended, waived,
discharged or terminated orally nor may any breach of any provision of this
Guarantee and Indemnity be waived or discharged orally.
8.2 If at any time any provision of this Guarantee and Indemnity is or becomes
illegal, invalid or unenforceable in any respect the remaining provisions of
this Guarantee and Indemnity shall in no way be affected or impaired thereby.
9. INDEPENDENT LEGAL ADVICE
9.1 The Guarantors hereby declare that they have been advised to seek
independent legal advice on the effect and consequence of the Guarantors signing
this Guarantee and Indemnity and the Guarantors hereby agree that the provisions
contained in the Guarantee and Indemnity shall be binding on the Guarantors
regardless of whether the Guarantors have resorted to any such advice.
10. WAIVERS
10.1 No failure or delay by any party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial execution of any right, power or privilege preclude any further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and not exclusive of any rights and
remedies provided by law.
11. LAW AND JURISDICTION
Schedule 9 -
<PAGE>
167
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
11.1 This Guarantee and Indemnity is governed by, and shall be construed in
accordance with, the laws of Malaysia.
11.2 The Guarantors irrevocably:-
(a) submits to the exclusive jurisdiction of the Courts of Malaysia
PROVIDED ALWAYS in the case of the foreign Guarantor, he will
irrevocably submits to the non-exclusive jurisdiction of the Courts of
Malaysia and the Courts of Sweden;
(b) waives any objections on the ground of venue or forum non convenience
or any similar grounds;
(c) consents to service of process by mall or in any other manner
permitted by the relevant law.
1l.3 [*] shall at all times maintain an agent for service of process in
Malaysia. Such agent shall be:-
Name:
Address:
and the said Guarantor abovenamed undertakes not to revoke the authority of
the above agent and if, for any reason, such agents or any successor agent
no longer serves as agent of the said Guarantor to receive service of
process, the said Guarantor shall promptly appoint another such agent and
advise the Agent thereof.
12. COSTS
12.1All costs and disbursements of and incidental to this Guarantee and
Indemnity and the collection of any money due or to become due hereunder
including the legal costs of the Agent and the other Beneficiaries on a
full indemnity basis shall be borne by the Guarantors.
13. ASSIGNMENT/TRANSFER
13.1 This Guarantee and Indemnity shall be binding upon and enure to the
benefit of each party hereto and its successors, Transferees and assigns.
__________
*Confidential portion has been omitted and filed separately with the Commission.
Schedule 9 -
<PAGE>
168
Borrower : Facility Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
13.2 The Guarantors shall not be entitled to assign or transfer all or any of
its rights, benefits and obligations hereunder without the prior written consent
of the Instructing Group obtained through the Agent.
13. 3 Any Lender may, at any time, assign all or any of its rights and benefits
hereunder or transfer in accordance with Clause 13.5 all or any of its rights,
benefits and obligations hereunder to any financial institution provided that at
the same time it assigns or, as the case may be, transfers an equal portion of
its rights, benefits and obligations under the other Loan Documents to the same
financial institution.
13.4 If any Lender assigns all or any of its rights and benefits hereunder in
accordance with Clause 13.3, then, unless and until the assignee has agreed with
the Agent and the other Beneficiaries that it shall be under the same
obligations towards each of them as it would have been under if it had been an
original party hereto as a Lender, the Agent and the other Beneficiaries shall
not be obliged to recognize such assignee as having, the rights against each of
them which it would have had if it had been such a party hereto.
13.5 If any Lender wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 13.3, then such transfer may be
effected by the delivery to the Agent of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date specified
in such Transfer Certificate and the fifth business day after (or such earlier
business day endorsed by the Agent on such Transfer Certificate falling on or
after) the date of delivery of such Transfer Certificate to the Agent:
(i) to the extent that in such Transfer Certificate the Lender party thereto
seeks to transfer its rights, benefits and obligations hereunder, the
Guarantors and such Lender shall be released from further obligations
towards one another hereunder and their respective rights against one
another shall be cancelled (such rights, benefits and obligations being
referred to in this Clause 13.5 as "discharged rights and obligations");
(ii) the Guarantors and the Transferee party thereto shall assume obligations
towards one another and/or acquire rights against one another which differ
from such discharged rights and obligations only insofar as the Guarantors
and such Transferee have assumed and/or acquired the same in place of the
Guarantors and such Lender; and
Schedule 9 -
<PAGE>
169
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(iii) the Agent such Transferee and the other Beneficiaries shall acquire the
same rights and benefits and assume the same obligations between
themselves as they would have acquired and assumed had such Transferee
been an original party hereto as a Lender with the rights, benefits
and/or obligations acquired or assumed by it as a result of such
transfer.
14. SUCCESSORS BOUND
14.1 This Guarantee and Indemnity shall be binding upon the respective
successors-in-title of the Guarantors and the respective successors-in-title and
assigns of the Agent.
15. PRINCIPAL/SUBSIDIARY INSTRUMENTS
15.1 It is hereby agreed and declared that this Guarantee and Indemnity and
the Loan Documents are instruments employed in one transaction namely to secure
the Facility in an aggregate sum of Ringgit Malaysia Ninety One Million
(RM91,000,000.00) for principal only together with interest thereon and all
other monies payable by the Borrower to the Agent and the other Beneficiaries
under the Loan Documents and for the purpose of Section 4(3) of the Stamp Act
1949, the Loan Agreement shall be deemed to be the principal instrument and this
Guarantee and Indemnity shall be deemed to be the subsidiary instrument.
IN WITNESS WHEREOF this GUARANTEE AND INDEMNITY is executed by the
parties hereto.
THE AGENT
SIGNED by )
)
and )
)
for and on behalf of PERMATA ) ________________
MERCHANT BANK BERHAD, )
as Agent on the day of )
,199 )
________________
Schedule 9 -
<PAGE>
170
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
THE GUARANTORS
SIGNED by [*] )
as Guarantor on )
the day of , )
199 in the presence of:- )
SIGNED by [*] )
as )
Guarantor on the day of )
,199 )
in the presence of:- )
SIGNED by [*] )
as Guarantor on the )
day of , )
199 in the presence of:- )
________
*Confidential portion has been omitted and filed separately with the Commission.
Schedule 9 -
<PAGE>
171
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 10
ASSIGNMENT
THIS DEED OF ASSIGNMENT is made on the day of ,199_
BETWEEN:
(1) SYARIKAT TELEFON WIRELESS (M) SDN. BHD., a company incorporated in Malaysia
and having its registered office at 2nd Floor, Wisma Tai Yoon, 9B Lorong
Medan Tuanku Satu, Medan Tuanku, 50300 Kuala Lumpur (the "Borrower") of the
one part; and
(2) PERMATA MERCHANT BANK BERHAD (the "Agent") of a company incorporated in
Malaysia and licensed to carry on banking business and having its
registered office at 27th Floor, Menara Boustead, No. 69, Jalan Paja
Chiilan, 50200 Kuala Lumpur as agent for the Beneficiaries (as hereinafter
defined) of the other part.
WHEREAS:-
(A) By a loan agreement to be entered into simultaneously within this
Assignment or shortly hereafter (the "Loan Agreement") between (1) the
Borrower and (2) the Agent and (3) PERMATA MERCHANT BANK BERHAD and PERWIRA
AFFIN BANK BERHAD, (the "Lenders"), the Lenders agree to make available to
the Borrower a term loan facility of up to the maximum principal sum of
Ringgit Malaysia Ninety One Million (RM91,000,000.00) (the "Facility") upon
and subject to the terms and conditions therein set out.
(B) It is a condition precedent to the availability of the Facility that inter-
alia the Borrower executes this Assignment in favor of the Agent as
security for the Facility.
NOW THIS ASSIGNMENT WITNESSETH AND IT IS HEREBY AGREED as follows:-
1. DEFINITIONS
1.1 Except where the context otherwise requires, terms and expressions defined
in the Loan Agreement and not otherwise defined herein bear the same meanings
where used in this Assignment, and the
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bdn.
Facility : Term Loan Facility of RM91,000,000.00
following terms and expressions where used in this Assignment bear the meanings
respectively set opposite them:-
Beneficiaries the Agent, the Arranger and the Lenders;
Credit Balance all amounts (whether of principal or interest) from time to
time and at any time standing to the credit of the Project
Account;
Project Account the bank account opened and maintained, or to be opened and
maintained with the Project Account Bank, by the Borrower
for the purpose of receiving the Project Proceeds;
Project Account Bank PERWIRA AFFIN BANK BERHAD or such other licensed bank
acceptable to the Agent and appointed by the Borrower with
whom the Borrower shall open and maintain the Project
Account;
Project Accountant COOPERS & LYBRAND or such other firm of accountants
acceptable to the Agent to be appointed by the Borrower as
accountant of the Project to monitor all incoming and
outgoing funds in relation to the Project Account;
Project Proceeds all amounts payable to the Borrower including but not
limited to all equity, shareholders' advances, loan
drawings and revenue proceeds received by the Borrower in
respect of the Project;
Indebtedness at any time, the aggregate of all sums advanced from time
to time by the Lenders to the Borrower together with
interest thereon and all other monies payable to the
Beneficiaries or any of them pursuant to, upon and under
the Loan Documents (whether in respect of principal,
interest, Additional Interest, fees, commission, costs
expenses, indemnity or otherwise).
1.2 HEADINGS
Clause headings are for ease of reference only.
2. COVENANT TO PAY INDEBTEDNESS
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
2.1 The Borrower hereby covenants with the Agent and the other Beneficiaries
that it will duly pay the Indebtedness.
3. ASSIGNMENT
3.1 ASSIGNMENT
The Borrower as beneficial owner hereby assigns and agrees to assign
absolutely to the Agent as security for the payment of the Indebtedness all its
present and future rights, title and interest in and to--
(a) the Project Account; and
(b) the Credit Balance.
3.2 REASSIGNMENT
The Borrower may, at its own cost, call for a reassignment of the rights,
title and interest hereby assigned at any time after all amounts payable under
the Loan Documents have been paid in full.
4. PROJECT ACCOUNT
4.1 PROJECT ACCOUNT
To give proper effect to the intent and purposes of the assignment herein
contained, the Borrower shall open and maintain the Project Account with the
Project Account Bank and all the Project Proceeds shall be deposited and paid
into the Project Account.
4.2 NO DEALINGS
Until such time as the Borrower is entitled to call for a reassignment of
the rights, title and interest hereby assigned under Clause 3.2, no part of the
Credit Balance shall be repayable or payable to the Borrower save and except
with the express written consent of the Agent.
4.3 NO ASSIGNMENT
The Credit Balance (and any part thereof), the rights, title and interest
of the Borrower in and to the Project Account and the Credit Balance, any right
of the Borrower against the Project Account Bank in relation to the Project
Account and the Credit Balance and the right
Schedule 10 -
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
of the Borrower to call for a reassignment pursuant to clause 3.2 shall not be
capable of assignment, transfer or encumbrance (otherwise than in favor, or with
the prior written consent of the Agent). Without prejudice to the foregoing, the
Borrower undertakes not to, and not to purport to, sell, assign, transfer,
mortgage, charge or otherwise deal with or encumber the Project Proceeds, the
Credit Balance (or any part thereof), any of its rights, title and interest in
and to the Project Account and the Project Proceeds and the Credit Balance, any
right in relation to the Project Account and the Project Proceeds or the Credit
Balance or the right of the Borrower to call for a reassignment pursuant to
clause 3.2, to the extent that any such sale, assignment, transfer, mortgage,
charge or other dealing shall be void.
4.4 APPLICATION OF THE CREDIT BALANCE
Subject to Clause 6 the Credit Balance shall be applied upon the following
terms and conditions and in the following manner:-
(a) the Borrower shall be at liberty to make withdrawals from the Project
Account for the following purposes only:-
(i) for purchase of materials, goods, equipment and machinery pertaining
to the Project and the meeting of the other development costs of the
Project;
(ii) for making installment repayment of the principal sum and payment of
interest, fees and commissions due and payable under the Facility;
and
(iii) for meeting operating, maintenance, overhead and administrative
costs and expenses incurred in the day to day management and
administration of the Borrower,
PROVIDED AILWAYS THAT:
(aa) all withdrawals from the Project Account shall be verified by the
Project Accountant;
(bb) withdrawals to be utilized for the purpose stipulated under item (i)
above shall be supported by official invoices; and
(cc) withdrawals to be utilized for the purpose stipulated under item
(iii) above shall be supported by bills and/or statement of request
for payment; and
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(b) the Borrower shall cause the Project Accountant to provide the Agent with a
statement of account in respect of the Project Account within fifteen (15)
days from the end of each month.
5. UNDERTAKINGS
5.1 The Borrower hereby undertakes to the Agent that it will do or permit to be
done each and every act or thing, including executing any documents, which the
Agent may from time to time require to be done for the purpose of enforcing the
Agent's rights under this Assignment or for perfecting any security created or
intended to be created by this Assignment, or for obtaining the full benefits of
this Assignment and of the rights and powers herein, and will allow its name to
be used as and when required by the Agent for that purpose.
5.2 The Borrower undertakes that forthwith upon execution of this Assignment to
deliver a notice of assignment in the form set out in Appendix A hereto to the
Project Account Bank and shall procure an acknowledgment by the Project Account
Bank to the Agent of the receipt of such notice of assignment in the form set
out in Appendix B hereto.
6. DEFAULT
6.1 If:-
(a) the Borrower shall fail to observe or perform any of its agreements,
covenants, stipulations, terms and conditions contained in this Assignment;
or
(b) an Event of Default as defined in Clause 13.1 of the Loan Agreement shall
occur,
then and in either of such cases, the Indebtedness outstanding for the time
being shall immediately become payable by the Borrower to the Agent on demand
and the Agent shall forthwith be entitled to exercise the rights and power upon
default provided by law and this Assignment without previous notice to or
concurrence on the part of the Borrower and no further withdrawals from the
Project Account shall be made by the Borrower.
7. ENFORCEMENT OF SECURITY
7.1 ENFORCEMENT
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
The security hereby created shall immediately become enforceable if the
Loan is declared immediately due and payable Pursuant to Clause 6.1 above.
7.2 AGENT'S RIGHTS
At any time after the security hereby created becomes enforceable the Agent
may apply, or cause to be applied, all or any part of the Credit Balance in
accordance with Clause 14.2 of the Loan Agreement as if the same had been held
or received by the Agent thereunder.
7.3 APPLICATION OF MONEYS
All moneys held or received by the Agent after the security hereby created
becomes enforceable shall be applied by the Agent, or paid to the Agent for
application, in accordance with Clause 14.2 of the Loan Agreement.
8. CONTINUING SECURITY
8.1 CONTINUING SECURITY
The security hereby constituted shall be a continuing security and is in
addition to, and shall not be merged in or in any way prejudice any other
Security Interest which the Agent may now or at any time hold OR have regard to
the Borrower or any other person in respect of the obligations of the Borrower
under the Loan Documents.
9. MISCELLANEOUS
9.1 NO LIABILITY
Notwithstanding the provisions of Clause 3.1, the Borrower shall remain
liable to perform all the obligations assumed by it in relation to the Project
Account and the Credit Balance and the Agent shall be under no obligation of any
kind whatsoever in relation thereto nor be under any liability whatsoever in
relation thereto in the event of any failure by the Borrower to perform such
obligations.
9.2 GOVERNING LAW
This Assignment is governed by, and shall be construed in accordance with, the
laws of Malaysia.
9.3 INDEMNITY
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
The Borrower shall fully indemnify the Agent against all costs, charges,
expenses and liabilities which the Borrower may incur under or by virtue of the
assignment herein contained except such as arises or arise as a result of the
fraud or willful misconduct of the Agent.
10. ASSIGNMENT/TRANSFER OF ASSIGNMENT
10.1 The Agent shall be at liberty to assign and transfer this Assignment and
the costs and expenses of the Agent and incidental to such assignment or
transfer shall be paid by the Borrower and any statement therein of the amount
due to the Agent under or by virtue of this Assignment shall be conclusive and
binding for all purposes against the Borrower save for manifest error.
10.2 The Borrower shall not be entitled to assign or transfer all or any of its
rights, benefits and obligations hereunder without the prior written consent of
the Instructing Group obtained through the Agent.
10.3 Any Lender may, at any time, assign all or any of its rights and benefits
hereunder or transfer in accordance with Clause 10.5 all or any of its rights,
benefits and obligations hereunder to any financial institution provided that at
the same time it assigns or, as the case may be, transfers an equal portion of
its rights, benefits and obligations under the other Loan Documents to the same
financial institution.
10.4 If any Lender assigns all or any of its rights and benefits hereunder in
accordance with Clause 10.3, then, unless and until the assignee has agreed with
the Agent and the other Beneficiaries that it shall be under the same
obligations towards each of them as it would have been under if it had been an
original party hereto as a Lender, the Agent and the other Beneficiaries shall
not be obliged to recognize such assignee as having the rights against each of
them which it would have had if it had been such a party hereto.
10.5 If any Lender wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 10.3, then such transfer may be
effected by the delivery to the Agent of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date specified
in such Transfer Certificate and the fifth business day after (or such earlier
business day endorsed by the Agent on such Transfer Certificate falling on or
after) the date of delivery of such Transfer Certificate to the Agent:
Schedule 10 -
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(i) to the extent that in such Transfer Certificate the Lender party thereto
seeks to transfer its rights, benefits and obligations hereunder, the
Borrower and such Lender shall be released from further obligations towards
one another hereunder and their respective rights against one another shall
be cancelled (such rights, benefits and obligations being referred to in
this Clause 10.5 as "discharged rights and obligations");
(ii) the Borrower and the Transferee party thereto shall assume obligations
towards one another and/or acquire rights against one another which differ
from such discharged rights and obligations only insofar as the Borrower
and such Transferee have assumed and/or acquired the same in place of the
Borrower and such Lender; and
(iii)the Agent such Transferee and the other Beneficiaries shall acquire the
same rights and benefits and assume the same obligations between themselves
as they would have acquired and assumed had such Transferee been an
original party hereto as a Lender with the rights, benefits and/or
obligations acquired or assumed by it as a result of such transfer.
11. PRINCIPAL/SUBSIDIARY INSTRUMENTS
11.1 PRINCIPAL/SUBSIDIARY INSTRUMENTS
It is hereby agreed and declared that this Assignment and the Loan
Documents are instruments employed in one transaction namely to secure the
Facility in an aggregate sum of Ringgit Malaysia Ninety One Million
(RM91,000,000.00) for principal only together with interest thereon and all
other monies payable by the Borrower to the Agent and the Lenders under the Loan
Documents and for the purpose of Section 4(3) of the Stamp Act 1949, the Loan
Agreement shall be deemed to be the principal instrument and this Assignment
shall be deemed to be the subsidiary instrument.
Schedule 10 -
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179
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
IN WITNESS WHEREOF the parties hereto have executed this Assignment the day
and year herein written.
The execution of this instrument )
by the Borrower, SYARIKAT )
TELEFON WIRELESS (M) SDN. )
BHD., was duly effected in )
a manner authorized by its )
constitution under the Seal )
of the Borrower, SYARIKAT )
TELEFON WIRELESS (M) SDN. BHD., )
which said Seal was hereunto duly )
affixed on the day of , )
199 in the presence of:- )
_______________ Director
_______________ Director/Secretary
SIGNED by )
)
and )
)
for and on behalf of PERMATA ) _______________
MERCHANT BANK BERHAD, )
as Agent on the day of )
,199 )
_______________
Schedule 10 -
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180
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
APPENDIX A
NOTICE OF ASSIGNMENT
From SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
To [Name of Project Account Bank]
[Date]
Dear Sirs
RE: PROJECT ACCOUNT NO. [ ](THE "PROJECT ACCOUNT") OPENED AND
MAINTAINED WITH YOUR BANK BY SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
("STW")
We hereby give you notice that by a deed of assignment dated the day of
, 199 (the "Assignment") and made between STW and PERMATA MERCHANT BANK BERHAD
as agent for itself and your bank (the "Agent"), STW has assigned absolutely to
the Agent all STW's rights, title and interest in and to all moneys held under
the Project Account referred to above.
You are hereby authorized and directed to pay to the Agent pursuant to the
Assignment upon notice from the Agent all monies standing in the credit of the
Project Account which are due and payable to STW.
This notice and the instructions herein contained are irrevocable and may not be
modified or varied without the consent in writing of the Agent.
Please acknowledge to the Agent the receipt of this notice in the form of the
acknowledgment attached.
Yours faithfully
____________________
for and on behalf of
SYARIKAT TELEFON WIRELESS
(M) SDN. BHD.
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
APPENDIX B
From: [Name of Project Account Bank]
To: PERMATA MERCHANT BANK BERHAD
[Date]
Dear Sir
RE: PROJECT ACCOUNT NO. [ ] (THE "PROJECT ACCOUNT")
OPENED AND MAINTAINED WITH OUR BANK BY SYAIRIKAT TELEFON WIRELESS SDN.
BHD. ("STW")
We acknowledge receipt of a notice of assignment of the moneys held under the
Project Account in your favor and hereby confirm our agreement to the assignment
(the "Assignment") upon terms as contained therein. We note that henceforth all
payments under the Project Account to be made to STW should be made to
yourselves or as you may otherwise direct upon the terms of the Assignment and
shall forthwith forward all monies standing in the credit of the Project Account
to you upon notification from you to do so.
We confirm that we will not effect any amendments or variations to the Project
Account without your prior written consent.
Yours faithfully
____________________
for and on behalf of
[Name of Project Account Bank]
c.c. STW
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182
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 11
DECLARATION BY DIRECTORS
To: PERMATA MERCHANT BANK BERHAD
as Agent
[Date]
Attention: [ ]
LOAN AGREEMENT DATED [ ] 199[]
I refer to the term loan facility for Ringgit Malaysia Ninety One Million
(RM91,000,000.00) (the "Facility") constituted by a loan agreement (the "Loan
Agreement") dated [ ] day of [ ], 1995 and made between (1)
Syarikat Telefon Wireless (M) Sdn. Bhd., (the "Borrower") as borrower (2) your
bank as Arranger and Agent and (3) the financial institutions listed in Schedule
1 of the Loan Agreement (the "Lenders") as lenders. Terms defined in the Loan
Agreement have the same meanings herein.
I am a director of the Borrower.
As required by the Loan Agreement:-
(i) I hereby confirm that 1 am not and none of my parents, spouse and children
is a director, officer or employee of any of the Lenders; and
(ii) I hereby irrevocably confirm and undertake that all present and future
loans granted by me to the Borrower will be subordinated to the Loan and
will not be repaid in whole or in part without the prior written consent
of the Lenders.
____________________
[Name of Director]
Schedule 11 -
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183
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 12
COLLATERAL AGREEMENT
THIS AGREEMENT is made on [ ],1995
BETWEEN:-
(1) (a) [TO INSERT NAMES OF THE SHAREHOLDERS OF THE
BORROWER];
(b) [ ];
(c) [ ];
(collectively the "Shareholders");
(2) SYARIKAT TELEFON WIRELESS (M) SDN. BHD. (the "Borrower");
(3) PERMATA MERCHANT BANK BERHAD (the "Agent") as agent for the Beneficiaries
(as hereinafter defined).
WHEREAS:-
(A) PERMATA MERCHANT BANK BERHAD AND PERWIRA AFFIN BANK BERHAD (the "Lenders")
have agreed at the request of the Borrower and the Shareholders to provide
a Ringgit Malaysia Ninety One Million (RM91,000,000) term, loan facility
(the "Facility") to the Borrower upon the terms and conditions set out in a
loan agreement (the "Loan Agreement") to be entered into simultaneously
with this Agreement or shortly hereafter between (1) the Borrower as
borrower, (2) the Agent as arranger and agent and (3) the Lenders as
lenders.
(B) The Shareholders are shareholders of and lenders to the Borrower.
(C) It is a condition precedent to availability of the Facility that the
Shareholders and the Borrower execute this Agreement in favor of the Agent.
NOW THEREFORE IN CONSIDERATION of the above premises the parties hereto
agree as follows:-
1. INTERPRETATION
In this Agreement terms defined in the Loan Agreement shall bear the same
meanings when used herein, unless otherwise defused herein, and in addition when
used herein:
Schedule 12 -
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(i) "BENEFICIARIES" means the Arranger, the Agent and the Lenders;
(ii) "INDEBTEDNESS FOR BORROWED Money" means any indebtedness of the Borrower
owed to any Shareholder for or in respect of any monies borrowed by the
Borrower from any Shareholder or amounts raised under any other
transaction having the commercial effect of a borrowing by the Borrower
from any Shareholder;
(iii) "LOAN DOCUMENTS" means the Loan Agreement, the Security Documents and this
Agreement;
(iv) "MEMORANDUM OF DEPOSIT" means the memorandum of deposit to be executed by
each of the Shareholders pursuant to Clause 12.1 in favor of the Agent
creating a fixed charge over its portion of the Shares as security for the
Facility substantially in the form set out in Appendix B;
(V) "ORIGINAL FINANCIAL STATEMENTS" means:-
(a) in relation to [ ], the audited consolidated financial
statements of [ ] for the financial year ended the
[ ]; and
(b) in relation to [ ], the audited consolidated financial
statements of [ ] for the financial year ended the
[ ];
(c) in relation to [ ], the audited consolidated financial
statements of for the financial year ended
the [ ];
(vi) "SENIOR LIABILITIES" means the Loan, all interest thereon and all fees and
other amounts expressed to be payable to the Beneficiaries under the Loan
Documents;
(vi) "SHARES" all those shares in the Borrower which shall represent 100% of
the total issued paid up capital of the Borrower;
(vii) "SHAREHOLDERS" means the shareholders of the Borrower as specified in the
preamble of this Agreement and where the context so requires or admits,
references to Shareholders shall be construed as references to any of
them;
Schedule 12 -
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185
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(viii) "SUBORDINATED LIABILITIES" means all monies, whether in the nature of
principal, interest or otherwise, from time to time due and to become due
to any Shareholder from the Borrower in respect of any:-
(a) Indebtedness for Borrowed Money owed to any Shareholder by the
Borrower at any time; and
(b) any preference shares in the Borrower owned by any Shareholder,
and shall include additional loans granted to the Borrower and preference
shares in the Borrower subscribed for under Clause 5.1 (ii) herein.
2. REPRESENTATIONS
2.1 Each Shareholder represents that:-
(i) it is a corporation duly incorporated under the laws of Malaysia with
power to enter into this Agreement and to exercise its rights and perform
its obligations thereunder and all corporate and other action required to
authorize its execution of this Agreement and its performance of its
obligations hereunder has been duly taken;
(ii) in any proceedings taken in Malaysia in relation to this Agreement, it
will not be entitled to claim for itself or any of its assets immunity
from suit, execution, attachment or other legal process;
(iii) all acts, conditions and things required to be done, fulfilled and
performed in order (a) to enable it lawfully to enter into, exercise its
rights under and perform and comply with the obligations expressed to be
assumed by it in this Agreement, (b) to ensure that the obligations
expressed to be assumed by it in this Agreement are legal, valid and
binding and (c) to make this Agreement admissible in evidence have been
done, fulfilled and performed;
(iv) under the laws in force at the date hereof, it is not necessary that this
Agreement be filed, recorded or enrolled with any court or other authority
or that (save for stamp duty of a nominal amount) any stamp, registration
or similar tax be paid on or in relation to this Agreement; and
Schedule 12 -
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186
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(v) the obligations expressed to be assumed by it in this Agreement are legal
and valid obligations binding on it in accordance with the terms hereof,
(vi) it has not taken any corporate action nor have any other steps been taken
or legal proceedings been started or (to the best of its knowledge and
belief) threatened against it for its winding-up, dissolution,
administration or re-organization or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar officer of it
or of any or all of its assets or revenues;
(vii) it is not in breach of or in default under any agreement to which it is a
party or which is binding on it or any of its assets to an extent or in a
manner which might have a material adverse effect on its business or
financial condition;
(viii)no action or administrative proceeding of or before any court or' agency
which might have a material adverse effect on its business or financial
condition has been started or threatened;
(ix) all of the written information supplied by it to the Agent and the other
Beneficiaries in connection with this Agreement is true, complete and
accurate in all material respects and it is not aware of any material
facts or circumstances that have not been disclosed to the Agent and the
other Beneficiaries and which might, if disclosed, adversely affect the
decision of the Agent and the other Beneficiaries to enter into the Loan
Documents to which it is a party;
(x) the execution of this Agreement and its exercise of its rights and
performance of its obligations hereunder will not result in the existence
of nor oblige it to create any encumbrance over all or any of its present
or future revenues or assets;
(xi) the execution of this Agreement and its exercise of its rights and
performance of its obligations hereunder do not and will not:
(a) conflict with any agreement, mortgage, bond or other instrument or
treaty to which it is a party or which is binding upon it or any of
its assets;
(b) conflict with its constitutive documents and rules and regulations;
or
Schedule 12 -
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187
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(c) conflict with any applicable law, regulation or official or judicial
order;
(xii) the execution of this Agreement constitutes, and its exercise of its
rights and performance of its obligations hereunder will constitute,
private and commercial acts done and performed for private and commercial
purposes; and
(xiii) it is an exempt private company and as such, Section 133A of the
Companies Act, 1965 is not in any way contravened.
2.2 Each of the Shareholders further represents that:-
(i) its respective Original Financial Statements were prepared in accordance
with accounting principles generally accepted in Malaysia and consistently
applied and give (in conjunction with the notes thereto) a true and fair
view of its financial condition as at the date as of which they were
prepared and the results of its operations during the financial year ended
on such date;
(ii) since publication of its respective Original Financial Statements there
has been no material adverse change in its respective business or
financial condition;
(iii) as at the date as of which its respective Original Financial Statements
were prepared, there were no liabilities (contingent or otherwise) which
were not disclosed thereby (or by the notes thereto) or reserved against
therein nor were there at that date any unrealized or anticipated losses
arising from its respective commitments entered into by it which were not
so disclosed or reserved against; and
(iv) as at the date hereof the only Indebtedness for Borrowed -Money owed by
the Borrower to the various Shareholders are owed to the Shareholders
being of the nature described in item 1 of the First Schedule hereto.
2.3 Each of the Shareholders hereby represents and warrants that it is the
beneficial owner of the Shares in such proportion as stated in item 2 of
the First Schedule hereto and such Shares are free from all claims,
charges, liens and any other encumbrances whatsoever.
3. SUBORDINATION
Schedule 12 -
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
3.1 Each of the parties hereto agrees that the Senior Liabilities shall rank
in all respects in priority to the Subordinated Liabilities and that accordingly
all of the Subordinated Liabilities shall be fully subordinated to the Senior
Liabilities.
4. UNDERTAKINGS OF THE BORROWER
4.1 From and after the date hereof and so long as any of the Senior
Liabilities are outstanding the Borrower shall not without the prior written
consent of the Agent:-
(i) pay, prepay or repay (or permit the payment prepayment or repayment of) or
make any distribution (or permit any distribution to be made) in respect
of any of the Subordinated Liabilities in cash or in kind;
(ii) discharge any of the Subordinated Liabilities by set off or any right of
combination of accounts;
(iii) waive or release any term of the Subordinated Liabilities; or
(iv) take or omit to take any action whereby the subordination of the
Subordinated Liabilities or any part thereof to the Senior Liabilities
might be terminated, impaired or adversely affected.
5. UNDERTAKINGS OF THE SHAREHOLDERS
5.1 From and after the date hereof and so long as any of the Senior
Liabilities are outstanding or in force, the Shareholders:-
(i) shall not without the prior written consent of the Agent;
(aa) receive payment, prepayment or repayment of, or any distribution
in respect of (or on account of), any of the Subordinated
Liabilities in cash or in kind or apply any money or property in
discharge of any Subordinated Liabilities;
(bb) discharge the Subordinated Liabilities by set-off or any right
of combination of accounts; or
(cc) amend, vary, waive or release any term of the Subordinated
Liabilities;
Schedule 12 -
<PAGE>
189
Borrower : Syarikat Telefon Wireless (M) Snd. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(ii) shall ensure that the Borrower--
(aa) remains solvent and able to meet all its financial -liabilities
as and when they fall due; and
(bb) will complete the Project timeously,
and to this end shall whenever necessary put the Borrower in funds
including funds to meet costs-overrun in respect of the Project,
whether by way of provision of additional loans or subscription for
additional preference shares, in each case ranking pari passu in
priority with then existing Subordinated Liabilities or by way of
subscription for additional equity in the Borrower;
(iii)shall ensure that each Shareholder will remain an exempt private
company and in the event that any of them shall cease to be an exempt
private company, then that Shareholder shall render such financial
assistance to the Borrower by way of equity or preference shares or in
any other manner that is in conformity to the laws of Malaysia.
5.2 From and after the date hereof and so long as any of the Senior Liabilities
are outstanding or in force, the Shareholders shall not reduce their
respective shareholdings in the Borrower without the prior written consent
of the Instructing Group save and except if the aggregate of all
reduction(s) is equal or less than seven point five per cent (7.5%) of the
total paid up capital of the Borrower.
6. SUBORDINATION PRIOR TO INSOLVENCY PROCEDURES
6.1 If in breach of Clause 5.1: -
(i) any Shareholder receives a payment or distribution in cash or in kind of,
or on account of, any of the Subordinated Liabilities;
(ii) the Borrower makes any payment or distribution in cash or in kind on
account of the Subordinated Liabilities;
(iii)any of the Subordinated Liabilities are discharged by set-off or by
exercise of any right of combination of accounts; or
(iv) any Shareholder receives any other payment or value in respect of the
Subordinated Liabilities,
Schedule 12 -
<PAGE>
190
Borrower : Syarikat Telefon Wireless (M) Snd. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
the Shareholder receiving or otherwise obtaining the benefit of such payment,
set-off or combination of accounts will hold in trust on behalf of the
Beneficiaries and forthwith pay an amount equal to the amount of the payment so
received by it to the Agent for application against or retention by the Agent on
account of the Senior Liabilities, which amount shall be treated, as between
such Shareholder, the Borrower and the Beneficiaries, as originally paid to the
Beneficiaries and not to such Shareholder.
7. SUBORDINATION ON INSOLVENCY
7.1 If:-
(i) any resolution is passed or order made for the winding up,
liquidation, dissolution, or reorganization of the Borrower;
(ii) the Borrower becomes subject to any insolvency, bankruptcy,
reorganization, receivership, liquidation, dissolution or other
similar proceeding whether voluntary or involuntary (and whether or
not involving insolvency);
(iii)the Borrower assigns its assets for the benefit of its creditors or
enters into any agreement with its creditors generally; or
(iv) the Borrower becomes subject to any distribution of its assets, or if
any analogous event occurs anywhere,
then--
(a) the Agent and the other Beneficiaries may, (i) claim, enforce and
prove for the Subordinated Liabilities, (ii) file claims and proofs,
give receipts and take all such proceedings and do all such things as
it sees fit to recover the Subordinated Liabilities and (iii) receive
all distributions on the Subordinated Liabilities for application
towards the Senior Liabilities;
(b) if and to the extent that the other Beneficiaries are not entitled to
claim, enforce, prove, file claims or proofs, or take proceedings for
the Subordinated Liabilities, each Shareholder will do so in good time
as reasonably requested by the Agent and the other Beneficiaries;
Schedule 12 -
<PAGE>
191
Borrower : Syarikat Telefon Wireless (M) Snd. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(c) any payment or distribution of any kind. or character, whether in
cash, securities, or other property which is payable or deliverable
upon or with respect to the Subordinated Liabilities -or any part
thereof to any Shareholder by the Borrower shall be held in trust by
such Shareholder for the benefit of the other Beneficiaries and shall
forthwith be paid or delivered directly to the Agent for application
against the Senior Liabilities until the Senior Liabilities have been
fully paid and satisfied;
(d) if the trust in paragraph (c) above fails or cannot be given effect
to, such Shareholder (so as to bind any agent or trustee on its
behalf) will, upon demand, pay an amount equal to such payment or
distribution to the Agent for application towards the Senior
Liabilities until the Senior Liabilities have been fully paid and
satisfied; and
(e) the trustee, liquidator, assignee or other person distributing the
assets of the Borrower or their proceeds shall, and is hereby directed
to, pay distributions on the Subordinated Liabilities direct to the
Agent until the Senior Liabilities are irrevocably paid in full.
8. ENFORCEMENT BY THE SHAREHOLDERS
8.1 Unless the Instructing Group has previously consented thereto in writing no
Shareholder will:-
(i) demand or accelerate any of the Subordinated Liabilities or otherwise
declare any of the Subordinated Liabilities prematurely payable for any
reason whatsoever;
(ii) enforce the Subordinated Liabilities by execution or otherwise;
(iii)petition for (or vote in favor of any resolution for) or initiate or
support or take any steps with a view to any insolvency, liquidation,
reorganization, administration or dissolution proceedings or any voluntary
arrangement or assignment for the benefit of creditors or any similar
proceedings involving the Borrower, whether by petition convening a
meeting, voting for a resolution or otherwise.
9. ASSIGNMENT OF CLAIM
Schedule 12 -
<PAGE>
192
Borrower : Syarikat Telefon Wireless (M) Snd. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
9.1 No Shareholder will assign or transfer to any person the whole or any part
of the Subordinated Liabilities or any interest therein otherwise than to the
Beneficiaries in respect of the Loan Agreement.
10. CONTINUING AGREEMENT
10.1 The subordination effected by this Agreement shall continue to apply in
respect of the Subordinated Liabilities notwithstanding any intermediate payment
in whole or in part of the Senior Liabilities.
11. WAIVER OF DEFENCES
11.1 The subordination effected by this Agreement and the obligations of each of
the Borrower and the Shareholders hereunder shall remain in full force and
effect without regard to, and shall not be impaired or affected by:-
(i) any time or indulgence granted to or composition with the Borrower, the
Shareholders or any other person; or
(ii) the taking, variation (no matter how fundamental or extensive), compromise,
renewal or release of, or refusal or neglect to perfect or enforce, any
rights, remedies or securities against or granted by the Borrower, the
Shareholders or any other person; or
(iii)any legal limitation, disability, incapacity or other circumstances
relating to the Borrower, the Shareholders or any other person or, any
amendment to or variation of the terms of any document or security; or
(iv) any other act, omission or circumstances, whether or not the Borrower or
the Shareholders shall have notice or knowledge thereof.
12. CHARGIING OF THE SHARES
12.1 In consideration of the Lenders at the request of the Shareholders making
and continue to make available the Facility to the Borrower each Shareholder
hereby irrevocably covenants and undertakes that upon written notification from
the Agent, it shall forthwith execute in favor of the Agent the Memorandum of
Deposit and such other relevant documents as the Agent may prescribe to enable
each of the Shareholders to create a fixed charge over their respective portion
of the Shares in favor of the Agent as trustee for the Beneficiaries as
Schedule 12 -
<PAGE>
193
Borrower : Syarikat Telefon Wireless (M) Snd. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
security for the Facility and all expenses incurred in connection with the above
shall be borne solely by the Borrower.
12.2 In connection with the Shareholders' covenant and undertaking stipulated in
Clause 12.1 above, each Shareholder shall deposit the share certificates of
its/his portion of the Shares together with the corresponding duly executed
registrable transfer form thereof with the Agent who shall hold the same as
stakeholder.
13. COVENANTS
13.1 The Borrower and each Shareholder shall obtain, comply with the terms of
and do all that is necessary to maintain in full force and effect all
authorizations, approvals, licenses and consents required in or by the laws and
regulations of Malaysia to enable it lawfully to enter into and perform its
obligations under this Agreement or to ensure the legality, validity,
enforceability or admissibility in evidence in Malaysia.
14. NOTICES
14.1 Each communication to be made hereunder shall be made in writing but,
unless otherwise stated, may be made by telex, facsimile or letter.
14.2 Any communication or document to be made or delivered by one person to
another hereunder shall (unless such person has by fifteen days written notice
to the Agent) specified another address, person or department be made or
delivered to such other person at the address and marked for the attention of
the person and/or the department identified with its signature to the Loan
Agreement or, in the case of a Shareholder, hereunder and shall be deemed to
have been delivered (i) in the case of any communication made by telex, on the
date of transmission with confirmed answerback,(ii) in the case of any
communication made by facsimile, when transmission thereof is confirmed by an
activity report stating the correct number of pages sent and that such
transmission is error free (or equivalent) or (iii) in the case of any
communication made by letter, when left at that address or (as the case may be)
five (5) days after the same has been deposited in the post first class postage
prepaid in an envelope addressed to it at that ,address Provided that any
communication or document to be made or delivered to the Agent shall be
effective only when received by the Agent.
15. ASSIGNMENT/TRANSFER
Schedule 12 -
<PAGE>
194
Borrower : Syarikat Telefon Wireless (M) Snd. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
15.1 The Agent shall be at liberty to assign and transfer this Agreement and the
costs and expenses of the Agent and incidental to such assignment or transfer
shall be paid by the Borrower and any statement therein of the amount due to the
Agent under or by virtue of this Agreement shall be conclusive and binding for
all purposes against the Borrower save for manifest error.
15.2 The Shareholders and the Borrower shall not be entitled to assign or
transfer all or any of its rights, benefits and obligations hereunder without
the prior written consent of the Instructing Group obtained through the Agent.
15.3 Any Lender may, at any time, assign all or any of its rights and benefits
hereunder or transfer in accordance with Clause 15.5 all or any of its rights,
benefits and obligations hereunder to any financial institution provided that at
the same time it assigns or, as the case may be, transfers an equal portion of
its rights, benefits and obligations under the other Loan Documents to the same
financial institution.
15.4 If any Lender assigns all or any of its rights and benefits hereunder in
accordance with Clause 15.3, then, unless and until the assignee has agreed with
the Agent and the other Beneficiaries that it shall be under the same
obligations towards each of them as it would have been under if it had been an
original party hereto as a Lender, the Agent and the other Beneficiaries shall
not be obliged to recognize such assignee as having the rights against each of
them which it would have had if it had been such a party hereto.
15.5 If any Lender wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 15.3, then such transfer may be
effected by the delivery to the Agent of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date specified
in such Transfer Certificate and the fifth business day after (or such earlier
business day endorsed by the Agent on such Transfer Certificate falling on or
after) the date of delivery of such Transfer Certificate to the Agent:
(i) to the extent that in such Transfer Certificate the Lender party thereto
seeks to transfer its rights, benefits and obligations hereunder, the
Shareholders, the Borrower and such Lender shall be released from further
obligations towards one another hereunder and their respective rights
against one another shall be cancelled (such rights, benefits and
obligations being referred to in this Clause 15.5 as "discharged rights and
obligations");
Schedule 12 -
<PAGE>
195
Borrower : Syarikat Telefon Wireless (M) Snd. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(ii) the Shareholders, the Borrower and the Transferee party thereto shall
assume obligations towards one another and/or acquire rights against one
another which differ from such discharged rights and obligations only
insofar as the Shareholders, the Borrower and such Transferee have assumed
and/or acquired the same in place of the Chargor and such Lender; and
(iii)the Agent such Transferee and the other Beneficiaries shall acquire the
same rights and benefits and assume the same obligations between themselves
as they would have acquired and assumed had such Transferee been an
original party hereto as a Lender with the rights, benefits and/or
obligations acquired or assumed by it as a result of such transfer.
16. DISCLOSURE
16.1 The Agent may disclose to any actual or potential assignee, to any person
who may otherwise enter into contractual relations with the Agent and the other
Beneficiaries in relation to this Agreement or to any governmental agency or
authority requiring the same such information about any Shareholder as the Agent
shall consider appropriate.
17. INDEMNITY
17.1 The Shareholders each hereby jointly and severally undertake to indemnify
the Agent and the other Beneficiaries from and against any loss or expense,
including legal
fees, which it may sustain as a consequence of any default by any Shareholder in
the performance of any of the obligations expressed to be assumed by it under
this Agreement.
18. GOVERNING LAW AND JURISDICTION
18.1 This Agreement shall be governed by and construed in accordance with the
laws of Malaysia.
18.2 The Borrower and each Shareholder irrevocably agrees that the Courts of
Malaysia shall have jurisdiction to hear and determine any suit, action or
proceedings and to settle any disputes, which may arise out of or in connection
with this Agreement and, for such purpose, irrevocably submits to the
jurisdiction of such courts.
Schedule 12 -
<PAGE>
196
Borrower : Syarikat Telefon Wireless (M) Snd. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed on the day and in the year first above written.
The execution of this Agreement by )
[ ] )
as a Shareholder is duly effected )
in a manner authorized by its )
constitution under the Seal of )
[ ] )
which said Seal is hereunto duly )
affixed on this day of )
, 1995 )
in the presence of:- )
_______________ Director
_______________ Director/Secretary
Correspondence particulars of [ ]
Address:
Facsimile:
Attention:
Schedule 12 -
<PAGE>
197
Borrower : Syarikat Telefon Wireless (M) Snd. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
The execution of this Agreement by )
[ ] )
as a Shareholder is duly effected in )
a manner authorized by its )
constitution under the Seal of )
[ ] )
which said Seal is hereunto duly )
affixed on this day of )
,1995 )
in the presence of:- )
_______________ Director
_______________ Director/Secretary
Correspondence particulars of [ ]
Address:
Facsimile:
Attention:
Schedule 12 -
<PAGE>
198
Borrower : Syarikat Telefon Wireless (M) Snd. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
The execution of this Agreement by )
[ ] )
as a Shareholder is duly effected in )
a manner authorized by its )
constitution under the Seal of )
[ ] )
which said Seal is hereunto duly )
affixed on this day of )
,1995 )
in the presence of:- )
_______________ Director
_______________ Director/Secretary
Correspondence particulars of [ ]
Address:
Facsimile:
Attention:
Schedule 12 -
<PAGE>
199
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
The execution of this Agreement by )
[ ] )
as a Shareholder is duly effected in )
a manner authorized by its )
constitution under the Seal of )
[ ] )
which said Seal is hereunto duly )
affixed on this day of )
,1995 )
in the presence of:- )
_______________ Director
_______________ Director/Secretary
Correspondence particulars of [ ]
Address:
Facsimile:
Attention:
Schedule 12 -
<PAGE>
200
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
The execution of this Agreement by )
the Borrower, SYARIKAT TELEFON )
WIRELESS (M) SDN. BHD. is duly )
effected in a manner authorized by )
its constitution under the Seal )
of the Borrower, SYARIKAT TELEFON )
WIRELESS (M) SDN. BHD. which said )
Seal is hereunto duly affixed on )
this day of , 199 )
in the presence of:- )
_______________ Director
_______________ Director/Secretary
Schedule 12 -
<PAGE>
201
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
THE AGENT
SIGNED by )
)
and )
)
for and on behalf of )
PERMATA MERCHANT BANK ) _______________
BERHAD as Agent on the )
day of ,1995 )
_______________
Schedule 12 -
<PAGE>
202
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
APPENDIX A
DETAILS OF SUBORDINATED LIABILITIES
EXISTING AS AT THE DATE OF THIS AGREEMENT
ITEM 1
Subordinated Liabilities owed to the Shareholders:-
NAME AMOUNT OF SUBORDINATED LIABILITIES
ITEM 2
Shareholdings of the Shareholders:-
NAME SHAREHOLDINGS NO. OF SHARES
Schedule 12 -
<PAGE>
203
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
APPENDIX B
MEMORANDUM OF DEPOSIT OF STOCK AND
NON-MARKETABLE SECURITIES
To: PERMATA MERCHANT BANK BERHAD
27th Floor, Menara Boustead
No. 69 Jalan Paja Chulan
50200 Kuala Lumpur
I/We [ ] of [ ] refer to the loan agreement dated
the day of 1995 (the "Loan Agreement") entered into between:-
(1) SYARIKAT TELEFON WIRELESS (M) SDN. BHD. (the "Borrower");
(2) PERMATA MERCHANT BANK BERHAD (the "Agent");
(3) (i) [ ]; and
(ii) [ ],
(collectively the "Lenders"),
pursuant to which the Lenders have subject to the terms and conditions therein
contained granted and made available to the Borrower a term loan facility of
Ringgit Malaysia Ninety One Million (RM91,000,000) only (the "Facility").
I/We also refer to the shareholder's agreement dated the day of ,1995
(the "Shareholders' Agreement") entered into between (1) myself/ourselves and
the other shareholders of the Borrower (together the "Shareholders") (2) the
Borrower and (3) the Agent, wherein the Shareholders have agreed that in
consideration of the Lenders making available the Facility to the Borrower at
the Shareholders' request, each of the Shareholders shall upon written
notification from the Agent create a fixed charge over such shares in the
Borrower owed by each of the Shareholders respectively in favor of the Agent as
agent for the Beneficiaries (as hereinafter defined) as security for the
Facility.
In consideration of the above premises and [further consideration to be
specified at the time of execution], the Chargor has executed this
Schedule 12 -
<PAGE>
204
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Memorandum of Deposit in favor of the Agent as trustee for the Beneficiaries
upon the following terms and conditions.
1. DEFINITIONS
1.1 Words and expressions defined in the Loan Agreement bear, except where the
context otherwise requires or as otherwise specified, the same meanings
when used herein.
1.2 The following words and expressions, when used in this Memorandum bear the
meanings respectively set opposite them:-
Additional Interest the additional interest payable by the Borrower
pursuant to Clause 12.5(a) of the Loan Agreement
due to failure to pay any Indebtedness when so
payable;
Actual Security Value the Total Value of the Mortgaged Securities, or,
where the Mortgaged Securities are denominated in
a currency other than Ringgit Malaysia, the
equivalent in Ringgit Malaysia for the time being
as determined by the Agent, of such Total Value;
Additional Security such further Qualifying Securities as are required
so that the Actual Security Value will, following
the making of the relative Advance, as the case
may be, equal or exceed the Required Security
Value and thereafter such Qualifying Securities
as, by virtue of Clause 6.1 below, are for the
time being subject to this Memorandum and includes
all and any securities, rights, moneys and
property whatsoever which may at any time after
the date hereof be derived from, accrued on or
offered in respect of any Additional Securities or
any other Qualifying Securities charged in
substitution therefor pursuant hereto then in
existence, whether by way of redemption, exchange,
conversion, rights, bonus, capital reorganization
or otherwise howsoever;
Schedule 12 -
<PAGE>
205
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Advance the amount of each drawdown made or to be made to
the Borrower pursuant to and under the Facility;
Beneficiaries the Arranger, the Agent and the Lenders;
Chargor [ ] of
[ ] and includes its
representatives, successors-in-title;
Event of Default any of the events or states of affairs specified
in clause 13.1 in the Loan Agreement;
Indebtedness at any time, the aggregate of all sums advanced
from time to time by the Lenders to the Borrower
together with interest thereon and all other
monies payable to the Beneficiaries or any of them
pursuant to, upon and under the Loan Documents
(whether in respect of principal, interest,
Additional Interest, fees, commission, costs,
expenses, indemnity or otherwise);
Loan Agreement the loan agreement dated the day of
, 1995 between (1) the Borrower; (2) the Agent;
and (3) the Lenders and includes any subsequent
renewals and variations thereof permitted by the
Agent and the Lenders;
Mortgaged Securities the Originally Charged Shares and the Additional
Security, as well as any other Qualifying
Securities which are charged in addition to or in
substitution for any Mortgaged Securities for the
time being pursuant hereto and includes all and
any securities rights moneys and property
whatsoever which may at any time after the date
hereof be derived from,
Schedule 12 -
<PAGE>
206
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
accrued on or be offered in respect of the
Originally Charged Shares and Additional Security
so charged or any other Mortgaged Securities then
in existence, whether by way of redemption,
exchange, conversion, rights, bonus, capital
reorganization or otherwise howsoever;
Originally Charged
Shares those Shares as are charged pursuant to this
Memorandum which are more particularly described
in the Schedule hereto;
Power of Attorney the Power of Attorney granted by the Chargor to
the Agent pursuant to Clause 3 hereof;
Qualifying Securities securities acceptable to the Agent, which are in
the absolute beneficial ownership of the Chargor,
free from any Security Interest;
Required Security Value the required security value as may be determined
by the Lenders from time to time at their absolute
discretion;
Security Interest any mortgage, charge, pledge, lien, right of set-
off or any security interests howsoever created or
arising;
Total Value the total value of the Mortgaged Securities as
determined by the Agent at their absolute
discretion from time to time.
1.3 The headings in this Memorandum are inserted for convenience only and shall
be ignored in construing the provisions of this Memorandum.
1.4 Words denoting the singular includes the plural number and vice versa.
1.5 If the name of the Chargor hereinbefore inserted is that of a limited
company or other corporation any of the provisions herein
Schedule 12 -
<PAGE>
207
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
contained which are primarily and literally applicable to the case of a
single and individual person only shall be construed and take effect so as
to give the Agent hereunder a security for the money owing from that
limited company or corporation as identical or analogous as may be with or
to that which would have been given for the money owing from a single
individual if the Chargor had been a single individual and any money shall
be deemed to be so owing notwithstanding any defect informality or
insufficiency in the borrowing powers of the Chargor or in the exercise
thereof which might be defense as between the Chargor and the Agent.
1.6 References to clauses, sub-clauses and paragraphs are to be construed as
references to clauses, sub-clauses and paragraphs of this Memorandum.
1.7 References to any statute or legislation includes any statutory amendment
or re-enactment thereof.
2. CHARGE
2.1 As a continuing security for the payment of the Indebtedness and the
performance by the Borrower of its obligations under the relevant Loan
Documents and the Chargor of its obligations under this Memorandum, the
Chargor as beneficial owner hereby charges by way of mortgage to the Agent
all its rights, title and interest in and to:-
(a) the Originally Charged Shares; and
(b) the Additional Security,
as well as any other Qualifying Securities from time to time charged in
addition to and or in substitution for any of the securities referred to in
(a) and (b) above.
2.2 The Chargor shall deliver or procure that there are delivered to or to
order of the Agent all certificates or other documents of title in relation
to the Mortgaged Securities together with duly executed blank transfers in
respect thereof.
2.3 The charge hereby created shall be in addition to, and shall not merge
with, or in any way prejudice, any other Security Interest or right which
the Agent and the other Beneficiaries may now, or at any time hereafter,
hold or have, as against the Chargor or any other person or property, in
respect of the Indebtedness,
Schedule 12 -
<PAGE>
208
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
including, without limitation, any liens to which the Agent may become
entitled on the certificates or other documents of title relating to any of
the Mortgaged Securities.
3. POWER OF ATTORNEY
3.1 In consideration of the aforesaid premises the Chargor hereby irrevocably
and by way of security for the payment by the Chargor of the Indebtedness
and the performance by the Borrower of its obligations under the relevant
Loan Documents and the Chargor of its obligation under this Memorandum
appoints the Agent or any of its directors or any of its officers (from
time to time duly appointed or authorized in writing by the Agent for the
purposes herein and the certificate of the Agent of such appointment shall
be final and conclusive) to be the Chargor's attorney or attorneys
(hereinafter collectively called "the Attorney") for or in the name of the
Chargor or through the Chargor's nominee or otherwise in the name of the
Chargor to do and execute the following acts and deeds or any of them as
and when the Attorney shall think fit:-
(a) to demand, sue for and receive from any person, registered company,
corporation, government or other body politic all dividends,
interests, bonuses or any other sums that may become due to the
Chargor in respect of any of the Mortgaged Securities and likewise any
capital sum represented by or complied in any of the Mortgaged
Securities as and when the same shall respectively be payable or
repayable;
(b) for any such purpose to sign, endorse and execute all receipts,
dividend and interest warrants, cheques, releases, discharges,
reconveyances, or other deeds or documents whatsoever that may be
necessary or usual in the circumstances;
(c) to attend, vote at and otherwise take part in all meetings held in
connection with any company or corporation in relation to any of the
Mortgaged Securities and to sign proxies for the purpose of voting
thereat or for any other purpose connected therewith as freely as the
Chargor could do;
(d) out of any of the money of the Chargor in the Attorney's hands or
under the control of the Attorney to pay all calls that may lawfully
be made upon the Chargor or other expenses
Schedule 12 -
<PAGE>
209
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
that may be incurred in relation to any of the Mortgaged Securities
and to give security for the payment of the same;
(e) to receive all notices, reports, accounts, circulars and other
documents which are sent to the registered holders of the Mortgaged
Securities;
(f) to receive or accept service of, or agree to waive, all or any notices
or to agree to accept short notice for and to attend all or any
meetings or class meetings of the registered holders of the Mortgaged
Securities and exercise all voting and other rights and powers which
may at any time be exercisable in respect thereof at any such
meetings;
(g) to transfer or procure the transfer of all or any of the Mortgaged
Securities into the name of the Attorney or its nominee or nominees or
the name of any purchaser of the Mortgaged Securities (and for such
purpose to complete, make and/or execute any form or forms of transfer
in respect of any thereof) and to execute and deliver all other deeds
or documents and to do all acts and things which the Attorney may
consider necessary or advisable to perfect or to give proper effect to
the intent and purpose of this Memorandum, or to procure the
registration of any transfer of the Mortgaged Securities in the name
of any such transferee;
(h) to sell, transfer, exchange or otherwise dispose of all or any part of
the title to and interest in and any rights attaching to all or any of
the Mortgaged Securities for such consideration (which may comprise or
include shares or debentures) and upon such terms and generally in
such manner as the Attorney may in its absolute discretion think fit
and for this purpose to enter into any contract for such sale or
disposition on such terms (including the giving of such warranties and
indemnities) and subject to such conditions as the Attorney shall in
its absolute discretion think fit;
(i) to receive or authorize the receipt of the consideration for such
sale, transfer, exchange or disposition as is referred to in paragraph
(h) above and to apply any proceeds thereof in or towards the
discharge of the Indebtedness in the manner stipulated in this
Memorandum;
(j) to execute and deliver all and any other or further instruments of
charge and other documents that the Chargor is at any time and from
time to time obliged to execute
Schedule 12 -
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210
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
pursuant to this Memorandum, and to effect all such registrations and
do all such other things as may be necessary or as may seem to the
Attorney advisable in order properly to give effect thereto, and to
execute all such documents and to do all such other acts and things in
relation to all or any stock or shares the subject of any such further
or other charges as the Attorney is by this instrument entitled or
empowered to execute or do in relation to this Memorandum;
(k) to assent (if it seems to the Attorney necessary or desirable) to any
arrangement modifying the Chargor's rights;
(l) generally to exercise all rights and privileges and perform all duties
which now or hereafter may appertain to the Chargor in relation to any
of the Mortgaged Securities;
(m) to cause this Power of Attorney to be registered at the registry of
the High Court of Malaya and in the books of any company or
corporation or elsewhere as may be necessary or desirable;
(n) to disclose to any person or party who may be concerned with the
exercise of the powers hereby conferred, including any purchaser or
potential purchaser of any of the Mortgaged Securities the terms of
this Memorandum and such other documents or information as may be
related thereto or to the exercise of the Agent's powers hereunder or
to the Mortgaged Securities where such disclosure is deemed by the
Attorney to be necessary for or expedient to the exercise of the
powers hereunder;
(o) to appoint and at the Attorney's discretion to remove from time to
time any substitute for or agent under the Attorney in connection with
any of the purposes aforesaid upon such terms as the Attorney shall
think fit.
3.2 The Chargor hereby declares that this Power of Attorney shall be
irrevocable so long as this Memorandum shall remain in effect or so long as
the Borrower shall remain under any liability (contingent or otherwise)
under the Loan Documents and or in respect of the Facility.
3.3 The Chargor hereby further declares that the Attorney shall not be held
responsible or liable to the Chargor for any loss or
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211
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
damage howsoever and whatsoever arising as a result of any act neglect
omission of the Attorney arising out of the exercise of the powers granted
to the Attorney herein (save and except for any loss or damage caused by
the gross negligence of the Attorney) and the Chargor shall keep the
Attorney indemnified against all costs expenses and charges which the
Attorney may incur in the exercise of the powers aforesaid and the
provisions of this paragraph shall continue in force notwithstanding the
discharge by the Chargor of all its obligations under this Memorandum.
3.4 The Chargor hereby further declares that all and every receipt(s), deed(s),
matter(s) and thing(s) which shall be by the Attorney given, made, executed
or done for the aforesaid purposes shall be as good, valid and effectual to
all intents and purposes whatsoever as if the same had been signed, sealed,
delivered, given or made or done by the Chargor itself.
3.5 The Chargor hereby undertakes at all times to ratify whatsoever the
Attorney shall lawfully do or cause to be done in or concerning the
premises by virtue of this Power of Attorney.
4. CALLS
The Chargor shall forthwith make payment of all calls or other amounts which may
be or become due in respect of the Mortgaged Securities whether or not the
Chargor is the registered holder. The Agent shall not under any circumstance be
liable for such calls or other payments whether or not the Agent or its nominee
is a registered holder of any or all of such Mortgaged Securities. If the
Chargor shall fail to make any such payment, the Agent may make payment of the
amounts of any such calls or other amounts on behalf of the Chargor or such
registered holder. In such event, the Chargor shall forthwith on demand
indemnify the Agent against each and every such payment, together with interest
thereon (as well after as before judgment) from the date of payment by the Agent
until the date of repayment by the Chargor under this indemnity at the rate or
rates specified in the Loan Agreement.
5. EXERCISE OF RIGHTS
5.1 Unless an Event of Default shall have occurred and be continuing, the
Chargor shall be entitled to receive all income derived from the Mortgaged
Securities and to exercise all rights attaching to any part thereof as he
may think fit, but shall deliver to the
Schedule 12 -
<PAGE>
212
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Agent forthwith upon receipt copies of all notices, reports, accounts and
circulars issued to the registered holders of the Mortgaged Securities
(unless the Agent or its nominee is the registered holder).
5.2 The Chargor will procure that, following the occurrence of any Event of
Default and whilst any Event of Default is continuing, all income derived
from the Mortgaged Securities shall be paid to or to the order of the
Agent, (and if received by the Chargor, the Chargor shall forthwith pay the
same to the Agent) and any such income received by the Agent shall be
retained by the Agent in a cash collateral deposit account maintained for
that purpose until:-
(a) the Event of Default shall have been remedied to the satisfaction of
the Agent whereupon any such income shall subject to no other Event of
Default having occurred and be continuing and if the Agent and the
Lenders so agrees, be released to the Chargor;
(b) payments in full by the Chargor of the Indebtedness; or
(c) recall and or termination of the Facility pursuant to the terms of the
Loan Documents.
5.3 The security constituted by this Memorandum and any further or other
security constituted pursuant hereto, shall become enforceable immediately
on the occurrence of any Event of Default, and the Agent shall be entitled
then, and at any time thereafter, and without prior notice to the Chargor
to sell or otherwise dispose of all the Chargor's title to and interest in
the Mortgaged Securities for such consideration (which may comprise or
include shares or debentures), upon such terms and generally in such manner
as the Agent may, in its absolute discretion think fit and so that the
Agent shall be entitled as against the Chargor, to retain and apply the
proceeds of any sale or disposal and all and any amounts then standing to
the credit of any cash collateral deposit account pursuant to Clause 5.2
above, in or towards the discharge of the Indebtedness as the same fall
due, in such manner as the Agent may in its absolute discretion think fit
(and for that purpose to effect any currency conversion that the Agent may
consider appropriate) with any surplus being paid to the Chargor or other
person entitled thereto. The Agent shall not be liable for any loss
howsoever arising out of such sale.
Schedule 12 -
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
5.4 The rights, powers and authorities of the Agent pursuant to the Power of
Attorney hereunder shall be in addition to, and shall not in any way
prejudice or affect the rights and powers of the Agent under this
Memorandum; notwithstanding any other provision herein contained the Agent
and or any substitute or agent of the Agent under the said Power of
Attorney may at any time prior to the discharge of all moneys hereby
secured without notice to the Chargor transfer the Mortgaged Securities
into the name of the Agent or its nominees and the Chargor shall upon
demand and at the Chargor's cost execute and do all such transfers acts
assurances or things as the Agent may require for assuring and vesting the
full legal title in the Mortgaged Securities or any of them to and in the
name(s) of the Agent or its nominees PROVIDED ALWAYS that save as aforesaid
and as is otherwise stated herein neither the Agent nor any of its
substitutes or agents under the Power of Attorney will exercise any of the
other rights, powers or authorities conferred by the said Power of Attorney
(other than powers of substitution and appointment of agents and the powers
conferred in paragraph (o) of Clause 3.1 of the said Power of Attorney)
unless and until an Event of Default has occurred, whereupon and whereafter
the Agent (or its substitute or agent) shall be entitled to exercise all
and any such rights, powers and authorities as it may in its absolute
discretion think fit.
6. FURTHER SECURITY
6.1 If at any time any Mortgaged Security shall cease to be a Qualifying
Security or the Agent shall determine the Actual Security Value is less
than the Required Security Value then the Agent may, at any time whilst
such circumstances are continuing, require the Chargor to provide to the
Agent further and other security in the form of further Qualifying
Securities, and to execute and deliver to the Agent or procure the
execution and delivery to the Agent by any nominee of such instrument or
instruments of charge in favor of the Agent in relation thereto, in such
form and on such terms, as the Agent may require, so that such shares and
securities become part of the Additional Securities.
6.2 In the event of the Agent requiring further security pursuant to Clause 6.1
above, the Chargor will do all such acts and things, and execute all such
further or other documents, as may be necessary or as the Agent may require
in order to constitute, render enforceable or perfect such security and to
protect the rights of the Agent in relation thereto, and in particular
will,
Schedule 12 -
<PAGE>
214
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
within fourteen (14) days of notice of such requirement, identify,
and offer to the Agent further Qualifying Securities as aforesaid to be
charged, having an aggregate Actual Security Value which is not less than
the difference between the Required Security Value and the Actual Security
Value of the existing Mortgaged Securities already charged and execute all
and any instruments of charge and other documents relating thereto as
required and forthwith upon being so requested by the Agent.
6.3 Any securities which cease for any reason to be acceptable to the Agent
shall cease to be Qualifying Securities.
6.4 Any determination of the Agent as to the Actual Security Value of, or
attributable to, all or any part of the Mortgaged Securities and any
further security provided (or proposed to be provided) pursuant to this
Clause 6 shall, in the absence of manifest error, be conclusive.
7. REASSIGNMENT
7.1 In the event of any Mortgaged Securities ceasing to be Qualifying
Securities (the "Disqualified Securities") the Agent shall, upon the
provision of other Qualifying Securities in accordance with Clause 6 having
in the aggregate an Actual Security Value not less than the value, so
assessed, of the Disqualified Securities on the last day on which they are
accepted by the Agent, release the Disqualified Securities from this
Memorandum.
7.2 Upon payment in full of the Indebtedness in accordance with the terms
hereof and of the Loan Documents and upon there being no further moneys to
be lent by the Lenders pursuant to the Loan Agreement the Agent will, at
the request and cost of the Chargor, release the Mortgaged Securities then
charged hereunder from the charge hereby created and transfer the same to
the Chargor or as the Chargor may direct in writing.
8. RIGHTS TO RESORT TO OTHER SECURITIES
The Agent shall at any time be at liberty (without being bound to do so) to
resort for the benefit of the Beneficiaries to any other means of payment at any
time and in any order as it may think fit without thereby diminishing the
Chargor's liability hereunder and the Agent may exercise its rights hereunder
for the payment of the amount hereby intended to be secured either after
resorting to other means of
Schedule 12 -
<PAGE>
215
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
payment or at any time notwithstanding that other means of payment have not been
resorted to.
9. REPRESENTATIONS AND WARRANTIES
9.1 In the event the Chargor is a corporation the Chargor hereby represents and
warrants to and undertakes with the Agent as follows
(a) the Chargor is duly incorporated with limited liability and validly
existing under the laws of Malaysia;
(b) the Chargor is an exempt private company and by virtue thereof, the
creation of this Memorandum has not contravened Section 133A of the
Companies Act, 1965 in any way;
(c) the documents which contain or establish the Chargor's constitution
incorporate provisions which authorize, and all necessary action has
been taken to authorize, and all authorizations of any governmental or
other authority have been duly and unconditionally obtained and are in
full force and effect which are required to authorize, the Chargor to
own the Mortgaged Securities, carry on its business as they are now
being conducted, and sign and deliver, and perform the transactions
contemplated in this Memorandum and the Power of Attorney and to
enable the Agent to exercise the rights, powers and authorities hereby
and thereby vested in the Agent;
(d) it is in the interest of the Chargor as a related company to assist
the Chargor in the manner herein provided;
(e) neither the signing and delivery of this Memorandum and the Power of
Attorney nor the performance of any of the transactions contemplated
in them will :-
(i) contravene or constitute a default under any provision contained
in any agreement, instrument, law, judgment, order, license,
permit or consent by which the Chargor or any of its assets is
bound or affected; or
(ii) cause any limitation on its powers whether imposed by or
contained in any document which contains or establishes its
constitution or in any law, order, judgment, agreement,
instrument or otherwise, to be executed;
Schedule 12 -
<PAGE>
216
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(iii) result in the creation or imposition of any obligation to
create or impose, any mortgage, lien, pledge or charge on any of
the Chargor's assets pursuant to the provisions of any mortgage,
contract or other undertaking or instrument;
(f) this Memorandum and the Power of Attorney when signed will constitute
the legal, valid and binding obligations of the Chargor in accordance
with their terms;
(g) the Chargor is the beneficial owner of and has title to the Mortgaged
Securities;
(h) the property and rights of the Chargor to the Mortgaged Securities is
not affected by any Security Interest, and the Chargor is not a party
to nor is it nor any of the property and rights hereby mortgaged bound
by, any order, agreement or instrument under which the Chargor is, or
in certain events may be, required to create, assume or permit to
arise any Security Interest;
(i) no event has occurred which constitutes, or which with the giving of
notice and/or the lapse of time and/or a relevant determination would
constitute, a contravention of, or default under, any agreement or
instrument by which the Chargor or any of its assets is bound or
affected, being a contravention or default which might either have an
adverse effect on the business, assets or condition of the Chargor or
adversely affect its ability to observe or perform its obligation
under this Memorandum and the Power of Attorney;
(j) no litigation, arbitration or administrative proceeding or claim which
might by itself or together with any other such proceedings or claims
either have an adverse effect on any of the Chargor's business, assets
or condition or adversely affect its ability to observe or perform its
obligations under this Memorandum and the Power of Attorney is
presently in progress or pending or, to the best of the knowledge,
information and belief of the Chargor, threatened against the Chargor
or any of its assets;
(k) no extraordinary circumstance or change of law or other government
action shall have occurred which shall make it improbable that the
business of the Chargor can be carried out or that the Chargor will be
able to observe and perform
Schedule 12 -
<PAGE>
217
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
the covenants and obligations on its part to be performed and observed
under this Memorandum and the Power of Attorney;
(l) no violation of any provisions of legislation, Court orders, judgment
and others have been committed by the Chargor;
(m) no information furnished by the Chargor in connection with this
Memorandum contains any untrue statement or omits to state any fact
the omission of which makes the statements therein, in the light of
the circumstances under which they were made, misleading, and all
expressions of expectation, intention, belief and opinion contained
therein were honestly made on reasonable grounds after due and careful
inquiry by the Chargor;
(n) the Chargor has fully disclosed in writing to the Agent all facts
relating to the Chargor which the Chargor knows or should reasonably
know and which are material for disclosure to the Agent in the context
of this Memorandum and the Power of Attorney.
9.2 In the event the Chargor is an individual the Chargor hereby represents and
warrants to and undertakes with the Agent as follows:-
(a) That neither the signing and delivery of this Memorandum nor the
performance of any of the transactions contemplated in them will:-
(i) contravene or constitute a default under any provision contained
in any agreement, instrument, law, judgment, order, license,
permit or consent by which the Chargor or any of his assets is
bound or affected; or
(ii) result in the creation or imposition of any obligation to create
or impose, any mortgage, lien, pledge or charge on any of the
Chargor's assets pursuant to the provisions of any mortgage,
contract or other undertaking or instrument;
(b) no extraordinary circumstance or change of law or other government
action shall have occurred which shall make it improbable that the
business of the Chargor can be carried out or that the Chargor will be
able to observe and perform
Schedule 12 -
<PAGE>
218
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
the covenants and obligations on his part to be performed and observed
under this Memorandum;
(c) that this Memorandum constitute the legal, valid and binding
obligations of the Chargor enforceable in accordance with their terms
and the obligations of the Chargor in respect of the payment of
principal, interest, fees and other expenses and charges do not
contravene any legislation or regulation binding on the Chargor;
(d) that the Chargor is not in default this Memorandum or any other
contract or agreement binding on the Chargor or to which he is
subject;
(e) that there is no order of any Court or other governmental agency or
any provision of any existing agreement binding on the Chargor or to
which he is subject which would be contravened or breached by the
execution, delivery and performance of this Memorandum;
(f) no litigation, arbitration or administrative proceeding or claim which
might by itself or together with any other such proceedings or claims
either have a material adverse effect on his business, assets or
condition or materially and adversely affect his ability to observe or
perform his obligations under this Memorandum is presently in progress
or pending or, to the best of the knowledge, information and belief of
the Chargor, threatened against the Chargor or any of his assets;
(i) all necessary returns have been delivered by or on behalf of the
Chargor to the relevant taxation authorities and the Chargor is not in
default in the payment of any taxes of a material amount, and no
material claim is being asserted with respect to taxes which has not
been disclosed in the financial statements submitted to the Agent;
(j) that the Chargor has fully disclosed in writing to the Agent all facts
relating to the Chargor which the Chargor knows or should reasonably
know and which are material for disclosure to the Agent in the context
of this Memorandum;
(k) that no lawsuits or investigations by governmental agency, body or
other regulatory authority are pending or to be instituted against the
Chargor;
Schedule 12 -
<PAGE>
219
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(l) that no violation of any provision of legislation court orders and
judgment has been committed by the Chargor.
9.3 The Chargor acknowledges that the Beneficiaries have, at the request of the
Chargor accepted this Memorandum and the Power of Attorney on the basis of,
and in full reliance on, the aforesaid representations and warranties,
which will be correct and complied with in all material respects so long
as, this Memorandum, the Power of Attorney and the other Loan Documents
shall remain in force.
10. MISCELLANEOUS
10.1 No provision of any law restricting a mortgagee's or chargee's right of
consolidation of mortgages shall apply to this Memorandum or to any further
or other charge created pursuant hereto.
10.2 The Chargor shall and hereby undertakes to fully indemnify the Agent and
the other Beneficiaries from and against any expense, loss, damage or
liability (as to the amount of which the certificate of the Agent and the
other Beneficiaries shall, in the absence of manifest error, be conclusive)
which it may incur as the consequence of the occurrence of an Event of
Default or otherwise in connection with this Memorandum and/or other Loan
Documents. Without prejudice to its generality, the foregoing indemnity
shall extend to any interest, fees and other sums whatsoever paid or
payable on account of any funds borrowed in order to carry any unpaid
amount and to any loss (including loss of profit), premium, penalty or
expense which may be incurred in liquidating or employing deposits from
third parties.
10.3 (a) Every notice or demand under this Memorandum shall be in writing but
may be given or made by telex, telegram, facsimile or cable.
(b) Any notice required to be given by the Chargor shall, if given by
telex, be subsequently confirmed by letter posted or delivered as soon
as practicable thereafter.
(c) Subject as aforesaid any notice or certificate required to be given by
the Chargor to the Agent hereunder shall be in writing and shall be
addressed to the Agent at 27th Floor, Menara Boustead, No. 69, Jalan
Raja Chulan, 50200 Kuala Lumpur or at such other address as may from
time to time be notified by the Agent to the Chargor for that purpose.
Any
Schedule 12 -
<PAGE>
220
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
notice or certificate required to be given to the Chargor hereunder
shall be given by telex, facsimile, telegram, cable or letter
addressed to the Chargor at its address hereinbefore specified or such
other address as may from time to time be notified by the Chargor to
the Agent for the purpose.
(d) Any notice or certificate delivered personally shall be deemed to be
given at the time of such delivery. Any notice or certificate
dispatched by first class inland letter shall be deemed to have been
given 48 hours after posting. Any notice or certificate transmitted
by telex or facsimile shall be deemed to have been given at the time
of transmission and any notice or certificate sent by cable shall be
deemed to have been given 24 hours after dispatch. All notices or
certificates given hereunder by telex, facsimile, telegram or cable
shall be subsequently confirmed by letter posted or delivered as soon
as practicable thereafter.
10.4 The security liabilities and or obligations under this Memorandum shall
continue to be valid and binding for all purposes whatsoever
notwithstanding any change by amalgamation reconstruction or otherwise
which may be made in the constitution of the Agent and it is expressly
declared that no change of any sort whatsoever in relation to or affecting
the Chargor shall in any way affect the security, liabilities and or
obligations created hereunder.
10.5 This Memorandum shall be governed by and construed in accordance with the
laws of Malaysia and the service of any writ or summons or any legal
process in respect of any such action or proceeding may be effected on the
Chargor by the Agent by forwarding a copy of the writ or summons statement
of claim or other legal process by prepaid registered post to its address
as indicated herein as the case may be.
10.6 Any term condition stipulation provision covenant or undertaking of @s
instrument which is illegal, prohibited or unenforceable in any
jurisdiction shall as to such jurisdiction be ineffective to the extent of
such illegality, voidness, prohibition or unenforceability without
invalidating the remaining provisions hereof and any such illegality,
voidness, prohibition or unenforceability in any jurisdiction shall not
invalidate or render illegal, void or unenforceable any such term condition
Schedule 12 -
<PAGE>
221
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
stipulation provision covenant or undertaking in any other jurisdiction.
10.7 This Memorandum is expressly intended to be and shall be a continuing
security for all moneys whatsoever now or from time to time owing by the
Chargor notwithstanding that the Chargor may at any time or times cease to
be indebted to the Agent and the other Beneficiaries for any period or
periods and notwithstanding any settlement of account or accounts.
10.8 No failure to exercise nor any delay in exercising on the part of the
Agent and the other Beneficiaries any right or remedy hereunder shall
operate as a waiver thereof nor shall any single or partial exercise of
any right or remedy prevent any further or other exercise hereof or the
exercise of any action right or remedy.
10.9 This Memorandum shall be binding on the representatives successors-in-
title of the Chargor and the successors-in-title and assigns of the Agent.
10.10 The terms of the Loan Agreement shall where the context so permits and
unless repugnant to the context, apply to this Memorandum as if set out
herein.
11. PRINCIPAL/SUBSIDIARY INSTRUMENTS
11.1 It is hereby agreed and declared that this Memorandum and the Loan
Agreement are instruments employed in one transaction namely 'to secure
the Indebtedness in an aggregate sum of Ringgit Malaysia Ninety One
Million (P-M9 1,000,000) for principal only together with interest thereon
and all other monies payable under the Loan Agreement and the Security
Documents to the Agent and the Lenders and for the purpose of Section 4(3)
of the Stamp Act 1949, the Loan Agreement shall be deemed to be the
principal instrument and this Memorandum shall deemed to be the subsidiary
instrument.
Schedule 12 -
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222
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
IN WITNESS WHEREOF the Chargor has executed this Memorandum this day of
,1995.
*[The Common Seal of the abovenamed )
Chargor, )
was hereunto duly affixed in )
accordance with its Constitution )
in the presence of:- )
Director Director/Secretary
I, an Advocate and Solicitor of the High
Court in Malaya practicing at Kuala Lumpur hereby certify that on this day
of , 1995 the Common Seal of [
], was duly affixed to the above written instrument in my presence in accordance
with the regulations of the said Company.
Witness my hand,
_______________]
or
Schedule 12 -
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223
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
*[SIGNED by )
the abovenamed Chargor )
[ ] )
in the presence of:- )
I, an Advocate and Solicitor of the High
Court in Malaya practicing at Kuala Lumpur hereby certify that the signature of
the donor abovenamed was written in my presence on this day of
,199 and is, to my own personal knowledge, the true signature of who has
acknowledged to me that he/she is of full age and that he/she has voluntarily
executed this instrument.
Witness my hand
_______________
*Delete as appropriate
Schedule 12 -
<PAGE>
224
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
THE SCHEDULE HEREINBEFORE REFERRED TO
THE ORIGINALLY CHARGED SHARES
DESCRIPTION OF SECURITY SHARE CERTIFICATE NO. NO. OF SHARES
Schedule 12 -
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Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 13
TRANSFER CERTIFICATE
To: PERMATA MERCHANT BANK BERHAD
relating to the agreement (as from time to time amended, varied, novated or
supplemented, the "Loan Agreement") dated [ ] , 1995 whereby a term
loan facility was made available to SYARIKAT TELEFON WIRELESS (M) SDN. BHD. as
borrower by a group of lenders on whose behalf PERMATA MERCHANT BANK BERHAD
acted as agent in connection therewith.
1. Terms defined in the Loan Agreement shall, subject to any contrary
indication, have the same meanings herein. The terms Lender, Transferee,
Lender's Participation and Amount Transferred are defined in the schedule
hereto.
2. The Lender confirms that the Lender's Participation is an accurate
summary of its participation in the Loan Agreement and requests the Transferee
to accept and procure the transfer to the Transferee of the portion(s) of the
Lender's Participation as set forth in paragraph 5 of the Schedule hereto by
counter-signing and delivering this Transfer .Certificate to the Agent at its
address for the service of notices specified in the Loan Agreement.
3. The Transferee hereby requests the Agent to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the purposes of
Clause 19 of the Loan Agreement so as to take effect in accordance with the
terms thereof on the Transfer Date or on such later date as may be determined in
accordance with the terms thereof.
4. The Transferee confirms that it has received a copy of each of the Loan
Documents together with such other information as it has required in Connection
with this transaction and that it has not relied and will not hereafter rely on
the Lender to check or inquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any such information and
further agrees that it has not relied and will not rely on the Lender to assess
or keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of the Borrower.
Schedule 13 -
<PAGE>
226
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
5. The Transferee hereby undertakes with the Lender and each of the other
parties to the Loan Documents that it will perform in accordance with their
terms all those obligations which by the terms of the Loan Documents will be
assumed by it after delivery of this Transfer Certificate to the Agent and
satisfaction of the conditions (if any) subject to which this Transfer
Certificate is expressed to take effect.
6. The Lender makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness, adequacy
or enforceability of the Loan Documents or any document relating thereto and
assumes no responsibility for the financial condition of the Borrower, any Third
Party or any other person or for the performance and observance by the Borrower
or any Third Party or any other person of any of its obligations under the Loan
Documents or any document relating thereto and any and all such conditions and
warranties, whether express or implied by law or otherwise, are hereby excluded.
7. The Lender hereby gives notice that nothing herein or in the Loan
Documents (or any document relating thereto) shall oblige the Lender to (i)
accept a re-transfer from the Transferee of the whole or any part of its rights,
benefits and/or obligations under the Loan Documents transferred pursuant hereto
or (ii) support any losses directly or indirectly sustained or incurred by the
Transferee for any reason whatsoever including, without limitation, the non-
performance by the Borrower, any Third Party or any other party to the Loan
Documents of its obligations under any document. The Transferee hereby
acknowledges the absence of any such obligation as is referred to in (i) or (ii)
above.
8. The Transferee confirms that it is an entity falling within the
description of Section 38(1B)(c) of the Companies Act, 1965, of Malaysia.
9. This Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with the laws of
Malaysia.
THE SCHEDULE
1 Lender:
2. Transferee:
Schedule 13 -
<PAGE>
227
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
3. Transfer Date:
4. Lender's Participation:
COMMITMENT Portion of Loan*
[specify Commitment of [specify Lender's portion of the
the Lender Loan]
5. Amount Transferred:
PORTION OF COMMITMENT PORTION OF LOAN
TRANSFERRED TRANSFERRED*
[specify percentage of [specify amount in dollars
the Commitment corresponding to percentage
transferred] of Lender's portion of the Loan
transferred]
6. Adjusted Commitments under the Loan Agreement after Transfer:-
Lender :
Transferee :
[Transferor Lender] [Transferee Lender]
By: By:
Date: Date:
*Complete only if the Loan or such portion thereof has been drawn.
Schedule 13 -
<PAGE>
228
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
ADMINISTRATIVE DETAILS OF TRANSFEREE
Address:
Contact Name:
Account for Payments:
Telex:
Facsimile:
Telephone:
Schedule 13 -
<PAGE>
229
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE 14
MEMORANDUM OF PLEDGE
THIS MEMORANDUM OF PLEDGE is made the day of
,199 Between SYARIKAT TELEFON WIRELESS (M) SDN. BHD., a company incorporated in
Malaysia and having its registered office at 2nd Floor, Wisma Tai Yoon, 9B
Lorong Medan Tuanku Satu, Medan Tuanku, 50300 Kuala Lumpur (the "Borrower"),
incorporated in Malaysia and licensed to carry on banking business and having
its registered office at 27th Floor, Menara Boustead, No. 69, Jalan Raja Chulan,
50200 Kuala Lumpur (the "Agent") as agent for the Beneficiaries (as hereinafter
defined) of the other part.
WHEREAS:-
(i) By a loan agreement (the "Loan Agreement") to be entered into
simultaneously with this Memorandum or shortly hereafter between the
Borrower of the first part, the Agent of the second part and the Lenders of
the third part, the Lenders agree subject to the conditions therein
appearing, to make available to the Borrower a term loan facility (the
"Facility") in the maximum aggregate principal amount of Ringgit Malaysia
Ninety One Million (RM91,000,000.00)only. -
(ii) The Borrower undertook in the Loan Agreement that the Borrower will inter
alia execute this Memorandum in favor of the Agent as trustee for itself as
agent and for the Lenders as further security for the Facility.
IN PURSUANCE of the Loan Agreement and in consideration of the premises the
Borrower HEREBY AGREES, COVENANTS AND UNDERTAKES with the Agent as follows:-
1. DEFINITIONS
1.1 Except where the context otherwise requires, terms and expressions defined
in the Loan Agreement and not otherwise defined herein bear the same meanings
where used in this Memorandum, and the following terms and expressions where
used in this Memorandum bear the meanings respectively set opposite them:
Additional Interest the additional interest payable by the Borrower pursuant to
Clause 12.5 (a) of the Loan Agreement and pursuant to the
other Loan Documents due to
Schedule 14 -
<PAGE>
230
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
failure to pay any Indebtedness when due and payable
thereunder;
Beneficiaries the Arranger, the Agent and the Lenders;
Fixed Deposit the fixed deposit(s) held under the certificate(s) more
particularly described in Schedule A hereto and any
renewal(s) thereof;
Fixed Deposit Bank the bank in which the Borrower has placed the Fixed Deposit;
Indebtedness at any time the aggregate of all sums advanced from time to
time by the Lenders to the Borrower pursuant to the Loan
Agreement together with interest thereon and all other
monies payable to the Beneficiaries or any of them pursuant
to, upon and under the Loan Documents (whether in respect of
principal, interest, Additional Interest, fees, prepayment
premium, costs, expenses, indemnity or otherwise);
Loan Documents the Loan Agreement, the Collateral Agreement, this
Memorandum and the other Security Documents and any other
documents for the time being constituting security for the
Facility or any part thereof,
Prescribed Rates the respective rates of interest (including Additional
Interest) chargeable on the Indebtedness or any part thereof
stipulated in the Loan Agreement or such other rate or rates
which the Lenders may at their discretion stipulate from
time to time or at any time in the manner provided for
therein.
1.2 The headings in this Memorandum are inserted for convenience only and shall
not be taken read and construed as essential parts of this Memorandum.
References to Clauses are to be construed as references to Clauses of this
Memorandum. All references to provisions of statutes include such provisions as
modified, re-certified or re-enacted. Words applicable to natural persons
include any body of persons, company, corporation, firm or partnership corporate
or incorporate and vice versa. Words importing the masculine gender shall
include the feminine and neuter genders and vice versa. Words importing the
singular number shall include the plural number and vice
Schedule 14 -
<PAGE>
231
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
versa. Where two or more persons or parties are included or comprised in any
expressions, agreements, covenants, terms, stipulations and undertakings
expressed to be made to such persons or parties shall, unless expressly stated
to the contrary, be enforceable by them jointly and severally and agreements,
covenants, terms, stipulations and undertakings expressed to be made by or on
the part of such persons or parties shall be deemed to be made by and binding
upon such persons or parties jointly and severally.
2. THE PLEDGE
2.1 In consideration of the Lenders having agreed at the Borrower's request to
make available the Facility to the Borrower pursuant to the provisions of the
Loan Agreement, the Borrower hereby irrevocably pledges the Fixed Deposit and
any renewal(s) thereof up to the principal sum of Ringgit Malaysia One Million
(PM 1,000,000.00) to the Agent to be held by the Agent as continuing security
for the due payment by the Borrower to the Lenders of the Indebtedness together
with interest thereon at the Prescribed Rate(s).
3. NO WITHDRAWAL AND ENCUMBRANCES
3.1 During the continuance of this Memorandum the Borrower shall not be
entitled, except with the prior written consent of the Agent, to withdraw the
whole or any part of the Fixed Deposit.
3.2 During the continuance of this Memorandum the Borrower shall not assign,
transfer or in any way deal with the Fixed Deposit or the Borrower's rights,
title or interest therein or any rights in relation thereto.
4. DEFAULT
4.1 The Borrower hereby further authorizes the Agent in default of payment by
the Borrower to the Lenders of the Indebtedness or any part thereof under its
account in respect of the Facility and/or if the Borrower shall fail to observe
and perform any of its covenants and undertakings hereunder and under the Loan
Documents without further notice to the Borrower to forthwith appropriate all or
any part of the amount(s) from the Fixed Deposit in or towards payment or
discharge of any or all of the Indebtedness together with interest
aforementioned up to the date of actual payment (as well after as before
judgment).
5. POWER OF ATTORNEY
Schedule 14 -
<PAGE>
232
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
5.1 For the purpose of giving effect to the Borrower's obligations under this
Memorandum the Borrower hereby irrevocably appoints the Agent and/or the manager
and/or the officer in charge for the time being of the Agent, the attorney(s) of
the Borrower for the Borrower and in the Borrower's attorney's own name(s) or in
the name of the Borrower or in the joint names of the attorney and the Borrower
and on behalf of the Borrower as its act and deed to execute sign and deliver,
any documents pertaining to the Fixed Deposit, to collect all sums of monies as
are due under the Fixed Deposit, to renew the Fixed Deposit for such period(s)
as the Agent may direct, to issue good receipts therefor and to do such act,
deed and/or things as the Agent may require in respect of this Memorandum with
power for such Attorney to substitute and appoint one or more Attorneys under
them or each of them for all or any of the purposes aforesaid as they or each of
them shall think fit AND the Borrower hereby agrees and undertakes at all times
hereafter to ratify and confirm whatsoever the said Attorney or his Attorneys
shall lawfully do or cause to be done in and concerning the premises by virtue
of this Memorandum.
6. CHANGES IN CONSTITUTION
6.1 Any change in the constitution(s) of the Lenders, the Agent and or the
Borrower or the Agent's and or the Borrower's absorption in or amalgamation with
any other person or the acquisition of all or any part of the Agent's and or
Borrower's undertaking, as the case may be, by any other person shall not in any
way prejudice or affect the Agent's rights hereunder.
7. ASSIGNMENT/TRANSFER OF THE MEMORANDUM
7.1 The Agent shall be at liberty to assign and transfer this Memorandum and
the costs and expenses of the Agent and incidental to such assignment or
transfer shall be paid by the Borrower and any statement therein of the amount
due to the Agent under or by virtue of this Memorandum shall be conclusive and
binding for all purposes against the Borrower save for manifest error.
7.2 The Borrower shall not be entitled to assign or transfer all or any of its
rights, benefits and obligations hereunder without the prior written consent of
the Instructing Group obtained through the Agent.
7.3 Any Lender may, at any time, assign all or any of its rights and benefits
hereunder or transfer in accordance with Clause 7.5 all or any of its rights,
benefits and obligations hereunder to any financial institution provided that at
the same time it assigns or, as the case
Schedule 14 -
<PAGE>
233
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
may be, transfers an equal portion of its rights, benefits and obligations under
the other Loan Documents to the same financial institution.
7.4 If any Lender assigns all or any of its rights and benefits hereunder in
accordance with Clause 7.3, then, unless and until the assignee has agreed with
the Agent and the other Beneficiaries that it shall be under the same
obligations towards each of them as it would have been under if it had been an
original party hereto as a Lender, the Agent and the other Beneficiaries shall
not be obliged to recognize such assignee as having the rights against each of
them which it would have had if it had been such. a party hereto.
7.5 If any Lender wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 7.3, then such transfer may be
effected by the delivery to the Agent of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date specified
in such Transfer Certificate and the fifth Business Day after (or such earlier
Business Day endorsed by the Agent on such Transfer Certificate falling on or
after) the date of delivery of such Transfer Certificate to the Agent:
(i) to the extent that in such Transfer Certificate the Lender party thereto
seeks to transfer its rights, benefits and obligations hereunder, the
Borrower and such Lender shall be released from further obligations
towards one another hereunder and their respective rights against one
another shall be cancelled (such rights, benefits and obligations being
referred to in this Clause 7.5 as "discharged rights and obligations");
(ii) the Borrower and the Transferee party thereto shall assume obligations
towards one another and/or acquire rights against one another which differ
from such discharged rights and obligations only insofar as the Borrower
and such Transferee have assumed and/or acquired the same in place of the
Borrower and such Lender; and
(iii) the Agent such Transferee and the other Beneficiaries shall acquire the
same rights and benefits and assume the same obligations between
themselves as they would have acquired and assumed had such Transferee
been an original party hereto as a Lender with the rights, benefits and/or
obligations acquired or assumed by it as a result of such transfer.
8. UNDERTAKING
Schedule 14 -
<PAGE>
234
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
The Borrower hereby undertakes to forthwith upon the execution of this
Memorandum issue the Notice substantially in the form set out in Schedule B1 to
the Fixed Deposit Bank and to procure the Acknowledgment from the Fixed Deposit
Bank substantially in the form set out in Schedule B2 addressed to the Agent.
9. CONTINUING SECURITY
This security shall not be considered as satisfied by any conditional
payment or satisfaction of the whole or any sum or sums of money owing or by any
payment made to be held in suspense but shall be a continuing security and
extend to cover all or any sum or sums of money which shall for the time being
or from time to time be due and owing by the Borrower to the Lenders under or in
connection with or arising from the Facility and/or this Memorandum.
10. WAIVER
No failure or delay on the Agent's part in exercising nor any omission to
exercise any right, power, privilege or remedy accruing to the Agent under this
Memorandum upon any default on the part of the Borrower shall impair any such
right, power, privilege or remedy or to be construed as a waiver thereof or an
acquiescence in such default nor shall any waiver or action by the Agent in
respect of any default or any acquiescence in any such default affect or impair
any of the Agent's rights, power, privilege or remedy in respect of any other or
subsequent default.
11. NOTICES
(a) Notices to be given or served under the provisions of this Memorandum shall
be deemed properly given or served if given in writing delivered personally
or by post by prepaid letter, telex or facsimile transmission addressed to
the relevant party at its address stated above or to any telex number or
facsimile number which is published as belonging to it (or such other
address or telex or facsimile number as is notified by any party to the
other party hereunder). Every notice or other communication shall be
deemed to have been received in the case of a telex message or facsimile
transmission the next working day after the date of dispatch, subject to
such telex message or facsimile transmission being confirmed forthwith
thereafter by written notice delivered by post to the party entitled to
receive the same as aforesaid, and in the case of a letter the next working
day after the date of delivery when delivered personally or forty-eight
(48) hours after it has been put into post.
Schedule 14 -
<PAGE>
235
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(b) In proving the giving of a notice hereunder it shall be sufficient to prove
that the notice was left or that the envelope containing such notice was
properly addressed and posted or that the telex bears the correct
answerback or that the facsimile transmission report bears the correct
transmission receipt confirmation of the party to whom the notice was sent.
12. GOVERNING LAW
This Memorandum shall be governed by and construed in accordance with the
laws of Malaysia.
Schedule 14 -
<PAGE>
236
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
AS WITNESS WHEREOF this Memorandum is executed by the parties hereto.
The execution of this instrument )
by the Borrower SYARIKAT TELEFON )
WIRELESS (M) SDN. BHD. is duly )
effected in a manner authorized )
by its constitution under the )
Seal of the Borrower which said )
Seal is hereunto duly affixed on )
this day of , 199 )
in the presence of.- )
_______________ Director
_______________Director/Secretary
I, an Advocate and Solicitor of the High Court
in Malaya practicing at Kuala Lumpur hereby certify that on this day of
,199 the Common Seal of SYARIKAT TELEFON WIIRELESS (M) SDN. BHD., was duly
affixed to the above written instrument in my presence in accordance with the
regulations of the said Company.
Witness my hand
_______________
Schedule 14 -
<PAGE>
237
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SIGNED by ) PERMATA MIERCHANT BANK BERHAD
) by its Attorneys
and )
)
for and on behalf of )
PERMATA MERCHANT BANK BERHAD )
in the presence of:- )
Schedule 14 -
<PAGE>
238
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE A
CERTIFICATE NO. ISSUED BY AMOUNT IN THE NAME OF
Schedule 14 -
<PAGE>
239
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE B1
NOTICE
[Letterhead of Syarikat Telefon Wireless (M) Sdn. Bhd.]
Date: [ ]
To: [Name of the Fixed Deposit Bank]
Dear Sirs,
We refer to the fixed deposit receipt No. [ ] and such other
fixed deposit(s) to be placed with you up to the aggregate principal sum of
Ringgit Malaysia One Million (RM1,000,000.00) under our fixed deposit account
No.[ ] (collectively, the "Deposit").
We enclosed herewith a copy of the memorandum of pledge dated day of
,1995 (the "Pledge") between us and PERMATA MERCHANT BANK BERHAD as
trustee (the "Agent") and we hereby give you notice that pursuant to the Pledge,
the Deposit whether additional or by way of renewals or otherwise have been
pledged to the Agent as trustee upon the terms of the Pledge.
We irrevocably and unconditionally instruct and authorize you:-
(i) to disclose to the Agent without any reference to or further authority
from us and without any inquiry by you as to the justification for such
disclosure, such information relating to the Deposit as the Agent may, at
any time and from time to time, request you to disclose to it;
(ii) to hold the Deposit to the order of the Agent;
(iii) at any time and from time to time upon receipt by you of instructions in
writing from the Agent to release the Deposit or any part thereof to act
in accordance with such instructions, without any reference to or further
authority from us and without any inquiry by you as to the justification
for such instructions or the validity of them; and
(iv) to comply with the terms of any written notice, statement or instructions
in any way relating or purporting to relate to the Pledge and/or the
Deposit which you receive at any time and from time to time from the Agent
without any reference to or further
Schedule 14 -
<PAGE>
240
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
authority from us and without any inquiry by you as to the justification
for such notice, statement or instructions or the validity of them.
The instructions and authorizations which are contained in this letter
shall remain in full force and effect until the Agent give you notice in writing
revoking them.
Kindly acknowledge receipt of this letter and your acceptance of the
instructions and authorizations contained in it by signing the attached form of
acknowledgment and returning it to the Agent.
Yours faithfully
____________________
(signature of authorized signatory)
(SYARIKAT TELEFON WIRELESS (M) SDN. BHD)
Schedule 14 -
<PAGE>
241
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
SCHEDULE B2
ACKNOWLEDGEMENT
[Letterhead of the Fixed Deposit Bank]
Date:
To:
PERMATA MERCHANT BANK BERHAD
Dear Sirs,
We, [ ] acknowledge receipt of a notice dated the day
of ,1995 (the "Notice") addressed to us by SYARIKAT TELEFON WIRELESS
(M) SDN. BHD. (the "Company") regarding the fixed deposit(s) (collectively, the
"Deposit") more specifically mentioned in the Notice and we undertake to act in
accordance and comply with the terms of the Notice. A copy of the Notice is
annexed hereto.
We acknowledge and confirm:-
(i) we do not have, and will not make or exercise, any claims or demands, any
rights of counterclaim, rights of set-off or any other equities against
the Company in respect of the Deposit or any parts thereof;
(ii) we have not, as at the date of this Acknowledgment, received any notice
that any third party has or will have any right or interest whatsoever in
or has made or will be making any claim or demand or taking any action
whatsoever against the Deposit or any parts thereof.
We undertake that, in the event of our becoming aware at any time that any
person or entity other than yourselves or the Company has or will have any right
or interest whatsoever in or has or will be making any claim or demand or taking
any action whatsoever against the Deposit or any parts thereof, we will
immediately give written notice of the terms of such right or interest claim or
demand or action to both yourselves and the Company.
We have made the acknowledgments and confirmations and have given the
undertakings set out in this letter in the knowledge that they are required by
you in connection with the security which has been consisted by the Company in
your favor under a memorandum of pledge dated the day of
1995.
Schedule 14 -
<PAGE>
242
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
We confirm that we shall not permit the whole or any part of the Deposit to be
withdrawn without your prior written authority.
Yours faithfully
Schedule 14 -
<PAGE>
DATED THIS 2/ND/ DAY OF OCTOBER, 1995
BETWEEN
PERMATA MERCHANT BANK BERHAD
AND
INTERNATIONAL WIRELESS COMMUNICTIONS, INC.
*************************
OPTION AGREEMENT
*************************
ADNAN SUNDRA & LOW
ADVOCATES & SOLICITORS
KUALA LUMPUR
PMB/00503.95/JC/pa/ek(ar3)
AGREEMENT
<PAGE>
THIS AGREEMENT is made the 2nd day of October, 1995,
Between:-
PERMATA MERCHANT BANK BERHAD, a company incorporated in Malaysia and having its
registered office at 27th Floor, Menara Boustead, No 69, Jalan Raja Chulan,
50200 Kuala Lumpur (the "Bank") of the one part; and
INTERNATIONAL WIRELESS COMMUNICATIONS INC., a company incorporated in the State
of Delaware in the United States of America and having its registered office at
15E, North Street, Dover, Kent County, Delaware ( the "Grantor") of the other
part.
WHEREAS:
1. SYARIKAT TELEFON WIRELESS (M) SDN. BHD. (the "Company") is a company
incorporated in Malaysia and having its registered office at 2nd Floor,
Wisma Tai Yoon, 9B Lorong Medan Tuanku Satu, Medan Tuanku, 50300 Kuala
Lumpur and has an authorised capital of Ringgit Malaysia Fifty Million
(RM50,000,000) divided into fifty million (50,000,000) ordinary shares of
Ringgit Malaysia One (RMI100) each of which forty six million four hundred
and eighteen thousand (46,418,000) shares have been issued and fully paid
up or credited as fully paid up (the "Issued Shares").
2. As at the date hereof, the Grantor is the beneficial owner of thirty two
per cent (32%) of the Issued Shares (the "Grantor's Shares").
At the request of the Company and its shareholders (including the Grantor), the
Bank has agreed to the following:
to arrange for the Company a syndicated term loan facility of Ringgit
Malaysia Ninety One Million (RM91,000,000.00) (the "Facility");
to participate in the granting of the Facility to the Company together
with PERWIRA AFFIN BANK BERHAD ("PERWIRA"); and
to act as the agent for the lenders in respect of the Facility,
upon the terms and conditions set out in a loan agreement (the "Loan
Agreement") to be entered into simultaneously with this Agreement or
shortly hereafter between (1) the Company, (2) the Bank as arranger and
agent (the "Agent") and (3) the Bank and PERWIRA as lenders (together the
"Lenders").
<PAGE>
In consideration of the above thereof the Grantor has irrevocably agreed to do
the following:
to grant the Bank a call option (the "Call Option") over such number of the
Grantor's Shares (the "Option Shares") constituting seven point five per cent
(7.5%) of the Grantor's Shares; and
to give the Bank the right of first refusal in respect of matters more
specifically stated under Clause 9.1 hereof,
upon the terms and conditions hereinafter contained.
All the other shareholders of the Company (the "Other Shareholders") have on
even date granted to the Bank call options over seven point five percent (7.5%)
of their shares in the Company respectively (the "Other Options") on terms and
conditions similar to the terms and conditions of the Call Option herein
contained.
NOW IT IS HEREBY AGREED as follows:
1. THE CALL OPTION
1.1 In consideration of the above premises, the Grantor hereby grants to the
Bank the Call Option which is an unconditional and irrevocable right
exercisable at any time within the Call Option Period (as hereinafter
defined) by the Bank to purchase from the Grantor all or part of the Option
Shares, free from all encumbrances together with all rights and bonuses
attaching thereto from the date hereof at the price and on the terms and
conditions hereinafter contained.
2. EXERCISE OF CALL OPTION
2.1 The Bank shall be entitled to exercise the Call Option at any time
commencing from the date hereof and ending on a date that is seven (7)
years from the date of the first drawndown of the Facility under the Loan
Agreement (the "Option Period") upon the occurrence of the following
events, in the manner as set out in Clause 2.2 hereof:
(a) the approval of the Securities Commission ("SC") being obtained for
the listing ("the Listing") of the Company on the first board or the
second board of the Kuala Lumpur Stock Exchange ("the KLSE") as the
case may be; or
(b) an agreement ("the Sale Agreement") being executed between the Grantor
and the Other Shareholders of the one part and a company listed on the
KLSE ("the Listed Company") of the
<PAGE>
other part for the sale of the Issued Shares (excluding the Option
Shares) by the Grantor and the Other Shareholders to the Listed
Company; or
(c) five (5) years having expired from the date of the first drawdown of
the Facility under the Loan Agreement without either of the events
stated in Clauses 2.1 (a) or 2.1 (b) having occurred.
2.2 The Call Option may be exercised by the Bank by way of a notice in writing
(the "Option Notice") issued by the Bank to the Grantor as follows:
(i) in respect of the exercise of the Call Option upon occurrence of the
event set out in Clause 2.1 (a) or 2.1 (b) shall be substantially in
the form set out in Schedule I Part A; and
(ii) in respect of the exercise of the Call Option upon occurrence of the
event set out in Clause 2.1(c) shall be substantially in the form set
out Schedule I Part B. The Call Option shall be exercised upon service
of the Option Notice by the Bank in accordance with the provisions of
Clause 10.1 and the Grantor shall sell and the Bank shall purchase
such number of the Option Shares as specified in the Option Notice
(the "Sale Shares").
3. PRICE
3.1 The parties hereto hereby agree that the price payable by the Bank for the
Sale Shares shall be determined as follows:
(a) If the Bank exercises the Call Option pursuant to Clause 2.1(a)
hereof, the price payable by the Bank for each of the Sale Shares
shall be fifty per cent (50%) of the listing price of each of the
Issued Shares as approved or determined by the SC; or
(b) If the Bank exercises the Call Option pursuant to Clause 2.1(b)
hereof, the price payable by the Bank for each of the Sale Shares
shall be fifty percent (50%) of the purchase price of each of the
Issued Shares as set out in the Sale Agreement; or
(c) If the Bank exercises the Call Option pursuant to Clause 2.1(c)
hereof; the price payable by the Bank for the Sale Shares shall be
determined by the following person(s) and in the following manner:
<PAGE>
(i) the Bank shall notify the Grantor in the Option Notice of the
independent firm of auditors or merchant bankers appointed by
the Bank (the "Bank's Appointee") to certify the fair value of
the Sale Shares valued on a going concern basis as between a
willing buyer and willing seller and without adjustment on
grounds that the shareholding represents a minority or majority
interest in the Borrower;
(ii) If the Grantor does not appoint its own independent firm of
auditors or merchant bankers ("the Grantor's Appointee") to
certify the fair value of the Sale Shares on the above basis and
notify the Bank of such appointment within seven (7) days from
the date of the Option Notice, the Grantor shall be deemed to
have consented to the appointment of the Bank's Appointee and
the price as certified by the Bank's Appointee shall be final
and binding on the parties.
(iii) In the event that the Grantor wishes to appoint the Grantor's
Appointee, the Grantor shall do so within seven (7) days from
the date of the Option Notice and shall inform the Bank within
the said seven (7) days period and the price payable by the Bank
for the Sale Shares shall be the average of the two (2) prices
certified (a) by the Bank s Appointee and (b) by the Grantor's
Appointee as the fair value of the Sale Shares.
(iv) The parties shall procure their respective appointees to certify
the fair value of the Sale Shares within seven (7) days from the
date of the Option Notice. All fees and expenses of the Bank's
Appointee and the Grantor's Appointee (if applicable) shall be
borne and paid solely by the Grantor.
4. COMPLETION
4.1 Upon the exercise of the Call Option by the Bank, the parties shall within
a period of seven (7) days from the date of the exercise of the Call Option
pursuant to Clause 2.2(i) hereof or within seven (7) days from the date the
last of the Bank's Appointee and the Grantor's Appointee (if applicable)
certifies the fair value of the Sale Shares in the case of Clause 2.2(ii)
hereof (the "Completion Date") comply simultaneously with their obligations
as follows:
(a) the Bank shall on Completion Date subject to the Grantor complying
with Clause 4.1(b)(i) and (ii) hereof pay to the
<PAGE>
Grantor the price for the Sale Shares calculated in accordance with
Clause 3 hereof by way of a bankers draft or cashier's order; and
(b) the Grantor shall :
(i) cause the Agent with whom the Grantor has deposited the share
certificates of the Grantor's Shares and the corresponding duly
executed registrable transfer forms in respect of the Grantor's
Shares (collectively the "Share Documents") pursuant to the
Shareholders' Agreement (as defined in the Loan Agreement) to
release to the Bank or its nominee on the Completion Date the
Share Documents in respect of the Sale Shares; and
(ii) deliver to the Bank or its nominee on the Completion Date any
form of waiver or consent required to enable the Sale Shares to
be registered in favour of the Bank or its nominee.
5. VENUE FOR COMPLETION
5.1 The parties hereto agree that the completion of the sale and purchase
transaction on the Completion Date as stipulated in Clause 4.1 shall be
carried out at the venue nominated by the Bank in the Option Notice at its
absolute discretion.
6. VARIATION OF SHARE CAPITAL
6.1 If, while the Call Option is outstanding, the Company shall effect or carry
out any capitalisation issue, subdivision, consolidation or reduction of
its share capital or any variation of its issued share capital, including
without limitation any rights or bonus issue or special or restricted
issue, then the number of shares which shall remain the subject of the Call
Option shall be adjusted accordingly in such manner as shall place the Bank
in the same position as regards the percentage of the Grantor's shares in
the Company which the Bank shall be entitled to purchase pursuant to the
exercise of the Call Option and the purchase price of each such share shall
be adjusted accordingly. In connection with the above, the Grantor hereby
covenants that it shall take up all capitalisation issues which the Company
may undertake from time to time such that the Grantor's shareholding in the
Company shall at all times remain at the percentage that the Grantor's
Shares represent in the share capital of the Company.
7. WARRANTY AND UNDERTAKING OF THE GRANTOR
<PAGE>
7.1 The Grantor hereby warrants to the Bank that at the time of execution of
this Agreement, it is the beneficial owner of all the Grantor's Shares and
that the Option Shares will be sold to the Bank free of encumbrances and
with all rights attaching thereto as at the date of exercise of the Call
Option by the Bank and, subject to Clause 7.2 hereof, the Grantor has full
power and authority to exercise and enjoy all rights attaching thereto
without the consent of any other person and to grant an option in respect
of the same upon the terms and conditions of this Agreement.
7.2 The Grantor hereby undertakes that it shall not sell transfer assign
dispose pledge encumber or in any way deal with their shares in the Company
during the Option Period, unless with the prior written consent of the
Bank. Upon the exercise of the Call Option, the Grantor shall procure and
ensure that all the Sale Shares are free from any liens, charges, pledges,
equities, adverse interests and encumbrances whatsoever and shall be freely
transferable to the Bank.
7.3 The Grantor hereby covenants that in the event the Call Option is
exercised, the Grantor shall procure the registration of the transfer of
the Sale Shares in favour of the Bank or its nominees and do such acts and
things and execute such documents as shall be necessary to give effect to
the sale of the Sale Shares.
7.4 The Grantor hereby warrants that all voting and other rights attached to
the Sale Shares shall accrue to the Bank or its nominee on the date of
deliverance of the Option Notice to the Grantor and following that time the
Grantor shall exercise all voting and other rights at the direction of the
Bank or its nominee and shall account for all dividends or other
distributions of the Company declared or paid by reference to a record date
which is subsequent to such date of deliverance of the Option Notice.
8. RIGHT OF FIRST REFUSAL
8.1 The Grantor hereby agrees and undertakes to procure or cause the Company to
give the Bank the right of first refusal to act for the Company in respect
of (a) the corporate exercises undertaken by the Company in respect of the
Listing or the Sale and (b) any exercises undertaken by the Company for
raising of finance and/or such other corporate exercises for any form of
capital raising of the Company.
9. MISCELLANEOUS
<PAGE>
9.1 Notices required or permitted to be given hereunder shall be in writing and
shall be deemed to have been validly given to the parties hereto if
delivered at or sent by hand to the addresses stated herein or to their
respective last known address and if so given shall be deemed to have been
received when delivered (if delivered by hand) or on the third day of
despatch (if delivered by mail).
9.2 The stamp duties and all other fees and expenses in connection with or
incidental to this Agreement (including the Bank's solicitors fees) shall
be borne by the Grantor.
9.3 Time shall be of the essence of this Agreement.
9.4 This Agreement shall be binding on the successors-in-title of the Grantor
and the successors-in-title and assigns of the Bank. The Bank may assign
all or any of its rights and benefits hereunder to such party(ies) as the
Bank may determine at its absolute discretion without reference to or the
consent of the Grantor.
9.5 The Schedule hereto shall have full force and effect and shall be read as
part of this Agreement as if they were incorporated herein.
9.6 This Agreement is governed by and shall be construed in accordance with,
the laws of Malaysia.
9.7 The Grantor irrevocably:-
(a) submit to the non-exclusive jurisdiction of the course of Malaysia and
the courts of the State of Delaware in the United States of America;
(b) waives any objections on the ground of venue or form non-convenience
or any similar grounds;
(c) consents to service of process by mail or in any other manner
permitted by the relevant law.
9.8 The Grantor shall at all times maintain an agent for service of process in
Malaysia. Such agent shall be:-
Name : M/S PRASAD ABRAHAM & ASSOCIATES
Address : No. 02-02, 2nd Floor
Bangunan Ming
Jalan Bukit Nanas
50250 Kuala Lumpur
<PAGE>
and the Grantor undertakes not to revoke the authority of the above agent
and if, for any reason, such agent or any successor agent no longer serves
as the agent of the Grantor to received service of process, the Grantor
shall promptly appoint another such agent and advise the Bank thereof.
<PAGE>
IN WITNESS WHEREOF the parties hereto have set their respective hands
the day and year first above written.
SIGNED BY )
JAN-OLOF CONNY DOLONIUS )
as attorney (P.A. No. 45465/95) )
for and on behalf of ) /s/
INTERNATIONAL WIRELESS )
COMMUNICATIONS INC. )
in the presence of:- )
/s/
LOO YEN NI
Advocate & Solicitor
Kuala Lumpur
SIGNED BY )
Hassan Hussain )
for and on behalf of ) /s/
PERMATA MERCHANT BANK )
BERHAD in the presence of:- )
/s/
CHONG YEE CHOUN
ADVOCATE & SOLICITOR
KUALA LUMPUR
<PAGE>
UNDERTAKING BY THE COMPANY
We, SYARIKAT TELEFON WIRELESS (M) SDN BHD, a company incorporated in
Malaysia and having its registered address at 2nd Floor, Wisma Tai Yoon, 9B
Lorong Medan Tuanku Satu, Medan Tuanku, 50300 Kuala Lumpur hereby agrees and
undertakes that the right of first refusal, shall be given to PERMATA MERCHANT
BANK BERHAD ("the Bank"), to act for us in respect of :
(a) any corporate exercises undertaken by us for the Listing or the Sale (as
defined in this Agreement; and
(b) any exercises undertaken by us for the raising of finance and/or the
corporate exercises undertaken by us for any form of capital raising.
Dated the 19th day of September, 1995.
SIGNED BY Joseph Vijay )
Kumar a/L Arulnathan )
for and on behalf of ) /s/
SYARIKAT TELEFON )
WIRELESS (M) SDN. BHD. )
in the presence of:- )
/s/
CHONG YEE CHOUN
ADVOCATE & SOLICITOR
KUALA LUMPUR
<PAGE>
SCHEDULE I
(PART A)
[Letterhead of PERMATA MERCHANT BANK BERHAD]
To: [Name of Grantor]
RE: NOTICE OF EXERCISE OF CALL OPTION TO PURCHASE [ ] SHARES IN THE
CAPITAL OF SYARIKAT TELEFON WIRELESS (M) SDN. BHD. ("STW")
(i) We refer to the call option (the "Call Option") granted by you to us under
and pursuant to the agreement dated the day of , 1995
(the "Agreement") made between (1) you as grantor and (2) ourselves as
option holder. Terms defined in the Agreement shall have the same meanings
herein.
(ii) We hereby exercise our rights under the Call Option to purchase [specify
the number] shares in STW from you (the "Sale Shares").
(iii) Payment for the Sale Shares amounting to Ringgit Malaysia [____________
(RM___________)] shall be made by us to you at the office of [specify the
address] on the Completion Date in accordance with Clause 4.1 of the
Agreement.
Yours faithfully,
____________________________________
PERMATA MERCHANT BANK BERHAD
<PAGE>
SCHEDULE I
(PART B)
[Letterhead of PERMATA MERCHANT BANK BERHAD]
To: [Name of Grantor]
RE: NOTICE OF EXERCISE OF CALL OPTION TO PURCHASE [ ] SHARES IN THE
CAPITAL OF SYARIKAT TELEFON WIRELESS (M) SDN. BHD. ("STW")
We refer to the call option (the "Call Option") granted by you to us under and
pursuant to the agreement dated the ________ day of ________, 1995 (the
"Agreement") made between (1) you as grantor and (2) ourselves as option holder.
Terms defined in the Agreement shall have the same meanings herein.
We hereby exercise our rights under the Call Option to purchase [specify the
number] shares in STW from you (the "Sale Shares").
Please be informed that we have or shall appoint [name of independent firm of
auditors or merchant bank] ("Our Appointee") to certify the fair value of the
Sale Shares. In the event that you do not appoint another independent firm of
auditors or merchant bank and inform us of such appointment within seven (7)
days from the date of this Notice, it shall be deemed that you have consented to
the appointment of Our Appointee for purposes of Clause 3.1(c) of the Agreement.
Payment for the Sale Shares determined in accordance with Clause 3.1(c) of the
Agreement shall be made by us to you at the office of [specify the address] on
the Completion Date in accordance with Clause 4.1 of the Agreement.
Yours faithfully
____________________________________
PERMATA MERCHANT BANK BERHAD
<PAGE>
DATED THIS 2ND DAY OF OCTOBER, 1995
BETWEEN
INTERNATIONAL WIRELESS COMMUNICATIONS INC.
and
SHUBILA HOLDING SDN. BHD.
and
LARANDA SDN. BHD.
AND
SYARIKAT TELEFON WIRELESS (M) SDN. BHD.
AND
PERMATA MERCHANT BANK BERHAD
***********************
COLLATERAL AGREEMENT
***********************
ADNAN SUNDRA & LOW
ADVOCATES & SOLICITORS
KUALA LUMPUR
PMB/00503.95/JC/ek
<PAGE>
[SEAL]
COLLATERAL AGREEMENT
THIS AGREEMENT is made the 2/nd/ day of October, 1995 BETWEEN:
(1) (a) INTERNATIONAL WIRELESS COMMUNICATIONS INC. ("IWC");
(b) SHUBILA HOLDING SDN. BHD. ("SHUBILA"); and
(c) LARANDA SDN. BHD. ("LARANDA"),
(collectively the "Shareholders");
(2) SYARIKAT TELEFON WIRELESS (M) SDN. BHD. (the "Borrower");
(3) PERMATA MERCHANT BANK BERHAD (the "Agent") as agent for the Beneficiaries
(as hereinafter defined).
WHEREAS:
(A) PERMATA MERCHANT BANK BERHAD AND PERWIRA AFFIN BANK BERHAD (the "Lenders")
have agreed at the request of the Borrower and the Shareholders to provide
a Ringgit Malaysia Ninety One Million (RM91,000,000) term loan facility
(the "Facility") to the Borrower upon the terms and conditions set out in a
loan agreement (the "Loan Agreement") to be entered into simultaneously
with this Agreement or shortly hereafter between (1) the Borrower as
borrower, (2) the Agent as arranger and agent and (3) the Lenders as
lenders.
(B) The Shareholders are shareholders of and lenders to the Borrower.
(C) It is a condition precedent to availability of the Facility that the
Shareholders and the Borrower execute this Agreement in favor of the Agent.
NOW THEREFORE IN CONSIDERATION of the above premises the parties hereto
agree as follows:
1. INTERPRETATION
In this Agreement terms defined in the Loan Agreement shall bear the same
meanings when used herein, unless otherwise defined herein, and in addition when
used herein:
(i) "BENEFICIARIES" means the Arranger, the Agent and the Lenders;
<PAGE>
2
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(ii) "INDEBTEDNESS FOR BORROWED MONEY" means any indebtedness of the Borrower
owed to any Shareholder for or in respect of any monies borrowed by the
Borrower from any Shareholder or amounts raised under any other
transaction having the commercial effect of a borrowing by the Borrower
from any Shareholder;
(iii) "LOAN DOCUMENTS" means the Loan Agreement, the Security Documents and
this Agreement;
(iv) "MEMORANDUM OF DEPOSIT" means the memorandum of deposit to be executed by
each of the Shareholders pursuant to Clause 12.1 in favor of the Agent
creating a fixed charge over its portion of the Shares as security for the
Facility substantially in the form set out in Appendix B;
(v) "ORIGINAL FINANCIAL STATEMENTS" means:
(a) in relation to SHUBILA, the audited consolidated financial statements
of SHUBILA for the financial year ended the 31st day of December,
1994; and
(b) in relation to LARANDA, the audited consolidated financial statements
of LARANDA for the financial year ended the 28/th/ day of February,
1995;
(c) in relation to IWC, the audited consolidated financial statements of
IWC for the financial year ended the day of , 199
(vi) "SENIOR LIABILITIES" means the Loan, all interest thereon and all fees and
other amounts expressed to be payable to the Beneficiaries under the Loan
Documents;
(vi) "SHARES" all those shares in the Borrower which shall represent 100% of
the total issued paid up capital of the Borrower;
(vii) "SHAREHOLDERS" means the shareholders of the Borrower as specified in the
preamble of this Agreement and where the context so requires or admits,
references to Shareholders shall be construed as references to any of
them;
(viii)"SUBORDINATED LIABILITIES" means all monies, whether in the nature of
principal, interest or otherwise, from time to time due
<PAGE>
3
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
and to become due to any Shareholder from the Borrower in respect of any:
(a) Indebtedness for Borrowed Money owed to any Shareholder by the
Borrower at any time; and
(b) any preference shares in the Borrower owned by any Shareholder,
and shall include additional loans granted to the Borrower and preference
shares in the Borrower subscribed for under Clause 5.1(ii) herein;
(ix) "STATE" means the State of Delaware in the United States of America.
2. REPRESENTATIONS
2.1 Each Shareholder represents that:
(i) SHUBILA and LARANDA are corporations duly incorporated under the laws of
Malaysia and IWC is a corporation duly incorporated under the laws of the
State with power to enter into this Agreement and to exercise its rights
and perform its obligations thereunder and all corporate and other action
required to authorize its execution of this Agreement and its performance
of its obligations hereunder has been duly taken;
(ii) in any proceedings taken in Malaysia (or the State in respect of IMC) in
relation to this Agreement, it will not be entitled to claim for itself or
any of its assets immunity from suit, execution, attachment or other legal
process;
(iii) all acts, conditions and things required to be done, fulfilled and
performed in order (a) to enable it lawfully to enter into, exercise its
rights under and perform and comply with the obligations expressed to be
assumed by it in this Agreement, (b) to ensure that the obligations
expressed to be assumed by it in this Agreement are legal, valid and
binding and (c) to make this Agreement admissible in evidence have been
done, fulfilled and performed;
<PAGE>
4
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
(iv) under the laws in force at the date hereof, it is not necessary that this
Agreement be filed, recorded or enrolled with any court or other
authority or that (save for stamp duty of a nominal amount) any stamp,
registration or similar tax be paid on or in relation to this Agreement;
and
(v) the obligations expressed to be assumed by it in this Agreement are legal
and valid obligations binding on it in accordance with the terms hereof;
(vi) it has not taken any corporate action nor have any other steps been taken
or legal proceedings been started or (to the best of its knowledge and
belief) threatened against it for its winding-up, dissolution,
administration or re-organization or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar officer of it
or of any or all of its assets or revenues;
(vii) it is not in breach of or in default under any agreement to which it is a
party or which is binding on it or any of its assets to an extent or in a
manner which might have a material adverse effect on its business or
financial condition;
(viii) no action or administrative proceeding of or before any court or agency
which might have a material adverse effect on its business or financial
condition has been started or threatened;
(ix) all of the written information supplied by it to the Agent and the other
Beneficiaries in connection with this Agreement is true, complete and
accurate in all material respects and it is not aware of any material
facts or circumstances that have not been disclosed to the Agent and the
other Beneficiaries and which might, if disclosed, adversely affect the
decision of the Agent and the other Beneficiaries to enter into the Loan
Documents to which it is a party;
(x) the execution of this Agreement and its exercise of its rights and
performance of its obligations hereunder will not result in the existence
of nor oblige it to create any encumbrance over all or any of its present
or future revenues or assets;
(xi) the execution of this Agreement and its exercise of its rights and
performance of its obligations hereunder do not and will not:
<PAGE>
5
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
(a) conflict with any agreement, mortgage, bond or other instrument or
treaty to which it is a party or which is binding upon it or any of
its assets;
(b) conflict with its constitutive documents and rules and regulations;
or
(c) conflict with any applicable law, regulation or official or judicial
order;
(xii) the execution of this Agreement constitutes, and its exercise of its
rights and performance of its obligations hereunder will constitute,
private and commercial acts done and performed for private and commercial
purposes; and
(xiii)SHUBILA and LARANDA are exempt private companies and as such, Section 133A
of the Companies Act, 1965 is not in any way contravened.
2.2 Each of the Shareholders further represents that:
(i) its respective Original Financial Statements were prepared in accordance
with accounting principles generally accepted in Malaysia (and in the case
of IWC, the State) and consistently applied and give (in conjunction with
the notes thereto) a true and fair view of its financial condition as at
the date as of which they were prepared and the results of its operations
during the financial year ended on such date;
(ii) since publication of its respective Original Financial Statements there
has been no material adverse change in its respective business or
financial condition;
(iii) as at the date as of which its respective Original Financial Statements
were prepared, there were no liabilities (contingent or otherwise) which
were not disclosed thereby (or by the notes thereto) or reserved against
therein nor were there at that date any unrealized or anticipated losses
arising from its respective commitments entered into by it which were not
so disclosed or reserved against; and
(iv) as at the date hereof the only Indebtedness for Borrowed Money owed by the
Borrower to the various Shareholders are owed to the
<PAGE>
6
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
Shareholders being of the nature described in item 1 of the First Schedule
hereto.
2.3 Each of the Shareholders hereby represents and warrants that it is the
beneficial owner of the Shares in such proportion as stated in item 2 of
the First Schedule hereto and such Shares are free from all claims,
charges, liens and any other encumbrances whatsoever.
3. SUBORDINATION
3.1 Each of the parties hereto agrees that the Senior Liabilities shall rank in
all respects in priority to the Subordinated Liabilities and that
accordingly all of the Subordinated Liabilities shall be fully subordinated
to the Senior Liabilities.
4. UNDERTAKINGS OF THE BORROWER
4.1 From and after the date hereof and so long as any of the Senior Liabilities
are outstanding the Borrower shall not without the prior written consent of
the Agent:
(i) pay, prepay or repay (or permit the payment prepayment or repayment
of) or make any distribution (or permit any distribution to be made)
in respect of any of the Subordinated Liabilities in cash or in kind;
(ii) discharge any of the Subordinated Liabilities by set off or any right
of combination of accounts;
(iii) waive or release any term of the Subordinated Liabilities; or
(iv) take or omit to take any action whereby the subordination of the
Subordinated Liabilities or any part thereof to the Senior
Liabilities might be terminated, impaired or adversely affected.
5. UNDERTAKINGS OF THE SHAREHOLDERS
5.1 From and after the date hereof and so long as any of the Senior Liabilities
are outstanding or in force, the Shareholders:
<PAGE>
7
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
(i) shall not without the prior written consent of the Agent;
(aa) receive payment, prepayment or repayment of, or any
distribution in respect of (or on account of), any of the
Subordinated Liabilities in cash or in kind or apply any money
or property in discharge of any Subordinated Liabilities;
(bb) discharge the Subordinated Liabilities by set-off or any right
of combination of accounts; or
(cc) amend, vary, waive or release any term of the Subordinated
Liabilities;
(ii) shall ensure that the Borrower:
(aa) remains solvent and able to meet all its financial liabilities
as and when they fall due; and
(bb) will complete the Project timeously,
and to this end shall whenever necessary put the Borrower in funds
including funds to meet costs-overrun in respect of the Project,
whether by way of provision of additional loans or subscription for
additional preference shares, in each case ranking pari passu in
priority with then existing Subordinated Liabilities or by way of
subscription for additional equity in the Borrower;
(iii) shall ensure that each Shareholder namely SHUBILA and LARANDA will
remain an exempt private company and in the event that any of them
shall cease to be an exempt private company, then that Shareholder
shall render such financial assistance to the Borrower by way of
equity or preference shares or in any other manner that is in
conformity to the laws of Malaysia.
5.2 From and after the date hereof and so long as any of the Senior Liabilities
are outstanding or in force, the Shareholders shall not reduce their
respective shareholdings in the Borrower without the prior written consent
of the Instructing Group save and except if the aggregate of all
reduction(s) is equal or less than seven point five per cent (7.5%) of the
total paid up capital of the Borrower.
<PAGE>
8
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
6. SUBORDINAT10N PRIOR TO INSOLVENCY PROCEDURES
6.1 If in breach of Clause 5.1:
(i) any Shareholder receives a payment or distribution in cash or in kind of,
or on account of, any of the Subordinated Liabilities;
(ii) the Borrower makes any payment or distribution in cash or in kind on
account of the Subordinated Liabilities;
(iii) any of the Subordinated Liabilities are discharged by set-off or by
exercise of any right of combination of accounts; or
(iv) any Shareholder receives any other payment or value in respect of the
Subordinated Liabilities,
the Shareholder receiving or otherwise obtaining the benefit of such payment,
set-off or combination of accounts will hold in trust on behalf of the
Beneficiaries and forthwith pay an amount equal to the amount of the payment so
received by it to the Agent for application against or retention by the Agent on
account of the Senior Liabilities, which amount shall be treated, as between
such Shareholder, the Borrower and the Beneficiaries, as originally paid to the
Beneficiaries and not to such Shareholder.
7. SUBORDINATION ON INSOLVENCY
7.1 If:
(i) any resolution is passed or order made for the winding up,
liquidation, dissolution, or reorganization of the Borrower;
(ii) the Borrower becomes subject to any insolvency, bankruptcy,
reorganization, receivership, liquidation, dissolution or other
similar proceeding whether voluntary or involuntary (and whether or
not involving insolvency);
(iii) the Borrower assigns its assets for the benefit of its creditors or
enters into any agreement with its creditors generally; or
(iv) the Borrower becomes subject to any distribution of its assets, or
if any analogous event occurs anywhere,
<PAGE>
9
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
then:
(a) the Agent and the other Beneficiaries may, (i) claim, enforce and
prove for the Subordinated Liabilities, (ii) file claims and proofs,
give receipts and take all such proceedings and do all such things as
it sees fit to recover the Subordinated Liabilities and (iii) receive
all distributions on the Subordinated Liabilities for application
towards the Senior Liabilities;
(b) if and to the extent that the other Beneficiaries are not entitled to
claim, enforce, prove, file claims or proofs, or take proceedings for
the Subordinated Liabilities, each Shareholder will do so in good time
as reasonably requested by the Agent and the other Beneficiaries;
(c) any payment or distribution of any kind or character, whether in cash,
securities, or other property which is payable or deliverable upon or
with respect to the Subordinated Liabilities or any part thereof to
any Shareholder by the Borrower shall be held in trust by such
Shareholder for the benefit of the other Beneficiaries and shall
forthwith be paid or delivered directly to the Agent for application
against the Senior Liabilities until the Senior Liabilities have been
fully paid and satisfied;
(d) if the trust in paragraph (c) above fails or cannot be given effect
to, such Shareholder (so as to bind any agent or trustee on its
behalf) will, upon demand, pay an amount equal to such payment or
distribution to the Agent for application towards the Senior
Liabilities until the Senior Liabilities have been fully paid and
satisfied; and
(e) the trustee, liquidator, assignee or other person distributing the
assets of the Borrower or their proceeds shall, and is hereby directed
to, pay distributions on the Subordinated Liabilities direct to the
Agent until the Senior Liabilities are irrevocably paid in full.
8. ENFORCEMENT BY THE SHAREHOLDERS
8.1 Unless the Instructing Group has previously consented thereto in writing no
Shareholder will:
<PAGE>
10
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
(i) demand or accelerate any of the Subordinated Liabilities or otherwise
declare any of the Subordinated Liabilities prematurely payable for any
reason whatsoever;
(ii) enforce the Subordinated Liabilities by execution or otherwise;
(iii) petition for (or vote in favor of any resolution for) or initiate or
support or take any steps with a view to any insolvency, liquidation,
reorganization, administration or dissolution proceedings or any voluntary
arrangement or assignment for the benefit of creditors or any similar
proceedings involving the Borrower, whether by petition convening a
meeting, voting for a resolution or otherwise.
9. ASSIGNMENT OF CLAIM
9.1 No Shareholder will assign or transfer to any person the whole or any part
of the Subordinated Liabilities or any interest therein otherwise than to the
Beneficiaries in respect of the Loan Agreement.
10. CONTINUING AGREEMENT
10.1 The subordination effected by this Agreement shall continue to apply in
respect of the Subordinated Liabilities notwithstanding any intermediate payment
in whole or in part of the Senior Liabilities.
11. WAIVER OF DEFENSES
11.1 The subordination effected by this Agreement and the obligations of each
of the Borrower and the Shareholders hereunder shall remain in full force and
effect without regard to, and shall not be impaired or affected by:
(i) any time or indulgence granted to or composition with the Borrower, the
Shareholders or any other person; or
(ii) the taking, variation (no matter how fundamental or extensive),
compromise, renewal or release of, or refusal or neglect to perfect or
enforce, any rights, remedies or securities against or granted by the
Borrower, the Shareholders or any other person; or
(iii) any legal limitation, disability, incapacity or other circumstances
relating to the Borrower, the Shareholders or any
<PAGE>
11
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
other person or, any amendment to or variation of the terms of any
document or security; or
(iv) any other act, omission or circumstances, whether or not the Borrower or
the Shareholders shall have notice or knowledge thereof.
12. CHARGING OF THE SHARES
12.1 In consideration of the Lenders at the request of the Shareholders making
and continue to make available the Facility to the Borrower each Shareholder
hereby irrevocably covenants and undertakes that upon written notification from
the Agent, it shall forthwith execute in favor of the Agent the Memorandum of
Deposit and such other relevant documents as the Agent may prescribe to enable
each of the Shareholders to create a fixed charge over their respective portion
of the Shares in favor of the Agent as trustee for the Beneficiaries as security
for the Facility and all expenses incurred in connection with the above shall be
borne solely by the Borrower.
12.2 In connection with the Shareholders' covenant and undertaking stipulated in
Clause 12.1 above, each Shareholder shall deposit the share certificates of
its/his portion of the Shares together with the corresponding duly executed
registrable transfer form thereof with the Agent who shall hold the same as
stakeholder.
13. COVENANTS
13.1 The Borrower and each Shareholder shall obtain, comply with the terms of
and do all that is necessary to maintain in full force and effect all
authorizations, approvals, licenses and consents required in or by the laws and
regulations of Malaysia to enable it lawfully to enter into and perform its
obligations under this Agreement or to ensure the legality, validity,
enforceability or admissibility in evidence in Malaysia.
14. NOTICES
14.1 Each communication to be made hereunder shall be made in writing but,
unless otherwise stated, may be made by telex, facsimile or letter.
14.2 Any communication or document to be made or delivered by one person to
another hereunder shall (unless such person has by fifteen
<PAGE>
12
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
days' written notice to the Agent) specified another address, person or
department be made or delivered to such other person at the address and marked
for the attention of the person and/or the department identified with its
signature to the Loan Agreement or, in the case of a Shareholder, hereunder and
shall be deemed to have been delivered (i) in the case of any communication made
by telex, on the date of transmission with confirmed answerback, (ii) in the
case of any communication made by facsimile, when transmission thereof is
confirmed by an activity report stating the correct number of pages sent and
that such transmission is error free (or equivalent) or (iii) in the case of any
communication made by letter, when left at that address or (as the case may be)
five (5) days after the same has been deposited in the post first class postage
prepaid in an envelope addressed to it at that address Provided that any
communication or document to be made or delivered to the Agent shall be
effective only when received by the Agent.
15. ASSIGNMENT/TRANSFER
15.1 The Agent shall be at liberty to assign and transfer this Agreement and the
costs and expenses of the Agent and incidental to such assignment or transfer
shall be paid by the Borrower and any statement therein of the amount due to the
Agent under or by virtue of this Agreement shall be conclusive and binding for
all purposes against the Borrower save for manifest error.
15.2 The Shareholders and the Borrower shall not be entitled to assign or
transfer all or any of its rights, benefits and obligations hereunder without
the prior written consent of the Instructing Group obtained through the Agent.
15.3 Any Lender may, at any time, assign all or any of its rights and benefits
hereunder or transfer in accordance with Clause 15.5 all or any of its rights,
benefits and obligations hereunder to any financial institution provided that at
the same time it assigns or, as the case may be, transfers an equal portion of
its rights, benefits and obligations under the other Loan Documents to the same
financial institution.
15.4 If any Lender assigns all or any of its rights and benefits hereunder in
accordance with Clause 15.3, then, unless and until the assignee has agreed with
the Agent and the other Beneficiaries that it shall be under the same
obligations towards each of them as it would have been under if it had been an
original party hereto as a Lender,
<PAGE>
13
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
the Agent and the other Beneficiaries shall not be obliged to recognize such
assignee as having the rights against each of them which it would have had if it
had been such a party hereto.
15.5 If any Lender wishes to transfer all or any of its rights, benefits and/or
obligations hereunder as contemplated in Clause 15.3, then such transfer may be
effected by the delivery to the Agent of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date specified
in such Transfer Certificate and the fifth business day after (or such earlier
business day endorsed by the Agent on such Transfer Certificate falling on or
after) the date of delivery of such Transfer Certificate to the Agent:
(i) to the extent that in such Transfer Certificate the Lender party thereto
seeks to transfer its rights, benefits and obligations hereunder, the
Shareholders, the Borrower and such Lender shall be released from further
obligations towards one another hereunder and their respective rights
against one another shall be cancelled (such rights, benefits and
obligations being referred to in this Clause 15.5 as "discharged rights
and obligations");
(ii) the Shareholders, the Borrower and the Transferee party thereto shall
assume obligations towards one another and/or acquire rights against one
another which differ from such discharged rights and obligations only
insofar as the Shareholders, the Borrower and such Transferee have assumed
and/or acquired the same in place of the Chargor and such Lender; and
(iii) the Agent such Transferee and the other Beneficiaries shall acquire the
same rights and benefits and assume the same obligations between
themselves as they would have acquired and assumed had such Transferee
been an original party hereto as a Lender with the rights, benefits and/or
obligations acquired or assumed by it as a result of such transfer.
16. DISCLOSURE
16.1 The Agent may disclose to any actual or potential assignee, to any person
who may otherwise enter into contractual relations with the Agent and the other
Beneficiaries in relation to this Agreement or to any governmental agency or
authority requiring the same such information about any Shareholder as the Agent
shall consider appropriate.
<PAGE>
14
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
17. INDEMNITY
17.1 The Shareholders each hereby jointly and severally undertake to indemnify
the Agent and the other Beneficiaries from and against any loss or expense,
including legal
fees, which it may sustain as a consequence of any default by any Shareholder in
the performance of any of the obligations expressed to be assumed by it under
this Agreement.
18. GOVERNING LAW AND JURISDICTION
18.1 This Agreement shall be governed by and construed in accordance with the
laws of Malaysia.
18.2 The Borrower and each Shareholder irrevocably agrees that the Courts of
Malaysia shall have jurisdiction to hear and determine any suit, action or
proceedings and to settle any disputes, which may arise out of or in connection
with this Agreement and, for such purpose, irrevocably submits to the
jurisdiction of such courts.
18.3 IWC shall at all times maintain an agent for service of process in
Malaysia. Such agent shall be:
Name: M/S PRASAD ABRAHAM & ASSOCIATES
Address: No. 02-02, 2nd Floor, Bangunan Ming
Jalan Bukit Nanas
50250 Kuala Lumpur
and IWC undertakes not to revoke the authority of the above agent and if, for
any reason, such agent or any successor agent no longer serves as agent of IWC
to receive service of process. IWC shall promptly appoint another such agent and
advise the thereof Agent.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed on the day and in the year first above written.
<PAGE>
15
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
The execution of this Agreement by )
JAN-OLOF CONNY DOLONIUS )
as attorney (P.A. No. 45465/95) ) /s/
for and on behalf of )
INTERNATIONAL WIRELESS )
COMMUNICATIONS INC. )
as a Shareholder in the presence of:- )
/s/
LOO YEN NI
Advocate & Solicitor
Kuala Lumpur
Correspondence Particulars
Address : c/o PRASAD ABRAHAM & ASSOCIATES
No. 02-02, 2nd Floor, Bangunan Ming
Julan Bukit Nanas
50250 Kuala Lumpur
<PAGE>
16
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
The execution of this Agreement by )
SHUBILA HOLDINGS )
SDN. BHD. as a Shareholder is ) [SEAL]
duly effected in a manner )
authorised by its constitution under )
the Seal of SHUBILA HOLDINGS )
SDN. BHD. which said Seal is )
hereunto duly affixed on this 19th )
day of September, 1995 )
in the presence of:- )
/s/ Director
- ------------------------------------
/s/ Director/Secretary
- ------------------------------------
Correspondence Particulars
Address : 2nd Floor, Wisma Tai Yoon
9B, Lorong Medan Tuanku Satu
Medan Tuanku
50300 Kuala Lumpur
<PAGE>
17
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
The execution of this Agreement by )
LARANDA SDN. BHD. )
as a Shareholder is duly effected in )
a manner authorized by its ) [SEAL]
constitution under the Seal of )
LARANDA SDN. BHD., which )
said Seal is hereunto duly affixed )
affixed on this 19th day of September, )
1995 in the presence of:- )
/S/ Director
- -------------------------------------
/s/ Director/Secretary
- -------------------------------------
Correspondence Particulars
Address : 2nd Floor, Wisma Tai Yoon
9B, Lorong Medan Tuanku Satu
Medan Tuanku
50300 Kuala Lumpur
<PAGE>
18
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
The execution of this Agreement by )
the Borrower, SYARIKAT )
TELEFON WIRELESS (M) )
SND. BHD. is duly effected in a )
manner authorised by its constitution )
under the Seal of the Borrower, ) [SEAL]
SYARIKAT TELEFON )
WIRELESS (M) SDN. BHD. )
which said Seal is hereunto duly )
affixed on this 19th day of )
September, 1995 )
in the presence of:- )
/s/ Director
- ------------------------------------
/s/ Director/Secretary
- ------------------------------------
<PAGE>
19
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
THE AGENT
SIGNED BY )
Hassan Hussain )
TELEFON WIRELESS (M) )
for and on behalf of ) /s/
PERMATA MERCHANT BANK )
BERHAD as Agent on the 2nd )
day of October, 1995 )
/s/
CHONG YEE CHOUN
ADVOCATE AND SOLICITOR
KUALA LUMPUR
<PAGE>
20
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000, 000.00
APPENDIX A
DETAILS OF SUBORDINATED LIABILITIES
EXISTING AS AT THE DATE OF THIS AGREEMENT
ITEM 1
Subordinated Liabilities owed to the Shareholders:
NAME AMOUNT OF SUBORDINATED LIABILITIES
ITEM 2
Shareholdings of the Shareholders:
NAME SHAREHOLDINGS NO. OF SHARES
SHUBILA 57% 26,418,000
LARANDA 11% 5,000,000
IWC 32% 15,000,000
<PAGE>
21
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000 000.00
APPENDIX B
MEMORANDUM OF DEPOSIT OF STOCK AND
NON-MARKETABLE SECURITIES
To: PERMATA MERCHANT BANK BERHAD
27th Floor, Menara Boustead
No. 69 Jalan Paja Chulan
50200 Kuala Lumpur
I/We [ ] of [ ] refer to the loan agreement dated
the day of ,1995 (the "Loan Agreement") entered into between:
(1) SYARIKAT TELEFON WIRELESS (M) SDN. BHD. (the "Borrower");
(2) PERMATA MERCHANT BANK BERHAD (the "Agent");
(3) (i) [ ]; and
(ii) [ ],
(collectively the "Lenders"),
pursuant to which the Lenders have subject to the terms and conditions therein
contained granted and made available to the Borrower a term loan facility of
Ringgit Malaysia Ninety One Million (RM91,000,000) only (the "Facility").
I/We also refer to the shareholder's agreement dated the day of ,1995
(the "Shareholders' Agreement") entered into between (1) myself/ourselves and
the other shareholders of the Borrower (together the "Shareholders") (2) the
Borrower and (3) the Agent, wherein the Shareholders have agreed that in
consideration of the Lenders making available the Facility to the Borrower at
the Shareholders' request, each of the Shareholders shall upon written
notification from the Agent create a fixed charge over such shares in the
Borrower owed by each of the Shareholders respectively in favor of the Agent as
agent for the Beneficiaries (as hereinafter defined) as security for the
Facility.
<PAGE>
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
In consideration of the above premises and [* further consideration to be
specified at the time of execution], the Chargor has executed this Memorandum of
Deposit in favor of the Agent as trustee for the Beneficiaries upon the
following terms and conditions.
1. DEFINITIONS
1.1 Words and expressions defined in the Loan Agreement bear, except where the
context otherwise requires or as otherwise specified, the same meanings
when used herein.
1.2 The following words and expressions, when used in this Memorandum bear the
meanings respectively set opposite them:
Additional Interest the additional interest payable by the Borrower
pursuant to Clause 12.5(a) of the Loan Agreement
due to failure to pay any Indebtedness when so
payable;
Actual Security Value the Total Value of the Mortgaged Securities, or,
where the Mortgaged Securities are denominated in
a currency other than Ringgit Malaysia, the
equivalent in Ringgit Malaysia for the time being
as determined by the Agent, of such Total Value;
Additional Security such further Qualifying Securities as are required
so that the Actual Security Value will, following
the making of the relative Advance, as the case
may be, equal or exceed the Required Security
Value and thereafter such Qualifying Securities
as, by virtue of Clause 6.1 below, are for the
time being subject to this Memorandum and includes
all and any securities, rights, moneys and
property whatsoever which may at any time after
the date hereof be derived from, accrued on or
offered in respect of any Additional Securities or
any other Qualifying Securities charged in
substitution therefor pursuant
_____________________
* [To be inserted]
<PAGE>
23
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
then in existence, whether by way of redemption,
exchange, conversion, rights, bonus, capital
reorganization or otherwise howsoever;
Advance the amount of each drawdown made or to be made to
the Borrower pursuant to and under the Facility;
Beneficiaries the Arranger, the Agent and the Lenders;
Chargor [ ] of [
] and includes its representatives,
successors-in-title;
Event of Default any of the events or states of affairs specified
in clause 13.1 in the Loan Agreement;
Indebtedness at any time, the aggregate of all sums advanced
from time to time by the Lenders to the Borrower
together with interest thereon and all other
monies payable to the Beneficiaries or any of them
pursuant to, upon and under the Loan Documents
(whether in respect of principal, interest,
Additional Interest, fees, commission, costs,
expenses, indemnity or otherwise);
Loan Agreement the loan agreement dated the day of
, 1995 between (1) the Borrower; (2) the Agent;
and (3) the Lenders and includes any subsequent
renewals and variations thereof permitted by the
Agent and the Lenders;
Mortgaged Securities the Originally Charged Shares and the Additional
Security, as well as any other Qualifying
Securities which are charged in addition to or in
substitution for any Mortgaged Securities for the
time being pursuant hereto and includes all and
any securities rights moneys and property
whatsoever which may at any time after
<PAGE>
24
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
the date hereof be derived from, accrued on or be
offered in respect of the Originally Charged
Shares and Additional Security so charged or any
other Mortgaged Securities then in existence,
whether by way of redemption, exchange,
conversion, rights, bonus, capital reorganization
or otherwise howsoever;
Originally Charged those Shares as are charged pursuant to this
Shares Memorandum which are more particularly described
in the Schedule hereto;
Power of Attorney the Power of Attorney granted by the Chargor to
the Agent pursuant to Clause 3 hereof;
Qualifying Securities securities acceptable to the Agent, which are in
the absolute beneficial ownership of the Chargor,
free from any Security Interest;
Required Security Value the required security value as may be determined
by the Lenders from time to time at their absolute
discretion;
Security Interest any mortgage, charge, pledge, lien, right of set-
off or any security interests howsoever created or
arising;
Total Value the total value of the Mortgaged Securities as
determined by an independent firm of auditors of
merchant bankers appointed by the Agent at their
absolute discretion from time to time.
1.3 The headings in this Memorandum are inserted for convenience only and shall
be ignored in construing the provisions of this Memorandum.
1.4 Words denoting the singular includes the plural number and vice versa.
<PAGE>
25
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
1.5 If the name of the Chargor hereinbefore inserted is that of a limited
company or other corporation any of the provisions herein contained which
are primarily and literally applicable to the case of a single and
individual person only shall be construed and take effect so as to give the
Agent hereunder a security for the money owing from that limited company or
corporation as identical or analogous as may be with or to that which would
have been given for the money owing from a single individual if the Chargor
had been a single individual and any money shall be deemed to be so owing
notwithstanding any defect informality or insufficiency in the borrowing
powers of the Chargor or in the exercise thereof which might be defense as
between the Chargor and the Agent.
1.6 References to clauses, sub-clauses and paragraphs are to be construed as
references to clauses, sub-clauses and paragraphs of this Memorandum.
1.7 References to any statute or legislation includes any statutory amendment
or re-enactment thereof.
2. CHARGE
2.1 As a continuing security for the payment of the Indebtedness and the
performance by the Borrower of its obligations under the relevant Loan
Documents and the Chargor of its obligations under this Memorandum, the
Chargor as beneficial owner hereby charges by way of mortgage to the Agent
all its rights, title and interest in and to:-
(a) the Originally Charged Shares; and
(b) the Additional Security,
as well as any other Qualifying Securities from time to time charged in
addition to and or in substitution for any of the securities referred to in
(a) and (b) above.
2.2 The Chargor shall deliver or procure that there are delivered to or to
order of the Agent all certificates or other documents of title in relation
to the Mortgaged Securities together with duly executed blank transfers in
respect thereof.
<PAGE>
26
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
2.3 The charge hereby created shall be in addition to, and shall not merge
with, or in any way prejudice, any other Security Interest or right which
the Agent and the other Beneficiaries may now, or at any time hereafter,
hold or have, as against the Chargor or any other person or property, in
respect of the Indebtedness, including, without limitation, any liens to
which the Agent may become entitled on the certificates or other documents
of title relating to any of the Mortgaged Securities.
3. POWER OF ATTORNEY
3.1 In consideration of the aforesaid premises the Chargor hereby irrevocably
and by way of security for the payment by the Chargor of the Indebtedness
and the performance by the Borrower of its obligations under the relevant
Loan Documents and the Chargor of its obligation under this Memorandum
appoints the Agent or any of its directors or any of its officers (from
time to time duly appointed or authorized in writing by the Agent for the
purposes herein and the certificate of the Agent of such appointment shall
be final and conclusive) to be the Chargor's attorney or attorneys
(hereinafter collectively called "the Attorney") for or in the name of the
Chargor or through the Chargor's nominee or otherwise in the name of the
Chargor to do and execute the following acts and deeds or any of them as
and when the Attorney shall think fit:
(a) to demand, sue for and receive from any person, registered company,
corporation, government or other body politic all dividends,
interests, bonuses or any other sums that may become due to the
Chargor in respect of any of the Mortgaged Securities and likewise any
capital sum represented by or complied in any of the Mortgaged
Securities as and when the same shall respectively be payable or
repayable;
(b) for any such purpose to sign, endorse and execute all receipts,
dividend and interest warrants, cheques, releases, discharges,
reconveyances, or other deeds or documents whatsoever that may be
necessary or usual in the circumstances;
(c) to attend, vote at and otherwise take part in all meetings held in
connection with any company or corporation in relation to any of the
Mortgaged Securities and to sign proxies for the purpose of voting
thereat or for any other
<PAGE>
27
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
purpose connected therewith as freely as the Chargor could do;
(d) out of any of the money of the Chargor in the Attorney's hands or
under the control of the Attorney to pay all calls that may lawfully
be made upon the Chargor or other expenses that may be incurred in
relation to any of the Mortgaged Securities and to give security for
the payment of the same;
(e) to receive all notices, reports, accounts, circulars and other
documents which are sent to the registered holders of the Mortgaged
Securities;
(f) to receive or accept service of, or agree to waive, all or any notices
or to agree to accept short notice for and to attend all or any
meetings or class meetings of the registered holders of the Mortgaged
Securities and exercise all voting and other rights and powers which
may at any time be exercisable in respect thereof at any such
meetings;
(g) to transfer or procure the transfer of all or any of the Mortgaged
Securities into the name of the Attorney or its nominee or nominees or
the name of any purchaser of the Mortgaged Securities (and for such
purpose to complete, make and/or execute any form or forms of transfer
in respect of any thereof) and to execute and deliver all other deeds
or documents and to do all acts and things which the Attorney may
consider necessary or advisable to perfect or to give proper effect to
the intent and purpose of this Memorandum, or to procure the
registration of any transfer of the Mortgaged Securities in the name
of any such transferee;
(h) to sell, transfer, exchange or otherwise dispose of all or any part of
the title to and interest in and any rights attaching to all or any of
the Mortgaged Securities for such consideration (which may comprise or
include shares or debentures) and upon such terms and generally in
such manner as the Attorney may in its absolute discretion think fit
and for this purpose to enter into any contract for such sale or
disposition on such terms (including the giving of such warranties and
indemnities) and subject to such conditions as the Attorney shall in
its absolute discretion think fit;
<PAGE>
28
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(i) to receive or authorize the receipt of the consideration for such
sale, transfer, exchange or disposition as is referred to in paragraph
(h) above and to apply any proceeds thereof in or towards the
discharge of the Indebtedness in the manner stipulated in this
Memorandum;
(j) to execute and deliver all and any other or further instruments of
charge and other documents that the Chargor is at any time and from
time to time obliged to execute pursuant to this Memorandum, and to
effect all such registrations and do all such other things as may be
necessary or as may seem to the Attorney advisable in order properly
to give effect thereto, and to execute all such documents and to do
all such other acts and things in relation to all or any stock or
shares the subject of any such further or other charges as the
Attorney is by this instrument entitled or empowered to execute or do
in relation to this Memorandum;
(k) to assent (if it seems to the Attorney necessary or desirable) to any
arrangement modifying the Chargor's rights;
(l) generally to exercise all rights and privileges and perform all duties
which now or hereafter may appertain to the Chargor in relation to any
of the Mortgaged Securities;
(m) to cause this Power of Attorney to be registered at the registry of
the High Court of Malaya and in the books of any company or
corporation or elsewhere as may be necessary or desirable;
(n) to disclose to any person or party who may be concerned with the
exercise of the powers hereby conferred, including any purchaser or
potential purchaser of any of the Mortgaged Securities the terms of
this Memorandum and such other documents or information as may be
related thereto or to the exercise of the Agent's powers hereunder or
to the Mortgaged Securities where such disclosure is deemed by the
Attorney to be necessary for or expedient to the exercise of the
powers hereunder;
(o) to appoint and at the Attorney's discretion to remove from time to
time any substitute for or agent under the Attorney
<PAGE>
29
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
in connection with any of the purposes aforesaid upon such terms as
the Attorney shall think fit.
3.2 The Chargor hereby declares that this Power of Attorney shall be
irrevocable so long as this Memorandum shall remain in effect or so long as
the Borrower shall remain under any liability (contingent or otherwise)
under the Loan Documents and or in respect of the Facility.
3.3 The Chargor hereby further declares that the Attorney shall not be held
responsible or liable to the Chargor for any loss or damage howsoever and
whatsoever arising as a result of any act neglect omission of the Attorney
arising out of the exercise of the powers granted to the Attorney herein
(save and except for any loss or damage caused by the gross negligence of
the Attorney) and the Chargor shall keep the Attorney indemnified against
all costs expenses and charges which the Attorney may incur in the exercise
of the powers aforesaid and the provisions of this paragraph shall continue
in force notwithstanding the discharge by the Chargor of all its
obligations under this Memorandum.
3.4 The Chargor hereby further declares that all and every receipt(s), deed(s),
matter(s) and thing(s) which shall be by the Attorney given, made, executed
or done for the aforesaid purposes shall be as good, valid and effectual to
all intents and purposes whatsoever as if the same had been signed, sealed,
delivered, given or made or done by the Chargor itself.
3.5 The Chargor hereby undertakes at all times to ratify whatsoever the
Attorney shall lawfully do or cause to be done in or concerning the
premises by virtue of this Power of Attorney.
4. CALLS
The Chargor shall forthwith make payment of all calls or other amounts which may
be or become due in respect of the Mortgaged Securities whether or not the
Chargor is the registered holder. The Agent shall not under any circumstance be
liable for such calls or other payments whether or not the Agent or its nominee
is a registered holder of any or all of such Mortgaged Securities. If the
Chargor shall fail to make any such payment, the Agent may make payment of the
amounts of any such calls or other amounts on behalf of the Chargor or such
registered holder. In such event, the Chargor shall forthwith on
<PAGE>
30
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
demand indemnify the Agent against each and every such payment, together with
interest thereon (as well after as before judgment) from the date of payment by
the Agent until the date of repayment by the Chargor under this indemnity at the
rate or rates specified in the Loan Agreement.
5. EXERCISE OF RIGHTS
5.1 Unless an Event of Default shall have occurred and be continuing, the
Chargor shall be entitled to receive all income derived from the Mortgaged
Securities and to exercise all rights attaching to any part thereof as he
may think fit, but shall deliver to the Agent forthwith upon receipt copies
of all notices, reports, accounts and circulars issued to the registered
holders of the Mortgaged Securities (unless the Agent or its nominee is the
registered holder).
5.2 The Chargor will procure that, following the occurrence of any Event of
Default and whilst any Event of Default is continuing, all income derived
from the Mortgaged Securities shall be paid to or to the order of the
Agent, (and if received by the Chargor, the Chargor shall forthwith pay the
same to the Agent) and any such income received by the Agent shall be
retained by the Agent in a cash collateral deposit account maintained for
that purpose until:
(a) the Event of Default shall have been remedied to the satisfaction of
the Agent whereupon any such income shall subject to no other Event of
Default having occurred and be continuing and if the Agent and the
Lenders so agrees, be released to the Chargor;
(b) payments in full by the Chargor of the Indebtedness; or
(c) recall and or termination of the Facility pursuant to the terms of the
Loan Documents.
5.3 The security constituted by this Memorandum and any further or other
security constituted pursuant hereto, shall become enforceable immediately
on the occurrence of any Event of Default, and the Agent shall be entitled
then, and at any time thereafter, and without prior notice to the Chargor
to sell or otherwise dispose of all the Chargor's title to and interest in
the Mortgaged Securities for such consideration (which may
<PAGE>
31
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
comprise or include shares or debentures), upon such terms and generally in
such manner as the Agent may, in its absolute discretion think fit and so
that the Agent shall be entitled as against the Chargor, to retain and
apply the proceeds of any sale or disposal and all and any amounts then
standing to the credit of any cash collateral deposit account pursuant to
Clause 5.2 above, in or towards the discharge of the Indebtedness as the
same fall due, in such manner as the Agent may in its absolute discretion
think fit (and for that purpose to effect any currency conversion that the
Agent may consider appropriate) with any surplus being paid to the Chargor
or other person entitled thereto. The Agent shall not be liable for any
loss howsoever arising out of such sale.
5.4 The rights, powers and authorities of the Agent pursuant to the Power of
Attorney hereunder shall be in addition to, and shall not in any way
prejudice or affect the rights and powers of the Agent under this
Memorandum; notwithstanding any other provision herein contained the Agent
and or any substitute or agent of the Agent under the said Power of
Attorney may at any time prior to the discharge of all moneys hereby
secured without notice to the Chargor transfer the Mortgaged Securities
into the name of the Agent or its nominees and the Chargor shall upon
demand and at the Chargor's cost execute and do all such transfers acts
assurances or things as the Agent may require for assuring and vesting the
full legal title in the Mortgaged Securities or any of them to and in the
name(s) of the Agent or its nominees PROVIDED ALWAYS that save as aforesaid
and as is otherwise stated herein neither the Agent nor any of its
substitutes or agents under the Power of Attorney will exercise any of the
other rights, powers or authorities conferred by the said Power of Attorney
(other than powers of substitution and appointment of agents and the powers
conferred in paragraph (o) of Clause 3.1 of the said Power of Attorney)
unless and until an Event of Default has occurred, whereupon and whereafter
the Agent (or its substitute or agent) shall be entitled to exercise all
and any such rights, powers and authorities as it may in its absolute
discretion think fit.
6. FURTHER SECURITY
6.1 If at any time any Mortgaged Security shall cease to be a Qualifying
Security or the Agent shall determine the Actual Security Value is less
than the Required Security Value then the Agent may, at any time whilst
such circumstances are continuing,
<PAGE>
32
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
require the Chargor to provide to the Agent further and other security in
the form of further Qualifying Securities, and to execute and deliver to
the Agent or procure the execution and delivery to the Agent by any nominee
of such instrument or instruments of charge in favor of the Agent in
relation thereto, in such form and on such terms, as the Agent may require,
so that such shares and securities become part of the Additional
Securities.
6.2 In the event of the Agent requiring further security pursuant to Clause 6.1
above, the Chargor will do all such acts and things, and execute all such
further or other documents, as may be necessary or as the Agent may require
in order to constitute, render enforceable or perfect such security and to
protect the rights of the Agent in relation thereto, and in particular
will, within fourteen (14) days of notice of such requirement, identify,
and offer to the Agent further Qualifying Securities as aforesaid to be
charged, having an aggregate Actual Security Value which is not less than
the difference between the Required Security Value and the Actual Security
Value of the existing Mortgaged Securities already charged and execute all
and any instruments of charge and other documents relating thereto as
required and forthwith upon being so requested by the Agent.
6.3 Any securities which cease for any reason to be acceptable to the Agent
shall cease to be Qualifying Securities.
6.4 Any determination of the Agent as to the Actual Security Value of, or
attributable to, all or any part of the Mortgaged Securities and any
further security provided (or proposed to be provided) pursuant to this
Clause 6 shall, in the absence of manifest error, be conclusive.
7. REASSIGNMENT
7.1 In the event of any Mortgaged Securities ceasing to be Qualifying
Securities (the "Disqualified Securities") the Agent shall, upon the
provision of other Qualifying Securities in accordance with Clause 6 having
in the aggregate an Actual Security Value not less than the value, so
assessed, of the Disqualified Securities on the last day on which they are
accepted by the Agent, release the Disqualified Securities from this
Memorandum.
<PAGE>
33
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
7.2 Upon payment in full of the Indebtedness in accordance with the terms
hereof and of the Loan Documents and upon there being no further moneys to
be lent by the Lenders pursuant to the Loan Agreement the Agent will, at
the request and cost of the Chargor, release the Mortgaged Securities then
charged hereunder from the charge hereby created and transfer the same to
the Chargor or as the Chargor may direct in writing.
8. Rights to resort to Other Securities
The Agent shall at any time be at liberty (without being bound to do so) to
resort for the benefit of the Beneficiaries to any other means of payment at any
time and in any order as it may think fit without thereby diminishing the
Chargor's liability hereunder and the Agent may exercise its rights hereunder
for the payment of the amount hereby intended to be secured either after
resorting to other means of payment or at any time notwithstanding that other
means of payment have not been resorted to.
9. Representations and Warranties
9.1 The Chargor hereby represents and warrants to and undertakes with the Agent
follows:-
(a) the Chargor is duly incorporated and validly existing under the laws
of [* specify the country of incorporation];
(b) in the event the Chargor is a corporation incorporated in Malaysia,
the Chargor is an exempt private company and by virtue thereof, the
creation of this Memorandum has not contravened Section 133A of the
Companies Act, 1965 in any way;
(c) the documents which contain or establish the Chargor's constitution
incorporate provisions which authorize, and all necessary action has
been taken to authorize, and all authorizations of any governmental or
other authority have been duly and unconditionally obtained and are in
full force and effect which are required to authorize, the Chargor to
own the Mortgaged Securities, carry on its business as they are now
being conducted, and sign and deliver, and perform the transactions
contemplated in this Memorandum and the
___________________________
* [To be inserted]
<PAGE>
34
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
Power of Attorney and to enable the Agent to exercise the rights,
powers and authorities hereby and thereby vested in the Agent;
(d) it is in the interest of the Chargor as a related company to assist
the Chargor in the manner herein provided;
(e) neither the signing and delivery of this Memorandum and the Power of
Attorney nor the performance of any of the transactions contemplated
in them will:
(i) contravene or constitute a default under any provision contained
in any agreement, instrument, law, judgment, order, license,
permit or consent by which the Chargor or any of its assets is
bound or affected; or
(ii) cause any limitation on its powers whether imposed by or
contained in any document which contains or establishes its
constitution or in any law, order, judgment, agreement,
instrument or otherwise, to be executed;
(iii)result in the creation or imposition of any obligation to
create or impose, any mortgage, lien, pledge or charge on any of
the Chargor's assets pursuant to the provisions of any mortgage,
contract or other undertaking or instrument;
(f) this Memorandum and the Power of Attorney when signed will constitute
the legal, valid and binding obligations of the Chargor in accordance
with their terms;
(g) the Chargor is the beneficial owner of and has title to the Mortgaged
Securities;
(h) the property and rights of the Chargor to the Mortgaged Securities is
not affected by any Security Interest, and the Chargor is not a party
to nor is it nor any of the property and rights hereby mortgaged bound
by, any order, agreement or instrument under which the Chargor is, or
in certain events may be, required to create, assume or permit to
arise any Security Interest;
<PAGE>
35
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(i) no event has occurred which constitutes, or which with the giving of
notice and/or the lapse of time and/or a relevant determination would
constitute, a contravention of, or default under, any agreement or
instrument by which the Chargor or any of its assets is bound or
affected, being a contravention or default which might either have an
averse effect on the business, assets or condition of the Chargor or
adversely affect its ability to observe or perform its obligation
under this Memorandum and the Power of Attorney;
(j) no litigation, arbitration or administrative proceeding or claim which
might by itself or together with any other such proceedings or claims
either have an adverse effect on any of the Chargor's business, assets
or condition or adversely affect its ability to observe or perform its
obligations under this Memorandum and the Power of Attorney is
presently in progress or pending or, to the best of the knowledge,
information and belief of the Chargor, threatened against the Chargor
or any of its assets;
(k) no extraordinary circumstance or change of law or other government
action shall have occurred which shall make it improbable that the
business of the Chargor can be carried out or that the Chargor will be
able to observe and perform the covenants and obligations on its part
to be performed and observed under this Memorandum and the Power of
Attorney;
(l) no violation of any provisions of legislation, Court orders, judgment;
and others have been committed by the Chargor;
(m) no information furnished by the Chargor in connection with this
Memorandum contains any untrue statement or omits to state any fact
the omission of which makes the statements therein, in the light of
the circumstances under which they were made, misleading, and all
expressions of expectation, intention, belief and opinion contained
therein were honestly made on reasonable grounds after due and careful
inquiry by the Chargor;
(n) the Chargor has fully disclosed in writing to the Agent all facts
relating to the Chargor which the Chargor knows or should reasonably
know and which are material for disclosure
<PAGE>
36
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
to the Agent in the context of this Memorandum and the Power of
Attorney.
9.2 The Chargor acknowledges that the Beneficiaries have, at the request of the
Chargor accepted this Memorandum and the Power of Attorney on the basis of,
and in full reliance on, the aforesaid representations and warranties,
which will be correct and complied with in all material respects so long
as, this Memorandum, the Power of Attorney and the other Loan Documents
shall remain in force.
10. Miscellaneous
10.1 No provision of any law restricting a mortgagee's or chargee's right of
consolidation of mortgages shall apply to this Memorandum or to any further
or other charge created pursuant hereto.
10.2 The Chargor shall and hereby undertakes to fully indemnify the Agent and
the other Beneficiaries from and against any expense, loss, damage or
liability (as to the amount of which the certificate of the Agent and the
other Beneficiaries shall, in the absence of manifest error, be conclusive)
which it may incur as the consequence of the occurrence of an Event of
Default or otherwise in connection with this Memorandum and/or other Loan
Documents. Without prejudice to its generality, the foregoing indemnity
shall extend to any interest, fees and other sums whatsoever paid or
payable on account of any funds borrowed in order to carry any unpaid
amount and to any loss (including loss of profit), premium, penalty or
expense which may be incurred in liquidating or employing deposits from
third parties including the expenses incurred by the Agent in the
appointment of the independent firm of auditors or merchants bankers to
determine the Total Value.
10.3 (a) Every notice or demand under this Memorandum shall be in writing but
may be given or made by telex, telegram, facsimile or cable.
(b) Any notice required to be given by the Chargor shall, if given by
telex, be subsequently confirmed by letter posted or delivered as soon
as practicable thereafter.
<PAGE>
37
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
(c) Subject as aforesaid any notice or certificate required to be given by
the Chargor to the Agent hereunder shall be in writing and shall be
addressed to the Agent at 27th Floor, Menara Boustead, No. 69, Jalan
Raja Chulan, 50200 Kuala Lumpur or at such other address as may from
time to time be notified by the Agent to the Chargor for that purpose.
Any notice or certificate required to be given to the Chargor
hereunder shall be given by telex, facsimile, telegram, cable or
letter addressed to the Chargor at its address hereinbefore specified
or such other address as may from time to time be notified by the
Chargor to the Agent for the purpose.
(d) Any notice or certificate delivered personally shall be deemed to be
given at the time of such delivery. Any notice or certificate
dispatched by first class inland letter shall be deemed to have been
given 48 hours after posting. Any notice or certificate transmitted by
telex or facsimile shall be deemed to have been given at the time of
transmission and any notice or certificate sent by cable shall be
deemed to have been given 24 hours after dispatch. All notices or
certificates given hereunder by telex, facsimile, telegram or cable
shall be subsequently confirmed by letter posted or delivered as soon
as practicable thereafter.
10.4 The security liabilities and or obligations under this Memorandum shall
continue to be valid and binding for all purposes whatsoever
notwithstanding any change by amalgamation reconstruction or otherwise
which may be made in the constitution of the Agent and it is expressly
declared that no change of any sort whatsoever in relation to or affecting
the Chargor shall in any way affect the security, liabilities and or
obligations created hereunder.
10.5 This Memorandum shall be governed by and construed in accordance with the
laws of Malaysia and the service of any writ or summons or any legal
process in respect of any such action or proceeding may be effected on the
Chargor by the Agent by forwarding a copy of the writ or summons statement
of claim or other legal process by prepaid registered post to its address
as indicated herein as the case may be.
10.6 Any term condition stipulation provision covenant or undertaking of this
instrument which is illegal, prohibited or unenforceable
<PAGE>
38
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
in any jurisdiction shall as to such jurisdiction be ineffective to the
extent of such illegality, voidness, prohibition or unenforceability
without invalidating the remaining provisions hereof and any such
illegality, voidness, prohibition or unenforceability in any jurisdiction
shall not invalidate or render illegal, void or unenforceable any such term
condition stipulation provision covenant or undertaking in any other
jurisdiction.
10.7 This Memorandum is expressly intended to be and shall be a continuing
security for all moneys whatsoever now or from time to time owing by the
Chargor notwithstanding that the Chargor may at any time or times cease to
be indebted to the Agent and the other Beneficiaries for any period or
periods and notwithstanding any settlement of account or accounts.
10.8 No failure to exercise nor any delay in exercising on the part of the Agent
and the other Beneficiaries any right or remedy hereunder shall operate as
a waiver thereof nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise hereof or the exercise of any
action right or remedy.
10.9 This Memorandum shall be binding on the representatives successors-in-title
of the Chargor and the successors-in-title and assigns of the Agent.
10.10The terms of the Loan Agreement shall where the context so permits and
unless repugnant to the context, apply to this Memorandum as if set out
herein.
11. Principal/Subsidiary Instruments
11.1 It is hereby agreed and declared that this Memorandum and the Loan
Agreement are instruments employed in one transaction namely to secure the
Indebtedness in an aggregate sum of Ringgit Malaysia Ninety One Million
(RM91,000,000) for principal only together with interest thereon and all other
monies payable under the Loan Agreement and the Security Documents to the Agent
and the Lenders and for the purpose of Section 4(3) of the Stamp Act 1949, the
Loan Agreement shall be deemed to be the principal instrument and this
Memorandum shall deemed to be the subsidiary instrument.
<PAGE>
39
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
IN WITNESS WHEREOF the Chargor has executed this Memorandum this day
of , 1995.
The Common Seal of the above named )
Chargor, )
was hereunto duly affixed in )
accordance with its Constitution in )
the presence of: )
Director Director/Secretary
I, an Advocate and Solicitor of the High Court in
Malaya practicing at Kuala Lumpur hereby certify that on this day of
, 1995 the Common Seal of , was duly affixed to the above
written instrument in my presence in accordance with the regulations of the said
Company.
Witness my hand,
_________________________
<PAGE>
40
Borrower : Syarikat Telefon Wireless (M) Sdn. Bhd.
Facility : Term Loan Facility of RM91,000,000.00
THE SCHEDULE HEREINBEFORE REFERRED TO
THE ORIGINALLY CHARGED SHARES
DESCRIPTION OF SHARE CERTIFICATE NO. NO. OF SHARES
SECURITY
<PAGE>
AGREEMENT TO ALLOCATE RESPONSIBILITY
THIS AGREEMENT is made on November _________, 1996 between:
(1) INTERNATIONAL WIRELESS COMMUNICATIONS, INC. ("IWC");
(2) SHUBILA HOLDINGS SDN BHD ("Shubila"); and
(3) LARANDA SDN BHD ("Laranda"),
(collectively, the "Shareholders").
WHEREAS :
(A) Each of the Shareholders is a party to the Collateral Agreement dated
_______, 1996 (the "Collateral Agreement") among the Shareholders, the
Borrower (as defined in the Collateral Agreement) and the Agent (as defined
in the Collateral Agreement).
(B) Clause 17.1 of the Collateral Agreement provides that the shareholders
shall jointly and severally indemnify the Agent and the other beneficiaries
(as defined in the Collateral Agreement) from and against any loss or
expense, including legal fees (collectively, "Liabilities"), suffered as a
result of the default by any Shareholder in performing its obligations
arising under the Collateral Agreement.
(C) The Shareholders now wish to allocate among themselves responsibility for
Liability resulting from defaults by Shareholders in performing their
obligations arising under the Collateral Agreement.
NOW THEREFORE IN CONSIDERATION of the above premises the parties hereto
agree as follows:
1. ALLOCATION OF RESPONSIBILITY
1.1 Each Shareholder shall be solely responsible for satisfying and Liability
resulting from (1) a breach by such Shareholder of any representation of
warranty by it in Clause 2.1, 2.2 or 2.3 of the Collateral Agreement or
(ii) any failure by such Shareholder to perform any obligation applicable
to it under Clause 5.1 (I), 5.1 (iii), 6.1, 7.1 (b), 7.1 (c), 8.1, 9.1,
12.1, 12.2, 13.1, 15.2 or 15.5 (ii).
<PAGE>
1.2 If any Liability arises as a result of a breach of the obligations of the
Shareholders arising under Clause 5.2 (ii) of the Collateral Agreement:
(a) Any Shareholder that fails to provide its pro rata share of financial
assistance provided by Shareholders in order to comply with Clause 5.2 (ii)
of the Collateral Agreement shall first satisfy an amount of such Liability
equal to the difference between its pro rata share of such financial
assistance and the amount of any financial assistance actually provided by
such Shareholder.
(b) If any such Liability remains unsatisfied after the operation of Clause
1.2(a), each Shareholder shall satisfy its pro rata share of any such
remaining Liability.
For purposes of this Clause 1.2, a Shareholder"s pro rata share shall be
calculated based on the shares of capital stock of Borrower held by such
Shareholder pursuant to all form 24 of the Company and such pro rata share to be
calculated as the time of such breach.
2. INDEMNIFICATION
2.1 Each Shareholder shall indemnify the other Shareholders from any loss or
expense, including legal fees, which they may sustain as a result of any
default by such Shareholder in performing any of its obligations arising
under this Collateral Agreement.
3. OVERRIDE OF CLAUSE 17.1 OF COLLATERAL AGREEMENT
3.1 The obligations of the Shareholders arising under this Agreement shall
remain in full force and effect notwithstanding the obligations of the
Shareholders to jointly and severally indemnify the Agent and the other
Beneficiaries for Liabilities pursuant to Clause 17.1 of the Collateral
Agreement.
4. GOVERNING LAW AND JURISDICTION
4.1 This Agreement shall be governed by and construed in accordance with the
laws of Malaysia.
4.2 Each Shareholder irrevocably agrees that the courts of Malaysia shall have
jurisdiction to hear and determine any suit, action or proceedings and to
settle any disputes, which may arise out of or in connection with this
Agreement and for such purpose, irrevocably submits to the jurisdiction of
such courts save and except for IWC shall irrevocably submit to the non-
exclusive jurisdiction of the Courts of the State.
<PAGE>
4.3 IWC shall at all times maintain an agent for service of process in
Malaysia. Such agent shall be:
Name :
Address :
and IWC undertakes not to revoke the authority of the above agent and if,
for any reason, such agent or any successor agent no longer serves as agent
of IWC to receive service of process. IWC shall promptly appoint another
such agent and advise the Agent thereof.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed on the day and in the year first above written.
The execution of this Agreement by )
JAN - OLOF CONNY DOLONIUS ) /s/
as attorney (P.A. No. ) )
for and on behalf of )
INTERNATIONAL WIRELESS )
COMMUNICATIONS, INC. )
as a Shareholder in the presence of: )
Correspondence Particulars
Address:
Facsimile:
Attention:
<PAGE>
The execution of this Agreement: )
SHUBILA HOLDINGS SDN BHD )
as a Shareholder is duly effected in )
manner authorized by its )
constitution under the Seal of )
SHUBILA HOLDINGS SDN BHD )
which said Seal is hereunto duly )
affixed on this day of , )
in the presence of: )
/s/___________________ Director
/s/___________________ Director /
Correspondence Particulars
Address:
Facsimile:
Attention:
<PAGE>
The execution of this Agreement: )
LARANDA SDN BHD )
as a Shareholder is duly effected in )
manner authorized by its )
constitution under the Seal of )
LARANDA SDN BHD )
which said Seal is hereunto duly )
affixed on this day of , )
in the presence of: )
/s/___________________ Director
/s/___________________ Director /
Correspondence Particulars
Address:
Facsimile:
Attention:
<PAGE>
EXHIBIT 10.13B
SALE AND TERMINATION AGREEMENT
DATE: 11 October 1995
PARTIES:
(1) PT RAJASA HAZANAH PERKASA, a limited liability company established under
the laws of the Republic of Indonesia and having its principal office at
Wisma Pejaten, Jl. Pejaten Barat No. 6, Jakarta 12510 ("RHP");
(2) PT DETONA SATYA DINAMIKA, a limited liability company established under the
laws of the Republic of Indonesia and having its principal office at
Setiabudi II Building, 3A Floor, Jl. H.R Rasuna Said, Jakarta 12920
("DSD");
(3) PT BINA REKSA PERDANA, a limited liability company established under the
laws of the Republic of Indonesia and having its principal office at
Arthaloka Building, 14th Floor, Jl. Jend. Sudirman 2, Jakarta ("BRP");
(4) INTERNATIONAL WIRELESS COMMUNICATIONS, a corporation established under the
laws of the State of Delaware, USA, and having its principal office at 400
South El Camino Real, Suite 1275, San Mateo, California, 94402, USA
("IWC"); and
(5) BELL ATLANTIC INDONESIA, a corporation established under the laws of the
State of Delaware, USA, and having its principal office at Arlington,
Virginia, USA ("BA").
RECITALS:
(A) Under a Joint Venture Agreement dated 21 April 1993 between BA, BRP, RHP
and PT Panutan Duta ("PD") (the "Joint Venture Agreement'), BA obtained
certain rights to an ownership interest in RHP.
(B) Subsequently, BRP acquired PD's shares in RHP and BRP is currently the sole
shareholder in RHP.
(C) IWC and DSD have agreed with BRP to obtain an ownership interest in RHP.
(D) BA is the assignee of the benefit of all obligations owed to its affiliate
Bell Atlantic International, Inc. ("BAII") by
1
<PAGE>
RHP, BRP and PD under agreements related to or pursuant to the Joint
Venture Agreement including without limitation a Services Agreement dated
16 December 1992 between BAII and RHP and Loan Agreements dated 21 April
1993 between BAII and RHP, PD and BRP respectively (the "Related
Agreements").
(E) The Parties wish to terminate all existing arrangements and agreements in
relation to BA's participation in RHP, under the terms set out below.
AGREED TERMS:
1. BA agrees, subject to the terms of this Termination Agreement, to
relinquish, and to sell and transfer to DSD, BRP and IWC, all of its right,
title and interest in RHP, including its rights to share and other
financial rights in RHP, whether direct or through its shareholders.
2. In consideration of BA's relinquishment of title and interest as provided
in Clause 1, RHP, BRP, IWC and DSD have issued a promissory note in favor
of BA in the form of the attached.
3. RHP, BRP, IWC and DSD hereby consent to the assignment of the Related
Agreements from BAII to BA.
4. The Joint Venture Agreement and the Related Agreements are hereby
terminated and each party thereto hereby releases the other parties thereto
from any and all obligations thereunder.
5. RHP, BRP, IWC and DSD hereby indemnify and hold harmless BA and its
shareholders, affiliates, directors, employees, agents and consultants for
any loss, damage, liability, cost or expense (including attorney fees)
sustained by it in connection with any claim by PD under the Joint Venture
Agreement or the Related Agreements.
6. In the event that the amounts due under the Promissory Note are not paid by
the Maturity Date (as defined therein) BA will, without prejudice to any
other rights at law including to enforce its rights under the Promissory
Note, have the right, exercisable at its direction, to a 35% ownership
interest in RHP or to assign such interest to a third party.
7. The parties agree to take all necessary action and execute such further
documents as may be necessary to give effect to the provisions of this
Agreement.
2
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8. This Agreement supersedes any and all existing agreements or arrangements
between the parties whether written or oral which relate to the subject
matter hereof.
9. This Agreement shall be governed by and construed in accordance with the
laws of the Republic of Indonesia.
DULY EXECUTED on the above date.
PT RAJASA HAZANAH PERKASA
By /s/ By /s/
---------------------------- ----------------------------
Name: Name:
Title: President Director Title: President Komisaris
PT DELTONA SATYA DINAMIKA
By /s/ By /s/
---------------------------- ----------------------------
Name: Name:
Title: President Director Title: President Komisaris
PT BINA REKSA PERDANA
By /s/ By /s/
---------------------------- ----------------------------
Name: Name:
Title: President Director Title: President Komisaris
3
<PAGE>
INTERNATIONAL WIRELESS COMMUNICATIONS
By /s/ Hugh McClung
----------------------------
Name: Chairman
Title: Hugh McClung
BELL ATLANTIC INDONESIA, INC.
[Seal]
By /s/ Robert B. Harmon
----------------------------
Name: Robert B. Harmon
Title: Executive Director
4
<PAGE>
PROMISSORY NOTE
Date: 11 October 1995
Amount: US$17,120,000
Due on: 10 October 1996
FOR VALUE RECEIVED, PT Rajasa Hazanah Perkasa, a limited liability company
established under the laws of the Republic of Indonesia and having its principal
office at Wisma Pejaten, Jl. Pejaten Barat No. 6, Jakarta 12510; PT Deltona
Satya Dinamika, a limited liability company established under the laws of the
Republic of Indonesia and having its principal office at Setiabudi II Building,
3A Floor, Jl II.R Rasuna Said, Jakarta 12920; PT Bina Reksa Perdana, a limited
liability company established under the laws of the Republic of Indonesia and
having its principal office at Arthaloka Building, 14th Floor, Jl. Jenderal
Sudirman 2, Jakarta, and International Wireless Communications, a corporation
established under the laws of the State of Delaware, USA, and having its
principal office at 400 South El Camino Real, Suite 1275, San Mateo, California
94420, USA (each a "Payer" and collectively the "Payers") hereby jointly and
severally unconditionally promise to pay to the order of Bell Atlantic
Indonesia, Inc., a corporation established under the laws of the State of
Delaware, USA the "Payee" at its principal office at 1310 North Court House Rd,
Arlington, VA 22201 the amount of US$17,112,000, comprised of US$16,000,000 in
principal and US$1,112,000 in interest on 10 October 1996 (the "Maturity Date")
together with any other amount determined as provided herein.
Any amount of this Promissory Note that is not received by the Payee on or
before the Maturity Date will bear interest at the rate of 10% per annum based
on a 360-day year and calculated from the Maturity date until payment is
received by the Payee.
In the event any Payer is required to withhold any tax from any payment under
this Promissory Note, other than withholding not to exceed 10% on the amount of
any interest payable hereunder, then the amount due and payable shall
automatically increase to that amount which after the withholding, will result
in the Payee actually receiving the same amount as it would have received had
the withholding tax been limited to 10% on the interest payable hereunder.
The non-exercise by the Payee of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent
instance. The Payers each hereby irrevocably waive diligence, presentment,
demand, protest and
1
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notice of any kind in the enforcement of this Promissory Note other than as
herein provided. Except as otherwise provided herein, all amounts owned by
Payee pursuant to this Promissory Note shall be paid in full, without set-off
or counterclaim, free and clear of any deduction or withholding except as
expressly provided in this Promissory Note.
This Promissory Note shall be governed by and interpreted in accordance with the
laws of the Republic of Indonesia, without prejudice to or limitation of any
other rights or remedies available to the holder hereof under the laws of any
other jurisdiction.
PT RAJASA HAZANAH PERKASA
By /s/ By /s/
---------------------------- ----------------------------
Name: Name:
Title: President Director Title: President Komisaris
PT DELTONA SATYA DINAMIKA
By /s/ By /s/
---------------------------- ----------------------------
Name: Name:
Title: President Director Title: President Komisaris
PT BINA REKSA PERDANA
By /s/ By /s/
---------------------------- ----------------------------
Name: Name:
Title: President Director Title: President Komisaris
INTERNATIONAL WIRELESS COMMUNICATIONS
By /s/ Hugh McClung
----------------------------
Name: Hugh McClung
Title: Chairman
2
<PAGE>
EXHIBIT 10.13C
SHAREHOLDERS AGREEMENT
by and among
PT BINA REKSA PERDANA
and
INTERNATIONAL WIRELESS COMMUNICATIONS
and
PT DELTONA SATYA DINAMIKA
and
PT RAJASA HAZANAH PERKASA
HADIPUTRANTO, HADINOTO & PARTNERS
Landmark Building Tower A, 24th Floor
Jl. Jend. Sudirman No. 1
Jakarta 12910
<PAGE>
Table of Contents
Page
----
1. PURPOSE OF THE AGREEMENT; CONVERSION OF RHP 2
2. CAPITAL OF RHP 2
3. PRIOR TO APPROVAL OF THE AMENDED ARTICLES OF ASSOCIATION 3
4. FOLLOWING APPROVAL OF THE AMENDED ARTICLES OF ASSOCIATION 5
5. MANAGEMENT AND SUPERVISION OF THE COMPANY 5
6. REPRESENTATION AND WARRANTIES 8
7. TRANSITION PERIOD BUSINESS PLAN AND BUDGET 10
8. PRE-CONVERSION EXPENSES 10
9. DISTRIBUTION OF PROFITS DURING TRANSITION PERIOD 11
10. FINANCIAL POLICY 11
11. CONFIDENTIALITY AND NON-DISCLOSURE 13
12. EFFECTIVE DATE; TERM AND TERMINATION 14
13. ARBITRATION 15
14. GENERAL PROVISIONS 16
EXHIBIT A 20
EXHIBIT B 21
EXHIBIT C 22
EXHIBIT D 23
EXHIBIT E 24
2
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SHAREHOLDERS AGREEMENT
This SHAREHOLDERS AGREEMENT (the "Agreement") is made and entered into on this
9th day of November 1995 by and among:
1 PT BINA REKSA PERDANA ("BRP"), a company established and operating under
the laws of the Republic of Indonesia, with its principal office at
Arthaloka Building, 14th Floor, Jalan Jenderal Sudirman No. 2, Jakarta
10220, Indonesia;
2. INTERNATIONAL WIRELESS COMMUNICATIONS ("IWC"), a corporation organized and
operating under the laws of the State of Delaware, United States of
America, with offices at 400 South El Camino Real, Suite 1275, San Mateo,
California 94402, United States of America;
3. PT DELTONA SATYA DINAMIKA ("DSD"), a company established and operating
under the laws of the Republic of Indonesia, with its principal office at
Setiabudi Building II, Floor 3A, Jl. HR Rasuna Said, Jakarta 12920,
Indonesia; and
4. PT RAJASA HAZANAH PERKASA ("RHP"), a company established and operating
under the laws of the Republic of Indonesia, with its principal office at
Wisma Pejaten, Jl. Pejaten Barat No. 6, Pasar Minggu, Jakarta, Indonesia.
(IWC and DSD hereinafter collectively, shall be referred to as the "New
Shareholders", and the New Shareholders, RHP and BRP hereinafter collectively
shall be referred to as the "Parties").
WHEREAS:
(A) As at the date of this Agreement, RHP has authorized and issued capital of
Rp. 1.000.000.000,00 (one billion Rupiah) representing 1.000 (one thousand
shares) with a nominal value of Rp. 1.000.000,00 (one million Rupiah) per
share, with BRP being registered holder of 1000 shares or 100%;
(B) RHP under a revenue sharing arrangement with PT (Persero) Telekomunikasi
Indonesia ("TELKOM"), has been authorized to operate a NMT 450 cellular
system in certain geographical areas in Jakarta and West Java, covering a
number of designated lines for a certain time. RHP requires financing to
clear up its
<PAGE>
financial obligations and to finance the expansion of its network to
become a nationwide network and to achieve that objective the Parties have
signed an agreement entitled Amendment to the Business Agreement on 17
April 1995 (the "Amended Business Agreement");
(C) To implement to the Amended Business Agreement, the Parties have submitted
a Model II.C Application to Badan Koordinasi Penanaman Modal (the
Investment Coordinating, Board - "BKPM") for the conversion of RHP into a
limited liability company established under Indonesia's Foreign Investment
Law No. 1/1967, as amended, and all implementing regulations relating
thereto, and further, IWC and DSD have effected the first funding of
US$5,000,000 each as committed for Phase I of the Implementation Plan in
the Amended Business Agreement;
(D) The Parties have acquired the approval of the competent authorities to
change the status of RHP to become a foreign investment company within the
framework of Law No. 1 Year 1967, as amended, pursuant to:
(a) Letter of Approval of the State Minister for the Mobilization of
Investment Fund/Chairman of BKPM No. 22/V/PMA/1995 dated 26 May 1995;
and
(b) Letter from BKPM No. 1226/A.6/1995 dated 28 September 1995 on
Amendment of Composition of Ownership of Foreign and Indonesian
Partners.
(E) BRP, RHP, Bell Atlantic Indonesia, Inc. and PT Panutan Duta have entered
into but have not yet fully implemented a Joint Venture Agreement dated 21
April 1993, which agreement, together with its related agreements, have
been terminated pursuant to a Sale and Termination Agreement dated 1
October 1995.
NOW THEREFORE, the Parties agree as follows:
1. PURPOSE OF THE AGREEMENT; CONVERSION OF RHP
1.1 The purpose of this Agreement is to set forth the terms and conditions of
(i) the Parties' respective financial investments in RHP; (ii) the
agreements of the Parties relating to capitalization, share transfers,
management and operation of RHP; and (iii) certain other matters.
1.2 Concurrently with execution of this Agreement, BRP and RHP shall convene an
extraordinary general meeting shareholders of RHP with an agenda including
the following matters, without limitation:
2
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(a) to increase RHP's authorized capital from Rp.1.000.000.000,00 to
Rp.25.000.000.000,00 (or equivalent value of US$11,061,947) and,
issue that authorized capital to the Parties in the proportions as
described in Article 2;
(b) to amend RHP's Articles of Association to become in form and
substance as attached hereto as Exhibit A (such amended Articles of
Association, the "Amended Articles of Association"). BRP and RHP
shall take such steps as are appropriate and reasonable to assure
that the Amended Articles of Association are filed with and approved
by all necessary governmental authorities.
2. CAPITAL OF RHP
2.1 Upon approval by the Minister of Justice to the Amended Articles of
Association:
(a) RHP shall have authorized capital ("Authorized Capital") of
Rp.25.000.000.000,00 - twenty five billion Rupiah (or equivalent
value of US$11,061,947.00 - eleven million sixty one thousand nine
hundred and forty seven United States Dollar), divided into 25,000
(twenty five thousand)registered shares ("Shares"), each share having
a nominal value of Rp.1.000.000,00 - one million Rupiah (or
equivalent to US$442.00 - four hundred and forty two United States
Dollar). The Parties acknowledge that the exchange rate to be used
to determine the Rupiah equivalent of the corresponding value in
United States dollar under this Agreement will be Rp.2.260,00
equivalent to US$1.00;
(b) IWC and DSD have effected the second funding by IWC and DSD, as
required in the Amended Business Agreement, in the amount of:
(i) US$5,000,000 (five million United States Dollar) from IWC, the
receipt of which is hereby acknowledged; and
(ii) US$5,000,000 (five million United States Dollar) from DSD, the
receipt of which is hereby acknowledged,
and RHP shall cause these amounts to be converted to 6,250 shares of
the Authorized Capital in the name of IWC and DSD, respectively,
amounting to Rp.6.250.000.000,00 - six billion two hundred and fifty
million Rupiah (or equivalent to US$2,765,487 - two million seven
hundred and sixty, five
3
<PAGE>
million four hundred and eighty seven United States Dollar) of
nominal value for each of IWC and DSD; and
(c) BRP, in addition to its current shareholding, shall subscribe to
11,500 shares of the Authorized Capital, amounting to Rp.
11.500.000.000,00 eleven billion five hundred million Rupiah (or
equivalent to US$5,088,496 - five million eighty eight thousand four
hundred and ninety six United States Dollar) of nominal value.
2.2 The registered shareholding and ownership of RHP upon the occurrence of all
the events specified in Article 2.1 shall become as follows:
BRP: 12,500 shares (50% of the total outstanding Shares)
IWC: 6,250 shares (25% of the total outstanding Shares)
DSD: 6,250 shares (25% of the total outstanding Shares)
3. PRIOR TO APPROVAL OF THE AMENDED ARTICLES OF ASSOCIATION
3.1 In addition to the provisions of this Agreement, which shall be applicable
to the Parties as of the execution hereof, as of the execution of the
Amended Articles of Association, the relationship between the Parties shall
also be governed by the Amended Articles of Association.
3.2 Upon execution of the Amended Articles of Association, but prior to its
approval by the Minister of Justice (the "Transition Period"):
(a) any references to shareholders shall be applicable to the Parties in
accordance with the shareholding ratios set out in Article 2.2, and
any references to meetings of shareholders shall mean meetings of the
Parties as new shareholders;
(b) any references herein to the Direksi and its members shall be
applicable to the persons appointed in the Amended Articles of
Association as the new Direksi, whose members shall serve as the
Transitional Management Board in managing the affairs of RHP, having
the same function as the Direksi and its members according to the
Amended Articles of Association;
(c) any references herein to the Dewan Komisaris and its members shall be
applicable to the persons appointed in the Amended Articles of
Association as the new Dewan Komisaris, whose members shall serve as
the Transitional Supervisory Board in
4
<PAGE>
supervising the management of RHP, having the same function as the
Dewan Komisaris and its members according to the Amended Articles of
Association;
3.3 To give legal effect to the authority of the respective Transitional
Management Board and the Transitional Supervisory Board, it is agreed that
immediately upon the commencement of the Transition Period:
(a) the members of the Direksi of RHP who were elected prior to conversion
shall each delegate to the Transitional Management Board sufficient
powers to manage the activities of RHP during the Transition Period.
Such delegations shall be substantially in the form of the Minutes of
Meeting as appended as Exhibit B; and
(b) the members of the Dewan Komisaris of RHP who were elected prior to
conversion shall jointly delegate to the Transitional Supervisory,
Board sufficient powers to supervise the management of RHP by the
Transitional Management Board during the Transition Period. Such
delegations shall be substantially in the form of the Minutes of
Meeting appended hereto as Exhibit C.
It is hereby agreed by BRP and RHP that such delegations of authority
during the Transition Period shall not be withdrawn without prior mutual
consent of the Parties.
3.4 Without prejudice to the delegations of authority provided for in this
Article, immediately following execution of the Amended Articles of
Association, the Direksi and Dewan Komisaris of RHP shall assist the
Transitional Management Board to obtain any license, permit or approval and
shall register with the tax and other competent authorities as required by
prevailing laws and regulations or otherwise as necessary for RHP to
undertake its business in accordance with its purposes and objectives as
set forth in the Amended Articles of Association and this Agreement.
3.5 It is agreed that during the Transition Period, RHP and BRP shall jointly,
and severally indemnify and hold harmless each of the New Shareholders for
any loss, damage or liability sustained by it or them in excess of the
capital invested by each of them as a result of any claims brought against
RHP, IWC and DSD in connection with their respective investment in or
lending to RHP except to the extent such loss, damage, liability, or claim
was the result of reckless or willful misconduct of the Party(ies) against
whom the claim is brought.
5
<PAGE>
4. FOLLOWING APPROVAL OF THE AMENDED ARTICLES OF ASSOCIATION
4.1 Immediately upon approval of the Amended Articles of Association by the
Minister of Justice, the Parties shall cause the Direksi of RHP to:
(a) register the approved Amended Articles of Association (together with
its approval by the Minister of Justice) with the District Court
having jurisdiction over RHP's domicile or in the Company Register
maintained by the Department of Trade, as applicable, having due
consideration to the enactment of the new Company Law, Law No.1 of
1995;
(b) publish the Amended Articles of Association (together with its
approval by the Minister of Justice and the registration with the
District Court or in Company Register, as applicable) in the State
Gazette of the Republic of Indonesia; and
(c) complete any other registration and obtain any other license required
by prevailing laws and regulations or required for RHP to undertake
its business in accordance with its purposes and objectives as set
forth in its Amended Articles of Association.
4.2 Not later than 60 (sixty) calendar days after approval of the Amended
Articles of Association by the Minister of Justice, the Parties shall cause
the Direksi of RHP to hold the first Extraordinary General Meeting of
Shareholders of RHP in order to:
(a) ratify the appointment of the members of the Direksi and Dewan
Komisaris of RHP appointed in the Amended Articles of Association; and
(b) decide other matters in accordance with the provisions of the Amended
Articles of Association.
4.3 It is expressly agreed that at any time before or after approval of the
Amended Articles of Association by the Minister of Justice, RHP shall only
engage in activities for which the appropriate/required registration,
approval, license or consent has been obtained and is subsisting, and RHP
shall use its best efforts to preserve its business organization intact and
will preserve the goodwill of its subscribers, suppliers and others having
business relations with it.
5. MANAGEMENT AND SUPERVISION OF THE COMPANY
6
<PAGE>
5.1 In accordance with the Amended Articles of Association, RHP shall be
managed by a Direksi consisting of 3 (three) members, under the supervision
of a Dewan Komisaris consisting of 4 (four) members.
5.2 The Parties shall cause the General Meeting of Shareholders that elects
members of the Direksi and Dewan Komisaris to elect the person recommended
by shareholder(s) entitled to nominate persons for the position concerned,
as described below:
(a) BRP shall be entitled to nominate 1 (one) member of the Direksi who
will become the President Director, while IWC and DSD shall each be
entitled to nominate 1 (one) member of the Direksi; and
(b) BRP shall be entitled to nominate 2 (two) members of the Dewan
Komisaris, including the President Komisaris, IWC and DSD will each be
entitled to nominate 1 (one) member of the Dewan Komisaris.
5.3 The quorum for meetings of the Direksi shall be 3 (three) Directors present
or represented and, except as provided in Article 5.5, the decisions of the
Direksi shall be adopted by a simple majority of the Directors present or
represented at a duly held meeting in which a quorum is present. The
meeting shall be conducted in the English language.
5.4 The quorum for meetings of the Dewan Komisaris shall be 4 (four) members
present or represented and, the decisions of the Dewan Komisaris shall be
adopted by a simple majority of the Komisaris present at a duly held
meeting in which a quorum is present. The meeting shall be conducted in
the English language.
5.5 Notwithstanding the provisions of Article 5.3, the Parties agree that the
affirmative vote of all members of the Direksi shall be required for the
following actions:
(a) designation of and change to RHP bank account signatories;
(b) loans, guarantees or trade credits to third parties in amounts
exceeding US$25,000, whether in a single or a series of related
transactions;
(c) contracts, agreements or transactions with any shareholders of RHP or
with any of their affiliated companies which involve amounts in annual
value in excess of US$75,000 in a single or a series of related
transactions;
(d) determining employee compensation guidelines;
7
<PAGE>
(e) any expenditure greater than the Rupiah equivalent of US$250,000,
provided that expenditures approved in the approved annual business
plan or approved budget shall not be regarded as expenditures for the
purpose of this provision;
(f) material amendments to the authorization policies as set forth from
time to time by the General Meeting of Shareholders;
(g) acquiring by purchase, lease or any other method movable or immovable
property having a price (in the case of leasing, an annual lease
price) in excess of the equivalent in any currency of US$250,000 (two
hundred and fifty thousand United States dollars) for any individual
transaction and US$1,000,000 (one million United States Dollars) in
the aggregate per year or such amount as otherwise approved by the
Dewan Komisaris from time to time;
(h) selling or disposing of movable or immovable property having a value
exceeding the limit from time to time determined by the Dewan
Komisaris;
(i) participating in any other business enterprise, including without
limitation establishing any subsidiary, without prejudice to any
approvals that may be required from competent authorities;
(j) establishing lines of credit or other credit facilities; and
(k) entering into, amending or terminating contracts in which the goods
and/or services to be purchased, sold or leased having a value in
excess of the equivalent in any currency of US$250,000 (two hundred
and fifty thousand United States dollars) for any individual
transaction and US$1,000,000 (one million United States dollars) in
the aggregate per year, or such amount as otherwise approved by the
Dewan Komisaris from time to time;
5.6 The Direksi shall represent RHP within and outside the Courts of Justice
with regard to all matters and is entitled to take all actions pertaining
to management and ownership affairs. Prior approval by the Dewan Komisaris
either in a meeting or by circular resolution in lieu of meeting shall be
required for the following actions:
(a) borrowing any money (provided that drawing money from an established
credit or loan account which has been so
8
<PAGE>
approved shall not be regarded as borrowing for the purpose of this
provision);
(b) binding RHP as guarantor and/or extending loans to or on behalf of
third parties;
(c) granting any hypothecation, fiduciary transfer of proprietary rights
for security purposes, pledge or other security interest or priority
claim in any property or assets of RHP;
(d) issuing interim dividends;
(e) transferring, acquiring or granting any licenses, sublicenses or
rights with respect to telecommunication technology, technical know-
how, trade secrets, patents, copyrights, trademarks, tradenames or
other intellectual property;
(f) undertaking any new business or substantially expanding any existing
business;
(g) issuance of securities by RHP on a stock exchange;
(h) writing off any accounts receivables or releasing any claims of RHP.
5.7 The Parties agree that, subject to compliance with the Articles of
Association, RHP's assets may be used to secure RHP's obligations with
respect to any borrowed money or other credit facilities. Each party
agrees that, should any shareholder guarantees be required to secure such
additional financing, each party will guarantee that percentage of such
financing as equals its percentage share ownership of RHP.
5.8 On or before November 1 of each calendar year, the Direksi shall finalize:
(i) the annual business plan, (ii) the annual budget, including capital and
operating expenditures; and (iii) the annual marketing plan. Adoption of
these plans by the meeting of Direksi shall be by majority vote.
5.9 Except as otherwise agreed in accordance with Article 5.5, the designated
Chief Operating Officer (COO) shall be authorized by the Direksi to be the
joint signatory along with the President Director on all bank accounts of
RHP. The Parties agree to cause the Direksi to adopt all such measures and
execute all such authorizations, documents and delegations of authority as
are required to implement at an effective management level the
9
<PAGE>
authorization policy with respect to purchase commitments, payment
authorization and disbursements.
5.10 With respect to participation in any other business enterprise in which
RHP has an equity interest, the Parties agree that participation in and
exercise of any management decision making at the Direksi level and
participation in and exercise of any supervisory functions at the Dewan
Komisaris level in any such enterprises by RHP shall at all times evidence
a single voting block reflecting the affirmative approval of all Parties.
6. REPRESENTATION AND WARRANTIES
6.1 Each of the Parties hereby represents and warrants as follows:
(a) this Agreement shall constitute its legally binding obligation;
(b) there is no provision of any existing law, rule, mortgage, indenture,
contract, financing statement, agreement or resolution binding on it
that would conflict with or any way prevent the execution, delivery,
or carrying out of the terms of this Agreement or any other document
or agreement referred to herein; and
(c) each of the Parties shall comply with the provisions of all applicable
national, federal, state, provincial, and local laws, ordinances, and
regulations of the United States of America and the Republic of
Indonesia, as applicable, and any other governmental entity having
jurisdiction over the activities being carried out under this
Agreement, including without limitation all provisions of the United
States Foreign Corrupt Practices Act (the "Act"). In addition, each
of the Parties represents and warrants neither it nor its affiliates,
nor any officer, director, shareholder, representative, employee, or
agent thereof, has made or will make, or cause to be made, in
connection with this Agreement and the course of action contemplated
by it, any payments, loans or gifts of any money or anything of value,
directly or indirectly, (i) to or for the use or benefit of any
official or employee of any government, (ii) to any political party or
official or candidate thereof, (iii) to any other person either for an
advance or reimbursement if it knows that any part of such payment,
loan or gift will be directly or indirectly given or paid by such
other person, or will reimburse such other persons for payments, gifts
or loans previously made, to any governmental official or political
party, or candidate of official thereof, or (iv)
10
<PAGE>
to any other person or entity, the payment of which would violate the
laws, or regulations having the force of law, of the United States of
America or the Republic of Indonesia or any other governmental entity
having jurisdiction over the activities being carried out under this
Agreement.
6.2 RHP and BRP each represent and warrant to the New Shareholders that:
(a) as at the date of this Agreement, RHP has authorized and issued
capital of Rp. 1.000.000.000,00 (one billion Rupiah) representing
1.000 (one thousand shares) with a nominal value of Rp. 1.000.000,00
(one million Rupiah) per share, with BRP being registered holder of
1000 shares or 100%, and that there are no outstanding subscriptions,
options, warrants, rights, convertible securities, or other agreements
or commitments obligating RHP to issue any shares of or other equity
interests in, or securities or rights convertible into or exchangeable
for shares of or other equity interests in RHP, except as provided in
the Amended Business Agreement and this Agreement;
(b) RHP's financial statements consisting of income and loss statements
for the years ending 31 December 1993 and 31 December 1994, audited by
Drs. Siddharta & Siddharta, a registered public accountant and
attached hereto as Exhibit D present fairly the financial condition,
assets, liabilities, obligations and results of operations of RHP as
of their respective dates and periods, and are correct and complete in
all material respects, and have been prepared in accordance with
generally accepted accounting principles. Except as disclosed in
those financial statements, there are no undisclosed liabilities of
RHP;
(c) RHP has good and valid title to all of the assets reflected in the
Financial Statements referred to in sub-paragraph (b) above, and such
assets constitute all of the assets at any time owned by RHP relating
to or usable in connection with its business;
(d) the total outstanding liabilities (including tax liabilities, but
excluding the amount set forth in Exhibit E) of RHP is as set forth in
the financial Statements referred to in sub-paragraph (b) above. Any
liabilities in excess of such amounts listed in Exhibits D and E shall
be the sole responsibility of BRP; and
(e) all monies owed, if any, by RHP to its former shareholders, is fully
repaid, except for the amounts referred to in the
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Tahir Debt Repayment Schedule attached as Exhibit E, which shall be
paid by RHP.
6.3 The Parties covenant that the foregoing representations and warranties
shall be true and accurate as of the date of this Agreement, it being
understood that each and all of the RHP and BRP indemnifications,
representations and warranties provided in this Agreement are of the joint
and several nature.
7. TRANSITION PERIOD BUSINESS PLAN AND BUDGET
7.1 Promptly but in any event no later than 30 (thirty) days following the
commencement of the Transition Period, the Transitional Management Board
shall submit to the New Shareholders for their review and approval a
business plan.
7.2 The business plan shall be a plan for the implementation, expansion and
operation of RHP's business and shall include, at a minimum, the following
items:
(a) Schedules for the expansion of the NMT 450 Mhz cellular system and of
any additional lines and any other areas of RHP's business;
(b) Schedules for the procurement of supplies, equipment and services by
RHP;
(c) Schedules of the staffing requirements of RHP;
(d) Schedules of the capitalization and financing requirements of RHP;
(e) Schedules and descriptions of marketing and sales projections and
strategies;
(f) Schedules for the pricing of services provided by RHP; and Schedules
and descriptions of projected financial results of RFIP; and
(g) Recommendations for the dividend policy for the current fiscal year.
8. PRE-CONVERSION EXPENSES
8.1 The following pre-conversion expenses shall be borne by RHP:
(a) all fees and expenses of the notary in Indonesia relating to the
execution of the Amended Articles of Association, the
12
<PAGE>
application to the Ministry of Justice for approval to the Amended
Articles of Association, and for obtaining such approvals, and any
other documents or actions related to the foregoing;
(b) any fees, taxes, duties or other costs relating, to any matter
referred to in points (a); and
(c) any other expenses that the General Meeting of Shareholders of RHP
determines to be treated as pre-conversion expenses of RHP.
8.2 All other expenses in respect to this Agreement incurred by each party
shall be borne by such party, including without limitation:
(a) all fees and expenses of their respective legal counsel relating to
the preparation and execution of this Agreement, the Amended Articles
of Association or any agreement referred to herein or relating to the
conversion of RHP and any agreements to be entered into by RHP and
third parties which are related to this conversion; and
(b) any fees, taxes, duties or other costs relating to any matter referred
to in paragraph (a) above.
9. DISTRIBUTION OF PROFITS DURING TRANSITION PERIOD
During the Transition Period and within 20 (twenty) days following the end
of each fiscal quarter, the Direksi shall determine the amount of
Distributable Cash (as defined below) of RHP for such quarter and shall
distribute, unless otherwise agreed to in writing by the Parties, the whole
amount in the following manner:
(a) during the Transition period, to each of the Parties in accordance
with their respective investment interests in RHP as reflected in
Article 2.2 of this Agreement; and
(b) following the Transition Period, in accordance with their respective
shareholding interest in RHP and pursuant to the provisions on
dividends contained in the Amended Articles of Association.
The term "Distributable Cash" shall only be applicable during the
Transition Period and shall mean undistributed net earnings of RHP.
13
<PAGE>
10. FINANCIAL POLICY
10.1 Access to the Books, Records and Facilities
Each party and its representatives shall have full and complete access to
the books, records and facilities of RHP at any time during normal business
hours and upon reasonable notice for the purpose of inspection, examination
and copying or any other reasonable purpose, and the cooperation of RHP and
the members of the Dewan Komisaris and Direksi and employees shall be
extended for such purposes. The financial statements of RHP shall be kept
in the English language to the extent deemed cost-effective by the Direksi
and as permitted under applicable laws. The minutes of corporate meetings
of the Direksi, Dewan Komisaris and General Meeting of Shareholders shall
be kept in the English language.
10.2 Financial Policy Control and Reporting
(a) Reports. For purposes of adequately informing the Parties, the
-------
Direksi shall be charged to provide each party with the following:
(i) monthly financial statements of RHP, including an income
statement and a statement of cash flows and a balance sheet
(collectively the "Financial Statements"), not later than 10
(ten) working days after the end of the following month. This
monthly financial statement shall include summary financial and
operating data, an explanation of any major budget variances, as
well as discussion of operational challenges and accomplishments
and the delineation of key issues under consideration by the
Direksi.
(ii) not later than 90 (ninety) days after the end of each fiscal
year, audited annual Financial Statements of RHP prepared in
accordance with generally accepted accounting principles
consistently applied together with an unqualified opinion of
RHP's Auditor (as defined below) and accompanied by supplemental
schedules showing any adjustments required in such Financial
Statements that would be required in order to conform such
Financial Statements to United States' generally accepted
accounting principles;
(iii) by the end of each fiscal year the annual business plans
prepared by the Direksi; and
14
<PAGE>
(iv) such other records, reports and data as each party may reasonably
request for compliance with its legal and contractual
obligations.
(b) Fiscal Year; Books of Account. RHP shall have a calendar fiscal year.
-----------------------------
RHP shall keep full and accurate books of account, which shall be kept
in accordance with generally accepted accounting principles. At the
end of each fiscal year of RHP, the books shall be examined at RHP's
expense by RHP's external public auditor (the "Auditor"). The Auditor
shall be appointed by the Parties at an Annual General Meeting of
Shareholders from among recognized accounting firms licensed in
Indonesia which have an international affiliation.
(c) Tax Matters. The Direksi shall approve all tax elections and tax
-----------
accounting methods adopted by RHP for income tax purposes, and all
agreements and settlements proposed to be entered into with the
Indonesian government as a result of an audit or examination of RHP's
Indonesian tax returns.
(d) Other. Any party may at its own expense conduct periodic compliance
-----
audits of RHP with respect to, by way of illustration only in the case
of the New Shareholders, matters relating to the Act, MFJ, U.S. export
control regulations and company employee codes of conduct. It is
further agreed that if reporting for financial, tax, corporate, or
legal compliance matters should become particularly onerous and for
the benefit solely of one of the Parties, then the Direksi shall be
entitled to bill such services rendered to the party concerned based
on a calculation of reasonable costs under the circumstances.
11. CONFIDENTIALITY AND NON-DISCLOSURE
11.1 The Parties shall maintain in confidence the contents of this Agreement
and shall not disclose the same, or any part hereof, without the written
consent of the other Party(ies), except as may be otherwise required by
law, regulation or effective government policy.
11.2 All Proprietary Information disclosed by one party to the other in the
course of performing this Agreement shall remain the property of and be
deemed proprietary to the disclosing party. For purposes of this Article
11, "Proprietary Information" shall mean any technical data, including
computer software and computer programs, design information, architectural
drawings, customer usage patters, engineering diagrams or any other similar
15
<PAGE>
information in tangible or recorded form, or other non-public, confidential
or proprietary information in tangible form, including marketing data and
business plans, or any know how and other intangible information, which is
disclosed by one party to the other in the course of performing this
Agreement, and which, if in tangible form, is stamped or otherwise marked
to indicate its confidential nature or, if in intangible form, is confirmed
in writing as confidential or proprietary information within ten (10)
business days of disclosure. The receiving party agrees: (a) to receive
and hold such Proprietary Information in strict confidence; (b) to accord
such Proprietary Information the protection that major U.S. corporations
customarily accord their own closely held, confidential and proprietary
information; (c) to hold such Proprietary Information in trust for the
disclosing party; and (d) to use such Proprietary Information solely and
exclusively in accordance with the terms of this Agreement in order to
carry out the purposes of RHP. Except as otherwise provided in this
Agreement, nothing contained in this Agreement shall be construed as
granting or conferring any rights by license or otherwise in any
Proprietary Information disclosed hereunder. No disclosure of any
Proprietary information pursuant to this Article 11 shall be construed as a
public disclosure of such Proprietary Information by either party for any
purpose whatever.
11.3 Notwithstanding the provisions of Article 11.1, neither party shall he
liable for disclosure or use of Proprietary Information belonging to any
other party if the same:
(a) was properly in the public domain at the time it was disclosed;
(b) was properly known to and available for use by the receiving, party
and recorded as such in its files at the time of receipt;
(c) is proven by the receiving party by appropriate documentation to have
been independently developed by the receiving party;
(d) is proven by the receiving party by appropriate documentation to have
become properly known to the receiving party from a source other than
the disclosing party without breach, to the knowledge of the receiving
party, of any confidentiality obligation by the receiving party; or
(e) is publicly released in response to a subpoena, court order or other
legal process under circumstances in which a protective order or
confidentiality agreement has been
16
<PAGE>
requested but rejected by the appropriate judicial or other lawful
authority.
11.4 Notwithstanding the provisions of Article 12, the provisions of this
Article 11 shall continue to apply for a period of two (2) years:
(a) to each of the Parties and to any individual or entity who becomes a
party to this Agreement after such party, individual or entity is no
longer a party, hereto; or
(b) if this Agreement is terminated, expired or canceled.
Further, it is agreed that upon termination, expiration or cancellation of
this Agreement, the receiving party shall, at the disclosing party's
option, return or destroy all Proprietary Information received from the
disclosing party, and shall destroy all analyses, compilations, forecasts,
studies and other documents based upon such Proprietary Information, to the
extent they include Proprietary Information. The restrictions contained
herein on the disclosure or use of information shall survive through the
termination, expiration or cancellation of this Agreement, regardless of
the manner in which this Agreement is terminated, expired or canceled.
11.5 The foregoing provisions of Article 11 shall not be interpreted to prevent
any party, provided that it is entitled under the Amended Articles to sell
all or any of the Shares it owns to third parties, from disclosing to
potential third party purchasers information relating RHP and its
operations so long as prior to the disclosure the party intending to sell
the Shares has obtained in writing an agreement from the third party not to
disclose such information to other persons, and to use such information
only for the purpose of evaluating whether or not to acquire the Shares
being offered for sale.
12. EFFECTIVE DATE; TERM AND TERMINATION
12.1 This Agreement shall become effective on the date of the occurrence of the
last of the following events (the "Effective Date"):
(a) this Agreement shall have been executed by all the Parties; and
(b) this Agreement and the transactions contemplated hereby shall have
received the requisite corporate approvals of the New Shareholders;
17
<PAGE>
and shall remain in effect as to each individual or entity who is or
becomes a party as long as such individual or entity funds shares in RHP;
12.2 This Agreement may be terminated at any time upon agreement of all persons
or entitles who are Parties. The Parties expressly waive Article 1266 of
the Indonesian Civil Code to the extent necessary to effect termination of
this Agreement as provided herein without judicial involvement.
12.3 Should one party (referred to in this Article 12.3 as the "Defaulting
Shareholder"):
(i) enter into any voluntary arrangements with creditors, appoint
receivers or liquidators, become insolvent, file, or have filed
against it a petition to be declared bankrupt or be the subject of a
similar proceeding, which petition is not revoked, or lifted or denied
by the court, within 60 (sixty) calendar days after the date such
petition was filed; or
(ii) breach any provision of this Agreement that has a material impact on
RHP's ability to perform its business or which jeopardizes the rights
of Parties not in breach as contemplated hereunder, and which breach
is not cured within 60 (sixty) calendar days after written notice to
cure from any other party; or
(iii)breach any material provision of any other agreement with RHP, which
breach is not cured within 60 (sixty) calendar days after written
notice to cure from any other party;
then, subject to applicable laws and regulations, the party(ies) who is
(are) not so insolvent, in bankruptcy proceedings, or in breach shall be
entitled, at its (their) option and upon written notice to the Defaulting
Shareholder, to purchase (or cause its (their) lawful designee to purchase)
on a pro rata basis the shares of RHP held by the Defaulting Shareholder at
a price and on terms and conditions in accordance with the provisions on
transfer of shares set forth in the Articles of Association. In the event
there is more than one party not insolvent, in bankruptcy proceedings or in
breach, such parties shall determine by vote whether to exercise the rights
hereunder, with each such party being entitled to vote in accordance with
the number of shares it owns.
12.4 The Parties further agree that:
18
<PAGE>
(a) if the Parties in good faith conclude that the continuation of RHP no
longer will be feasible because of a deadlock in the Direksi or Dewan
Komisaris; or
(b) if legal or political reasons arise in the USA or in the Republic of
Indonesia which have a material adverse financial effect on RHP;
then the Parties will discuss the means of winding up the Company. If the
Parties are unable to agree within 90 (ninety) days as to the manner in
which the assets of RHP are to be distributed to the Parties, then RHP
shall be dissolved and all of the assets owned by RHP shall be liquidated
and sold and the proceeds realized from liquidation distributed in
accordance with the procedures set forth in the Amended Articles of
Association and Indonesian company law.
13. ARBITRATION
13.1 The Parties each agree that any dispute arising out of or in connection
with this Agreement, including without limitation any question regarding
its existence, validity, termination, or the rights or obligations of
either of them, that cannot be settled amicably within 30 (thirty) days
after it has been first raised in writing shall be settled by arbitration
under the Arbitration Rules of the Singapore International Arbitration
Center (the "Rules") and the provisions of this Article 13.
13.2 The arbitration shall be conducted in Singapore at the facilities of the
Singapore International Arbitration Center by three arbitrators appointed
in accordance with the Rules. Any notice of arbitration, response or other
communication given to or by a party to the arbitration shall be given and
deemed received as provided in the Rules. The costs of the arbitration
shall be determined and paid by the parties to the arbitration as provided
in the Rules.
13.3 The Parties agree not to institute any legal proceedings arising out of or
in connection with this Agreement, except only as provided in this Article
13 and then only to enforce in any court having jurisdiction any award
rendered by the arbitrators. In the event any legal proceedings are
instituted in any court to enforce any arbitration award, the party against
whom enforcement of that arbitration award is sought shall pay all costs,
including without limitation the costs of legal counsel and translation
fees, of the party seeking to enforce the arbitration award.
19
<PAGE>
14. GENERAL PROVISIONS
14.1 Throughout the term of this Agreement, neither BRP or any of its
affiliates shall, whether alone or in conjunction with any third party, in
any manner, without the prior written consent of the other Parties,
participate, either directly or indirectly, in the ownership, financing,
implementation, expansion or operation of wireless communications,
transmission, manufacturing or distribution services in Indonesia, except
through RHP in accordance with this Agreement.
14.2 Neither this Agreement nor any interest herein may be assigned, in whole
or in part, by any party without the prior written consent of each of the
other parties, except that without securing such prior consent but upon
advance written notice, IWC shall have the right to assign this Agreement
to any of their affiliates.
14.3 All notices, requests, consents, demands and other communications required
or contemplated under this Agreement ("Notices") shall be in writing and
(i) personally, delivered, or (ii) sent by air courier (for delivery within
4 (four) business days after sending), shipping prepaid, or (iii) sent by
facsimile transmission, addressed as follows:
If to BRP, addressed to:
PT BINA REKSA PERDANA
Arthaloka Building, 14th Floor
Jalan Jenderal Sudirman No. 2
Jakarta, Indonesia
Facsimile: (62-21) 5700-861
Attention: President Director
If to IWC, addressed to:
INTERNATIONAL WIRELESS COMMUNICATIONS
400 South El Camino Real, Suite 1275
San Mateo, California 94402
United States of America
Facsimile:
Attention:
If to DSD, addressed to:
PT DELTONA SATYA DINAMIKA
Setiabudi Building II, Floor 3A
Jl. HR Rasuna Said
20
<PAGE>
Jakarta 12920, Indonesia
Facsimile: (62-21)
Attention: President Director
If to RHP, addressed to:
PT RAJASA HAZANAH PERKASA
Wisma Pejaten
Jl. Pejaten Barat No.6, Pasar Minggu
Jakarta 10210, Indonesia
Facsimile: (62-21) 7800 520
Attention: Director (Chief Operating Officer)
or such other persons or address as any party may request by notice given
as aforesaid. Notices shall be deemed given and received at the time of
personal delivery or, if sent by air courier, 4 (four) business days after
such sending, or if sent by facsimile transmission, 1 (one) business day
after the transmission. All notices and other communications among the
Parties Hereunder shall be in the English language.
14.4 This Agreement shall be exclusively governed by and construed in
accordance with the laws of the Republic of Indonesia, regardless of its
place of negotiation, execution or performance and regardless of any
conflicts of laws or rules which would require the application of the laws
of another jurisdiction, except for matters which pertain to the MFJ (as
defined below) which shall be construed in accordance with the laws of the
United States.
14.5 Each of the Parties acknowledges that IWC and its parent company are
subject to the Modified Final Judgment ("MFJ") as entered in United States
v. American Telephone & Telegraph Co. CA.82-0192, August 25, 1982, and as
amended from time to time. The Parties agree that they will take any and
all such actions as they are reasonably able to take to ensure that IWC's
share ownership in RHP and participation in the transaction contemplated in
this Agreement does not cause it to be in violation of the MFJ.
14.6 This Agreement shall be binding upon the Parties and their successors and
permitted assigns.
14.7 The provisions of this Agreement shall be deemed severable, and if any
part of any provision is held to be illegal, void, voidable, invalid, non-
binding or unenforceable in its entirety or partially or as to any party,
for any reason, such provision may be changed, consistent with the intent
of the Parties, to the extent reasonably, necessary, to make the provision,
as so changed, legal, valid, binding and enforceable. If any provision
21
<PAGE>
of this Agreement is held to be illegal, void, voidable, invalid,
non-binding or unenforceable in its entirety or partially or as to any
party, for any reason, and if such provision cannot be changed consistent
with the intent of the Parties to make it fully legal, valid, binding and
enforceable, then such provision shall be stricken from this Agreement if
doing so would not change the basic intent of the Parties, and (if such
provision is so stricken) the remaining provisions of this Agreement shall
not in any way be affected or impaired, but shall remain in full force and
effect. To the extent permitted by applicable law, the Parties waive any
provision of law which renders any provision hereof unenforceable in any
respect.
14.8 No party (the "Non-performing Party") shall be in default or otherwise
liable for any delay in or failure of its performance under this Agreement
where such delay or failure arises by reason of any act of God, fire,
storm, tempest, flood, earthquake, riot, civil commotion, civil war,
rebellion, revolution, insurrection, military or usurped power, aircraft,
strikes, labor disputes, or other similar cause beyond the control of the
Non-performing Party; provided, however, that the delay or failure in
performance could not have reasonably been foreseen or provided against by
the Non-Performing Party; and provided further that the Non-Performing
Party exercises such diligence as the circumstances may require. In the
event a force majeure condition occurs which prevents performance by the
Non-Performing Party for sixty (60) days or longer, then this Agreement or
the affected part thereof shall, at the option of the party adversely
affected by the force majeure condition, be suspended for the duration of
the force majeure condition.
14.9 This Agreement, together with its Exhibits and the Amended Business
Agreement supersede any other written agreements, letters of intent,
memoranda of understanding and any other written understandings or oral
arrangements among the parties. Changes, modifications, amendments,
supplements, alterations and additions to this Agreement shall be mutually
agreed in writing. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the
Parties, their permitted successors and assigns and they shall not be
construed as conferring any rights on any other persons.
14.10 Each of the Parties shall be deemed at all times to be an independent
contractor and as such, during the term of this Agreement, its employees
shall at all times remain under its sole control. The Parties shall not
be deemed to be partners or joint venturers or agents of each other for
any purpose whatsoever or to be sharing profits and losses arising out of
22
<PAGE>
the efforts of any such Parties except to the extent provided in this
Agreement.
14.11 No licenses, express or implied, under any patents, copyrights, trade
secrets, trademarks, service marks or other intellectual property rights
are granted by any party or any of its affiliates under this Agreement.
RHP shall not adopt or register any trademarks, trade names or service
marks which are identical or confusingly similar to, or imitations of,
those of any of the Parties or any of their affiliates, without the
express written consent of the relevant party or the relevant affiliate.
14.12 A waiver by any party of any right it may have under this Agreement shall
be effective only if made expressly and in writing duly signed by the
party granting the waiver. The failure of any party to insist, in any one
or more instances, on performance of any of the terms or conditions of
this Agreement shall not be construed as a waiver or relinquishment of any
rights granted under this Agreement or of the future performance of any
such term, covenant or condition, but the obligations of the Parties with
respect thereto shall continue in full force and effect.
14.13 The headings contained in this Agreement have been inserted for the
convenience of reference only, and neither such headings nor the placement
of any term hereof under any particular heading shall in any way restrict
or modify any of the terms or provisions hereof. Terms used in the
singular shall be read in the plural, and vice versa, and terms used in
the masculine gender shall be read in the feminine or neuter gender, when
the context so requires. The term "person" as used herein refers to a
natural person, a corporation, a partnership, a joint venture or joint
operation, a limited liability company, a governmental entity or agency,
or other company, entity or association, as the context requires.
14.14 The Parties shall promptly take the necessary actions and execute such
further or other documents in such manner as to ensure that the
provisions, intent, and spirit of the Amended Business Agreement, this
Agreement and the Amended Articles of Association shall be complied with
and carried into full effect. The Parties shall also exercise good faith
at all times in the course of performing the agreements set forth in this
Agreement.
23
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives as of the day and year first written
above.
PT RAJASA HAZANAH PERKASA Approved
By /s/ Tonny Hardianto By /s/ Hutomo Mandala Putra
------------------------------ ------------------------------
Name : Tonny Hardianto Name : Hutomo Mandala Putra
Title : Director Title : Komisaris
PT BINA REKSA PERDANA Approved
[Seal]
By /s/ Tonny Hardianto By /s/ Hutomo Mandala Putra
------------------------------ ------------------------------
Name : Tonny Hardianto Name :
Title : President Director Title : President Komisaris
INTERNATIONAL WIRELESS PT DELTONA SATYA DINAMIKA
COMMUNICATIONS
By /s/ John Tolton By /s/ Amir Abdul Rachman
------------------------------ ------------------------------
Name : John Tolton Name : Amir Abdul Rachman
Title : Attorney-in-Fact Title : Director
24
<PAGE>
Exhibit A
Minutes of the Extraordinary General Meeting of
Shareholders of PT Rajasa Hazanah Perkasa
<PAGE>
TABLE OF CONTENTS
Page
----
1. NAME AND DOMICILE...................................... 4
2. TIME OF INCEPTION AND DURATION......................... 4
3. PURPOSES AND OBJECTIVES................................ 4
4. CAPITAL................................................ 4
5. SHARES................................................. 7
6. REPLACEMENTS........................................... 8
7. REGISTER OF SHAREHOLDERS............................... 8
8. TRANSFER OF SHARES..................................... 9
9. MANAGEMENT............................................ 12
10. POWERS OF THE DIREKSI................................. 13
11. MEETINGS OF THE DIREKSI............................... 16
12. THE DEWAN KOMISARIS................................... 17
13. POWERS OF THE DEWAN KOMISARIS......................... 18
14. MEETINGS OF THE DEWAN KOMISARIS....................... 19
15. FINANCIAL YEAR AND ACCOUNTS........................... 21
16. GENERAL MEETINGS OF SHAREHOLDERS...................... 21
17. ANNUAL GENERAL MEETINGS OF SHAREHOLDERS............... 22
18. EXTRAORDINARY GENERAL MEETINGS OF SHAREHOLDERS........ 22
19. PLACE AND NOTICE OF GENERAL MEETINGS OF SHAREHOLDERS.. 23
20. CHAIRPERSON OF THE GENERAL MEETINGS OF SHAREHOLDERS... 23
21. RESOLUTIONS AND VOTING RIGHTS AT THE GENERAL MEETINGS
OF SHAREHOLDERS....................................... 24
22. APROPRIATION OF PROFITS; DIVIDENDS.................... 25
23. RESERVE FUND.......................................... 26
24. AMENDMENT OF THE ARTICLES OF ASSOCIATION.............. 26
25. DISSOLUTION........................................... 27
26. MISCELLANEOUS PROVISIONS.............................. 27
1
<PAGE>
MINUTES OF
THE EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS OF
PT RAJASA HAZANAH PERKASA
NUMBER:
On this day, ,the day of one thousand nine hundred and (__-__-19__),
at____________ (Western Indonesia Time).
At the request of the Direksi of the limited liability company, PT RAJASA
HAZANAH PERKASA (hereinafter referred to as the "Company"), domiciled in
Jakarta, the Articles of Association of which as contained in Deed No.22,
dated 17 December 1984, passed before Pariwondo Soekarno, Notary in
Jakarta, which Deed was approved by the Minister of Justice by his Decision
Letter No. C2-2666.HT.01.01.Th'85, dated 8 May 1985, registered at the
District Court of South Jakarta under Registration Number 503/Not/1985/PN
JKT.SEL, dated 24 July 1985, and published in the State Gazette No.82,
dated 14 October 1986, Supplement No. 1 199, and lastly amended by Deed No.
15, dated 10 May 1985, as amended by Deed No.34, dated 14 August 1985, both
passed before Pariwondo Soekarno, Notary, in Jakarta, which were approved
by the Minister of Justice by his Decision Letter No.C2-
6866.HT.01.04.Th'85, dated 29 October 1985, registered at the District
Court of South Jakarta under Registration Numbers 770 and 771/Not/1986/PN
JAKSEL, dated 10 September 1986, and published in the State Gazette No. 82,
dated 14 October 1986, Supplement No. 1200.
I, ___________, Notary in Jakarta, in the presence of witnesses known to me,
Notary, and whose names will be mentioned at the end of this Deed, was, at
___________,Jakarta, in order to draw up the minutes of all matters to be
discussed and resolved in an Extraordinary General Meeting of Shareholders of
the Company convened on the day, date, time and at the place as mentioned above
(hereinafter referred to as "Meeting").
Present in this Meeting and therefore appeared before me, Notary, in the
presence of witnesses, whose name will be mentioned at the end of this Deed:
1. Mister Tonny Hardianto, businessman, residing in Jakarta, Jalan ___________
Jakarta, according to his statement in this matter acting in his capacity
as Director of the Company;
2. Mister Tonny Hardianto, businessman, residing in Jakarta, Jalan ___________
Jakarta, according to his statement is a Director and therefore in this
matter acting on behalf of PT Bina Reksa Perdana ("BRP") the owner and
holder of 1000 shares of the
<PAGE>
Company, which represents 100% of the total shares issued and existing up
to this day; and
3. Mister Hugh McClung, businessman, temporarily residing in Jakarta, a
Director and therefore acting for and on behalf of the limited liability
company International Wireless Communications ("IWC") established under the
laws of the of the State of Delaware, United States of America, with
offices at 400 South El Camino Real, Suite 1275, San Mateo, California
94402 USA.
4. Mister _______________ businessman, residing in Jakarta, attending by
invitation of the Company, according to his statement as a Director and
therefore in this matter acting for and on behalf of PT Deltona Satya
Dinamika ("DSD"), a limited liability, company established under the laws
of the Republic of Indonesia, with offices at Setiabudi Building 11, floor
3A, Jl. HR. Rasuna Said, Jakarta 12920, Indonesia.
The Appearer Mr. Tonny Hardianto, acting in his capacity as the President
Director of the Company, pursuant to Article 17 paragraph 1 of the Articles of
Association of the Company, presided over the Meeting as Chairman of the Meeting
and opened the Meeting, and announced:
Whereas, in this Meeting were present or represented the total number of
shares of the Company issued up to this day and date amounting to 1,000
shares, each share worth 1,000,000 Rupiah nominal value; and
Whereas, therefore, pursuant to Article 16 paragraph 4 of the Articles of
Association of the Company, no prior notice for this Meeting was required
and the Meeting was legally convened and was entitled to adopt legal and
binding decisions.
Because all those present at the Meeting had been priorly informed of the
agenda of this Meeting,, the Chairman proposed to the Meeting and the
Meeting unanimously approved and, subject to the approval by the Minister
of Justice to the amendment to the Company's Articles of Association,
resolved the following resolutions:
1 RESOLVED, to approve the change of the status of the Company, to
become a Foreign Investment Company within the framework of Law No. 1
Year 1967 as amended by Law No. 11 Year 1970, pursuant to:
Letter of Approval of the State Minister for the Mobilization of
Investment Fund/Chairman of BKPM No. 22/V/PMA/1995 dated 26 May 1995;
and
2
<PAGE>
BKPM Letter No. 1226/A.6/1995 dated 28 September 1995 on amendment of
composition of ownership of foreign and Indonesian partners.
2. RESOLVED, to approve the increase of the authorized capital of the Company
to become Rp 25.000.000.000,00 - twenty five billion Rupiah (or equivalent
value of US$11,061,947.00 - eleven million sixty one thousand nine hundred
and forty seven United States Dollar), divided into 25,000 (twenty five
thousand) registered shares ("Shares"), each share having a nominal value
of Rp 1.000.000,00 - one million Rupiah (or equivalent to US$442.00 - four
hundred and forty two United States Dollar) and FURTHER RESOLVED, to issue
new shares from that increase to
PT Bina Reksa Perdana in the amount of 11,500 new shares, having the
aggregate nominal value of Rp 11.500.000.000,00 - eleven billion five
hundred million Rupiah (or equivalent to US$5,088,496 - five million
eighty eight thousand four hundred and ninety six United States
Dollar);
International Wireless Communications in the amount of 6,250 new
shares, having the aggregate nominal value of Rp 6.250.000.000,00 six
billion two hundred and fifty million Rupiah (or equivalent to
US$2,765,487 - two million seven hundred and sixty five million four
hundred and eighty seven United States Dollar);
PT Deltona Satya Dinamika in the amount of 6,250 new shares, having
the aggregate nominal value of Rp 6.250.000.000,00 - six billion two
hundred and fifty million Rupiah (or equivalent to US$2,765,487 - two
million seven hundred and sixty five million four hundred and eighty
seven United States Dollar);
3. RESOLVED, that as a result of the conversion of the Company to become a
Foreign Investment Company in accordance with approvals granted by the
competent authorities, the increase of capital and the issuance of new
shares as resolved above, to confirm the shareholding of the Company with
the following composition:
(1) PT Bina Reksa Perdana: 12,500 shares of the Company having an
aggregate nominal value of Rp 12.500.000.000,00 - eleven billion five
hundred million Rupiah (or equivalent to US$5,530,973 - five million
five hundred and thirty million nine hundred and seventy three United
States Dollar) and representing 50% of the total shares issued by the
Company;
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(2) International Wireless Communications; 6,250 shares of the Company,
having an aggregate nominal value of Rp 6.250.000.000,00 - six billion
two hundred and fifty million Rupiah (or equivalent to US$2,765,487 -
two million seven hundred and sixty five-thousand four hundred and
eighty seven United States Dollar) and representing 25% of the total
shares issued by the Company;
(4) PT Deltona Satya Dinamika: 6,250 shares of the Company having an
aggregate nominal value of Rp 6.250.000.000,00 - six billion two
hundred and fifty million Rupiah (or equivalent to US$2,765,487 - two
million seven hundred and sixty five million four hundred and eighty
seven United States Dollar) and representing 25% of the total shares
issued by the Company;
4. RESOLVED, to honorably discharge all present members of the Direksi and the
Dewan Komisaris of the Company and to appoint new members of the Direksi
and the Dewan Komisaris of the Company effective as of the date of the
Minister of Justice approval to the Amended Articles of the Company, with
the following composition:
President Director Suprapto Pegeng
Director Hugh McClung
Director Amir Abdul Rachman
President Komisaris Hutomo Mandala Putra
Komisaris Tonny Hardianto
Komisaris Nila Motik Abdul Rachman
Komisaris Sam Endy
5. RESOLVED, to approve the amendment of the entire Articles of Association,
so that henceforth the Articles of Association of the Company (hereinafter
referred to as the "Articles of Association") shall read as follows:
1. NAME AND DOMICILE
-----------------
The company is named: "PT RAJASA HAZANAH PERKASA" (hereinafter in these Articles
of Association also referred to as the "Company") and shall be domiciled in
Jakarta, and may open branches and representative offices in other places within
or outside the territory of the Republic of Indonesia.
2. TIME OF INCEPTION AND DURATION
------------------------------
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The Company shall be formed for a period of seventy five (75) consecutive years
commencing from the date of approval of its Deed of Establishment by the
Minister of Justice, with the provision that the Law on Foreign Investment (Law
Number 1/Year 1967), as amended, shall be applicable to the Company during a
period of thirty (30) years from the date of the commencement of commercial
production, unless the permit for foreign capital investment is extended or
renewed.
3. PUPPOSES AND OBJECTIVES
-----------------------
The purposes and objectives of the Company are:
(a) to engage in the business of providing wireless telecommunications
services throughout Indonesia;
(b) to engage in any business activity or endeavor ancillary,
complementary or relating to the business activities noted in the
preceding paragraph (a) and to conduct its activities for its own
account or in conjunction with other persons or corporate entitles in
such manner and form as may be required, without prejudice to
prevailing laws and regulations.
4. CAPITAL
-------
4.1 The authorized capital. of the Company shall be Rp 25.000.000.000,00 -
twenty five billion Rupiah (or equivalent value of US$11,061,947.00 -
eleven million sixty one thousand nine hundred and forty seven United
States Dollar) divided into 25,000 (twenty five thousand) registered
shares, each share having a nominal value of Rp 1.000.000,00 - one million
Rupiah (or equivalent to US$442.00 - four hundred and forty two United
States Dollar).
4.2 The above mentioned authorized capital has been subscribed by:
(1) PT Bina Reksa Perdana: 12,500 (twelve thousand five hundred) shares of
the Company having an aggregate nominal value of Rp 12.500.000.000,00
eleven billion five hundred million Rupiah (or equivalent to
US$US$5,530,973 - five million five hundred and thirty million nine
hundred and seventy three United States Dollar);
(2) International Wireless Communications: 6,250 shares of the Company
having an aggregate nominal value of Rp 6.250.000.000,00 - six billion
two hundred and fifty million Rupiah (or equivalent to US$2,765,487 -
two million seven
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hundred and sixty five million four hundred and eighty seven United
States Dollar);
(4) PT Deltona Satya Dinamika: 6,250 shares of the Company having and
aggregate nominal value of Rp 6.250.000.000,00 - six billion two
hundred and fifty million Rupiah (or equivalent to US$2,765,487 - two
million seven hundred and sixty five million four hundred and eighty
seven United States Dollar);
4.3 One hundred percent of the nominal value of each of the above mentioned
subscribed ,shares, or an aggregate sum of Rp 25.000.000.000,00 - twenty
five billion Rupiah (or equivalent value of US$11,061,947.00 - eleven
million sixty one thousand nine hundred and forty seven United States
Dollar) will have been paid up in cash at the latest on the date of
approval of these Amended Articles of Association by the Minister of
Justice.
4.4 Payment for shares in kind or other than by payment in cash or by reduction
of the Company's debt pursuant to the terms of an agreement approved by all
shareholders, shall be subject to approval of all shareholders and if
approved, the Direksi shall have the property to be contributed as payment
appraised in accordance with prevailing laws and regulations.
4.5 In the event that additional shares are issued or the authorized capital of
the Company is increased, then, unless otherwise agreed by all
shareholders, and subject to prevailing laws and regulations, each
shareholder shall be entitled to subscribe to that number of the shares at
any time to be issued out of such increased authorized capital as bears the
same proportion to the total number of shares to be issued as the number of
shares already subscribed to by it bears to the total shares already issued
by the Company.
Subject to prior approval by a General Meeting of Shareholders, the Direksi
shall determine when to issue shares representing such increased authorized
capital, which determination shall be made on the basis of the needs of, or
requirements imposed on, the Company. If the Direksi is considering to
issue new shares, it shall promptly, notify the shareholders.
Unless otherwise determined by the General Meeting of Shareholders, the
price per share at which such new shares are to be issued shall be (i) the
per share book value of already issued shares at the time the new shares
are issued, which value shall be determined by the Direksi, or (ii) the
share's nominal value, whichever is higher. The Direksi shall also
determine the amount
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of such price per share that must be paid at the time such new shares are
issued.
The Direksi shall notify each shareholder of the date, amount and per share
price (and amount thereof that must be paid upon issuance) of any new issue
of shares. Each shareholder shall have thirty (30) days from the date of
receipt of such notice to accept its proportionate share of the shares to
be issued. In the event any shareholder fails to notify the Direksi in
writing within such thirty (30) day period that it will subscribe to all of
its proportionate share of the shares to be issued, or notifies the Direksi
in writing that it will not subscribe to such shares or will subscribe to
fewer shares than those to which it is entitled, then the Direksi may offer
such shares that were not subscribed:
(i) proportionally to each other shareholder who agrees to subscribe to all
of its proportionate share of the shares to be issued, or,
(ii) in the case of shares which remain unsubscribed, to third parties
approved by the General Meeting of Shareholders, without prejudice to
the requirement to obtain approval from the competent authorities.
In the event any foreign shareholder is for any reason prohibited from
subscribing to or cannot obtain approval from the competent authorities to
subscribe to or purchase all of the new shares to which it is otherwise
entitled pursuant to this Article, then such foreign shareholder shall be
entitled to designate a person or legal entity entitled to purchase shares
in the Company. Such person or legal entity, upon the approval of the
General Meeting of Shareholders and subject to obtaining any approvals
front competent authorities that may be required, will have the right to
purchase any of the new shares to be issued that such foreign shareholder
would otherwise be entitled to subscribe to as provided in this Paragraph.
4.6 The Direksi may, by resolution and notice to the shareholders, require
payment of all or any portion of the value of any subscribed shares that
have not yet been fully paid. Such resolution and notice shall state the
amount of such payment and the date when such payment will be due.
4.7 In case a shareholder fails to pay to the Company any amount in payment for
the shares issued to it by the Company when payment is due as provided in
the Articles of Association, including as provided in Paragraph (3), (5) or
(6) of this Article, then the Direksi shall be obligated to serve on the
said shareholder a
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written demand for payment of all or any portion of the unpaid amount for
the shares issued to such shareholder, together with interest thereon to
be determined by the Direksi from time to time. Interest shall be counted
from the date of the demand, or from such later date as the Direksi shall
determine, until the total amount due including interest shall have been
fully paid. Amounts received shall be applied first against accrued
interest.
4.8 In the event that the nonpaying shareholder fails to pay in full all
outstanding amounts including interest within fourteen (14) days after the
payment date mentioned in the demand or within such longer period as
determined by the Direksi and set forth in the said demand, then the
shareholder concerned must sell all his shares that are not fully paid to
another shareholder or to a third party comprising one or more other
persons or entitles, without prejudice to the provisions in the Articles of
Association including without invitation Article 8, and with the approval
of the General Meeting of Shareholders, without prejudice to any
requirement to obtain approval from the competent authorities.
For the implementation of the transfer of such shares from the nonpaying
shareholder to another shareholder or a third party, the Direksi is
entitled and authorized, for and 011 behalf of such shareholder who failed
to make the payment, to (i) appear before competent authorities, submit
information and sign and submit applications as necessary or desirable in
order to obtain the approval from the competent authorities and (ii) take
any other action, which is required to accomplish the above transfer of
shares as required by the Articles of Association, including without
limitation Article 8.
4.9 The transfer of such shares to other parties as provided in Paragraph 8 of
this Article shall not relieve the shareholder who has failed to make the
demanded payment from the responsibility for any loss to the Company
resulting from such failure, and such shareholder shall be obliged to
indemnify the Company for any unpaid interest and other damages caused by
its failure to pay.
4.10 Notwithstanding the provisions of Paragraph (5) of this Article, any
shareholder to whom Paragraph (7) or Paragraph (8) of this Article is
applicable shall not be entitled to subscribe to any new shares to be
issued by the Company until it has indemnified the Company in full pursuant
to Paragraph (9) of this Article.
SHARES
------
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5.1 All shares of the Company shall be registered shares and issued in the name
of the owner as registered in the Register of Shareholders of the Company.
5.2 Subject to Paragraph (1) of this Article, each share certificate issued
will be for at least one share and shall mention the serial number of the
share concerned and shall bear the signatures of the President Komisaris
and President Director.
5.3 The Company may issue a collective certificate as evidence of ownership of
two or more shares held by one shareholder, which collective certificate
shall mention the number of shares concerned and the serial numbers
thereof, and which shall bear the signatures of the President Komisaris and
President Director.
5.4 Each share certificate and each collective certificate shall be numbered
and shall state the date of issue and, if so determined by the Direksi, a
legend or legends identifying applicable restrictions on the transfer of
shares and qualifications applicable to the share(s) represented by such
certificate.
5.5 The Company shall acknowledge only one person, either an individual or a
legal entity, as being entitled to exercise and utilize all the rights
attaching to a share by law or the Articles of Association upon a share.
In the event that any share for whatsoever reason becomes the property of
several persons, then those persons having joint ownership shall designate
in writing to the Direksi one person from amongst them or another person as
their joint representative and only such representative's name shall be
entered into the Register of Shareholders of the Company and such
representative shall be considered as the legal holder/owner of the share
concerned and shall be entitled to exercise and utilize all the rights
attaching to said share by law or the Articles of Association upon said
share. Prior to the Company receiving, the written notification with
respect to the designation of a joint representative or any change in such
designation, the Company shall be entitled to treat the person whose name
is registered in the Register of Shareholders of the Company as the only
person entitled to exercise and utilize the rights attaching to said share
by law or the Articles of Association.
6. REPLACEMENTS
------------
6.1 In case any share certificate is damaged or replacement thereof is deemed
necessary for any other reason determined by the Direksi, the original
share certificate may be exchanged for its replacement upon written request
addressed to the Direksi and on
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surrender of the original share certificate or whatever is left thereof.
6.2 Whenever a replacement certificate has been issued as provided in Paragraph
(1) of this Article 6, the original share certificate, or whatever is left
of it, shall be marked as being cancelled at the subsequent meeting of the
Direksi and the proceeding shall be recorded in the minutes of such meeting
and thereafter reported to the General Meeting of Shareholders.
The cancellation of original share certificates and the issuance of
replacement certificates shall be recorded in the Register of Shareholders
pursuant to Article 7.
6.3 In case a share certificate is lost or totally destroyed, the replacement
may be issued to the shareholder concerned, provided he gives satisfactory
evidence to the Direksi, that said share certificate is in fact lost or
totally destroyed and gives such guarantee as may be deemed necessary by
the Direksi in any particular case.
6.4 The issuance of a replacement in accordance with the provisions of this
Article renders the original share certificate null and void.
6.5 All expenses incurred in connection with the replacement of share
certificates in accordance with the provisions of this Article shall be
borne by the shareholder concerned.
6.6 The provisions in Paragraphs (1) through (5) of this Article shall be
applicable, mutatis mutandis, to the issuance of replacements for
collective certificates.
7. REGISTER OF SHAREHOLDERS
------------------------
7.1 The Direksi shall keep a Register of Shareholders of the Company, which
Register shall contain each shareholder's name and address as notified in
writing by the shareholder concerned to the Direksi, the serial numbers of
the shares, the number of shares held by each. shareholder, any pledge or
other encumbrance of any share, and other particulars deemed necessary by
the Direksi and/or by prevailing laws and regulations. Each shareholder
shall notify the Direksi in writing of every change in address of such
shareholder and, promptly upon receipt of such notice, the Direksi shall
record such change of address of such shareholder in the Register of
Shareholders.
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The address as recorded in the Register of Shareholders shall be used for
all correspondence, notices and dividends sent to the shareholder and in
the event of other rights that may be exercised by the such shareholder.
Each shareholder may request copies of all or part of the notices sent to
third parties designated by such shareholder.
7.2 The Direksi, upon request of the shareholder, transferee, pledgee or other
secured party concerned, but, in case of a pledge or other encumbrance of
any share, only after approval of the General Meeting of Shareholders as
provided in Paragraph (10) of Article 8, shall record the particulars of
such transfer, pledge or other encumbrance of shares, and shall make any
notation deemed necessary by the Direksi in the Register of Shareholders in
a manner to be determined by the Direksi and based on satisfactory evidence
acceptable to the Direksi.
7.3 Any registration, recordation or annotation in the Register of
Shareholders, shall be signed by the President Director or one of the
members of the Direksi authorized to act for and on behalf of the Direksi
pursuant to Article 10 hereof.
7.4 For the Company, the registration of a shareholder in the Register of
Shareholders shall constitute complete evidence for the ownership of shares
and other matters stated in the Register of Shareholders.
7.5 Unless otherwise provided in the Articles of Association, notices, demands,
offers and acceptances and other correspondences to be given or made to a
shareholder pursuant to the Articles of Association, shall be deemed given
or made if addressed to such shareholder as provided in the Register of
Shareholders and for shareholders whose address is within Indonesia if hand
delivered or sent by prepaid registered mail, whereas for shareholders
whose address is outside of Indonesia, if sent by prepaid air courier, in
each case requesting signature acknowledging receipt.
7.6 The Register of Shareholders shall be open for inspection at any time
during office hours at the request of any shareholder. The Company shall
provide to any shareholder, upon its request and at its expense, a copy of
the Register of Shareholders.
8. TRANSFER OF SHARES
------------------
8.1 None of the shareholders shall be entitled to sell, transfer or otherwise
assign any, of its shares other than in accordance with this Article,
except with the approval of the General Meeting of
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Shareholders at which the owners of all of the shares issued by the Company
are present or represented and a resolution to that effect is approved by
the affirmative vote of all shareholders and without prejudice to
prevailing' laws and regulations.
8.2 if a shareholder wishes to transfer all or part of its shareholding in the
Company, (hereinafter the shareholder who wishes to transfer its shares is
referred to as the "Selling Shareholder", whereas the shares to be
transferred are referred to as the "Sale Shares") to a bona fide potential
third party purchaser (hereinafter referred to as the "Third Party
Purchaser"), the Selling Shareholder shall OIVC to the other shareholders
(hereinafter referred to as the "Other Shareholders") notice in writing
(hereinafter referred to as a "Transfer Notice") of its wish to transfer
the Sale Shares, together with details of the Third Party Purchaser, the
purchase price and other material terms agreed between the Selling
Shareholder and the Third Party Purchaser. A Transfer Notice shall
constitute an offer by the Selling Shareholder to the Other Shareholders to
sell the Sale Shares to the Other Shareholders in accordance with the
provisions of this Article 8.
8.3 Following receipt of a Transfer Notice, each of the Other Shareholders
shall by giving to the Selling Shareholder notice in writing (hereinafter
referred to as the "Acceptance Notice") within a period of sixty (60) days
of receipt of the Transfer Notice (the "Acceptance Period") have the right
to purchase the whole (but not part only) of a proportion of Sale Shares
equal to the proportion borne by its shares to the aggregate shares of the
Other Shareholders, at a purchase price (per share) and on other material
terms no less favorable to the Selling Shareholder than those agreed
between the Selling Shareholder and the Third Party Purchaser.
Any Sale Shares in respect of which no Acceptance Notice is received within the
Acceptance Period shall within fifteen (15) days of the expiry of the
Acceptance Period be offered to those Other Shareholders from whom
Acceptance Notices were so received, and each of whom, by giving to the
Selling Shareholder a second Acceptance Notice (hereinafter referred to as
the "Second Acceptance Notice") within a further period of thirty (30)
days, shall be entitled to purchase the whole (but not part only) of a
proportion of such Sale Shares equal to the proportion borne by its shares
to the aggregate shares of those Other Shareholders from whom Acceptance
Notices were so received, at a purchase price (per share) and on other
material terms no less favorable than those specified in the Transfer
Notice, provided that each of the Other Shareholders shall be entitled to
assign its rights under this Paragraph (3) of Article 8 to an alternative
third
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party purchaser approved by the General Meeting of Shareholders, subject to
such alternative third party purchaser giving satisfactory evidence of its
undertaking to the Selling Shareholder to complete the sale and purchase in
accordance with Paragraph (6) of this Article 8.
8.4 Each of the Other Shareholders shall, by giving, the Acceptance Notice.
under Paragraph (3) of this Article 8, become bound to purchase the Sale
Shares accepted by it pursuant to the Acceptance Notice, subject only to
all necessary, approvals of competent regulatory authorities.
8.5 Completion of the sale and purchase of the Sale Shares shall take place
within sixty (60) days of the receipt by the Selling Shareholder of an
Acceptance Notice, and the obtaining, of all necessary approvals from the
competent regulatory authorities, provided that if all necessary approvals
are not obtained within one hundred twenty (120) days of the receipt by
the Selling Shareholder of an Acceptance Notice, the Acceptance Notice and
the rights of the Other Shareholders under Paragraph (3) of this Article 8
above shall automatically terminate and the Selling Shareholder shall be
entitled to sell the Sale Shares to the Third Party Purchaser, without
prejudice to the requirement of approval from the competent authorities as
may be required. The other shareholders shall be bound to give all
reasonable assistance with a view to obtaining such approvals in a timely
manner.
The transfer of shares to the Third Party Purchaser shall be carried out
at a price and on material terms no less favorable to the Selling
Shareholder than those specified in the Transfer Notice, provided that
such transfer shall have been completed within a period of 60 days from
(i) the date of expiry of the period for giving the Acceptance Notice, or
if applicable, from the date of expiry of the period during which a Second
Acceptance Notice may be given, or (ii) the date on which an Acceptance
Notice ceases to have effect pursuant to Paragraph (5) of this Article 8.
The Other Shareholders undertake to give all necessary approval to any
such share transfer.
8.7 Any foreign shareholder that for any reason is prohibited from purchasing,
or accepting, or cannot obtain approval that may be required from the
competent authorities to purchase or accept, all of the shares that lie
would be entitled to purchase or accept under the preceding Paragraphs of
this Article, shall be entitled to designate a third party who, will have
the same right to purchase or otherwise accept all or part of the shares
that such foreign shareholder would otherwise have been entitled to
purchase or accept, without prejudice to obtaining any approvals
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from the competent regulatory authorities that may be required, and subject
to the third party obtaining the approval of the General Meeting of
Shareholders.
8.8 The preceding Paragraphs of this Article shall not apply in the case of a
transfer of shares resulting from death or if the sale or transfer is
required pursuant to any law, regulation, order, decision or instruction
from any competent authority, or in the case of a sale or other transfer to
an Affiliate of the selling/transferring shareholder, or if approved by
resolution of an Extraordinary General Meeting of Shareholders upon the
affirmative vote of all shareholders or their duly authorized
representatives, or if all other shareholders have waived their rights
under such Paragraphs. As used in the preceding sentence, the term
"Affiliate" shall mean a person that directly or indirectly, through one or
more intermediaries, controls or is controlled by or is under common
control with, the person specified, through the ownership of shares, by
voting rights, by contract or otherwise, where "control" means ownership of
more than fifty percent (50%) of the total shares (and "controls" and
"controlled by" are construed accordingly).
8.9 All sales and other share transfers shall be evidenced by a document signed
by or on behalf of the transferor and the transferee of the share
concerned, which document of share transfer shall be in the form as
prescribed by or satisfactory to the Direksi, without prejudice to the
provisions in the Commercial Code with respect to the transfer of shares.
8.10 Any pledge or other encumbrance of a share of the Company must be approved
by the General Meeting of Shareholders and recorded in the register of
Shareholders. Any sale by the pledgee or other secured party of pledged or
otherwise encumbered shares shall be subject to the provisions of this
Article as well as the applicable laws and regulations relating to pledges.
8.11 Shares shall only be sold or otherwise transferred pursuant to procedures
specified in the preceding Paragraphs of this Article 8 and, if applicable,
Paragraph (8) of Article 4. Any sale or other transfer of shares in
contravention of such provisions of the Articles of Association shall not
be recognized by the Company. In addition, the sale or other transfer of
shares shall be subject to any approval of the competent authorities that
may be required.
Any party purchasing or otherwise accepting a transfer of shares without an
approval that may be required from competent authorities shall not be
entitled to exercise any authority or rights whatsoever as a shareholder,
including the rights to
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participate or vote in the General Meeting of Shareholders or to receive
payments of dividends or distributions upon liquidation, with respect to
such shares until the transfer of such shares has been approved by the
competent authorities and registered in the Register of Shareholders.
8.12 In the case of a change of ownership of a share, the original owner
registered in the Register of Shareholders shall be deemed to remain the
owner of such share until the name of the new owner has been entered in the
Register of Shareholders.
8.13 No transfer of shares shall be registered during the period from the date
of the dispatch of the notices for a General Meeting of Shareholders until
and including the date of the closing of such meeting.
8.14 Any person becoming entitled to a share as a consequence of the death of a
shareholder or in any case in which the ownership of a share changes by
operation of law, regulation, order, decision or instruction from any
competent authority may, upon producing, such evidence of transfer and its
entitlement to the shares as may from time to time be required by the
Direksi, apply in writing to be registered as the holder of the share. The
share transfer shall be registered only if the Direksi can accept and is
satisfied with the evidence of title, without prejudice to the provisions
in the Articles of Association.
9. NIIANAGEMENT
------------
9.1 The company shall be managed by a Direksi under the supervision of the
Dewan Komisaris.
9.2 The Direksi shall consist of three (3) members, one (1) of whom shall be
the President Director.
9.3 The members of the Direksi shall be appointed by the General Meeting of
Shareholders. One (1) member of the Direksi shall be appointed from
candidates recommended by the foreign shareholder and two (2) including the
President Director shall be appointed from candidates recommended by the
Indonesian shareholder(s). The General Meeting of Shareholders shall be
bound to appoint the persons recommended as aforesaid.
9.4 The members of the Direksi shall be appointed for a term commencing, on the
date determined by the General Meeting of Shareholders that appoints them
and, except as provided in the following sentence, ending at the close of
the next Annual General Meeting of Shareholders after the date of their
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appointments. If for any reason whatsoever the post of a member of the
Direksi is not filled by the General Meeting of Shareholders upon the
expiration of such member's terms as stated lit the preceding sentence,
then the term for such member of the Direksi shall continue, and such
member shall remain in office, until his successor is appointed.
9.5 Members of the Direksi may be reappointed to serve after the expiration of
their terms of office.
9.6 A General Meeting of Shareholders may at any time dismiss a member of the
Direksi prior to the expiration of his term of office if such member has
violated the Articles of Association, has neglected his duties or upon the
recommendation of the same group of shareholders who, pursuant to
'Paragraph (3) of this Article, initially recommended the- appointment of
such member.
9.7 A member of the Direksi may resign from his office by giving at least
thirty (30) days notice in writing to the Company of his intention to do
so, provided that a General Meeting of Shareholders may agree that such
resigning member may resign prior to the expiration of such thirty-day
period.
9.8 The term of office of a member of the Direksi shall automatically terminate
if such member of the Direksi:
9.8.1 is declared bankrupt or a court decision is issued pursuant to which
he/she is to be put under custody; or
9.8.2 becomes prohibited from being a member of the Direksi under a
provision of prevailing laws or regulations; or
9.8.3 dies.
9.9 If a vacancy occurs in the Direksi, then a General Meeting of Shareholders
shall be held within 30 (thirty) days after the vacancy occurs to fill said
vacancy. The vacancy shall be filled from candidates recommended by the
same group of shareholders who, pursuant to Paragraph (3) of this Article,
initially recommended the appointment of the member of the Direksi whose
post has become vacant.
9.10 The term of office of any person appointed to the Direksi to fill a
vacancy resulting from any cause whatsoever shall be the remaining portion
of the term of the member of the Direksi so replaced, unless otherwise
determined by the General Meeting of Shareholders.
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9.11 Salaries or other remunerations may be granted to the members of the
Direksi as determined by the General Meeting of Shareholders.
9.12 The Direksi shall meet for the transaction of business from time to time
and in any event at least once in every three (3) months.
10. POWERS OF THE DIREKSI
---------------------
10.1 The President Director and one other Director jointly shall represent the
Direksi. In case of absence or disability of the President Director and
such other Director, of which impediments no evidence to third parties
shall be required, one of the members of the Direksi designated in writing
by the President Director or such other Director, -Is the case may be,
shall have the power to act for and on behalf of the Direksi. Any other
member of the Direksi authorized by a duly adopted resolution of the
Direksi shall also be entitled and empowered to act for and on behalf of
the Direksi, in each case in accordance with the resolution adopted by the
Direksi.
10.2 The Direksi shall represent the company within and outside the Courts of
Justice with regard to all matters and is entitled to take all actions
pertaining to management and ownership affairs.
The affirmative vote of all members of the Direksi shall be required for
the following actions:
(a) designation of and change to the Company bank account signatories;
(b) loans, guarantees or trade credits to third parties in amounts
exceeding, US$25,000, whether in a single or a series of related
transaction;
(c) contracts, agreements or transactions with any shareholders or with any
of their affiliated companies which involve amounts in annual value, in
excess of US$75,000. in a single or a series of related transactions;
(d) borrowing money in amounts greater than the Rupiah equivalent of US$
250,000 (provided that drawing moneys from an established credit or
loan account which previously has been authorized in the approved
annual business plan shall not be regarded as borrowing for the purpose
of this provision);
(e) determining employee compensation guidelines;
(f) writing off any accounts receivables or releasing any claims of the
Company, in excess of US$100,000;
17
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(g) any expenditure greater than the Rupiah equivalent of US$250,000,
provided that expenditures approved in the approved annual business
plan or approved budget shall not be regarded as expenditures for the
purpose of this provision;
(h) material amendments to the authorization policies as set forth from
time to time by the General Meeting of Shareholders;
(i) acquiring by purchase, lease or any other method movable or immovable
property having a price (in the case of leasing, an annual lease price)
in excess of the equivalent in any currency of US$250,000 for any
individual transaction and US$1,000,000 in the aggregate per year or
such amount as otherwise approved by the Dewan Komisaris from time to
time;
(j) selling or disposing of movable or immovable property having a value
exceeding the limit from time to time determined by the Dewan
Komisaris;
(k) participating in any other business enterprise, including without
limitation establishing any subsidiary, without prejudice to any
approvals that may be required from competent authorities;
(l) establishing lines of credit or other credit facilities;
(m) entering into, amending or terminating contracts in which the goods
and/or services to be purchased, sold or leased having a value in
excess of the equivalent in any currency of US$250,000 for any
individual transaction and US$1,000,000 in the aggregate per year, or
such amount as otherwise approved by the Dewan Komisaris from time to
time;
Prior approval by the Dewan Komisaris shall be required for the following
actions:
(a) borrowing any money (provided that drawing money from an established
credit or loan account which has been so approved shall not be
regarded as borrowing for the purpose of this provision) having, a
value in excess of the equivalent in any currency of US$500,000 for
any individual transaction or such amount as otherwise approved by the
Dewan Komisaris from time to time;
(b) binding the Company as guarantor and/or extending loans to or on
behalf of third parties;
18
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(c) granting any hypothecation, fiduciary transfer of proprietary rights
for security, purposes, pledge or other security interest or priority
claim in any property or assets of the Company;
(d) issuing interim dividends;
(c) transferring, acquiring or granting any licenses, sublicenses or
rights with respect to telecommunication technology, technical know-
how, trade secrets, patents, copyrights, trademarks, tradenames or
other intellectual property;
(t) undertaking any new business or substantially expanding any existing
business.
(g) issuance of securities by the Company on a stock exchange.
Towards third parties the approval of the Dewan Komisaris shall be
sufficiently proven by the signature on the document concerned of, by a
minutes of the meeting of the Dewan Komisaris.
10.3 The Direksi shall determine the relationship and distribution of work
among, the members of the Direksi pursuant to the provisions in the
Articles of Association.
10.4 Any member of the Direksi who has been authorized by the Direksi' as
provided in Paragraph 1 of this Article to act for and on behalf of the
Direksi shall be entitled to authorize one or more persons as his attorney-
in-fact by written power(s) of attorney,, such powers to be exercised only
in accordance with the Articles of Association. Any such authorizations
shall not relieve the authorizing member of the Direksi from his ultimate
accountability.
10.5 On an annual basis and at least thirty (30) days prior to the end of each
fiscal year of the Company, the Direksi shall prepare and submit to the
Dewan Komisaris for its review and approval the documents specified in
Paragraph 7 of Article 13.
11. MEETINGS OF THE DIREKSI
11.1 The Direksi shall meet at least once every three (3) months upon notice
given by the President Director. In addition, any Director may at any time
in writing or by telex or facsimile request the President Director to
convene a meeting of the Direksi, stating in such request the matters to be
discussed. If the President Director falls to convene a meeting of the
Direksi
19
<PAGE>
on the date specified in such request, having due regard for the
requirements for giving notice to the members of the Direksi, or within
thirty days from the date of receiving such request if no date is specified
in the request, then the Director who requested the meeting may convene a
meeting of the Direksi by direct notice to the members of the Direksi.
All reasonable expenses of members of the Direksi for attending the
quarterly meetings of the Direksi shall be borne by the Company.
11.2 A meeting of the Direksi shall be convened by delivery of notice to each
member of the Direksi, stating the time, date and place of the meeting and
the items to be discussed. Such notice shall be delivered by hand, or sent
by prepaid air courier, in each case against proper receipt, or sent by
telegram, telex or facsimile. If sent by telegram, telex or facsimile a
written confirmation shall be sent by air courier as soon as practicable,
provided that failure to receive such confirmation shall not invalidate the
telegraphic, telex or facsimile notice. The notice shall be sent not less
than ten (10) days before such meeting, excluding the date of the notice
and the date of the meeting. If all members of the Direksi are present
and/or represented and approve the agenda for the meeting, such prior
notice shall not be required.
Each member of the Direksi shall accept and comply within a shorter period
of notice than that prescribed by the Articles of Association if, in the
opinion of the President Director, the matters to be considered at such
meeting require urgent decision provided that the shorter period of notice
is not less than seven (7) days.
11.3 The President Director, or, in case of his absence or disability, of which
impediment no evidence to third parties shall be required, another member
of the Direksi designated in writing by the President Director, or, if no
such designation has been made, selected by the meeting from among those
present, shall preside over each meeting of the Direksi.
11.4 A member of the Direksi may be represented at a meeting of the Direksi
only by another member of the Direksi on the basis of a written power of
attorney.
11.5 A meeting of the Direksi shall be a lawful meeting and shall be empowered
to adopt valid resolutions only if all members of the Direksi are present
and/or represented.
20
<PAGE>
11.6 Except as otherwise provided for in the Articles of Association,
resolutions of the meeting of the Direksi shall be adopted upon approval of
a majority of members of the Direksi. Each member of the Direksi shall be
entitled to cast one (1) vote and in addition one (1) vote for each other
member he validly represents.
11.7 Minutes of the meeting of the Direksi shall be drawn up by a person
present at the meeting designated by the chairperson of the meeting and
shall be signed by all members of the Direksi present at the meeting, to
verify the completeness and accuracy of the minutes. If the minutes are
drawn up by a notaris, the above signatures are not required. Minutes of a
meeting made and signed as aforesaid shall I serve as legal evidence
concerning resolutions adopted, and of the events that happened at the
meeting concerned and shall be binding upon all members of the Direksi and
the Company
11.8 The Direksi may also adopt valid and binding resolutions without convening
a meeting of the Direksi if all members of the Direksi have granted their
approval as evidenced by their signed consent.
11.9 A copy of, or excerpt from, the minutes of a meeting of the Direksi or of
resolutions adopted in accordance with Paragraph 8 of this Article shall be
deemed a legal copy or excerpt if it is stated to be a true copy or excerpt
and such statement is signed by all members of the Direksi or if it is
issued by the notaris who has drawn up the minutes concerned.
12. THE DEWAN KOMISARIS
-------------------
12.1 The Dewan Komisaris has the responsibility to supervise the management of
the Company by the Direksi and to carry out legal actions as stipulated in
the Articles of Association with due regard to prevailing laws and
regulations.
12.2 The Dewan Komisaris shall consist of four (4) members, one (1) of whom
shall be the President Komisaris.
12.3 The members of the Dewan Komisaris shall be appointed by the General
Meeting of Shareholders. The President Komisaris and two (2) other members
of the Dewan Komisaris shall be appointed from candidates recommended by
the Indonesian shareholders. One (1) member of the Dewan Komisaris shall
be appointed from candidates recommended by the foreign shareholder. The
General Meeting of Shareholders shall be bound to appoint the persons
recommended as aforesaid.
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<PAGE>
12.4 The members of the Dewan Komisaris shall be appointed for a term
commencing on the date determined by the General Meeting of Shareholders
that appoints them and, except as provided in the following sentence,
ending at the close of the next Annual General Meeting of Shareholders
after the date of their appointments. If for any reason whatsoever the
post of a member of the Dewan Komisaris is not filled by the General
Meeting of Shareholders on the date stated in the preceding sentence, then
the term for such member of the Dewan Komisaris shall continue, and such
member shall remain in office, until his successor is appointed.
12.5 Members of the Dewan Komisaris may be reappointed to serve after the
expiration of their terms of office.
12.6 A General Meeting of Shareholders may at any time dismiss a member of the
Dewan Komisaris prior to the expiration of his term of office if such
member has violated the Articles of Association or has neglected his duties
or for any other reason.
12.7 A member of the Dewan Komisaris may resign from his office by giving at
least thirty (30) days notice in writing to the Company of his intention to
do so, provided that a General Meeting of Shareholders may agree that such
resigning member may resign prior to the expiration of such thirty day
period.
12.8 The term of office of a member of the Dewan Komisaris shall automatically
terminate if such member of the Dewan Komisaris:
a. is declared bankrupt or a court decision is issued pursuant to which
he/she is to be put under custody; or
b. becomes prohibited from being a member of the Dewan Komisaris under a
provision of prevailing laws or regulations; or
c. dies.
12.9 If a vacancy occurs in the Dewan Komisaris, then a General Meeting of
Shareholders shall be held within three (3) months after the vacancy
occurs to fill said vacancy. The vacancy shall be filled from candidates
recommended by the same croup of shareholders who, pursuant to Paragraph 3
of this Article, initially recommended the appointment of the member of
the Dewan Komisaris whose post has become vacant.
12.10 The term of office of any person appointed to fill a vacancy resulting
from any cause whatsoever shall be the remaining
22
<PAGE>
portion of the term of the member of the Dewan Komisaris so replaced.
12.11 Honoraria or other remunerations may be granted to the members of the
Dewan Komisaris as determined by the General Meeting of Shareholders.
13. POWERS OF THE DEWAN KOMISARIS
-----------------------------
13.1 The Dewan Komisaris shall have the authority to take all actions necessary
or required to supervise the management of the Company by the Direksi.
13.2 Any member of the Dewan Komisaris may examine and review all or any of the
accounts, books, records, agreements and other documents of the Company,
and may examine and inspect the assets of the Company wherever they may be
located. The Dewan Komisaris, by duly adopted resolution of the Meeting of
the Dewan Komisaris, may also appoint or authorize an authorized person(s)
(including, any member of the Dewan Komisaris) to enter any building or
other premises owned, rented or controlled by the Company to undertake such
examination, review and inspection. The Direksi, and each member thereof,
shall give all information related to the Company, and provide such
assistance as may be, requested by the Dewan Komisaris or such appointed or
authorized person.
13.3 The Dewan Komisaris, based on the resolution of the meeting of the Dewan
Komisaris, may at any time suspend any member of the Direksi from his
duties if such member has violated the Articles of Association, has
neglected his duties or has acted contrary to the interests of the Company.
13.4 Within ten (10) days following such suspension, the Dewan Komisaris shall
give notice to each shareholder convening an Extraordinary General Meeting
of Shareholders to meet within thirty (30) days after the date of such
suspension to determine whether the member of the Direksi in question shall
be discharged or whether the suspension is to be revoked. Such notice
shall state the reason for the suspension and shall also be sent to the
suspended member of the Direksi, who shall be entitled to appear before
such Extraordinary General Meeting of Shareholders and explain his actions
or omissions. Such Meeting shall be presided over by the President
Komisaris or in his absence, of which impediment no evidences to third
parties shall be required, by one of the other members of the Dewan
Komisaris selected by the Dewan Komisaris for such purpose, or if no such
person is
23
<PAGE>
present, then by a person selected by the Meeting from among those present.
13.5 If the notices referred to in the preceding Paragraph are not given within
ten (10) days following the suspension or if the General Meeting of
Shareholders fails to discharge such member within such thirty-day period,
then such suspension shall be revoked automatically.
13.6 If all members of the Direksi are suspended or for any reason there are no
members of the Direksi at all, the members of the Dewan Komisaris shall
manage the Company for the time being and shall call within thirty (30)
days after the occurrence of such event a General Meeting of Shareholders
to appoint new members of the Direksi. The Dewan Komisaris is entitled to
empower one or more members of the Dewan Komisaris to manage the Company
until new members of the Direksi have been appointed.
13.7 The Dewan Komisaris shall review and approve the following:
(a) on an annual basis, the proposed business plan which shall commence
with the next financial year; and
(b) an annual procurement, operational and marketing plan for the next
financial year; and
(c) an annual budget including capital and operating expenditures.
14. MEETINGS OF THE DEWAN KOMISARIS
-------------------------------
14.1 The Dewan Komisaris shall meet at least once in every six months upon
notice given by the President Komisaris. The President Director or any
member of the Dewan Komisaris may at any time in writing or by telex or
facsimile request the President Komisaris to convene a meeting of the Dewan
Komisaris, stating in such request the matters to be discussed. If the
President Komisaris falls to convene a meeting of the Dewan Komisaris to be
held on the date specified in such request, having due regard for the
requirements f6r giving notice to the members, or within twenty-one (21)
days from the date of receiving such request if no date is specified in the
request, then the person who requested the meeting may convene a meeting of
the Dewan Komisaris by direct notice to the members of the Dewan Komisaris.
All reasonable expenses, including for travel and lodging, of members of
the Dewan Komisaris and the Direksi (if any) for attending semi-annual
meetings of the Dewan Komisaris shall be borne by the Company.
24
<PAGE>
14.2 A meeting, of the Dewan Komisaris shall be convened by delivery of notice
to each member of the Dewan Komisaris and to the President Director if such
meeting Is to be convened upon his request, stating the time, date and
place of the meeting and the items to be discussed. Such notice shall be
delivered by hand or sent by prepaid air courier, in each case against
proper receipt, or by telegram, telex or facsimile. If sent by telegram,
telex or facsimile a written confirmation shall be sent by air courier as
soon as practicable, provided that failure to receive such confirmation
shall not invalidate such telegraphic or telex notice. The notice shall be
held less than ten (10) days before such meeting, excluding the date of the
notice and the date of the meeting. If all members of the Dewan Komisaris
are present and/or represented and approve the agenda for the meeting, such
prior notice shall not be required.
Each member of the Dewan Komisaris shall accept a shorter period of notice
than that prescribed by the Articles of Association if, in the opinion of
the President Komisaris, the matters to be considered at such meeting
require urgent decision provided that the shorter period of notice is not
less than ten (10) days.
14.3 The President Komisaris, or, in case of his absence or disability, of
which impediment no evidence to third parties shall be required, another
member of the Dewan Komisaris selected by the meeting from among those
present, shall preside over each meeting, of the Dewan Komisaris.
14.4 A member of the Dewan Komisaris may be represented at a meeting of the
Dewan Komisaris only by another member of the Dewan Komisaris on the basis
of a written power of attorney.
14.5 A meeting of the Dewan Komisaris shall be a lawful meeting and shall be
empowered to adopt valid resolutions only if all members of the Dewan
Komisaris are present and/or represented.
14.6 Resolutions of the meeting, of the Dewan Komisaris shall be adopted upon
approval of a majority of the members of the Dewan Komisaris present or
represented in the meeting. Each member of the Dewan Komisaris shall be
entitled to cast one (1) vote and in addition one (1) vote for each member
lie validly represents.
14.7 Minutes of a meeting of the Dewan Komisaris shall be drawn up by a person
present at the meeting designated by the chairperson of the meeting and
shall be signed by the chairperson of the meeting and one (1) other person
present, one of which is nominated by the foreign shareholder(s), to verify
the completeness and accuracy of the minutes.
25
<PAGE>
If the minutes are drawn up by a notaris, the above signatures are not
required. Minutes of a meeting made and signed as aforesaid shall serve as
legal evidence of resolutions adopted and of the events that happened, at
the meeting concerned and shall be binding upon all members of the Dewan
Komisaris and the Company.
14.8 The Dewan Komisaris may also adopt valid and binding resolutions without
convening a meeting of the Dewan Komisaris if all members of the Dewan
Komisaris have been notified of the text of the resolutions and all members
of the Dewan Komisaris have granted their approval as evidenced by their
signed consent.
14.9 A copy of, or excerpts from, the minutes of a meeting of the Dewan
Komisaris or of resolutions adopted in accordance with Paragraph 8 of this
Article, shall be deemed a legal copy or excerpt if it is stated to be a
true copy or excerpt and such statement is signed by at least three (3)
members of the Dewan Komisaris, or if it is issued by the notaris who has
drawn up the minutes concerned.
15. FINANCIAL YEAR AND ACCOUNTS
---------------------------
15.1 The first financial year of the Company shall commence on this date and
end on the 31st day of December of the same year, and each financial year
thereafter shall commence on the first day of January and end on the
thirty-first day of December of the following year. At the thirty-first
day of December of each year the books of the Company shall be closed.
15.2 As from the date the books are closed, a balance sheet, a profit and loss
statement and such other financial statements as deemed necessary or useful
by the Direksi shall be prepared and audited by an independent and
internationally reputable firm of certified public accountants along with
the annual report of the Direksi. If the account of profits and losses in
any financial year shows a loss which cannot be covered by the reserve fund
as referred to in Article 23 hereunder, the loss shall remain recorded as
such in the profit and loss statement and furthermore for the succeeding
years the Company shall not be deemed as having made a profit as long as
the loss recorded as such in the account of profit and loss statement has
not been fully covered by undistributed net earnings.
15.3 The aforesaid balance sheet, profit and loss statement and other financial
statements shall be signed by all members of the Direksi, and shall be made
available at the Company's office for
26
<PAGE>
inspection by the shareholders from the date of the notice to shareholders
convening the Annual General Meeting of Shareholders referred to in Article
17 below.
15.4 The approval of the balance sheet and profit and loss statement by the
Annual General Meeting of Shareholders shall constitute a full release of
the members of Direksi and the Dewan Komisaris from their responsibilities
and a ratification of all actions taken by them during the financial year
under review to the extent such actions are reflected in the aforesaid
balance sheet and profit and loss statement, except for fraud, embezzlement
and any other criminal acts.
16 GENERAL MEETINGS OF SHAREHOLDERS
--------------------------------
16.1 There are two (2) kinds of General Meetings of Shareholders:
a. an Annual General Meeting of Shareholders is a General Meeting of
Shareholders as mentioned in Article 17 hereunder;
b. an Extraordinary General Meeting of Shareholders is a General Meeting
of Shareholders other than an Annual General Meeting of Shareholders.
16.2 Unless the context requires otherwise, "General Meeting of Shareholders"
shall mean both an Annual and an Extraordinary General Meeting of
Shareholders.
17. ANNUAL GENERAL MEETINGS OF SHAREHOLDERS
---------------------------------------
17.1 The Annual General Meeting of Shareholders shall meet once a year at the
latest by the end of the sixth month following the end of the Company's
financial year.
17.2 At the Annual General Meeting of Shareholders:
a. the Direksi shall report on the affairs and management of the Company
and the results that have been achieved during the course of the past
financial year;
b. the audited balance sheet and the profit and loss statement covering
the past financial year shall be submitted for approval and
ratification;
c. the appropriation of the profits for the Year under review and the
amount of the dividends, if any, to be paid with
27
<PAGE>
respect to the Company's undistributed net earnings shall be
determined and approved;
d. members of the Direksi and Dewan Komisaris shall be appointed, if
necessary;
e. an auditor shall be appointed; and
f. resolutions may be adopted as to other matters properly brought
forward pursuant to the Articles of Association.
18. EXTRAORDINARY GENERAL MEETINGS OF SHAREHOLDERS
----------------------------------------------
18.1 An Extraordinary General Meeting, of Shareholders shall be convened
whenever it is deemed necessary by a resolution of the Direksi or as
otherwise required pursuant to the Articles of Association.
18.2 The President Director shall convene an Extraordinary General Meeting, of
Shareholders upon receipt of a request in writing from the Dewan Komisaris
or one (1) or more shareholders representing at least twenty percent (20%)
of the shares issued by the Company, stating in such request the matters to
be dealt with and the week in which the meeting shall be held, which week
must commence not less than thirty (30) days following the date of the
request.
The President Director shall determine the date during the week specified
in such request on which such meeting shall be held and promptly, but in no
event more than fourteen (14) days following receipt of such request, give
notice to all shareholders convening the Extraordinary General Meeting of
Shareholders. If the President Director falls within fourteen (14) days
after receipt of the written request to give notice convening, such Meeting
the Dewan Komisaris or the shareholder(s) that made the request shall be
entitled to convene the Meeting themselves on the date noted in the notice
at the expense of the Company, with due observance of the provisions of the
Articles of Association. Such Meeting shall be presided over by a
chairperson elected by and from amongst those present. Provided any and
all requirements in the Articles of Association with respect to subject
matter, notice, quorum and voting requirements have been properly complied
with, all resolutions adopted by such Meeting shall be valid and binding.
19. PLACE AND NOTICE OF GENERAL MEETINGS OF SHAREHOLDERS
----------------------------------------------------
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19.1 Without prejudice to the provisions of the Articles of Association,
meetings of the General Meeting of Shareholders shall be held at the
domicile of the Company or at such other location in Indonesia as may be
determined by the Direksi.
19.2 Except as otherwise provided in the Articles of Association, notices
convening a General Meeting of Shareholders shall be delivered or sent not
less than fourteen (14) days in the case of an Extraordinary General
Meeting of Shareholders and thirty (30) days in the case of all Annual
General Meeting of Shareholders before the date of the meeting, excluding,,
the date of the notice and the date of the meeting.
19.3 The notice shall state the place, date and time as well as the agenda of
the meeting and notices for all Annual General Meeting of Shareholders
shall be accompanied by a notification that copies of the balance sheet and
profit and loss statement for the preceding financial year are available
for inspection by shareholders at the offices of the Company as from the
date of the notice for the meeting concerned and call be obtained upon
written requests within fourteen (14) days before the meeting concerned.
19.4 If all shareholders are present and/or represented in the General Meeting
of Shareholders, prior notice shall not be required and such Meeting shall
be entitled to take binding decisions, and provided that all shareholders
present or represented agree, may consider any matter.
19.5 Proposals from shareholders shall be included in the agenda of a meeting,,
of the General Meeting of Shareholders if the proposal concerned has been
submitted in writing to the Direksi by one (1) or more shareholders
representing at least twenty, percent (20%) of the shares issued by the
Company and after they have been received by the Direksi, the Direksi shall
promptly notify all shareholders of the additional agenda item contained in
such notice.
20. CHAIRPERSON OF THE GENERAL MEETINGS OF SHAREHOLDERS
---------------------------------------------------
20.1 Except as otherwise provided in the Articles of Association, all General
Meetings of Shareholders shall be presided over by the President Director
or, in his absence or disability, of which impediment no evidence to third
parties shall be required, by a member of the Direksi authorized to
represent the Direksi as provided in Paragraph 1 of Article 10, or if such
member of the Direksi is not present, then by a member of the Dewan
Komisaris designated by the Dewan Komisaris.
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<PAGE>
If no such member of the Direksi or of the Dewan Komisaris is present, then
the meeting shall be chaired by a person elected by the Meeting from among
those present on the basis of a majority of the votes legally cast.
The chairperson of the Meeting shall be entitled to request evidence of the
authority of the attendants at the meeting.
20.2 Minutes of a meeting of a General Meeting of Shareholders shall be drawn
up by a person present at the meeting designated by the chairperson and
shall be signed by the chairperson and two (2) shareholders representing,
respectively, the foreign shareholder(s) and the Indonesian shareholder(s).
If the minutes are drawn up by a notaris, the above signatures are not
required. Minutes of a meeting made and signed as aforesaid shall serve as
legal evidence of resolutions adopted, and of the events that happened, at
the meeting concerned and shall be binding upon all shareholders, members
of the Direksi, members of the Dewan Komisaris and the Company.
A copy of, or excerpts from, the minutes of a meeting of the General
Meeting of Shareholders or of resolutions adopted in accordance with
Paragraph 6 of Article 21 shall be deemed a legal copy or excerpt if it is
stated to be a true copy or excerpt and such statement is signed by any two
(2) members of the Direksi, one of whom is appointed by the foreign
shareholder(s), or if it is issued by the notaris who has drawn-up the
minutes concerned.
21. RESOLUTIONS AND VOTING RIGHTS AT THE GENERAL MEETINGS OF SHAREHOLDERS
---------------------------------------------------------------------
21.1 Each share shall grant to its holder the right to cast one (1) vote.
21.2 Voting concerning, persons shall be by unsigned folded ballot papers
unless the chairperson of the Meeting, without objection being raised by
any person present and entitled to vote, permits any other manner of
voting; voting concerning other matters shall be orally, unless a secret
ballot is requested by shareholders present or represented owning a
majority of the issued shares present at the meeting. With respect to any
matter requiring only a majority vote for approval, the proposal shall be
deemed to have been rejected in the case of a tie vote, provided that in
the event the voting, deals with appointment of members of the Direksi and
Dewan Komisaris, it will be so continued until one of the nominees has
obtained a majority of votes legally cast.
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<PAGE>
21.3 Blank votes and void votes shall be considered not legally cast, and thus
being, nonexistent shall not be counted in determining the total votes
cast.
21.4 Shareholders may be represented in the General Meeting of Shareholders by
another Direksi, the person by virtue of a power of attorney, provided that
members of the Dewan Komisaris and employees of the Company shall not be
permitted to act as proxy, of a shareholder at a General Meeting of
Shareholders and any votes cast by them as proxy are not valid. The power
of attorney shall be in the form satisfactory to the Direksi, without
prejudice to prevailing laws and regulations with respect to evidence in
the Civil Code and shall be submitted to the Direksi on or before the
General Meeting of Shareholders concerned.
21.5 Unless otherwise provided in the Articles of Association, a General
Meeting of Shareholders shall be entitled to take binding decisions at a
meeting if the owners of at least eighty five percent (85 %) of the shares
issued by the Company are present or represented by duly authorized
proxies. Unless otherwise provided in the Articles of Association,
resolutions or other actions of such General Meeting of Shareholders shall
be adopted or approved upon the affirmative vote of shareholders or their
duly, authorized proxies representing at least fifty five percent (55 %) of
the shares issued by the Company.
21.6 Shareholders may also adopt valid and binding resolutions without
convening, a General Meeting of Shareholders if all shareholders have been
notified of the text of the resolutions and all shareholders have granted
their approval as evidenced by their signed consent. Any such resolution
shall be considered as a resolution adopted by the General Meeting of
Shareholders.
21.7 The Articles of Association and all resolutions legally adopted by the
General Meeting of Shareholders in accordance with the Articles of
Association shall be binding upon all shareholders.
22. DIVIDENDS
---------
22.1 The President Director shall submit a proposal to the Annual General
Meeting,, of Shareholders relating to the appropriation of the profits of
the Company after taxation as shown in the financial statements that have
been audited by an independent and internationally reputable firm of
certified public accountants and have been approved by the General Meeting
of Shareholders, which proposal may state the amount of such profit to be
transferred to reserve as stipulated in Article 23
31
<PAGE>
hereunder and the amount to be distributed as dividends to the
shareholders.
22.2 Such transfer of profit to be distributed to shareholders as dividends
shall be approved by the General Meeting of Shareholders in accordance
with a resolution adopted at a General Meeting of Shareholders by an
affirmative vote of shareholders or their duly authorized proxies
representing at least fifty five percent (55 %) of the shares issued by
the Company, or as provided in Paragraph 6 of Article 21, which resolution
shall also determine the time and manner of payment of the dividends. A
dividend for a share shall be payable to the person in whose name the
share is registered and recorded in the Register of Shareholders on the
date such dividend becomes payable as determined by or on the authority of
the General Meeting of Shareholders that approved the distribution of such
dividend. The Direksi shall notify all shareholders of the date on which
any dividends are available for distribution.
22.3 The Direksi, based on a resolution of the meeting of the Direksi and any
approval required pursuant to Paragraph 2 of Article 10, may at any time
distribute interim dividends to the shareholders if the financial position
of the Company so permits and if the undistributed net earnings of the
Company exceed the amounts needed for the future requirements of the
Company's business as determined by the Direksi or by prevailing laws and
regulations, provided that such interim dividends snarl be offset against
the dividends which will be distributed on the basis of a resolution of
the next Annual General Meeting of Shareholders adopted in accordance with
the provisions of the Articles of Association.
22.4 Dividends left unclaimed after five (5) years counted from the day they
are payable shall cease to be payable and shall be returned to the account
of the Company.
23. RESERVE FUND
------------
23.1 A reserve fund may be created and the amount thereof determined by the
General Meeting of Shareholders in accordance with the Articles of
Association and upon recommendation of the Direksi.
23.2 The reserve fund may be used for capital outlays or for other purposes as
decided by the General Meeting of Shareholders, but only for the benefit of
the Company.
23.3 Subject to resolutions of the General Meeting of Shareholders, the
President Director shall administer the reserve fund and endeavor that such
reserve fund shall make a profit. Any profit
32
<PAGE>
earned from such reserve fund shall be entered in the profit and loss
account.
23.4 The General Meeting of Shareholders shall be entitled at any time to
decide to reduce the reserve fund and return the amount of such reduction
to unallocated retained earnings.
24. AMENDMENT OF THE ARTICLES OF ASSOCIATION
----------------------------------------
24.1 Amendments to the Articles of Association can, except as hereinafter
provided, only, be adopted by a' resolution of an Extraordinary General
Meeting of Shareholders at which shareholders representing at least eighty
five percent (85 %) of the shares issued by the Company are present and/or
represented. Such resolution shall be adopted upon the affirmative vote of
shareholders or their duly authorized proxies representing at least eighty
five percent (85%) of the shares issued by the Company. If at such Meeting
the number of shares represented is not sufficient to reach the quorum
stipulated, then at the earliest seven (7) days thereafter, a second
Extraordinary General Meeting of Shareholders may be convened and adopt
resolutions to amend the Articles of Association if shareholders or their
duly authorized proxies representing at least eighty five percent (85 %) of
the shares issued by the Company are present or represented and such
resolution is approved by at least a majority of the shares duly
represented at the Meeting. Such amendments may also be adopted as
provided in Paragraph 6 of Article 21.
24.2 Resolutions of the General Meeting of Shareholders regarding reductions of
the Company's authorized capital shall be published in the State Gazette of
the Republic of Indonesia, and in one or more daily newspapers circulated
in the location of the Company's domicile.
24.3 Any amendment adopted in accordance with the foregoing provisions of this
Article 24 shall be subject to any approval of the competent authorities
required by law.
25. DISSOLUTION
-----------
25.1 Any decision to dissolve the Company may be adopted by resolution of an
Extraordinary General Meeting of Shareholders at which shareholders
representing at least eighty five percent (85%) of the shares issued by the
Company are present and/or represented. Such resolution shall be adopted
upon the affirmative vote of shareholders or their duly authorized proxies
representing at least fifty five percent (55 %) of the shares
33
<PAGE>
issued by the Company, or upon approval of a resolution adopted as provided
in Paragraph 6 of Article 21. Upon adoption of such resolution, the
liquidation of the Company's assets and payment of its liabilities shall be
carried out b the President Director, unless the General Meeting of
Shareholders shall determine otherwise.
25.2 A resolution to dissolve the Company must be registered at the office of
the Clerk of the appropriate District Court ("Kantor Panitera Pengadilan
Negeri") having jurisdiction over the domicile of the Company and must be
published in the State Gazette of the Republic of Indonesia and in at least
two (2) daily newspapers circulated in the location of the Company's
domicile together with a notice thereof to the creditors.
25.3 The Articles of Association shall remain in force until the date the
account of the liquidation is lawfully ratified at a General Meeting of
Shareholders based on the approval of a majority of the votes legally cast
and a full discharge is given to all liquidators.
25.4 The remaining balance of the liquidation account shall be divided among,
the shareholders, each receiving in proportion to the paid nominal value of
the total shares respectively owned.
26. MISCELLANEOUS PROVISIONS
------------------------
All matters that are not provided for or not adequately covered in the
Articles of Association shall be decided by the General Meeting of
Shareholders in accordance with the Articles of Association.
In connection with any, amendment of the Articles of Association, the Company
give power of attorney to:
Mr. ______________, assistant of the Notaris, and ____________ both residing, in
Jakarta, singly and/or 'jointly have been given power of attorney with the right
to transfer this power of attorney to other person, to submit a request for
approval and confirmation of these Minutes of Meeting from the appropriate
authorities and to make amendments and/or additions in whatever form to these
Articles of Association which may be required in order to obtain the said
approval and confirmation and for that purpose to submit and sign all
applications and other legal documents, to choose domicile and to perform all
acts which may be required. The appearers are all known to me, Notaris.
IN WITNESS WHEREOF
34
<PAGE>
The Chairman asked the shareholders if there were any other matters to be
brought before the meeting. Because there were none presented, the Chairman
closed the meeting at West Indonesia Time.
Therefore I, Notary made this Minutes of Meeting for using whichever needed.
35
<PAGE>
Exhibit B
Delegations of Authority from
Board of Directors
<PAGE>
EXHIBIT B
MINUTES OF THE MEETING
OF
THE BOARD OF DIRECTORS OF
PT RAJASA HAZANAH PERKASA
(the "Company")
- --------------------------------------------------------------------------------
Date :
Place :
Present : Mr. Tonny Hardianto (Director)
Mr. Tonny Hardianto, acting as the sole Director of the Company explained:
1 That by action of the shareholders of the Company taken at an Extraordinary
Meeting of Shareholders of the Company dated _________, shareholder
approval was granted to approve the change of the status of the Company
from a domestic Company to become a foreign investment Company within the
framework of Law No. 1 Year 1967 as amended by Law No. 11 Year 1970,
pursuant to:
Letter of Approval of the State Minister for the Mobilization of
Investment Fund/Chairman of BKPM No. 22/V/PMA/1995 dated 26 May 1995;
and
Letter of BKPM No. 1226/A.6/1995 dated 28 September 1995 on Amendment
of Composition of Ownership of Foreign and Indonesian Partners.
2. That the Board of Directors of the Company wish to delegate the day to day
management of the Company to certain qualified individuals during an
interim period commencing as of today's date and concluding, on the date of
approval by the Minister of Justice of the amendment to the Company's
Articles of Association, Deed No. ______ dated ______ passed before Sinta
Susikto, SH, Notary in Jakarta (the "Interim Period").
Further, the Director explained that in the interest of achieving a smooth and
efficient exercise of management responsibilities during
1
<PAGE>
the Interim Period, it is deemed necessary to delegate to certain individuals
the authorization to act for and on behalf of the Board of Directors for the
discharge of routine management responsibilities during the Interim Period.
After full consideration of the matter brought forward by the Director, the
Meeting, resolved as follows:
RESOLUTION I
That during the Interim Period the functional management activities of the
Company shall be performed by a Transition Board of Management and therefore
RESOLVED, to appoint the following individuals as the members of the Transition
Board of Management:
Mr. Suprapto Pegeng (Chairman)
Mr. Hugh McClung
Mr. Amir Abdul Rachman
FURTHER RESOLVED, that the Transition Board of Management shall determine the
distribution of work among its members.
The relationship among the members and their meeting procedures shall be
governed by the provisions in the Articles of Association (as lastly amended)
applicable to the relationship among the members of the Board of Directors and
the meeting of the Board of Directors of the Company and the Shareholders
Agreement between and among the Company, PT Bina Reksa Perdana, International
Wireless Communications, and PT Deltona Satya Dinamika, dated ____ November
1995.
RESOLUTION II
- -------------
RESOLVED, to authorize, empower and direct the Transition Board of Management to
perform routine management responsibilities with full power and authority on
behalf, in the name, on the account and for the benefit of the Board of
Directors, to represent the Company within and outside the Courts of Justice
with regard to all matters and be entitled to take all actions pertaining to
management and ownership affairs.
FURTHER RESOLVED, that any three members of the Transition Board of Management,
one of whom shall be an individual appointed by PT Bina Reksa Perdana, shall be
entitled to represent the Transition Board of Management, with the limitations
set forth below;
The affirmative vote of all members of the Transition Board of Management
shall be required for the following actions:
2
<PAGE>
(a) designation of and change to the Company bank account signatories;
(b) loans, guarantees or trade credits to third parties in amounts
exceeding, US$25,000, whether in a single or a series of related
transaction;
(c) contracts, agreements or transactions with any shareholders or with
any of their affiliated companies which involve amounts in annual
value, in excess of US$75,000. in a single or a series of related
transactions;
(d) borrowing money in amounts greater than the Rupiah equivalent of
US$250,000 (provided that drawing moneys from an established credit or
loan account which previously has been authorized in the approved
annual business plan shall not be regarded as borrowing for the
purpose of this provision;
(e) determining employee compensation guidelines;
(f) writing off any accounts receivables or releasing any claims of the
Company in excess of US$100,000;
(g) any expenditure greater than the Rupiah equivalent of US$250,000,
provided that expenditures approved in the approved annual business
plan or approved budget shall not be regarded as expenditures for the
purpose of this provision;
(h) material amendments to the authorization policies as set forth from
time to time by the General Meeting of, Shareholders;
(i) acquiring by purchase, lease or any other method movable or immovable
property having a price (in the case of leasing, an annual lease
price) in excess of the equivalent in any currency of US$250,000 for
any individual transaction and US$1,000,000 in the aggregate per year
or such amount as otherwise approved by the Transition Board of
Supervision from time to time;
(j) selling or disposing of movable or immovable property having a value
exceeding the limit from time to time determined by the Transition
Board of Supervision;
(k) participating in any other business enterprise, including without
limitation establishing any subsidiary, without
3
<PAGE>
prejudice to any approvals that may be required from competent
authorities;
(l) establishing lines of credit or other credit facilities;
(m) entering into, amending or terminating contracts in which the goods
and/or services to be purchased, sold or leased having a value in
excess of the equivalent in any currency of US$250,000 for any
individual transaction and US$1,000,000 in the aggregate per year, or
such amounts as otherwise approved by the Transition Board of
Supervision from time to time;
Prior approval by the Transition Board of Supervision shall be required for
the following actions:
(a) borrowing any money (provided that drawing money from an established
credit or loan account which has been so approved shall not be
regarded as borrowing for the purpose of this provision) having a
value in excess of the equivalent in any currency of US$500,000 for
any individual transaction or such amount as otherwise approved by the
Transition Board of Supervision from time to time;
(b) binding the Company as guarantor and/or extending loans to or on
behalf of third parties;
(c) granting any hypothecation, fiduciary transfer of proprietary rights
for security, purposes, pledge or other security interest or priority
claim in any property or assets of the Company;
(d) issuing interim dividends;
(e) transferring, acquiring or granting any licenses, sublicenses or
rights with respect to telecommunication technology, technical know-
how, trade secrets, patents, copyrights, trademarks, tradenames or
other intellectual property;
(f) undertaking any new business or substantially expanding any existing
business.
(g) issuance of securities by the Company on a stock exchange.
Towards third parties the approval of the Transition Board of Supervision
shall be sufficiently proven by the signature on the document concerned of,
or by a minutes of the meeting of the Transition Board of Supervision.
4
<PAGE>
Since there were no other matters to be considered, the Director closed the
meeting, and requested Mr. _________ to draw up the minutes of the Meeting to be
used as evidence whenever and wherever necessary.
Made and executed in Jakarta and signed by the Director on behalf of those
present.
Director
By /s/
-------------------------
Name : Tonny Hardianto
Title : Director
5
<PAGE>
Exhibit C
Delegations of Authority from
Board of Commissioners
<PAGE>
EXHIBIT C
MINUTES OF THE MEETING
OF
THE BOARD OF COMMISSIONERS
PT RAJASA HAZANAH PERKASA
(the "Company")
- --------------------------------------------------------------------------------
Date :
Place :
Present : Mr. Hutomo Mandala Putra (Commissioner)
Mr. Hutomo Mandala Putra, acting as the sole Commissioner of the Company
explained:
1. That by action of the shareholders of the Company taken at an Extraordinary
General Meeting, of Shareholders of the Company dated shareholder approval
was granted to approve the change of the status of the Company from a
domestic Company to become a foreign investment Company within the
framework of Law No. 1 Year 1967 as amended by Law No. 11 Year 1970,
pursuant to:
Letter of Approval of the State Minister for the Mobilization of
Investment Fund/Chairman of BKPM No. 22/V/PMA-/1995 dated 26 May
1995; and
Letter of BKPM No. 1226/A.6/1995 dated 28 September 1995 on
Amendment of Composition of Ownership of Foreign and Indonesian
Partners.
2. That the Board of Commissioners of the Company wish to delegate the day to
dam, supervision of the Board of Directors of the Company to certain
qualified individuals during an interim period commencing as of today's
date and concluding on the date of approval by the Minister of Justice of
the amendment to the Company's Articles of Association, Deed No. ____ dated
____,
1
<PAGE>
passed before Sinta Susikto, SH, Notary in Jakarta (the "Interim Period").
Further, the Commissioner explained that in the interest of achieving a smooth
and efficient exercise of supervisory responsibilities during the Interim
Period, it is deemed necessary, to delegate to certain individuals the
authorization to act for and on behalf of the Board of Commissioners for the
discharge of routine supervisory responsibilities during the Interim Period.
After full consideration of the matter brought forward by the Commissioner, the
Meeting resolved as follows:
RESOLUTION I
- ------------
That during,, the Interim Period the supervisory responsibilities of the Board
of Commissioners shall be performed by a Transition Board of Supervision and
therefore RESOLVED, to appoint the following, individuals as the members of the
Interim Supervisory Board:
Mr. Hutomo Mandala Putra (Chairman)
Mr. Tonny Hardianto
Mrs. Nila Motik Abdul Rachman
Mr. Sam Endy
FURTHER RESOLVED, that the Transition Board of Supervision shall determine the
distribution of work among its members. However, the relationship among the
members and their meeting procedures shall be governed by the provisions in the
Articles of Association (as lastly, amended) applicable to the relationship
among the members of the Board of Commissioners and the meeting of the Board of
Commissioners and the Shareholders Agreement between and among the Company, PT
Bina Reksa Perdana, International Wireless Communications, and PT Deltona Satya
Dinamika, dated November, 1995.
RESOLUTION II
- -------------
RESOLVED, to authorize, empower and direct the Transition Board of Supervision
to perform routine supervisory responsibilities with full power and authority on
behalf, in the name, on the account and for the benefit of the Board of
Commissioners, to take all actions necessary or required of the Board of
Commissioners by the Articles of Association to supervise the management of the
Company by the Transition Board of Management during the Interim Period.
2
<PAGE>
FURTHER RESOLVED, that any approval given by the Transition Board of Supervision
to the Transition Board of Management shall be in accordance with said Articles
of Association.
Since there were no other matters to be considered, the Commissioner closed the
meeting and requested Mr. __________ to draw up the Minutes of the Meeting to
be used as evidence whenever and wherever necessary.
Made and executed in Jakarta and signed by the Commissioner.
Commissioner
By /s/
---------------------------
Name : Hutomo Mandala Putra
Title : Commissioner
3
<PAGE>
Exhibit D
RHP Financial Statement for years ending 31 December 1993 and 31 December 1994
[Incorporated by reference to Registrant's
Registration Statement on Form S-1, File No. 333-11987
Consolidated Financial Statements]
<PAGE>
Exhibit E
Tahir Debt Repayment Schedule
<PAGE>
RECEIPT
<TABLE>
<CAPTION>
No. Date Amount(Rp.) Check No.
<C> <S> <C> <C>
1. 25 Jan 1995 300.000.000.00
2. 25 Feb 1995 150.000.000.00
3. 25 Mar 1995 150.000.000.00
4. 25 Apr 1995 150.000.000.00
5. 25 May 1995 150.000.000.00
6. 25 Jun 1995 150.000.000.00
7. 25 Jul 1995 300.000.000.00
8. 25 Aug 1995 350.000.000.00
9. 25 Sep 1995 350.000.000.00
10. 25 Oct 1995 350.000.000.00 GH 360880
11. 25 Nov 1995 350.000.000.00 GH 360881
12. 25 Dec 1995 350.000.000.00 GH 360882
13. 24 Jan 1996 350.000.000.00 GH 360883
14. 24 Feb 1996 350.000.000.00 GH 360884
15. 26 Mar 1996 350.000.000.00 GH 360885
16. 24 Apr 1996 350.000.000.00 GH 360886
17. 25 May 1996 350.000.000.00 GH 360887
18. 24 Jun 1996 350.000.000.00 GH 360888
19. 25 Jul 1996 350.000.000.00 GH 360889
20. 24 Aug 1996 350.000.000.00 GH 360890
21. 24 Sep 1996 350.000.000.00 GH 360891
22. 25 Oct 1996 350.000.000.00 GH 360892
23. 24 Nov 1996 400.000.000.00 GH 360893
24. 25 Dec 1996 400.000.000.00 GH 360894
25. 24 Jan 1997 400.000.000.00 GH 360895
26. 24 Feb 1997 400.000.000.00 GH 360896
27. 25 Mar 1997 400.000.000.00 GH 360897
Total 8,600,000,000.00
</TABLE>
RHP has paid in full up to the 9th payment, 25 September 1995 the amount of Rp.
2.050.000.000 (two billion fifty million Rupiahs).
Jakarta, 9 November 1995
Receiver,
[Seal] /s/
Hari Indra Utama Tahir
1
<PAGE>
EXHIBIT 10.13D
COOPERATIVE AGREEMENT
IN THE MATTER OF
ESTABLISHMENT OF A JOINT VENTURE TO PROVIDE
CELLULAR PHONE SERVICES
BETWEEN
PT. TELEKOMUNIKASE INDONESIA
YAYASAN DANA PENSIUN PEGAWAI PT. TELKOM
AND
PT RAJASA HAZANAH PERKASA
Number: PKS 234 / HK.810/UTA-00/95
This agreement was made on Thursday, November thirtieth, in the year nineteen
hundred and ninety five, in Jakarta, between":
1. PT. TELEKOMUNIKASI INDONESIA, NPWP 1.000.013.1201, which was established
by the document number 128 of Notary IMAS FATIMAH SH, in Jakarta, September 24,
1991 and modified by document number 74, July 25, 1995 and document number 15,
August 7, 1995, legalized by the minister of Justice of the Republic of
Indonesia with decision number C2-9834.HT.01.04.Th.95, August 8, 1995, located
at Jln. Japati number 1, Bandung, in this legal matter represented by SETYANTO
P. SANTOSA, Principal Director, and referred to hereafter in this agreement as
TELKOM.
2. YAYASAN DANA PENSIUN PEGAWAI PT. TELKOM [Pt. Telkom Workers' Pension Fund
Foundation], established by document number 65 of Notary Wiratni Achmadi SH, on
December 12, 1982 in Bandung and whose statutes were announced in the Berita
Negara Republik Indonesia number 78 tambahan negara number 22, and modified with
notarial document number 72, January 2, 1987, located on Jl. Diponegoro number
42, Bandung, in this legal matter represented by RUBINI SUPARAN, manager,
hereafter in this agreement referred to as YDPP TELKOM.
3. PT. RAJASA PERKASA, NPWP 1.374.427.126, established by document number 22
of Notary Pariwondo Soekarno SH, in Jakarta on December 17, 1984, legalized by
the Minister of Justice of the Republic of Indonesia, number C2-
6866.HT.01.04.TH.85, May 8, 1985 and modified by notarial document number 15,
drawn up by Notary Pariwondo Soekarno SH, dated May 10, 1985 and number 34,
August 14,1985, legalized by the Minister of Justice of the Republic of
Indonesia, number C26866.HT.01.04.TH.85, October 29, 1985, and further modified
by notarial document number 41, drawn up by Notary Ny. Machmudah Rijanto SH, in
Jakarta, February 23, 1995, located at Jl. Pejaten Barat number 6, South
Jakarta, in this legal matter represented by TONNY HARDIANTO, Director, and
<PAGE>
to approve the legal actions described below, signed by HUTOMO MANDALA PUTRA in
his position as Commissioner, hereafter in this agreement referred to as RHP.
Taking into consideration the following,
a. that TELKOM, based on regulation no. 3, 1989, in connection with government
regulation no. 25 1991, is the Executing Agency empowered to coordinate internal
telecommunications services;
b. that RHP with letter number 856/RHPMS/IX94, September 8, 1994, requested
that the Minister for Tourism, Post and Telecommunications (MENPARPOSTEL) enter
into a joint venture to provide cellular telephone services in collaboration
with TELKOM;
C. that MENPARPOSTEL with letter to RHP number PB.301/1/25/MPPT-95, April 28,
1995, agreed to the cooperation detailed in b above;
d. that the management of TELKOM with letter TEL.320/HK810/SEK-30/95,
September 7, 1995, to the Minister of Finance, requested approval to form a
joint venture among RHP, TELKOM and YDPP TELKOM to provide cellular phone
service;
e. that the Board of Commissioners of TELKOM with letter number
198/DK/K/X/95,' October 19, 1995 to the Minister of Finance supported the
formation of the said joint venture among RHP, TELKOM and YDPP TELKOM to provide
cellular phone services;
f. that MENPARPOSTEL with letter number KS.001/3/4/MPPT-95, September 25, 1995,
to the Minister of Finance supported the formation of the said joint venture
among RHP, TELKOM and YDPP TELKOM to provide cellular phone services;
g. that the Minister of Finance as TELKOM stockholder through letter number
S611/MK.016/1995, October 23, 1995, agreed to the involvement of TELKOM as
stockholder in the said joint venture.
having reached agreement, TELKOM, RHP and YDPP TELKOM are all bound in this
Cooperative Agreement in the matter of the Establishment of a Joint Venture to
Provide Cellular Telephone Services, with the conditions and stipulations
delineated in the following articles:
ARTICLE 1
DEFINITION
<PAGE>
(1) Unless specified to the contrary in the following articles and attachments,
the words written in the Agreement and Attachments have the following meanings:
Perjanjian (Agreement) refers to the Cooperative Agreement in the matter of
the Establishment of a Joint Venture to Provide
Cellular Telephone Services
Persetujuan (Agreement) refers to each agreement based on the rules and
regulations in effect, that is needed to establish a
company so that the Parties can share ownership in the
capital of the company so the company can operate and
carry out its efforts as laid out in this Agreement.
Anggaran dasar (Statutes)(also called Akte Pendirian) refers to the statutes of
the company in the Indonesian language, including
changes agreed to by all Parties and authorized by the
Minister of Justice.
Modal dasar (Capital) refers to the financial capital of the company
Perseroan (Company) refers to a limited (incorporated) company established
by the Parties based on this Agreement and the
regulations in effect as delineated in Article 6 of
this Agreement.
Dewan Komisaris
(Board of Commissioners) refers to the Board of Commissioners of the company
Direksi
(Management Board) refers to the Board of Directors of the company
Pemegang saham
(Shareholders) refers to each owner of stock/shares listed in the list
of shareholders of the company
Pola bagi hasil STKB-C
(Profit-sharing) means (i) Cooperative Agreement for the Development of
STKBC Phase 1 Jakarta Bandung with profit sharing
<PAGE>
with a capacity of 10.000 sst between TELKOM and RHP
number 62/KS010/UTAOO/85, April 28 1985; (ii)
Cooperative Agreement for the Development of STKBC
Phase 11 Jakarta Bandung with profit-sharing with a
capacity of 5.000 sst between TELKOM and RHP number
22/KS010/UTAOO/89, January 23, 1989; (iii) Cooperative
Agreement for the Development of STKBC Phase III
Jakarta Bandung with profit-sharing with a capacity of
16.000 sst between TELKOM and RHP number
312A/KS010/UTAOO/91, June 13 1991 (hereafter in this
Agreement referred to as PBH STKB-C)
Rupiah refers to the legal tender of the Republic of Indonesia
Saham (Share/Stock) refers to shares which are recorded as the capital of
the company and are issued in the name of the
shareholders as listed in the List of Shareholders
(2) All titles in the articles of this Agreement are intended only to aid
understanding and are not to be used to interpret or conclude the meaning or
intent of the Agreement.
ARTICLE 2
ESTABLISHMENT OF THE COMPANY
(1) The Parties agree to establish a joint venture in the form of a limited
(incorporated) company, hereafter referred to as Perseroan, with statutes that
will be formalized before a Notary in Jakarta, to be chosen by the Parties.
(2) The company will be established based on the rules and regulations of the
Republic of Indonesia.
(3) Each and every matter related to establishment of the company according to
the rules in effect is the joint responsibility of the Parties as determined in
another section of this Agreement.
(4) The Parties are obliged to submit each and every appeal/application for the
agreement and approval needed to establish and manage the company in order to
allow and ensure that the company can carry out its business following other
<PAGE>
agreements connected with this Agreement and the rules and regulations in
effect.
(5) The Parties agree that at the time of the establishment of the Company and
during its operations, they will endeavor to improve and develop the said
Company, including but not limited to maximal efforts to allow the company to
increase implementation of telecommunications services as agreed by the
Government in accordance with the rules and regulations currently in effect and
compatible with the goals and objectives of the Company.
ARTICLE 3
COST OF ESTABLISHING THE COMPANY
Funds that have been and will be issued by the Parties for the establishment of
the company based on this Agreement become the responsibility of each Party,
except:
a. funds for appraisal of STKB-C assets will be the responsibility of all
Parties
b. funds that are directly connected with the establishment of the
Company, limited by (i) notary fees related to official documents on
the forming of the company, and the cost of announcing the company in
Berita negara, (ii) taxes having a connection with the transfer of
STKBC assets based on this Agreement, which are to be handled by the
Parties according to the rules and regulations in effect.
c. Funds connected with development of the STKB-C infrastructure
including establishment of the Company, excluding the STKB-C
Cooperative Profit-sharing Agreement, which are issued by each Party,
which do not include appraisal costs, the level of which is to be
decided later by TELKOM and RHP and calculated as a Company debt
ARTICLE 4
GOALS AND OBJECTIVES OF THE COMPANY
(1) The Parties are in agreement that the Company has the following goals and
objectives:
a. To provide telecommunications facilities and services related to a
development of a Mobile Cellular Telephone
<PAGE>
Network, in accordance with the current laws and regulations
b. To achieve the above goals and objectives, the Company will engage in
the following activities, among others:
1. planning, engineering, building, providing, owning, developing,
operating and maintaining the STBS facilities to support
implementation of the above telecommunications services
2. Improving the capacity of the STBS facilities in order to
increase telecommunications services to society at large
3. Providing maintenance and repair services as well as STBS
equipment
4. Carrying out research, testing and development of mobile cellular
telephone technology, as considered necessary by the Company's
Board of Management.
5. Carrying out activities that are as widespread as possible in the
manner and form authorized by the rules and regulations currently
in effect.
(2) The Company can collaborate and/or participate in other company's business
both in Indonesia and outside, where the goals and objectives are the same
or similar to those of the Company.
ARTICLE 5
DURATION OF THE COMPANY
In accordance with this Agreement, the Company will be established for a
duration of seventy five (75) years, calculated from the date the company
statutes were agreed.
ARTICLE 6
NAME AND LOCATION OF THE COMPANY
The name of the Company to be established will be PT. MOBILE SELULAR INDONESIA,
shortened as MOBISEL, or another name agreed by all the parties involved. It
will have a headquarters office in Jakarta, with branch offices or
representatives elsewhere, both within and outside Indonesia, as determined by
the Company's Management Board with the approval of the Board of Commissioners.
<PAGE>
ARTICLE 7
COOPERATION WITH TELKOM AS EXECUTING BODY
MOBISEL as Third Party for telecommunications services will enter into an
agreement with TELKOM so that TELKOM will become Executing Body for Internal
Telecommunications Services, among other things for collaboration in human
resources and interconnection of the STBS network with the Public Switch
Telephone Network (PSTN), based on the agreement of the Parties.
ARTICLE 8
CAPITAL
(1) The basic capital of the company consists of Rp. 100.000.000.000.--,
comprised of 50.000.000 (fifty million) shares valued at a nominal rate of Rp.
2.000. - each (two thousand rupiah).
(2) Of the capital described in clause (1) above, the amount of Rp.
41.589.728.000.-- (forty one billion, five hundred eighty-nine million, seven
hundred twenty-eight thousand rupiah) will deposited in cash and or in kind by
TELKOM, YDPP TELKOM and RHP or 20.794.864 (twenty million, seven hundred ninety-
four thousand, eight hundred sixty-four) shares will likewise be deposited, as
delineated below:
a. 25% or Rp. 10.397.432.000.-- (ten billion, three hundred ninety-seven
million, four hundred thirty-two thousand rupiah) or 5.198.716 (five
million, one hundred ninety-eight thousand, seven hundred sixteen)
TELKOM shares
b. 5% or Rp. 2.079.486.000.-- (two billion, seventy-nine million, four
hundred eighty-six thousand rupiah) or 1.039.743 (one million, thirty-
nine thousand, seven hundred forty-three) YDPP TELKOM shares
c. 70% or Rp. 29.112.810.000.-- (twenty-nine billion, one hundred twelve
million, eight hundred ten thousand rupiah) or 14.556.405 (fourteen
million, five hundred fifty-six thousand, four hundred five) RHP
shares
(3) The depositing of capital described in clause (2) a, b, and c above will be
carried out by each Party as explained below:
a. TELKOM's deposit of Rp. 10.397.432.000.-- (ten billion, three hundred
ninety-seven million, four hundred thirty-two thousand rupiah) will be
calculated from the results of the valuation of equipment and
facilities of
<PAGE>
the STKB-C Profit-sharing Project which becomes the property of TELKOM
as intended by clause (4) a of this Article.
b. YDPP TELKOM's deposit of Rp. 2.079.486.000.-- (two billion, seventy-
nine million, four hundred eighty-six thousand rupiah) in the form of
a pure grant of equipment and facilities from the STKB-C Profit-
sharing Project, which becomes the property of RHP for and in the name
of YDPP TELKOM.
c. RHP's deposit of Rp. 29.112.810.000.-- (twenty-nine billion, one
hundred twelve million, eight hundred ten thousand rupiah) will be
calculated from the results of the valuation of the equipment and
facilities of the STKB-C Profit-sharing Project, which becomes the
property of RHP as intended by clause (4) b of this Article.
(4) The Parties agree to enter the value of the PBH STKB-C assets as of
December 31, 1994, as a capital deposit of TELKOM, YDPP TELKOM and RHP to
establish the company, the value of which has been calculated over a ten
year period and agreed to be a total of Rp. 52.342.326.140 (fifty-two
billion, three hundred forty-two million, three hundred twenty-six
thousand, one hundred forty rupiah), broken down as follows:
a. Value of the assets which will become the property of TELKOM in the
amount of Rp. 17.007.582.392 (seventeen billion, seven million, five
hundred eighty-two thousand, three hundred ninety-two rupiah);
b. Value of the assets which will become the property of RHP in the
amount of Rp. 35.334.743.748 (thirty-five billion, three hundred
thirty-four million, seven hundred forty-three thousand, seven hundred
forty-eight rupiah);
From the valuation of the PBH STKB-C assets as of December 31, 1994, it is
intended that TELKOM, YDPP TELKOM and RHP make a capital deposit of Rp.
41.589.728.000,-- (forty-one billion, five hundred eighty-nine million, seven
hundred twenty-eight thousand rupiah) as laid out in clause (2), while the
remainder of the RHP debt as of June 30, 1995 to Svenska Handelsbanken to buy
infrastructure equipment for STKB-C Phase III, is Rp. 10.752.598.140,-- (ten
billion, seven hundred fifty-two million, five hundred ninety-eight thousand,
one hundred forty rupiah) will be transferred to the company. The remains of the
RHP debt
<PAGE>
which will fall due July 31, 1995, until such time as the operation of STKB-C is
handed over to the company, will be paid by RHP to Svenska Handelsbanken, with
the understanding that the amount will be repaid to RHP by the company.
The Parties are in agreement that a difference of more than the calculated value
of TELKOM's property according to clause (3) a and (4) a of this Article, will
be the responsibility of RHP, in the amount of Rp. 6.610.150.392,-- (six
billion, six hundred ten million, one hundred fifty thousand, three hundred
ninety-two rupiah), and RHP is obligated to pay this amount to TELKOM within one
month calculated from the date of signing of this Agreement.
(5) On the understanding that the new Company can operate after its statutes
are authorized by the Minister of Justice, then:
a. It is agreed that the transfer of PBH STKB-C operational assets to the
Company will come into effect as of the 20th of the month in which the
statutes are authorized by the Minister of Justice, with the
stipulation that if the statutes are authorized on the 20th of any
month, then the operation of the company will begin on that day.
b. It is agreed that the transfer of STKB-C income to the Company will
begin to be calculated from one month before the 20th as defined in a
of this clause, which will be collected the following month.
c. The STKB-C Cooperative Profit-sharing Agreement between TELKOM and RHP
is still in effect during the time that the stipulations in clause (5)
a above are not met.
(6) Shares that are still in reserve will be issued according to the need for
working capital, at the time and according to the conditions established by
the management with the agreement of the Board of Commissioners, while
heeding the regulations in the statues of the Company, as long as the
shares are not sold at a price below the market rate.
This decision and the announcement of it must stipulate the amount to be
paid and the date due, and must be sent by the management in a registered
letter or by courier to each shareholder, based on the last address listed
in the list of shareholders.
<PAGE>
(7) When the shares in reserve are going to be issued then the shareholders
must be given the first opportunity to buy them, ahead of the public
announcement 30 calendar days. That time period can be extended by the
Company's management after they broadcast their intention to sell shares
and each shareholder can buy them, as much as possible according to the
number of shares they already own and in accordance with the stipulations
in clause (2).
(8) All remaining shares must be sold within ten years, calculated from the
date of authorization of the statutes of the company by the Minister of
Justice, except if the time period is extended by the authorized parties if
deemed necessary, and at the request of the management.
(9) If the basic amount of the capital established at the General Meeting of
Shareholders increases, then further shares can only be placed on the
market by the management at the time and with the conditions stipulated by
the management meeting, and the management meeting must stipulate share
prices as well as other conditions as seen necessary, but not at prices
below the market rate.
(10) If there is a further increase in shares, then the management must offer
them first to shareholders whose names are already listed in the list of
shareholders, with prices based on the book rate and for one month after
the offer is made, the shareholders will be given the opportunity to buy
shares before they are issued publicly, equal to the ratio of shares they
already own.
(11) In the case of shareholders who are slow or negligent in making payments to
the Company for their shares, the management has the right to collect the
payment by giving a collection letter 14 days before the payment date.
(12) In connection with clause (8) above, if payment is not made within 14 days
of receipt of the collection letter, then the shareholder in question must
pay interest on the total amount owed, calculated from the payment date,
until the entire price of the shares is paid in full.
(13) The management is empowered to offer the shares to other potential buyers,
if within the stated time the shares are not paid in full by the listed
shareholders.
(14) Without lessening the stipulations in this Article, shareholders in arrears
does have the right to take advantage of offers to buy new shares issued by
the company
<PAGE>
until their debt is deemed by the Company to have been paid in full
including interest.
(15) The company will be funded with its own capital, and in addition, loans
from certain sources at the best money market rates, maintaining a maximum
ratio of 75:25 between debt and share capital.
ARTICLE 9
SHARES/STOCK
(1) All company shares are issued in the names of the shareholders as listed in
the list of company shareholders.
(2) The company will only recognize one individual or one legal organization as
the owner of a share.
(3) If a share, through whatever means, becomes the property of several people
or legal organizations, then the owners are required to name one person as
trustee, and only that person has the legal rights associated with
ownership of the share.
(4) If the stipulation in clause (3) above has not yet been made, i.e. a
trustee has not yet been named, no one has the right to speak in the
General Meeting of Shareholders as a representative of that share, and
dividend payments for that share will be postponed.
(5) Legally a shareholder must submit to the statutes of the Company and to the
decisions taken according to law in the General Meeting of Shareholders.
ARTICLE 10
SHARE LETTER (stock certificate)
(1) The company must issue stock certificates (share letters) for each share
that is sold.
(2) On the stock certificate is written the name of the owner and a sequential
number, and the certificate is signed by the Principal Director and the
Principal Commissioner.
(3) Collective stock certificates can be issued as proof of ownership of two or
more shares; in such a collective stock certificate, the total number of
shares owned must be specified and the sequential number for each share
must be recorded, along with the signatures of the Principal Director and
Principal Commissioner.
<PAGE>
(4) On each stock certificate or collective stock certificate, the issue date
must be recorded and the specifications regarding transfer of ownership, as
well as other conditions in effect for that share according to the
stipulations in the company's statutes.
ARTICLE 11
REPLACEMENT STOCK CERTIFICATES
(1) If a stock certificate becomes worn/damaged and cannot be used anymore, the
management can issue a replacement in response to a request from the
shareholder.
(2) The original stock certificate then will be destroyed and this fact will be
reported at the General Meeting of Shareholders by the management.
(3) If a stock certificate is lost, then the shareholder may request a
replacement from the management, subject to the opinion of the management
as to whether there is sufficient proof of the loss, as judged on a case-
by-case basis.
(4) After a replacement stock certificate is issued, then the original
certificate is no longer valid according to the Company.
(5) If for some other reason a stock certificate is deemed by management to
require replacing, then the shareholder must submit the stock certificate
to be replaced by a new one.
(6) All costs related to the issuance of a new stock certificate are the
responsibility of the shareholder, except replacement of stock certificates
as in clause (5) above, where replacement is initiated by the management,
in which case the costs are the responsibility of the Company.
(7) The stipulations in the above clauses apply also to the replacement of
collective stock certificates.
ARTICLE 12
LIST OF SHAREHOLDERS
(1) A list of the holders of all shares is to be drawn up and kept at the
Company office. In the list of shareholders is listed the names of the
owners of shares as well as their home addresses and any other information
deemed necessary by the management and/or required by the rules and
regulations currently in effect.
<PAGE>
(2) Shareholders must inform the Company of each change of address with a
letter to the Management. Before such a letter is received, all
notifications and announcements are to be considered legal if addressed to
the latest address on the list of shareholders.
(3) Transfer of the right to a share from one person or company to another must
be based on an official transfer document signed by the original owner and
the designated new owner or their representatives, or the transfer must be
based on other documents which according to the Management can be
considered legal proof of the transfer.
(4) The transfer of rights to a share must be accompanied by a written note on
the list of shareholders. On the stock certificate must be written the date
of the transaction and the signature of the Principal Director and the
Principal Commissioner.
(5) Every share used as security or transfer of rights to shares or other
guarantee regarding shares must be written in the list of shareholders as
specified by the management, based on proof received by the management in
relation to the security or rights transfer or other guarantee.
Admission/acknowledgment of shares used as security, rights transfer or
other guarantee, as required by Article 1153, Code of Civil Regulations
[Kitab Undang-Undang Hukum Perdata], can only be considered proved if the
list of shareholders includes a note about the security, guarantee or
transfer of rights.
(6) Transfer of rights to a share is only allowed if all stipulations in the
statutes of the Company are fulfilled.
(7) From the time a letter is issued calling a shareholders' meeting, to the
end of that meeting, transfer of rights to shares is not permitted.
(8) The management must store and maintain the list of shareholders in the best
possible manner.
(9) Each shareholder has the right to see the list of shareholders during the
working hours of the Company office.
ARTICLE 13
TRANSFER OF RIGHTS TO SHARES
(1) Selling and transfer of rights to shares is only permitted to other
shareholders or to parties designated by the
<PAGE>
general Meeting of Shareholders and with the approval of the management.
(2) Shareholders who wish to sell shares must make a written offer to the other
shareholders before the shares can be offered to the public, and must
specify price per share; they further must submit a written report to the
management regarding the offer above.
(3) Other shareholders have the right to buy shares offered, within 30 calendar
days of the offer being issued, and they have the right to buy a number of
shares in accordance with the ratio of total shares owned.
If within 30 days as stipulated above there is no answer from the
shareholders with the right to have first offer, then the shareholder who
wishes to sell shares must submit a second written offer by way of a
registered letter or courier.
(4) If within 30 calendar days from the second written announcement of intent
to sell, there still is no buyer, then it should be considered proven that
the shareholders do not want to exercise their right to purchase the
offered shares, and the shares can be offered at the same price to other
shareholders, or with the agreement of the General Meeting of Shareholders,
to a third party, in both cases according to the specifications and at a
price as close as possible to the price in the first offer.
(5) Other forms of transfer of rights to shares, except selling the shares, and
with the exception of inherited shares, are only permitted with the
authorization of the General Meeting of Shareholders.
(6) While any of the above transfer processes is started but still incomplete,
the shareholder is deemed not to have a legal say in the General Meeting of
Shareholders, and dividend payments are suspended.
ARTICLE 14
MANAGEMENT
(1) The Company is organized and led by a Management Board which consists of a
Principal Director and as many as 4 (four) other Directors.
(2) The members of the Management Board are nominated and dismissed by the
General Meeting of Shareholders. The
<PAGE>
members of the Management Board are nominated for a period of five (5)
years and their terms can be extended, although the General Meeting of
Shareholders reserves the right to dismiss Management Board members
anytime.
(3) Management Board members receive a salary and certain other
facilities/support, including insurance, the method of payment and amount
to be established by the General Meeting of Shareholders.
(4) If for some reason one of the places on the Management Board is vacant,
within 30 calendar days after the vacancy occurs a General Meeting of
Shareholders must be called in order to fill the vacancy, according to
clause (2) of this Article.
(5) Shareholders may nominate candidates for the vacant position on the
Management Board, with the following stipulations:
a. RHP must propose at least 2 candidates for one vacant Principal
Director position, and four candidates to fill 2 Director positions.
b. TELKOM must submit at least 2 candidates to fill one Director
position.
C. YDPP TELKOM must propose at least 2 candidates to fill one Director
position.
(6) Vacancies, as defined in clause (4) above, must be filled by candidates
proposed by the shareholders as described in clause (5).
ARTICLE 15
DUTIES AND AUTHORITY OF THE MANAGEMENT BOARD
(1) The principal duties of the Management Board are:
a. to lead and organize the Company according to its objectives and to
strive to increase the effectiveness and efficiency of the Company.
b. to control, maintain and organize the Company's assets
(2) The Management Board is the representative of the Company within and
outside the jurisdiction and carries out all actions and measures, both
related to management of the company and related to its property, and acts
as the link between the Company and third parties, with the limitations
outlined in clauses (3) and (4) below.
<PAGE>
(3) The actions of the Management Board as described below must be approved by
the Board of Commissioners:
a. to borrow money on a short-term basis, taking into consideration the
stipulations in clause (4) d of this Article.
b. to offer loans on a short-term basis in the name of the Company
c. to manage the Company's fixed assets, arranging for short-term credit
as necessary
d. to liquidate moveable fixed assets, erase bad debts, and get rid of
property up to and not exceeding the level stipulated by the General
Meeting of Shareholders.
e. to change the system of remuneration of the Company
(4) The actions listed below can only be carried out by the Management Board
with the knowledge and consideration of the Board of Commissioners, and
after receiving written approval from the General Meeting of Shareholders:
a. to liquidate or put up as security the Company fixed assets in
accordance with clause (3) c and d of this Article.
b. to participate in the Company or in other companies or agencies or to
organize new companies.
c. to relinquish part or all participation in the Company or in other
bodies.
d. to give long- or medium-term loans or to take short-term loans that
are not operational in nature, in excess of the amounts specified by
the General Meeting of Shareholders.
e. to commit the Company as guarantor in a manner that has financial
implications in excess of the amounts specified by the General Meeting
of Shareholders.
f. to fail to demand payment of debts and to liquidate bad debts as well
as to get rid of unwanted property up to the limit established by the
General Meeting of Shareholders in accordance with clause (3) d.
<PAGE>
The Board of Commissioners will offer suggestions and advice to the General
Meeting of Shareholders on various matters that are submitted for decision, as
laid out in clause (4) a to f above.
(5) The Principal Director has the right and the authority to act for and in
the name of the Management Board as well as to represent the Company. In
the case that the Principal Director does not attend a General Meeting or
if he or she is held up for some reason, which does not have to be
justified to a third party, then one of the other members of the Management
Board who is so designated by the Principal Director or the Board of
Commissioners, has the right and the authority to act for and in the name
of the Management Board and to represent the Company.
(6) The Management Board for certain actions has the right to nominate one or
more persons as representatives or trustees by giving the person or persons
the power delineated in the letter of authority.
(7) In the case of a vacancy in the Principal Director's position, all duties
and authority vested in the Principal Director within the Company statutes
can be adopted by one of the other Directors who is nominated by the Board
of Commissioners.
(8) The division of duties and authority among the members of the Management
Board is organized and established based on their agreement and with the
approval of the Board of Commissioners.
(9) In the case that the Company has priorities that are at odds with the
personal priorities of one of the Management Board members then the Company
will be represented by another Board member; and, in the case that the
Company has priorities that are at odds with the priorities of all the
Management Board members, then the Company will be represented by the Board
of Commissioners.
ARTICLE 16
MANAGEMENT BOARD MEETINGS
(1) The Management Board will hold meetings at least once every month or
whenever it is deemed necessary by the Principal Director or at the
suggestion of at least 2/5 (two-fifths) of the members of the Management
Board, with a statement of matters to be discussed. Management Board
meetings will be held in the Company office or in another location in the
<PAGE>
region of the Republic of Indonesia as determined by the Management Board.
(2) A summons for the Management Board to meet will be made by the Board
member/s empowered to represent the Management Board, according to clause
(5) of Article 13.
(3) A summons for the Management Board to meet must be delivered to each member
of the Board directly, and a signature must be received from each member
thus contacted, at least seven calendar days before the meeting is to be
held, not counting the day the summons is delivered and the day of the
meeting. The time period above may be shortened in accordance with the
consideration and decision of the Principal Director, to discuss matters of
an urgent nature.
(4) The summons must record the proposed agenda for the meeting as well as the
time and place it is to be held.
(5) If all members of the Management Board or their representatives are in
attendance already, then the summons in advance is not necessary and the
meeting can be held anywhere and the attendees are empowered to take the
necessary decisions.
(6) Management Board Meetings are led by the Principal Director. In the case
that the Principal Director cannot attend or is held up, the reasons for
which need not be justified to a third party, the Meeting will be led by
one of the other Directors who is nominated by the attendees.
(7) A member of the Management Board can only be represented at a meeting by
another Board member, based on the letter of authorization.
(8) Meetings of the Management Board are legal and are empowered to make
decisions with the agreement of at least 3/5 (three-fifths) of the members
or the representatives, if the Board members representing TELKOM, YDPP
TELKOM or RHP are included in the 3/5, and when the summons to the meeting
was delivered legally and in accordance with the stipulations in the
Company's statutes.
(9) When, as explained in clause (8), the representatives of TELKOM, YDPP
TELKOM or RHP do not answer the summons to meet twice in a row then at the
third meeting the Management Board is empowered to take decisions with the
approval of at least 3/5 of the members who are in attendance or
represented at the meeting, if the summons for the third
<PAGE>
meeting was delivered legally and in accordance with the stipulations in
the Company's statutes.
(10) Decisions of the Management Board must be reached through a process of
discussion and consensus. If this is not possible, then a decision is reached
based on the vote of the majority of members or their representatives present at
the meeting. If there is a tie, then the final decision is made by the Principal
Director.
(11) Each member of the Management Board who attends a meeting has the right to
cast one vote and one extra proxy vote for any other member he or she is
representing. Voting on an issue related to a member him or herself is done by
means of a folded, unsigned ballot while voting about other matters is done
orally, except if the Meeting Leader decides otherwise and there are no
objections from the other members. Blank and ruined ballots are not counted.
(12) Minutes must be taken of each meeting of the Management Board, and must be
signed by each person who attends the meeting. The signed minutes of the
Management Board meetings serve as legal proof of the decisions that were taken.
(13) The Management Board may also make legal decisions without holding a formal
meeting, with the stipulation that all members must receive a written
announcement of the proposal and every member must agree to the proposed action
in written form and sign it. Decisions taken in this manner have the same force
as decisions taken legally in meetings.
ARTICLE 17
BOARD OF COMMISSIONERS
(1) The Board of Commissioners acts as supervisor or controller of the Company
business carried out by the Management Board.
(2) The Board of Commissioners consists of a Principal Commissioner and as many
as four (4) other Commissioners.
(3) The members of the Board of Commissioners are nominated and dismissed by
the General Meeting of the Shareholders. Commissioners are nominated for a
period of three (3) years and their terms can be extended, or, without lessening
the right of the General meeting of the Shareholders, they can be dismissed.
(4) The members of the Board of Commissioners may receive honoraria and other
support, the types and amounts to be determined by the General Meeting of the
Shareholders.
<PAGE>
(5) If for some reason a position on the Board of Commissioners becomes vacant,
within thirty (30) calendar days of the vacancy occurring, a General Meeting of
the Shareholders must be called in order to fil1 the position according to the
stipulations in clause (3).
(6) Candidate members for the Board of Commissioners are proposed by TELKOM and
RHP with the following stipulations:
a. TELKOM has the right to propose at least two (2) candidates to fill 1
position as Principal Commissioner, and two (2) candidates to fill 1
Commissioner position.
b. RHP is empowered to propose at least six (6) candidates to fill
Commissioner positions.
(7) Vacancies as defined in clause (5) must be filled by candidates that are
proposed by shareholders, as explained in clause (6).
ARTICLE 18
THE DUTIES AND AUTHORITY OF THE BOARD OF COMMISSIONERS
(1) The Board of Commissioners, both together and individually at all times
during the Company's working hours has the right to enter the building and the
rooms therein, or other places used or controlled by the Company, and has the
right to check the books, letters, evidence, to check and reconcile the petty
cash, and so on, as well as to know all actions carried out by the Management
Board.
(2) The Management Board and each of its members is obligated to give
explanations regarding all matters related to the Company, if questioned by the
Board of Commissioners
(3) The Board of Commissioners, with the largest vote, is at all times
empowered to suspend one or more of the members of the Management Board from
their work, if he/she/they act contrary to the statutes of the Company or if
he/she/they neglect their duties.
(4) Before a member of the Management Board is suspended, he or she must
receive a written letter of intent to dismiss, including the reasons for the
dismissal action.
(5) Within thirty (30) calendar days of the suspension, the Board of
Commissioners must call a General Meeting of the Shareholders. At this meeting
the members will decide if the
<PAGE>
suspended Management Board member will be dismissed permanently, or returned to
his or her position on the Board. The suspended member must be allowed to attend
the meeting and depend him or her self. This meeting will be led by the
Principal Commissioner and if he or she does not attend, by one of the other
Commissioners appointed for the duty in a written letter by the Principal
Commissioner.
(6) If a General Meeting of the Shareholders is not called within thirty (30)
calendar days of the suspension, then the suspension is canceled and the
suspended person may assume his or her position on the Board once again.
(7) If the members of the Management Board are temporarily suspended as
explained in clause (3) and if the Company as a result has no members of the
Management Board, then the Board of Commissioners is obligated to assume the
responsibilities of the Management Board to organize the work of the Company.
(8) In the case that there is only one Commissioner, then all the duties and
authority given to the Principal Commissioner or the other Commissioners in the
statutes of the Company, fall to the single Commissioner.
(9) The Board of Commissioners may and has the right and the authority in the
matter of the General Meeting of the Shareholders, as follows:
a. to give opinions and advice to the shareholders about development
plans for the Company, work plans and Company statutes as well as changes and/or
additions, annual financial reports, occasional reports and other reports from
the Management Board.
b. to monitor and supervise the implementation of the work plan and
statutes of the Company as well as to submit evaluation reports to the General
Meeting of the Shareholders.
c. to follow the development of the Company's activities, and in all
matters related to the Company to watch for and indicate signs of decline, to
promptly report such signs to the shareholders along with suggestions regarding
steps that should be taken to improve the situation.
d. give opinions and advice to the shareholders about all other problems
considered to be important to the management of the Company.
<PAGE>
e. undertake other monitoring duties specified by the General Meeting of
the Shareholders
f. to submit regular reports to the shareholders (quarterly, annual), as
well as other reports as necessary regarding development of the Company and
results of its activities.
ARTICLE 19
MEETINGS OF THE BOARD OF COMMISSIONERS
(1) The Board of Commissioners is required to hold meetings at least once every
three months, and the Management Board may be invited to attend such meetings.
Board of Commissioners' meetings are held in the Company offices or at another
location in the region of the Republic of Indonesia, as determined by the Board
of Commissioners.
(2) The Board of Commissioners may also hold other occasional meetings if it is
considered by the Principal Commissioner to be necessary, or at the suggestion
of at least two-fifths (2/5) of the members of the Board of Commissioners.
Management Board members may also be invited to these meetings. The Principal
Commissioner is responsible for summoning the members to meet. If the Principal
Commissioner does not call a meeting within fourteen (14) calendar days of a
request from one of the members to hold a meeting then the members of the Board
of Commissioners who originally requested the meeting be called are empowered to
convene it themselves
(3) Summons to meetings of the Board of Commissioners must be delivered in
written form or delivered to each member of the Board directly, and each
member's signature must be collected, at least seven (7) calendar days before
the meeting is to be held, not counting the day the summons was delivered or the
day of the meeting.
(4) This written summons to meet must include an agenda as well as the time and
place of the meeting.
(5) If all the members of the Board of Commissioners, or their representatives,
attend a meeting then the procedure of advance notice described above does not
have to be followed. Such a meeting may be held anywhere and is empowered to
take legal and binding decisions.
(6) Meetings of the Board of Commissioners are led by the Principal
Commissioner, but if the Principal Commissioner cannot attend or is held up for
some reason which does not have to be
<PAGE>
justified before a third party, then the meeting will be led by someone chosen
from the members of the Board of Commissioners who are present.
(7) the members of the Board of Commissioners may only be represented at
meetings by other members of the Board of Commissioners, based on letter of
authority.
(8) Meetings of the Board of Commissioners are legally empowered to make
binding decisions if at least three-fifths (3/5) of the members or their
representatives are present as long as the Board of Commissioners members
appointed by TELKOM and RHP are represented at the meeting, and the summons to
the meeting was delivered in a legal manner according to the stipulations in the
Company statutes.
(9) When the representatives of TELKOM or RHP cannot attend meetings as
described in clause (8) twice in a row then at the third meeting the Board of
Commissioners is empowered to make binding decisions as long as three-fifths
(3/5) of the members are present, and the summons to the meeting was delivered
in a legal manner in accordance with the Company's statutes.
(10) Decisions of the meetings of the Board of Commissioners must be arrived at
through discussion and consensus. If this is not possible, then a decision is
made based on the vote of the majority of the members in attendance or their
representatives. If there is a tie, then the President Commissioner will cast
the deciding vote.
(11) Each member of the Board of Commissioners who attends the meetings has the
right to cast one (1) vote and one (1) additional proxy vote for each other
member of the Board that he or she is representing. Voting on topics related to
the individual members themselves is done by means of folded, unsigned ballots
while votes on other matters are cast orally.
Blank or ruined ballots are not counted in the final total.
(12) Minutes of each meeting of the Board of Commissioners must be recorded and
signed by the meeting leader and by one other member of the Board of
Commissioners who attended. Such signed minutes serve as legal proof/evidence
regarding the decisions that have been made at the meeting.
(13) The Board of Commissioners may also make legal decisions without holding a
meeting of the Board, with the stipulation that all members of the Board of
Commissioners must be given written notice of the proposal under consideration
and each member must
<PAGE>
give written approval of the proposal and sign it, as proof of their agreement.
Decisions taken in this manner have the same force as decisions made at meetings
of the Board of Commissioners.
ARTICLE 20
FISCAL YEAR
(1) The Company's fiscal year runs from the first (lst) of January until the
31st (thirty-first) of December. At the end of December each year the Company's
accounts are closed. In the year that the Company is established the accounts
will also be closed on the 31 of December.
(2) After the accounts are closed, it is the responsibility of the Management
Board to balance the books and to calculate profits and losses, and to produce
other financial reports in accordance with sound principles of accounting
practice, which must then be checked by the Board of Commissioners. The
aforementioned documents must be made available at the offices of the Company,
at least fourteen (14) calendar days before the date of the Annual General
Meeting of the Shareholders so they can be examined by the shareholders.
(3) The Company's accounts must be audited by an independent public accountant
appointed by the General Meeting of the Shareholders.
ARTICLE 21
GENERAL MEETINGS OF THE SHAREHOLDERS
(1) The General Meetings of the Company's Shareholders are:
a. the annual General Meeting of the Company's Shareholders as described in
Article 22 below;
b. irregular General Meetings of the shareholders, i.e. all meetings except
for the annual General Meeting fall into this category
(2) The phrase General Meeting of the Shareholders, within the Company's
statutes refers to two types of meetings: the annual General Meeting of the
Shareholders, and irregular General Meetings of the Shareholders, except where
deemed to have another meaning.
ARTICLE 22
ANNUAL GENERAL MEETINGS OF THE SHAREHOLDERS
<PAGE>
(1) The annual General Meeting of the Shareholders is held each year, at the
latest in June, and for the first year, will be held at the latest by the end of
June in the year that the Company is established.
(2) In the annual General Meeting of the Shareholders,
a. the management Board is required to present a report about the
Company's business and results of its activities achieved in the previous fiscal
year, especially as regards management of the Company;
b. balance statement and calculation of profit and loss must be submitted
for approval by the Meeting;
c. distribution of profits is decided
d. other matters are discussed as submitted, in accordance with the
stipulations of the Company's statutes
(3) Approval of the statements of balance of payments and profit and loss by
the annual General Meeting of the Shareholders means that they "give a clean
slate" to the members of the Management Board and the Board of Commissioners
regarding actions and decisions made and supervision given during the previous
fiscal year, to the extent that the actions are reflected in the balance of
payments and profit/loss statements.
(4) All materials and documents such as those mentioned in clause (2) must be
sent or delivered to the shareholders no later than fourteen (14) days before
the annual General Meeting of the Shareholders will begin.
(5) One or more shareholders who own at least ten percent (10%) of the
Company's stock may also make suggestions or proposals at the annual General
Meeting of the Shareholders, with the stipulation that the proposals or
suggestions must be received by the Management Board at least three (3) weeks
before the annual General Meeting of the Shareholders begins.
(6) Within thirty (30) calendar days before the new fiscal year comes into
effect, the Management Board must send a work plan and budget to the Board of
Commissioners and the shareholders, to request approval from the annual General
Meeting of the Shareholders.
(7) The Board of Commissioners is obligated to offer its opinions and advice
regarding the work plan and budget, and the
<PAGE>
said opinions must be delivered to the shareholders no later than thirty (30)
calendar days after receipt of the work plan and budget from the Management
Board. If within the time period stated above the Board of Commissioners does
not give any response then it can be assumed that the work plan and budget have
been accepted by the Board of Commissioners.
(8) When the accounts for the new fiscal year are opened, if the annual General
Meeting of the Shareholders has not yet given its decision, then while awaiting
approval of the work plan and budget, the work plan and budget may be deemed to
be valid documents for the routine operations of the Company, until such time as
the two documents are approved by the annual General Meeting of the
Shareholders.
ARTICLE 23
IRREGULAR GENERAL MEETINGS OF THE SHAREHOLDERS
(1) Irregular General Meetings of the Shareholders are held whenever it is
deemed necessary by the Management Board and or the Board of Commissioners and
or the shareholders.
(2) The Management Board must call and organize irregular General Meetings of
the Shareholders at the written request of shareholders with twenty percent
(20%) or more of the Company's shares, on the condition that, in the letter of
request, the matter to be discussed is described.
(3) If the Management Board neglects to call such a meeting within thirty (30)
calendar days of receipt of the letter of request, then the person or people who
signed the request have the right to call a meeting themselves at the Company's
expense, taking into consideration the stipulations in the Company's statutes;
at such a meeting, the Meeting Leader is chosen for and by those who attend and
all decisions taken within the meeting are binding on the Company, as long as
they are not in conflict with the Company's statutes.
ARTICLE 24
LOCATION AND SUMMONS
GENERAL MEETINGS OF THE SHAREHOLDERS
(1) General Meetings of the Shareholders are held in the offices of the
Company, or in another location determined by the Management Board within the
region of the Republic of Indonesia.
(2) Summonses to General Meetings of the Shareholders are usually in the form
of advertisements in Indonesian language
<PAGE>
newspapers published in the location of the Company's offices, or registered
letters may be sent no later than fourteen (14) calendar days before the date of
the Meeting; if in the opinion of the Management Board, the topics of discussion
need to be resolved quickly, then the time can be shortened to seven (7)
calendar days before the meeting, in both cases not counting the day the
announcement was made or the date of the meeting.
(3) The summons to a shareholders meeting must include a written agenda, as
well as the time and place of the meeting. As well, the summons for the annual
General Meeting of the Shareholders must record that the statements of balance
of payments and profit/loss are available in the Company's offices.
(4) If all shareholders or their representatives attend a meeting then a
summons in advance for the next meeting will not be necessary, and the said
meeting may take legal decisions and may be held anywhere within the region of
the Republic of Indonesia.
ARTICLE 25
LEADER AND MINUTES
GENERAL MEETING OF THE SHAREHOLDERS
(1) If not specified to the contrary somewhere else in this Agreement, then the
General Meeting of the Shareholders will be led by one of the shareholders as
selected by the shareholders who attend.
(2) Minutes of all discussion and decisions must be kept at each General
Meeting of the Shareholders, and must be signed by the Meeting Leader and one
shareholder or his or her representative designated for this purpose, and the
contents of the minutes will serve as evidence for all shareholders regarding
decisions and discussion during the meeting. No signatures are necessary if the
minutes are written in the form of a notarial document.
ARTICLE 26
QUORUM, VOTING AND DECISIONS
(1) General Meetings of the Shareholders are only deemed to be legal if at
least seventy-five percent (75%) of the shares issued by the Company to date are
represented at the meeting, unless specified otherwise in the Company's
statutes.
(2) Each shareholder may only be represented by other shareholders or another
person with a letter of authority.
<PAGE>
(3) The meeting leader has the right to ask for the when the letters of
authority of representatives of shareholders meeting is held.
(4) In the General Meetings of the Shareholders, each share owned gives its
owner one vote.
(5) Members of the Management Board and the Board of Commissioners and in
general the employees of the Company may not vote during General Meetings of the
Shareholders. Their votes will not be counted.
(6) A vote about a particular person will be undertaken using folded, unsigned
ballots, while votes on all other matters will be taken orally, unless the
Meeting decides otherwise.
(7) Blank or ruined votes will not be counted.
(8) All decisions of the General Meetings of Shareholders are deemed to be
legal if agreed by a minimum of eighty-five percent (85%) of the total shares
represented at the meeting, as described in clause (1).
(9) Shareholders may also make legal and binding decisions without holding a
Meeting, as long as the proposal in question is disseminated in written form to
all shareholders and as long as all shareholders indicate their approval of the
motion in written form and including their signature. Decisions taken in this
manner have the same force as decisions made at General Meetings.
ARTICLE 27
PROFIT DISTRIBUTION/SHARING
(1) Profits calculated by the General Meeting of Shareholders, after tax is
subtracted, are divided into reserve, dividends, and so on, the percentages of
each to be determined every year by the General Meeting of the Shareholders.
(2) If the calculation of profit and loss for a year shows losses, then the
losses must be written into the Company's accounts, and in the subsequent year
or years, the Company will be deemed not to have made a profit, until the losses
are made up.
(3) Dividends that are not claimed within five (5) years of being made
available for payment, will not be paid at all and will instead be entered into
the reserve accounts of the Company.
<PAGE>
(4) With due attention to the regulations in effect, a dividend for one share
must be paid to the shareholder whose name is written in the list of
shareholders on specified working days determined by or under the authority of
the General Meeting of the Shareholders, where the decision regarding
distribution of profits are made. The day of payment must not be more than two
(2) months after the date of the closing of the General Meeting of the
Shareholders and must be publicized to all shareholders and the Management
Board.
ARTICLE 28
RESERVE FUNDS
(1) Reserve funds are used to make up losses suffered by the Company. With due
attention to the stipulations above, the General Meeting of the Shareholders
will determine whether the reserve funds are used in full or part as working
capital or for other purposes.
(2) The Management Board must manage the reserve funds for that the reserve
funds make a profit, by whatever means deemed appropriate and with the agreement
of the Board of Commissioners.
(3) Profits accrued from the reserve funds are entered into the statement of
profit and loss.
(4) The General Meeting of the Shareholders is empowered to decide to decrease
the amount in the reserve fund and make the amount up with profits.
ARTICLE 29
LIQUIDATION
(1) In the case that the Company must be dissolved, because its lifespan as
noted in this Agreement is at an end, or as a result of a decision by the
General Meeting of the Shareholders or because the Company is no longer viable,
then the Management Board will begin liquidation proceedings under the
supervision of the Board of Commissioners.
(2) The decision to liquidate the Company must be registered with the office of
the registrar of the Court with authority in the jurisdiction where the Company
was located, and must also be announced in the Berita Negara of the Republic of
Indonesia, and in at least one daily newspaper with national circulation,
including the summons from the creditors.
<PAGE>
(3) The remaining funds after the liquidation will be distributed to the
stockholders, in accordance with the value of the shares they owned.
ARTICLE 30
SECRET/CONFIDENTIAL INFORMATION
(1) The Parties are in agreement that they will treat as confidential and
guarantee that all their employees, agents and employees of their agents will
treat as confidential all information received in any manner as a consequence of
implementing this Agreement, and they guarantee that information will not be
given to other parties except as needed to meet the Company's objectives.
(2) If one of the Parties wishes to pass on information regarding matters
connected with this Agreement to other parties, they must first secure the
written consent of the other Parties to this Agreement.
ARTICLE 31
DESIGNATED ADDRESS AND OFFICIALS
(1) To facilitate smooth implementation of this Agreement, the Parties are in
agreement that the officials that will be designated to represent each Party in
the operations, sending of letters, making announcements and so on, are:
For TELKOM:
For YDPP TELKOM:
For RHP:
(2) what is meant by "force majeure" is conditions which directly result in one
or more of the Parties not being able to carry out their obligations as laid out
in this Agreement, that is, conditions beyond the control of the Parties,
including but
<PAGE>
not limited to earthquakes, hurricanes, floods, fire, landslides, general
strikes, war, riots and Government policy or regulations.
(2) If such a situation occurs then the two Parties will discuss the matter and
find a solution to overcome the said situation, which is agreed by TELKOM, YDPP
TELKOM and RHP.
(3) All losses suffered by one of the parties as a result of such a situation
will not be the responsibility of the other parties.
ARTICLE 33
DATE OF IMPLEMENTATION AND LIFESPAN OF THE AGREEMENT
(1) This Agreement takes effect on the date the Parties sign it.
(2) This agreement will remain valid in accordance with the stipulations laid
out in Article 5, except if the Company is dissolved as delineated in Article 29
of this Agreement.
ARTICLE 34
SOLVING OF DISPUTES
(1) In the case that a difference of opinion or a dispute among the Parties
arises, in the implementation of the stipulations of this Agreement, the Parties
will agree to resolve their differences in advance by discussion and consensus.
(2) If the discussion process suggested in clause (1) does not result in
resolution of the problem, then the Parties agree to hand over their differences
of opinion or disputes to the Indonesian National Arbitration Board (BANI) to
resolve them at the first level and according to the procedures of BANI.
(3) While the dispute is in the process of negotiation and arbitration, the
Parties must still carry out their duties as laid out in this Agreement.
ARTICLE 35
DECLARATION AND GUARANTEE
a. The Parties are organizations established legally according to the rules
and regulations of the Republic of Indonesia, with the status of legal bodies,
so they have the capacity and authority to bind themselves in this Agreement and
to carry out the obligations therein;
<PAGE>
b. The Parties have already secured all necessary permissions and agreements
to sign and implement this Agreement, including but not limited to the agreement
and permission of the Board of Commissioners and the General Meeting of the
Shareholders in accordance with the statutes of all Parties.
c. This Agreement represents a legal and binding obligation and for the
Parties who will assume responsibility, and the Parties who sign this Agreement
have the authority to carry out these responsibilities.
ARTICLE 36
OTHER MATTERS
(1) The Parties are in agreement that if the Company needs human resources they
will prioritize human resources from the Parties. This matter will be dealt with
in a separate agreement between the Company and the Parties.
(2) Before the statutes of the Company are legalized by the Minister of
Justice, all actions of the Management Board connected with the Company can only
be carried out with the agreement of the shareholders.
(3) The Parties are in agreement that the Company must hold in reserve a number
of shares which can be made available to employees of the Company, which will be
decided in the General Meeting of the Shareholders.
(4) In the case that there is a difference in the contents or spirit of this
Agreement and the statutes of the Company, then the statutes of the Company are
deemed to take precedence. For matters that are covered in the Agreement, but
are not in statutes, the Agreement is legal and binding on the Parties.
ARTICLE 37
ATTACHMENTS
(1) The attachments to this Agreement represent an inseparable part of the
document and have the same force of law as the other articles in this agreement.
<PAGE>
In witness whereof, this agreement is signed by the authorized representatives
of TELKOM, YDPP TELKOM and RHP.
YDPP TELKOM, PT. TELEKOMUNIKASI INDONFSIA,
[Seal] [Seal]
/s/ /s/
RUBINI SUPARAN SETYANTO P. SANTOSA
---------------------- --------------------
Ketua Pelaksana Harian Direktur Utama
PT. RAJASA HAZANAH PERKASA
PT RAJASA HAZANAH PERKASA
/s/ /s/
TONNY HARDIANTO HUTOMO MANDALA PUTRA
---------------------- --------------------
Direktur Komisaris
<PAGE>
EXHIBIT 10.13E
[English Translation]
[Seal of Ministry of
Tourism, Post and
Telecommunications]
Ministry of Tourism,
Post & Telecommunications
Number : PB.301/1/25/MPPT-95 Jakarta, 28 April 1995
Classification :
Regarding : Principal License of Cooperation Provider of Mobile
Cellular Telephone (STBS) NMT-450 in Joint Venture Form.
To : President Commissioners of PT. Rajasa Hazanah Perkasa
JAKARTA
1. Referring to your letter No. 856/RHP-MS/1X-94 dated 8 September 1994
regarding proposal on cooperation provider of Mobile Cellular Telephone
(STBS) NMT-450 in a Joint Venture form with PT. Telkom in accord with KM. No.
39/KS.002/MPPT-93 on the Cooperation Agreement of telecommunication services
and KM. No. 91/PT.303/MPPT-93 on STBS provider; after considering,
evaluating, and anticipating the development of cellular telephone
technology, herewith we inform you that we accept your proposal.
The STBS NMT-450 service will cover national areas, which advance is to cover
provinces: Lampung, West Java, DKI Jakarta, Middle Java, Bali, and Lombok
Islands.
2. In regard to article No. 1, it is required that you coordinate with PT.
Telkom to finalize the status of the Joint Venture Agreement for STBS NMT-
450, and be ready to build the system and network no later than (3) three
years upon the issuance of this letter.
3. Thank you.
Ministry of Tourism,
[Seal of Post and Telecommunications
Ministry of
Tourism, Post /s/
and Telecom-
munications] JOOP AVE
cc: Minster of Finance
Director General of Postel
President Director of PT. Telkom
Chief of BKPM
<PAGE>
EXHIBIT 10.13F
CONFORMED COPY
--------------
FACILITY AGREEMENT
in respect of
US$60,000,000 Facility
between
P.T. MOBILE SELULAR INDONESIA
as the Borrower
and
NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD
as the Lender
COUDERT BROTHERS
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
CLAUSE PAGE
- ------ ----
<S> <C>
1. Interpretation..................................................... 1
2. The Facility....................................................... 8
3. Availability Of The Facility....................................... 12
4. Making Of Advances................................................. 13
5. Interest Periods................................................... 14
6. Interest........................................................... 14
7. Default Interest................................................... 14
8. Repayment.......................................................... 15
9. Cancellation And Prepayment........................................ 16
10. Illegality......................................................... 16
11. Market Disruption.................................................. 17
12. Representations And Warranties..................................... 17
13. Financial Information.............................................. 23
14. General Covenants And Undertakings................................. 27
15. Events Of Default.................................................. 39
16. Broken Funding Costs............................................... 43
17. Indemnity.......................................................... 43
18. Currency Of Account................................................ 44
19. Payments........................................................... 44
20. Taxes.............................................................. 45
21. Increased Costs.................................................... 47
22. Set-Off............................................................ 48
23. Fees, Costs And Expenses........................................... 48
24. Benefit Of Agreement............................................... 49
25. Miscellaneous...................................................... 50
26. Remedies And Waivers............................................... 51
27. Partial Invalidity................................................. 51
28. Notices............................................................ 51
29. Law And Jurisdiction............................................... 52
30. Construction Of Certain Provisions................................. 53
Schedule One: Form Of Advance Request......................... 58
Schedule Two: The Project Contracts........................... 59
Schedule Three: Form Of Master Assignment Of Sub-Accounts..... 60
</TABLE>
<PAGE>
THIS AGREEMENT is made on the 12th day of March, 1996
- --------------
BETWEEN:
- -------
(1) P.T. MOBILE SELULAR INDONESIA (the "BORROWER"); and
(2) NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD. (the "LENDER").
WHEREAS the Borrower has requested, and the Lender has agreed to make available,
- -------
a credit facility upon the terms and subject to the conditions set out in this
Agreement.
IT IS AGREED THAT:
- ------------------
1. INTERPRETATION
--------------
1.1 In this Agreement, each of the following expressions has, except where
the context otherwise requires, the meaning given to it below:
"ACCOUNTS" means the RP Escrow Account, the US Escrow Account and the
Reserve Account and "ACCOUNT" means any of them as the context may permit;
"ADVANCE" means, save as otherwise provided herein, the principal
amount of any drawing made hereunder (as from time to time reduced by
repayment);
"ADVANCE REQUEST" means a request made hereunder by the Borrower for
an Advance in the form set out in Schedule One hereto;
"ASSIGNMENT OF CONSTRUCTION CONTRACTS" means the assignment of
construction contracts entered or to be entered into between the Borrower and
the Security Agent in form and substance satisfactory to the Lender;
"ASSIGNMENT OF INSURANCES" means the assignment of insurances entered
or to be entered into between the Borrower and the Security Agent in form and
substance satisfactory to the Lender;
"ASSIGNMENT OF PERFORMANCE BONDS" means the assignment of performance
bonds entered or to be entered into between the Borrower and the Security Agent
in form and substance satisfactory to the Lender;
"ASSIGNMENT OF RECEIVABLES" means the assignment of all the
receivables from time to time of the Borrower entered or to be entered
<PAGE>
into between the Borrower and the Security Agent in form and substance
satisfactory to the Lender;
"ASSIGNMENT OF RESERVE ACCOUNT" means the assignment of account
proceeds in respect of the Reserve Account entered or to be entered into between
the Borrower and the Lender in form and substance satisfactory to the Lender;
"ASSIGNMENT OF RP ESCROW ACCOUNT" means the assignment of account
proceeds in respect of the RP Escrow Account entered or to be entered into
between the Borrower and the Lender in form and substance satisfactory to the
Lender;
"ASSIGNMENT OF US ESCROW ACCOUNT" means the assignment of account
proceeds in respect of the US Escrow Account entered or to be entered into
between the Borrower and the Lender in form and substance satisfactory to the
Lender;
"AUTHORISED SIGNATORY" means, in relation to any communication to be
made or any document to be certified or executed by or on behalf of the Borrower
under or in connection with this Agreement, at any time, any person:
(i) who is at such time duly authorised, by or pursuant to the
resolution of the Borrower referred to in Clause 2.3 or in such other manner as
may be acceptable to the Lender, to make such communication or to execute or
certify such document on behalf of the Borrower; and
(ii) in respect of whom the Lender has received a certificate of a
director or another of its Authorised Signatories, setting out the name and,
where such person is authorised to execute or certify documents, signature of
such person confirming such person's authority to act as aforesaid;
"AVAILABLE AMOUNT" means, at any given time, the Commitment of the
Lender at such time less the aggregate amount of the Advances then outstanding;
"AVAILABILITY TERMINATION DATE" means the earlier of the day which is
twelve (12) months after the date hereof and the first business day on which the
Available Amount is zero;
"COLLATERAL" means the security interests over all the property and
assets of the Borrower which are the subject of the Security Documents (or any
of them);
- 2 -
<PAGE>
"COMMITMENT" means, in relation to the Lender, at any given time and
except as the same may be reduced as provided herein, US$60,000,000 (as limited
by the terms of this Agreement);
"DRAWDOWN DATE" means, in relation to any Advance, the date for the
making thereof, as specified (subject to the provisions of this Agreement) in
the Advance Request relating thereto;
"EVENT OF DEFAULT" means any of the events specified in Clause 15;
"FACILITY" means the term loan facility of up to a maximum aggregate
amount of US$60,000,000 granted to the Borrower by the Lender pursuant to this
Agreement;
"FEES LETTER" means the letter of even date herewith exchanged between
the Lender and the Borrower setting out certain fees payable by the Borrower in
connection with the Facility;
"FIDUCIARY TRANSFER" means the fiduciary transfer of proprietary
rights entered or to be entered into between the Borrower and the Security Agent
in relation to all plant, machinery, equipment and other tangible property from
time to time of the Borrower as security (amongst other things) for all sums
from time to time due from the Borrower to the Lender hereunder;
"GUARANTEE" means the corporate guarantee issued or to be issued by
the Guarantor in favour of the Lender in respect of the obligations of the
Borrower under the Transaction Documents in form and substance satisfactory to
the Lender;
"GUARANTOR " means P. T. Rajasa Hazanah Perkasa;
"HYPOTHEC" means the deeds of hypothec entered or to be entered into
between the Borrower and the Security Agent in respect of all the right, title
and interest from time to time of the Borrower in the Real Property in form and
substance satisfactory to the Lender;
"INDONESIA" means the Republic of Indonesia;
"INFORMATION MEMORANDUM" means the document or documents in relation
to the Borrower and the Project which, at the Borrower's request and on its
behalf was or were prepared in relation to the transactions contemplated herein
and distributed to the Lender during September, October, November and December,
1995;
- 3 -
<PAGE>
"INTEREST PAYMENT DATE" means each of the days which are six (6),
twelve (12), eighteen (18) and twenty-four (24) months after thedate of the
making of the first Advance and, thereafter, each of the Repayment Dates
Provided Always that if any Interest Payment Date occurs on a day which is not a
Banking Day, such Interest Payment Date shall be the immediately succeeding
Banking Day;
"INTEREST PERIOD" means, without prejudice to the provisions of Clause
5:
(i) with respect to the first Interest Period in relation to any
Advance, the period commencing on and including the Drawdown Date of each
Advance and ending on and including the immediately succeeding Interest Payment
Date; and
(ii) with respect to any subsequent Interest Period in relation to any
Advance, the period having a duration of six (6) months and each succeeding six
(6) months and commencing on and including the last day of the immediately
preceding Interest Period and ending on and including the immediately succeeding
Interest Payment Date;
"LENDING OFFICE" means, in relation to the Lender, the office
identified as such in the signature pages hereof or such other office as it may
from time to time select;
"LETTER OF COMFORT" means the Letter of Comfort issued or to be issued
by the Shareholders in favour of the Lender in respect of the obligations of the
Borrower under the Transaction Documents in form and substance satisfactory to
the Lender;
"LIBOR" means, in relation to any Advance or unpaid amount, the rate
per annum determined by the Lender to be the rate at which the Reference Bank
was offering to prime banks in the London Interbank Market deposits in dollars
for the relevant funding period at or about 11.00 a.m. on the second London
Banking Day before the commencement of such period, to the extent that this
definition relates to any unpaid amount and such unpaid amount is due to be paid
in a currency other than dollars then the reference to dollars shall be
construed as a reference to such other currency, and, for the purposes of this
definition, "RELEVANT FUNDING PERIOD" means the relevant Interest Period
relating to such Advance or, in the case of an unpaid amount, the period in
respect of which LIBOR is required to be determined hereunder in relation to
such unpaid amount;
"LICENCE" means the licence granted to the Borrower by the Government
of Indonesia in respect of the operation of the NMT-450 Network on the terms and
conditions contained therein;
- 4 -
<PAGE>
"LOAN" means the aggregate principal amount from time to time
outstanding hereunder;
"MARGIN" means two point five per cent. (2.5%) per annum;
"NMT-450 NETWORK" means the Nordic Mobile Telephone system, the terms
and conditions of the operation of which are contained in the Licence;
"NEGATIVE PLEDGE LETTER" means the negative pledge letter issued or to
be issued by the Shareholders in favour of the Lender and in form and substance
satisfactory to the Lender;
"NETWORK ASSETS" means all assets which from time to time form part of
the NMT-450 Network (including each phase thereof) including, without
limitation, all land, buildings, licences, rights of way and easements;
"OBLIGORS" means the Borrower, the Shareholders and the Guarantor and
"OBLIGOR" means either of them as the context may permit;
"POTENTIAL EVENT OF DEFAULT" means any event or circumstance
(including, without limitation, any of those events specified in Clause 15)
which may or would become (with the passage of time, the giving of notice or the
making of any determination hereunder or any combination thereof) an Event of
Default;
"POWER OF ATTORNEY TO ESTABLISH HYPOTHECS" means the power or powers
of attorney in notarial form executed or to be executed by the Borrower in
favour of the Security Agent pursuant to which the Security Agent is empowered
to establish hypothecs over the Real Property (or any part thereof);
"POWER OF ATTORNEY TO SELL" means the power or powers of attorney in
notarial form executed or to be executed by the Borrower in favour of the
Security Agent pursuant to which the Security Agent is empowered to sell the
Real Property (or any part thereof);
"PROJECT" means the first stage of the construction and implementation
of the NMT-450 Network in Bandar Lampung in Sumatra, Java, Bali and Lombok;
"PROJECT CONTRACTS" means the contracts more specifically referred to
in Schedule Two hereof and any other contract from time to time entered into by
the Borrower in respect of the Project;
- 5 -
<PAGE>
"PROJECT COMPLETION DATE" means the earlier of the date falling
thirteen (13) months after the date hereof and the date upon which the Borrower
produces evidence satisfactory to the Lender that the equipment necessary in
respect of the NMT-450 Network has been installed, tested and accepted and the
Project has commenced operation;
"REAL PROPERTY" means all land, buildings and fixtures related to the
NMT-450 Network and/or the Network Assets from time to time owned by the
Borrower;
"REFERENCE BANK" means the principal London office of The Bank of
Tokyo, Limited (or any successor thereof whether by merger, amalgamation or
otherwise) or such substitute reference bank or banks as may from time to time
be specified by the Lender;
"REPAYMENT DATE" means each of the days which are thirty (30), thirty-
six (36), forty-two (42), forty-eight (48), fifty-four (54) and sixty (60)
months after the date of the making of the first Advance;
"RESERVE ACCOUNT" means the US$ denominated account maintained by the
Borrower with such offshore bank or financial institution which is acceptable to
the Lender and into which will be paid certain amounts agreed between the
Borrower and the Lender from the RP Escrow Account as more particularly referred
to in Clause 14.3 of this Agreement;
"RP ESCROW ACCOUNT" means the Rupiah denominated account maintained by
the Borrower with such bank or financial institution in Indonesia which is
acceptable to the Lender and into which all the receivables of and other amounts
due to the Borrower are to be paid;
"SECURITY AGENT" means Nissho Iwai International (Singapore) Pte.,
Ltd. Or, as the case may be, any successor or replacement security agent
appointed under certain of the Security Documents and the Security Sharing
Agreement;
"SECURITY DOCUMENTS" means the Deed of Assignment of Receivables, the
Deed of Hypothec, the Power of Attorney to Establish Hypothecs, the Power of
Attorney to Sell, the Share Pledge Agreement, the Assignment of Construction
Contracts, the Assignment of Insurances, the Assignment of Performance Bonds,
the Assignment of RP Escrow Account, the Assignment of US Escrow Account, the
Assignment of Reserve Account, Fiduciary Transfer and, with effect from the date
of delivery hereof in accordance with the provisions of this Agreement, the
Master Assignment of Sub-Accounts;
- 6 -
<PAGE>
"SECURITY SHARING AGREEMENT" means the agreement entered or to be
entered into between the Borrower, the Security Agent, the Lender and certain
other persons which may become parties thereto from time to time which shall be
in form and substance satisfactory to the Lender;
"SHAREHOLDERS" means P.T. Telekomunikasi Indonesia and Yayasan Dana
Pensiun Pegawai P.T. Telkom;
"SHARE PLEDGE AGREEMENT" means the share pledge agreement entered or
to be entered into between the Guarantor and the Security Agent in form and
substance satisfactory to the Lender;
"SVENSKA LOAN" means the credit facility or credit facilities extended
to the Guarantor by Svenska Handelsbanken (or any affiliate thereof) in a
maximum aggregate amount of US$3,500,000 (or its equivalent);
"TELKOM LETTER" means the letter issued by P.T. Telekomunikasi
Indonesia to the Borrower delivered or to be delivered by the Borrower to the
Lender in accordance with the provisions of Clause 14.1(xix) acknowledging that
P.T. Telekomunikasi Indonesia shall forthwith remit all monies paid into its
account by the subscribers of the Borrower into the RP Escrow Account until such
time as the Borrower establishes its own billing system and its collection of
subscribers' charges system;
"TOCL" means the Team for the Co-ordination of the Management of
Offshore Commercial Loans;
"TRANSACTION DOCUMENTS" means this Agreement, the Security Sharing
Agreement, the Letter of Comfort, the Negative Pledge Letter, the Guarantee, the
Project Contracts, the Fees Letter, the Licence, the Telkom Letter and the
Security Documents;
"US ESCROW ACCOUNT" means the US$ denominated account maintained by
the Borrower with such offshore bank or financial institution which is
acceptable to the Lender and into which will be paid certain amounts agreed
between the Borrower and the Lender from the RP Escrow Account as more
particularly referred to in Clause 14.3 of this Agreement;
"VALUATION REPORT" means the valuation report dated 16th March, 1995
prepared by the Valuers in respect of the Network Assets or, if any such report
has been delivered, the most recent valuation report delivered to the Lender;
and
- 7 -
<PAGE>
"VALUERS" means Drs Soejatna Soenoesoebrata & Associates.
2. THE FACILITY
------------
2.1 The Lender grants to the Borrower, upon the terms and subject to the
conditions hereof, a committed term loan facility in an aggregate amount of up
to US$60,000,000 the availability of which shall cease on the Availability
Termination Date.
2.2 The Facility is intended to be used in respect of (i) the
construction and implementation of the Project including, without limitation, to
fund all construction, commissioning, insurance, legal and other costs of and
relating to the Project and (ii) subject to the receipt by the Lender of the
information (in form and substance satisfactory to the Lender) referred to in
Clause 14.1(xx), the discharge of the Svenska Loan and the Borrower hereby
agrees and undertakes to apply all amounts raised hereunder in or towards such
purpose. In this respect, the Lender acknowledges that the Guarantor has from
time to time provided funds by way of interest free loans (the "INTEREST FREE
LOANS") to the Borrower to enable the Borrower to commence operations and that
the Borrower may, out of proceeds of the first Advance, repay such of the
Interest Free Loans as have been used by the Borrower to acquire tangible assets
so long as such tangible assets are adequately identified in the attachment to
the Advance Request given by the Borrower to the Lender in respect of the first
Advance. With respect to any other assets acquired or expenses payable which
relate directly to the Interest Free Loans (hereinafter referred to as "SOFT
ASSETS"), the Borrower agrees that it shall, by no later than the last day of
the calendar month in which the first Advance is made, provide to the Lender a
certificate (in form and substance satisfactory to the Lender) of the Borrower's
auditors setting out the details of the Soft Assets and, in the event that such
auditor's certificate is satisfactory to the Lender, the Lender agrees that the
Borrower shall be entitled to apply the proceeds of all or part of future
Advances made hereunder in repayment of such part of the Interest Free Loans as
relate to the Soft Assets. Notwithstanding the foregoing, the Lender shall not
be obliged to concern itself with, or be responsible for, the application of
amounts advanced or raised hereunder.
2.3 The Borrower may not issue and the Lender shall not be obliged to
accept any Advance Request unless the Lender has received all of the documents
and matters listed below in form and substance satisfactory to the Lender:
- 8 -
<PAGE>
(i) CONSTITUTIVE DOCUMENTS
----------------------
A copy, certified by an Authorised Signatory of each of the
Borrower and the Guarantor (each a "RELEVANT OBLIGOR") to be a true, complete
and up to date copy, of (a) the Articles of Association of such Relevant Obligor
(or such other constitutive document as may be appropriate) and any amendments
thereto, all as published in the Annex of the State Gazette of Indonesia and (b)
the minutes of meeting(s) of the shareholders of such Relevant Obligor at which
such amendments (if any) to the Articles of Association of such Relevant Obligor
(which have not yet been so published) were adopted.
(ii) APPOINTMENTS
------------
A copy, certified by an Authorised Signatory of each Relevant
Obligor to be a true, complete and up to date copy, of the minutes of meeting(s)
of the shareholders of each Relevant Obligor at which the appointment of the
incumbent members of the Board of Commissioners and Board of Directors of such
Relevant Obligor were adopted.
(iii) APPROVALS AND AUTHORISATIONS
----------------------------
A copy, certified by an Authorised Signatory or Authorised
Signatories of each Obligor to be a true, complete and up to date copy, of each
of the following documents:
(a) the approval of the requisite members of the Board of
Commissioners or other appropriate corporate authority of each Relevant Obligor
approving the execution of each Transaction Document to which such Relevant
Obligor is to be a party and the delivery of the same by such Relevant Obligor;
and
(b) a certificate issued by the Board of Directors of each
Relevant Obligor authorising a named person or persons to sign and deliver each
Transaction Document to which such Relevant Obligor is to be a party and all
documents, statements and certificates to be given thereunder and to give all
notices which may be or may be required to be given by or on behalf of such
Relevant Obligor thereunder.
(iv) SPECIMEN SIGNATURES
-------------------
A certificate of an Authorised Signatory of each Relevant
Obligor setting out the names and specimen signatures of the relevant members of
the Board of Commissioners and the Board of Directors of each Relevant Obligor
together with the person or persons
- 9 -
<PAGE>
referred to in paragraph (iii) above or, alternatively, a copy of the identity
card of each such person.
(v) CONSENTS
--------
A copy, certified by an Authorised Signatory of each Obligor to
be a true copy, of each such law, decree, consent, licence, approval,
registration or declaration as is, in the opinion of Indonesian counsel to the
Lender, necessary to render each Transaction Document to which such Obligor is a
party legal, valid, binding and enforceable, to make each Transaction Document
admissible in evidence in Indonesia and to enable each of the Obligors to
perform their respective obligations thereunder.
(vi) STAMP DUTY
----------
Evidence satisfactory to the Lender that each Transaction
Document has been stamped with applicable stamp duty in Indonesia.
(vii) REPORTING
---------
Evidence satisfactory to the Lender that the execution of this
Agreement has been duly reported to Bank Indonesia, the Ministry of Finance of
Indonesia and TOCL.
(viii) TRANSACTION DOCUMENTS
---------------------
Each of the Transaction Documents (other than the Hypothec,
the Power of Attorney to Establish Hypothecs, the Power of Attorney to Sell and
the Telkom Letter) duly signed by the parties thereto together with evidence
satisfactory to the Lender that all notices and other documents required to be
made or delivered have been made or delivered (including, without limitation,
evidence satisfactory to the Lender that all original stock certificates
relating to the shares which are the subject of the Share Pledge Agreement have
been delivered to the Security Agent and that the security interests created
pursuant to the Share Pledge Agreement have been noted in the share register of
the Borrower).
(ix) HYPOTHECS
---------
An agreed English translation of each of the Hypothec, the
Power of Attorney to Establish Hypothecs and the Power of Attorney to Sell,
initialled by the Borrower and the Lender.
- 10 -
<PAGE>
(x) INSURANCES
----------
Evidence satisfactory to the Lender that the Security Agent
has been named as loss payee under each contract or policy of insurance effected
by the Borrower in relation to the Collateral.
(xi) VALUATION REPORT
----------------
A copy, certified by an Authorised Signatory of the Borrower
to be a true, complete and up to date copy, of the Valuation Report which shall
be in form and substance satisfactory to the Lender.
(xii) FEES LETTER
-----------
The Fees Letter duly signed by the parties thereto.
(xiii) LEGAL OPINIONS
--------------
A legal opinion from Kusnandar & Associates, Indonesian legal counsel
to the Lender, in a form acceptable to the Lender and a legal opinion from
Coudert Brothers, English legal counsel to the Lender, in a form acceptable to
the Lender.
(xiv) PROCESS AGENTS
--------------
Evidence that the persons referred to in Clause 29.5 have
agreed to act as the agents of the Borrower for the service of process
hereunder.
(xv) TRANSFER OF NETWORK ASSETS
--------------------------
Evidence satisfactory to the Lender that the title to the
Network Assets (and each of them) has been fully and effectively transferred to
the Borrower, such evidence to be in the form of minutes of the meetings of the
shareholders of the Borrower (in form and substance satisfactory to the Lender)
providing for the transfer to the Borrower of such assets.
(xvi) APPROVAL BY THE MINISTRY OF JUSTICE
-----------------------------------
Evidence satisfactory to the Lender that the Articles of
Association of the Borrower have been approved by the Ministry of Justice of
Indonesia.
- 11 -
<PAGE>
(xvii) PROJECT CONTRACTS
-----------------
Evidence satisfactory to the Lender that each of the Project
Contracts has been duly executed and is in full force and effect and, where any
Project Contract is to be assigned to the Borrower by any person, that each such
assignment has been fully and effectively completed.
(xviii) THE ACCOUNTS
------------
Evidence satisfactory to the Lender that each of the Accounts
has been fully and effectively established in accordance with the laws of the
relevant jurisdiction in which such Account is located.
(xix) MANAGEMENT FEE
--------------
Payment by the Borrower to the Lender of the first
installment of the management fee more particularly referred to in the Fees
Letter.
(xx) MAINTENANCE OF CAPITAL
----------------------
Evidence satisfactory to the Lender that the paid up share
capital of the Borrower is at least Rp 41,589,000,000.
(xxi) GENERAL
-------
Such other documents or matters as the Lender may reasonably
require in relation to the Transaction Documents or any of them.
3. AVAILABILITY OF THE FACILITY
----------------------------
3.1 Save as otherwise provided herein, the Borrower may from time to time
request an Advance under the Facility by the delivery to the Lender, not later
than 11.00 a.m. on the third business day before the proposed Drawdown Date for
such Advance, of a duly completed Advance Request in relation to such Advance.
3.2 Each Advance Request delivered to the Lender hereunder shall be
irrevocable and shall specify:
(i) the proposed Drawdown Date of such Advance which shall be a
Banking Day which is or precedes the Availability Termination Date;
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<PAGE>
(ii) the proposed amount of such Advance which shall be (a) a minimum
amount of US$5,000,000 and an integral multiple of US$500,000 which is less than
the Available Amount (and, in the event that the aggregate amount referred to in
the attachment to such Advance Request referred to in sub-Clause (iv) below is
not an integral multiple of US$500,000, the amount of such Advance shall be
rounded up to the nearest US$500,000) or (b) equal to the Available Amount;
(iii) the Interest Period for which the Borrower wishes such Advance to
be made but subject to the provisions of Clause 5; and
(iv) by way of an attachment thereto which shall be in form and
substance satisfactory to the Lender, the specific purpose or purposes for which
the proceeds of such Advance is or are to be used.
3.3 The Borrower may not request under this Clause 3 more than one (1)
Advance to be made on any one (1) day and may not deliver any other Advance
Request hereunder during the period between the delivery of an Advance Request
and the Drawdown Date relating thereto.
3.4 At close of business on the Availability Termination Date, any undrawn
portion of the Facility shall automatically be cancelled and the Available
Amount reduced to zero.
4. MAKING OF ADVANCES
------------------
4.1 If the Borrower requests an Advance hereunder in accordance with
Clause 3 and:
(i) none of the events referred to in Clause 11 shall have occurred
in relation to such Advance;
(ii) the Lender is satisfied that the use or uses to which the
proceeds of such Advance is or are to be put is or are consistent with the
provisions of Clause 2.2 of this Agreement;
(iii) either:
(a) no Event of Default or Potential Event of Default has
occurred; and
(b) the representations and warranties set out in Clause 12 are
true on and as of the proposed date for the making of such Advance,
- 13 -
<PAGE>
or the Lender agrees to the making of such Advance, having
waived the conditions referred to in paragraphs (a) and/or (b) above,
then, on the Drawdown Date relating to such Advance, the Lender shall make such
Advance available to the Borrower in accordance with the provisions of this
Agreement.
4.2 Notwithstanding any other provision of this Agreement, if the Lender's
Commitment is reduced in accordance with the provisions of either of Clause 10
or Clause 15 of this Agreement after the Lender has received the Advance Request
for an Advance, then the amount of that Advance shall be reduced so as to
reflect such reduction in the Lender's Commitment.
5. INTEREST PERIODS
----------------
If two (2) or more Interest Periods end at the same time, then, on the last
day of those Interest Periods, the Advances to which they relate shall be
consolidated into (and thereafter, save as otherwise provided herein, be treated
in all respects as) a single Advance hereunder.
6. INTEREST
--------
6.1 In respect of each Advance, the Borrower agrees to pay the Lender
interest on the amount outstanding from time to time on each Interest Payment
Date for the Interest Period then ending at the rate per annum determined by the
Lender to be the sum of the Margin and LIBOR for such Interest Period, which
determination shall be conclusive and binding upon the Borrower.
6.2 Interest shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest Period.
6.3 Promptly after the determination of LIBOR in respect of an Interest
Period, the Lender shall notify the Borrower of such LIBOR and of the amount of
interest due on the Interest Payment Date for the relevant Interest Period. Such
notice shall be conclusive and binding on the Borrower, absent manifest error.
Failure to so notify the Borrower shall not in any way relieve the Borrower of
its obligations hereunder.
7. DEFAULT INTEREST
----------------
7.1 If the Borrower fails to pay any amount (referred to herein as an
"UNPAID AMOUNT") in accordance with the provisions of this
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<PAGE>
Agreement and without prejudice to the other rights and remedies conferred upon
the Lender pursuant to this Agreement, the Borrower shall pay interest in
dollars on such unpaid amount from the time of default up to the time of actual
payment (as well after as before judgment) at the rate per annum which is two
point five per cent. (2.5%) over and above the Margin and LIBOR relating thereto
Provided that:
(i) if, in respect of any such period, LIBOR cannot be determined,
then the rate of interest applicable to such unpaid amount shall be two point
five per cent. (2.5 %) over and above the Margin and the rate notified by the
Lender to the Borrower before the last day of such period to be that which
expresses as a percentage rate per annum the cost to the Lender of funding
determined from whatever source or sources the Lender may select such unpaid
amount for such period; and
(ii) if such unpaid amount is all or part of an Advance which became
due and payable on a day other than an Interest Payment Date relating thereto,
then the first such period applicable thereto shall be equal to the unexpired
portion of such Interest Period and the rate of interest applicable thereto
shall be that which exceeds by two point five per cent. (2.5%) the rate
applicable to it immediately before it fell due.
7.2 Any interest which shall have accrued on any unpaid amount shall be
due and payable and shall be paid by the Borrower at the end of the period by
reference to which it is calculated or on such other date as the Lender may
specify by notice to the Borrower. Interest payable under this Clause shall
accrue daily (on the basis of a year of three hundred and sixty (360 days) from
and including the first day to the last day of each period for which a rate of
interest is to be determined as aforesaid.
7.3 Any unpaid amount shall (for the purposes of this Clause 7 and Clause
21) be treated as an advance and accordingly in this Clause 7 and in Clause 21,
the expressions "ADVANCE" and "ADVANCE" include any unpaid amount.
7.4 If any payment to be made by the Borrower under this Clause would
otherwise be due on a day which is not a Banking Day, it shall be due on the
next succeeding Banking Day.
8. REPAYMENT
---------
Subject to the provisions of this Agreement which may require earlier
repayment thereof, the amount of the Loan (as at the Availability Termination
Date) shall be repaid by the Borrower by six
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<PAGE>
(6) equal installments, with one (1) installment being paid on each of the
Repayment Dates.
9. CANCELLATION AND PREPAYMENT
---------------------------
9.1 The Borrower shall not be entitled to cancel the whole or any part of
any undrawn amount of the Facility.
9.2 The Borrower may, if it has given to the Lender not less than thirty
(30) days' prior notice thereof, prepay the Loan in whole or in part (being an
amount or integral multiple of US$5,000,000) on any Interest Payment Date which
ends after the Availability Termination Date. Subject as provided below, a
prepayment fee in the amount of one per cent. (1%) flat on the amount so prepaid
shall be payable by the Borrower on the date of such prepayment. The Lender
agrees however that no such prepayment fee shall be payable by the Borrower in
the event and to the extent that such prepayment is made on any Interest Payment
Date, the amount prepaid is such that the full amount of the Loan will be repaid
and/or prepaid on such date and such prepayment is made out of the monies
standing to the credit of the Reserve Account at such time. Any prepayment so
made shall satisfy, to the extent of such prepayment, the Borrower's obligations
under Clause 8 in inverse chronological order.
9.3 Any notice given by the Borrower under Clause 9.2 shall be
irrevocable, shall specify the date upon which such prepayment is to be made and
the amount of such prepayment and shall oblige the Borrower to make such
prepayment on the relevant Interest Payment Date.
9.4 The Borrower shall not be entitled to prepay all or any part of the
Loan otherwise than as specifically provided for in this Agreement and shall not
be entitled to reborrow any amount prepaid.
10. ILLEGALITY
----------
In the event that by reason of the introduction, imposition or variation of
any law or directive or any change in the interpretation or application of any
law or directive or otherwise, it is or will be unlawful or contrary to any
directive of any agency of any state for the Lender to allow all or any part of
its Commitment to remain outstanding or to fund all or any part of any Advance
or to carry out all or any of its other obligations hereunder or otherwise to
participate in the extension of credit to the Borrower under or in accordance
with the provisions of this Agreement, then the Lender shall, promptly after its
Lending Office shall become aware of the same, deliver to the Borrower a
certificate to that effect and:
- 16 -
<PAGE>
(i) the Lender shall not thereafter be obliged to make Advances or
otherwise participate in the extension of credit to the Borrower hereunder and
the amount of its Commitment shall be immediately reduced to zero; and
(ii) if the Lender so requires, the Borrower shall on such date as
the Lender shall have specified, repay all outstanding Advances together with
accrued interest thereon and all other amounts owing to the Lender hereunder.
11. MARKET DISRUPTION
-----------------
If, in relation to any Advance to be made hereunder or, as the case may be,
any outstanding Advance, LIBOR cannot be determined:
(i) the Lender shall promptly notify the Borrower of such event;
(ii) in the case of any Advance requested hereunder but not yet
made, such Advance shall, unless the Lender otherwise agrees, not be made; and
(iii) in the case of any outstanding Advance, the Interest Period
relating thereto shall be one (1) month and if the Lender or the Borrower so
requires, the Lender and the Borrower shall enter into negotiations with a view
to agreeing a substitute basis for determining the rate of interest to be
applicable to Advances in the future and, if such substitute basis is agreed, it
shall take effect in accordance with its terms and be binding on the Borrower
and the Lender Provided that if, within one (1) month of the giving of the
notice referred to above, a substitute basis as is referred to above has not
been agreed, the Lender may declare (any such declaration to be binding upon the
Borrower) that each Advance shall become due and payable on the Interest Payment
Date in respect of its then current Interest Period together with interest
thereon at the rate per annum which is the sum of the Margin and the rate
notified by the Lender to the Borrower before the last day of such period to be
that which expresses as a percentage rate per annum the cost to the Lender of
funding such Advance from whatever source or sources it may select for such
period.
12. REPRESENTATIONS AND WARRANTIES
------------------------------
12.1 MATTERS OF LAW
--------------
The Borrower acknowledges that the Lender enters into this Agreement
and grants the Facility to the Borrower in full reliance
- 17 -
<PAGE>
upon the representations made by it below and, accordingly, the Borrower
represents and warrants to and for the benefit of the Lender that:
(i) it is a corporation duly organised and validly existing under
the laws of Indonesia and has the power and authority to own its assets and to
engage in the business in which it engages and/or proposes to engage in;
(ii) it has full power and authority to enter into each Transaction
Document to which it is a party and to exercise its rights, perform the
obligations expressed to be assumed by it and make the representations and
warranties made by it thereunder;
(iii) the documents pursuant to which the Borrower has been
established (as amended) include provisions which give power and authority to
the Borrower to enter into, exercise its rights under and perform the
obligations expressed to be assumed by it under each Transaction Document to
which it is a party and all corporate and other action required to authorise its
execution of each Transaction Document to which it is a party, its exercise of
its rights and its performance of the obligations expressed to be assumed by it
thereunder has been duly taken;
(iv) under the laws of Indonesia in force at the date hereof, its
indebtedness under this Agreement ranks and will rank at least pari passu with
----------
all its other unsecured and unsubordinated indebtedness with the exception of
that which is preferred by the operation of bankruptcy, insolvency and other
similar laws of general application;
(v) each of the execution and delivery by it of each of the
Transaction Documents to which it is a party and the exercise by it of its
rights thereunder and the performance by it of the obligations expressed to be
assumed by it thereunder does not or will not contravene or, as the case may be,
constitute a breach or default under, or cause to be exceeded any limitation on
it or the powers of its Board of Directors or Board of Commissioners imposed by
or contained in (a) any law by which it or any of its assets is bound or
affected, (b) any document or agreement which provides for the establishment or
otherwise regulates the constitution and affairs of the Borrower or (c) any
agreement to which it is a party or by which any of its assets are bound;
(vi) in any proceedings taken in Indonesia in relation to any
Transaction Document, it will not be entitled to claim for itself or any of its
assets immunity from suit, execution, attachment or other legal process;
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<PAGE>
(vii) in any proceedings taken in Indonesia in relation to this
Agreement, the choice of English law as the governing law of this Agreement
should be recognised and enforced however, it being understood that the
Indonesian courts are often unpredictable in rendering decisions on this issue;
(viii) all action, conditions and things required to be taken,
fulfilled and performed (including, without limitation, the obtaining of any
necessary consents, licences, appeals or exemptions) in order (a) to enable it
lawfully to enter into, exercise its rights under and perform and comply with
the obligations expressed to be assumed by it in each Transaction Document to
which it is a party, (b) to ensure that the obligations expressed to be assumed
by it in each Transaction Document to which it is a party are legal, valid,
binding and enforceable and (c) to make each Transaction Document to which it is
a party admissible in evidence in Indonesia have been done, fulfilled and
performed;
(ix) except for (a) the reporting of the execution of this Agreement
to Bank Indonesia, the Ministry of Finance of Indonesia and TOCL (which the
Borrower acknowledges it is obliged to do prior to utilisation of the Facility),
(b) the payment of stamp duty in the amount of Rp2,000 in respect of each
Transaction Document, and (c) the registration of the Hypothec with the
appropriate land office or land offices in Indonesia, under the laws of
Indonesia in force at the date hereof, it is not necessary that any Transaction
Document be filed, recorded or enrolled with any court or other authority in
Indonesia or that any stamp, registration or similar tax be paid on or in
relation to any Transaction Document;
(x) the obligations expressed to be assumed by it in each of the
Transaction Documents to which it is a party are legal and valid obligations
binding on it and enforceable against it and all of its assets in accordance
with the terms thereof; and
(xi) under the laws of Indonesia in force at the date hereof, it
will be required to make a deduction or withholding on account of tax from any
payment in the nature of interest and fees it may make hereunder but it will not
otherwise be required to make any deduction or withholding from any payment it
may make hereunder.
12.2 MATTERS OF FACT
---------------
The Borrower further acknowledges that the Lender enters into this
Agreement and grants the Facility to the Borrower in full reliance upon the
representations made by the Borrower below and, accordingly, the Borrower
further represents and warrants to and for the benefit of the Lender that:
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<PAGE>
(i) no litigation, arbitration or administrative proceeding is
current or pending or (to the best of its knowledge and belief) threatened (a)
to restrain the entry into, exercise of its rights under and/or performance of
the obligations expressed to be assumed by it under any of the Transaction
Documents to which it is a party and/or (b) which would have a material adverse
effect upon the financial condition or business of the Borrower or any of its
subsidiaries or upon the ability of the Borrower to perform or comply with any
of the obligations expressed to be assumed by it under any of the Transaction
Documents to which it is a party;
(ii) no distress, execution or other process is being levied or
enforced upon or sued or (to the best of its knowledge and belief) threatened
against the whole or any part of the business, undertaking or assets of the
Borrower or any of its subsidiaries;
(iii) neither the Borrower nor any of its subsidiaries has taken any
corporate action nor have any other steps been taken or legal proceedings been
started or (to the best of its knowledge and belief) threatened against the
Borrower or any of its subsidiaries for its bankruptcy, winding-up, dissolution,
administration, judicial management or re-organisation or for the appointment of
a receiver, administrator, administrative receiver, judicial manager, trustee or
similar officer of the Borrower or any of its subsidiaries or of any or all of
its assets or revenues;
(iv) no Event of Default has occurred or will occur as a result of
the entry into by the Borrower of any of the Transaction Documents to which it
is a party or the exercise by the Borrower of any of its rights thereunder and
the Borrower is not aware of any event or circumstance which might give rise to
the occurrence of such an Event of Default;
(v) neither the Borrower nor any of its subsidiaries is in breach
of or in default under any agreement including, without limitation, any Project
Contract to which it is a party or which is binding on it or any of its assets
to an extent or in a manner which might have a material adverse effect on the
business or financial condition of the Borrower any of its subsidiaries;
(vi) no action or administrative proceeding of or before any court
or agency which might have a material adverse effect on the business or
financial condition of the Borrower or any of its subsidiaries has been started
or (to the best of its knowledge and belief) threatened;
(vii) the Guarantor's Financial Statements and, once relevant, its
Financial Statements were prepared in accordance with
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<PAGE>
accounting principles generally accepted in Indonesia and consistently applied
and give (in conjunction with the notes thereto) a true and fair view of the
financial condition of the Guarantor and its subsidiaries and, once relevant,
the Borrower and its subsidiaries at the date as of which they were prepared and
the results of the operations of the Guarantor and its subsidiaries and, once
relevant, the Borrower and its subsidiaries during the financial year then
ended;
(viii) since publication of the Guarantor's Financial Statements and,
once relevant, the Financial Statements, there has been no material adverse
change in the business or financial condition of the Guarantor or any of its
subsidiaries and, once relevant, the Borrower or any of its subsidiaries;
(ix) as at the date as of which the Guarantor's Financial Statements
and, once relevant, the Financial Statements were prepared, neither the
Guarantor nor any of its subsidiaries nor, once relevant, the Borrower nor any
of its subsidiaries had any liabilities (contingent or otherwise) which were not
disclosed thereby (or by the notes thereto) or reserved against therein nor any
unrealised or anticipated losses arising from commitments entered into by it
which were not so disclosed or reserved against;
(x) the information contained in the Information Memorandum and all
of the other written information supplied by the Borrower to the Lender in
connection with the Transaction Documents was on the date upon which it was
given to the Lender, to the best of the Borrower's knowledge, true, complete and
accurate in all material respects and it is not aware of any material facts or
circumstances that have not been disclosed to the Lender and which might, if
disclosed, materially adversely affect the decision of a person considering
whether or not to provide finance to the Borrower;
(xi) all necessary returns have been delivered by or on behalf of
the Guarantor and its subsidiaries and, once relevant, the Borrower and its
subsidiaries to the relevant taxation authorities and neither the Guarantor nor
any of its subsidiaries nor, once relevant, the Borrower nor any of its
subsidiaries is in default of any taxes and no claim is being made with respect
to taxes which is not disclosed in the Guarantor's Financial Statements or, once
relevant, the Financial Statements;
(xii) save as permitted by Clause 14.2 (ii), no security interest
exists over all or any of the present or future revenues or assets of the
Borrower or any of its subsidiaries;
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<PAGE>
(xiii) except as provided for under the Security Documents, the
execution of each Transaction Document to which it is a party and its exercise
of its rights and performance of its obligations thereunder will not result in
the existence of nor oblige the Borrower or any of its subsidiaries to create
any security interest over all or any of its present or future revenues or
assets;
(xiv) the execution of each Transaction Document to which it is a
party constitutes, and its exercise of its rights and performance of its
obligations thereunder will constitute, private and commercial acts done and
performed for private and commercial purposes;
(xv) the Borrower is, and shall during the entire term of the
Facility continue to be, the sole owner of all the Collateral and other Network
Assets and shall not during the term of the Facility be subject to any security
interest other than pursuant to security interests created or to be created
pursuant to the Security Documents and/or as provided in the Security Sharing
Agreement;
(xvi) the security interests conferred or to be conferred upon the
Security Agent, as security agent for and on behalf of the Lender (amongst
others) and directly upon the Lender pursuant to the Security Documents
constitute first priority security interests in favour of the Security Agent or,
as the case may be, the Lender over the Collateral and every part thereof;
(xvii) the Borrower has obtained all authorisations and approvals,
has made all appropriate filings and registrations with governmental bodies and
regulatory authorities, is in compliance with all notices relevant to and has
taken all other action to obtain and maintain its ownership of such part of the
Collateral and the Network Assets as is owned by it;
(xviii) save as otherwise notified to the Lender in writing, the
Borrower has fulfilled all the terms and conditions contained in the Licence;
(xix) all information supplied or to be supplied by the Borrower to
the Valuers for the purpose of the Valuation Report delivered as a condition
precedent hereunder was true, complete and accurate in all respects and the
Borrower is not aware of any additional facts or circumstances which could or
should have been or be disclosed in relation thereto; and
(xx) the valuation attributed to the Network Assets and every part
thereof in the Valuation Report delivered as a condition precedent hereunder is
an accurate and realistic valuation thereof.
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<PAGE>
12.3 The representations and warranties set out in Clauses 12.1 and 12.2
shall survive the execution of this Agreement and the utilisation of the
Facility hereunder and shall be deemed to be repeated on each Interest Payment
Date by reference to the facts and circumstances then subsisting except that
each reference to the Guarantor's Financial Statements and the Financial
Statements contained in Clauses 12.2(vii), (ix) and (xi) above shall be
construed as a reference to the most recent audited financial statements
delivered to the Lender pursuant to Clause 13.
13. FINANCIAL INFORMATION
---------------------
13.1 The Borrower shall and shall procure that the Guarantor shall:
(i) as soon as the same become available, but in any event within
one hundred and twenty (120) days after the end of each of its financial years,
deliver to the Lender the audited financial statements of the Borrower or, as
the case may be, the Guarantor for such financial year, such financial
statements to be audited by the Borrower's or, as the case may be, the
Guarantor's present auditors or, if otherwise, by auditors which are acceptable
to the Lender;
(ii) as soon as the same become available, but in any event within
sixty (60) days after the end of each half of each of its financial years,
deliver to the Lender the unaudited financial statements of the Borrower or, as
the case may be, the Guarantor for such period;
(iii) as soon as the same become available, but in any event within
sixty (60) days after the end of each half of each of its financial years,
deliver to the Lender forecasts of the cashflow, debt service and profit and
loss accounts up to the final maturity of all debt in respect of the Project;
(iv) supply to the Lender (as and when the same are distributed to
its shareholders) all circulars and annual reports from time to time distributed
by it to its shareholders, any press release or written public announcement or
any other information made available by it to the public; and
(v) from time to time on the request of the Lender, furnish the
Lender with such information about the business and financial condition of the
Borrower or, as the case may be, the Guarantor as the Lender may require.
13.2 The Borrower shall and shall procure that the Guarantor shall ensure
that:
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<PAGE>
(i) each set of financial statements and forecasts delivered by it
pursuant to Clause 13.1 is prepared on the same basis as was used in the
preparation of the Guarantor's Financial Statements and the Borrower's Financial
Statements and in accordance with accounting principles generally accepted in
Indonesia and consistently applied; and
(ii) each set of financial statements delivered by it pursuant to
Clause 13.1(i) and (ii) contains a balance sheet and a profit and loss account
and all financial information delivered by the Borrower or, as the case may be,
the Guarantor pursuant to Clause 13.1 is certified by the Chief Financial
Officer (or the person holding a similar position within the Borrower or, as the
case may be, the Guarantor at such time) of the Borrower or, as the case may be,
as being true and accurate and, in the case of the financial statements
delivered pursuant to Clause 13.1(i) and (ii), giving a true and fair view of
the financial condition of the Borrower or, as the case may be, the Guarantor as
at the end of the period to which those financial statements relate and of the
results of its operations during such period.
13.3 The Borrower shall ensure that the financial condition of the
Borrower, as evidenced by each of the Borrower's then most recent audited annual
financial statements and the most recent financial statements and projections of
the Borrower delivered to the Lender under the provisions of Clause 13.1 of this
Agreement (adjusted, as the Lender may consider appropriate, to take account of
any changes in circumstances which occur after the date as of which such
financial statements were prepared), shall be such that at all times after the
later of (i) the date falling six (6) months after the Project Completion Date
and (ii) twelve (12) months after the date upon which the final Advance is made
(the "CALCULATION COMMENCEMENT DATE") the Debt Service Coverage Ratio is not
less than 1.4:1.
13.4 In this Clause 13:
"DEBT SERVICE COVERAGE RATIO" means at any time and with respect to
any Calculation Period the ratio of (i) the aggregate of (a) the Net Cash Flow
in respect of such Calculation Period plus (b) the Equity at the time of
calculation minus (c) the Capital Expenditure in respect of such Calculation
Period plus (d) any amount received and retained by the Borrower during such
Calculation Period in respect of any Asset Sale to (ii) the amount at such time
calculated to be all amounts of principal projected to fall due and payable
under the Transaction Documents in respect of such Calculation Period;
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<PAGE>
"ASSET SALE" means any sale, lease, transfer or other disposal
(howsoever described) and whether entered into by way of one (1) or more
transactions;
"CALCULATION DATE" means each 30 June and 31 December in each calendar
year falling after the Calculation Commencement Date;
"CALCULATION PERIOD" means:
in relation to the first such period, the period beginning on the date
falling six (6) months before the first Calculation Date falling after the
Calculation Commencement Date and ending on such Calculation Date; and
thereafter, each period beginning on one Calculation Date and ending
on the next Calculation Date falling thereafter;
"NET CASH FLOW" means at any time and with respect to any period an
amount equal to:
(i) the Revenues for such period; less
(ii) the Expenditure for such period and the Taxes which are paid or in
respect of which the Borrower shall make provision for during or in respect of
such period;
"REVENUES" means with respect to any period the aggregate of:
(i) all amounts in cash received by the Borrower in the ordinary course of
its business;
(ii) all interest income received by the Borrower in respect of cash held
by it at any bank or financial institution; and
(iii) the proceeds of all loans or other financial accommodation actually
received by the Borrower;
"EXPENDITURE" means with respect to any period the aggregate of:
all operating and maintenance costs payable by the Borrower during
such period;
all insurance premiums payable by the Borrower during such period;
<PAGE>
(iii) all professional and other fees, costs and expenses payable by
the Borrower under or pursuant to any of the Project Contracts;
(iv) all costs and expenses of a management, operating or maintenance
(but not a capital) nature incurred or to be incurred by the Borrower,
including, without limitation, administrative and management costs, employee
costs and establishment and overhead costs;
(v) damages payable by the Borrower during such period pursuant to
any of the Project Contracts; and
(vi) any other costs and expenses payable by the Borrower with
respect to the Project during such period pursuant to any of the Project
Contracts,
Provided Always that such Expenditure shall exclude any depreciation and/or
other non-cash items;
"CAPITAL EXPENDITURE" means costs and expenses which, in accordance
with generally accepted accounting principles in Indonesia consistently applied,
would be regarded to be of a capital (but not an operating) nature incurred or
to be incurred by the Borrower;
"EQUITY" means, in relation to the Borrower, the aggregate of (i) all
its paid up share capital and (ii) any advance made available by any of the
Shareholders which is subordinated, in form and substance to the Lender, to the
claims of all other creditors of the Borrower; and
"TAXES" shall be construed so as to include, without limitation, any
present or future tax, levy, impost, duty, charge, fee, deduction or withholding
of any nature whatsoever and howsoever termed (including, without limitation,
any penalty or interest payable in connection with any failure to pay or any
delay in paying any of the same) by whomsoever, and whomsoever and whenever
imposed, levied, collected, withheld or assessed.
13.5 All expressions used in the definitions of this Clause 13 which are
not otherwise defined herein shall be construed in accordance with generally
accepted accounting principles in Indonesia (as used in the Borrower's most
recent audited annual financial statements).
13.6 The Borrower agrees that, promptly upon the transfer of title to it of
any part of the Real Property, it shall execute or procure the execution and
delivery of each of a Hypothec, Power of Attorney to Establish Hypothecs and
Power of Attorney to Sell over
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<PAGE>
that part of the Real Property in favour of the Security Agent as security agent
for and on behalf of the Lender (amongst others), each such Hypothec, Power of
Attorney to Establish Hypothecs and Power of Attorney to Sell to be in form and
substance satisfactory to the Lender.
13.7 The Lender and the Borrower hereby acknowledge that the Security
Sharing Agreement contemplates the sharing with other banks or financial
institutions ("NOMINATED BANKS") of certain of the security interests granted in
accordance with the provisions of this Agreement. The Lender agrees, subject to
the provisions of the Security Sharing Agreement (i) to share all of the
security interests set forth in the Security Sharing Agreement with the
Nominated Banks for the purpose of securing any further loans made or to be made
by the Nominated Banks to the Borrower in an amount up to but not exceeding
US$60,000,000 and (ii) that, in the event that any Nominated Bank shall request
that those security interests which have been granted to the Lender in
accordance with the provisions hereof but which are not the subject of the
Security Sharing Agreement be shared with such Nominated Bank, then the Lender
shall, subject to the completion of satisfactory documentation relating thereto
and the payment by the Borrower of all costs and expenses (including legal fees)
relating thereto, consent to and participate in the sharing of such security
interests.
14. GENERAL COVENANTS AND UNDERTAKINGS
----------------------------------
14.1 POSITIVE UNDERTAKINGS
---------------------
The Borrower undertakes and agrees with the Lender that so long as any
amount remains to be advanced and/or remains payable and/or any person is under
any actual or contingent liability hereunder, it shall:
(i) obtain, comply with each of the terms and conditions of, renew
and do all that is necessary to maintain in full force and effect all
authorisations, approvals, licences, consents, exemptions, registrations,
recordings, filings or notarisations (and, where possible, promptly deliver
certified true copies thereof to the Lender) to enable it lawfully to enter
into, exercise its rights and perform the obligations expressed to be assumed by
it under each Transaction Document to which it is a party and to ensure the
legality, validity, enforceability and admissibility in evidence in Indonesia of
each Transaction Document to which it is a party and to ensure the validity or
priority of the liabilities and obligations of the Borrower and the rights of
the Lender thereunder. Furthermore, the Borrower undertakes and agrees with the
Lender forthwith to take all such action as the Lender may from time to time
notify to the
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<PAGE>
Borrower to ensure the legality, validity, enforceability or admissibility in
evidence in England and Singapore of each Transaction Document to which it is a
party or to ensure the enforceability and priority thereof under the laws of
England and/or Singapore;
(ii) comply in all respects with all laws, regulations and
directives relating to or regulating the ownership by it and each of its
subsidiaries of their assets (including, without limitation, the Real Property,
the Network Assets and all property or assets comprising the Collateral), the
carrying on by it of the business it engages in or proposes to engage in and the
entry into and performance by it of the obligations expressed to be assumed by
it in each Transaction Document to which it is a party;
(iii) maintain insurances on and in relation to its business and
assets with reputable underwriters or insurance companies against fire and such
other risks and to such extent as is usual for companies carrying on a business
such as that carried on by the Borrower and as is usual in respect of the nature
of the Project and it will punctually pay all premiums payable in respect of the
said policies of insurance and submit to the Lender receipts for such payment.
Such policies shall be in such amounts and shall contain such reasonable terms
and provisions as shall be approved by the Lender including without limitation a
provision that the insurer shall not terminate or cancel the insurance without
giving the Lender at least thirty (30) days notice of termination or
cancellation and such terms and provisions shall not be varied without the prior
consent in writing of the Lender. In this respect, the Borrower agrees forthwith
to deliver to the Lender the original of all policies or contracts of insurance
entered into by it and will ensure that the Lender is named as loss payee (in a
manner and on such terms as are satisfactory to the Lender) on each such policy
or contract of insurance. In the event the Borrower fails to maintain insurance
as provided hereunder, the Lender will have the right to have such insurance
effected at the cost of the Borrower and all moneys paid by the Lender in
respect of such insurances shall on demand be repaid to the Lender and until
repayment shall be considered unpaid amounts due hereunder and bear interest
accordingly;
(iv) promptly inform the Lender of the occurrence of any Event of
Default and, upon receipt of a written request to that effect from the Lender,
confirm to the Lender (by way of a certificate issued by an Authorised Signatory
of the Borrower) that, save as previously notified to the Lender or as notified
in such confirmation, no Event of Default has occurred or, if any Event of
Default has occurred, a full description of the nature and extent thereof and
the action or steps taken (or proposed to be taken) by the Borrower to remedy
the same;
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<PAGE>
(v) ensure that at all times its indebtedness under this Agreement
ranks at least pari passu with its other unsecured and unsubordinated
----------
indebtedness with the exception of that which is preferred by the operation of
bankruptcy, insolvency and other similar laws of general application;
(vi) permit the Lender and/or any person authorised by the Lender
(including, but without limitation, an auditor or accountant appointed by it for
such purpose) from time to time to have access to and inspect (a) all
agreements, documents, financial information, technical specifications and all
other matters relating to the Project and (b) the books of account of the
Borrower and any of its subsidiaries, respond forthwith to any reasonable
queries or requests for information sought by such representative and discuss in
good faith with such person any aspect of the Project and/or the books of
account of the Borrower or its subsidiaries;
(vii) maintain and procure that each of its subsidiaries shall
maintain a system of books and records and a system of accounting established
and administered in accordance with accounting principles generally accepted in
Indonesia applied on a consistent basis, and set aside on its books all proper
reserves as shall be required by such accounting principles;
(viii) cause all of its properties utilised in the Project or
otherwise in the conduct of its business to be maintained and kept in good
condition, repair and working order, all as necessary to carry on the Borrower's
business, and the Borrower shall maintain the conduct of its business consistent
with that conducted upon its entering into this Agreement;
(ix) without prejudice to sub-clause (iv) above, deliver to the
Lender details of any litigation, arbitration or administrative proceedings
relating to the Project or, as the case may be, which might have a material
adverse effect upon the business and/or financial condition of the Borrower or
any of its subsidiaries and/or the ability of the Borrower to perform or comply
with any of its obligations under any Transaction Document to which it is a
party and or the ability of the Borrower to diligently and timeously complete
the Project;
(x) promptly inform the Lender of the occurrence of any event which
has or may have a material adverse effect upon the valuation of the Network
Assets as set forth in any Valuation Report, the Collateral and/or the Real
Property and, upon receipt of a written request to that effect from the Lender,
confirm to the Lender that, save as previously notified to the Lender or as
notified in such confirmation, no such event has occurred;
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<PAGE>
(xi) ensure that the issued and paid-up capital of the Borrower is,
prior to the initial drawdown of the Facility, increased to Rp41,589,000,000;
(xii) ensure that all governmental licences and/or consents
necessary in respect of the construction and operation of the NMT-450 Network by
the Borrower are from time to time promptly obtained;
(xiii) promptly after the date hereof, report the execution of this
Agreement to Bank Indonesia, the Ministry of Finance of the Republic of
Indonesia and TOCL and file such reports regarding this Agreement (with a copy
thereof promptly being sent to the Agent) as are required by Bank Indonesia, the
Ministry of Finance of the Republic of Indonesia and TOCL;
(xiv) ensure that at all times and from time to time all the
conditions contained in the Licence are fulfilled;
(xv) save as provided below, procure that the Guarantor and the
Shareholders will continue directly to own in aggregate (legally and
beneficially) one hundred per cent. (100%) of the shares of the Borrower and to
control the Borrower. The Lender agrees with the Borrower that up to twenty-five
per cent. (25%) of the shares of the Borrower may be transferred to a first
class internationally recognised operator of telecommunication networks without
any consent from the Lender but on condition that the Borrower shall forthwith
notify the Lender of any advanced proposal therefor or actual decision in
relation thereto. Furthermore, the Lender agrees with the Borrower that the
Borrower shall be entitled from time to time to request the Lender to consent to
further dilution of the shareholding interest of the Guarantor and the
Shareholders in the Borrower;
(xvi) ensure that the appointment of process agents made in Clause
29.5 is at all times effective failing which the Lender shall at the cost and
expense of the Borrower be entitled and is hereby authorised by the Borrower
from time to time to appoint a replacement process agent by notice to the
Borrower;
(xvii) provide from time to time and forthwith upon request therefor
by the Lender reports in form and substance satisfactory to the Lender in
respect of the construction of the NMT-450 Network and the progress of the
Project generally;
(xviii) forthwith upon the establishment of the billing system and
collection of subscribers' charges system of the Borrower (and the Borrower
hereby expressly undertakes to procure that such systems are established by no
later than 31 August, 1996), enter into the master assignment of sub-accounts in
the form set out in Schedule
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<PAGE>
Three ("MASTER ASSIGNMENT OF SUBACCOUNTS") and take all steps as are necessary
or desirable in the reasonable opinion of the Lender to the perfect the Master
Assignment of SubAccounts;
(xix) as soon as possible after the date hereof and, in any event, by
no later than the date falling six (6) weeks after the date hereof, deliver to
the Lender a copy of the Telkom Letter duly executed in form and substance
satisfactory to the Lender; and
(xx) at any time prior to the use of any part of the Facility to
discharge the Svenska Loan provide details satisfactory to the Lender of the
Svenska Loan.
14.2 NEGATIVE COVENANTS
------------------
The Borrower shall not, without the prior written consent of the Lender.
which consent shall not unreasonably be withheld:
(i) pay, make or declare any dividend or other distribution in
respect of any financial year unless the Borrower is in compliance with all the
obligations expressed to be assumed by it in this Agreement; or
(ii) create or permit to subsist any security interest over all or
any of its present or future revenues or assets other than (a) any security
interest which has been disclosed in writing to and acknowledged in writing by
the Lender prior to the execution hereof and secures only indebtedness
outstanding at the date hereof, (b) any security interest created or
contemplated under the Security Documents or as provided in the Security Sharing
Agreement or under this Agreement and (c) certain other security interests as
may, from time to time, be agreed between the Lender and the Borrower; or
(iii) make any loans or grant any credit (save in the ordinary course
of business) or, except for loans provided to the Borrower by the shareholders
from time to time of the Borrower and such loans are fully and effectively
subordinated (in form and substance satisfactory to the Lender) to the claims of
the Lender under the Transaction Documents, incur further borrowings (except to
the extent that such further borrowings are incurred in respect of the second
and/or third phases of the Project and which do not exceed an aggregate of
US$60,000,000) of any nature or give any guarantee or lease any assets to or for
the benefit of any person; or
(iv) alter any rights attaching to its issued shares in existence at
the date hereof; or
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<PAGE>
(v) save for the sale, lease, transfer or other disposal of
revenues or assets having an aggregate value of not more than US$20,000 or its
equivalent in any financial year of the Borrower, sell, lease, transfer or
otherwise dispose of, by one (1) or more transactions or series of transactions
(whether related or not), the whole or any part of its revenues or its assets
otherwise than on an arm's length basis for full consideration in the ordinary
course of its business; or
(vi) enter into any investment or business activity other than the
construction and operation of the NMT-450 Network and any business which is
directly related thereto; or
(vii) cancel or terminate (or consent to any cancellation or
termination of) any of the Project Contracts or other agreements or documents
with respect to the Project or, save as provided below, amend or otherwise
modify or give any consent, waiver or approval to any variation of or deviation
from the terms of any Project Contract or other agreement or document with
respect to the Project Provided that such amendment, modification, consent,
waiver or approval may be made or, as the case may be, given so long as it will
not adversely affect the business and/or financial condition of the Borrower
and/or materially change the nature, extent or progress of the Project; or
(viii) enter into any business transactions on a non-arm's length
basis with any affiliates of the Borrower unless such business transaction is
favourable to the Borrower; or
(ix) change its corporate structure either by merger, amalgamation,
consolidation, reorganization, reconstruction or otherwise Provided that, and
subject to the consent of the Lender (which consent shall not unreasonably be
withheld), any such merger, amalgamation, consolidation, reorganisation or
reconstruction may be permitted if the solvency and the operations of the
Borrower are not, in the sole opinion of the Lender, materially detrimentally
affected.
14.3 THE ACCOUNTS
------------
The Borrower hereby irrevocably and unconditionally agrees with the
Lender that monies shall be credited and debited to each of the RP Escrow
Account. the US Escrow Account and the Reserve Account in the manner
contemplated below. The Borrower further irrevocably and unconditionally agrees
with the Lender that it shall comply in all respects with the arrangements set
forth below in relation to each of the Accounts and the Borrower will not do or
carry out any action which is inconsistent with the arrangements set out below
relating to each of the Accounts.
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<PAGE>
(a) PURPOSE OF EACH ACCOUNT
-----------------------
The Borrower agrees with the Lender that the purpose of each of
the Accounts shall be as reflected below, namely that:
(i) THE RP ESCROW ACCOUNT
---------------------
the purpose of the RP Escrow Account shall be (a) to
receive or otherwise have credited to it all receivables and other amounts of
whatsoever nature due from time to time to the Borrower on any account
whatsoever from its customers and other debtors and the Borrower hereby agrees
with the Lender from time to time to instruct (in a manner satisfactory to the
Lender) all its customers and other debtors to make payment of all such sums due
or to become due to the Borrower to the RP Escrow Account and (b) to serve as a
fund from which the Borrower shall discharge all expenses associated with its
business as budgetted and approved by the Lender and, in addition, the
obligations under Clause 6 of this Agreement to pay interest on the Loan. In the
event that, for any reason whatsoever, any amount payable to the Borrower is not
immediately paid and credited to the RP Escrow Account by the relevant customer
or debtor, the Borrower hereby undertakes with the Lender to procure that such
amount is forthwith credited to the RP Escrow Account;
(ii) THE RESERVE ACCOUNT
-------------------
the purpose of the Reserve Account shall be to receive and
have credited to it amounts from the RP Escrow Account, having been converted
into dollars, in the manner and in the amounts contemplated in paragraph (b)(ii)
below; the monies from time to time standing to the credit of the Reserve
Account shall serve as a fund which the Borrower may, at its election, use to
prepay the whole (but not part) of the Loan which is outstanding on any
Repayment Date and the Borrower hereby agrees with the Lender to use the funds
standing to the credit of the Reserve Account for such purpose. For the
avoidance of doubt, the Borrower agrees with the Lender that the monies standing
to the credit of the Reserve Account shall only be used in or towards the
repayment (including a prepayment) of the Loan in full and, in particular, that
such monies may not be used in or towards any partial repayment (including a
prepayment) of the Loan; and
(iii) THE US ESCROW ACCOUNT
---------------------
the purpose of the US Escrow Account shall be to receive
and have credited to it amounts from the RP Escrow Account, having been
converted into dollars, in the manner and in the amounts contemplated in
paragraph (b)(iii) below; the monies from time to time
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<PAGE>
standing to the credit of the US Escrow Account shall serve as a fund which
shall be used to enable the Borrower to repay the relevant part of the Loan on
each of the Repayment Dates in the manner provided for in Clause 8 of this
Agreement (save, for the avoidance of doubt, in relation to any Repayment Date
if (and only if) the Borrower elects to prepay, on such Repayment Date, the
entire amount of the Loan which is outstanding). The Borrower hereby agrees with
the Lender to use the funds standing to the credit of the US Escrow Account for
such purposes.
(b) PAYMENTS TO THE ACCOUNTS
------------------------
The Borrower agrees with the Lender that the following monies
shall be paid and credited to each Account and the Borrower further agrees with
the Lender to procure that all such monies as are referred to below shall be
paid and credited to each Account strictly in accordance with the provisions of
this sub-Clause (b):
(i) THE RP ESCROW ACCOUNT
---------------------
(a) all receivables and other amounts due from time to
time to the Borrower on any account whatsoever from its customers and other
debtors shall immediately be paid and credited to the RP Escrow Account;
(b) amounts from time to time standing to the credit of
the RP Escrow Account shall be used to (a) purchase dollars to be credited to
the Reserve Account and the US Escrow Account in the manner contemplated in
paragraphs (b)(ii) and b(iii) below, (b) finance the expenses relating to the
business and operations of the Borrower as reflected in the budget which shall
be approved by the Lender or otherwise as from time to time approved by the
Lender and (c) purchase dollars to enable the Borrower to make payment of
interest on the Loan under Clause 6 of this Agreement.
(ii) THE RESERVE ACCOUNT
-------------------
subject to the provisions of paragraph (c) below, amounts
standing to the credit of the RP Escrow Account shall be used to purchase
dollars to be immediately credited to the Reserve Account in the following
amounts and at the following times:
(a) on the last business day of each of the 7th, 8th, 9th,
10th, 11th and 12th month after the making of the first Advance, the Borrower
Will ensure that there is credited to the Reserve Account an amount in dollars
which is equal to one-sixth of the interest payment which, taking the then
prevailing LIBOR which has been determined for the purposes of this Agreement
and applying it to
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<PAGE>
a deemed calculation of the interest payment which, by the application of the
then prevailing LIBOR determined hereunder, would be due from the Borrower under
Clause 6 of this Agreement on the first Repayment Date; and
(b) on the last business day of each of the 19th, 20th,
21st, 22nd, 23rd and 24th month after the making of the first Advance, the
Borrower will ensure that there is credited to the Reserve Account an amount in
dollars which is equal to one-sixth of the amount of the Loan which falls due
for repayment on the first Repayment Date.
In the event that the Borrower elects to prepay the Loan on
any Repayment Date and such prepayment shall result in the entire amount of the
Loan ceasing to exist thereafter (a "PREPAYMENT DATE"), the Borrower agrees that
the aggregate amount standing to the credit of the Reserve Account on the
Prepayment Date shall be applied in or towards repayment of the Loan without
penalty on the Prepayment Date. In the event that the Borrower does not elect to
prepay the Loan on any Prepayment Date, then the Borrower agrees with the Lender
that, on the final Repayment Date, the aggregate amount standing to the credit
of the Reserve Account shall be applied in repayment of such part of the Loan as
is required by the Borrower on the final Repayment Date under the provisions of
Clause 8 of this Agreement.
(iii) THE US ESCROW ACCOUNT
---------------------
subject to the provisions of paragraph (c) below, amounts
standing to the credit of the RP Escrow Account shall be used to purchase
dollars to be immediately credited to the US Escrow Account in the following
amounts and at the following times:
(a) on the last business day of each of the 25th, 26th,
27th, 28th, 29th and 30th month after the making of the first Advance, the
Borrower will ensure that there is credited to the US Escrow Account an amount
in dollars which is equal to one-sixth of the amount of the Loan which falls due
for repayment on the first Repayment Date. The Borrower agrees with the Lender
that the aggregate amount standing to the credit of the US Escrow Account on the
first Repayment Date shall be applied in repayment of such part of the Loan as
is required to be repaid by the Borrower on the first Repayment Date under the
provisions of Clause 8 of this Agreement ;
(b) on the last business day of each of the 31st, 32nd,
33rd, 34th, 35th and 36th month after the making of the first Advance, the
Borrower will ensure that there is credited to the US Escrow Account an amount
in dollars which is equal to one sixth of the amount of the Loan which plus due
for repayment on the second
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<PAGE>
Repayment Date. The Borrower agrees with the Lender that the aggregate amount
standing to the credit of the US Escrow Account on the second Repayment Date
shall be applied in repayment of such part of the Loan as is required to be
repaid by the Borrower on the second Repayment Date under the provisions of
Clause 8 of this Agreement;
(c) on the last business day of each of the 37th, 38th,
39th, 40th, 41st and 42nd month after making of the first Advance, the Borrower
will ensure that there is credited to the US Escrow Account an amount in dollars
which is equal to one-sixth of the amount of the Loan which falls due for
repayment on the third Repayment Date. The Borrower agrees with the Lender that
the aggregate amount standing to the credit of the US Escrow Account on the
third Repayment Date shall be applied in repayment of such part of the Loan as
is required to be repaid by the Borrower on the third Repayment Date under the
provisions of Clause 8 of this Agreement;
(d) on the last business day of each of the 43rd, 44th,
45th, 46th, 47th and 48th month after making of the first Advance, the Borrower
will ensure that there is credited to the US Escrow Account an amount in dollars
which is equal to one-sixth of the amount of the Loan which falls due for
repayment on the fourth Repayment Date. The Borrower agrees with the Lender that
the aggregate amount standing to the credit of the US Escrow Account on the
fourth Repayment Date shall be applied in repayment of such part of the Loan as
is required to be repaid by the Borrower on the fourth Repayment Date under the
provisions of Clause 8 of this Agreement; and
(e) on the last business day of each of the 49th, 50th,
51st, 52nd, 53rd and 54th month after making of the first Advance, the Borrower
will ensure that there is credited to the US Escrow Account an amount in dollars
which is equal to one-sixth of the amount of the Loan which falls due for
repayment on the fifth Repayment Date. The Borrower agrees with the Lender that
the aggregate amount standing to the credit of the US Escrow Account on the
fifth Repayment Date shall be applied in repayment of such part of the Loan as
is required to be repaid by the Borrower on the fifth Repayment Date under the
provisions of Clause 8 of this Agreement;
(c) DEFAULT
-------
Notwithstanding the provisions of paragraph (b) above, the Lender
hereby agrees with the Borrower that the failure by the Borrower to ensure, on
any date referred to in paragraph (b) above, that the precise amount referred to
therein be credited to the Reserve Account and/or the US Escrow Account shall
not constitute an Event of Default Provided that on the last day of each six
-------------
month period referred to in paragraphs (b)(ii)(b), (b)(iii)(a), (b)(iii)(b),
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<PAGE>
(b)(iii)(c), (b)(iii)(d) and (b)(iii)(e) and, in the case of the six month
period referred to in Clause (b)(ii)(a), the date falling 18 months after the
making of the first Advance, the aggregate amount standing to the credit of the
Reserve Account or, as the case may be, the US Escrow Account, is at least equal
to:
(i) in the case of paragraph (b)(ii)(a), the total amount of
interest payable by the Borrower under Clause 6 of this Agreement on the first
Repayment Date or, if less, on any subsequent Repayment Date;
(ii) in the case of paragraph (b)(ii)(b), the amount of the
Loan which falls due for repayment on the first Repayment Date under the
provisions of Clause 8 of this Agreement;
(iii) in the case of paragraph (b)(iii)(a), the amount of the
Loan which falls due for repayment on the first Repayment Date under the
provisions of Clause 8 of this Agreement;
(iv) in the case of paragraph (b)(iii)(b), the amount of the
Loan which falls due for repayment on the second Repayment Date under the
provisions of Clause 8 of this Agreement;
(v) in the case of paragraph (b)(iii)(c), the amount of the
Loan which falls due for repayment on the third Repayment Date under the
provisions of Clause 8 of this Agreement;
(vi) paragraph (b)(iii)(d), the amount of the Loan which falls
due for repayment on the fourth Repayment Date under the provisions of Clause 8
of this Agreement;
(vii) paragraph (b)(iii)(e), the amount of the Loan which falls
due for repayment on the fifth Repayment Date under the provisions of Clause 8
of this Agreement;
Notwithstanding the foregoing, the Borrower agrees with the
Lender that it shall use its best efforts to ensure that the precise amount
required by the provisions of paragraph (b) above to be credited to the Reserve
Account and/or the US Escrow Account shall be so credited and it shall use its
best efforts, in the month or months immediately succeeding the existence of any
shortfall, to ensure that such further amounts are credited to the Reserve
Account and/or the US Escrow Account so that the Borrower shall comply with the
obligations expressed to be assumed by it under paragraph (b) above as if the
grace or cure periods referred to in this paragraph (c) were not applicable.
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<PAGE>
(d) PRIORITY OF PAYMENTS FROM THE RP ESCROW ACCOUNT
-----------------------------------------------
The Borrower agrees with the Lender that monies shall, with the
prior written consent of the Lender, be debited from the RP Escrow Account in
the following order of priority:
first, in or towards satisfaction of the Borrower's obligation to
pay interest under Clause 6 of this Agreement on each of the Interest Payment
Dates;
second, in or towards payment of the approved budgetted expenses
relating to the business and operations of the Borrower as approved by the
Lender or otherwise as agreed from time to time by the Lender Provided that the
consent of the Lender to the payment of the following monies from the RP Escrow
Account shall not be necessary for so long as the Borrower is in compliance with
the obligations expressed to be assumed by it under this Agreement (and, for
this purpose, the provisions of Clause 14.3(c) shall be ignored so that it shall
be a requirement that the Borrower be in strict compliance with its obligations
under Clause 14.3(b) of this Agreement);
(a) any interest earned in connection with monies standing
to the credit of any of the Accounts, it being agreed by the Lender that
interest earned in connection with the Reserve Account and the US Escrow Account
shall be credited to the RP Escrow Account; and
(b) any and all monies standing to the credit of the RP
Escrow Account which are not then required to enable the Borrower to comply with
its obligations under this Agreement including without limitation the
obligations of the Borrower under Clause 14.3(b) and this Clause 14.3(d) and
which are generated from the issue or sale of shares in the Borrower;
third, in or towards payment of the amounts referred to in
paragraph (b)(ii)(a) above;
fourth, in or towards payment of the amounts referred to in
paragraph (b)(ii)(b) above;
fifth, in or towards payment of the amounts referred to in
paragraph (b)(iii) above;
sixth, in or towards repayment of principal on each of the
Repayment Dates; and
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<PAGE>
seventh, but without prejudice to any of the foregoing
provisions, at any time after the date falling thirty (30) months after the
making of the first Advance, any and all monies standing to the credit of the RP
Escrow Account which are not (whether by the making of any prepayment of the
Loan or otherwise) then required to enable the Borrower to comply with its
obligations due at such time under this Agreement including, without limitation,
the obligations of the Borrower under Clause 14.3(b) and this Clause 14.3(d)
and, for the avoidance of doubt. after the date falling thirty (30) months after
the making of the first Advance, the Lender agrees to the release of such
surplus monies referred to herein without need for its prior written consent in
accordance with the provisions hereof.
(e) NETTING OF PAYMENTS
-------------------
The Borrower and the Lender agree that if, by the operation of
the provisions of this Agreement and in respect of payments to be made on any
particular day (the "RELEVANT DAY"), the Borrower would be required to make a
payment to the Lender on the Relevant Day and the Lender would be required to
agree to the remittance of funds from the RP Escrow Account to the Borrower on
the Relevant Day then, on the Relevant Day, those payments shall be netted so
that the Lender, or as the case may be, the Borrower shall receive a net amount
which is equal to the difference between the amounts payable on the Relevant
Date.
(f) TRANSFER OF FUNDS
-----------------
Any amount contained in the Reserve Account which is not required
to enable the Borrower to perform its obligations as set out under this
Agreement shall be transferred to the US Escrow Account, and the Lender hereby
consents to such transfer.
15. EVENTS OF DEFAULT
-----------------
15.1 If:
(i) the Borrower and/or the Guarantor fails to pay any sum due from
it under this Agreement (in the case of the Borrower) or the Guarantee (in the
case of the Guarantor) at the time, in the currency and in the manner specified
therein and such failure is not rectified within seven (7) business days of the
occurrence thereof: or
(ii) any representation, warranty or statement made or deemed to be
made by any Obligor under or pursuant to any Transaction Document to which it is
a party or in any notice or other document, certificate or statement delivered
by it pursuant thereto or in
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connection therewith is or proves to be incorrect or misleading and, if capable
of being remedied, is not remedied within a period of six (6) months from the
occurrence of such breach; or
(iii) the Borrower fails duly to perform or comply with any of the
obligations expressed to be assumed by it in Clauses 13 or 14 including, without
limitation and for the avoidance of doubt, the failure by the Borrower to ensure
that amounts are credited to the Accounts in the manner provided for in Clause
14.3; or
(iv) any Obligor fails duly to perform or comply with any other
material covenant or other material obligation expressed to be assumed by it in
any Transaction Document to which it is a party and, if in the opinion of the
Lender such failure is capable of being remedied, such failure is not remedied
within thirty (30) days after the occurrence thereof Provided Always that such
grace period will not apply in respect of a breach by the Borrower relating to
the grant of any security interest other than those security interests
specifically contemplated hereunder or under the Security Documents; or
(v) any other indebtedness in excess of US$00,000 (or its
equivalent) in the aggregate of any Obligor or any of their respective
subsidiaries (a) is not paid when due or within any applicable grace period in
any agreement or instrument relating to such indebtedness, or (b) becomes due
and payable, or capable of being declared due and payable, before its normal or
agreed maturity by reason of a default (howsoever described) except that this
subClause shall not apply to any indebtedness which any Obligor is contesting in
good faith and by appropriate proceedings; or
(vi) any Obligor or any of its respective subsidiaries is unable to
pay or admits its inability to pay its debts as they fall due, commences
negotiations with a view to, or takes any proceedings under any law for a
readjustment, rescheduling or deferment of all or any of its indebtedness or
proposes, makes or enters into a general assignment or arrangement for the
benefit of or a composition with any one (1) or more of its creditors; or
(vii) any corporate action or other steps are taken (by any person)
for the bankruptcy, liquidation, winding-up, or dissolution of the Borrower or
any of its respective subsidiaries or for the appointment of a receiver,
administrator, custodian, judicial manager, trustee or similar officer of the
Borrower or any of its respective subsidiaries or any of its assets or revenues;
or
(viii) any execution, attachment. distress or other legal process is
levied enforced or sued out on or against, or any person having a security
interest thereover takes possession of or forecloses
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<PAGE>
against the whole or any part of, the property, undertaking or assets of the
Borrower or any of its respective subsidiaries; or
(ix) any provision of any Transaction Document is or becomes, for
any reason, invalid or unenforceable or any Transaction Document shall at any
time for any reason cease to be in full force and effect whether by any reason
or matter affecting any Obligor or by any event which renders it illegal for any
Obligor to perform or comply with any or all of its obligations under any
Transaction Document to which it is a party; or
(x) any agency of any state seizes, compulsorily acquires,
expropriates or nationalises the Borrower or any of its respective subsidiaries
and/or all or more than five per cent. (5%) of its assets or shares in any
manner whatsoever (whether direct or indirect); or
(xi) the Borrower suspends or threatens to suspend all or a
substantial part of the construction and/or development of the Project without
reasonable cause and/or the Borrower or any of its subsidiaries suspends or
threatens to suspend all or any part of their respective operations without
reasonable cause or ceases, or threatens to cease to carry on their respective
main business as carried on at the date hereof or enters into any business which
is unrelated to their respective existing business or operations and/or at any
time for whatever reason the Borrower abandons the construction, development
and/or operation of the Project; or
(xii) any Obligor repudiates any Transaction Document to which it is
a party or does or causes to be done any act or thing evidencing an intention to
repudiate any Transaction Document to which it is a party and/or the Borrower
repudiates any agreement or document relating to the Project or does or causes
to be done any act or thing evidencing an intention to repudiate any agreement
relating to the Project; or
(xiii) at any time any act, condition or thing required to be done,
fulfilled or performed in order (a) to enable any Obligor lawfully to enter
into, exercise its rights under and perform the obligations expressed to be
assumed by it in any Transaction Document to which it is a party, (b) to ensure
that the obligations expressed to be assumed by such Obligor in any Transaction
Document to which it is a party are legal, valid, binding and enforceable or (c)
to make each Transaction Document admissible in evidence in Indonesia, Singapore
and England is not done, fulfilled or performed; or
(xiv) except in the case of the Assignment of Receivables and the
various Hypothecs, any security interest expressed to be conferred upon the
Security Agent and/or the Lender and/or the under
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<PAGE>
any Transaction Document ceases to be a security interest over the property and
assets the subject thereof in accordance with its terms; or
(xv) any material event occurs or material circumstances arise
which give grounds in the opinion of the Lender for belief that any Obligor may
not (or may be unable to) perform or comply with any one (1) or more of its
obligations under any Transaction Document to which it is a party (and, for this
purpose, the repayment of principal and the payment of interest shall be deemed
to be material obligations); or
(xvi) the Project Completion Date does not occur on or prior to the
date falling thirteen (13) months after the date hereof; or
(xvii) the Guarantor and the Shareholders cease at any time and for
whatever reason directly to own in aggregate (legally and beneficially) one
hundred per cent. (100%) of the shares of the Borrower otherwise than in
accordance with the provisions of Clause 14.1(xv) hereof and/or the Guarantor
and the Shareholders cease at any time and for whatever reason to control the
Borrower; or
(xviii) any change in any necessary governmental approvals occurs or
any amendment to any of the Project Contracts is made which, in the sole opinion
of the Lender, may adversely affect the Borrower's ability to meet its
obligations contained herein,
then, and in any such case and at any time thereafter, the Lender may:
(a) cancel its Commitment whereupon the same shall be so
cancelled and reduced to zero; and/or
(b) declare all the outstanding Advances together with
accrued interest thereon and any and all sums of whatsoever nature due from the
Borrower hereunder to be immediately due and payable (without demand, protest or
notice upon the Borrower) or to be due and payable on demand of the Lender upon
such terms and subject to such conditions as the Lender may from time to time
specify and, in the event that the Borrower shall fail to comply with its
obligations hereunder in respect thereof, the Lender shall be entitled to
enforce its rights under the Security Documents.
16 BROKEN FUNDING COSTS
--------------------
Notwithstanding any other provision of this Agreement, if the Lender
receives or recovers all or any part of the Loan otherwise than on a Repayment
Date relating thereto, the Borrower shall pay to the Lender on demand an amount
equal to the amount (if any) by which
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(i) the additional interest which would have been payable on the amount so
received or recovered had it been received or recovered on such Repayment Date
exceeds (ii) the amount of interest received or recovered by the Lender by
placing a dollar deposit (equal to the amount received or recovered) with a
prime bank in Singapore for a period starting on the third Banking Day following
the date of such receipt and ending on such Repayment Date.
17. INDEMNITY
---------
17.1 The Borrower undertakes to indemnify the Lender against:
(i) any cost, claim, loss, expense (including legal fees on a full
indemnity basis) or liability together with any service tax thereon, which it
may sustain or incur as a consequence of the occurrence of any Event of Default
or any other breach or default by the Borrower in the performance of any of the
obligations or covenants expressed to be assumed by it in this Agreement; and
(ii) any loss it may sustain or incur as a result of its funding an
Advance requested by the Borrower hereunder but not made by reason of the
operation of any one (1) or more of the provisions hereof.
17.2 Any amount received or recovered from the Borrower by the Lender under
or in connection with this Agreement in a currency (such currency being referred
to herein as the "OTHER CURRENCY") other than the currency in which such sum is
expressed to be due under this Agreement (such currency being referred to herein
as the "CURRENCY OF ACCOUNT") whether as a result of, or the enforcement of, a
judgment or order of a court or tribunal in any jurisdiction, in the winding-up
or dissolution of the Borrower or otherwise, shall only constitute a discharge
of the Borrower's payment obligations hereunder to the extent of the amount in
the Currency of Account which the Lender is able, in accordance with its usual
practice, to purchase with the amount of the Other Currency so received or
recovered. The Borrower undertakes to indemnify the Lender against any cost,
claim, loss, expense (including legal fees on a full indemnity basis) or
liability together with any service tax thereon which the Lender may incur or
sustain in the event that the amount so received by it in the Currency of
Account (following the conversion into the Currency of Account of any amount
received in the Other Currency) is less than the amount of the Currency of
Account due to the Lender under or in connection with this Agreement.
17.3 Each indemnity contained in this Clause constitutes a separate and
independent obligation of the Borrower from the other obligations of the
Borrower contained in this Agreement, shall give
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rise to a separate and independent cause of action against the Borrower and
shall apply irrespective of any time or other indulgence granted to the
Borrower. The Borrower agrees that each such indemnity shall continue in full
force and effect notwithstanding the existence of any judgment, order, claim or
proof for a liquidated amount in respect of any sum due under or in connection
with this Agreement or any judgment or order relating thereto.
18. CURRENCY OF ACCOUNT
-------------------
The dollar is the currency of account and is the currency of payment for
each and every sum at any time due from the Borrower hereunder Provided that:
(i) each payment in respect of costs and expenses shall be made in the
currency in which the same were incurred; and
(ii) each payment pursuant to Clause 21.1 shall be made in the currency
specified by the party claiming thereunder.
19. PAYMENTS
--------
19.1 On each date on which this Agreement requires an amount to be paid by
the Borrower or the Lender hereunder, the Borrower or, as the case may be, the
Lender shall make the same available to the other by payment in such funds as is
for the time being customary for the settlement of international banking
transactions in the currency so payable to such account or bank as the Borrower
or, as the case may be, the Lender may from time to time specify for this
purpose.
19.2 On each date on which this Agreement requires an amount to be paid by
the Lender to the Borrower, the Lender shall make the same available by
application:
(i) first, in or towards payment (on the date of receipt) of any
amount then due and payable from the Borrower hereunder to the Lender; and
(ii) secondly, in or towards payment (on the date of receipt) to such
account of the Borrower such bank in Indonesia as the Borrower shall have
previously notified to the Lender for this purpose.
19.3 All payments required to be made by the Borrower hereunder shall be
calculated without reference to any set-off or counterclaim and shall be made
free and clear of and without any deduction for or on account of any set-off or
counterclaim.
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<PAGE>
19.4 The Lender shall maintain in accordance with its usual practice an
account or accounts, which shall as between the Borrower and the Lender be prima
-----
facie evidence of the amounts from time to time lent by, owing to and paid to
- -----
the Lender hereunder.
19.5 Payments received by the Lender hereunder shall be applied: first, to
payment of fees due and payable to the Lender (if any); second, to payment of
accrued interest on the overdue Loan; third, to payment of accrued interest on
the Loan; fourth, to repayment of the overdue portion of the Loan; fifth, to
repayment of the Loan and sixth, to prepayment of the Loan.
20. TAXES
-----
20.1 All payments by the Borrower under this Agreement, whether in respect
of principal, interest, fees, costs, expenses or any other matter, shall be made
in full without any deduction or withholding for or on account of tax unless the
deduction or withholding is required by law, in which case the Borrower shall:
(i) ensure that the deduction or withholding does not exceed the
minimum amount legally required;
(ii) forthwith pay to the Lender such additional amount or amounts
so as to ensure that the net amount received by the Lender will be equal to the
full amount which it would have received had no such deduction or withholding
been made or required to be made;
(iii) pay to the relevant taxation or other authorities within the
period for payment permitted by applicable law the full amount of the deduction
or withholding (including, but without prejudice to the generality of the
foregoing, the full amount of any deduction or withholding from any additional
amount paid under this sub-Clause); and
(iv) furnish to the Lender, within thirty (30) days after it has
made payment to the relevant tax or other authority:
(a) an official receipt of the relevant authority in respect
of all amounts so deducted or withheld; or
(b) if such receipts are not issued by the relevant
authorities on payment to them of amounts so deducted or withheld, a
certification of deduction or withholding or equivalent evidence (which shall be
satisfactory to the Lender) of the relevant deduction or withholding.
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<PAGE>
20.2 Without prejudice to the provisions of Clause 20.1, if the Lender is
required to make any payment on account of tax (other than tax on its overall
net income) on or in relation to any sum received or receivable hereunder by the
Lender (including, without limitation, any sum received or receivable under this
Clause 20) or any liability in respect of any such payment is asserted, imposed,
levied or assessed against the Lender, the Borrower shall, upon demand of the
Lender, promptly indemnify the Lender against such payment or liability,
together with any interest, penalties and expenses payable or incurred in
connection therewith.
20.3 If the Borrower makes a payment under this Clause 20 for the account
of the Lender and the Lender, in its sole opinion, determines that it has
received or been granted a credit against or relief or remission for, or
repayment, of, any tax paid or payable by it in respect of or calculated with
reference to the deduction or withholding giving rise to such payment, the
Lender shall, to the extent that it can do so without prejudice to the retention
of the amount of such credit, relief, remission or repayment, pay to the
Borrower, such amount as the Lender shall, in its sole opinion, have determined
to the attributable to such deduction or withholding. Any payment made by the
Lender under this Clause shall be conclusive evidence of the amount due to the
Borrower hereunder and shall be accepted by the Borrower in full and final
settlement of its rights of reimbursement hereunder in respect of the relevant
deduction or withholding. Nothing herein contained shall interfere with the
right of the Lender to arrange its tax affairs in whatever manner it thinks fit
and, in particular, the Lender shall not be under any obligation to claim
credit, relief, remission, or repayment from or against its corporate profits or
similar tax liability in respect of the amount of such deduction or withholding
in priority to any other claims, reliefs, credit or deductions available to it,
nor oblige the Lender to disclose any information relating to its tax affairs or
any computations in respect thereof.
20.4 In order to assist the Borrower in qualifying for reduction pursuant
to any applicable income tax treaty in the rate of any deduction or withholding
applicable under Indonesian law to payments of interest to the Lender, the
Lender shall furnish to the Borrower, no later than the earliest date on which
any interest payment is to be made under Clause 6 of this Agreement, a
certificate of domicile (or such other certificate or document, howsoever
entitled, which would constitute evidence of the Lender's tax residence in the
applicable treaty country) and all such other documents as are reasonably
necessary to enable the Borrower to qualify for reductions pursuant to Dir. Jen
Tax Rule SE-08/93.
- 46 -
<PAGE>
20.5 If, at any time, the Borrower is required by law to make any deduction
or withholding from any sum payable by it hereunder (or if the Borrower becomes
aware of any such proposed requirement or there is any change in the rates at
which or the manner in which such deductions or withholdings are calculated),
the Borrower shall promptly notify the Lender thereof.
21. INCREASED COSTS
---------------
21.1 In the event that the Lender determines that, by reason of the
introduction of or any change in the interpretation or administration of any law
and/or compliance with any directive from any central bank or other fiscal,
monetary or other authority or agency (including, without limitation, a
directive which affects the manner in which the Lender is required to or does
maintain capital resources having regard to its obligations hereunder and to
amounts owing to it hereunder):
(i) the Lender incurs a cost as a result of its making of one (1) or
more Advances hereunder or as a result of its having entered into and/or
assuming or maintaining its Commitment hereunder; or
(ii) there is any increase in the cost to the Lender of maintaining
and/or funding all or any part of its Commitment and/or of maintaining all or
any part of its obligations under or in connection with this Agreement; or
(iii) the Lender suffers a reduction in the rate of return on its
overall capital (not being a reduction by reason of the imposition of, or
increase in the rates of, tax payable on its overall net income) as a result of
a change in the manner in which the Lender is required to allocate resources to
its obligations hereunder; or
(iv) the Lender becomes liable to make any payment on account of tax
or otherwise (other than tax on its overall net income) on or calculated by
reference to the amount of any Advance made or to be made by it hereunder and/or
any sum received or receivable by it hereunder,
the Borrower shall, from time to time on demand of the Lender, promptly pay to
the Lender amounts sufficient to indemnify the Lender against, as the case may
be, (a) such cost, (b) such increased cost (or such proportion of such increased
cost as is, in the opinion of the Lender, attributable to its funding or
maintaining Advances hereunder) (c) such proportion of such reduction as is, in
the opinion of the Lender, attributable to its obligations hereunder or (d) such
liability.
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<PAGE>
21.2 In the event that any such cost, increased cost, reduction in rate of
return, liability or loss as is referred to in paragraphs (i) to (iv) of Clause
21.1 is not (by reason of the manner in which any applicable law or directive
from any central bank or other fiscal, monetary or other authority or agency is
applied, enforced or given effect) directly charged to the Lender but instead to
any person which is a holding company, a subsidiary of or otherwise affiliated
with the Lender, then, for all the purposes of this Clause 21, such cost,
increased cost, reduction in rate of return liability or loss shall be deemed to
have been incurred by the Lender.
22. SET-OFF
-------
The Borrower authorises the Lender to apply any credit balance to which the
Borrower is entitled on any account of the Borrower with the Lender in
satisfaction of any sum due and payable from the Borrower to the Lender
hereunder but unpaid; for this purpose, the Lender is authorised to purchase
with the moneys standing to the credit of any such account such other currencies
as may be necessary to effect such application. The Lender shall not be obliged
to exercise any right given to it by this Clause.
23. FEES, COSTS AND EXPENSES
------------------------
23.1 The Borrower shall pay to the Lender the fees specified in the Fees
Letter at the times, and in the amounts, specified in the Fees Letter. The
Borrower shall also pay to the Lender a commitment fee calculated in the manner
and payable at the times specified in the Fees Letter.
23.2 The Borrower shall, from time to time on demand of the Lender,
reimburse the Lender for all costs and expenses (including legal fees) together
with any service tax thereon incurred by it in or in connection with the
negotiation, preparation, execution and completion of this Agreement, the
Security Documents, the Letter of Comfort, the Negative Pledge Letter, the
Guarantee, the Fees Letter and all other ancillary documents necessary for the
preparation, execution and completion of the aforesaid documents and the
completion of the transactions herein contemplated subject to a maximum limit of
US$70,000 in respect of the professional fees of legal counsel to the Lender.
23.3 The Borrower shall, from time to time on demand of the Lender,
reimburse the Lender for all reasonable costs and expenses (including, without
limitation, legal fees and all out of pocket expenses on a full indemnity basis)
together with any service tax thereon incurred in or in connection with (i) the
preservation and/or enforcement of any of the rights of the Lender under this
Agreement
- 48 -
<PAGE>
and (ii) any variation, consent, approval, waiver or amendment relating to this
Agreement.
23.4 The Borrower shall pay all stamp, documentary and other taxes to which
this Agreement or any judgment given in connection herewith is or at any time
may be subject and shall indemnify the Lender against any liabilities, costs,
claims and expenses resulting from any failure to pay or any delay in paying any
such tax.
24. BENEFIT OF AGREEMENT
--------------------
24.1 This Agreement shall be binding upon, and inure to the benefit of each
party hereto and their respective successors and assigns.
24.2 The Borrower shall not be entitled to assign, transfer or otherwise
deal in any way with all or any of its rights, benefits and obligations under
this Agreement.
24.3 The Lender may, at any time, assign all or any of its rights and
benefits hereunder Provided that the Lender shall at all times have an interest
in not less than fifty per cent. (50%) of the amount of the Loan unless the
Borrower otherwise consents thereto (such consent not to be unreasonably
withheld).
24.4 Save as provided below, the Lender may disclose to a potential
assignee or to any other person with whom it may wish to enter into contractual
relations in connection with any Transaction Document such information about the
Borrower and its financial condition as shall have been made available to the
Lender thereunder together with such other information as the Lender shall
consider appropriate. The Borrower hereby consents to the disclosure of any and
all such information. Notwithstanding the foregoing, the Lender shall not be
entitled to disclose:
(a) the customer lists provided by the Borrower to the Lender under
the Assignment of Receivables; or
(b) any such information as is referred to above to any person
actively participating in the telecommunications industry in Indonesia, in this
case without the consent of the Borrower (such consent not to be unreasonably
withheld).
25. MISCELLANEOUS
-------------
25.1 Interest and fees shall accrue from day to day and shall be calculated
on the basis of a year of three hundred and sixty (360)
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<PAGE>
days (or, if market practice differs, in accordance with market practice) and
the actual number of days elapsed.
25.2 A certificate of the Lender as to (i) the amount by which a sum
payable to it hereunder is to be increased under Clause 20, (ii) the amount for
the time being required to indemnify it against any such cost, payment or
liability as is mentioned in Clause 20.2 or 21.1 or (iii) the amount of any sum
due from the Borrower hereunder shall, in the absence of manifest error, be
conclusive for the purposes of this Agreement.
25.3 This Agreement and the documents contemplated hereby shall supersede
any prior expression of intent or understanding with respect to this
transaction.
25.4 Each party hereto shall maintain in confidence and not disclose in any
manner or to any person without the prior written consent of the other party
hereto any information or data which may be furnished by such other party
(hereinafter referred to as the "FURNISHING PARTY") pursuant hereto or to any
other Transaction Document and which is notified to such other party by the
Furnishing Party to be confidential in nature (hereinafter referred to as
"CONFIDENTIAL INFORMATION") Subject Always to the obligation of the party
receiving such Confidential Information (hereinafter referred to as THE
"RECEIVING PARTY") to disclose such Confidential Information to any person (i)
pursuant to a request by any governmental or regulatory agency or funding source
of the Lender, (ii) pursuant to a request or order of any person in accordance
with any applicable law or regulation or (iii) which is referred to in any
Transaction Document (including, without limitation, any legal counsel,
independent auditor, valuer or representative or attorney of any party hereto)
and which shall specifically be notified of the confidentiality of such
Confidential Information. Without prejudice to the foregoing, the provisions
contained in the previous sentence shall not apply to (a) any information that
was known to the Receiving Party prior to the time it received such information
from the Furnishing Party pursuant to this Agreement or any other Transaction
Document, (b) any such Confidential Information that becomes part of the public
domain other than through the fault of the Receiving Party or is received by the
Receiving Party without restriction as to its disclosure, (c) any specific terms
and conditions hereof and of any other Transaction Document that are disclosed
by the Lender to any of its funding sources and (d) any specific terms and
conditions hereof and of any other Transaction Document and any other
Confidential Information that is disclosed by the Lender to any other person to
which the Lender intends to transfer or otherwise assign its interest hereunder
in accordance with the provisions of Clause 24.3 hereof.
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<PAGE>
26. REMEDIES AND WAIVERS
--------------------
No failure to exercise, nor any delay in exercising, on the part of the
Lender, any right or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy prevent any further
or other exercise thereof or the exercise of any other right or remedy. The
rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law.
27. PARTIAL INVALIDITY
------------------
If, at any time, any provision hereof is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions hereof nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction shall in any way be affected or impaired thereby.
28. NOTICES
-------
28.1 Any notice or other communication required to be given to the Lender
under this Agreement shall be sent to it at the address, telex number or
facsimile number specified in the signature pages hereof marked for the
attention of the person(s) or department specified thereon or such other
address, telex number or facsimile number and/or such other attention as may be
notified to the Borrower in accordance with this Clause. Any notice or other
communication required to be given to the Borrower hereunder shall be sent to it
at the address, telex number or facsimile number specified in the signature
pages hereof or such other address, telex number or facsimile number as may be
notified by the Borrower to the Lender in accordance with this Clause.
28.2 Any communication from one party to another shall be deemed to be
received by the Borrower (if sent by telex or facsimile) on the day of despatch
(provided, in the case of any telex transmission, the correct answerback is
received and, in the case of any facsimile transmission, a transmission report
confirming full and proper transmission thereof is received) or (in any other
case) when left at the address referred to in Clause 28.1 or fourteen (14) days
after being deposited in the post, postage prepaid in an envelope addressed to
such party at that address. Any change in the address, telex number or facsimile
number of the Borrower or, as the case may be, the Lender shall be notified to
the other party by not less than fourteen (14) days' prior notice.
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<PAGE>
28.3 Each communication and document made or delivered by one party to
another pursuant to this Agreement shall be in the English language or
accompanied by a translation thereof into English certified (by an officer of
the person making or delivering the same) as being a true and accurate
translation thereof.
29. LAW AND JURISDICTION
--------------------
29.1 This Agreement shall be governed by, and shall be construed in
accordance with, English law.
29.2 It is irrevocably agreed for the exclusive benefit of the Lender that
the courts of England are to have jurisdiction to hear and determine any suit,
action or proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and that accordingly, any suit, action or
proceeding arising out of or in connection with this Agreement may be brought in
such courts.
29.3 The Borrower irrevocably agrees that the courts of Singapore shall
have jurisdiction to hear and determine any suit, action or proceeding, and to
settle any disputes, which may arise out of or in connection with this Agreement
and, for such purposes, irrevocably submits to the jurisdiction of such courts.
29.4 The Borrower irrevocably waives any objection which it might now or
hereafter have to the courts referred to in Clause 29.2 and Clause 29.3 being
nominated as the forum to hear and determine any suit, action or proceeding, and
to settle any disputes, which may arise out of or in connection with this
Agreement and agrees not to claim that any such court is not a convenient or
appropriate forum.
29.5 The Borrower agrees that the process by which any suit, action or
proceeding is begun may be served on it by being delivered (i) in connection
with any suit, action or proceeding in England, to The Law Debenture Trust
Corporation p.l.c. at Princes House, 95 Gresham Street, London EC2V 7LY or its
other principal place of business for the time being and (ii) in connection with
any suit, action or proceeding in Singapore to BSL Associates Pte. Ltd. at 220
Orchard Road #05-01, Midpoint Orchard, Singapore 0923 or its other principal
place of business in Singapore for the time being.
29.6 The Borrower hereby consents generally in respect of any legal action
or proceeding arising out of or in connection with this Agreement to the giving
of any relief or the issue of any process in connection with such action or
proceeding including, without limitation, the making, enforcement or execution
against any property whatsoever (irrespective of its use or intended use) of any
order or judgment which may be made or given in such action or proceeding.
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<PAGE>
30. CONSTRUCTION OF CERTAIN PROVISIONS
----------------------------------
30.1 In this Agreement, each reference to the following expressions shall,
where the context so permits, be construed as set forth below:
an "AGENCY" of a state shall be construed so as to include, without
limitation, any agency, authority, central bank, department, government,
legislature, minister, ministry, official or public or statutory person or
state-owned organisation (whether autonomous or not) of, or the government of,
that state or any political sub-division in or of that state and any person who
in any capacity whatsoever then owns, holds, administers or controls any of the
reserves of that state;
an "AGREEMENT" shall be construed so as to include, without limitation, a
concession, contract, deed, franchise, licence or undertaking (in each case,
whether oral or written);
the "ASSETS" of any person shall be construed, without limitation, as a
reference to the whole or any part of its business, undertaking, property,
assets or revenues (including any right to receive revenues);
a "BANKING DAY" shall be construed as a reference to a day (other than a
Saturday or Sunday) on which banks generally are open for business in London,
Singapore and New York City;
a "BUSINESS DAY" shall be construed as a reference to a day (other than a
Saturday or Sunday) on which banks generally are open for business in London,
Singapore, New York City and Jakarta;
a "CLAUSE" shall, unless otherwise specified herein, be construed as a
reference to a clause hereof;
a "CONSENT" shall be construed so as to include, without limitation, an
approval, authorisation, exemption, filing, licence, order, permission, permit,
recording or registration (and references to obtaining consents shall be
construed accordingly);
a "DIRECTIVE" shall be construed so as to include, without limitation, any
present or future directive, law, policy, regulation, request, requirement or
voluntary credit restraint programme (in each case, whether or not having the
force of law but, if not having the force of law, the compliance with which is
in accordance with the general practice of persons to whom the directive is
addressed);
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<PAGE>
the "FINANCIAL STATEMENTS" shall be construed as a reference to the first
audited financial statements of the Borrower;
a "GUARANTEE" shall be construed so as to include, without limitation, any
obligation (howsoever termed) of any person to pay, purchase, provide funds
(whether by way of the advance of money, the purchase of or subscription for
shares or other securities, the purchase of assets or services or otherwise) for
the payment of, indemnify against the consequences of default in the payment of,
or otherwise be responsible for, any indebtedness, obligation or other duty of
any other person;
the "GUARANTOR'S FINANCIAL STATEMENTS" shall be construed as a reference to
the audited financial statements of the Guarantor for its financial year ended
31 December, 1994 and dated 2 June, 1995;
"INDEBTEDNESS" shall be construed so as to include, without limitation, any
obligation, liability or forbearance (whether present or future, actual,
conditional or contingent, direct or indirect, secured or unsecured or incurred
as principal, guarantor or surety or otherwise) for the payment or repayment of
money;
a "LAW" shall be construed so as to include, without limitation, common or
customary law and any constitution, decree, judgment, legislation, order,
ordinance, regulation, statute, treaty or other legislative measure in any
jurisdiction or any present or future directive, regulation, request or
requirement (in each case, whether or not having the force of law but, if not
having the force of law, the compliance with which is in accordance with the
general practice of persons to whom the directive, regulation, request or
requirement is addressed) and "LAWFUL" and "UNLAWFUL" shall be construed
accordingly;
the "LENDER" shall be construed so as to include, without limitation, its
and any subsequent successors and assigns in accordance with their respective
interests;
a "LONDON BANKING DAY" shall be construed as a reference to a day (other
than a Saturday or Sunday) on which banks generally are open for business in
London;
a "MONTH" is a reference to a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next succeeding
calendar month except that, where any such period would otherwise end on a day
which is not a Banking Day, it shall end on the next succeeding Banking Day,
unless that day falls in the calendar month succeeding that in which it would
otherwise have ended, in which case it shall end on the immediately preceding
Banking Day
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<PAGE>
Provided that, if a period starts on the last Banking Day in a calendar month or
if there is no numerically corresponding day in the month in which that period
ends, that period shall end on the last Banking Day in that later month and
references to "MONTHS" shall be construed accordingly;
a "PERSON" shall be construed, without limitation, as a reference to any
natural person, firm, company, corporation, government (or any political sub-
division thereof), state or agency of a state or any association, business,
joint venture or partnership (whether or not having separate legal personality);
a "SCHEDULE" shall, unless otherwise specified herein, be construed,
without limitation, as a reference to a schedule hereto;
a "SECURITY INTEREST" shall be construed so as to include, without
limitation, any conditional sale, encumbrance, mortgage, charge, pledge, lien,
hypothecation, title retention arrangement or any other form of preferential
arrangement having a similar effect, in each case howsoever created or arising;
"SERVICE TAX" shall be construed, without limitation, as a reference to any
goods and/or services tax including any other or similar tax which may be
imposed from time to time;
a "SUBSIDIARY" of a company or corporation shall be construed, without
limitation, as a reference to any company or corporation:
(i) which is controlled, directly or indirectly, by the first-
mentioned company or corporation;
(ii) more than half the issued share capital of which is beneficially
owned, directly or indirectly, by the first-mentioned company or corporation; or
(iii) which is a subsidiary of another subsidiary of the first-
mentioned company or corporation,
and, for these purposes, a company or corporation shall be treated as being
controlled by another if that other company or corporation is able to direct its
affairs and/or to control the composition of its board of directors or
equivalent body;
"TAX" shall be construed so as to include, without limitation, any present
or future tax, levy, impost, duty, charge, fee, deduction or withholding of any
nature whatsoever and howsoever termed (including, without limitation, any
penalty or interest payable in
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<PAGE>
connection with any failure to pay or any delay in paying any of the same) by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed;
"UNPAID AMOUNT" shall be construed so as to include, without limitation,
any amount of whatsoever nature due and payable by the Borrower hereunder but
unpaid; and
the "WINDING-UP", "BANKRUPTCY", "DISSOLUTION", INSOLVENCY", "JUDICIAL
MANAGEMENT" or "ADMINISTRATION" of a company or corporation shall be construed
so as to include, without limitation, any equivalent or analogous proceedings
under the law of the jurisdiction in which such company or corporation is
incorporated or any jurisdiction in which such company or corporation carries on
business including the seeking of liquidation, winding-up, reorganisation,
dissolution, judicial management, administration, arrangement, adjustment,
protection or relief of debtors and whether voluntary or involuntary.
30.2 "US$" and "DOLLARS" denote lawful currency of the United States of
America; "RP" and "RUPIAH" denote lawful currency of Indonesia.
30.3 If the context so requires or permits, any reference in this
Agreement to this Agreement or any other agreement or document shall be
construed, without limitation, as a reference to this Agreement or, as the case
may be, such other agreement or document as the same may have been, or may from
time to time be, amended, varied, novated or supplemented and any reference to
any statutory provision shall include such provision and any regulations made
thereunder and any statutory re-enactment, modification or replacement thereof.
30.4 Clause and Schedule headings are for ease of reference only.
30.5 Except where the context otherwise requires, words importing the
singular number include the plural number and vice versa.
30.6 If, in relation to any period for which an interest rate is to be
determined hereunder and by reason of any change in market practice to that
existing at the date hereof, quotations would ordinarily be given by the Lender
to prime banks in the London Interbank Market for deposits in dollars for
delivery on the first day of that period on a day other than the second Banking
Day before the commencement of such period then, in such case, all references
herein to the second Banking Day before the commencement of the relevant period
shall be read and construed as references to the day on which such quotations
would, in accordance with market practice, ordinarily be given in the London
Interbank Market for deposits in dollars for
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<PAGE>
delivery on the first day of such period and the relevant provisions of this
Agreement shall, in such case, be read and construed accordingly.
30.7 Save where the contrary is indicated, any reference in this Agreement
to a time of day shall be construed as a reference to London time.
IN WITNESS whereof the duly authorised representatives of the parties have
----------
signed this Agreement the day and year first before written.
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<PAGE>
SCHEDULE ONE
FORM OF ADVANCE REQUEST
-----------------------
From: P.T. Mobile Selular Indonesia
To : Nissho Iwai International (Singapore) Pte., Ltd.
Date:
Dear Sirs
31. We refer to the credit facility agreement (the "FACILITY AGREEMENT") dated
12th March, 1996 and made between ourselves as the Borrower (1) and yourselves
as the Lender (2).
32. We hereby give you notice that we wish an Advance to be made to us under
the Facility Agreement as follows:
(i) Amount
(ii) Drawdown Date :
*(iii) Initial Interest Period:
(iv) Account Details and Bank :
33. As required by the provisions of the Facility Agreement, we attach a
description of the use or uses to which the proceeds of the Advance will be put.
34. We confirm that, at the date hereof, the representations and warranties set
out in Clause 12 of the Facility Agreement are true as of the date hereof and no
Event of Default or Potential Event of Default has occurred.
35. Terms defined in the Facility Agreement shall have the same meanings in
this Advance Request.
Yours faithfully
- -----------------------------
for and on behalf of
P.T. MOBILE SELULAR INDONESIA
- -------------------
*Insert only if there are no outstanding Advances
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<PAGE>
SCHEDULE TWO
------------
THE PROJECT CONTRACT'
---------------------
Purchase Contract 0741/DIR-RHP/IX-95 dated 29 September, 1995 between P.T.
Rajasa Perkasa as Buyer and Ericsson Radio Systems AB as Contractor.
Purchase Contract 028/TNK-RHP/I-96 dated 12 January, 1996 between P.T.
Rajasa Hazanah Perkasa as Buyer and Damm Cellular International A/S as
Contractor.
Service Contract dated 19 January, 1996 between P.T. Rajasa Hazanah Perkasa
as Purchaser and Nokia Telecommunications (Singapore) Pte Ltd as Purchaser.
Supply Contract dated 7 February 1996 between P.T. Rajasa Hazanah Perkasa
as Buyer and Tecnomen Oy as Contractor.
Supply Contract dated 19 January 1996 between P.T. Rajasa, Hazanah Perkasa
as the Buyer and Nokia Telecommunications OY as the Supplier.
- 59 -
<PAGE>
SCHEDULE THREE
--------------
FORM OF MASTER ASSIGNMENT OF SUB-ACCOUNTS
-----------------------------------------
MASTER ASSIGNMENT OF SUB-ACCOUNTS
between
P.T. MOBILE SELULAR INDONESIA
as the Borrower
and
NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD.
as the Lender
- 60 -
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
CLAUSE NO PAGE NO
- --------- -------
PART 1
INTERPRETATION
<S> <C>
1. Interpretation........................................................
PART 2
ASSIGNMENT
2. Assignment............................................................
3. Perfection of Security and Further Assurance..........................
4. Deposits..............................................................
PART 3
ASSIGNED ACCOUNT
5. Statements............................................................
PART 4
CURRENCY
6. Currency..............................................................
PART 5
WARRANTIES AND UNDERTAKINGS
7. Warranties and Undertakings...........................................
PART 6
EFFECTIVENESS OF SECURITY, REMEDIES AND WAIVERS
8. Effectiveness of Security.............................................
9. Remedies and Waivers..................................................
PART 7
MISCELLANEOUS
10. Provisions Severable..................................................
11. Notices...............................................................
12. Assignment of Rights..................................................
13. Fees, Costs and Expenses..............................................
14. Discharge.............................................................
15. Governing Law.........................................................
16. Jurisdiction..........................................................
Schedule One....................................................
Schedule Two....................................................
</TABLE>
- 61 -
<PAGE>
THIS DEED is made on the [ ] day of March, 1996
- ---------
BETWEEN:
- -------
(1) P.T. MOBILE SELULAR INDONESIA, a company with limited liability duly
organised and existing under the laws of the Republic of Indonesia,
carrying on business in Indonesia (the "BORROWER"); and
(2) NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD., a company with limited
liability duly organised and existing under the laws of the Republic of
Singapore, carrying on business in Singapore (the "LENDER").
WHEREAS:
- --------
(A) Pursuant to a term loan facility agreement (as the same may from time to
time be amended, varied or supplemented, the ("FACILITY AGREEMENT") dated
12 March, 1996 made between the Borrower and the Lender, the Lender has
agreed to make available to the Borrower a term loan facility in the
maximum aggregate amount of up to United States Dollars Sixty Million
(US$60,000,000) on the terms and subject to the conditions set out therein.
(B) As security for the Borrower's obligations under the Facility Agreement and
each other Transaction Document (as defined below), the Borrower has agreed
to enter into this master assignment of sub-accounts.
THE PARTIES NOW AGREE AS FOLLOWS:
- ---------------------------------
PART 1
INTERPRETATION
--------------
36. INTERPRETATION
--------------
36.1 Terms and expressions defined in the Facility Agreement which are
used herein shall, unless otherwise defined herein or the context otherwise
requires, have the same meaning in this Deed.
36.2 In this Deed, the following expressions shall have, except where the
context otherwise requires, the following meanings:
"ACCOUNT BANKS" means the each of the Banks identified as such in Schedule
One and "ASSIGNED BANK" means any of them, as the context may permit;
- 62 -
<PAGE>
"ASSIGNED ACCOUNTS" means each of the Indonesian Rupiah accounts of the
Borrower with each of the Account Banks identified as such in Schedule One or
such other account as the Lender and the Borrower may agree in writing and
"ASSIGNED ACCOUNT" means any of them, as the context may permit;
"ASSIGNED PROPERTY" means all the rights, title and interest of the
Borrower in and to each of the Assigned Accounts and all monies from time to
time representing the Deposits;
"DEPOSITS" means all monies now or at any time hereafter standing to the
credit of each of the Assigned Accounts and all entitlements to interest and
other rights and benefits accruing to or arising in connection with such monies
and "DEPOSIT" shall be construed accordingly;
"SECURED OBLIGATIONS" means all present and future, actual or contingent
obligations of the Borrower under or pursuant to the Facility Agreement or any
other Transaction Document;
"SUBSCRIBER" means any person with whom the Borrower has contracted in
respect of the use of or subscription to the NMT-450 Network (as defined in the
Facility Agreement) by such subscriber; and
"TRANSACTION DOCUMENTS" means the Facility Agreement and any other
agreement or document entered into by the Borrower or any other person as
contemplated under the Facility Agreement and "TRANSACTION DOCUMENT" shall be
construed accordingly.
36.3 "US$" and "DOLLARS" denote lawful currency of the United States of
America and "RP" and "RUPIAH" denote the lawful currency of Indonesia.
36.4 Save where the contrary is indicated, any reference in this Deed to:
(i) this Deed or any other agreement or document shall be construed
as a reference to this Deed or, as the case may be, such other agreement or
document as the same may have been or may from time to time be amended, varied,
novated or supplemented and shall include any document which is supplemental to,
is expressed to be collateral with or is entered into pursuant to or in
accordance with the terms of this Deed or, as the case may be, such other
agreement or document;
(ii) a statute shall be construed as a reference to such statute as
the same may have been, or may from time to time be, amended or re-enacted;
- 63 -
<PAGE>
(iii) a time of the day shall, unless otherwise specified, be
construed as a reference to Jakarta time;
(iv) a "CLAUSE", "PART" or a "SCHEDULE" is a reference to a clause
hereof, part hereof or schedule hereof; and
(v) the singular shall include the plural and vice versa and to
one gender shall include all genders.
36.5 Clause, Part and Schedule headings are for ease of reference only.
36.6 Any reference in this Deed to the Borrower or the Lender shall be
construed so as to include their respective successors, transferees and assigns
in accordance with their respective interests.
PART 2
ASSIGNMENT
----------
37. ASSIGNMENT
----------
37.1 The Borrower as beneficial owner hereby assigns in favour of the
Lender as security for the payment and discharge of the Secured Obligations all
of its right, title and interest in and to the Assigned Property.
37.2 The Borrower shall, upon the execution hereof or as soon as
practicable following the opening of each of the Assigned Accounts, execute and
deliver to each of the relevant Account Banks a notice of assignment in the form
set out in Part I of Schedule Two, and shall procure that each such Account Bank
acknowledges such notice in the form set out in Part II of Schedule Two.
38. PERFECTION OF SECURITY AND FURTHER ASSURANCE
--------------------------------------------
The Borrower shall at any time at the request of the Lender and at the cost
of the Borrower promptly sign, seal, execute, deliver and do all deeds,
instruments, notices, documents, acts and things (including, without limitation,
further or other legal assignments, transfers, mortgages, legal or other charges
or securities) as in each such case may be necessary for the purpose of
maintaining, perfecting or protecting the security constituted by or pursuant to
this Deed (or purported to be constituted by or pursuant to this Deed) or for
facilitating the realisation thereof and the exercise of all powers, authorities
and discretions vested in the Lender. Without prejudice to the generality of the
foregoing, such assignments, transfers,
- 64 -
<PAGE>
mortgages, legal or other charges, or securities shall be in such form as the
Lender shall require and may contain provisions such as are herein contained or
provisions to the like effect and/or such other provisions of whatsoever kind as
the Lender shall consider necessary for the maintenance or perfection of the
security constituted by or pursuant to this Deed.
39. DEPOSITS
--------
39.1 Save as herein provided, the Deposits, shall be deemed to be made by
the Borrower on the terms that (except with the Lender's prior written consent)
they shall finally mature on the date (the "MATURITY DATE") on which the Secured
Obligations are fully and finally discharged Provided that following an Event of
Default, the Lender shall at all times be entitled (but not obliged) and is
hereby authorised to apply all or any part of the Deposits in or towards
discharge of the Secured Obligations due and payable in accordance with the
terms of the Facility Agreement.
39.2 Until the Maturity Date of the Deposits the Borrower shall not be
entitled to withdraw, transfer or otherwise deal with all or any monies from
time to time comprising the Deposits without the Lender's prior written consent
and neither the Lender nor any of the Account Banks shall have any duty to
account to the Borrower in respect of the Deposits Provided Always that the
Borrower shall be entitled to withdraw or transfer monies in accordance with the
provisions of Clause 4.3.
39.3 The Borrower hereby agrees with the Lender to procure that all
amounts standing to the credit of each of the Assigned Accounts are, forthwith
upon the crediting thereof to the relevant Assigned Account, transferred and
remitted to the RP Escrow Account.
39.4 In respect of any Deposit, the existence of any time deposit shall
not prejudice the Lender's rights under or pursuant to the terms of this Clause
4 and/or the other terms of this Deed, and, without prejudice to the generality
of the foregoing, neither the Lender nor any of the Account Banks shall be
precluded or in any way obliged to delay the exercise of its rights as aforesaid
until the expiry of any such time deposit and as a consequence of the exercise
of its rights as aforesaid it may unilaterally terminate such time deposit or
direct such time deposit to be terminated at any time and adjust interest
payable by it (if any) accordingly.
39.5 If, at any time prior to the Lender releasing the Deposits from the
security hereby constituted, any monies forming part of the Deposits shall be
subject to terms which constitute (or would, but for this Clause 4.5,
constitute) a time deposit or are successively
- 65 -
<PAGE>
redeposited on terms which constitute a time deposit, all monies so redeposited
shall continue to be subject to the provisions hereof and form a Deposit or part
thereof notwithstanding any expiry of such time deposit until the Maturity Date.
39.6 The provisions of this Clause 4 shall be without prejudice to the
provisions of Clause 2.1.
PART 3
ASSIGNED ACCOUNTS
-----------------
40. STATEMENTS
----------
The Borrower shall procure that a copy of monthly statements in respect of
each of the Assigned Accounts is forthwith after the end of each calendar month
given to the Lender.
PART 4
CURRENCY
--------
41. CURRENCY
--------
41.1 If any sum due from the Borrower under this Deed or any order or
judgment given or made in relation hereto has to be converted from the currency
(the "FIRST CURRENCY") in which the same is payable hereunder or under such
order or judgment into another currency (the "SECOND CURRENCY") for the purpose
of (i) making or filing a claim or proof against the Borrower, (ii) obtaining an
order or judgment in any court or other tribunal, (iii) enforcing any order of
judgment given or made in relation hereto, or (iv) applying the same in
satisfaction of the Secured Obligations, the Borrower shall indemnify and hold
harmless each of the persons to whom such sum is due from and against any loss
suffered as a result of any discrepancy between (a) the rate of exchange used
for such purpose to convert the sum in question from the first currency into the
second currency and (b) the rate or rates of exchange at which such person may
in the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof or for application in satisfaction
of the Secured Obligations.
41.2 For the purpose of or pending the satisfaction of the Secured
Obligations or for the purpose of crediting any monies to any account or making
any application therefrom, the Lender may convert any monies received, recovered
or realised or subject to application by the Lender under this Deed or any
monies to be credited to any such account (including the proceeds of any
previous conversion under this Clause 6.2) from their existing currency of
denomination into such
- 66 -
<PAGE>
other currency of denomination as the Lender may think fit and any such
conversion shall be effected at the rate or rates of exchange at which the
Lender may in the ordinary course of business purchase such other currency of
denomination with such existing currency of denomination and any cost, expenses
or commissions incurred in effecting any such conversion shall be deducted from
the proceeds of any such conversion.
41.3 References herein to any currency extend to any funds of that
currency and for the avoidance of doubt funds of one currency may be converted
into different funds of the same currency.
PART 5
WARRANTIES AND UNDERTAKINGS
---------------------------
42. The Borrower hereby warrants and undertakes, to the best of its knowledge
having made all reasonable enquiries, to the Lender that:
(i) each of the Assigned Accounts has been opened and will at all
times be maintained with each of the Account Banks;
(ii) the Assigned Property is capable of being assigned by the
Borrower to the Lender under the terms of this Deed and all documents, papers,
writings and collateral thereunto appertaining, as well as the signatures
thereon, are genuine and in all respects what they purport to be;
(iii) it has no knowledge of any fact or circumstance which might
inhibit the making of any payment or the performance of any obligation by each
of the Account Banks under each of the relevant Assigned Accounts or impair the
validity of this Deed;
(iv) it has full title and legal authority to transfer and convey the
Assigned Property in accordance with the terms of this Deed;
(v) it has not made or suffered to exist any prior, and will not
make or suffer to exist any further, assignment, sale, transfer or security
interest of the whole or any part of the Assigned Property;
(vi) it has not subjected and will not subject the Assigned Property
or any part thereof to any defence, set-off or counterclaim;
(vii) it shall not, without the prior written consent of the Lender,
terminate, permit to be terminated, compromise or settle for cash, credit or
otherwise any of its claims under each of the Assigned
- 67 -
<PAGE>
Accounts or discharge or release each of the relevant Account Banks for the
making of any payment or the performance of any obligation under each of the
relevant Assigned Accounts;
(viii) it shall promptly upon receipt of all present and future
receivables arising out of or in connection with any contract (whether oral or
in writing) entered into between the Borrower and any Subscriber, deposit such
receivables into each of the Assigned Accounts and shall procure that, upon
receipt by the relevant Assigned Bank of any such receivables, such receivables
are forthwith transferred into the RP Escrow Account (as defined in the Facility
Agreement);
(ix) it shall promptly pay or provide for the payment and discharge
of all taxes, assessments, levies or other governmental charges which may be
levied, assessed or imposed on or in relation to each of the Assigned Accounts
and will promptly pay or provide for the payment and discharge of all statutory
and other liens or adverse claims which may arise in relation to each such
Assigned Account;
(x) it shall promptly notify the Lender of any levy, assessment or
imposition of any levy or charge, or the filing of any lien in respect of each
of the Assigned Accounts and will take all steps necessary or which the Lender
may direct to prevent each such Assigned Account from being subjected to the
possibility of loss, forfeiture or sale;
(xi) it shall do or permit to be done such further acts and shall
execute such additional documents, agreements or notices which the Lender may
from time to time request to be done or executed for the purpose of preserving
and/or enforcing the rights of the Lender hereunder and under the Facility
Agreement and/or any Transaction Document; and
(xii) it will pay when due all amounts payable under or in relation
to each of the Assigned Accounts and comply with the terms and conditions of
each such Assigned Account and, in the event that any amounts payable under or
in connection with each such Assigned Account are paid by the Lender, it shall
immediately reimburse and indemnify the Lender in respect thereof.
PART 6
EFFECTIVENESS OF SECURITY, REMEDIES AND WAIVERS
-----------------------------------------------
43. EFFECTIVENESS OF SECURITY
-------------------------
43.1 The security constituted by or pursuant to this Deed shall be without
prejudice and in addition to and shall be independent of
- 68 -
<PAGE>
every guarantee, indemnity or other security which the Lender may at any time
hold for the Secured Obligations and it is hereby declared that no prior
security held by the Lender over the whole or any part of the Assigned Property
shall merge in the security hereby constituted.
43.2 This Deed shall remain in full force and effect as a continuing
security until discharged by the Lender in accordance with Clause 14.
44. REMEDIES AND WAIVERS
--------------------
44.1 Any receipt, release or discharge of the security provided by, or of
any liability arising under, this Deed may be given by the Lender alone and
shall not release or discharge the Borrower from any liability for the same or
any other monies which may exist independently of this Deed. Where such receipt,
release or discharge is related only to part of the Assigned Property such
receipt, release or discharge shall not prejudice or affect the security hereby
created in relation to the remainder of the Assigned Property.
44.2 The Lender may in its discretion grant time or other indulgence to,
or make any other arrangement, variation or release with, the Borrower or any
other person (whether or not party hereto and whether or not jointly liable with
the Borrower) in respect of the Secured Obligations or of any other security
therefor or guarantee in respect thereof without prejudice either to the
security constituted by or pursuant to this Deed or to the liability of the
Borrower for the Secured Obligations.
44.3 The rights, powers and remedies provided in this Deed are cumulative
and are not, nor are they to be construed as, exclusive of any rights, powers or
remedies provided by law.
44.4 No failure on the part of the Lender to exercise, or delay on its
part in exercising, any of the rights, powers and remedies provided for by this
Deed or by law shall operate as a waiver thereof, nor shall any single or
partial waiver of any such rights preclude any further or other exercise of such
rights or the exercise of any other rights.
PART 7
------
MISCELLANEOUS
-------------
45. PROVISIONS SEVERABLE
--------------------
Every provision contained in this Deed shall be severable and distinct from
every other such provision and if at any time any one or more of such provisions
is or becomes invalid, illegal or
- 69 -
<PAGE>
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected thereby.
46. NOTICES
-------
46.1 Except if effected orally by a bailiff jurusita, any notice to be
given to any party hereto required or permitted to be given hereunder shall be
in writing and shall be either (i) personally delivered against proper receipt,
(ii) transmitted by postage prepaid registered mail (airmail if international),
(iii) transmitted by telex, (iv) transmitted by telefax or (v) transmitted by
courier, as elected by the party giving such notice, to the addressee at the
address or telex number or telefax number indicated below or at such other
address or telex number or telefax number as such addressee shall have conveyed
by notice (effective upon receipt) to the other party.
to the Borrower: P.T. MOBILE SELULAR INDONESIA
Mashill Tower, 23rd Floor
Jl. Jend. Sudirman Kav. 25
Jakarta 12920
Indonesia
Phone No: (62 21) 526 7944
Telefax No: (62 21) 526 7945
Attention: Mr. Suprapto Pegeng /
Ms. Irene Tanumiharja
to the Lender: NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD.
16 Raffels Quay #34-00
Hong Leong Building
Singapore 048581
Phone No: (65) 223 0487
Telefax No: (65) 225 0240
Attention: Mr. Takeshi Ehara
Finance and Accounting Department
46.2 Unless otherwise provided herein, the date of notice hereunder shall
be deemed to be (i) the date of receipt if delivered personally, (ii) the date
fourteen (14) days after posting if transmitted by mail, (iii) the date of
transmission with confirmed answerback if transmitted by telex, (iv) the date of
transmission, if transmitted by telefax and such transmission is confirmed by an
activity report stating the correct number of pages sent and that such
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<PAGE>
transmission is correctly transmitted or (v) the date two (2) days after
delivery to the courier service if transmitted by courier.
46.3 Except if effected orally by a bailiff (jurusita) each communication
and document made or delivered by one party to another pursuant to this Deed of
Assignment shall be in the English language.
47. ASSIGNMENT OF RIGHTS
--------------------
47.1 The Lender shall have a full and unfettered right to assign the whole
or any part of the benefit of this Deed to a third party without consent and any
assignee shall be entitled to enforce and proceed upon this Deed in the same
manner as if named herein. The Borrower hereby authorises the Lender to modify
the conditions hereof and to renew this Deed to incorporate the security
interest of the assignee(s) herein as the Lender may deem proper without loss of
priority.
47.2 The Lender shall be entitled to disclose to a potential assignee or
to any person who may otherwise enter into contractual relations with the Lender
in relation to this Deed such information concerning the Borrower as the Lender
shall consider appropriate Provided Always that the Lender shall not be entitled
to disclose any information with respect to the customer lists of the Borrower
and shall further not be entitled to disclose any information contemplated
hereby to any person in the telecommunications industry in Indonesia without, in
both cases, the prior written consent of the Borrower, which consent shall not
unreasonably be withheld.
47.3 The Borrower shall have no right to assign or transfer or otherwise
deal with its rights or obligations hereunder.
48. FEES, COSTS AND EXPENSES
------------------------
The Borrower shall indemnify the Lender on demand against all reasonable
costs and expenses in connection with the exercise and enforcement of any rights
and collection of all or any part of the Assigned Property under this Deed. Any
and all such costs and expenses shall be secured by this Deed.
49. DISCHARGE
---------
If at any time the Lender shall have received full payment of all sums due
to it under the Facility Agreement and the Transaction Documents and the
Borrower is under no further actual or contingent liability to the Lender under
the Facility Agreement or any Transaction Document, the Lender will, subject
always to the prior
- 71 -
<PAGE>
exercise by it of any of its rights hereunder, at the expense and cost of the
Borrower re-assign to the Borrower all the Assigned Property and return to the
Borrower all instruments (whether made payable to order or to bearer) and all
other commercial paper of any kind received in connection with each of the
Assigned Accounts. The Borrower hereby agrees to and shall bear the risk that
any and all of the Assigned Property or any part thereof may cease to exist.
50. GOVERNING LAW
-------------
This Deed shall be governed by and construed in accordance with the laws of
the Republic of Indonesia.
51. JURISDICTION
------------
The Borrower agrees that any legal action or proceeding arising out of this
Deed may be brought before the jakarta Pusat Court of First Instance and
irrevocably submits itself to the non-exclusive jurisdiction of such Court and
selects the Clerk's office of such Court as its general and permanent domicile.
The submission by the Borrower to such jurisdiction shall not (and shall not be
construed so as to) limit the right of the Lender to commence any proceedings
arising out of this Deed in whatsoever jurisdiction it shall deem fit nor shall
the commencement of any such legal action or proceeding in one jurisdiction
preclude the Lender from beginning any further or other such legal action or
proceeding in the same or any other jurisdiction.
IN WITNESS WHEREOF the parties hereto have caused this Deed to be duly
executed on the day and year first above written.
- 72 -
<PAGE>
SCHEDULE ONE
LIST OF ACCOUNT BANKS AND ASSIGNED ACCOUNTS
-------------------------------------------
<TABLE>
<CAPTION>
Name of Account Bank Details of Assigned Account
- ----------------------- ---------------------------
<S> <C>
[ ] [ ]
[ ] [ ]
[ ] [ ]
</TABLE>
- 73 -
<PAGE>
SCHEDULE TWO
------------
PART 1
------
NOTICE OF ASSIGNMENT
--------------------
Date: [ ], 1996
To: [Insert name of relevant Account Bank]
From: P.T. Mobile Selular Indonesia
Dear Sirs
We, account holder of account number [ ] with your bank (the
"ACCOUNT") hereby give you notice that by a deed of assignment of account dated
[ ], 1996, we have assigned to Nissho Iwai International (Singapore) Pte.,
Ltd. (the "LENDER") for and on behalf of itself all our right, title and
interest under, in and to all monies now or hereafter standing to the credit of
the Account and all entitlement to interests and other rights and benefits
accruing to or arising in connection with such monies.
Accordingly, we hereby irrevocably authorise and instruct you to treat the
Lender as being entitled to exercise all our rights under the Account. The
Lender is authorised and empowered by us to withdraw, transfer or otherwise deal
with any and all of the deposits in the Account. No further moneys should be
paid to us and we are no longer authorised and empowered to deal with any or all
of the deposits in the Account.
You are hereby irrevocably and unconditionally authorised and instructed to
transfer and remit from the Account to [insert details of the RP Escrow
Account], immediately upon the crediting thereof to the Account, all sums from
time to time received in or standing to the credit of the Account.
Please note that these instructions may be revoked, supplemented or varied
in any way and at any time by the Lender, and that these instructions are not
otherwise to be revoked or varied in any way or by any person without the
consent in writing of the Lender.
Will you please acknowledge receipt of and signify your agreement to this
letter by signing and returning an acknowledgment in the enclosed form.
Yours faithfully
P.T. MOBILE SELULAR INDONESIA
By:
-------------------------------
Name:
Title:
- 74 -
<PAGE>
PART 2
------
ACKNOWLEDGEMENT OF ASSIGNMENT
-----------------------------
To: P.T. MOBILE SELULAR INDONESIA
And to: NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD.
We refer to the notice of assignment (the "Notice of Assignment") dated
[ ], 1996 from P.T. Mobile Selular Indonesia (the "BORROWER") in respect of
account number[ ] with our bank (the "ACCOUNT") and we write to
acknowledge receipt thereof and, to the extent necessary to give effect to the
deed of assignment referred to therein, to consent to the execution, delivery
and performance by the Borrower of such deed of assignment.
We agree immediately upon the crediting thereof to the Account, to remit
all amounts standing to the credit of the Account to [insert details of the RP
Escrow Account] and not to set-off to the prejudice of Nissho Iwai International
(Singapore) Pte., Ltd., the moneys in the Account against any claim which we may
have against the Borrower.
We further agree that we shall not permit any material variation,
modification or amendment of the terms and conditions of the Account without the
prior written consent of Nissho Iwai International (Singapore) Pte., Ltd., that
we shall not terminate or cancel the Account.
We confirm that we have received no other notice of assignment from the
Borrower and that we will comply with the directions to us contained in the
Notice of Assignment and with the terms of the deed of assignment referred to
therein.
Yours faithfully
[NAME OF ACCOUNT BANK]
By:
-----------------------------------
Name:
Title:
Date:
- 75 -
<PAGE>
SIGNATURE PAGE
- --------------
THE BORROWER
- ------------
P.T. MOBILE SELULAR INDONESIA
- ------------------------------------------
By:
THE LENDER
- ----------
NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD.
- ------------------------------------------
By:
- 76 -
<PAGE>
SIGNATURE PAGES
---------------
THE BORROWER
- ------------
P.T. MOBILE SELULAR INDONESIA
By: /s/ Mr. Suprapto Pegeng
Address: Mashill Tower, 23rd Floor
Jl. Jend. Sudirman Kav. 25
Jakarta 12920
Indonesia
Facsimile No: (62 21) 526 7945
Attention: Mr. Suprapto Pegeng /
Ms. Irene Tanumiharja
THE LENDER
- ----------
NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD
By: /s/ Mr. Hiromi Imakoga
Lending Office Address: 16 Raffles Quay #34-00
Hong Leong Building
Singapore 048581
Facsimile No: (65) 225 0240
Attention: Mr. Takeshi Ehara
Finance and Accounting Department
- 77 -
<PAGE>
ACKNOWLEDGEMENT
- ---------------
The Guarantor hereby acknowledges that it has read and understands the
provisions of this Facility Agreement.
P.T. RAJASA HAZANAH PERKASA
By: Mr. Suprapto Pegeng
- 78 -
<PAGE>
SHARE PLEDGE AGREEMENT
between
P.T. RAJASA HAZANAH PERKASA
as the Shareholder
and
NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD
as the Security Agent
for and on behalf of
THE BENEFICIARIES
(as defined herein)
<PAGE>
THIS SHARE PLEDGE AGREEMENT is made as of the 12th day of March, 1996.
- ---------------------------
BY:
- --
P.T. RAJASA HAZANAH PERKASA (the "Shareholder")
IN FAVOR OF:
- -----------
NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD. a limited liability
company duly organized and existing under the laws of the Republic of Singapore
and having its legal domicile at Singapore, as the security agent (in its
capacity as such, the "SECURITY AGENT") for and on behalf of (i) itself, (ii)
Nissho Iwai International (Singapore) Pte., Ltd. as the lender under the
Existing Facility Agreement referred to below (in its capacity as such, the
"LENDER") and (iii) the financial institutions from time to time party to the
Nominated Banks Facility Agreement referred to below (in their capacity as such,
the "NOMINATED BANKS" and individually a "NOMINATED BANK").
WHEREAS:
- -------
(A) Pursuant to a term loan facility agreement (as the same may from time to
time be amended, varied or supplemented, the "EXISTING FACILITY AGREEMENT")
dated 12 March, 1996 made between P.T. Mobile Selular Indonesia (the
"BORROWER") and the Lender, the Lender has agreed to make available to the
Borrower a term loan facility in the maximum aggregate amount of up to
United States Dollars Sixty Million (US$60,000,000) on the terms and
subject to the conditions set out therein.
(B) It is intended that, under a credit agreement or credit agreements
(hereinafter referred to as the "NOMINATED BANKS FACILITY AGREEMENT") to be
entered into in the future between the Borrower and other banks or
financial institutions (hereinafter referred to collectively as the
"NOMINATED BANKS" and individually as a "NOMINATED BANK") to be nominated
by the Borrower in accordance with the provisions of the Security Sharing
Agreement (as defined below), the Nominated Banks will grant to the
Borrower, upon the terms and subject to the conditions to be set out
therein, a credit facility or credit facilities in the aggregate amount of
up to Sixty Million United States dollars (US $60,000,000).
(C) Pursuant to a security sharing agreement dated 12 March, 1996 (as the same
may from time to time be amended, varied or supplemented
1
<PAGE>
hereinafter referred to as the "SECURITY SHARING AGREEMENT") made between,
inter alia, the Borrower and the Security Agent and, as the case may be, to
be acceded to by the Nominated Banks pursuant to the provisions thereof,
each of the parties thereto other than the Borrower and the Security Agent,
amongst other things, have appointed or will appoint the Security Agent to
act on their behalf thereunder to administer and collect the proceeds of
any enforcement hereunder.
(D) As security for the Borrower's obligations under the Existing Facility
Agreement and, with effect from the delivery of the relevant Accession
Notices in accordance with the provisions hereof and of the Security
Sharing Agreement, the Nominated Bank Facility Agreement (furthermore the
Existing Facility Agreement and, subject as provided above, the Nominated
Bank Facility Agreement are collectively referred to herein as the
"FACILITY AGREEMENTS") and any other Transaction Document (as defined
below) the Shareholder has agreed to enter into this Share Pledge
Agreement.
The parties now AGREE AS FOLLOWS:
----------------
1. INTERPRETATION AND ACCESSION OF THE NOMINATED BANKS.
---------------------------------------------------
(a) Terms and expressions defined in the Security Sharing Agreement
which are used herein shall, unless otherwise defined herein or the context
otherwise requires, have the same meaning in this Share Pledge Agreement.
(b) In this Share Pledge Agreement, the following terms shall have
the meaning given to them below:
"ACCESSION NOTICE" means a notice in or substantially in the form set
out in Schedule Three signed by the Borrower and each other person contemplated
thereby:
"BANKS" shall mean the Lender and, with effect from the delivery of
the relevant Accession Notice in accordance with the provisions hereof and of
the Security Sharing Agreement, each Nominated Bank referred to therein;
"BENEFICIARIES" shall mean the Security Agent and the Banks;
"PLEDGED COLLATERAL" shall mean the Stock and all cash, securities,
declared but unpaid dividends following the occurrence of a Default, rights,
warrants and other property at any time and from time to time received,
receivable or otherwise
2
<PAGE>
distributed (except for any declared and paid dividends) in respect of or in
exchange for any or all of the Stock;
"STOCK" shall mean (i) the shares of the capital stock of the Borrower
now owned by the Shareholder as identified in Schedule One and (ii) all shares
of the capital stock of the Borrower or other securities at any time and from
time to time received, receivable or otherwise distributed to the Shareholder in
addition to or in substitution or replacement for any shares referred to in sub-
clause (i) above; and
"TRANSACTION DOCUMENTS" shall mean the Facility Agreements, the
Security Sharing Agreement and any other agreement or document entered into by
the Borrower or any other person as contemplated under the Facility Agreements
and the Security Sharing Agreement.
(c) Each of the parties hereto agrees that upon the execution of an
Accession Notice and the delivery thereof to the Security Agent in accordance
with the provisions hereof and of the Security Sharing Agreement, each Nominated
Bank referred to therein shall become a party hereto and shall have all the
rights, benefits and obligations conferred or, as the case may be, imposed upon
it by the provisions hereof as if such Nominated Bank had been a signatory
hereto.
(d) Upon the execution and delivery of an Accession Notice in the
manner contemplated by Clause 1(C), the Security Agent shall hold this Share
Pledge Agreement and all Enforcement Proceeds arising hereunder for and on
behalf of the Beneficiaries (including each such Nominated Bank) in the manner
provided for in this Agreement.
(e) The procedures for and the conditions applicable to the accession
of Nominated Banks which are set out in the Security Sharing Agreement shall be
deemed to be incorporated herein mutatis mutandis as if the same had been set
out herein in full.
2. PLEDGE OF STOCK
---------------
2.1 In order to secure and warrant the prompt payment when due (whether at
stated maturity, by acceleration or otherwise) of all amounts now or hereafter
payable by the Borrower to the Beneficiaries under the Facility Agreements and
the other Transaction Document, the Shareholder hereby pledges, hypothecates,
assigns, transfers, sets over and delivers to the Security Agent for and on
behalf of the
3
<PAGE>
Beneficiaries and the Security Agent hereby accepts the Stock and other Pledged
Collateral as a continuing security.
2.2 The Shareholder shall (i) immediately deliver to the Security Agent
for and on behalf of the Beneficiaries and duly endorsed for transfer all
shares, stock certificates, liquidation dividends, subscription rights or other
evidence of ownership or entitlement now held by them relating to the Stock,
including without limitation all rights or bonus issues, and (ii) immediately
upon the acquisition or receipt thereof, deliver to the Security Agent for and
on behalf of the Beneficiaries and duly endorsed for transfer all shares, stock
certificates, liquidation dividends, subscription rights or other evidence of
ownership or entitlement hereafter held by them relating to the other Pledged
Collateral, including without limitation any rights or bonus issues.
2.3 The Shareholder shall immediately give notice of this Share Pledge
Agreement in the form of the notice of pledge set out in Schedule Two to the
directors of the Borrower with a copy to the Security Agent, and shall, in
accordance with the Borrower's deed of establishment or articles of association
(or comparable documents), obtain the registration in the Borrower's shareholder
register of this Share Pledge Agreement and any other requisite authorization
from the directors, commissioners and/or shareholders of the Borrower, as
relevant, with respect to the share pledge provided herein.
2.4 In addition to its obligations under Clause 2.3, the Shareholder shall
immediately obtain the acknowledgment and consent hereto of the Borrower by
procuring its signature hereto in the spaces provided at the end of this Share
Pledge Agreement. By such signature hereto, the Borrower agrees with the
Security Agent, for and on behalf of the Beneficiaries, to immediately cause the
registration in its shareholder register of this Share Pledge Agreement.
2.5 The Shareholder further covenants and agrees to deliver to the
Security Agent for and on behalf of the Beneficiaries such further agreements,
documents and instruments, and to obtain such further registrations, as the
Security Agent may request in furtherance of the transactions herein
contemplated.
2.6 The Shareholder further covenants and agrees to pay any and all stamp
duties or other transfer tax payable upon transfer of the Pledged Collateral to
the Beneficiaries.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
-----------------------------------------
3.1 The Shareholder represents, warrants, and covenants to the
Beneficiaries as follows:
4
<PAGE>
(i) the Shareholder has (and, with respect to any Pledged
Collateral acquired by it after the date of this Share Pledge Agreement, will
have) good and marketable title to the Pledged Collateral free and clear of any
liens, charges, encumbrances, or security interests of any kind whatsoever
(except for the security interests granted to the Beneficiaries pursuant to this
Share Pledge Agreement) ;
(ii) the Shareholder has taken all appropriate and necessary
corporate action to authorize the execution, delivery and performance of this
Share Pledge Agreement and the representative of the Shareholder executing this
Share Pledge Agreement is fully authorized to do so;
(iii) this Share Pledge Agreement is the legal, valid, binding and
enforceable obligation of the Shareholder under Indonesian law;
(iv) save for obtaining the approval of the shareholders of the
Borrower (which has been done) no provision of the deed of establishment or
articles of association (or comparable documents) or resolutions of the
Shareholder, the Borrower, or any agreement or instrument by which the
Shareholder or the Borrower is bound, prohibits or in any way restricts the
ability of the Shareholder to pledge, hypothecate, assign, set over and deliver
the Pledged Collateral as provided hereunder;
(v) the Stock and every part thereof is validly issued;
(vi) the Pledged Collateral is not subject to any restriction on
alienation or transfer except as provided by law and rights of first refusal
under the articles of association of the Borrower and under Article 13 of the
Cooperative Agreement dated 30 November 1995 among all of the shareholders of
the Borrower;
(vii) there are no outstanding rights, options, warrants, conversion
rights, or other commitments or agreements for the purchase or acquisition of
the Pledged Collateral; and
(viii) the Shareholder shall defend the right, title and special
property of each of the Beneficiaries in and to the Pledged Collateral against
the claims and demands of all persons whatsoever.
3.2 The Shareholder covenants (i) not to sell, assign, transfer, or
otherwise dispose of, or grant any option with respect to, or pledge or
otherwise encumber (except pursuant to this Share Pledge Agreement), any of the
Pledged Collateral or any interest therein and
5
<PAGE>
(ii) not to deal with the Pledged Collateral in any way contrary to the interest
of any Beneficiary.
4. VOTING WHILE NO DEFAULT EXISTS
------------------------------
Unless a Default has occurred and is continuing, the Shareholder shall
be entitled to vote the Stock and give consents, waivers and ratifications in
respect thereof; provided, however, that without the prior written consent of
-------- -------
the Security Agent no vote shall be cast or consent, waiver or ratification
given or action taken which would be inconsistent with any provision of this
Share Pledge Agreement, the Facility Agreements or any other Transaction
Document. All such rights of the Shareholder to vote and give consents, waivers
and ratifications shall, to the fullest extent permitted by law, cease upon the
occurrence of a Default and the Security Agent shall have the sole and exclusive
right and authority to exercise on behalf of the Beneficiaries all such rights
and powers to the fullest extent permitted by law.
5. REMEDIES IN CERTAIN CASES
-------------------------
5.1 If a Default shall have occurred and is continuing, the Security Agent
acting for and on behalf of the Beneficiaries may, without demand of payment or
notice of intention and without obtaining any decree, order or authorization of
any court, all of which the Shareholder hereby irrevocably waives, immediately
or at any other time as the Security Agent shall in its sole discretion
determine sell all or any part of the Pledged Collateral at a public sale or (to
the fullest extent permitted by law) privately, at such price and upon such
other terms and conditions as the Security Agent shall in its sole discretion
determine. The Shareholder irrevocably authorizes and empowers the Security
Agent to appear wherever necessary, to draw up and to sign deeds of sale and
purchase covering the Pledged Collateral and transfer deeds, to receive the
proceeds of any sale, to give legal receipt therefor, to apply such proceeds
against any and all costs and expenses, including notarial and legal fees,
incurred by the Beneficiaries in connection with such sale or otherwise in
carrying out the terms of this Share Pledge Agreement, then against the sums due
from the Borrower to the Beneficiaries pro-rata under the Facility Agreements
and the other Transaction Document in accordance with the Security Sharing
Agreement, to turn over to the Shareholder subject to the rights of any third
parties any balance of such proceeds remaining after the discharge of all of the
aforesaid sums due and payable to the Beneficiaries hereunder or under the other
Transaction Document (but without any obligation on the part of the
Beneficiaries to pay interest thereon), and in general to do everything
necessary or beneficial to pass good title to the Pledged Collateral to the
purchaser or purchasers thereof, including any such actions as may be
6
<PAGE>
required to acquire from competent authorities consent for the transfer of any
Pledged Collateral, to sign and submit applications in connection therewith and
to register or cause to be registered the Stock and any other part of the
Pledged Collateral being shares of capital stock or other securities, in the
name of the purchaser or purchasers thereof on the records of the relevant
issuer. The purchaser of any of the Pledged Collateral shall hold the same
absolutely free from any claim or right of any kind of the Shareholder including
repossession, all of which rights the Shareholder hereby irrevocably waives and
releases.
5.2 If it becomes necessary for the Security Agent or its representatives
to act in the name of the Shareholder in the course of enforcing any rights
under this Share Pledge Agreement, the Shareholder irrevocably and
unconditionally authorizes and gives full power of attorney (with the right of
substitution and the right to revoke any substitution granted) to the Security
Agent and its representatives to accomplish such purpose and to do and perform
any and all acts deemed by the Security Agent or such person necessary or
incidental to the execution of those rights. This power of attorney and all
other powers conferred on the Security Agent by the Shareholder under this Share
Pledge Agreement form an integral and inseparable part of this Share Pledge
Agreement without which the Beneficiaries would not have entered into the
Facility Agreements. The authority thus given is therefore irrevocable and will
not terminate by reason of any of the occurrences mentioned in Articles 1813,
1814 and 1816 of the Indonesian Civil Code, or by reason of any operation of law
which is capable of being waived. Upon request of the Security Agent, the
Shareholder further agrees to execute such additional authorizations and powers
of attorney as may reasonably be needed for carrying out the provisions of this
paragraph. The Security Agent is authorized to delegate to its agents or
employees as it may choose the exercise of any or all of the powers conferred on
it hereunder.
6. CASH DIVIDENDS
--------------
As long as the Pledged Collateral is pledged hereunder and upon the
occurrence of a Default, all declared but unpaid dividends, and in the event the
Borrower is wound up, all liquidating dividends in respect of the Stock or such
other part of the Pledged Collateral, shall be paid to the Security Agent as
additional security for payments of amounts payable to the Beneficiaries under
the Facility Agreements and the other Transaction Document.
7. ASSIGNMENT
----------
Each Beneficiary may assign or transfer all or any of its rights and
obligations under this Share Pledge Agreement to a third
7
<PAGE>
party or parties without the necessity of the consent of or notice to the
Shareholder. In addition to but not in limitation of any Beneficiary's right to
assign or transfer its rights and obligations under this Share Pledge Agreement,
the Shareholder hereby irrevocably and unconditionally authorizes the Security
Agent to terminate this Share Pledge Agreement and in the name of and on behalf
of the Shareholder to enter into a new share pledge agreement with parties
designated by the Security Agent as Beneficiaries with respect to the Pledged
Collateral on comparable terms and conditions. The Shareholder may not assign,
transfer or delegate any of its rights or obligations under this Share Pledge
Agreement without the prior written consent of the Security Agent, and any such
attempted assignment, transfer or delegation without such consent shall be void.
8. THE SHAREHOLDER'S OBLIGATIONS NOT AFFECTED
------------------------------------------
The security interests granted to the Beneficiaries and the
obligations and undertakings of the Shareholder under this Share Pledge
Agreement shall remain in full force and effect without regard to, and shall not
be impaired or affected by any or all of the following, with or without the
consent of or notice to the Borrower:
(i) any extension or change in the time of payment and/or manner,
place or terms of payment of all or any of the obligations secured by this Share
Pledge Agreement or any amendment to the Facility Agreements or any other
Transaction Document for the purpose of adding any provisions or changing in any
manner the rights or obligations of any Beneficiary, the Shareholder, the
Borrower or any other party thereunder, including without limitation any
increase in the amount or extension of the term of the credit facility provided
to the Borrower under the Facility Agreements; or
(ii) any exchange, release, surrender or realization upon or other
dealing with any security which is now or may hereafter be held by any
Beneficiary in connection with all or any of the obligations secured by this
Share Pledge Agreement; or
(iii) any settlement or compromise with the Borrower (unless such
settlement or compromise with the Borrower expressly provides otherwise), and/or
any other person liable thereon, of any and all of the obligations secured by
this Share Pledge Agreement and/or any subordination of the payment of the same
or any part thereof to the payment of any other debts or claims which at any
time or from time to time may be due and owing to any Beneficiary and/or any
other persons; or
8
<PAGE>
(iv) any bankruptcy, insolvency or similar proceeding regarding the
Borrower or any other party providing security for any of the obligations
secured by this Share Pledge Agreement;
(v) any assignment or transfer by the Shareholder of its interest in
the Pledged Collateral (without prejudice to any restriction hereunder), unless
the Security Agent has expressly agreed to discharge the Shareholder from its
obligations and undertakings under this Share Pledge Agreement; or
(vi) any lack of validity or enforceability of the Facility
Agreements or any other Financing Document.
9. TERM
----
This Share Pledge Agreement shall be effective on the date hereof.
Upon the later of the termination of each Commitment (as defined in the Facility
Agreements) and the full payment of all the obligations secured hereby, the
Security Agent shall, upon the written request of the Shareholder and at the
Shareholder's expense, promptly release the Pledged Collateral to the
Shareholder together with any necessary endorsements on the stock certificates
to restore the Stock and any other Pledged Collateral being shares of capital
stock or other securities to the Shareholder unencumbered by the pledge granted
hereunder.
10. CERTAIN WAIVERS
---------------
10.1 No failure or delay on the part of any Beneficiary in exercising any
power of sale, lien or other right or remedy hereunder or otherwise and no
single or partial exercise thereof, and no notice or demand which may be given
to or made upon the Shareholder with respect to any power of sale, lien or other
right or remedy hereunder or otherwise, shall constitute a waiver thereof, or
limit or impair the right of such Beneficiary to take any action or to exercise
any power of sale, lien or other right or remedy hereunder or otherwise, or
prejudice the rights of such Beneficiary against the Shareholder in any respect.
10.2 The Beneficiaries shall have no duty or obligation to satisfy the
indebtedness secured hereby out of any other property, or pursuant to any other
pledge, undertaking or other security relating to such indebtedness and may
realize on the Pledged Collateral and/or any other security available to it in
such order or concurrently as they may see fit and the Beneficiaries will not be
required to take any recourse against any other person or persons before
realizing on the Pledged Collateral.
9
<PAGE>
10.3 For so long as any amount remains payable or any other obligation
remains outstanding to any Beneficiary under the Facility Agreements or any
other Transaction Document, the Shareholder shall not, and hereby irrevocably
and unconditionally waives all rights it may have to, exercise in respect of any
Pledged Collateral enforced by any Beneficiary hereunder any right of
subrogation or any other right or remedy which the Shareholder may have against
the Borrower as a result of the enforcement of such Pledged Collateral.
10.4 The Shareholder hereby waives all of its rights and privileges under
the Indonesian Commercial and Civil Codes (to the extent applicable) as
necessary to give full effect to this Share Pledge Agreement, including but not
limited to Articles 1401, 1402, 1430, 1821, 1831, 1833, 1837, 1843, 1847, 1848,
1849 and 1850 of the Civil Code.
11. NOTICES
-------
11.1 Except if effected orally by a bailiff (jurusita), any notice to be
given to any party hereto required or permitted to be given hereunder shall be
in writing and shall be either (i) personally delivered against proper receipt,
(ii) transmitted by postage prepaid registered mail (airmail if international),
(iii) transmitted by telex, (iv) transmitted by telefax or (v) transmitted by
courier, as elected by the party giving such notice, to the addressee at the
address or telex number or telefax number indicated below or at such other
address or telex number or telefax number as such addressee shall have conveyed
by notice (effective upon receipt) to the other party.
to the Shareholder: P.T. RAJASA HAZANAH PERKASA
Wisma Pejatem
Jalau Pejatem Barat No. 6
Jakarta 12510
Indonesia
Phone No.: (62 21) 7800 450
Telefax No.: (62 21) 7800 520
Attention: Mr. Suprapto Pegeng/
Ms. Irene Tanumiharja
to the Security Agent: NISSHO IWAI INTERNATIONAL
(SINGAPORE) PTE., LTD.
16 Raffles Quay #34-00
Hong Leong Building
Singapore 048581
10
<PAGE>
Phone No.: (65) 2230487
Telefax No.: (65) 2250240
Attention: Mr. Takeshi Ehara
Finance and Accounting
Department
11.2 Unless otherwise provided herein, the date of notice hereunder shall
be deemed to be (i) the date of receipt if delivered personally, (ii) the date
fourteen (14) days after posting if transmitted by mail, (iii) the date of
transmission with confirmed answerback if transmitted by telex, (iv) the date of
transmission, if transmitted by telefax and such transmission is confirmed by an
activity report stating the correct number of pages sent and that such
transmission is correctly transmitted or (v) the date two (2) days after
delivery to the courier service if transmitted by courier.
11.3 Except if effected orally by a bailiff (jurusita), each communication
and document made or delivered by one party to another pursuant to this Share
Pledge Agreement shall be in the English language.
12. EXPENSES; INDEMNIFICATION
-------------------------
The Shareholder shall reimburse each Beneficiary for all costs and
expenses, including the reasonable fees and expenses of counsel, incurred in
connection with the administration and enforcement of this Share Pledge
Agreement. The Shareholder further promises and agrees to indemnify and hold
each Beneficiary harmless from all reasonable losses, claims, damages,
liabilities, penalties, judgments, suits, costs and expenses of any kind or
nature whatsoever incurred or suffered by, or asserted against it, in respect of
the execution, performance, administration or enforcement of this Share Pledge
Agreement, except that such indemnity shall not, as to any Beneficiary, be
available to the extent that such losses, claims, damages, liabilities,
penalties, judgments, suits, costs or expenses resulted from the gross
negligence or willful misconduct of such Beneficiary.
13. GOVERNING LAW
-------------
13.1 This Share Pledge Agreement shall be governed by and construed in
accordance with by the laws of the Republic of Indonesia.
14. JURISDICTION
------------
11
<PAGE>
14.1 The Shareholder irrevocably agrees that the Jakarta Pusat Court of
First Instance shall have non-exclusive jurisdiction to hear and determine any
suit, action or proceeding and to settle any disputes which may arise out of or
in connection with this Share Pledge Agreement and, for such purposes,
irrevocably submits to the jurisdiction of such Court and selects the Clerk's
office of such Court as its general and permanent domicile. The submission by
the Shareholder to such jurisdiction shall not (and shall not be construed so as
to) limit the right of the Beneficiaries or any of them to commence any
proceedings arising out of this Share Pledge Agreement in whatever jurisdiction
it shall deem fit nor shall the commencement of any such legal action or
proceeding in one jurisdiction preclude the Beneficiaries from beginning any
further or other such legal action or proceeding in the same or any other
jurisdiction.
14.2 To the extent that the Shareholder may in any jurisdiction claim for
itself or its assets immunity from suit, execution, attachment (whether in aid
of execution, before judgment or otherwise) or other legal process and to the
extent that in any such jurisdiction there may be attributed to itself or its
assets such immunity (whether or not claimed), the Shareholder hereby
irrevocably agrees not to claim and hereby irrevocably waives such immunity to
the fullest extent permitted by the laws of such jurisdiction.
15. MISCELLANEOUS
-------------
15.1 This Share Pledge Agreement may not be amended except by an
instrument in writing signed by the Shareholder and the Security Agent. The
Shareholder undertakes to pay all present and future taxes, charges, stamp
duties and expenses in connection with the execution, delivery and performance
of this Share Pledge Agreement and related documents. The headings of this Share
Pledge Agreement are for convenience of reference only and shall not define or
limit the provisions hereof.
15.2 Any provision of this Share Pledge Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof and without affecting the validity or
enforceability of such provisions in any other jurisdiction.
IN WITNESS whereof, the Shareholder and the Security Agent have
----------
executed and delivered this Share Pledge Agreement as of the day and year first
above written.
12
<PAGE>
SCHEDULE ONE
------------
DESCRIPTION OF STOCK
--------------------
<TABLE>
<CAPTION>
REPRESENTED BY
SHAREHOLDER NUMBER OF SHARES SHARE CERTIFICATE NUMBERS
- ------------------------------ ---------------- -------------------------
<S> <C> <C>
P.T. Rajasa Hazanah Perkasa 14,556,405 1 to 14,556,405
</TABLE>
13
<PAGE>
SCHEDULE TWO
Notice of Pledge
----------------
[ ], 1995
P.T. MOBILE SELULAR INDONESIA
Mashill Tower, 23rd Floor
Jl. Jend. Sudirman Kav. 25
Jakarta 12920
Indonesia
Attention: Irene Thanumiharja
Vice President Finance
Pledge of Shares
----------------
Dear Sirs:
We hereby notify you that, pursuant to a Share Pledge Agreement dated as of
[ ], 1996, all of the issued and outstanding shares of capital stock of
P.T. Mobile Selular Indonesia (the "BORROWER") now owned by us (as represented
by certificates numbers [ ] through [ ] have been pledged to Nissho
Iwai International (Singapore) Pte., Ltd as security agent (the "SECURITY
AGENT") for and on behalf of the Beneficiaries referred to in such Share Pledge
Agreement.
We further notify you that, pursuant to the Share Pledge Agreement, (i) any
additional shares in the Borrower from time to time owned by us are pledged
thereunder, (ii) if the Security Agent notifies you that a Default (as such term
is defined pursuant or by reference to the Share Pledge Agreement) has occurred
and is continuing, we will not be entitled to vote our shares in the Borrower
and the Security Agent shall be entitled to vote our shares and (iii) the
Security Agent is entitled to receive directly any liquidation dividends and any
declared but unpaid (but not any other) dividends payable in respect of our
shares in the Borrower pledged thereunder.
We hereby agree and authorize you upon notice from the Security Agent that
a Default (as such term is defined pursuant or by reference to the Share Pledge
Agreement) has occurred and is continuing, (i) to accept and act on any written
notice from the Security Agent in
14
<PAGE>
respect of the exercise of the voting rights attached to our shares and (ii)
from the date hereof, to pay any liquidation dividends and any declared but
unpaid (but not any other) dividends in respect of our shares in accordance with
the written instructions, or with the prior written consent, of the Security
Agent. This authorization may not be revoked without the prior written consent
of the Security Agent.
We hereby request you to immediately cause the registration of this pledge
of shares in your shareholder register, and by your acknowledgment hereof you
confirm that you have so registered this pledge.
P.T. RAJASA HAZANAH PERKASA
By:
---------------------------
Name:
Title:
Acknowledged and Consented to:
P.T. MOBILE SELULAR INDONESIA
By:
---------------------------
Name:
Title:
15
<PAGE>
SCHEDULE THREE
Form of Accession Notice
THIS ACCESSION NOTICE is entered into on the [ ] day of [
---------------------
], 199[ ].
BETWEEN:
- -------
(1) P.T. MOBILE SELULAR INDONESIA (the "BORROWER");
(2) P.T. RAJASA HAZANAH PERKASA (the "SHAREHOLDER");
(3) [NAME OF SECURITY AGENT] (in its capacity as such, the "SECURITY AGENT");
and
(4) * [ ] (the "NOMINATED BANK")/[ ]
(the "NOMINATED BANKS REPRESENTATIVE").]
and IS SUPPLEMENTAL TO the Shared Security Documents and Security Sharing
Agreement referred to below.
(a) SECURITY SHARING AGREEMENT
--------------------------
By a security sharing agreement (the "SECURITY SHARING AGREEMENT") dated 12
March, 1996 made between P.T. Mobile Selular Indonesia (the "BORROWER") as
the Borrower, P.T. Rajasa Hazanah Perkasa (the "SHAREHOLDER") as the
Shareholder, Nissho Iwai International (Singapore) Pte., Ltd as the Lender
and as the original Security Agent, it was agreed that the Borrower and the
Shareholder would have the right to nominate banks or financial
institutions to become parties to the Shared Security Documents (as defined
therein) and the Security Sharing Agreement by signing and delivering this
Accession Notice subject to and in accordance with the provisions of the
Shared Security Documents and the Security Sharing Agreement. Terms
defined in or by reference to the Security Sharing Agreement shall, unless
otherwise defined herein, bear the same meaning when used herein.
** [The Borrower and the Shareholder have nominated [ ]
to be a Nominated Bank/have nominated [ ] the "NOMINATED BANKS
REPRESENTATIVE")
- -------------------------
* Delete as appropriate
** Delete as appropriate
16
<PAGE>
to represent [insert names of all nominated banks] as Nominated Banks for
the purposes of the Shared Security Documents and the Security Sharing
Agreement.] The details of the Facility Agreement to which this nomination
relates are set out in Schedule hereto.
(b) ACCESSION OF NOMINATED BANK
---------------------------
* [The Nominated Bank/the Nominated Banks Representative acting on behalf
of the Nominated Banks referred to above] confirms that it wishes to become
a party to the Shared Security Documents and the Security Sharing Agreement
and undertakes to comply with all the obligations expressed to be assumed
by [the Nominated Bank/Nominated Banks] under each of the Shared Security
Documents and the Security Sharing Agreement and otherwise to be bound by
the provisions thereof as if [it/they] had been an original party thereto.
The Borrower, the Shareholder, the Lender and the Security Agent (acting on
behalf of all the Beneficiaries) confirm that, upon the execution of this
Accession Notice by all the parties hereto and the delivery of an original
thereof to the Security Agent, the [Nominated Bank/Nominated Banks] shall
become a party to the Shared Security Documents and the Security Sharing
Agreements and each of the Shared Security Documents and the Security
Sharing Agreement shall be amended and construed accordingly.
(c) LAW
---
This Accession Notice shall, to the extent that it relates to the Shared
Security Documents be governed by the laws of Indonesia.
This Accession Notice shall, to the extent that it relates to the Security
Sharing Agreement, be governed by the laws of England.
IN WITNESS whereof the duly authorized representatives of the parties
----------
hereto have signed this Accession Notice the day and year first before written.
SCHEDULE
--------
[INSERT DETAILS OF FACILITY AGREEMENT TO WHICH THE NOMINATION RELATES]
- ---------------------
* Delete as appropriate
17
<PAGE>
THE BORROWER
- ------------
P.T. MOBILE SELULAR INDONESIA
By:
------------------------------
THE SHAREHOLDER
- ---------------
P.T. RAJASA HAZANAH PERKASA
By:
------------------------------
THE LENDER
- ----------
NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD
By:
------------------------------
THE SECURITY AGENT
- ------------------
[ ]
By:
------------------------------
[THE NOMINATED BANK/THE NOMINATED BANKS REPRESENTATIVE]
-----------------------------------------------------
[ ]
By:
------------------------------
18
<PAGE>
SIGNATURE PAGE
--------------
THE SHAREHOLDER
- ---------------
P.T. RAJASA HAZANAH PERKASA
By: /s/
------------------------------
Name:
Title:
By:/s/
------------------------------
Name:
Title:
THE SECURITY AGENT
- ------------------
NISSHO IWAI INTERNATIONAL (SINGAPORE) PTE., LTD.
By:/s/
19
<PAGE>
EXHIBIT 10.14
STOCKHOLDER AGREEMENT
BETWEEN
TELEPARBS PARTICIPACOES LTDA. (RBS)
AND
INTERNATIONAL WIRELESS COMMUNICATION, INC. (IWC)
AUGUST 31/ST/, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. FORMATION OF NEWCO AND SUBSCRIPTION OF NEWCO'S CAPITAL............ 1
1.1. Formation.................................................. 1
1.2. Shares Bound to this Agreement............................. 1
1.3. NEWCO's Capital Upon Formation - RBS Ownership............. 2
1.4. NEWCO's Capital Increase - IWC and IWC Nominee Ownership... 2
1.5. Purchase of Pelot.......................................... 3
1.6. No Contingency............................................. 3
1.7. Ownership Structure........................................ 3
1.8. RBS Option................................................. 3
1.9. Organization, Good Standing and Qualification.............. 4
1.10 NEWCO's Stock.............................................. 4
2. BUSINESS PLAN..................................................... 4
3. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS................ 5
3.1. Authorization.............................................. 5
3.2. Purchase Entirely for Own Account.......................... 5
4. CONDITIONS OF STOCKHOLDERS' OBLIGATIONS AT FORMATION.............. 5
4.1. By-Laws.................................................... 5
4.2. Proceedings and Documents.................................. 5
4.3. Business Plan.............................................. 6
5. COVENANTS OF NEWCO................................................ 6
5.1. Subsequent Business Plan................................... 6
5.2. Supermajority Approval by Stockholders of Certain Actions.. 6
5.3. Board of Directors......................................... 7
5.4. Delivery of Financial Statements........................... 9
5.5. Inspection................................................. 10
5.6. Registration Rights........................................ 11
6. COVENANTS OF STOCKHOLDERS......................................... 11
6.1. Election of Directors...................................... 11
6.2. Right of First Refusal..................................... 11
6.3. Co-Sale Rights............................................. 13
6.4. Resource commitments....................................... 16
6.5. Participation Rights....................................... 16
7. TERM AND TERMINATION....... ...................................... 17
7.1. Term ...................................................... 17
7.2. Terminating Events......................................... 17
7.3. Effect of Terminating Event................................ 17
7.4. Fair Market Value of Capital Stock of NEWCO................ 18
7.5. Material Breach............................................ 18
</TABLE>
<PAGE>
<TABLE>
<S> <C>
8. Miscellaneous........................................................ 18
8.1. Survival of Warranties........................................ 18
8.2. Successors and Assigns........................................ 18
8.3. Governing Law and Jurisdiction................................ 18
8.4. Counterparts.................................................. 19
8.5. Title and Subtitles........................................... 19
8.6. Notices....................................................... 19
8.7. Finder's Fee.................................................. 19
8.8. Remedies...................................................... 19
8.9. Expenses...................................................... 19
8.10 Amendments and Waivers........................................ 20
8.11 Severability.................................................. 20
8.12 Aggregation of Stock.......................................... 20
8.13 Entire Agreement.............................................. 20
8.14 Language...................................................... 20
</TABLE>
<PAGE>
THIS STOCKHOLDER AGREEMENT is made as of the 31/st/ day of August 1995, by
and between INTERNATIONAL WIRELESS COMMUNICATIONS, INC., a Delaware corporation
("IWC"), and TELEPARBS - PARTICIPACOES LTDA., a Brazilian company wholly owned
by Rede Brasil Sul ("RBS"), ("RBS" and "IWC and/or its nominees" collectively,
the "Stockholders").
RECITALS
--------
WHEREAS, NEWCO will be incorporated through the joint efforts of the
Stockholders as a joint venture company to conduct the business to offer
wireless trunking services in 400 mHZ and 800 mHZ in Brazil;
WHEREAS, RBS a radio and television broadcast organization, wholly owns the
companies Telcom, Rede Sul, Sulitel and Teleporto (the latter a company under
formation resulting from the split off of Portofino) and owns 50% of the capital
of Sao Paulo Sistemas (SPS) (collectively referred to as the "Companies") which
have been granted trunking licenses listed on Schedule A hereto (the "RBS
Licenses");
[ ]
WHEREAS, IWC, an international trunking operator, indirectly owns trunking
licenses, through SRC, a Brazilian company and its recently acquired subsidiary
Pelot, another Brazilian subsidiary, whose licenses are listed on Schedule B
hereto (the "Pelot Licenses");
WHEREAS, another Brazilian company, wholly owned by IWC or an individual
selected by IWC (the "IWC Nominee") will participate in the NEWCO;
WHEREAS, RBS and SRC have additional applications for licenses at 400 mHz
and 800 mHz in the Brazilian Ministry of Telecommunications listed on Schedule C
hereto (the "SRC & RBS Applications for Licenses");
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. FORMATION OF NEWCO AND SUBSCRIPTION OF NEWCO'S CAPITAL
------------------------------------------------------
1.1. Formation. NEWCO shall be formed as a "sociedade anonima" pursuant
---------
to Law no. 6404, of 12.15.76, and its acts for incorporation shall be filed with
the Board of Trade of the State of Rio Grande do Sul, Brazil, within thirty days
after the execution of this Agreement.
1.2. Shares Bound to this Agreement. All Shares of NEWCO's capital stock
------------------------------
subscribed to by the Stockholders as provided for in
<PAGE>
this section 1 or which may be owned by the Stockholders in the future,
including, without limitation, by means of subscription, acquisition, bonus
distribution, split or reverse split (the "Shares") are bound to this Agreement.
Subscribed, acquired and bonus Shares are covered by the definition of Shares,
unless otherwise expressly excluded in the context.
1.3. NEWCO's Capital Upon Formation - RBS Ownership. Upon NEWCO's
----------------------------------------------
formation, RBS shall subscribe to all NEWCO's initial capital stock represented
by 300,000 common Shares, all of them registered and without par value (except
for one Share which shall be subscribed to by a person designated by RBS and
shall be considered for the purposes hereof as owned by RBS). Such NEWCO's
initial capital stock shall be totally paid up by RBS by means of the transfer
to NEWCO of all the quotas of the Companies held by RBS (i.e. excluding 50% of
the quotas of SPS which are held by third parties) evaluated for such purposes
based on their book value on the date of such transfer.
1.4. NEWCO's Capital Increase - IWC and IWC Nominee Ownership. IWC alone
--------------------------------------------------------
or jointly with its nominees shall make an initial contribution equivalent to
US$10,600,000.00 at the commercial exchange rate, as follows:
(a) RBS agrees to hold a general stockholders meeting of NEWCO
within 30 days following the date of its formation ("Effective Date") and
approve with its voting rights a capital increase of NEWCO by the issuance
of 700,000 new common Shares, all of them registered and without par value.
(b) IWC and or its nominee shall contribute a total amount,
including cash, the cost of equipment already purchased by IWC, and the
cost of equipment committed to be purchased by IWC, whose value in
Brazilian currency shall be equivalent to US$2,100,000.00, within 10 days
from the capital increase.
(c) So long as NEWCO is in compliance with this Agreement hereof,
IWC and IWC Nominee shall pay up the remaining amount of such subscription
price in two installments, the first one in the amount in Brazilian
currency equivalent to US$5,850,000.00 (including the US$2,100,000.00 as
defined in paragraph 1.4(b)) until December 31, 1996, and the second
installment in the amount in Brazilian currency equivalent to
US$4,750,000.00 until December 31, 1997, all pursuant to the document
called "Newco Business Plan 1995-1997" (the "Business Plan") which is
initialed by the Stockholders and attached to this Agreement;
(d) All unpaid Shares to be subscribed hereunder shall enjoy the
same rights as paid-in Shares and no suspension or restriction to the
voting and other rights shall apply.
<PAGE>
1.5. Purchase of Pelot. So long as the parties are in compliance with the
-----------------
above sections, NEWCO will purchase, on the Effective Date, 100% of SRC capital
stock for the aggregate price in Brazilian currency equivalent to R$1.00. IWC
declares that SRC, on the effective Date will not have any asset or liability
other than SRC applications and the Pelot quotas. IWC shall cause SRC to be
split off so that all assets and liabilities unrelated to the trunking business
are delivered to a new company resulting from the split off. After such purchase
of the capital stock of SRC, NEWCO will indirectly hold all the rights of SRC in
respect to applications for Licenses, and also acquire Pelot and the Pelot
licenses.
1.6. No Contingency. As a condition for IWC joining NEWCO, RBS warrants
--------------
that the Companies (including the company which resulted from the partial split
off of its subsidiary Portofino) have the licenses for the exploitation of
trunking mentioned in Schedule A hereto free and clear or any liens or third
party rights, whether from the other company which resulted from the split of
Portofino or others. IWC provides the same warranties as to the Pelot's
Licenses. RBS further guarantees that NEWCO and the Companies shall not have
obligations or contingencies whatsoever, including without limitation tax
liabilities (FISTEL and others), agreeing to keep IWC and its nominees, and
NEWCO harmless and protected from any complaints, suits or claims arising from
possible and past contingencies.
[ ]
1.7. Ownership Structure. On the Effective Date, after the general
-------------------
stockholders meeting provided for in Section 1.4. above is hold, the subscribed
capital of NEWCO will be owned by the Stockholders as follows:
<TABLE>
<CAPTION>
Nr. of
Stockholders Shares %
------------ ------ ----
<S> <C> <C>
IWC and IWC Nominee 700,000 70%
RBS 300,000 30%
TOTAL 1,000,000 100%
</TABLE>
1.8. RBS Option. RBS will have an option to subscribe to an additional
----------
400,000 Shares of NEWCO at a price of US16.30 per Share, so that its total
Shares may reach up to 50% plus one of the voting Shares of the Common Stock of
NEWCO. Such RBS option shall be effective (i) until September 1st, 1997; or (ii)
30 days from IWC's providing all of the Additional Funds, whichever occurs
earlier, provided, however that the option will in any event not be exercisable
until January 1st, 1997.
<PAGE>
If RBS exercises its option to acquire a 50.1% ownership interest in NEWCO,
RBS will work with IWC in good faith to provide a mechanism whereby IWC will be
able to satisfy the U.S. Investment Act of 1940 with regard to the IWC ownership
interest in connection with exercising such option, which mechanism shall be the
creation of one non-voting Share to be subscribed for a nominal value by IWC so
that the economic interest of IWC is 50% of the Share ownership of NEWCO while
its voting interest remains at 49.9% of NEWCO.
Each Stockholder hereby agrees to vote in favor of and take any other
action reasonable requested in connection with the exercise by RBS of such
option to subscribe NEWCO's new Shares, including, but not limited to, approve
the issue of such new Shares at the general stockholders meetings to be held for
such purpose and waive any preemptive right it may be entitled to.
1.9. Organization, Good Standing and Qualification. On the Effective
---------------------------------------------
Date, NEWCO will be a corporation duly organized under the laws of Brazil and
will have full corporate power and authority to carry on its business as
proposed to be conducted in its Business Plan. On the Effective Date, NEWCO will
not have any asset or liability other than RBS licenses and certain expenses
incurred in connection with its formation. NEWCO will be duly qualified to
transact business and in good standing in each jurisdiction in which the failure
to so qualify would have a material adverse effect on its business or
properties.
1.10. NEWCO's Stock. The Shares when issued and subscribed to in
-------------
accordance with the terms of this Agreement for the consideration expressed
herein will be duly and validly issued, fully paid, and nonassessable, and will
be free of restrictions on transfer other than restrictions on transfer under
this Agreement and under the applicable Brazilian laws. Except for (i) the
Shares to be issued to RBS, IWC and IWC Nominee and the option to be granted to
RBS under this Section 1 and (ii) the rights provided for in this Agreement,
there will not be outstanding any other options, warrants, rights (including
conversion or preemptive rights) or agreements for the subscription or
acquisition from NEWCO of any Shares of its capital stock. NEWCO is not a party
or subject to any Agreement or understanding and, to the best of the
Stockholder's knowledge, there is no (x) agreement or understanding between any
persons or entities which effects or relates to the voting or giving of written
consents with respect to any security or by a director of NEWCO or (z) any buy-
sell agreements.
2. BUSINESS PLAN
-------------
The Business Plan of NEWCO delivered to the Stockholders has been
prepared in good faith by the Joint Venture partners, RBS and
<PAGE>
IWC. NEWCO will be operated in accordance with the initial Business Plan and a
successor Annual Business Plan. NEWCO will prepare the annual Business Plan for
each year at least 60 days prior to commencement of the year.
3. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS.
--------------------------------------------------
The Stockholders hereby represents and warrants that:
3.1. Authorization. The Stockholders have full power and authority
-------------
to enter into the agreements, and each such agreements constitutes their valid
and legally binding obligation, enforceable in accordance with their terms and
constitutes valid and legally binding obligations of the Stockholders,
enforceable in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors rights generally, and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
3.2. Purchase Entirely for Own Account. This Agreement is made with
---------------------------------
such Stockholders, which by such Stockholders' execution of this Agreement such
Stockholders hereby confirm, that the Shares will be acquired for investment for
such Stockholders' own account, not as a nominee or agent but for and within the
overall corporate and shareholders of each party, and not with a view to the
resale or distribution of any part thereof, and that such Stockholders have no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, such Stockholders further
represent that such Stockholders do not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Shares.
4. CONDITIONS OF STOCKHOLDERS' OBLIGATIONS AT FORMATION.
----------------------------------------------------
The obligations of the Stockholders of this Agreement are subject to
the fulfillment on or before the formation of each of the following conditions,
the waiver of which shall not be effective against the Stockholder if it does
not consent in writing thereto.
4.1. By-Laws. The By-Laws of NEWCO shall have been approved by the
-------
Stockholders, at the general stockholders meeting to be held on the Effective
Date in accordance with section 1.4. above, which By-laws shall contain the
provisions required under sections 6.2, and 6.3 hereof.
4.2. Proceedings and Documents. All corporate and other proceeding
-------------------------
in connection with the transactions contemplated at the
<PAGE>
formation and all documents incident thereto shall be reasonably satisfactory in
form and substance to Stockholders' counsel, and they shall have received all
such counterpart original and certified or other copies of such documents as
they may reasonably request.
4.3. Business Plan. The Business Plan shall have been approved by
-------------
each of the Stockholders. Each Business Plan shall include operations, sales and
also an annual expenditure and investment budget and subsequent capital
investments, financial and dividend policies, remuneration of officers and their
participation in the profits (if any), and major disbursements. Any amendments
to the Business Plan shall only be valid after approval by NEWCO's Board. The
management of NEWCO shall conduct NEWCO's activities in strict compliance with
the Business Plan. NEWCO's Board shall have the option to replace any executive
whose acts violate the Business Plan. Any contracts or transactions unrelated to
the Business Plan or not provided therein shall be subject to the approval of
both parties.
5. COVENANTS OF NEWCO
------------------
5.1. Subsequent Business Plan. On or before sixty (60) days before
------------------------
the beginning of each fiscal year of NEWCO, the Board of Directors of NEWCO
shall adopt and approve a Business Plan for the next two fiscal years of NEWCO's
operations (each one a "Subsequent Business Plan"). Each Subsequent Business
Plan shall set forth the financial and business plan for NEWCO for the next two-
year period in such detail as NEWCO Board shall determine appropriate. Each
Subsequent Business Plan shall be subject to approval by IWC and RBS, which
approval shall not be unreasonably withheld.
5.2. Supermajority Approval by Stockholders of Certain Actions.
---------------------------------------------------------
NEWCO's By-laws shall contain a provision establishing that the following
decisions shall require the approval of Stockholders representing at least
seventy-five percent (75%) of the NEWCO's whole voting capital stock.
(i) any significant change in NEWCO's By-laws, including any
change in provisions regarding the supermajority approval by Stockholders and by
the Board of Directors;
(ii) any increase of NEWCO's stock capital (except the capital
increase for the incorporation of reserves or by legal imposition or for the
compliance with the options set forth in Section 1.3. above), including any
decision to raise capital or debt in excess of debt/equity ratio of 2/1 or
equity capital, split or reverse split of Shares, redemption or purchase of
Shares for cancellation or keeping at treasury, issuance or sale by NEWCO of any
securities convertible into Shares, including, but not limited to,
<PAGE>
subscription bonds, beneficiary parts or call options or Shares subscription
rights;
(iii) any corporate conversion, merger, consolidation, split or
reorganization;
(iv) enter into ownership, management or operation of any
business other than SMR services;
(v) termination of NEWCO's operations;
(vi) sale, transfer or waiver of any rights of NEWCO regarding
the RBS Licenses and/or Pelot Licenses and/or SRC and RBS Applications for
Licenses; or a sale of all or substantially all of NEWCO;
(vii) the reduction of the minimum mandatory dividend
provided for in NEWCO's By-laws, which cannot be lower than 25% of NEWCO's net
profits;
(viii) the authorization to the officers of NEWCO to confess
bankruptcy or to enter into general composition with creditors.
5.3. Board of Directors.
------------------
(a) The Board of Directors of NEWCO shall be comprised of four
(04) members. RBS shall be entitled to elect, in separate voting, two members of
the Board, one of them to be the Chairman of the Board. The designation of such
Chairman by RBS shall be subject to the prior approval of IWC. Each of IWC and
IWC Nominee shall be entitled to elect, in separate voting, one (01) member of
the Board of Directors.
(b) The Stockholders agree to exercise the voting rights
attached to their Shares so that the members indicated in accordance with item
(a) above are elected for the Board of Directors of NEWCO.
(c) In the event the shareholding of any Stockholder (jointly
with any permitted nominee), for any reason whatsoever, becomes less than ten
percent (10%) of the total capital stock of NEWCO, the members of the Board of
Directores elected by such Stockholder shall be removed at the first NEWCO's
general meeting held after such reduction of shareholding.
(d) The Stockholders hereby undertake to do their best to
ensure that members appointed by them be present to all meetings of NEWCO's
Board of Directors. In the event of absence or impediment of any of the Board of
Directors' members, such member
<PAGE>
shall appoint another member of the Board of Directors who shall vote on behalf
of such member as if he were present at the meeting as may be specified by
written instructions of the absent member. In the event of resignation or
permanent impediment of any member during the term of office to which he was
elected, his substitute shall be appointed by the same Stockholder that had
appointed the replaced member.
(e) The resolutions of the Board of Directors shall be taken upon
the favorable votes of the majority of the members or by the unanimous decision
if one member elected by RBS and one member elected by IWC or its nominee have
attended the meeting. However, the following matters shall require, for their
approval the favorable votes of at least three (03) members, by themselves or
represented pursuant to item (d) above:
(i) Election or replacement of NEWCO's officers, provided that
no Directors should unreasonably withhold his approval for the election of any
officer;
(ii) Approval of the Business Plan and Annual Budget and any
subsequent Business Plan;
(iii) Any extension or material changes to the Service
Agreement with related entities;
(iv) Acquisition, sale and/or creation of liens on assets of
NEWCO which value represents more than US$1,000,000.00 (or the equivalent in
Brazilian currency), or sale of all or substantially all of NEWCO's assets;
(v) Any major business decision or action not provided for in
the Business Plan or any Subsequent Business Plan.
(vi) Appoint special attorneys-in-fact to represent the Company
in the performance of the acts or activities listed hereafter for periods in
excess of twelve (12) months. Judicial powers of attorney may be of indefinite
duration and may be granted without a quotaholders' approval;
(vii) Establish new businesses unrelated to the Company's
existing business;
(viii) Cause the Company to merge with other entities, or to
sell, encumber, or acquire an interest in another business or entity, whether a
corporation, partnership, sole proprietorship, or other enterprise;
(ix) Vote, encumber, transfer, or dispose of shares or quotas
owned by the Company in other related or unrelated companies;
<PAGE>
(x) Issue or redeem Company securities or obligations in
excess of the Brazilian currency equivalent of US$100,000.00);
(xi) Guarantee loans or other obligations of any party, whether
an individual or an entity;
(xii) Lend money (other than to NEWCO's customers in the
normal course of business), borrow money, or transfer, issue, or otherwise deal
in any debt instruments of the Company in excess of the Brazilian currency
equivalent of US$1,000,000.00;
(xiii) Organize, dissolve, or liquidate subsidiary companies;
(xiv) Purchase, sell, mortgage, or otherwise dispose of or
encumber any of its assets having a fair market value in excess of the Brazilian
currency equivalent of US$100,000.00;
(xv) Execute any contracts or agreements (including lease
agreements, distribution agreements, real estate contracts, agreements with
related parties etc.) whose value exceeds the Brazilian currency equivalent of
US$50,000.00 or which is for a term of one (1) year or longer;
(xvi) License the use of or otherwise disclose in any manner
patented or unpatented technology, technical data, know-how, or other
confidential information that may be known to the Company;
(xvii) Cause the Company to be dissolved or liquidated, or
appoint a liquidator, or petition for the Company's bankruptcy;
(xviii) Reinvest profits or distribute dividends; and
(xix) Increase or decrease NEWCO's capital;
5.4. Delivery of Financial Statements. NEWCO shall deliver to each
--------------------------------
Stockholder:
(a) as soon as practicable, but in any event within ninety
(90) days after the end of each fiscal year of NEWCO, an income statement
for such fiscal year, a balance sheet of NEWCO and a statement of
stockholder's equity as of such year-end, and a statement of cash flows for
such year, including notes thereto, such year-end financial reports to be
in reasonable detail, prepared in accordance with Brazilian generally
accepted accounting principles on the basis of the constant currency
methodology required by the Brazilian Securities Commission-CVM for public-
held companies (the "Accounting Principles"), and audited and certified by
independent public accountants of international recognized standing
selected by NEWCO;
<PAGE>
(b) within fifteen (15) days of the end of each month, an
unaudited income statement, a balance sheet an a statement of cash flows
for and as of the end of such month, in reasonably detail;
(c) within fifteen (15) days of the end of each calendar
quarter, a quarterly operations report summarizing activities during the
preceding quarter;
(d) with respect to the financial statements called for in
subsection (b) of this Section 6.4, an instrument executed by the Chief
Financial Officer or President of NEWCO certifying that such financials
were prepared in accordance with Brazilian generally accepted accounting
principles on the basis of the constant currency methodology required by
the Brazilian Securities Commission-CVM for public-held companies
consistently applied with prior practice for earlier periods and fairly
present the financial condition of NEWCO and its results of operation for
the period specified, subject to quarterly review and year-end audit
adjustment; and
(e) such other information relating to the financial
condition, business, prospects, or corporate affairs of NEWCO as the
Stockholders may from time to time request, provided, however, that NEWCO
shall not be obligated under this subsection (e) or any other subsection of
Section 6.4 to provide information which it deems in good faith to be a
trade secret or similar confidential information which it deems in good
faith to be a trade secret or similar confidential information. The
covenant set forth in this Section 6.4 shall terminate and be of no further
force or effect if IWC and RBS shall no longer control NEWCO due to the
legitimate sale of Common Stock of NEWCO to third parties, without
prejudice of each Stockholder rights under the applicable Brazilian
legislation.
5.5. Inspection. NEWCO will also permit each Stockholder and its
----------
authorized representatives, at all reasonable times and as often as reasonably
requested, to visit and inspect, at the expense of such Stockholders, any of the
properties of NEWCO, to inspect its books and records and to make extracts
therefrom, and to discuss the affairs, finances and accounts of NEWCO with its
officers and consult with and advise the officers of NEWCO as to the a
management of NEWCO, provided that the Stockholders shall maintain the
confidentiality of any proprietary information of NEWCO thereby obtained and
provided further that the Stockholders shall conduct all such inspections in a
manner that is not disruptive to the employees or operations of NEWCO. The
covenant set forth in this Section 6.5 shall terminate and be of no further
force or effect if IWC and RBS shall not longer control NEWCO due to the
legitimate sale of Common Stock of NEWCO to third parties, without prejudice of
each Stockholder rights under the applicable Brazilian legislation.
<PAGE>
5.6. Registration Rights.
-------------------
(a) It will be the intent of NEWCO within 5 years of its
formation or sooner as the Board of Directors may provide to raise
additional capital for the NEWCO and its Stockholders through an Initial
Public Offering (IPO) in Brazil or through private equity transactions.
After NEWCO has completed three (03) years of profitable operations, each
Stockholder holding at least 30% (thirty percent) of the total NEWCO's
Common Stock may sell, in whole or in part, the Shares then held by such
Stockholder pursuant to a public offering ("Public Sale") under the
Brazilian securities laws or other applicable Brazilian laws ("Brazilian
Securities Laws"), and each Stockholder hereby agrees to exercise the vote
of its shares and take all necessary or desirable actions to cause NEWCO
(at NEWCO's expense) to become a publicly-held company under the Brazilian
Securities Laws and to enable such Stockholder to consummate a Public Sales
as soon as possible after such request. NEWCO, for such purpose, shall
assist such Stockholder in connection with such Public Sale and shall
furnish all information which the Stockholder or the managing underwriters
deem necessary or desirable to be disclosed in a prospectus to be
distributed in connection with a Public Sale.
(b) Except as provided in this Agreement, NEWCO shall not grant
to any other person the right to request or require NEWCO to become a
publicly-held company, or the right to consent that NEWCO becomes a
publicly-held company.
6. COVENANTS OF STOCKHOLDERS.
-------------------------
6.1. Election of Directors. Each of the Stockholders hereby
---------------------
covenants that it shall vote its Shares in a manner so as to maintain the
composition of the Board of Directors described in Section 5.3 hereof. In the
event of any vacancy on NEWCO's Board of Directors, such vacancy shall be filled
in a manner consistent with Section 5.3. In all events, the election will be
consistent with Brazilian law regarding foreign ownership (if any).
6.2. Right of First Refusal. No sale of Shares or transfer of
----------------------
preemptive rights by either Party can take place without (i) the express written
approval of the other Party or (ii) the selling Party's first offering the
Shares to the other Party pursuant to the terms hereof.
(a) In the event a Stockholder (a "Seller") desires to accept
a bona fide third-party offer for the transfer of any or all of the Shares
(the shares subject to such offer to be hereafter called the "Target
Shares"), the Seller shall promptly deliver to each of the Stockholders
written notice of the intended disposition ("Disposition
<PAGE>
Notice") and the basic terms and conditions thereof, including the identity
of the proposed purchaser.
(b) The Stockholders shall, for a period of thirty (30) days
from receipt of the Disposition Notice, have the right to purchase the
Target Shares, upon issuing an Exercise Notice, upon substantially the same
terms and conditions specified in the Disposition Notice.
(c) Subject to the Stockholders' co-sale rights described in
Section 6.3 below, in the event the Exercise Notice with respect to the
Target Shares is not given to the Seller within thirty (30) days following
the date of such Stockholders' receipt of the Disposition Notice, the
Seller shall have a period of thirty (30) days thereafter in which to sell
all the Target Shares upon terms and conditions (including the purchase
price) not more favorable to the third-party transferee than those
specified in the Disposition Notice. The third-party transferee shall
furnish the remaining Stockholders with a written agreement to be bound by
and comply with all other provisions of this Agreement. In the event the
Seller does not notify the Stockholders, and consummate the sale or
disposition of the Target Shares within the thirty (30) day period, NEWCO
shall not register any attempted disposition of the Target Shares. The
parties shall cause NEWCO to execute a copy hereof, maintain a copy in its
head offices and observe its obligations hereunder.
(d) The right of first refusal granted hereunder to the
Stockholders shall be allocated among such parties pro rata based on their
respective aggregate holdings of NEWCO's issued and outstanding Common
Stock and shall be limited by the applicable Brazilian securities laws
regarding foreign ownership (if any). The sale and/or transfer of
Brazilian-owned equity shall be according to such laws so as not to allow
foreign ownership to increase above permitted levels (if any).
(e) In the event that the Stockholders do not exercise the
right of first refusal pursuant to this Section 6.2 with respect to all
Target Shares described in a particular Disposition Notice, then such right
shall not apply to any Target Shares described in such Disposition Notice.
(f) The rights of an Stockholder under this Section and the
correlative obligations of each Stockholder terminate upon the occurrence
of any of the following events :
(1) the liquidation, dissolution or indefinite cessation
of the business operations of NEWCO;
<PAGE>
(2) the execution by NEWCO of a general assignment for the
benefit of creditors or the appointment of a receiver or trustee to take
possession of the property and assets of NEWCO;
(3) immediately prior to the Sale and Purchase of a bona
fide firm commitment underwritten public offering of NEWCO's Common Stock
is registered.
Notwithstanding the foregoing, either of the parties may sell,
transfer or otherwise dispose of all its shares in NEWCO in favor of any of its
wholly-owned subsidiaries or its shareholders, and such transfer shall not be
subject to or give rise to any right of first refusal or co-sale, provided that
the potential acquiring parties shall be previously notified by the Seller of
the terms of this Agreement, and, as a condition for the validity of the
acquisition, the potential acquiring party shall assume, in writing, prior to
the transfer becoming effective, all the rights and obligations contained in
this Agreement and any amendments thereto. The same first refusal or co-sale
rights hereunder shall apply in case of change of control of any of the
Stockholders (except for a transfer of Shares from IWC nominees to any IWC
controlled entity or affiliate) .
6.3. Co-Sale Rights. [ ] Subject to the right to
--------------
first refusal provisions in Section 6.2, if a Seller proposes to enter into a
transaction regarding the sale of Common Stock, which, if consummated, would
result in aggregate sales of Common Stock by such Seller in excess of 5% of its
Shares in any calendar year, each Stockholder, though limited by the applicable
Brazilian securities laws regarding foreign ownership (if any) and the sale
and/or transfer of Brazilian-owned equity which shall be according to such laws
so as not to allow foreign ownership to increase above permitted levels (if
any), shall have such right exercisable upon written notice to Seller within
thirty (30) days after receipt of the Seller's Disposition Notice, to
participate in such sale of the Target Stock on the same terms and conditions as
those set forth in the Disposition Notice. To the extent one or more of the
Stockholders exercise such right of participation, the number of shares of
Target Stock that the Seller may sell in the transaction shall be
correspondingly reduced, but within the Brazilian ownership requirements (if
any). The right of participation of each of the Stockholders shall be subject to
the terms and conditions set forth in this Section. In all events, the election
will be consistent with Brazilian law regarding foreign ownership.
(a) Each Stockholder shall be deemed to own the number of shares
of Common Stock that such Stockholder actually holds plus the number of
shares of Common Stock that are issuable upon
<PAGE>
conversion of any Shares of Preferred Stock then held by such Stockholder
(as the case may be).
(b) Each of the Stockholders may sell all or any part of the
number of shares of Common Stock of NEWCO up to the portion corresponding
to the ratio of Common Shares then owned by the Stockholder in relation to
the total number of NEWCO's issued and outstanding Shares.
(c) To the extent a Stockholder elects not to sell the full
number of shares it is entitled to sell pursuant to subparagraph (b) above,
the other Stockholders' rights to participate in the sale shall be
increased pro rata by a corresponding number of Shares.
(d) Each of the Stockholders may effect its participation in the
sale by delivering to the Seller for transfer to the purchase offeror one
or more certificates, properly endorsed for transfer (or a commitment to
execute the respective entries in NEWCO's Share Registry Book, whichever is
applicable), which represent the number of Shares of Common Stock that the
party elects to sell pursuant to Section 6.3.
(e) The stock certificates that the Stockholders deliver to such
Seller (or the execution of entries in NEWCO's Share Registry Book,
whichever is applicable) pursuant to Section 6.3 shall be performed by the
Seller to the purchase offeror in consummation of the sale of the Common
Stock pursuant to the terms and conditions specified in the Disposition
Notice, and such Seller shall promptly thereafter remit to each Stockholder
that portion of the sale proceeds to which the Stockholder is entitled by
reason of its participation in such sale.
(f) The exercise or non-exercise of the rights of the
Stockholders hereunder to participate in one or more sales of Target Shares
shall not adversely affect their rights to participate in subsequent Common
Stock sales by the Seller.
(g) In the event a Seller should sell any Shares in contravention
of the co-sale rights of the Stockholder under this Section (a "Prohibited
Transfer"), the Stockholders, in addition to such other remedies as may be
available at law, in equity or hereunder, and the nondefaulting party shall
have the put option provided below, and the Seller shall be bound by the
applicable provisions of such option.
(h) In the event of a Prohibited Transfer, each Stockholder shall
have the right to sell to the Seller the type and number of Shares equal to
the number of shares each Stockholder would
<PAGE>
have been entitled to transfer to the purchaser had the Prohibited Transfer
been effected pursuant to and in compliance with the terms hereof. Such
sale shall be made on the following terms and conditions:
(1) The price per share at which the shares are to be sold
to the Seller shall be equal to the price per share paid by the purchaser
to the Seller at the actual market price in the Prohibited Transfer. The
Seller shall also reimburse each Stockholder for any and all fees and
expense, including legal fees and expense, incurred to the exercise or the
attempted exercise of the Stockholders rights under this Section 6.3.
(2) Within 90 days after the later of the dates on which the
Stockholder (A) received notice of the Prohibited Transfer or (B) otherwise
become aware of the Prohibited Transfer, each Stockholder shall, if
exercising the option created here, deliver to the Seller the certificate
or certificates representing shares to be sold, each certificate to be
properly endorsed for transfer (or deliver a commitment to execute the
respective entries in NEWCO's Share Registry Book, whichever is
applicable).
(3) The Seller shall, upon receipt of the certificate or
certificates for the shares (or a commitment to execute the respective
entries in NEWCO's Share Registry Book, whichever is applicable) to be sold
by a Stockholder, pursuant to this subsection 6.3(h), pay the aggregate
purchase price therefor and the amount of reimbursable fees and expense, as
specified in clause (1) of this subsection 6.3(h), in each or by other
means acceptable to the Stockholder.
(4) Notwithstanding the foregoing, any attempt by a Seller
to transfer Shares in violation of this Section 6.3 hereof shall be void
and NEWCO agrees it will not effect such a transfer nor will it treat any
alleged transferee as the holder of such shares without the written consent
of a majority in interest of the Stockholders.
(i) The Nominative Shares Register Book of NEWCO, on the margin
of each Shares' registration, and the certificates representing the Shares,
if issued, shall bear the following legend: "The Shares represented by this
registry (or certificate) are subject to the condition specified in the
Stockholders Agreement dated as of August 31, 1995. Such legend shall be
removed upon termination of this Agreement."
(j) NEWCO shall register this Stockholders Agreement in its head-
office and shall fully comply with the obligations undertaken herein.
Transfers of Shares or of securities convertible
<PAGE>
into Shares or, further, the creation of any lies or encumbrance upon them
in disagreement with the provisions of this Agreement shall not be valid
and effective, and NEWCO shall refrain from registering them.
(k) The covenant set forth in this Section 6.3 shall terminate on
the earlier of the date when either party owns less than 10% of NEWCO's
Shares or the date on which NEWCO's Common Stock is subject to the
reporting requirements of the Brazilian securities laws.
6.4. Resource commitments. Each of the Stockholders hereby covenants
--------------------
that it will contribute adequate resources required for the successful operation
of NEWCO, provided, however, that NEWCO pays the Stockholders reasonable
compensations mutually agreed upon by NEWCO and the Stockholders for any of the
Stockholders' additional contribution of resources to NEWCO. This will be done
under a Service Agreement that the parties agree to negotiate in good faith. The
parties agree that they will offer NEWCO resources to make its successful and
such resources will be offered at cost including access to RBS transmission
sites and microwave networks.
6.5. Participation Rights. It will be the long term goal of NEWCO to
--------------------
gain additional channels to reach up to 1,000 or more channels in major cities
in Brazil and also to gain adequate coverage along major highways and in
secondary cities between the major cities in Brazil to accomplish this
objective. It may be necessary to partner with other license holders or to buy
other licenses. This will ordinarily require payments to the license holders
and/or require provision of capital for infrastructure and working capital. RBS
will be given the opportunity to participate in these investments to the extent
of its then interest in NEWCO (30% to 51%). Should RBS choose not to
participate, IWC may choose to go ahead with the investment. In this case, IWC
may elect to manage the new investment together with the channels owned by NEWCO
with a fair sharing of costs and revenue and the intention to maximize the value
of all channels.
Further, if either of the parties contemplate engaging in other wireless
telecommunications related business (except for the RBS commitments to Bellsouth
in cellular radio), the other party shall be entitled to participate as follows.
RBS will have a participation right to acquire an equity interest in each new
wireless communication project in which IWC acquires an equity interest within
Brazil within 45 days from IWC's respective offer. The amount of the equity
interest that may be acquired in the new project will be negotiated on a case by
case basis. In return, RBS declares that it will consider IWC as a possible
partner including for new businesses and new projects of telecommunications.
<PAGE>
7. TERM AND TERMINATION
--------------------
7.1. Term. Except as otherwise expressly set forth herein, this
----
Agreement shall enter into force on the date hereof and shall be valid for a
period of twelve (12) years from this date. In addition, each Stockholder shall
have the right to withdraw from this Agreement in whole or any part at any time
after NEWCO has become public-held company under Brazilian securities laws by
given written notice to NEWCO and to all other Stockholders.
7.2. Terminating Events. NEWCO and each of the Stockholders agree
------------------
that each of the events set forth below shall constitute a Terminating Event if
a party hereto, which is entitle to give such notice with respect to such event
pursuant to Section 8.3 below, elects to terminate this agreement upon the
occurrence of such event:
(a) The commission of a Material Breach (as defined below in
Section 8.5) by one of the parties hereto);
(b) The adjudication by a court or tribunal of competent
jurisdiction that one of such other parties is insolvent;
(c) The filing of petition in bankruptcy by one of the order
parties on its own behalf or the filing of any such petition against such
party by a third party if the proceedings is not dismissed or withdrawn
within sixty (60) days thereafter;
(d) An assignment by one of the other parties for the benefit
of its creditors;
(e) the commencement of dissolution or liquidation of one of
the other parties or than in consequence of a merger, amalgamation, or
other corporate reorganization to which is a party; and
(f) The enactment of any law or the existence of any court
decree which prevents or materially impairs NEWCO from engaging in the
wireless communication business.
If a party ("Defaulting Party") hereto should suffer any event
described in subparagraphs (a) through (f), that party shall immediately notify
the other parties (Non-Defaulting Parties) of the occurrence of such event.
7.3. Effect of Terminating Event. Upon the occurrence of a
---------------------------
Terminating Event, the parties shall have the rights as follows:
(a) As to a Terminating Event as described in subparagraphs
(c) through 8.2(f), the Non-Defaulting Parties shall
<PAGE>
have the right to purchase the capital stock of NEWCO held by the
Defaulting Party for an amount equal to the fair market value of such
stock, as determined in accordance with Section 8.4 below;
(b) As to the Terminating Event described in subparagraph
8.2(g), NEWCO shall be dissolved and liquidated.
7.4. Fair Market Value of Capital Stock of NEWCO. The fair market
-------------------------------------------
value of the capital stock of NEWCO held by the defaulting Party shall be
determined by arm's-length agreement between the Defaulting Party and the Non-
Defaulting Parties. If no such agreement can be reached between the parties, the
fair market, the fair market value of such interest shall be determined on the
basis of the appraisal procedure as follows: The Defaulting Party and the Non-
Defaulting Parties shall each appoint an appraiser and such appraisers acting
together shall appoint a third appraiser. Each such appraiser shall be
independent of and not affiliated with any of the Stockholders and shall be
qualified to appraise the fair market value pursuant to this Section 8.4 shall
be conclusive and binding on all parties hereto.
7.5. Material Breach. As used in this Section 8, any breach of the
---------------
provisions hereof which is not cured within thirty (30) days following notice
thereof to the Defaulting Party by any Non-Defaulting Parties shall constitute a
"Material Breach."
8. Miscellaneous.
-------------
8.1. Survival of Warranties. The warranties, representations and
----------------------
covenants of NEWCO and the Stockholders contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Formation and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Stockholders or NEWCO.
8.2. Successors and Assigns. Except as otherwise provided herein,
----------------------
the terms and conditions of this Agreement shall inure to the benefit of and any
be binding upon the respective successors and assigns of the parties (including
transferee of any Securities). Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
8.3. Governing Law and Jurisdiction. This Agreement shall be
------------------------------
governed by and construed under the laws of Brazil as applied to agreements
among Brazilian residents entered into and to be entirely within Brazil the
parties hereof elect the Courts of the City of Porto
<PAGE>
Alegre, Brazil, to settle any disputes arising herefrom, and hereby waives any
other Courts, as privileged as they may be.
8.4. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.5. Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.6. Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon person delivery to the party to be notified or upon
deposit with the Post Office, by registered or certified mail, postage prepaid
and addressed to the party to be notified at the address indicated for such
party on the signature page hereof, or at such other address as such party may
designate by ten (10) days' advance written notice to the other parties.
8.7. Finder's Fee. Each party represents that it neither is not will
------------
be obligated for any finder's fee or commission in connection with this
transaction. The Stockholder agrees to indemnify and to hold harmless NEWCO from
any liability for any commission or compensation in the nature of a finder's
fees (and the costs and expenses of defending against such liability or asserted
liability) for which the Stockholder or any of its officers, partners,
employees, or representatives is responsible. NEWCO agrees to indemnify and hold
harmless the Stockholder from any liability for any commission or compensation
in the nature of finder's fee (and the costs and expenses of defending against
such liability or asserted liability) for which NEWCO or any of its officers,
employees or representatives responsible.
8.8. Remedies. The Stockholders shall be entitled to enforce their
--------
rights under this Agreement specifically, to recover damage by reason of any
breach of any provision of this Agreement and to exercise all other rights
existing in their favor in law or otherwise. The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any breach of
the provisions of this agreement and any Stockholder may apply for specific
performance in order to enforce or prevent any violation of the provision of
this Agreement.
8.9. Expenses. Each party will pay its own expenses for costs
--------
incurred prior to incorporation of NEWCO. The costs of registering the
resolutions whereby IWC shall become a shareholder and shall be
<PAGE>
borne 70% by IWC and 30% by RBS. Subsequent costs shall be borne by NEWCO. If
any action at law or in equity is necessary to enforce or interpret the terms of
the Agreements, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
8.10. Amendments and Waivers. Any term of this Agreement may be
----------------------
amended and the observance of any terms of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of NEWCO and all the Stockholders.
Any amendment or waiver effected in accordance with this section shall be
binding upon each holder of any securities purchased under this Agreement at the
time outstanding (including securities are convertible), each future holder of
all such securities, and NEWCO.
8.11. Severability. If one more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with it
items.
8.12. Aggregation of Stock. All shares of the Common Stock held or
--------------------
acquired by affiliated entities or persons shall be aggregate together for the
purpose of determining the availability of any rights under this Agreement.
8.13. Entire Agreement. This Agreement and the agreements and
----------------
documents referred to herein constitute the entire agreement among the parties
and no party shall be liable or bound to any other party in any manner by any
warranties, representations, or covenants except as specifically set forth
herein or therein.
8.14. Language. This Agreement is executed in Portuguese and
--------
English and in case of discrepancy the version in Portuguese shall prevail.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
IWC RBS
By: /s/ By: /s/
--------------------------------- -----------------------------------
Name: John D. Lockton Name:
------------------------------ ---------------------------------
Title: President Title:
----------------------------- -------------------------------
Witnesses:
/s/
- ------------------------------------
<PAGE>
SCHEDULES A & B
TRUNKING LICENSES GRANTED
<TABLE>
<CAPTION>
CITIES POPS RBS CHANNELS PELOT CHANNELS TOTAL
<S> <C> <C> <C> <C>
Belo Horizonte 2038000 20 20
Vitoria 544000 20 20
Rio 6000000 20 20
Duque de Caxias 673000 20 20
Sao Paulo 11000000 10 10
Campinas 932000 15 15
Jundiai 291000 40 20 60
Santos 909000 40 40
Americana 369000 20 20
Piracicaba 285000 30 30
Sao Jose dos Campos 624000 25 25
Sao Jese Rio Preto 430000 0 20 20
Sorocoba 388000 20 20 40
Bauru 267000 20 20
Ribeirao Preto 441000 10 10
Curitiba 1533000 20 20
Florianapolis 415000 20 20 40
Joinville 362000 25 25
Blumenau 216000 20 20
Criciuma 150000 5 5
Itajai 122000 5 5
Tuburao 81000 5 5
Porto Alegre 1641000 60 20 80
Caxias do Sul 296000 20 20
Novo Hamburgo 387000 20 20
Osorio 52000 20 20
Santa Maria 218000 20 20
Salvador 1100000 0 20 20
Fortaleza 230000 20 20
TOTAL 31,994,000 550 140 690
---------- --- --- ---
(Cities only)
</TABLE>
Page 1
<PAGE>
Schedule C (800 MHz)
CVA - SERVICOS DE RADIOCOMUNICAOES S/C LTDA.
800 MHz APPLICATION
<TABLE>
<CAPTION>
STATION
NR. CITIES PROTOCOLO DATE STATE
<S> <C> <C> <C> <C>
01 Sao Paulo 53.000.00875/92 17/12/92 SP
1651 Santos 53.000.00875/92 17/12/92 SP
1652 Jundiai 53.000.00875/92 17/12/92 SP
1653 Campinas 53.000.00875/92 17/12/92 SP
1654 Caxias do Sul 53.000.00875/92 17/12/92 RS
1655 Porto Alegre 53.000.00875/92 17/12/92 RS
1656 Criciuma 53.000.00875/92 17/12/92 SC
1657 Florianopolis 53.000.00875/92 17/12/92 SC
1658 Florianopolis - Gov. Celso Ramos 53.000.00875/92 17/12/92 SC
1659 Camboriu 53.000.00875/92 17/12/92 SC
1660 ltajai 53.000.00875/92 17/12/92 SC
1661 Blumenau 53.000.00875/92 17/12/92 SC
1662 Joinville 53.000.00875/92 17/12/92 SC
1663 Ribeirao Preto 53.000.00875/92 17/12/92 SP
1664 Sao Jose do Rio Preto 53.000.00875/92 17/12/92 SP
1665 Franca 53.000.00875/92 17/12/92 SP
1666 Uberaba 53.000.00875/92 17/12/92 MG
1667 Uberlandia 53.000.00875/92 17/12/92 MG
1668 Goiania 53.000.00875/92 17/12/92 GO
1669 Anapolis 53.000.00875/92 17/12/92 GO
1670 Laguna 53.000.00875/92 17/12/92 SC
1671 Juiz de Fora 53.000.00875/92 17/12/92 MG
1672 Aguas de Lindoia 01/6/93 SP
1673 Altinopolis 01/6/93 SP
1674 Alto Alegre 01/6/93 SP
1675 Americana 01/6/93 SP
1676 Amparo 01/6/93 SP
1677 Aracatuba 01/6/93 SP
1678 Araraquara 01/6/93 SP
1679 Avanhandava 01/6/93 SP
1680 Bariri 01/6/93 SP
1681 Barra Bonita 01/6/93 SP
1682 Barretos 01/6/93 SP
1683 Batatais 01/6/93 SP
1684 Bauru 01/6/93 SP
1685 Bebedouro 01/6/93 SP
1686 Bilac 01/6/93 SP
1687 Birigui 01/6/93 SP
1688 Botucatu 01/6/93 SP
1689 Brauna 01/6/93 SP
1690 Brotas 01/6/93 SP
1691 Buritizal 01/6/93 SP
1692 Cajuru 01/6/93 SP
1693 Capivari 01/6/93 SP
1694 Charqueada 01/6/93 SP
1695 Colina 01/6/93 SP
</TABLE>
Page 1
<PAGE>
Schedule C (800 MHz)
CVA - SERVICOS DE RADIOCOMUNICAOES S/C LTDA.
800 MHz APPLICATION
<TABLE>
<CAPTION>
STATION
NR. CITIES PROTOCOLO DATE STATE
<S> <C> <C> <C> <C>
1696 Cosmopolis 01/6/93 SP
1697 Cravinhos 01/6/93 SP
1698 Descalvado 01/6/93 SP
1699 Dourado 01/6/93 SP
1700 Dumont 01/6/93 SP
1701 Fernando Prestes 01/6/93 SP
1702 Garca 01/6/93 SP
1703 Getulina 01/6/93 SP
1704 Guaira 01/6/93 SP
1705 Guapiacu 01/6/93 SP
1706 Guara 01/6/93 SP
1707 Guaraci 01/6/93 SP
1708 Guararapes 01/6/93 SP
1709 Iacanga 01/6/93 SP
1710 Ibate 01/6/93 SP
1711 Ibitinga 01/6/93 SP
1712 Itapira 01/6/93 SP
1713 Itapolis 01/6/93 SP
1714 Ituverava 01/6/93 SP
1715 Jaborandi 01/6/93 SP
1716 Jabuticabal 01/6/93 SP
1717 Jau 01/6/93 SP
1718 Jose Bonifacio 01/6/93 SP
1719 Lencois Paulista 01/6/93 SP
1720 Lindoia 01/6/93 SP
1721 Lins 01/6/93 SP
1722 Marilia 01/6/93 SP
1723 Matao 01/6/93 SP
1724 Miguelopolis 01/6/93 SP
1725 Monte Aprazivel 01/6/93 SP
1726 Morro Agudo 01/6/93 SP
1727 Morungaba 01/6/93 SP
1728 Nova Granada 01/6/93 SP
1729 Orlandia 01/6/93 SP
1730 Patrocinio Paulista 01/6/93 SP
1731 Pedregulho 01/6/93 SP
1732 Penapolis 01/6/93 SP
1733 Piacatu 01/6/93 SP
1734 Pinhal - Espirito Santo do 01/6/93 SP
1735 Piracicaba 01/6/93 SP
1736 Pirajui 01/6/93 SP
1737 Pirangi 01/6/93 SP
1738 Potirendaba 01/6/93 SP
1739 Pradopolis 01/6/93 SP
1740 Quintana 01/6/93 SP
1741 Rafard 01/6/93 SP
</TABLE>
Page 2
<PAGE>
Schedule C (800 MHz)
CVA - SERVICOS DE RADIOCOMUNICAOES S/C LTDA.
800 MHz APPLICATION
<TABLE>
<CAPTION>
STATION
NR. CITIES PROTOCOLO DATE STATE
<S> <C> <C> <C> <C>
1742 Ribeirao Corrente 01/6/93 SP
1743 Santa Barbara D'Oeste 01/6/93 SP
1744 Sao Carlos 01/6/93 SP
1745 Sao Joaquim da Barra 01/6/93 SP
1746 Sao Pedro 01/6/93 SP
1747 Sao Simao 01/6/93 SP
1748 Serra Negra 01/6/93 SP
1749 Sertaozinho 01/6/93 SP
1750 Socorro 01/6/93 SP
1751 Usina Esmeril 01/6/93 SP
1752 Valinhos 01/6/93 SP
1753 Valparaiso 01/6/93 SP
</TABLE>
Page 3
<PAGE>
Schedule C (400 MHz)
RELACAO DAS LOCALIDADES -- PROJETO TRUNKING
400 MHZ E-SMR
REDE 01
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
NR. CODIGO
ESTA PROTO- DO H1 H2 ATEN-
CAO LOCALIDADE ENDERECO COLO UF CEP MUNICIPIO (m) (m) UACAO
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Av. Paulista, 1754 - Bela
01 Sao Paulo Vista 007007 SP 01310-200 3550308-09 10 95 5,52
- --------------------------------------------------------------------------------------------------------------------------
Estrada Mogi-Salesopolis,
02 Mogi das Cruzes Km 9 - Cocuera 007011 SP 13730-000 3530607 10 75 4,61
- --------------------------------------------------------------------------------------------------------------------------
Sao Jose dos
03 Campos Torre da Embratel - Centro 007012 SP 13720-000 3549904 10 55 3,89
- --------------------------------------------------------------------------------------------------------------------------
Av. Juscelino K. de
04 Taubate Oliveira, 475 007013 SP 12010-600 3554102 10 45 3,53
- --------------------------------------------------------------------------------------------------------------------------
Rodovia Presidente Dutra,
05 Guaratingueta Km 59,8 007014 SP 12500-000 3518404 10 55 3,89
- --------------------------------------------------------------------------------------------------------------------------
Rua Maj. Joaquim Luiz
06 Lorena Bastos, 96 007015 SP 12600-000 3527207 10 55 3,89
- --------------------------------------------------------------------------------------------------------------------------
Rodovia Presidente Dutra,
07 Queiuz Km 14,6 007016 SP 12800-000 3541901 10 55 3,89
- --------------------------------------------------------------------------------------------------------------------------
Fazenda Ribeirlo Raso, SIN -
08 Resende Resende 005420 RJ 27534-970 3304201 10 55 3,89
- --------------------------------------------------------------------------------------------------------------------------
Rodovia RJ-1 55, Km 299 -
09 Barra Mansa Barra Mansa 005421 RJ 27301-970 3300407 10 55 3,89
- --------------------------------------------------------------------------------------------------------------------------
Rodovia BR-393, Km 304 -
10 Voita Redonda Voita Redonda 005422 RJ 27292-970 3306305 10 45 3,53
- --------------------------------------------------------------------------------------------------------------------------
Rodovia BR-1 16, Km 363 -
11 Pirai Pirai 005423 RJ 27175-000 3304003 10 65 4,25
- ---------------------------------------------------------------------------------------------------------------------------
Serra da Madureira, SIN -
12 Nova Iguacu Mesquita - Nova Iguacu 005424 RJ 26255-350 3303500-25 10 35 3,17
- --------------------------------------------------------------------------------------------------------------------------
Estrada do Exceisior SIN,
Alto da Boa Vista - Sumare -
13 Rio de Janeiro Rio de Janeiro 005425 RJ 20531-220 3304557 10 35 3,17
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------
NR. ALTURA
ESTA ALTI- DE
CAO LOCALIDADE RAIO TUDE ANTENA LATITUDE LONGITUDE
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
01 Sao Paulo 25 820 90 23S 34' 00" 46W 39' 00"
- -----------------------------------------------------------------------------------------
02 Mogi das Cruzes 10 749 70 23S 31' 22" 46W 11' 00"
- ------------------------------------------------------------------------------------------
Sao Jose dos
03 Campos 10 620 50 23S 10' 46" 45W 54' 28"
- ------------------------------------------------------------------------------------------
04 Taubate 10 681 40 23S 01' 30" 45W 31' 30"
- ------------------------------------------------------------------------------------------
05 Guaratingueta 25 540 50 22S 47' 47" 45W 56' 32"
- ------------------------------------------------------------------------------------------
06 Lorena 25 525 50 22S 43' 51" 45W 07' 29"
- ------------------------------------------------------------------------------------------
07 Queiuz 15 500 50 22S 32' 13" 44W 46' 26"
- ------------------------------------------------------------------------------------------
08 Resende 20 500 50 22S 33' 10" 44W 25' 45"
- ------------------------------------------------------------------------------------------
09 Barra Mansa 20 450 50 22S 32' 15" 44W 09' 45"
- ------------------------------------------------------------------------------------------
10 Voita Redonda 25 500 40 22S 29' 20" 44W 06' 15"
- ------------------------------------------------------------------------------------------
11 Pirai 25 500 60 22S 40' 00" 43W 50' 20"
- ------------------------------------------------------------------------------------------
12 Nova Iguacu 24 500 30 22S 47' 00" 43W 28' 50"
- ------------------------------------------------------------------------------------------
13 Rio de Janeiro 40 750 30 22S 58' 00" 43W 13' 45"
- ------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
Schedule C (400 MHz)
RELACAO DAS LOCALIDADES -- PROJETO TRUNKING
400 MHZ E-SMR
REDE 01
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
NR. CODIGO
ESTA PROTO- DO H1 H2 ATEN-
CAO LOCALIDADE ENDERECO COLO UF CEP MUNICIPIO (m) (m) UACAO
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Rodovia BR-040, Km 37 -
14 Petropolis Petropolis 005426 RJ 25662-970 3303906 10 65 4,25
- --------------------------------------------------------------------------------------------------------------------------
Rodovia BR-040, Km 81 -
15 ltaipava ltaipava 005427 RJ 25741-970 3303906-15 10 75 4,61
- --------------------------------------------------------------------------------------------------------------------------
Rodovia BR-040, Km 1 00 -
16 Areal Areal 005428 RJ 25845-000 3306008-10 10 65 4,25
- --------------------------------------------------------------------------------------------------------------------------
Rodovia BR-393, Km 1 1 8 -
17 Tres Rios Tres Rios 005429 RJ 25802-970 3306008 10 35 3,17
- --------------------------------------------------------------------------------------------------------------------------
Rodovia BR-145, Km 26 -
18 Barra do Piral Barra do Pirai 005430 RJ 27101-970 3300308 10 55 3,89
- --------------------------------------------------------------------------------------------------------------------------
Rodovia BR-393, Km 83 -
19 Andrade Pinto Andrade Pinto 005431 RJ 27770-000 3306206-10 10 35 3,17
- --------------------------------------------------------------------------------------------------------------------------
20 Juiz de Fora Av. Getulio Vargas, 181 007017 MG 36010-110 3136702 10 45 3,53
- --------------------------------------------------------------------------------------------------------------------------
21 Santos Dumont Rodovia BR-040, Km 739 007018 MG 36240-000 3160702 10 45 3,53
- --------------------------------------------------------------------------------------------------------------------------
Rua Cruz das Aimas, Acesso
22 Barbacena Km 699 - BR-040 007019 MG 36200-000 3105608 10 35 3,17
- --------------------------------------------------------------------------------------------------------------------------
Conselheiro
23 Lafaiete Rodovia BR-040, Km 645,5 007020 MG 36400-000 3118304 10 45 3,53
- --------------------------------------------------------------------------------------------------------------------------
Rua da Bahia, 1148 -
24 Belo Horizonte Centro 007027 MG 30160-011 3106200 10 81 5,01
- --------------------------------------------------------------------------------------------------------------------------
25 Betim Pca. Mitton Campos, 62 007026 MG 32510-140 3106705 10 45 3,53
- --------------------------------------------------------------------------------------------------------------------------
26 ltaguara Rodovia BR-381, Km 691 007025 MG - 3132206 10 65 4.43
- --------------------------------------------------------------------------------------------------------------------------
27 Otiveira Av. Maracana, 495 007024 MG 35540-000 3145604 10 55 3,89
- --------------------------------------------------------------------------------------------------------------------------
28 Perdoes Rodovia BR-381, Km 629,3 007022 MG 37260-000 3149903 10 60 4,25
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------
NR. ALTURA
ESTA ALTI- DE
CAO LOCALIDADE RAIO TUDE ANTENA LATITUDE LONGITUDE
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
14 Petropolis 25 1200 60 22S 32' 15" 43W 09' 15"
- ----------------------------------------------------------------------------------------------
15 ltaipava 20 1400 70 22S 22' 30' 43W 08' 20"
- ----------------------------------------------------------------------------------------------
16 Areal 23 500 60 22S 13' 50" 43W 06' 25"
- ----------------------------------------------------------------------------------------------
17 Tres Rios 18 300 30 22S 05' 40" 43W 12' 50"
- ----------------------------------------------------------------------------------------------
18 Barra do Piral 25 400 50 22S 29' 00" 44W 49' 00"
- ----------------------------------------------------------------------------------------------
19 Andrade Pinto 21 400 30 22S 14' 30" 43W 25' 35"
- ----------------------------------------------------------------------------------------------
20 Juiz de Fora 25 800 40 21S 45' 51" 43W 21' 01"
- ----------------------------------------------------------------------------------------------
21 Santos Dumont 15 840 40 21S 27' 24" 43W 33' 09"
- ----------------------------------------------------------------------------------------------
22 Barbacena 30 1180 30 21S 13' 33" 43W 46' 25"
- ----------------------------------------------------------------------------------------------
Conselheiro
23 Lafaiete 35 995 40 20S 39' 37" 43W 47' 10"
- ----------------------------------------------------------------------------------------------
24 Belo Horizonte 15 861 76 19S 49' 01" 43W 57' 23
- ----------------------------------------------------------------------------------------------
25 Betim 20 860 40 19S 58' 04" 44W 11' 54"
- ----------------------------------------------------------------------------------------------
26 ltaguara 20 840 60 20S 23' 32" 44W 29' 15"
- ----------------------------------------------------------------------------------------------
27 Otiveira 25 980 50 20S 41' 47" 44W 49' 48"
- ----------------------------------------------------------------------------------------------
28 Perdoes 25 945 55 2lS 05' 27" 45W 05' 29"
- ----------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
Schedule C (400 MHz)
RELACAO DAS LOCALIDADES -- PROJETO TRUNKING
400 MHZ E-SMR
REDE 01
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NR. CODIGO
ESTA PROTO- DO H1 H2 ATEN-
CAO LOCALIDADE ENDERECO COLO UF CEP MUNICIPIO (m) (m) UACAO
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
29 Carmo da Cachoeira Rodovia BR-381, Km 577,2 007023 MG - 3114006 10 60 4,25
- ------------------------------------------------------------------------------------------------------------------------------------
30 Sao Goncalo do
Sapucai Rodovia BR-381, Km 522,3 007021 MG - 3162005 10 65 4,43
- ------------------------------------------------------------------------------------------------------------------------------------
31 Pouso Alegre Av. Dr. Joao Beraldo, 460 007028 MG 37550-000 3152501 10 65 4,43
- ------------------------------------------------------------------------------------------------------------------------------------
32 Cambul Rodovia BR-284 007029 MG - 3110608 10 55 3,89
- ------------------------------------------------------------------------------------------------------------------------------------
33 ltapeva Av. Epaminondas Ferreira
Lobo, 197 007030 SP 18400-000 3522406 10 75 4,61
- ------------------------------------------------------------------------------------------------------------------------------------
34 Branganga Paulista Rua Eunice Ferraz
Fernandes, 151 007031 SP 12900-000 3507605 10 75 4,61
- ------------------------------------------------------------------------------------------------------------------------------------
35 Juquitiba Estrata Velha, Km 188,2 007032 SP 06950-000 3526209 10 75 4,61
- ------------------------------------------------------------------------------------------------------------------------------------
36 Pedro de Barros Rodovia BR-1 16 - Pedro de
Barros 007009 SP - - 10 80 4,97
- ------------------------------------------------------------------------------------------------------------------------------------
37 Juguit Rodovia Br-1 16, Km 382,7 007008 SP - 3526100 10 80 4,97
- ------------------------------------------------------------------------------------------------------------------------------------
38 Registro Rodovia BR-1 16, Km 442,5 007033 SP 11900-000 3542602 10 65 4,43
- ------------------------------------------------------------------------------------------------------------------------------------
39 Cajati Rodovia BR-1 16, Km 508 007034 SP - - 10 80 4,97
- ------------------------------------------------------------------------------------------------------------------------------------
40 Rio Vermelho Rodovia BR-1 16 - Rio
Vermelho PR-340, SIN- 007035 SP - - 10 65 4,43
- ------------------------------------------------------------------------------------------------------------------------------------
41 Cachoeira de Cima Cachoeira de Cima 007036 PR 83380-000 - 10 125 6,60
- ------------------------------------------------------------------------------------------------------------------------------------
42 Curitiba Av. Marechal Deodoro, 630 007037 PR 80020-320 4106902 10 100 5,70
- ------------------------------------------------------------------------------------------------------------------------------------
43 Paranagut Estrada Saquarema, Km 10-
Alexandra 007038 PR 86345-000 4118204-10 10 70 4,61
- ------------------------------------------------------------------------------------------------------------------------------------
44 Joinville Rua do Mirante, Morro do
Mirante - Imu 007039 SC 89600-000 4209102 10 40 3,53
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NR. ALTURA
ESTA ALTI- DE
CAO LOCALIDADE RAIO TUDE ANTENA LATITUDE LONGITUDE
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
29 Carmo da Cachoeira 20 945 55 21 S 27' 39" 45W 13' 25"
- -------------------------------------------------------------------------------------------------------------------------------
30 Sao Goncalo do
Sapucai 20 868 60 21 S 53' 32" 45W 35' 43"
- -------------------------------------------------------------------------------------------------------------------------------
31 Pouso Alegre 25 832 60 22 S 13' 48" 45W 56' 11"
- -------------------------------------------------------------------------------------------------------------------------------
32 Cambul 25 900 50 22 S 36' 44" 46W 03' 27"
- -------------------------------------------------------------------------------------------------------------------------------
33 ltapeva 25 685 70 23 S 58' 56" 48W 58' 32"
- -------------------------------------------------------------------------------------------------------------------------------
34 Branganga Paulista 18 820 70 22 S 57' 07" 46W 32' 31"
- -------------------------------------------------------------------------------------------------------------------------------
35 Juquitiba 10 685 70 23 S 55' 54" 47W 04' 36"
- -------------------------------------------------------------------------------------------------------------------------------
36 Pedro de Barros 15 75 75 24 S 14' 51" 47W 22' 22"
- -------------------------------------------------------------------------------------------------------------------------------
37 Juguit 20 70 75 24 S 19' 15" 47W 38' 05"
- -------------------------------------------------------------------------------------------------------------------------------
38 Registro 30 45 60 24 S 29' 15" 47W 50' 37"
- -------------------------------------------------------------------------------------------------------------------------------
39 Cajati 25 75 75 24 S 44' 10" 48W 07' 22"
- -------------------------------------------------------------------------------------------------------------------------------
40 Rio Vermelho 10 850 60 24 S 57' 22" 48W 30' 42"
- -------------------------------------------------------------------------------------------------------------------------------
41 Cachoeira de Cima 15 650 120 25 S 13' 55" 48W 45' 27"
- -------------------------------------------------------------------------------------------------------------------------------
42 Curitiba 35 950 95 25 S 25' 40" 49W 16' 23"
- -------------------------------------------------------------------------------------------------------------------------------
43 Paranagut 30 1000 65 25 S 32' 42" 48W 38' 33"
- -------------------------------------------------------------------------------------------------------------------------------
44 Joinville 35 229 35 26 S 18' 16" 48W 50' 44"
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
Schedule C (400 MHz)
RELACAO DAS LOCALIDADES -- PROJETO TRUNKING
400 MHZ E-SMR
REDE 01
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
NR. CODIGO
ESTA PROTO- DO H1 H2
CAO LOCALIDADE ENDERECO COLO UF CEP MUNICIPIO (m) (m)
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Av. Cap. Luis Homeaux, SIN
45 Santos - Sao Vicente 007040 SP 11370-500 3551009 10 40
- ------------------------------------------------------------------------------------------------------------
Av. Antonio Frederico
46 Jundial Ozanan, 600 007041 SP 13219-000 3525904 10 75
- ------------------------------------------------------------------------------------------------------------
Rua Barata Ribeiro, 50 -
47 Campinas ltapura 007042 SP 13023-030 3509502 10 55
- ------------------------------------------------------------------------------------------------------------
48 Limeira Boulevard de La Loi, 601 007043 SP 13610-000 3526902 10 70
- ------------------------------------------------------------------------------------------------------------
Av. Jos6 Antunes de
49 Leme Lisboa, 740 007044 SP 13610-000 3526704 10 75
- ------------------------------------------------------------------------------------------------------------
50 Porto Ferreira Av. 24 de Outubro, 1140 007045 SP 13660-000 3540705 10 55
- ------------------------------------------------------------------------------------------------------------
51 Cravinhos Fazenda Cravinhos - SP-050 007046 SP - 3513108 10 65
- ------------------------------------------------------------------------------------------------------------
52 Orlandia Rua Um, 964 007047 SP 14620-000 3534302 10 55
- ------------------------------------------------------------------------------------------------------------
53 Ituverava Rua lgara, 19 007048 SP 14500-000 3524006 10 55
- ------------------------------------------------------------------------------------------------------------
54 Igarapava Fazenda Sao Jeronimo 007049 SP - 3520103 10 65
- ------------------------------------------------------------------------------------------------------------
Torre da Radio Uberaba -
55 Uberaba Centro 007051 MG 36504-000 3170107 10 65
- ------------------------------------------------------------------------------------------------------------
Rua Duque de Caxias, 450 -
56 Uberlandia Centro 007052 MG 38400-066 3170206 10 75
- ------------------------------------------------------------------------------------------------------------
57 CatalAo Av. Jose Marcelino, 925 007053 GO 76313-000 5205109 10 75
- ------------------------------------------------------------------------------------------------------------
58 Cristalina Pca. Jose Damian. 34 007054 GO 73850-000 5206206 10 55
- ------------------------------------------------------------------------------------------------------------
Tore de TV e
59 Rio de Janeiro Telecomunicacoes Centro 007055 DF 70332-000 5300108 10 55
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
NR. ALTURA
ESTA ATEN- ALTI- DE
CAO LOCALIDADE UACAO RAIO TUDE ANTENA LATITUDE LONGITUDE
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
45 Santos 4,61 40 22 70 23S 57' 47" 46W 23' 31"
- ---------------------------------------------------------------------------------------------
46 Jundial 3,89 20 761 50 23S 11' 11" 46W 53' 03"
- ---------------------------------------------------------------------------------------------
47 Campinas 4,61 20 703 65 22S 54' 20" 47W 04' 35"
- ---------------------------------------------------------------------------------------------
48 Limeira 4,61 30 570 70 22S 33' 53" 47W 24' 06"
- ---------------------------------------------------------------------------------------------
49 Leme 3,89 30 619 50 22S 11' 08" 47W 23' 25"
- ---------------------------------------------------------------------------------------------
50 Porto Ferreira 4,43 30 560 60 21S 51' 14" 47W 28' 45"
- ---------------------------------------------------------------------------------------------
51 Cravinhos 3,89 30 788 50 21S 20' 55" 47W 43' 46"
- ---------------------------------------------------------------------------------------------
52 Orlandia 3,89 30 695 50 20S 43' 13" 47W 53' 12"
- ---------------------------------------------------------------------------------------------
53 Ituverava 4,43 30 605 60 20S 20' 22" 47W 46' 50"
- ---------------------------------------------------------------------------------------------
54 Igarapava 4,43 30 575 60 20S 02' 18" 47W 44' 49"
- ---------------------------------------------------------------------------------------------
55 Uberaba 4,61 10 841 70 19S 44' 54" 47W 55' 55"
- ---------------------------------------------------------------------------------------------
56 Uberlandia 4,61 10 874 70 18S 55' 09" 48W 16' 38"
- ---------------------------------------------------------------------------------------------
57 CatalAo 3,89 18 835 50 18S 10' 12" 47W 56' 31"
- ---------------------------------------------------------------------------------------------
58 Cristalina 3,89 15 1150 50 16S 46' 07" 47W 36' 49"
- ---------------------------------------------------------------------------------------------
59 Rio de Janeiro 3,89 15 1000 50 15S 46' 47" 47W 55' 47"
- ---------------------------------------------------------------------------------------------
</TABLE>
Page 4
