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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM T-3
FOR APPLICATION FOR QUALIFICATION OF INDENTURE UNDER
THE TRUST INDENTURE ACT OF 1939
POLYTAMA INTERNATIONAL FINANCE B.V.
(ISSUER)
P.T. POLYTAMA PROPINDO
(GUARANTOR)
(NAME OF APPLICANT)
<TABLE>
<S> <C>
C/O MEESPIERSON TRUST B.V. MIDPLAZA 2 BUILDING, 20TH FLOOR
AERT VAN NESSTRAAT 45 JALAN JEND. SUDIRMAN KAV, 10-11
4TH FLOOR JAKARTA 10220
3012 CA ROTTERDAM, INDONESIA
THE NETHERLANDS (011)(62)(21) 570-3883
(011)(31)(10) 403-5843
(ADDRESS AND TELEPHONE NUMBER OF ISSUER'S (ADDRESS AND TELEPHONE NUMBER OF
PRINCIPAL EXECUTIVE OFFICES) GUARANTOR'S PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
<TABLE>
<CAPTION>
TITLE OF CLASS AMOUNT
-------------- ------
<S> <C>
Guaranteed Secured Notes US$200,000,000
due June 15, 2007
</TABLE>
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As promptly as possible after the Effective Date of this Application for
Qualification
Name and Address of Agent for Service:
CT Corporation System
1633 Broadway
New York, New York 10069
(212) 245-4107
COPY TO:
JEROME L. COBEN, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
300 SOUTH GRAND AVENUE
LOS ANGELES, CA 90071-3144
(213) 687-5000
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GENERAL
1. GENERAL INFORMATION.
(a) Form of organization: Polytama International Finance B.V. (the "Issuer") is
a private company with limited liability (besloten vennootschap met beperkte
aansprakelijkheid ). P.T. Polytama Propindo (the "Company") is a limited
liability company.
(b) State or other sovereign power under the laws of which organized: The Issuer
is incorporated under the laws of The Netherlands. The Company is
incorporated in the Republic of Indonesia.
2. SECURITIES ACT EXEMPTION APPLICABLE.
If the modifications to the Existing Notes (as hereinafter defined) that
are the subject of the Consent Solicitation of the Issuer and the Company (the
"Consent Solicitation") are deemed to involve the issuance of a new security,
the Issuer, a private company with limited liability incorporated under the laws
of The Netherlands, and the Company, an Indonesian Corporation, are relying upon
the exemption from the registration requirements of the Securities Act of 1933,
as amended (the "Securities Act"), provided by Section 3(a)(9) thereunder, in
connection with the Consent Solicitation, as described herein. The Consent
Solicitation is being made by the Issuer and the Company pursuant to their
Consent Solicitation Statement dated July 13, 1998 (the "Statement"), and
consists of a request to modify certain provisions of the Issuer's outstanding
$200,000,000 11 1/4% Notes due 2007 (the "Existing Notes") guaranteed by the
Company (the Existing Notes, as modified by such modification, the "Modified
Notes").
The Company and the Issuer will not pay any commission or other
remuneration to any broker, dealer, salesman, or other person for soliciting
consents. Regular employees of the Company and the Issuer, who will not receive
additional compensation therefor, may provide information concerning the Consent
Solicitation to the holders of the Existing Notes ("Holders"). The Company and
the Issuer have made no arrangements and have no understanding with any dealer,
salesman or other person regarding the solicitation of consents.
There have not been any sales of securities of the same class as the
Modified Notes or the Existing Notes by the Issuer, nor are there any such other
sales planned, by or through an underwriter at or about the time of the Consent
Solicitation.
The Company and the Issuer retained Chase Securities, Inc. ("CSI"), as the
"Procedural Advisor," to advise the Company and the Issuer as to the structure,
process and certain procedural matters related to the Consent Solicitation. CSI
has not been retained to render an opinion as to the fairness of the Consent
Solicitation to Holders. CSI's services to the Issuer and the Company are
limited solely to advisory services, and CSI will not, directly or indirectly,
solicit consents under the Consent Solicitation or otherwise make
recommendations with respect to acceptance or rejection of the Consent
Solicitation. CSI will not be paid any fee or commission in connection with its
advisory services; it will be reimbursed for its expenses related to its
engagement.
The Company and the Issuer also have retained Corporate Investor
Communications, Inc. as the "Information Agent" in connection with the Consent
Solicitation. The Information Agent will provide to Holders only information
otherwise contained in the Statement and general information regarding the
mechanics of the consent process. The Information Agent will not solicit
consents in connection with the Consent Solicitation or make recommendations as
to the acceptance or rejection of the Consent Solicitation. The Information
Agent will be paid reasonable fees directly by the Company and the Issuer for
its services and will be reimbursed for its expenses related to its engagement.
There are no cash payments made or to be made by any Holder in connection
with the Consent Solicitation.
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AFFILIATIONS
3. AFFILIATES. Furnish a list or diagram of all affiliate of the Company and
indicate the respective percentages of voting securities or other bases of
control.
The organizational structure of the Company, including its shareholders and
its subsidiaries, is summarized in the following chart. Percentages represent
ownership interest in each entity.
[ORGANIZATIONAL STRUCTURE CHART]
(1) Shareholders of and their respective percentage of ownership interest in
the Company:
P.T. Tirtamas Majutama(1)................ 80%
BP Chemicals Investments Limited......... 10%
Nissho Iwai Corporation.................. 10%
(2) Subsidiaries of and their respective percentage of ownership interest held
by the Company:
Polytama International Finance
B.V. (Issuer).......................... 100%
Polytama II Subsidiary.................. 82%
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(1) The shareholders of Tirtamas are four closely held companies owned by
Hashim S. Djojohadikusumo, Honggo Wendratno, Al Nljoo and Siti Hediati
Haryadi, who own 35%, 25%, 25% and 15% of Tirtamas, respectively.
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MANAGEMENT AND CONTROL
4. DIRECTORS AND EXECUTIVE OFFICERS. List the names and complete mailing
addresses of all directors and executive officers of the applicant and all
persons chosen to become directors and executive officers. Indicate all offices
with the applicant held or to be held by each person named.
The names of the directors and executive officers of the Company are set
forth below. The mailing address of each of the directors and executive officers
is Midplaza 2 Building, 20th Floor, Jalan Jend. Sudirman Kav. 10-11, Jakarta
10220, Indonesia.
<TABLE>
<CAPTION>
NAME TITLE
- ---- -----
<S> <C>
Hashim S. Djojohadikusumo President Commissioner
Al Njoo Commissioner
Sekio Hara Commissioner
Siti Hediati Haryadi Commissioner
Anangga Roosdiono Commissioner
Michael Buzzacott Commissioner
Honggo Wendratno President Director
Horacio U. Marasigan Director (and Finance Director)
I. Made Widjanta Director (and Operations Director)
Ashley J. Reed Director
Yasunori Takagi Director
</TABLE>
5. PRINCIPAL OWNERS OF VOTING SECURITIES. Furnish the following information as
to each person owning 10 percent or more of the voting securities of the
applicant.
The following table sets forth certain information, as of July 10, 1998,
with respect to the beneficial ownership of the outstanding shares of common
stock of the Company held by each person or entity who owns 10% or more of the
shares of the Company's outstanding shares of common stock.
<TABLE>
<CAPTION>
NAME AND COMPLETE TITLE OF CLASS AMOUNT PERCENTAGE OF VOTING
MAILING ADDRESS OWNED OWNED SECURITIES OWNED
- ----------------- ----------------------- ---------- --------------------
<S> <C> <C> <C>
P.T. Tirtamas Majutama(1)............... Common Stock, par value 36,000,000 80.0%
BRI II Building, 25th Floor Rp. 2017 per share
Jalan Jend. Sudirman
Kav. 44-46,
Jakarta 10210, Indonesia
Nissho Iwai Corporation................. Common Stock, par value 4,500,000 10.0%
4-5, Akasaka 2 -- Chome Rp. 2017 per share
Minato-Ku
Tokyo 107, Japan
BP Chemicals Investments Limited........ Common Stock, par value 4,500,000 10.0%
Kuningan Plaza South Tower, Suite 401 Rp. 2017 per share
JL. H.R. Rasuna Said
Kav. 11-14
Jakarta 12940 Indonesia
</TABLE>
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(1) The shareholders of P.T. Tirtamas Majutama are four closely held companies
owned by Hashim S. Djojohadikusumo, Honggo Wendratno, Al Njoo and Siti
Hediati Haryadi owning 35%, 25%, 25% and 15% of Tirtamas, respectively.
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UNDERWRITERS
6. UNDERWRITERS. Give the name and complete mailing address of (a) each person
who, within three years prior to the date of filing the application, acted as an
underwriter of any securities of the obligor which were outstanding on the date
of filing the application, and (b) each proposed principal underwriter of the
securities proposed to be offered. As to each person specified in (a), give the
title of each class of securities underwritten.
(a) The following were the underwriters in the Issuer's issuance in June,
1997 of $200 million of 11 1/4% Guaranteed Secured Notes due 2007:
Chase Securities, Inc.
270 Park Avenue
New York, NY 10017
(b) There are no underwriters of the securities proposed to be offered in
the Consent Solicitation.
CAPITAL SECURITIES
7. CAPITALIZATION. (a) Furnish the following information as to each authorized
class of securities of the applicant.
(i) Equity Securities as of July 10, 1998.
<TABLE>
<CAPTION>
TITLE OF CLASS AMOUNT AUTHORIZED AMOUNT OUTSTANDING
- -------------- ----------------- ------------------
<S> <C> <C>
Common Stock Rp. 2,017 par value................ 45,000,000 shares 45,000,000 shares
</TABLE>
(ii) Debt Securities as of July 10, 1998.
<TABLE>
<CAPTION>
TITLE OF CLASS AMOUNT AUTHORIZED AMOUNT OUTSTANDING
- -------------- ----------------- ------------------
<S> <C> <C>
11 1/4% Guaranteed Secured Notes due 2007......... US$200,000,000 US$200,000,000
</TABLE>
(b) Give a brief outline of the voting rights of each class of voting
securities referred to in paragraph (a) above.
Holders of the Company's Common Stock have one vote per share for the
election of directors and all other matters, and have no cumulative voting
rights. Common shareholders do have preemptive rights but no conversion rights.
INDENTURE SECURITIES
8. ANALYSIS OF INDENTURE PROVISIONS. Insert at this point the analysis of
indenture provisions required under Section 305(a)(2) of the Trust Indenture Act
of 1939, as amended.
For purposes of this Section 8, the "Indenture" shall refer to the
Indenture, dated as of June 1, 1997, among the Issuer, the Company and the Bank
of New York, a New York banking corporation, as Trustee (the "Trustee"), as
supplemented by the First Supplemental Indenture, to be dated as of ,
1998 (the "First Supplemental Indenture"), subject to the Consent Solicitation
dated July 13, 1998. Other capitalized but otherwise undefined terms shall have
the meanings ascribed thereto in the Indenture.
(a) EVENTS OF DEFAULT
Events of Default with respect to the Notes under the Indenture includes
the following: (i) default in the payment of interest or any Additional Amounts
when due, continued for 30 days (ii) a default in the payment of principal of
any Note when due at its Stated Maturity, upon optional redemption, upon
required repurchase, upon declaration or otherwise, (iii) the failure by the
Company or the Issuer to comply with its obligations restricting Merger and
Consolidation activities, (iv) the failure by the Company or the Issuer to
comply for 30 days after the notice with any of its obligations in the covenants
relating to "Change of Control" (other
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than a failure to purchase Notes), "Limitation on Indebtedness," "Limitation on
Indebtedness and Preferred Stock of Restricted Subsidiaries," "Limitation on
Restricted Payments," "Limitation on Restrictions on Distributions from
Restricted Subsidiaries," "Limitation on Sales of Non-Collateral Assets and
Subsidiary Stock" (other than a failure to purchase Notes), "Limitation on Sales
of Collateral" (other than a failure to purchase Notes), "Limitation on
Affiliate Transactions," "Limitation on the Sale or issuance of Capital Stock of
Restricted Subsidiaries," "Limitation on Liens and Pari Passu Indebtedness,"
"Limitation on Sale/ Leaseback Transactions," "Limitation on Issuer Activities,"
"Keepwell Commitment," "Amendments to Security Documents," "Limitation on
Company's Business," "Insurance," "Taxes," "SEC Reports," "Limitation on
Withdrawals from Polytama II Account" and "Pipeline Rights", (v) the failure by
the Company or the Issuer to comply for 60 days after notice with its other
agreements contained in the Indenture, (vi) Indebtedness of the Company, the
Issuer or any Significant Subsidiary is not paid within any applicable grace
period after final maturity or is accelerated by the holders thereof because of
a default and the total amount of such indebtedness unpaid or accelerated excess
of $5 million (the "cross acceleration provision"), (vii) certain events of
bankruptcy, insolvency or reorganization of the Company, the Issuer or a
Significant Subsidiary (the "bankruptcy provisions"), (viii) any judgment of
decree for the payment of money in excess of $5.0 million is rendered against
the Company, the Issuer or Significant Subsidiary, remains outstanding for a
period of 60 days following such judgment and is not discharged, waived or
stayed within 10 days after notice (the "judgment default provision"), (ix) the
Guarantee ceases to be in full force and effect (other than in accordance with
the terms of such Guarantee) or the Company denies or disaffirms its obligations
under its Guarantee or (x)(A) the security interests under the Security
Documents or the Collateral Agency Agreement shall, at any time, cease to be in
full force and effect for any reason other than the satisfaction in full of all
obligations under the Indenture and discharge of the Indenture or any security
interest created thereunder shall be declared invalid or unenforceable, or the
Company or the Issuer shall assert, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or unenforceable; (B)
the Security Deed shall not have been registered in an amount of $224,750,000 or
more within 90 days from the Issue Date; or (C) the Collateral Agent shall cease
to have first priority perfected security interests in the Moveable Assets
Collateral, the Proceeds Collateral, the Subsidiary Investment Account, the
Polytama II Account, the Real Property Collateral (from and after the registry
of the Security Deed) or the Assigned rights (the "security default provision").
However, a default under clauses (iv), (v), (vi) or (viii) will not constitute
an Event of Default until the Trustee or the holders or 25% in principal amount
of the outstanding Notes notify the Company of the default and the Company or
the Issuer, as applicable, does not cure such default within the time specified
after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the holders
of at least 25% in principal amount of the outstanding Notes may declare the
principal of, accrued but unpaid interest on, and any Additional Amounts then
due or which will be due on all the Notes to be due and payable. Upon such a
declaration, such principal, interest and Additional Amounts shall be due and
payable immediately. If an Event of Default relating to certain events of
bankruptcy, insolvency or reorganization of the Company occurs and is
continuing, the principal of, interest and Additional Amounts on all the Notes
will ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any holders of the Notes.
Under certain circumstances, the holders of a majority in principal amount of
the outstanding Notes may rescind any such acceleration with respect to the
Notes and its consequences.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default occurs and is continuing, the Trustee will
be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the holders of the Notes unless
such holders have offered to the Trustee reasonable indemnity or security
against any loss, liability or expense. Except to enforce the right to receive
payment or principal, premium (if any) or interest when due, no holder of a Note
may pursue any remedy with respect to the Indenture or the Notes unless (i) such
holder has previously given the Trustee notice that an Event of Default is
continuing, (ii) holders of at least 25% in principal amount of the outstanding
Notes have requested the Trustee to pursue the remedy, (iii) such holders have
offered the Trustee reasonably security or indemnity against any loss, liability
or expense, (iv) the Trustee has not complied with such request within 60 days
after the receipt thereof and the offer of security or indemnity and (v) the
holders of a majority in principal amount of the outstanding Notes have not
given the Trustee a
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direction inconsistent with such request within such 60-day period. Subject to
certain restrictions, the holders of a majority in principal amount of the
outstanding Notes are given the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
holder of a Note that would involve the Trustee in personal liability.
(b) AUTHENTICATION AND DELIVERY OF THE NOTES AND APPLICATION OF PROCEEDS
The Notes shall be executed on behalf of the Issuer by its Managing
Director. Upon delivery of the Notes to the Trustee for authentication, an
officer of the Trustee shall manually sign the certificate of authentication on
the Note and deliver such Note. The proceeds from the Notes were used for
repayment of an Interim Loan, the balance of which was deposited in the
Subsidiary Investment Account for future investment in the Company's subsidiary.
However, under the terms of the First Supplemental Indenture, those proceeds in
the Subsidiary Investment Account are to be withdrawn therefrom (i) for payment
of interest due on June 15, 1998 plus Withholding Taxes and Additional Amounts,
(ii) for professional fees and expenses incurred in preparation of the Consent
Solicitation, and (iii) the balance for redemption of the Notes plus accrued and
unpaid interest to the date of such redemption.
(c) RELEASE OF PROPERTY SUBJECT TO LIEN
Neither the Company nor the Issuer may release assets that comprise part of
the Collateral unless such release falls into one of the following scenarios:
(1) If an asset that is part of the Collateral is released from the
lien in connection with a sale of such asset, the Company must receive (i)
consideration at least equal to the fair market value of the Collateral
subject to such release, (ii) at least 75% of the consideration thereof
received by the Company is in the form of cash or cash equivalents, (iii)
any such release is in compliance with the provisions of Section 12 of the
Indenture, and (iv) 100% of the proceeds from the sale of such assets is
promptly delivered and pledged by the Company to the Collateral Agent for
deposit in the Collateral Accounts.
(2) If the value of the Collateral asset being released equals to 25%
or more of the aggregate book value of the all Collateral and if such asset
is released through sale, (i) the proceeds from such sale must be
sufficient to prepay all unpaid principal, interest and all other amounts
payable in respect to all Secured Indebtedness, (ii) an amount equal to
100% of the sales proceeds from such release of security interest is
applied (A) to make an offer to the holders of the Securities to purchase
any and all the outstanding securities at a purchase price in cash equal to
101% of the Principal amount thereof plus accrued and unpaid interest and
any Additional Amounts due, and (B) to the extent of the balance of such
sales proceeds, after application in accordance with (A), to replace any
properties or assets or to purchase properties or assets to be used in the
business of the Company and owned by the Company, provided that such
properties or assets shall become Collateral governed by the Collateral
Agency Agreement.
(3) If the value of the Collateral asset being released is 25% or less
of the aggregate book value of the all Collateral and if such asset is
released through sale, an amount equal to 100% of the sales proceeds from
such Collateral disposition is applied, to the extent the Company elects,
to replace any assets or properties that were the subject of such assets or
properties that were the subject of such Collateral disposition or to
acquire properties or assets to be used in the business of the Company
within 18 months from the later of the date of such Collateral disposition
or the receipt of such sale proceeds, provided such properties or assets
will become subject to the liens of the Indenture and will become
Collateral governed by the Collateral Agency Agreement.
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(4) As long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Company may release assets
that comprise part of the Collateral without any consent by the Trustee
with respect to the followings:
(i) sell or otherwise dispose of any Collateral subject to the
Liens of the Indenture, the Collateral Agency Agreement and the Security
Documents, which may have become worn out or obsolete, not exceeding a
book value of $2.0 million in any one calendar year;
(ii) demolish or tear down any Collateral, if such demolition or
tearing down is in the best interests of the Company and the fair market
value and utility of the Collateral as an entirety will not thereby be
impaired;
(iii) sell or otherwise dispose of Collateral in isolated
transactions that do not exceed $1.0 million in the aggregate.
(5) The Company has the right to dispose of any Collateral asset upon
the Trustee's consent and upon compliance with the requirements of the
following provisions:
(i) if the property to be released has a book value of more than
$2.0 million, the Trustee is provided with a written resolution of a
majority of the Board of Directors requesting such release and
authorizing an application to the Trustee therefor;
(ii) the security afforded by the Liens of the Indenture, the
Collateral Agency Agreement and the Security Documents will not be
impaired by such release (except with respect to the Collateral so
released);
(iii) the Company has disposed of or will dispose of the Collateral
so to be released for a consideration representing its fair market
value;
(iv) no Default or Event of Default shall have occurred and be
continuing (or shall result therefrom);
(v) if the Collateral to be released is real property, following
such release and the release of the Lien of any applicable Security Deed
with respect thereto, the non-released property has sufficient utility
services and sufficient access to public roads, rail spurs, harbors,
canals, terminals, and other transportation structures for the continued
use of such non-released property in substantially the manner carried on
by the Company and its Subsidiaries prior to such release;
(vi) if the Collateral to be released is real property, following
such release, the non-released property subject to the Security Deed
will continue to comply in all material respects with applicable laws,
rules, regulations and ordinances relating to land use and building and
work place safety;
(vii) if the Collateral to be released is real property, following
such release, the fair value of the non-released property (exclusive of
the fair value of the released property) shall not be less than the fair
value of such non-released property subject to the Security Deed prior
to such release;
(viii) if the Collateral to be released is subject to a prior
Permitted Lien, there shall be delivered to the Trustee a certificate of
the trustee, fiduciary, transferee or other holder of such prior
Permitted Lien that it has received the Net Proceeds sufficient to
discharge such prior Permitted Lien and has been irrevocably authorized
by the Company to pay over to the Collateral Agent any balance of such
Net Proceeds remaining after the discharge of such Indebtedness secured
by such prior Permitted Lien; and, if any property other than cash or
cash equivalents is included in the consideration for any Collateral to
be released, there shall be delivered to the Trustee such instruments of
conveyance, assignment and transfer, if any, as may be reasonably
necessary, in the opinion of counsel to be given pursuant to paragraph
(xi), to subject to the Liens of the Indenture, the Collateral Agency
Agreement and the Security Documents all the right, title and interest
of the Company in and to such property;
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(ix) the first priority perfected security interest pursuant to the
Security Deed shall be in full force and effect continuously and
uninterrupted at all times with respect to the Collateral not to be
released;
(x) (A) the Company delivers an Officer's Certificate with respect
to the matters set forth in paragraphs (i) through (ix) above and
stating that all conditions precedent relating to the release of such
Collateral have been complied with, provided that matters set forth in
paragraphs (ii), (iii) and (iv) may be an opinion of the officer and (B)
the Officer's Certificate shall also be signed, in the case of clauses
(ii) (as to impairment of security), (iii) and (vii) by an Independent
Appraiser; and
(xi) an Opinion of Counsel, in form and substance reasonably
satisfactory to the Trustee, with respect to certain matters relating to
the release is delivered.
In case a Default or an Event of Default shall have occurred and be
continuing, the Company, while in possession of the Collateral (other than Trust
Monies, cash, cash equivalents, securities and other personal property held by
or required to be deposited or pledged with the Collateral Agent or with the
trustee, fiduciary, transferee or other holder of a prior Permitted Lien), may
do any of the things enumerated in this covenant with respect to such
Collateral, if each of the holders of the Notes by appropriate action of such
holders, shall consent to such action. In such event, any certificate filed
pursuant to this paragraph shall omit the statement to the effect that no
Default or Event of Default has occurred and is continuing (or would result
therefrom). This paragraph shall not apply, however, during the continuance of
an Event of Default.
All cash or cash equivalents allocable to holders of Notes received by the
Collateral Agent pursuant to this covenant shall be held by the Collateral
Agent, for the benefit of the holders.
(6) Substitute Collateral. The Company shall have the right to
substitute moveable assets for certain Moveable Assets Collateral upon
compliance with the provisions set forth below, and the Trustee shall
direct the Collateral Agent to release the related Collateral, provided
that (i) the Company subjects other similar property related to or used or
to be used in the Plant to the Liens of the Indenture, the First
Supplemental Indenture, the Collateral Agency Agreement and the Security
Documents (which shall be a first priority perfected Lien unless otherwise
contemplated by the Security Documents), (ii) such property has a fair
value greater than or equal to the value of the Collateral to be released
and (iii) the Company provides the Trustee with certain documentation and
appraisals and an Opinion of Counsel with respect to certain matters.
(d) SATISFACTION AND DISCHARGE
The Indenture shall cease to be of further effect with respect to the Notes
when: (1) either (i) the issuer or the Company delivers to the Trustee all
outstanding Securities (other than Securities replaced due to loss, mutilation,
destruction or wrongful possession) for cancellation or (ii) all outstanding
Securities have become due and payable, whether at maturity or as a result of
the mailing of a notice of redemption and the Issuer or the Company irrevocably
deposits with the Trustee funds sufficient to pay at maturity or permissible
redemption all outstanding Securities, including interest thereon (other than
Securities replaced due to loss, mutilation, destruction or wrongful possession)
and the Issuer or the Company, in either case, pays all other sums payable
hereunder with respect to the Securities; and (2) the Trustee shall have
acknowledged satisfaction and discharge of the Indenture upon satisfaction of
the conditions set forth above on demand of the Company accompanied by an
Officers' certificate and opinion of counsel.
(e) EVIDENCE OF COMPLIANCE WITH CONDITIONS AND COVENANTS
The Issuer and the Company will deliver to the Trustee within 120 days
after the end of each fiscal year of the Company an Officer's Certificate
stating (1) whether or not the Company and the Issuer have complied with the
conditions and covenants under the Indenture throughout the year, (2) whether or
not the Company and the Issuer know of any default (after stating that they
would normally have knowledge of such default), and (3) if either the Company or
the Issuer knows of any default, the status of such default and what action the
Issuer or the Company, as applicable, is taking or proposes to take with respect
thereto. For purposes of
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this paragraph, compliance will be determined without regard to any period of
grace or requirement of notice under this Indenture.
9. OTHER OBLIGORS. Give the name and complete mailing address of any person,
other than the applicant, who is an obligor upon the indenture securities.
No person other than the Company or the Issuer is an obligor with respect
to the Modified Notes.
CONTENTS OF APPLICATION FOR QUALIFICATION
This application for qualification comprises:
(a) Pages numbered one to twelve, consecutively;
(b) The statement of eligibility and qualification of the Trustee under the
Indenture to be qualified (on Form T-1 to be filed by amendment);
(c) The following exhibits, in addition to those filed as a part of the
statement of eligibility and qualification of the trustee:
<TABLE>
<S> <C> <C> <C>
(i) Exhibit T3A.1 -- Articles of Association of the Issuer (filed with
Registration Statement on Form F-1 (333-6854), Exhibit No.
3.1, and included herein by reference).
(ii) Exhibit T3A.2 -- Article of Association of the Company (filed with
Registration Statement on Form F-1 (333-6854), Exhibit No.
3.2, and included herein by reference).
(iii) Exhibit T3B -- Not applicable.
(iv) Exhibit T3C.1 -- Indenture dated as of June 1, 1997 between the Issuer, the
Company, as Guarantor, and the Bank of New York, as Trustee
(filed with Registration Statement on Form F-1 (333-6854),
Exhibit No. 4.1, and included herein by reference).
(v) Exhibit T3C.2* -- First Supplemental Indenture dated as of , 1998
between the Issuer, the Company, as Guarantor, and the Bank
of New York, as Trustee.
(vi) Exhibit T3D -- Not applicable.
(vii) Exhibit T3E.1* -- Consent Solicitation Statement, dated as of July 13, 1998.
(viii) Exhibit T3E.2* -- Consent Form, dated as of July 13, 1998.
(ix) Exhibit T3E.3* -- Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees dated July 13, 1998.
(xii) Exhibit T3F* -- Cross-Reference Sheet.
</TABLE>
- ---------------
* Filed herewith. All other exhibits have been previously filed.
10
<PAGE> 11
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
applicant, Polytama International Finance B.V., a corporation organized and
existing under the laws of The Netherlands, has duly caused this application to
be signed on its behalf by the undersigned, thereunto duly authorized, and its
seal to be hereunto affixed and attested, all in the city of Rotterdam, The
Netherlands on July 9, 1998.
(SEAL)
POLYTAMA INTERNATIONAL FINANCE B.V.
MeesPierson Trust B.V., in its
capacity as
Managing Director
By: /s/ D.C. VAN DER POEL
------------------------------------
Name: D.C. Van Der Poel
Title: Authorized Signatory
Attest: /s/ A. HAKSTEEG
--------------------------------
Name: A. Haksteeg
Title: Authorized Signatory
11
<PAGE> 12
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
applicant, P.T. Polytama Propindo, a corporation organized and existing under
the laws of the Republic of Indonesia, has duly caused this application to be
signed on its behalf by the undersigned, thereunto duly authorized, and its seal
to be hereunto affixed and attested, all in the city of Jakarta, Indonesia on
July 9, 1998.
(SEAL)
P.T. POLYTAMA PROPINDO
By: /s/ HONGGO WENDRATNO
------------------------------------
Name: Honggo Wendratno
Title: President Director
Attest: /s/ HORACIO U. MARASIGAN
-------------------------------------------------------
Name: Horacio U. Marasigan
Title: Director/Principal Financial Officer
12
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<S> <C>
Exhibit T3A.1 Articles of Association of the Issuer (filed with
Registration Statement on Form F-1 (333-6854), Exhibit No.
3.1, and included herein by reference).
Exhibit T3A.2 Article of Association of the Company (filed with
Registration Statement on Form F-1 (333-6854), Exhibit No.
3.2, and included herein by reference).
Exhibit T3B Not applicable.
Exhibit T3C.1 Indenture dated as of June 1, 1997 between the Issuer, the
Company, as Guarantor, and the Bank of New York, as Trustee
(filed with Registration Statement on Form F-1 (333-6854),
Exhibit No. 4.1, and included herein by reference).
Exhibit T3C.2* First Supplemental Indenture dated as of , 1998
between the Issuer, the Company, as Guarantor, and the Bank
of New York, as Trustee.
Exhibit T3D Not applicable.
Exhibit T3E.1* Consent Solicitation Statement, dated as of July 13, 1998.
Exhibit T3E.2* Consent Form, dated as of July 13, 1998.
Exhibit T3E.3* Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees dated July 13, 1998.
Exhibit T3F* Cross-Reference Sheet.
</TABLE>
- ---------------
* Filed herewith. All other exhibits have been previously filed.
13
<PAGE> 1
EXHIBIT T3C.2
ANNEX A
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF , 1998
AMONG
POLYTAMA INTERNATIONAL FINANCE B.V.
AS ISSUER,
P.T. POLYTAMA PROPINDO
AS GUARANTOR,
AND
THE BANK OF NEW YORK
AS TRUSTEE
------------------------
$200,000,000 11 1/4% GUARANTEED SECURED NOTES DUE 2007
------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-1
<PAGE> 2
This FIRST SUPPLEMENTAL INDENTURE, dated as of , 1998
(the "First Supplemental Indenture"), to the Indenture (as defined in the first
recital) is entered into by and between Polytama International Finance B.V., a
private company with limited liability incorporated under the laws of The
Netherlands, as issuer (the "Issuer"), P.T. Polytama Propindo, a limited
liability company incorporated under the laws of the Republic of Indonesia, as
guarantor (the "Company"), and The Bank of New York, a New York banking
corporation, as trustee (the "Trustee"). Capitalized terms that are not defined
herein shall have the meanings set forth in the Indenture.
WHEREAS, the Issuer, the Company and the Trustee, are parties to that
certain Indenture (as amended, modified or supplemented from time to time in
accordance with the terms thereof, the "Indenture") dated as of June 1, 1997
pursuant to which the Issuer issued US$200,000,000 in aggregate principal amount
of 11 1/4% Guaranteed Secured Notes due 2007.
WHEREAS, the Issuer and the Company desire to amend certain provisions of
the Indenture as more particularly described in Article I herein (the
"Amendments");
WHEREAS, Section 9.02 of the Indenture provides that the Issuer, the
Company and the Trustee may amend the Indenture with the written consent of the
Holders;
WHEREAS, 100% of the Holders have duly consented to the Amendments;
WHEREAS, the conditions set forth in the Indenture for the execution and
delivery of the Amendments have been satisfied; and
WHEREAS, the Issuer, the Company and the Trustee are executing and
delivering this First Supplemental Indenture in order to provide for the
Amendments;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Issuer, the Company and the
Trustee hereby agree as follows:
ARTICLE I
AMENDMENTS TO INDENTURE
SECTION 1.1. Preamble to the Indenture. Paragraph 2 of the Preamble is
hereby amended to read in its entirety as follows:
"Each party agrees as follows for the benefit of the other parties and for
the benefit (except as otherwise provided in this Indenture) of the Holders of
the Issuer's 11 1/4% Guaranteed Secured Notes Due 2007 (the "Notes", which term
shall include the Notes as amended pursuant to the First Supplemental Indenture
and any Notes issued thereafter in accordance with this Indenture, as amended by
the First Supplemental Indenture)."
SECTION 1.2. Section 1.01 of the Indenture -- Definitions. Section 1.01 of
the Indenture is hereby amended to include the following definitions:
""Additional Securities" means additional Securities which may be issued
after the Issue Date pursuant to Article 16 of this Indenture (other than in
exchange for or in replacement of outstanding Securities). All references herein
to "Securities" shall be deemed to include Additional Securities.
"First Supplemental Indenture" means the First Supplemental Indenture,
dated as of , 1998, entered into by and between the Issuer, the
Company and the Trustee.
"First Supplemental Indenture Effective Date" means the date the First
Supplemental Indenture shall have become effective in accordance with the terms
thereof."
A-2
<PAGE> 3
SECTION 1.3. Section 2.02. of the Indenture -- Execution and
Authentication. Paragraph 4 of Section 2.02 of the Indenture shall be amended to
read as follows:
"Section 2.02. Execution and Authentication. The Trustee shall authenticate
and deliver Securities for original issue in the aggregate principal amount of
not more than $200,000,000 (plus the amount of Additional Securities that may be
issued pursuant to the terms and conditions stated in Section 1 -- Interest of
the Form of Reverse Side of Note due 2007), pursuant to a written order of the
Issuer signed by an officer of the Issuer. The order shall specify the amount of
Securities to be authenticated and the date on which the original issue of the
Securities is to be authenticated. The aggregate principal amount of Securities
which may be outstanding at any time may not exceed $200,000,000 (plus the
amount of Additional Securities that may be issued pursuant to the terms and
conditions stated in Section 1 -- Interest of the Form of Reverse Side of Note
due 2007), except as provided in Section 2.07."
SECTION 1.4. Section 4.04 of the Indenture -- Limitation on Indebtedness
and Preferred Stock of Restricted Subsidiaries. Paragraph 1 of Section 4.04 of
the Indenture is hereby amended to read in its entirety as follows:
"Section 4.04. Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries. (A) neither the Issuer nor the Company shall permit any Restricted
Subsidiary to Incur, directly or indirectly, any Indebtedness or Preferred
Stock; provided, however, that the Issuer may Incur Indebtedness pursuant to the
issuance of Additional Securities and as permitted pursuant to Section 4.03(a)
or Section 4.03(b)."
SECTION 1.5. Section 4.22 of the Indenture -- Use of Proceeds. Section 4.22
of the Indenture is hereby amended to read in its entirety as follows:
"Section 4.22. Use of Proceeds. The proceeds to the Issuer from the sale of
the Securities (other than Additional Securities) shall be loaned by the Issuer
to the Company. The Company shall use such proceeds as set forth in the "Use of
Proceeds" section of the final prospectus used in connection with the offer and
sale of the Securities, provided however that, with respect to the portion of
the proceeds that constitute the Subsidiary Investment Collateral as of the
First Supplemental Indenture Effective Date, the Company shall use such proceeds
solely for the purposes and in the manner set forth in Article 15."
SECTION 1.6. Section 10.01 of the Indenture -- Guarantee. Paragraph 1 of
Section 10.01 of the Indenture is hereby amended to read in its entirety as
follows:
"Section 10.01. Guarantee. The Company, as principal obligor and not merely
as surety, irrevocably and unconditionally guarantees to each Holder of a
Security (including each Additional Security) authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns that: (i) principal
of, premium, if any, and interest on the Notes (including any Additional Amounts
payable in respect thereof) will be promptly paid in full when due, subject to
any applicable grace period, whether on the relevant Stated Maturity, on an
interest payment date, by acceleration, by call for redemption or upon
repurchase or purchase pursuant to Article 3, Sections 4.07, 4.08 or 4.10 or
Article 11 or otherwise and interest on the overdue principal and premium, if
any, and purchase price and interest on any interest, to the extent lawful (in
each case including interest accruing on or after filing of any petition in
bankruptcy or reorganization relating to the Issuer or the Company, whether or
not a claim for post filing interest is allowed in such proceeding), on the
Notes and all other amounts payable under the Notes and obligations of the
Issuer to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed when the same shall become due and payable, whether on
the relevant maturity date, upon acceleration, by call for redemption, upon
repurchase or purchase pursuant to a Change of Control, any Asset Disposition or
Major Collateral Disposition, any repurchase of Notes pursuant to Article 11 or
otherwise, all in accordance with the terms hereof and thereof; and (ii) in case
of any extension of time of payment or renewal of any Notes or of any such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, subject to any
applicable grace period, whether at maturity, on an interest payment date, by
acceleration, required repurchase or otherwise. All payments under this
Guarantee shall be made in U.S. dollars."
A-3
<PAGE> 4
SECTION 1.7. Section 12.04 of the Indenture -- Disposition of Collateral
Without Trustee Consent. Clause (iv) of Section 12.04 of the Indenture is hereby
amended to read in its entirety as follows:
"(iv) withdraw money from the Subsidiary Investment Account pursuant to
Article 15 in order to make the payments permitted thereunder."
SECTION 1.8. Article 15. There shall be added to the Indenture a new
Article 15 to read in its entirety as follows:
"Article 15
Additional Use Of Proceeds
Section 15.01 Use of Subsidiary Investment Collateral. Notwithstanding any
other provision to the contrary in this Indenture, the Collateral Agency
Agreement or the Security Documents, the Company hereby agrees as of the First
Supplemental Indenture Effective Date, that the Company shall make no further
investments in Use of Proceeds Transactions and that the Subsidiary Investment
Collateral as of the First Supplemental Indenture Effective Date shall be
applied solely for the purposes set forth below.
(a) Promptly upon receipt by the Trustee of notice from the Issuer or the
Company in accordance with Section 15.02(a), the Trustee shall direct the
Collateral Agent to transfer proceeds in the Subsidiary Investment Account to be
released and used as follows:
(i) to pay in full to all Holders the interest on the Securities due
and payable on June 15, 1998, but without any additional interest as
interest on overdue installments of interest pursuant to Section 4.01 of
this Indenture, payment of which is waived;
(ii) to pay in full pursuant to Section 4.01(b) of this Indenture any
Withholding Taxes and Additional Amounts that are due and payable in
relation to the payment of interest on the Securities due and payable on
June 15, 1998; and
(iii) to pay the fees and expenses of professional advisors and fees
and expenses (including the fees and expenses of counsel) of the Trustee
incurred in connection with the preparation of the First Supplemental
Indenture among the Company, the Issuer and the Trustee, the solicitation
of consents in connection therewith and the preparation of the Company's
annual report filed with the SEC on Form 20-F for the year ended December
31, 1997, not to exceed the aggregate amount of US$500,000.
(b) The balance of the proceeds in the Subsidiary Investment Account that
have not been used pursuant to (a) above shall be released and used to redeem in
part the outstanding principal amount of the Securities at a price equal to 100%
of the principal amount thereof plus accrued and unpaid interest to the date of
such redemption in accordance with the following:
(i) Promptly upon receipt by the Trustee of notice from the Issuer or
the Company in accordance with Section 15.02(b), the Trustee shall direct
the Collateral Agent to transfer the balance of the proceeds in the
Subsidiary Investment Account that have not been used pursuant to (a) above
to the Trustee for retention in a segregated account, which account the
Trustee shall establish and maintain at its principal corporate trust
office in New York, NY United States of America, in the name of the Trustee
on behalf of the Holders, which shall be kept separate from all other
accounts and assets of the Issuer and over which the Trustee shall have
sole dominion and control, including the sole right of withdrawal.
(ii) As promptly as possible thereafter, the Trustee shall use the
funds in the segregated account to redeem Securities in an amount equal to
the amount in such segregated account, less the accrued interest owing to
the redemption date and any Withholding Taxes that are payable in relation
to such accrued interest.
(iii) Together with such redemption of Securities, the Trustee shall
use the funds remaining in the segregated account for payment of the
accrued interest owing to the redemption date and upon
A-4
<PAGE> 5
compliance with the provisions of Section 15.02(b) shall release to the
Issuer the amount of such Withholding Taxes.
(iv) Securities shall be redeemed on a pro rata basis and the Trustee
shall notify in writing the Company and the Issuer of the Securities or
portions thereof to be redeemed, provided that, the Securities and any
portions thereof redeemed shall be in denominations of US$1000 or whole
multiples thereof.
(v) Following the receipt of notice from the Trustee of the Securities
or portions thereof to be redeemed, the Issuer shall provide a notice of
redemption containing the information required by Section 3.03 of the
Indenture, except that, the consenting Holders have consented to shorten or
waive the notice period requirement; in lieu of the information required
under clause (6), the notice shall state that the Securities called for
redemption are being redeemed pursuant to Article 15 of the Indenture; and
the provisions of Sections 3.04, 3.05 and 3.06 shall apply mutatis
mutandis, except that the Trustee shall deposit with the Paying Agent money
to pay the redemption price and accrued interest.
Section 15.02 Release of Funds from Subsidiary Investment Account.
(a) Upon the delivery by the Issuer or the Company to the Trustee of a
written notice requesting the release of proceeds from the Subsidiary Investment
Account for use for any of the purposes set forth in Section 15.01(a), such
notice to be accompanied by an Officer's Certificate that (i) specifies the
amount of funds required and the specific payments towards which the funds shall
be applied, and (ii) certifies that such funds shall be used solely for the
purposes permitted under Section 15.01(a), the Trustee shall be required to
direct the Collateral Agent, and to provide any instructions or authorizations
required by the Collateral Agent pursuant to the terms of the Collateral Agency
Agreement, to release, in the case of Section 15.01(a)(i), to the Trustee the
funds from the Subsidiary Investment Account requested pursuant to such written
notice for application by the Trustee to the specific payments specified in such
written notice and, in the case of Section 15.01(a)(ii) or 15.01(a)(iii), to the
Issuer the funds from the Subsidiary Investment Account requested pursuant to
such written notice for application by the Issuer to the specific payments
specified in such written notice.
(b) Upon the delivery by the Issuer or the Company to the Trustee of a
written notice requesting the release of proceeds from the Subsidiary Investment
Account for use of the purposes set forth in Section 15.01(b), such notice to be
accompanied by an Officer's Certificate that certifies that funds paid to the
Issuer for the Withholding Taxes shall be used solely for such purpose, the
Trustee shall be required to direct the Collateral Agent, and to provide any
instructions or authorizations required by the Collateral Agent pursuant to the
terms of the Collateral Agency Agreement, to release, in the case of Section
15.01(b)(i), to the Trustee the funds from the Subsidiary Investment Account
requested pursuant to such written notice for application by the Trustee as
specifically provided in Section 15.01(b).
Section 15.03 Waiver of Overdue Interest. Each Holder hereby waives its
right (if any) to overdue interest or interest on interest (if any) with respect
to the June 15, 1998 interest payment.
Section 15.04 Notation on Securities. Upon the First Supplemental Indenture
Effective Date and subsequent release and use of proceeds in the Subsidiary
Investment Account in accordance with the terms and conditions stated in Section
15.01(b) and 15.02(b) herein (including redemption of Securities), the Trustee,
pursuant to Section 9.05, shall request the holder of the Global Security to
deliver it to the Trustee, who shall place an appropriate notation on the
Security regarding the changed terms and return it to the Holders."
A-5
<PAGE> 6
SECTION 1.9 Article 16. There shall be added to the Indenture a new Article
16 to read in its entirety as follows:
"Article 16
Issuance of Additional Securities
Section 16.01 Procedures for Issuance of Additional Securities. The Issuer
shall deliver written irrevocable notice to the Trustee at least ten (10) and
not more than (30) Business Days prior to the date of issuance of Additional
Securities. Such notice shall be accompanied by a written order of the Issuer,
signed by an Officer of the Issuer, to the Trustee to authenticate and deliver
the Additional Securities in the amount and on the date specified in such order
and otherwise in accordance with the applicable provisions of Article 2.
Section 16.02 Conditions Precedent to Issuance of Additional
Securities. The option of the Issuer to issue Additional Securities for interest
payments due on December 15, 1998, June 15, 1999 and December 15, 1999 may be
exercised only if prior to December 1, 1998 the Trustee has received an Opinion
of Counsel from counsel to the Company substantially to the effect that (i) the
Additional Securities to be issued and each of the Security Documents (and any
amendments thereto) have been duly authorized, executed and delivered by the
Company and constitute valid and legally binding obligations against the Issuer
and the Company in accordance with their terms; (ii) each of the Security
Documents constitutes a valid and perfected (meaning enforceable against third
parties) security interest in the secured property to which it is expressed to
relate; (iii) the Additional Securities are entitled to the benefit of the
security interests created by the Security Documents; (iv) no additional
consents or approvals are necessary in connection with the issuance of the
Additional Securities nor is such issuance in contravention of any law, decree
or governmental order; and (v) the Additional Securities are entitled to the
benefit of the Indenture.
Section 16.03 Authorization. The Trustee is authorized (i) to enter into
any amendments, modifications or changes to the Collateral Agency Agreement that
may be necessary to give effect to the provisions of the First Supplemental
Indenture; and (ii) to instruct the Collateral Agent to enter into any
amendments, modifications or changes in the Security Documents necessary for the
Additional Securities to be entitled to the benefit of the security interests
created thereunder and otherwise to give effect to the provisions of the First
Supplemental Indenture."
SECTION 1.10. Section 1 of Exhibit A to the Indenture -- Form of Reverse
Side of Note due 2007, Interest. Section 1 of Exhibit A to the Indenture is
hereby amended to read in its entirety as follows:
"POLYTAMA INTERNATIONAL FINANCE B.V., a closed company with limited
liability duly organized and existing under the laws of The Netherlands, with
its statutory seat in Rotterdam, The Netherlands (herein referred to as the
"Issuer," which term includes its successors and assigns under the Indenture
hereinafter referred to), for value received, hereby promises to pay interest
(as set forth in the Indenture, such terms include Additional Amounts) on the
principal amount of this Security at the rate per annum shown above. The Issuer
will pay interest semiannually on June 15 and December 15 of each year. For
interest payments due on December 15, 1998 and June 15, 1999, the Issuer may, at
its option and subject to Section 16 of the Indenture, make interest payments
through the issuance of Additional Securities for the pro rata benefit of the
registered Holders of the Securities at the close of business on June 1 or
December 1 next preceding interest payment date, in an aggregate principal
amount equal to the amount of the interest that would be payable on such
interest payment dates at the rate per annum shown above. For the interest
payment due on December 15, 1999, the Issuer may, at its option, make this
interest payment through the issuance of Additional Securities in an aggregate
principal amount equal to the amount of the interest that would be payable on
such interest payment date, provided that if the Issuer elects this option
interest payable on such interest payment date shall be calculated at a rate per
annum of 13% for the period commencing on June 15, 1999 and ending on December
15, 1999. Interest on the Securities will accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid or duly provided for, from June 13, 1997 (or the date of issue in the case
of Additional Securities). Interest will be computed on the basis of a 360-day
year of twelve 30-day months. The Issuer shall pay interest on overdue principal
at the rate borne
A-6
<PAGE> 7
by this Security plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful. If the Issuer
elects to make an interest payment through the issuance of Additional Securities
as provided above, it must provide the Trustee and the Holders with irrevocable
notice of such election at least ten (10) and not more than (30) Business Days
prior to the date for such interest payment."
SECTION 1.11. Section 2 of Exhibit A to the Indenture -- Form of Reverse
Side of Note due 2007, Method of Payment. 2 of Exhibit A to the Indenture is
hereby amended to read in its entirety as follows:
"The Issuer will pay interest on the Securities (except defaulted interest)
to the Persons who are registered holders of the Securities at the close of
business on the June 1 or December 1 next preceding the interest payment date
even if the Securities are canceled after the record date and on or before the
Interest Payment Date. The Issuer will pay principal and, except as provided in
Section 1, interest in money of the United States of America that, at the time
of payment, is legal tender for payment of public and private debts. However,
the Issuer may pay principal and, except as provided in Section 1, interest by
check payable in such money. Payment of this Security will be made upon
surrender or presentation of this Security to a Paying Agent. However, at the
option of the Issuer, it may mail an interest check to a Holder's registered
address."
ARTICLE II
GENERAL PROVISIONS
SECTION 2.1. Effective Date. This First Supplemental Indenture and the
Amendments contained herein shall become effective as of the date first
above-written.
SECTION 2.2. Ratification of Indenture. Except as expressly amended by this
First Supplemental Indenture, the Indenture is in all respects hereby
acknowledged, ratified and confirmed and shall continue in full force and effect
in accordance with the terms thereof. The Indenture and the First Supplemental
Indenture shall be read and construed as one and the same instrument.
SECTION 2.3. Indemnity. The Issuer and the Company shall indemnify the
Trustee (and shall be jointly and severally liable therefor) against any and all
claims, loss, liabilities or expenses (including attorneys' fees) incurred by it
in connection with or arising out of the execution and delivery of the First
Supplemental Indenture and the performance of its duties hereunder. The Issuer
and the Company need not reimburse the Trustee for any expense, or indemnify the
Trustee against, any loss, liability or expense incurred by the Trustee through
the Trustee's own wilful misconduct, negligence of bad faith.
SECTION 2.4. Successors. All agreements of the Issuer, the Company and the
Trustee in this First Supplemental Indenture shall bind their respective
successors and assigns.
SECTION 2.5. Governing Law. This First Supplemental Indenture shall be
governed by, and construed in accordance with, the laws of the State of New York
but without giving effect to applicable principles of conflicts of law to the
extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 2.6. Severability. In case any provision of this First Supplemental
Indenture shall be deemed invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 2.7. Headings. The Article and Section headings in this First
Supplemental Indenture are for convenience only and shall not affect the
construction of the First Supplemental Indenture.
SECTION 2.8. Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts, each of which shall be deemed an
original but all such counterparts shall together constitute the same
instrument.
A-7
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the date first above written.
POLYTAMA INTERNATIONAL FINANCE
B.V., as Issuer,
By:
------------------------------------
Name:
Title:
P.T. POLYTAMA PROPINDO, as Guarantor,
By:
------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee,
By:
------------------------------------
Name:
Title:
Acknowledged and Consented to by:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:
--------------------------------------------------------
Name:
Title:
A-8
<PAGE> 9
ANNEX B
COMPARISON OF PROVISIONS OF THE
INDENTURE AFFECTED BY THE
PROPOSED AMENDMENTS
<TABLE>
<CAPTION>
INDENTURE PROVISIONS INDENTURE PROVISIONS
AS CURRENTLY IN EFFECT AS PROPOSED TO BE AMENDED
<S> <C>
Preamble to the Indenture Preamble to the Indenture
Each party agrees as follows for the Each party agrees as follows for the
benefit of the other parties and for the benefit of the other parties and for the
benefit (except as otherwise provided in benefit (except as otherwise provided in this
this Indenture) of the Holders of the Indenture) of the Holders of the Issuer's
Issuer's 11 1/4 % Guaranteed Secured Notes 11 1/4 % Guaranteed Secured Notes Due 2007
Due 2007 (the "Notes"). (the "Notes", which term shall include the
Notes as amended pursuant to the First
Supplemental Indenture and any Notes issued
thereafter in accordance with this
Indenture, as amended by the First
Supplemental Indenture).
SECTION 1.01 Definitions SECTION 1.01 Definitions
[None] "Additional Securities" means additional
Securities which may be issued after the Issue
Date pursuant to this Indenture (other than
in exchange for or in replacement of
outstanding Securities). All references
herein to "Securities" shall be deemed to
include Additional Securities.
[None] "First Supplemental Indenture" means the
First Supplemental Indenture, dated as of
, 1998, entered into by and
between the Issuer, the Company and the
Trustee.
[None] "First Supplemental Indenture Effective
Date" means the date the First Supplemental
Indenture shall have become effective in
accordance with the terms thereof.
SECTION 2.02. Execution and Authentication SECTION 2.02. Execution and Authentication.
The Trustee shall authenticate and The Trustee shall authenticate and
deliver Securities for original issue in the deliver Securities for original issue in the
aggregate principal amount of not more than aggregate principal amount of not more than
$200,000,000 pursuant to a written order of $200,000,000 (plus the amount of Additional
the Issuer signed by an officer of the Securities that may be issued pursuant to
Issuer. The order shall specify the amount the terms and conditions stated in Section
of Securities to be authenticated and the 1 -- Interest of the Form of Reverse Side of
date on which the original issue of the Note due 2007), pursuant to a written order
Securities is to be authenticated. The of the Issuer signed by an officer of the
aggregate principal amount of Securities Issuer. The order shall specify the amount
which may be outstanding at any time may not of Securities to be authenticated and the
exceed $200,000,000, except as provided in date on which the original issue of the
Section 2.07. Securities is to be authenticated. The
aggregate principal amount of Securities
which may be outstanding at any time may not
exceed $200,000,000 (plus the amount of
Additional Securities that may be issued
pursuant to the terms and conditions stated
in Section 1 -- Interest of the Form of Re-
verse Side of Note due 2007), except as
provided in Section 2.07.
</TABLE>
B-1
<PAGE> 10
<TABLE>
<CAPTION>
INDENTURE PROVISIONS INDENTURE PROVISIONS
AS CURRENTLY IN EFFECT AS PROPOSED TO BE AMENDED
<S> <C>
SECTION 4.04. Limitation on Indebtedness SECTION 4.04. Limitation on Indebtedness
and Preferred Stock of Restricted and Preferred Stock of Restricted
Subsidiaries Subsidiaries.
(A) neither the Issuer nor the Company (A) neither the Issuer nor the Company
shall permit any Restricted Subsidiary to shall permit any Restricted Subsidiary to Incur,
Incur, directly or indirectly, any directly or indirectly, any Indebtedness or
Indebtedness or Preferred Stock; provided, Preferred Stock; provided, however, that the
however, that the Issuer may Incur In- Issuer may Incur Indebtedness pursuant to
debtedness permitted pursuant to Section the issuance of Additional Securities and as
4.03(a) or Section 4.03(b) permitted pursuant to Section 4.03(a) or
Section 4.03(b).
SECTION 4.22 Use of Proceeds SECTION 4.22 Use of Proceeds
The proceeds to the Issuer from the The proceeds to the Issuer from the sale
sale of the Securities shall be loaned by of the Securities (other than Additional
the Issuer to the Company. The Company shall Securities) shall be loaned by the Issuer to
use such proceeds as set forth in the "Use the Company. The Company shall use such
of Proceeds" section of the final prospectus proceeds as set forth in the "Use of
used in connection with the offer and sale Proceeds" section of the final prospectus
of the Securities used in connection with the offer and sale
of the Securities, provided however that,
with respect to the portion of the proceeds
that constitute the Subsidiary Investment
Collateral, as of the First Supplemental
Indenture Effective Date, the Company shall
use such proceeds solely for the purposes
and in the manner set forth in Article 15.
SECTION 10.01. Guarantee. SECTION 10.01. Guarantee.
The Company, as principal obligor and The Company, as principal obligor and
not merely as surety, irrevocably and not merely as surety, irrevocably and
unconditionally guarantees to each Holder of unconditionally guarantees to each Holder of
a Security authenticated and delivered by a Security (including each Additional
the Trustee and to the Trustee and its Security), authenticated and delivered by
successors and assigns, that: (i) principal the Trustee and to the Trustee and its
of, premium, if any, and interest on the successors and assigns that: (i) principal
Notes (including and Additional Amounts of, premium, if any, and interest on the
payable in respect thereof) will be promptly Notes (including any Additional Amounts
paid in full when due, subject to any payable in respect thereof) will be promptly
applicable grace period, whether on the paid in full when due, subject to any
relevant Stated Maturity, on an interest applicable grace period, whether on the
payment date, by acceleration, by call for relevant Stated Maturity, on an interest
redemption or upon repurchase or purchase payment date, by acceleration, by call for
pursuant to Article 3, Sections 4.07, 4.08 redemption or upon repurchase or purchase
or 4.10 or Article 11 or otherwise and pursuant to Article 3, Sections 4.07, 4.08
interest on the overdue principal and or 4.10 or Article 11 or otherwise and
premium, if any, and purchase price and interest on the overdue principal and
interest on any interest, to the extent premium, if any, and purchase price and
lawful (in each case including interest interest on any interest, to the extent
accruing on or after filing of any petition lawful (in each case including interest
in bankruptcy or reorganization relating to accruing on or after filing of any petition
the Issuer or the Company, whether or not a in bankruptcy or reorganization relating to
claim for post filing interest is allowed in the Issuer or the Company, whether or not a
such proceeding), on the Notes and all other claim for post filing interest is allowed in
amounts payable under the Notes and such proceeding), on the Notes and all other
obligations of the Issuer to the Holders or amounts payable under the Notes and
the Trustee hereunder or thereunder will be obligations of the Issuer to the Holders or
promptly paid in full or performed when the the Trustee hereunder or thereunder will be
same shall become due and payable, whether promptly paid in full or performed when the
on the relevant maturity date, upon same shall become due and payable, whether
acceleration, by call for redemption, upon on the relevant maturity date, upon
repurchase or purchase pursuant to a Change acceleration, by call for redemption, upon
of Control, any Asset Disposition or Major repurchase or purchase pursuant to a Change
Collateral Disposition, any repurchase of of Control, any Asset Disposition or Major
Notes pursuant to Article 11 or otherwise, Collateral Disposition, any repurchase of
all in accordance with the terms hereof Notes pursuant to Article 11 or otherwise,
all in
</TABLE>
B-2
<PAGE> 11
<TABLE>
<CAPTION>
INDENTURE PROVISIONS INDENTURE PROVISIONS
AS CURRENTLY IN EFFECT AS PROPOSED TO BE AMENDED
<S> <C>
and thereof; and (ii) in case of any accordance with the terms hereof and
extension of time of payment or renewal of thereof; and (ii) in case of any extension
any Notes or of any such other obligations, of time of payment or renewal of any Notes
that the same will be promptly paid in full or of any such other obligations, that the
when due or performed in accordance with the same will be promptly paid in full when due
terms of the extension or renewal, subject or performed in accordance with the terms of
to any applicable grace period, whether at the extension or renewal, subject to any
maturity, on an interest payment date, by applicable grace period, whether at
acceleration, required repurchase or maturity, on an interest payment date, by
otherwise. All payments under this Guarantee acceleration, required repurchase or
shall be made in U.S. dollars otherwise. All payments under this Guarantee
shall be made in U.S. dollars.
SECTION 12.04 Disposition of Collateral SECTION 12.04 Disposition of Collateral
Without Trustee Consent Without Trustee Consent
(iv) withdraw money from the Subsidiary (iv) withdraw money from the Subsidiary
Investment Account in the manner and to the Investment Account pursuant to Article 15 in
extent permitted by Article 11 and Section order to make the payments permitted
4.05(b)(v) hereof and the Collateral Agency thereunder; and
Agreement in order to make investments in
the Use of Proceeds Transactions; and
ARTICLE 15 ADDITIONAL USE OF PROCEEDS ARTICLE 15 ADDITIONAL USE OF PROCEEDS
SECTION 15.01 Use of Subsidiary Investment SECTION 15.01 Use of Subsidiary Investment
Collateral Collateral
[None] Notwithstanding any other provision to
the contrary in this Indenture, the Collateral
Agency Agreement or the Security Documents,
the Company hereby agrees as of the First
Supplemental Indenture Effective Date, that
the Company shall make no further
investments in Use of Proceeds Transactions
and that the Subsidiary Investment
Collateral as of the First Supplemental
Indenture Effective Date shall be applied
solely for the purposes set forth below.
(a) Promptly upon receipt by the Trustee
of notice from the Issuer or the Company in
accordance with Section 15.02(a), the
Trustee shall direct the Collateral Agent to
transfer proceeds in the Subsidiary
Investment Account to be released and used
as follows:
(i) to pay in full to all Holders the
interest on the Securities due and payable
on June 15, 1998, but without any additional
interest as interest on overdue installments
of interest pursuant to Section 4.01 of this
Indenture, payment of which is waived;
(ii) to pay in full pursuant to Section
4.01(b) of this Indenture any Withholding
Taxes and Additional Amounts that are due
and payable in relation to the payment of
interest on the Securities due and payable
on June 15, 1998; and
(iii) to pay the fees and expenses of
professional advisors and fees and expenses
(including the fees and expenses of counsel)
of the Trustee in-
</TABLE>
B-3
<PAGE> 12
<TABLE>
<CAPTION>
INDENTURE PROVISIONS INDENTURE PROVISIONS
AS CURRENTLY IN EFFECT AS PROPOSED TO BE AMENDED
<S> <C>
curred in connection with the preparation of
the First Supplemental Indenture among the
Company, the Issuer and the Trustee, the
solicitation of consents in connection
therewith and the preparation of the
Company's annual report filed with the SEC
on Form 20-F for the year ended December 31,
1997, not to exceed the aggregate amount of
US$500,000.
(b) The balance of the proceeds in the
Subsidiary Investment Account that have not
been used pursuant to (a) above shall be
released and used to redeem in part the
outstanding principal amount of the
Securities at a price equal to 100% of the
principal amount thereof plus accrued and
unpaid interest to the date of such
redemption in accordance with the following:
(i) Promptly upon receipt by the Trustee
of notice from the Issuer or the Company in
accordance with Section 15.02(b), the
Trustee shall direct the Collateral Agent to
transfer the balance of the proceeds in the
Subsidiary Investment Account that have not
been used pursuant to (a) above to the
Trustee for retention in a segregated
account, which account the Trustee shall
establish and maintain at its principal
corporate trust office in New York, NY
United States of America, in the name of the
Trustee on behalf of the Holders, which
shall be kept separate from all other
accounts and assets of the Issuer and over
which the Trustee shall have sole dominion
and control, including the sole right of
withdrawal.
(ii) As promptly as possible thereafter,
the Trustee shall use the funds in the
segregated account to redeem Securities in
an amount equal to the amount in such
segregated account, less the accrued
interest owing to the redemption date and
any Withholding Taxes that are payable in
relation to such accrued interest.
(iii) Together with such redemption of
Securities, the Trustee shall use the funds
remaining in the segregated account for
payment of the accrued interest owing to the
redemption date and concurrently with such
redemption shall pay to the Issuer the
amount of such Withholding Taxes.
(iv) Securities shall be redeemed on a
pro rata basis and the Trustee shall notify in
writing the Company and the Issuer of the
Securities or portions thereof to be
redeemed, provided that, the Securities and
any portions thereof redeemed shall be in
denominations of US$1000 or whole multiples
thereof.
</TABLE>
B-4
<PAGE> 13
<TABLE>
<CAPTION>
INDENTURE PROVISIONS INDENTURE PROVISIONS
AS CURRENTLY IN EFFECT AS PROPOSED TO BE AMENDED
<S> <C>
SECTION 15.02 Release of Funds from SECTION 15.02 Release of Funds from
Subsidiary Investment Account Subsidiary Investment Account
[None] (a) Upon the delivery by the Issuer or
the Company to the Trustee of a written notice
requesting the release of proceeds from the
Subsidiary Investment Account for use for
any of the purposes set forth in Section
15.01(a), such notice to be accompanied by
an Officer's Certificate that (i) specifies
the amount of funds required and the
specific payments towards which the funds
shall be applied, and (ii) certifies that
such funds shall be used solely for the
purposes permitted under Section 15.01(a),
the Trustee shall be required to direct the
Collateral Agent, and to provide any
instructions or authorizations required by
the Collateral Agent pursuant to the terms
of the Collateral Agency Agreement, to
release, in the case of Section 15.01(a)(i),
to the Trustee the funds from the Subsidiary
Investment Account requested pursuant to
such written notice for application by the
Trustee to the specific payments specified
in such written notice and, in the case of
Section 15.01(a)(ii) or 15.01(a)(iii), to
the Issuer the funds from the Subsidiary
Investment Account requested pursuant to
such written notice for application by the
Issuer to the specific payments specified in
such written notice.
(b) Upon the delivery by the Issuer or
the Company to the Trustee of a written notice
requesting the release of proceeds from the
Subsidiary Investment Account for use of the
purposes set forth in Section 15.01(b), such
notice to be accompanied by an Officer's
Certificate that certifies that funds paid
to the Issuer for the Withholding Taxes
shall be used solely for such purpose, the
Trustee shall be required to direct the
Collateral Agent, and to provide any
instructions or authorizations required by
the Collateral Agent pursuant to the terms
of the Collateral Agency Agreement, to re-
lease, in the case of Section 15.01(b)(i),
to the Trustee the funds from the Subsidiary
Investment Account requested pursuant to
such written notice for application by the
Trustee as specifically provided in Section
15.01(b).
SECTION 15.03 Waiver of Overdue Interest SECTION 15.03 Waiver of Overdue Interest.
[None] Each Holder hereby waives its right (if
any) to overdue interest or interest on interest
(if any) with respect to the June 15, 1998
interest payment.
SECTION 15.04 Notation on Securities SECTION 15.04 Notation on Securities.
[None] Upon the First Supplemental Indenture Ef-
fective Date and subsequent release and use of
proceeds in the Subsidiary Investment
Account in accordance with the terms and
conditions stated in
</TABLE>
B-5
<PAGE> 14
<TABLE>
<CAPTION>
INDENTURE PROVISIONS INDENTURE PROVISIONS
AS CURRENTLY IN EFFECT AS PROPOSED TO BE AMENDED
<S> <C>
Section 15.01(b) and 15.02 herein (including
redemption of Securities), the Trustee,
pursuant to Section 9.05, shall request the
holder of the Global Security to deliver it
to the Trustee, who shall place an
appropriate notation on the Security
regarding the changed terms and return it to
the Holders.
ARTICLE 16 ISSUANCE OF ADDITIONAL SECURITIES ARTICLE 16 ISSUANCE OF ADDITIONAL SECURITIES
SECTION 16.01 Procedures for Issuance of SECTION 16.01 Procedures for Issuance of
Additional Securities Additional Securities.
[None] The Issuer shall deliver written irrevo-
cable notice to the Trustee at least ten (10) and
not more than (30) Business Days prior to
the date of issuance of Additional
Securities. Such notice shall be accompanied
by a written order of the Issuer, signed by
an Officer of the Issuer, to the Trustee to
authenticate and deliver the Additional
Securities in the amount and on the date
specified in such order and otherwise in
accordance with the applicable provisions of
Article 2.
SECTION 16.02 Conditions Precedent to SECTION 16.02 Conditions Precedent to
Issuance of Additional Securities Issuance of Additional Securities.
[None] The option of the Issuer to issue Addi-
tional Securities for interest payments due on
December 15, 1998, June 15, 1999 and
December 15, 1999 may be exercised only if
prior to December 1, 1998 the Trustee has
received an Opinion of Counsel from counsel
to the Company substantially to the effect
that (i) the Additional Securities to be
issued and each of the Security Documents
(and any amendments thereto) have been duly
authorized, executed and delivered by the
Company and constitute valid and legally
binding obligations against the Issuer and
the Company in accordance with their terms;
(ii) each of the Security Documents
constitutes a valid and perfected (meaning
enforceable against third parties) security
interest in the secured property to which it
is expressed to relate; (iii) the Additional
Securities are entitled to the benefit of
the security interest created by the
Security Documents; (iv) no additional
consents or approvals are necessary nor is
the issuance of the Additional Securities in
contravention of any law, decree or
governmental order; and (v) the Additional
Securities are entitled to the benefit of
the Indenture.
SECTION 16.03 Authorization SECTION 16.03 Authorization.
[None] The Trustee is authorized (i) to enter
into any amendments, modifications or changes
to the Collateral Agency Agreement that may be
necessary to give effect to the provisions
of the First Supplemental Indenture; and
(ii) to instruct the Collateral Agent to
enter into any amendments, modifications or
changes necessary to give effect to the
provisions of the First Supplemental
Indenture.
</TABLE>
B-6
<PAGE> 15
<TABLE>
<CAPTION>
INDENTURE PROVISIONS INDENTURE PROVISIONS
AS CURRENTLY IN EFFECT AS PROPOSED TO BE AMENDED
<S> <C>
Section 1 of Exhibit A to the Section 1 of Exhibit A to the
Indenture -- Form of Reverse Side of Note Indenture -- Form of Reverse Side of Note
due 2007, Interest due 2007, Interest
POLYTAMA INTERNATIONAL FINANCE B.V., a POLYTAMA INTERNATIONAL FINANCE B.V., a
closed company with limited liability duly closed company with limited liability duly
organized and existing under the laws of The organized and existing under the laws of The
Netherlands, with its statutory seat in Netherlands, with its statutory seat in
Rotterdam, The Netherlands (herein referred Rotterdam, The Netherlands (herein referred
to as the "Issuer," which term includes its to as the "Issuer," which term includes its
successors and assigns under the Indenture successors and assigns under the Indenture
hereinafter referred to), for value hereinafter referred to), for value
received, hereby promises to pay interest received, hereby promises to pay interest
(as set forth in the Indenture, such terms (as set forth in the Indenture, such terms
include Additional Amounts) on the principal include Additional Amounts) on the principal
amount of this Security at the rate per amount of this Security at the rate per
annum shown above. The Issuer will pay annum shown above. The Issuer will pay
interest semiannually on June 15 and interest semiannually on June 15 and
December 15 of each year. Interest on the December 15 of each year. For interest
Securities will accrue from the most recent payments due on December 15, 1998 and June
date to which interest has been paid or duly 15, 1999, the Issuer may, at its option and
provided for or, if no interest has been subject to Section 16 of the Indenture, make
paid or duly provided for, from June 13, interest payments through the issuance of
1997. Interest will be computed on the basis Additional Securities for the pro rata
of a 360-day year of twelve 30-day months. benefit of the registered Holders of the
The Issuer shall pay interest on overdue Securities at the close of business on June
principal at the rate borne by this Security 1 or December 1 next preceding interest
plus 1% per annum, and it shall pay interest payment date, in an aggregate principal
on overdue installments of interest at the amount equal to the amount of the interest
same rate to the extent lawful. that would be payable on such interest
payment dates at the rate per annum shown
above. For the interest payment due on
December 15, 1999, the Issuer may, at its
option, make this interest payment through
the issuance of Additional Securities in an
aggregate principal amount equal to the
amount of the interest that would be payable
on such interest payment date, provided that
if the Issuer elects this option interest
payable on such interest payment date shall
be calculated at a rate per annum of 13% for
the period commencing on June 15, 1999 and
ending on December 15, 1999. Interest on the
Securities will accrue from the most recent
date to which interest has been paid or duly
provided for or, if no interest has been
paid or duly provided for, from June 13,
1997 (or the date of issue in the case of
Additional Securities). Interest will be
computed on the basis of a 360-day year of
twelve 30-day months. The Issuer shall pay
interest on overdue principal at the rate
borne by this Security plus 1% per annum,
and it shall pay interest on overdue
installments of interest at the same rate to
the extent lawful. If the Issuer elects to
make an interest payment through the
issuance of Additional Securities as
provided above, it must provide the Trustee
and the Holders with irrevocable notice of
such election at least ten (10) and not more
than (30) Business Days prior to the date
for such interest payment.
Section 2 of Exhibit A to the Section 2 of Exhibit A to the
Indenture -- Form of Reverse Side of Note Indenture -- Form of Reverse Side of Note
due 2007, Method of Payment due 2007, Method of Payment
</TABLE>
B-7
<PAGE> 16
<TABLE>
<CAPTION>
INDENTURE PROVISIONS INDENTURE PROVISIONS
AS CURRENTLY IN EFFECT AS PROPOSED TO BE AMENDED
<S> <C>
The Issuer will pay interest on the The Issuer will pay interest on the
Securities (except defaulted interest) to Securities (except defaulted interest) to
the Persons who are registered holders of the Persons who are registered holders of
the Securities at the close of business on the Securities at the close of business on
the June 1 or December 1 next preceding the the June 1 or December 1 next preceding the
interest payment date even if the Securities interest payment date even if the Securities
are canceled after the record date and on or are canceled after the record date and on or
before the Interest Payment Date. The Issuer before the Interest Payment Date. The Issuer
will pay principal and, interest in money of will pay principal and, except as provided
the United States of America that, at the in Section 1, interest in money of the
time of payment, is legal tender for payment United States of America that, at the time
of public and private debts. However, the of payment, is legal tender for payment of
Issuer may pay principal and, and interest public and private debts. However, the
by check payable in such money. Payment of Issuer may pay principal and, except as
this Security will be made upon surrender or provided in Section 1, interest by check
presentation of this Security to a Paying payable in such money. Payment of this
Agent. However, at the option of the Issuer, Security will be made upon surrender or
it may mail an interest check to a Holder's presentation of this Security to a Paying
registered address. Agent. However, at the option of the Issuer,
it may mail an interest check to a Holder's
registered address.
</TABLE>
B-8
<PAGE> 1
EXHIBIT T3E.1
CONFIDENTIAL
CONSENT SOLICITATION STATEMENT
POLYTAMA INTERNATIONAL FINANCE B.V.
P.T. POLYTAMA PROPINDO
SOLICITATION OF CONSENTS TO AMEND INDENTURE
relating to
11 1/4% GUARANTEED SECURED NOTES DUE 2007
issued by
POLYTAMA INTERNATIONAL FINANCE B.V.
(US$200,000,000 principal amount outstanding)
Irrevocably and Unconditionally Guaranteed as to Payment of Principal,
Premium, Interest and Additional Amounts, if any, by
P.T. POLYTAMA PROPINDO
Each of Polytama International Finance B.V. (the "Issuer") and P.T.
Polytama Propindo (the "Guarantor") is soliciting (the "Consent Solicitation")
the consents (the "Consents") of holders of record (the "Holders") as of July 9,
1998 (the "Record Date") of its 11 1/4% Guaranteed Secured Notes due 2007 (the
"Notes"), which are irrevocably and unconditionally guaranteed as to payment of
Principal, Premium, Interest and Additional Amounts, if any, by the Guarantor to
certain amendments (the "Proposed Amendments") to the indenture governing the
Notes (the "Indenture") under which The Bank of New York is the Trustee (the
"Trustee").
The solicitations are being made upon the terms and are subject to the
conditions set forth in this Consent Solicitation Statement and in the
accompanying Consent Form. Adoption of the Proposed Amendments to the Indenture
requires the consent of Holders of 100% of the aggregate principal amount of the
Notes outstanding as of the Record Date (the "Requisite Consents").
The Proposed Amendments (i) permit the Issuer to use funds in the
Subsidiary Investment Account to make the interest payment due on the Notes on
June 15, 1998, to redeem a portion of the Notes and to pay certain fees and
expenses, and (ii) give the Issuer the option to make certain payments of
interest on the Notes through the issuance of Additional Securities under the
Indenture. See "Purpose of the Consent Solicitation" and "The Proposed
Amendments."
THE CONSENT SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK TIME, ON AUGUST 10,
1998, UNLESS EXTENDED (AS SO EXTENDED, THE "EXPIRATION DATE"). IF THE REQUISITE
CONSENTS WITH RESPECT TO THE CONSENT SOLICITATION HAVE NOT BEEN RECEIVED BY 5:00
P.M., NEW YORK TIME, ON THE EXPIRATION DATE, THE ISSUER MAY EXTEND THE CONSENT
SOLICITATION FOR A SPECIFIED PERIOD OR ON A DAILY BASIS UNTIL THE REQUISITE
CONSENTS HAVE BEEN RECEIVED.
Consent may be revoked by a Holder at any time prior to the receipt by the
Trustee of the Requisite Consents (the "Requisite Consent Date") on the terms
and conditions set forth herein and the effectiveness of the Proposed
Amendments, and will be automatically revoked if the Requisite Consents are not
obtained prior to the Expiration Date.
The information contained in this Consent Solicitation Statement is based
upon information provided solely by the Guarantor and the Issuer. Neither the
Procedural Advisor (as defined herein) nor the Information Agent (as defined
herein) has independently verified or makes any representation or warranty,
express or implied, or assumes any responsibility, for the accuracy or adequacy
of the information contained herein.
Each Holder is requested to read and carefully consider the information
contained herein and to give its consent to the Proposed Amendments by properly
completing and executing the accompanying Consent Form in accordance with the
instructions set forth herein and therein.
July 13, 1998
<PAGE> 2
The Proposed Amendments will become effective only upon (i) there being
received (and not revoked) prior to the Expiration Date the Requisite Consents
(the "Requisite Consent Condition"), (ii) execution by the Issuer, the Guarantor
and the Trustee of a First Supplemental Indenture, which embodies the Proposed
Amendments (the "Supplemental Indenture"), and (iii) the satisfaction of certain
other conditions. See "The Consent Solicitation -- Conditions to the Consent
Solicitation." The Issuer and the Guarantor intend to execute the Supplemental
Indenture as soon as practicable after the Requisite Consent Condition has been
satisfied.
No consent will be deemed to have been accepted until the Supplemental
Indenture is executed by the Issuer, the Guarantor and the Trustee and all
applicable other conditions have been satisfied or waived. Consents may be
revoked in accordance with the procedure set forth herein and in the Consent
Form at any time prior to the Requisite Consent Date, and will be automatically
revoked if the Requisite Consents are not obtained prior to the Expiration Date.
"The Consent Solicitation -- Revocation of Consents."
The Issuer expressly reserves the right, in its discretion and regardless
of whether any of the conditions described under "The Consent
Solicitation -- Conditions to the Consent Solicitation" have been satisfied,
subject to applicable law, to (i) terminate the Consent Solicitation upon the
failure to meet a condition specified herein or for any other reason; (ii) waive
any of the conditions to the Consent Solicitation; (iii) extend the Expiration
Date; or (iv) amend the terms of the Consent Solicitation. See "The Consent
Solicitation -- Expiration Date; Extensions; Amendment."
Only Holders are eligible to consent to the Proposed Amendments. Any
beneficial owner of Notes who is not a Holder of such Notes must arrange with
the person who is the Holder or such Holder's assignee or nominee to execute and
deliver a Consent Form on behalf of such beneficial owner. FOR PURPOSES OF THE
CONSENT SOLICITATION, THE DEPOSITORY TRUST COMPANY ("DTC") HAS AUTHORIZED DTC
PARTICIPANTS ("PARTICIPANTS") SET FORTH IN THE POSITION LISTING OF DTC AS OF THE
RECORD DATE TO EXECUTE CONSENT FORMS AS IF THEY WERE THE HOLDERS OF THE NOTES
HELD OF RECORD IN THE NAME OF DTC OR THE NAME OF ITS NOMINEE. ACCORDINGLY, FOR
PURPOSES OF THE CONSENT SOLICITATION, THE TERM "HOLDER" SHALL BE DEEMED TO
INCLUDE SUCH PARTICIPANTS.
The transfer of Notes after the Record Date will not have the effect of
revoking any consent validly given prior to such transfer, and each properly
completed and executed Consent Form will be counted notwithstanding any transfer
of the Notes to which such Consent Form relates, unless the applicable holder
has complied with the procedure for revoking consents described herein and in
the Consent Form.
HOLDERS WHO WISH TO CONSENT MUST DELIVER THEIR PROPERLY COMPLETED AND
EXECUTED CONSENT FORM TO THE INFORMATION AGENT AT THE ADDRESSES SET FORTH ON THE
BACK COVER PAGE OF THIS CONSENT SOLICITATION STATEMENT AND IN THE CONSENT FORM
IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH HEREIN AND THEREIN. CONSENTS
SHOULD NOT BE DELIVERED TO THE ISSUER, THE GUARANTOR, THE FINANCIAL ADVISOR OR
THE TRUSTEE. HOWEVER, THE ISSUER RESERVES THE RIGHT TO ACCEPT ANY CONSENT
RECEIVED BY ITSELF, THE GUARANTOR, THE FINANCIAL ADVISOR OR THE TRUSTEE. UNDER
NO CIRCUMSTANCES SHOULD ANY PERSON TENDER OR DELIVER NOTES TO THE ISSUER, THE
GUARANTOR, THE FINANCIAL ADVISOR, THE TRUSTEE OR THE INFORMATION AGENT AT ANY
TIME.
No person has been authorized to give any information or make any
representation other than those contained or incorporated by reference herein or
in the accompanying Consent Form and other materials, and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Issuer, the Guarantor, the Procedural Advisor, the Trustee,
the Information Agent or any other person. The statements made in this Consent
Solicitation Statement are made as the date hereof, and the delivery of this
Consent Solicitation Statement shall not under any circumstances create any
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
(ii)
<PAGE> 3
Recipients of this Consent Solicitation Statement and the accompanying
materials should not construe the contents hereof of thereof as legal, business
or tax advice. Each recipient should consult its own attorney, business advisor
and tax advisor as to legal, business, tax and related matters concerning this
solicitation.
TERMS USED IN THIS DOCUMENT THAT ARE NOT OTHERWISE DEFINED HEREIN HAVE THE
MEANINGS SET FORTH IN THE GUARANTOR'S ANNUAL REPORT ON FORM 20-F FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1997 OR, IF NOT DEFINED THEREIN, IN THE INDENTURE.
------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information....................................... 1
Incorporation of Certain Documents by Reference............. 1
Purpose of the Consent Solicitation......................... 1
The Proposed Amendments..................................... 8
The Consent Solicitation.................................... 8
Certain Income Tax Considerations........................... 13
Miscellaneous............................................... 18
Annex A: Form of Supplemental Indenture..................... A-1
Annex B: Comparison of Indenture Provisions Affected by
Proposed Amendments................................ B-1
</TABLE>
(iii)
<PAGE> 4
AVAILABLE INFORMATION
The Guarantor is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports and other information filed
by the Guarantor may be inspected at the public reference facilities maintained
by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices of the Commission:
New York Regional Office, 7 World Trade Center, 12th Floor, New York, New York
10048; and Chicago Regional Office, Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material may be obtained
from the Public Reference Section of the Commission, upon payment of fees
prescribed by the Commission. Reports, proxy and information statements and
other information filed with the Commission through the Electronic Data
Gathering, Analysis and Retrieval ("EDGAR") system are publicly available
through the Commission's Internet website (http://www.sec.gov).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission by the
Guarantor and are hereby incorporated by reference in this Consent Solicitation
Statement:
1. The Guarantor's Annual Report on Form 20-F for the fiscal year
ended December 31, 1997 (the "1997 20-F").
2. Such other reports filed pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act and, to the extent designated therein, reports on
Form 6-K furnished by the Guarantor after the date hereof and through the
Expiration Date.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Consent Solicitation Statement to the extent that a
statement contained herein or in any other subsequently filed document that also
is or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Consent Solicitation Statement. Subject to the foregoing, all information
appearing in this Consent Solicitation Statement is qualified in its entirety by
the information appearing in the documents incorporated herein by reference.
Copies of all documents that are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owners, to whom this
Consent Solicitation Statement is delivered, upon request. Copies of this
Consent Solicitation Statement, as amended or supplemented from time to time and
any other documents (or parts of documents) that constitute part of this Consent
Solicitation Statement will also be provided without charge to each such person,
upon request. Requests should be directed to the Information Agent, at the
address and telephone number set forth on the last page.
PURPOSE OF THE CONSENT SOLICITATION
The purpose of the Consent Solicitation is to approve the Proposed
Amendments.
BACKGROUND
As of the date of this Consent Solicitation Statement, the Issuer has
outstanding US$200,000,000 principal amount of Notes which mature on June 15,
2007. The Notes are irrevocably and unconditionally guaranteed (the "Guarantee")
as to principal, premium, interest and Additional Amounts, if any, by the
Guarantor. The Guarantee is an irrevocable, direct, unconditional and secured
obligation of the Guarantor and ranks pari passu with all other existing and
future Senior Indebtedness of the Guarantor.
1
<PAGE> 5
As of the date of this Consent Solicitation Statement, the Issuer and the
Guarantor have failed to pay the interest payment due and payable on the Notes
on June 15, 1998. Please refer to the 1997 20-F for a discussion of the
Guarantor's financial condition and the circumstances surrounding the failure to
pay interest. See especially Item 9 -- "Management's Discussion and Analysis of
Financial Condition and Results of Operations" for a discussion of the
Guarantor's current serious liquidity situation.
Upon issuance of the Notes, approximately US$51,750,000 of the proceeds
(the "Restricted Proceeds") were deposited in an account established with the
Collateral Agent in Jakarta (the "Subsidiary Investment Account") which, but for
certain restrictions imposed on their use under the Indenture, would be
available to satisfy in full the June 15, 1998 interest payment. Under the
Indenture, the Restricted Proceeds are required to be retained in a separate
account and used to make investments in Polytama II, a majority-owned subsidiary
of the Guarantor created for the purpose of building and operating a
polypropylene plant in Tuban, East Java Indonesia (the "Polytama II Project").
Pending the investment of the Restricted Proceeds in Polytama II, the Restricted
Proceeds are being held by the Collateral Agent in the Subsidiary Investment
Account as part of the collateral securing the Notes.
The Indenture also provides that if, by June 30, 1999, US$5 million or more
of proceeds remain in the Subsidiary Investment Account and are not subject to
legally binding commitments for Use of Proceeds Transactions (as defined in the
Indenture), then the Issuer or the Guarantor must make an offer to repurchase
Notes in an aggregate amount equal to the uncommitted proceeds at a price equal
to 101% of the principal. To the extent that the aggregate amount of Notes
tendered pursuant to such an offer is less than the amount of proceeds in the
Subsidiary Investment Account, or if the balance in the account is less than
US$5 million as of June 30, 1999, the Guarantor will be free to use the
remaining proceeds in any manner not otherwise prohibited by the Indenture.
As a result of recent developments within Indonesia, the sharp devaluation
of the Indonesian Rupiah and the overall deterioration in the market condition
for new development projects in Indonesia, the plans for the development of the
Polytama II Project have been indefinitely postponed. (See 1997 20-F, Item
9 -- "Recent Developments Regarding Polytama II.") At present, approximately
$51,750,000 is held in the Subsidiary Investment Account. The Indenture
prescribes no other uses for the Restricted Proceeds other than as set forth
above.
SUMMARY OF PROPOSED AMENDMENTS
The principal effect of the Proposed Amendments will be to permit the
Guarantor to make effective use of the funds in the Subsidiary Investment
Account. To accomplish this, the Proposed Amendments will provide for the
following:
(i) The Guarantor will use funds in the Subsidiary Investment Account
to cause the Issuer to pay the June 15, 1998 interest payment of US$11.25
million, and withholding taxes due the Indonesian government with respect
thereto. The total to be used for this purpose will be $12,500,000. By
consenting to the Proposed Amendments, holders will waive their rights, if
any, to overdue interest or interest on interest with respect to the June
15, 1998 interest payment.
(ii) The Guarantor will be entitled to use funds in the Subsidiary
Investment Account, up to a maximum amount of $500,000, to pay the fees and
expenses incurred in connection with the Consent Solicitation.
(iii) The Guarantor will use the balance of the funds in the
Subsidiary Investment Account to cause the Issuer to redeem Notes on a pro
rata basis, in integral multiples of $1,000, and to pay accrued interest to
the redemption date and withholding taxes due the Indonesian government
with respect to such accrued interest. If the redemption date is August 15,
1998, the aggregate amount of Notes redeemed will be $34,583,333, aggregate
accrued interest will be $3,750,000 and withholding taxes will be $416,667.
(iv) With respect to interest payments due on December 15, 1998, June
15, 1999 and December 15, 1999, the Guarantor will have the option of
causing the Issuer to make these payments in cash or to issue to all Note
holders additional Notes together with the Guarantee ("Additional
Securities"), in an
2
<PAGE> 6
aggregate amount equal to the interest due, identical to the existing
Securities except that they will be dated the date of the relevant interest
payment date and except that, if such option is exercised for the interest
payment due on December 15, 1999, the amount of interest due on such date
for this purpose will be calculated at the rate of 13% per annum for the
period commencing on June 15, 1999 and ending on December 15, 1999.
(v) No other use of the funds in the Subsidiary Investment Amount will
be permitted.
Assuming that the payments in (iii) above are made on August 15, 1998 and
that the Guarantor causes the Issuer to exercise its option to make the interest
payments due on December 15, 1998, June 15, 1999 and December 15, 1999 with the
issuance of Additional Securities, the aggregate principal amount of Notes
outstanding on December 16, 1999 will be approximately $193,056,176. This amount
is for illustration only and will be subject to change to the extent that the
payments in (iii) above are made on a date other than August 15, 1998.
The Guarantor has been advised that, in order for the Additional Securities
to have the benefit of the liens afforded by the Security Documents and the
Guarantee, certain amendments need to be made to the Security Documents.
Accordingly, by consenting to the Proposed Amendments, Holders will authorize
the Trustee to direct the Collateral Agent to enter into amendments of the
Securities Documents for this purpose, and it will be a condition precedent to
the issuance of any of the Additional Securities that the Trustee has received
the opinion of Indonesian counsel to the Guarantor substantially to the effect,
among other things, that the Additional Securities are valid and binding
obligations of the Issuer and the Guarantor, respectively, and that the
Additional Securities will have the benefit of the liens afforded by the
Security Documents and the Guarantee.
BENEFITS TO THE GUARANTOR OF THE PROPOSED AMENDMENTS
If adopted, the Proposed Amendments will permit the Guarantor to make
effective use of the liquidity represented by the funds in the Subsidiary
Investment Account to fund debt service payments due on the Notes through the
period ending on June 15, 2000, when the next payment permitted only in cash
will be due on the Notes. The Guarantor will also have the benefit of the
increased cash flow resulting from the interim and permanent reduction in
principal of the Notes effected by the Proposed Amendments.
In this manner, the Guarantor will have a period of approximately 24 months
(until the June 15, 2000 interest payment is due) to focus its efforts on the
cash conservation and enhancement objectives described in the 1997 20-F. (See
Item 1 -- "Description of Business -- Business Strategy.") In this regard, the
Guarantor believes that the past six months included an unusual concentration of
economic, social, political and operational difficulties that have disrupted
business activities in Indonesia and domestic market conditions generally and
the operations of the Guarantor in particular. In the event domestic and Asian
demand for polypropylene recovers from existing levels and PP (as defined in the
1997 20-F) firms and widens to reflect more normal market conditions, the
Guarantor believes it can generate sufficient cash in its operations in the near
term to meet its working capital requirements and, as conditions further improve
over time, to meet required interest payments as well. However, there can be no
assurance that conditions will so improve, or that other economic, social or
political difficulties may not arise that would adversely affect the Guarantor's
operations and cash flow. (See the 1997 20-F, Item 9 -- "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" for a discussion of the Guarantor's current serious liquidity
situation.)
IF CONSENTS NOT OBTAINED
Acceleration
The Guarantor, as of the date hereof, has not made the scheduled interest
payment on the Notes which was due June 15, 1998. Under the terms of the
Indenture, default in the payment of interest on the Notes which continues for a
period of 30 days constitutes an "Event of Default." Upon the occurrence and
continuation of an Event of Default, the Trustee or the Holders of not less than
25% in aggregate principal
3
<PAGE> 7
amount of the Notes then outstanding may declare the principal of, premium on,
and accrued interest on all of the outstanding Notes immediately due and
payable. The Guarantor believes that an Event of Default will occur on July 15,
1998.
Foreclosure and Collateral
Upon acceleration, the Note holders have, among others, the right to
foreclose upon the assets of the Company which are subject to the lien of the
Security Documents (the "Collateral"), which include the funds in the Subsidiary
Investment Account, in the manner provided in and subject to the terms of the
Indenture, the Guarantee, the Collateral Agency Agreement and the Security
Documents.
While the following summary description of the Collateral does not purport
to be complete and is subject to, and qualified in its entirety by reference to,
the Security Documents, including the definitions of certain terms contained
therein, the Collateral in summary consists of the following:
(i) from and after registration of the Security Deed within 90 days of
the Issue Date (which has occurred), the real property (including the land,
buildings, facilities and other assets permanently affixed thereto whether
now owned or hereafter acquired) comprising the Plant;
(ii) all moveable assets (other than Inventory, goods in process and
raw materials), whether now owned or hereafter acquired, which form a part
of, or are otherwise used in connection with, the Plant;
(iii) all insurance proceeds relating to the Plant;
(iv) the portion of the proceeds of the Notes held from time to time
in the Subsidiary Investment Account; and
(v) all rights arising out of or related to all contracts (including
the Propylene Supply Contract) and leases relating to the Plant, its
operation and the manufacture of polypropylene therein.
Part of the Pipeline through which the Company receives propylene from
Pertamina is located on land adjacent to the Plant Site, which is not owned by
the Company. The Collateral includes the Pipeline, but does not include an
assignment of the Company's rights to use certain land owned by a third party on
which a portion of the Pipeline is located. See "Difficulties with Foreclosure
Process."
Difficulties with Foreclosure Process
Indonesian law requires that foreclosure of a lien against property subject
to a security deed be effected by the holders of the registered security deed
either pursuant to a public auction conducted by the state auction office or, if
agreed by the parties to the security deed, by private sale. Any private sale
must be for the highest price available for the benefit of all parties, and can
be completed only if no objections are raised within one month after written
notice is given to the parties concerned and notices have been announced in at
least 2 daily newspapers circulated at the location of the property which is the
object of the security deed or in other local media. Under existing practice,
the state auction office will not conduct auction proceedings unless the secured
party has first obtained a writ of execution from the district court having
jurisdiction where the Guarantor is domiciled or in the chosen domicile of the
Guarantor, which could be where the land is located. In Indonesia, the prior
court decisions are guidelines only and are not binding precedents. As a result,
proceedings prior to a public auction can be lengthy and complex. In addition,
Indonesian law does not provide statutory guidance with respect to the
enforcement of a fiduciary transfer or with respect to the rights of the party
receiving a fiduciary transfer. While the secured party is considered the owner
of the property covered thereby and has the contractual right to repossess the
property, any foreclosure must be performed through public auction. In addition,
the "Balai Harta Peninggalan" (the "State Trustee"), a special agency of the
Department of Justice which acts as official receiver and administrator of
bankrupt estates, could take actions contrary to such contractual rights in the
interest of other creditors. In respect of the Security Deed, in the case of the
bankruptcy of the Guarantor, the holders of the registered Security Deed are by
virtue of Article 21 of the Mortgage Law entitled to exercise their rights under
the Mortgage Law.
4
<PAGE> 8
Under Indonesian law, an assignment of contractual rights will only bind
the obligor of the assigned rights after that obligor has been properly notified
of the assignment through the applicable district court, or has accepted or
acknowledged the assignment in writing. The Assignment of Rights did not require
the Guarantor to notify the obligor as a condition to closing of the initial
issuance of Notes or to make such notification until the occurrence of certain
events and if requested by the Collateral Agent. The Guarantor currently is in
negotiations to obtain the consent of (i) BP Chemicals to the assignment of
rights under the Propylene Supply Agreement, and (ii) Montell North America
Inc., formerly Himont Incorporated, to the assignment of rights under the
contract pursuant to which the Guarantor uses the SPHERIPOL(R) process at the
Plant for the production of polypropylene. There can be no assurance that any
consent referred to above can be obtained. If such consents are not obtained,
the Assignment of Rights will not initially be perfected against the obligors
under the contracts referred to above.
In addition, the Guarantor's interest in inventory, governmental permits,
licenses and approvals and certain rights relating to the Pipeline are not
included in the Collateral. In addition, persons or entities that are not
Indonesian nationals are generally prohibited from owning real or immoveable
property in Indonesia. Accordingly, any purchaser in a foreclosure sale would
have to meet Indonesian citizenship requirements and would not have all the
property, permits, licenses and approvals and rights relating to the Pipeline
necessary to produce polypropylene at the Plant. Such purchaser would have to
obtain separate permits and licenses to produce polypropylene from the
Indonesian government in order to be able to operate the Plant subsequent to
such sale.
Part of the Pipeline through which the Guarantor receives propylene is
located on land adjacent to the Plant Site, which is directly controlled by the
Indonesian government. The Guarantor has negotiated certain arrangements to
obtain certificated title to a portion of such land and rights to use another
portion of such land for the Pipeline. However, even though the Guarantor has
negotiated such arrangements, the Collateral does not include an assignment of
the Guarantor's rights to use certain land owned by a third party on which a
portion of the Pipeline is located.
Under Article 56A of the amended Bankruptcy Law (effective as of 22 August,
1998), the foreclosure right of a secured creditor of a bankrupt debtor is
stayed for a maximum period of 90 days as of the date of the adjudication in
bankruptcy, unless the debt is secured by cash or other readily available funds.
Additionally, a debtor may submit a petition for a suspension of payment of its
debts. If granted, foreclosure by a secured creditor may be stayed for a maximum
of 270 days from the date of the decision of the court to grant such suspension
of payment. The initial period of the suspension is a maximum of 45 days and
depending on the composition plan submitted to the court and the creditors, the
court may grant a further suspension if approved by more than 1/2 of the
unsecured creditors whose claims have been accepted or provisionally accepted
and who represent at least 2/3 of the claims of the unsecured creditors whose
claims have been accepted or provisionally accepted.
The foregoing factors could have an adverse impact on the Collateral
Agent's ability to foreclose on the Collateral or on the price of the Collateral
in any foreclosure proceeding. No assurance can be given that, should
enforcement of the Security Documents be sought, there would be any purchasers
of the Collateral or that the purchase price therefor would be sufficient to
satisfy all the obligations of the Issuer and the Guarantor under the Notes and
the Guarantee and any outstanding indebtedness.
CERTAIN SIGNIFICANT CONSIDERATIONS
In addition to the other information described elsewhere and incorporated
by reference herein, Holders should consider that if the Proposed Amendments
become effective, four semi-annual interest payments on the Notes can
effectively be made with proceeds that were previously designated for investment
in Polytama II and that, failing such use by June 30, 1999, would be used for
the repurchase of Notes by July 31, 1999. If the Proposed Amendments are
adopted, the Default and any Event of Default with respect to the June 15, 1998
interest payment will be cured and any Default will be avoided with respect to
non-payment in cash of the December 15, 1998, June 15, 1999 and December 15,
1999 interest payments, thereby depriving the Holders of rights they might
otherwise have with respect to these interest payments. Accordingly, adoption
5
<PAGE> 9
of the Proposed Amendments could increase the credit risks of the Holders with
respect to the Guarantor, could adversely affect the future market value of the
Notes or might otherwise be materially adverse to the interests of Holders.
Finally, certain working capital facilities of the Guarantor have expired
with amounts outstanding under them. (See the 1997 20-F, Item 9 -- "Liquidity
and Capital Resources -- Net Cash Provided by (used in) Operating Activities.")
While the lenders under these facilities have not to date expressed an intention
to pursue payment on these facilities in the near term, there can be no
assurance that they will not do so. If payment for the amounts due under these
facilities is so pursued and such amounts not paid, the Guarantor could become
the subject of proceedings for the enforcement of creditors rights, including
bankruptcy proceedings, under Indonesian law.
SUPPLEMENTAL INFORMATION
June Financial Information.
The following supplements the discussion and information in the 1997 20-F
which appears at Item 9 -- "Management's Discussion and Analysis of Financial
Conditions and Results of Operations -- Developments in 1998 -- Selected
Financial and Operational Data for the First Five Months in 1998" and should be
read in conjunction with that discussion and information. Footnotes indicated
are references to the footnotes in the 1997 20-F with respect to the similar
financial information which appears therein.
The Guarantor maintains monthly data only in its internal management
reports. Management report information is unaudited and not reviewed by the
Guarantor's accountants. In the ordinary course, management report information
requires adjustment and can reflect errors in attribution among periods.
Although the information is believed to be accurate by the Guarantor, potential
investors are cautioned that the information supplied may require such
adjustments or contain errors in its presentation. The Guarantor has provided
the following financial information on a monthly basis only because of the
Guarantor's current
6
<PAGE> 10
circumstances and impending consent solicitation. The Guarantor does not
necessarily intend to provide such financial data on a monthly basis in the
future.
<TABLE>
<CAPTION>
JUNE 1998
---------
<S> <C>
OPERATIONAL DATA
Production (thousands of tonnes)............................ 5.4
Sales (thousands of tonnes)
Domestic.................................................. 3.0
Export.................................................... 0.0
-------
Total............................................. 3.0
Finished Goods Inventory (thousands of tonnes).............. 5.3
Average Selling Price (US$ per MT)(2)(9)(10)................ 536
Cash Conversion Costs (US$ per MT)(2)(9)(10)................ 45
nP (US$ per MT)(2)(3)(9)(10)................................ 229
STATEMENT OF PROFIT AND LOSS DATA
(RP. IN BILLIONS)
Sales Revenue............................................... 24.0
Operating Income (Loss)..................................... 5.3
Net Income (Loss)........................................... (844.8)
EBITDA(4)(9)................................................ (806.7)
Adjusted EBITDA(5)(9)....................................... 14.7
BALANCE SHEET DATA
(RP. IN BILLIONS EXCEPT OTHERWISE STATED)
Rupiah Unrestricted cash.................................... 164.6
Dollar unrestricted cash (US$ in millions).................. 0.4
Total unrestricted cash and cash equivalents(6)... 170.0
Trade Receivables........................................... 30.9
Trade Payables & Accruals due to BP......................... 123.0
Trade Payables & Accruals due to others..................... 14.2
Total Trade Payables & Accrual.................... 137.2
Short Term Debt(7).......................................... 480.2
Long Term Debt(8)........................................... 3,020.0
Exchange Rate (Rp. to US$1.00)(10)(full Rupiah)............. 14,900
</TABLE>
- ---------------
(2) to (10) are references to footnotes in the 1997 20-F
Operating Activities
The following supplements the discussion in the 1997 20-F which appears at
Item 9 -- "Developments in 1998 -- Selected Financial and Operational Data for
the First Five Months in 1998" and should be read in conjunction with that
discussion.
While the Guarantor had anticipated continuing operations through mid-July,
it determined to shut down the Plant on July 7, 1998 and to continue the
shutdown until propylene is again available from the Pertamina Refinery, now
anticipated for the end of July. The shutdown is in accord with the Guarantor's
cash enhancement and conservation objectives in that it believes that, based
upon its current inventory position, margins do not currently justify continued
use of imported propylene.
In connection with the above, the Guarantor has commenced negotiations with
BP Chemicals and Pertamina to modify the pricing formula under its Propylene
Supply Contract with BP Chemicals which, if agreed, will provide for pricing
based upon the South East Asian spot price for propylene less a transportation
discount. If agreed, the modification will have the effect of bringing the
Guarantor's feedstock costs better into
7
<PAGE> 11
line with South East Asian polypropylene prices and thereby enable the Guarantor
to export products in the current circumstances with a reasonable margin. There
can be no assurance, however, that the modification will be agreed or even if
agreed conditions will not change in a manner which vitiates its anticipated
positive effect.
Polytama II
The following supplements the discussion in the 1997 20-F which appears at
Item 9 -- "Developments in 1998 -- Recent Developments Regarding Polytama II"
and should be read in conjunction with that discussion.
The Guarantor has received a written request from the management of
Polytama II to acknowledge that the Guarantor has an obligation to pay $5.74
million to Polytama II. The Guarantor and Polytama II are engaged in discussions
in an attempt to resolve this issue to their mutual satisfaction.
In the 1997 20-F, the Guarantor indicated that it is currently working with
its Indonesian counsel and other relevant parties to clarify the extent of the
Guarantor's obligations, if any, in respect of Polytama II's obligations. As
part of this effort, the Guarantor has determined that certain arrangements were
purportedly entered into by Polytama II during a period in its formation which
under Indonesia law provides for potential liability of Polytama II's "founders"
unless these arrangements are later ratified by Polytama II after its
incorporation. The "founders" of Polytama II consist of its existing
shareholders, including the Guarantor. The arrangements entered into by Polytama
II during the "founding" period have not as yet been ratified by Polytama II,but
the Guarantor believes that this will be accomplished with deliberate speed. No
assurance can be given, however, that the other shareholders of Polytama II will
act in concert with the Guarantor to have Polytama II ratify these arrangements.
In the absence of such ratification, if such arrangements are found to be a
legally binding commitment of the founders of Polytama II under Indonesian law
and if the amounts invoiced to Polytama II in accordance with these arrangements
are found to be appropriate and within the contemplation of such legally binding
commitment, then the Guarantor, together with the other shareholders of Polytama
II, would be liable for such amounts. These account for a substantial portion of
the approximately $45.8 million invoiced to Polytama II by third parties which
remain unpaid.
If payment for the $5.74 million were held to be an obligation of the
Guarantor or if payment for the third party invoices referred to above were held
to be valid and an obligation of the Guarantor and in either case were pursued
and not duly paid, the Guarantor could become the subject of proceedings for the
enforcement of creditors' rights, including bankruptcy proceedings, under
Indonesian law.
THE PROPOSED AMENDMENTS
Holders are referred to the Indenture and the form of the Supplemental
Indenture for the full and complete terms of the Proposed Amendments. The form
of the Supplemental Indenture is attached hereto as Annex A and solely for the
convenience of the reader, a comparison of the provisions of the Indenture
affected by the Proposed Amendments is included herein as Annex B. Copies of the
Indenture are available from the Information Agent upon request.
THE CONSENT SOLICITATION
GENERAL
The Proposed Amendments will become effective only upon (i) delivery to the
Trustee of valid and unrevoked consents to the Proposed Amendments from Holders
of 100% of the aggregate principal amount of the Notes outstanding as of the
Record Date, (ii) execution of the Supplemental Indenture by the Issuer, the
Guarantor and the Trustee, and (iii) the satisfaction or waiver of certain other
conditions. See "The Consent Solicitation -- Conditions to the Consent
Solicitation." The Issuer and the Guarantor intend to execute the Supplemental
Indenture after receipt of the Requisite Consents on or before the Expiration
Date. If the
8
<PAGE> 12
Consent Solicitation is terminated for any reason before the Expiration Date or
the other conditions to the Consent Solicitation are neither satisfied nor
waived, the Consents will be void.
Failure to deliver a Consent Form will have the same effect as if a Holder
had chosen not to give its consent with respect to the Proposed Amendments. The
delivery of a Consent Form will not affect a Holder's right to sell or transfer
the Notes.
Beneficial owners of Notes who wish to provide a consent and whose Notes
are held, as of the Record Date, in the name of a broker, dealer, commercial
bank, trust company or other nominee institution must contact such nominee
promptly and instruct such nominee, as the Holder of such Notes, to promptly
execute and deliver a Consent Form on behalf of the beneficial owner on or prior
to the Expiration Date.
Consents may be revoked at any time prior to the Expiration Date, and shall
be irrevocable, except as otherwise provided, from and after such time.
RECORD DATE
The Record Date for the determination of Holders entitled to give consents
pursuant to the Consent Solicitation is 5:00 p.m., New York City time, on July
9, 1998. The Issuer reserves the right to establish from time to time any new
date as such Record Date and, thereupon, any such new date will be deemed to be
the "Record Date" for purposes of the Consent Solicitation.
REQUISITE CONSENTS
Holders of Notes as of the Record Date must deliver (and not revoke) valid
consents in respect of 100% in aggregate principal amount of the Notes
outstanding as of the Record Date in order to approve the Proposed Amendments.
For purposes of the foregoing calculation, as of the date of this Consent
Solicitation Statement, none of the outstanding Notes were held by the Issuer,
the Guarantor or any of their respective affiliates.
The failure of a Holder of Notes as of the Record Date to deliver a consent
(including any failures resulting from broker non-votes) will have the same
effect as if such Holder had not consented to the Proposed Amendments.
EXPIRATION DATE; EXTENSIONS; AMENDMENT
The term "Expiration Date" with respect to the Consent Solicitation means
5:00 p.m., New York City time, on August 10, 1998, unless the Issuer, in its
discretion, extends the period during which the Consent Solicitation is open, in
which case the term "Expiration Date" means the latest date and time to which
such Consent Solicitation is extended.
In order to extend the Expiration Date, the Issuer will give notice of such
extension. An extension of the Expiration Date shall be effective if the
Guarantor gives oral or written notice thereof to the Trustee no later than 9:00
a.m. (and, if such notice is given orally, followed by written notice to the
Trustee (given by facsimile or otherwise) no later than 2:00 p.m.), New York
City time, on the first business day following any previously announced
Expiration Date. The Issuer may extend the Consent Solicitation on a daily basis
or for such specified period of time as it determines in its discretion.
If the Consent Solicitation is amended or modified in any manner by the
Issuer, it will promptly notify Holders who have received this Consent
Solicitation Statement and the accompanying Consent Form and extend the Consent
Solicitation for an adequate period to permit consents to be delivered or
revoked.
Notwithstanding anything to the contrary set forth in this Consent
Solicitation Statement, the Issuer reserves the right, in its discretion and
regardless of whether any of the conditions described below under "-- Conditions
to the Consent Solicitation" have been satisfied, subject to applicable law, at
any time prior to the Expiration Date to: (i) terminate the Consent Solicitation
upon the failure to meet a condition specified herein or for any other reason;
(ii) waive any of the conditions to the Consent Solicitation; (iii) extend the
Expiration Date; or (iv) amend the terms of the Consent Solicitation.
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<PAGE> 13
PROCEDURES FOR CONSENTING
All Consent Forms that are properly executed and delivered to the
Information Agent prior to the Expiration Date and not timely and properly
revoked will be given effect in accordance with the specifications therein.
Holders who desire to act with respect to the Proposed Amendments should so
indicate by marking the appropriate box in, and signing and dating, the
accompanying Consent Form included herein and delivering it to the Information
Agent at the addresses set forth in the Consent Form, in accordance with the
instructions contained herein and therein. If none of the boxes in the Consent
Form is checked, but the Consent Form is otherwise completed and signed, the
Holder will be deemed to have consented to the Proposed Amendments. Signatures
must be guaranteed in accordance with paragraph 6 of the Instructions in the
Consent Form.
The Consent Form must be executed in exactly the same manner as the name of
the Holder which appears on the Notes. An authorized DTC Participant must
execute the Consent Form exactly as its name appears on DTC's position listing
as of the Record Date. If the Notes are held of record by two or more joint
Holders, all such Holders must sign the Consent Form. If a signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing and must submit proper evidence
satisfactory to the Issuer of such person's authority to so act. If the Notes
are registered in different names, separate Consent Forms must be executed
covering each form of registration. If a Consent Form is executed by a person
other than the Holder, then such person must have been authorized by proper form
or in some other manner acceptable to the Issuer to execute the Consent Form
with respect to the applicable Notes on behalf of the Holder.
Any beneficial owner of the Notes who is not the Holder of such Notes must
arrange with the person who is the Holder or such Holder's assignee or nominee
to execute and deliver a Consent Form on behalf of such beneficial owner.
Each consent will be deemed to relate to the full principal amount of the
Notes held by such Holder.
A Holder must complete, sign and date the Consent Form (or photocopy
thereof) for such Holder's Notes and deliver such Consent Form to the
Information Agent by mail, first-class postage prepaid, hand delivery, overnight
courier or by facsimile transmission (with an original to be delivered
subsequently) at the addresses or facsimile numbers of the Information Agent set
forth on the back cover page hereof. Delivery of Consent Forms should be made
sufficiently in advance of the Expiration Date to assure that the Consent Forms
are received prior to the Expiration Date (and, in the case of facsimile
transmission, that original Consent Forms are received by the Issuer prior to
5:00 p.m., New York City time, on the third business date following the
Expiration Date). Under no circumstances should any person tender or deliver
Notes to the Issuer, the Guarantor, the Procedural Advisor, the Trustee or the
Information Agent at any time.
The Issuer reserves the right to accept Consent Forms delivered by any
other reasonable means or in any form that reasonably evidences the giving of
consent.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of consents and revocations of consents will be resolved
by the Issuer whose determination will be binding. The Issuer reserves the
absolute right to reject any or all consents and revocations that are not in
proper form or the acceptance of which could, in the opinion of the Issuer's
counsel, be unlawful. The Issuer also reserves the right to waive any
irregularities in connection with deliveries which must be cured within such
time as the Issuer determines. None of the Issuer, the Guarantor, the Procedural
Advisor, the Trustee, the Information Agent or any other person shall have any
duty to give notification of any such irregularities or waiver, nor shall any of
them incur any liability for failure to give such notification. Deliveries of
Consent Forms or notices of revocation will be not deemed to have been made
until such irregularities have been cured and waived.
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<PAGE> 14
REVOCATION OF CONSENTS
Each properly completed and executed consent will be counted in determining
whether the Requisite Consents have been received, notwithstanding any transfer
of the Notes to which such consent relates, unless the procedure for revocation
of Consents described below has been followed.
Each Holder as of the Record Date who has delivered a consent pursuant to
the Consent Solicitation will agree in the Consent Form that it will not revoke
its consent after receipt by the Trustee of the Requisite Consents, and that
until such time such Holder will not revoke its consent except in accordance
with the conditions and procedures for revocation of Consents provided below.
Prior to the Requisite Consent Date, any Holder as of the Record Date may
revoke any consent given as to its Notes or any portion of such Notes (in
integral multiples of US$1,000). A consent shall be irrevocable from and after
the Requisite Consent Date. A Holder desiring to revoke a consent must, prior to
the Requisite Consent Date, deliver to the Information Agent at the addresses
set forth on the back cover page of this Consent Solicitation Statement, written
revocation of such consent containing the name of such Holder, the certificate
numbers (if held in certificated form) or the CUSIP numbers (if held through
DTC) of the notes to which such revocation relates, and the principal amount of
the Notes to which such revocation relates. Revocations of Consent Forms shall
be effective upon receipt by the Information Agent.
The revocation must be executed by such Holder in the same manner as the
Holder's name appears on the consent to which the revocation relates. If a
revocation is signed by a trustee, partner, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person must so indicate when signing and must
submit with the revocation appropriate evidence of authority to execute the
revocation. A Holder may revoke a consent only if such revocation complies with
the provisions of this Consent Solicitation. Only a Holder of Notes as of the
Record Date is entitled to revoke a consent previously given. A beneficial owner
of Notes held through a DTC Participant as of the Record Date must instruct such
DTC Participant to revoke any consent already given with respect to such Notes.
A revocation that is not received by the Information Agent in a timely fashion
and accepted by the Issuer as a valid revocation will not be effective to revoke
a consent previously given.
A revocation of a consent may only be rescinded by the execution and
delivery of a new consent, in accordance with the procedures herein described,
by the Holder who delivered such revocation.
The Issuer reserves the right to contest the validity of any revocation and
all questions as to validity (including time of receipt) of any revocation will
be determined by the Issuer in its discretion, which determination will be
conclusive and binding. None of the Issuer, the Guarantor or any of their
respective affiliates, the Trustee, the Procedural Advisor, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities with respect to any revocation nor shall any of them
incur any liability for failure to give such notification.
CONDITIONS TO THE CONSENT SOLICITATION
The Consent Solicitation is conditioned on the satisfaction of (i) the
Requisite Consent Condition, (ii) the execution of the Supplemental Indenture
and (iii) the absence of any law or regulation which would, and the absence of
any injunction or action or other proceeding (pending or threatened) which (in
the case of any action or proceeding adversely determined) would, make unlawful
or invalid or enjoin the implementation of the Proposed Amendments, the entering
into of the Supplemental Indenture or challenge the legality or validity
thereof.
If any of the conditions are not satisfied on or prior to the Expiration
Date, the Issuer may, in its discretion and upon giving reasonable notice to the
Holders, allow the Consent Solicitation to lapse or extend the solicitation
period and continue soliciting consents pursuant to the Consent Solicitation.
The Consent Solicitation may be abandoned or terminated at any time prior to the
Expiration Date by the Issuer, for any reason, in which case any Consents
received will be voided.
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<PAGE> 15
FEES AND EXPENSES
The Guarantor has retained Chase Securities Inc. to act as procedural
advisor (the "Procedural Advisor") to the Guarantor, including in connection
with the Consent Solicitation, and Corporate Investor Communications, Inc. to
act as its information agent (the "Information Agent") in connection with the
Consent Solicitation. The Guarantor will bear the costs of the Consent
Solicitation. The Guarantor has agreed to pay the Information Agent customary
fees for its services in connection with the Consent Solicitation and to
reimburse the Procedural Advisor and the Information Agent for their
out-of-pocket expenses. The Issuer and the Guarantor have also agreed to
indemnify the Procedural Advisor and the Information Agent against certain
liabilities relating to the Consent Solicitation. No fee is to be paid to the
Procedural Advisor.
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<PAGE> 16
CERTAIN INCOME TAX CONSIDERATIONS
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain United States federal income tax
consequences associated with the adoption of the Proposed Amendments. This
summary is based upon existing United States federal income tax law, which is
subject to change, possibly retroactively. This summary does not discuss all
aspects of United States federal income taxation which may be important to
particular holders in light of their individual investment circumstances, such
as Notes held by investors subject to special tax rules (e.g., financial
institutions, insurance companies, broker-dealers, tax-exempt organizations, or,
except to the extent described below, Non-U.S. Holders (as defined below)) or to
persons that hold the Notes as a part of a straddle, hedge, or synthetic
security transaction for United States federal income tax purposes or that have
a functional currency other than the United States dollar, all of whom may be
subject to tax rules that differ significantly from those summarized below. In
addition, this summary does not discuss any foreign, state, or local tax
considerations. This summary assumes that investors hold their Notes as "capital
assets" (generally, property held for investment) under the United States
Internal Revenue Code of 1986, as amended (the "Code"). Holders are urged to
consult their tax advisors regarding the United States federal, state, local and
foreign income and other tax considerations associated with the adoption of the
Proposed Amendments.
For purposes of this summary, a "U.S. Holder" is a beneficial owner of a
Note that is (i) an individual who is a citizen or resident of the United
States, (ii) a corporation or partnership created or organized under the laws of
the United States or any state or political subdivision thereof, (iii) an estate
that is subject to United States federal income taxation without regard to the
source of its income, or (iv) a trust the administration of which is subject to
the primary supervision of a United States court and which has one or more
United States persons who have the authority to control all substantial
decisions of the trust. A "Non-U.S. Holder" is a beneficial owner of a Note who
is not a U.S. Holder.
CAPSULE SUMMARY FOR U.S. HOLDERS AND NON-U.S. HOLDERS
Adoption of Proposed Amendments
Subject to the assumptions set forth herein, both U.S. Holders and Non-U.S.
Holders will generally not recognize any gain or loss on either the adoption of
the Proposed Amendments or the receipt of the Pro Rata Principal Repayment. U.S.
Holders who have purchased their Notes subsequent to the initial offering of the
Notes at a Market Discount (as defined below), however, will recognize gain in
an amount equal to the excess of (i) the amount of the Pro Rata Principal
Repayment received by such holder over (ii) the portion of such holder's
adjusted tax basis in the Note allocable to the portion of the principal amount
of Note that is retired. Such gain will be capital gain, except to the extent of
accrued market discount subject to tax as ordinary income that has not been
previously included in ordinary income.
Original Issue Discount -- Payment of Interest in Additional Securities
Assuming that the Issuer elects to issue additional Notes in lieu of the
payment of interest in cash, U.S. Holders will be required, effectively, to
include in income as original issue discount, subject to tax as ordinary
interest income, an amount equal to the aggregate stated principal amount of the
additional Notes issued, reduced by any Excess Yield (as defined below), in lieu
of interest paid in cash during the period that the right to receive the
additional Notes accrues. Thereafter, the amount of original issue discount
includible in income during a complete calendar year should be equal to the
amount of scheduled interest payments made during such year plus any Excess
Yield. The actual receipt of scheduled interest payments, however, will not be
subject to United States federal income taxation.
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<PAGE> 17
U.S. HOLDERS
General
The United States federal income tax consequences of the adoption of the
Proposed Amendments will depend on, inter alia, whether the Notes are "publicly
traded" as specially determined for United States federal income tax purposes,
within a 60 day period ending 30 days after the adoption of the Proposed
Amendments. The Issuer believes that the Notes have not been so publicly traded
and the Issuer does not presently anticipate, and the remainder of this
discussion assumes, that the Notes will not become publicly traded on or prior
to the 30th day following the adoption of the Proposed Amendments.
Pro-rata Principal Repayment
The Issuer believes that the Pro Rata Principal Repayment on the Notes
should be treated, for United States federal income tax purposes, as a repayment
of a portion of the principal amount of the Notes and the remainder of this
discussion assumes that such treatment will be respected by the United States
Internal Revenue Service.
Original Purchasers and Certain Subsequent Purchasers. A U.S. Holder who is
either (i) an original purchaser of Notes or (ii) a subsequent purchaser of
Notes who did not purchase the Notes at a Market Discount (as defined below)
will not recognize any gain or loss upon the receipt of the Pro Rata Principal
Repayment. The adjusted tax basis of the Notes in the hands of such U.S. Holder
will be decreased by the amount of the Pro Rata Principal Repayment received by
such holder.
Subsequent Purchasers -- Market Discount. Under the pro rata prepayment
rules of the United States Treasury regulations, a U.S. Holder who purchased a
Note subsequent to the initial offering of the Notes at a "market discount"
(i.e., at purchase price that was less than the adjusted issue price of the
Notes) in excess of a statutorily defined de minimis amount (a "Market
Discount") will be treated as having received the Pro Rata Principal Repayment
in retirement of a portion of the principal amount of the Note equal to the Pro
Rata Principal Repayment received by such holder. As a result, such holder will
recognize gain in an amount equal to the excess of (i) the amount of the Pro
Rata Principal Repayment received by such holder over (ii) the portion of such
holder's adjusted tax basis in the Note allocable to the portion of the
principal amount of Note that is retired. Such gain will be capital gain, except
to the extent of accrued market discount subject to tax as ordinary income in
respect of which the holder has not previously elected to include in ordinary
income on a current basis. The adjusted tax basis of the portion of the
principal amount of the Note that remains outstanding will be equal to the
adjusted tax basis of such Note as determined immediately prior to the receipt
of the Pro Rata Principal Repayment less the adjusted tax basis allocable to the
retired portion of the principal amount as described above.
Significant Modification Rules
The modification of a debt instrument will result in a "deemed exchange" of
an old debt instrument for a new debt instrument, for United States federal
income tax purposes, if, taking into account all of the relevant facts and
circumstances, such modification constitutes a "significant modification." The
Issuer believes that, for United States federal income tax purposes, the
adoption of the Proposed Amendments should not constitute a significant
modification of the Notes -- and, accordingly, that the modification should not
be treated as a "deemed exchange" of old Notes for new Notes -- because such
adoption (i) will merely have the effect, overall, of extending the weighted
average maturity of the Notes, but will not extend the stated term to maturity
of the Notes and (ii) will not materially alter the yield to maturity of the
Notes. It is possible, however, that the Internal Revenue Service may
successfully assert that adoption of the Proposed Amendments constitutes a
deemed exchange of old Notes for new Notes. See "-- Alternative
Treatment -- Deemed Exchange of Old Notes for New Notes" below.
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Original Issue Discount
Because the Company may, as a result of the adoption of the Proposed
Amendments, elect to issue additional Notes in lieu of the payment of interest
in cash on the Notes as described above under the heading "Purpose of Consent
Solicitation -- Effect of Proposed Amendments," the Notes will be deemed to be
"reissued," solely for purposes of the application of the original issue
discount rules of the Code, as of the date of the adoption of the Proposed
Amendments. Consequently, U.S. Holders will be required to include original
issued discount in ordinary income over the period that they hold the Notes in
advance of the receipt of cash attributable thereto.
If the Issuer elects to issue additional Notes in lieu of the payment of
interest in cash, the amount of original issue discount includible in income
during the taxable period that the right to receive the additional Notes accrues
should be generally equal to the aggregate stated principal amount of such
additional Notes reduced by any "Excess Yield" as described immediately below.
If the Issuer elects to issue additional Notes in lieu of the payment of cash
due on December 15, 1999, the principal amount of such Notes in respect of the
annualized yield that exceeds 11.25% (the "Excess Yield") will not be currently
includible income but, effectively, will be amortized into income over the
remaining term of the Notes. Thereafter, the amount of original issue discount
includible in income during a complete calendar year should be equal to the
amount of scheduled interest payments made during such year plus the amortized
amount, if any, of Excess Yield.
Generally, the amount of original issue discount on the Notes will be equal
to the excess of (i) the sum of the principal amount due at maturity, the
principal amount of the additional Notes, plus all scheduled interest payments
over (ii) the adjusted issue price of the Notes (after taking into account the
reduction of issue price resulting from the Pro Rata Principal Repayment as
described above). The amount of original issue discount to be included in income
will be determined using a constant yield method. Any amount of discount
included in income will increase a U.S. Holder's adjusted tax basis in the Notes
and any scheduled payments of interest in cash will decrease such holder's
adjusted tax basis in the notes. The receipt of such cash interest payments will
not be subject to United States federal income tax.
Alternative Treatment -- Deemed Exchange of Old Notes for New Notes
If the Internal Revenue Service were to successfully assert that the
adoption of the Proposed Amendments constitutes a "significant modification,"
and, accordingly, a deemed exchange of old Notes for new Notes, the Company
believes that such deemed exchange would qualify as a "tax-free
recapitalization" under the Code. Accordingly, U.S. Holders would (i) not
recognize any gain or loss as a result of such deemed exchange, (ii) have an
adjusted tax basis in the new Notes equal to the adjusted tax basis (after
taking into account the reduction of basis resulting from the Pro Rata Principal
Repayment) in the old Notes deemed received in exchange therefor, and (iii) have
a holding period for the new Notes that includes the holding period of the old
Notes. The issue price of the new Notes would be equal to their stated principal
amount (i.e., an amount equal to the stated principal amount of the old Notes
after taking into account a reduction in such principal amount resulting from
the Pro Rata Principal Repayment). In addition, the new Notes would be deemed to
be issued with original issue discount and U.S. Holders of new Notes would be
required to include such discount in income on a current basis as described
above under the heading "-- U.S. Holders -- Original Issue Discount."
NON-U.S. HOLDERS
The adoption of the Proposed Amendments and the receipt of the Pro Rata
Principal Repayment will not give rise to any United States federal income tax
consequences to a Non-U.S. Holder unless (i) the interest or Pro Rata Principal
Repayment received on, or any gain recognized on the sale or other disposition
of, the Notes by such holder is treated as effectively connected with the
conduct by such holder of a trade or business in the United States or (ii) in
the case of any gain derived by an individual, such individual is present in the
United States for 183 days or more and certain other requirements are met.
In order to avoid back-up withholding on payments of interest, the Pro Rata
Principal Repayment, and other repayments of principal on the Notes made in the
United States, a non-U.S. holder of the Notes may be
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<PAGE> 19
required to complete, and provide the payor with, a Form W-8 ("Certificate of
Foreign Status"), or other documentary evidence, certifying that such holder is
an exempt foreign person.
INDONESIAN TAXATION
In general, beneficial owners of the Notes that are not Indonesian citizens
or residents or Indonesian permanent establishments ("Non-Indonesian Holders")
will not be subject to Indonesian income tax on modification of the terms of the
Notes.
THE NETHERLANDS TAX CONSIDERATIONS
The following is a summary of taxes imposed by The Netherlands. The summary
does not address any laws other than the tax laws of The Netherlands in force
and in effect as of the date hereof.
The additional securities that may be issued in lieu of payment of interest
in cash on the Notes, as described above under the heading "Purpose of Consent
Solicitation -- Effect of Proposed Amendments," are referred to as the
"Additional Securities" for purposes of this section on Netherlands taxation.
Withholding Tax
All payments under the Notes and the Additional Securities, whether made in
cash or in kind, may be made free of withholding or deduction of, for or on
account of any taxes of whatever nature imposed, levied, withheld or assessed by
The Netherlands or any political subdivision or taxing authority thereof or
therein.
Taxes on Income and Capital Gains
A holder of Notes or Additional Securities will not be subject to any
Netherlands taxes on income or capital gains in respect of any payment under the
Notes or the Additional Securities, whether made in cash or in kind, or in
respect of any gain realized on the disposal or the redemption of the Notes or
the Additional Securities, provided that:
(i) such holder is neither resident nor deemed to be resident in The
Netherlands; and
(ii) such holder does not have an enterprise or an interest in an
enterprise that is, in whole or in part, carried on through a permanent
establishment or a permanent representative in The Netherlands and to which
enterprise or part of an enterprise, as the case may be, the Notes or
Additional Securities are attributable; and
(iii) such holder does not have substantial interest or a deemed
substantial interest in the Issuer or, if such holder does have such an
interest, it forms part of the assets of an enterprise.
Generally, a holder of Notes or Additional Securities will not have a
substantial interest if he, his spouse, certain other relatives (including
foster children) or certain persons sharing his household, do not hold, alone or
together, whether directly or indirectly, the ownership of, or certain other
rights over, shares representing five percent or more of the total issued and
outstanding capital (or the issued and outstanding capital of any class of
shares) of the Issuer, or rights to acquire shares, whether or not already
issued, that represent at any time (and from time to time) five percent or more
of the total issued and outstanding capital (or the issued and outstanding
capital of any class of shares) of the Issuer or the ownership of certain profit
participating certificates that relate to five percent or more of the annual
profit of the Issuer and/or to five percent or more of the liquidation proceeds
of the Issuer. A deemed substantial interest is present if (all or part of) a
substantial interest has been disposed of, or is deemed to have been disposed
of, on a non-recognition basis.
A holder of Notes or Additional Securities will not be subject to taxation
in The Netherlands by reason only of the execution and delivery of the Consent
Form, the issue of the Notes or the Additional Securities by the Issuer, or the
performance by the Issuer of its obligations under the Notes or the Additional
Securities.
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<PAGE> 20
Net Wealth Tax
A holder of Notes or Additional Securities will not be subject to
Netherlands net wealth tax in respect of the Notes or the Additional Securities,
provided that such holder is not an individual or, if he is an individual,
provided that the conditions mentioned under clauses (i) and (ii) of the proviso
under "Taxes on Income and Capital Gains" above are met.
Gift, Estate and Inheritance Taxes
No gift, estate or inheritance taxes will arise in the Netherlands with
respect to the acquisition of Notes or Additional Securities by way of a gift
by, or on the death of, a holder of Notes or Additional Securities who is
neither resident nor deemed to be resident in The Netherlands, unless:
(i) such holder at the time of the gift has or at the time of his
death had an enterprise or an interest in an enterprise that is or was, in
whole or in part, carried on through a permanent establishment or a
permanent representative in The Netherlands and to which enterprise or part
of an enterprise, as the case may be, the Notes or the Additional
Securities are or were attributable; or
(ii) in the case of a gift of Notes or Additional Securities by an
individual who at the date of the gift was neither resident nor deemed to
be resident in The Netherlands, such individual dies within 180 days after
the date of the gift, while being resident or deemed to be resident in The
Netherlands.
Turnover Tax
No Netherlands turnover tax will arise in respect of any payment in
consideration for the issue of the Notes or the Additional Securities or with
respect to any payment by the Issuer of principal, interest or premium (if any)
on the Notes or the Additional Securities.
Capital Tax
No Netherlands capital tax will be payable in respect of or in connection
with the execution, delivery and/or enforcement by legal proceedings (including
the enforcement of any foreign judgment in the Courts of The Netherlands) of the
Consent Form, or the performance by the Issuer of its obligations under the
Notes or the Additional Securities, with the exception of capital tax that may
be due by the Issuer on capital contributions made or deemed to be made to the
Issuer under the Guarantee.
Other Taxes and Duties
No Netherlands registration tax, custom duty, transfer tax, stamp duty or
any other similar documentary tax or duty, other than court fees, will be
payable in The Netherlands in respect of or in connection with the execution,
delivery and/or enforcement by legal proceedings (including the enforcement of
any foreign judgment in the Courts of The Netherlands) of the Consent form, or
the performance by the Issuer of its obligations under the Notes or the
Additional Securities.
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<PAGE> 21
MISCELLANEOUS
The Consent Solicitation is not being made to, and Consent Forms will not
be accepted from or on behalf of, any Holder in any jurisdiction in which the
making of the Consent Solicitation to such Holder or the acceptance thereof from
such Holder would not be in compliance with the laws of such jurisdiction.
However, the Issuer may in its discretion take such action as it may deem
necessary to make the Consent Solicitation in any such jurisdiction and to
extend the Consent Solicitation to Holders in such jurisdiction.
HOLDERS WHO WISH TO CONSENT SHOULD DELIVER, BY REGULAR MAIL, AIR COURIER,
MESSENGER OR FAX, THEIR PROPERLY COMPLETED, EXECUTED AND DATED CONSENT FORMS TO
THE INFORMATION AGENT IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH HEREIN AND
THEREIN. ALL FACSIMILE TRANSMISSIONS MUST BE FOLLOWED BY DELIVERY OF ORIGINALLY
EXECUTED CONSENTS. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CONSENTS,
IS AT THE ELECTION AND RISK OF THE HOLDER. THE ADDRESS OF THE INFORMATION AGENT
AS FOLLOWS:
Via Regular Mail or By Hand or Overnight Delivery
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
Contact Persons: Paul Hebert or Chris Dowd
Facsimile Transmission:
(201) 804-8693
(Originally executed consents must follow)
Confirm by Telephone
(201) 896-1900 or Call Toll Free (800) 346-7885
NEITHER THE ISSUER NOR THE GUARANTOR HAS AUTHORIZED ANY PERSON TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATION IN CONNECTION WITH THIS SOLICITATION OF
CONSENTS OTHER THAN AS SET FORTH HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
ISSUER OR THE GUARANTOR. THE DELIVERY OF THIS CONSENT SOLICITATION STATEMENT
SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
HEREIN IS CORRECT AFTER THE DATE HEREOF.
Any questions or requests for assistance or additional copies of this
Consent Solicitation Statement or the Consent may be directed to the Information
Agent at its telephone number and location set forth above. For assistance in
completing the forms, you may also contact the Information Agent at the
telephone number and location set forth above.
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EXHIBIT T3E.2
CONSENT FORM
POLYTAMA INTERNATIONAL FINANCE B.V.
P.T. POLYTAMA PROPINDO
FORM FOR CONSENTING TO THE PROPOSED AMENDMENTS
PURSUANT TO THE CONSENT SOLICITATION STATEMENT DATED JULY 13, 1998
relating to
11 1/4% GUARANTEED SECURED NOTES DUE 2007
issued by
POLYTAMA INTERNATIONAL FINANCE B.V.
(US$200,000,000 principal amount outstanding)
Irrevocably and Unconditionally Guaranteed as to Payment of Principal,
Premium, Interest and Additional Amounts, if any, by
P.T. POLYTAMA PROPINDO
TO: INFORMATION AGENT
CORPORATE INVESTOR COMMUNICATIONS, INC.
THE CONSENT SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK TIME, ON AUGUST 10,
1998, UNLESS EXTENDED (AS SO EXTENDED, THE "EXPIRATION DATE"). IF THE REQUISITE
CONSENTS WITH RESPECT TO THE CONSENT SOLICITATION HAVE NOT BEEN RECEIVED BY 5:00
P.M., NEW YORK TIME, ON THE EXPIRATION DATE, THE ISSUER MAY EXTEND THE CONSENT
SOLICITATION FOR A SPECIFIED PERIOD OR ON A DAILY BASIS UNTIL THE REQUISITE
CONSENTS HAVE BEEN RECEIVED.
Via Regular Mail or By Hand or Overnight Delivery
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
Contact Persons: Paul Hebert or Chris Dowd
Personal and Confidential
The Consent Solicitation is made by Polytama International Finance B.V. (the
"Issuer") and by P.T. Polytama Propindo (the "Guarantor") only to Holders (as
defined below) of the 11 1/4% Guaranteed Secured Notes due 2007 (the "Notes") of
the Issuer and irrevocably and unconditionally guaranteed as to Payment of
Principal, Premium, Interest and Additional Amounts, if any, by the Guarantor,
as described in the accompanying Consent Solicitation Statement dated July 13,
1998 (the "Consent Solicitation Statement"). The term "Holder" as used herein
means any holder of record of the Notes as of June 5:00 p.m., New York City
time, on July 9, 1998 (the "Record Date"). Capitalized terms used herein but not
defined herein have the meanings given to them in the Consent Solicitation
Statement. The Consent Solicitation expires at 5:00 p.m., New York City time on
August 10, 1998, unless extended.
HOLDERS WHO WISH TO CONSENT MUST DELIVER THEIR PROPERLY COMPLETED AND
EXECUTED CONSENT FORMS BY MAIL, FIRST-CLASS POSTAGE PREPAID, HAND DELIVERY,
OVERNIGHT COURIER OR BY FACSIMILE TRANSMISSION (WITH AN ORIGINAL TO BE DELIVERED
SUBSEQUENTLY) TO THE INFORMATION AGENT (NOT TO THE ISSUER, THE GUARANTOR OR THE
TRUSTEE) AT THE ADDRESS OR NUMBERS SET FORTH ABOVE IN ACCORDANCE WITH THE
INSTRUCTIONS SET FORTH HEREIN AND IN THE CONSENT SOLICITATION STATEMENT.
HOWEVER, THE ISSUER RESERVES THE RIGHT TO ACCEPT ANY CONSENT RECEIVED BY THE
TRUSTEE. UNDER NO CIRCUMSTANCES SHOULD ANY PERSON TENDER OR DELIVER NOTES TO THE
ISSUER, THE GUARANTOR OR THE TRUSTEE AT ANY TIME.
Only Holders are eligible to consent to the Proposed Amendments. Any
beneficial owner of the Notes who is not a Holder of such Notes must arrange
with the person who is the Holder or such Holder's assignee or nominee to
execute and deliver a Consent Form on behalf of such beneficial owner. FOR
PURPOSES OF THE CONSENT SOLICITATION, THE DEPOSITORY TRUST COMPANY ("DTC") HAS
AUTHORIZED DTC PARTICIPANTS ("PARTICIPANTS") SET FORTH IN THE POSITION LISTING
OF DTC AS OF THE RECORD DATE TO EXECUTE CONSENT FORMS AS IF THEY WERE THE
HOLDERS OF THE NOTES HELD OF RECORD IN THE NAME OF DTC OR THE NAME OF ITS
NOMINEE. ACCORDINGLY, FOR PURPOSES OF THE CONSENT SOLICITATION, THE TERM
"HOLDER" SHALL BE DEEMED TO INCLUDE SUCH PARTICIPANT. The Issuer reserves the
right to establish from time to time any new date as the Record Date and,
thereupon, any such new date will be deemed to be the "Record Date" for purposes
of the Consent Solicitation.
By execution hereof, the undersigned acknowledges receipt of the Consent
Solicitation Statement. The undersigned hereby represents and warrants that the
undersigned is a Holder of the Notes indicated below and has full power and
authority to take the action indicated below in respect of such Notes. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Issuer to be necessary or desirable to perfect the undersigned's
consent.
The undersigned acknowledges that the undersigned must comply with the
provisions of this Consent Form, and complete the information required therein,
to validly consent to the Proposed Amendments set forth in the Consent
Solicitation Statement. The effectiveness of the Proposed Amendments is
conditioned on, among other things, (i) there being received (and not revoked)
on or prior to the Expiration Date (as defined below) the effective consent to
the Proposed Amendments by 100% of the aggregate principal amount of Notes that
are outstanding as of the Record Date and (ii) the execution of the related
First Supplemental Indenture (the "Supplemental Indenture") among the Issuer,
the Guarantor and the Trustee.
Please indicate by marking the appropriate box below whether you wish to (i)
consent to the Proposed Amendments or (ii) not consent to the Proposed
Amendments. The undersigned acknowledges that Consent Forms delivered pursuant
to any one of the procedures described under the heading "The Consent
Solicitation -- Procedures for Consenting" in the Consent Solicitation Statement
and in the instructions hereto will constitute a binding agreement among the
undersigned and the issuer upon the terms and subject to the conditions of the
Consent Solicitation. The undersigned further understands that if no box is
checked, but this Consent Form is executed and delivered to the Information
Agent, the undersigned will be deemed to have consented to the Proposed
Amendments. The undersigned hereby agrees that it will no revoke any consent it
grants hereby except in accordance with the procedures set forth herein and in
the Consent Solicitation Statement.
[ ] CONSENT [ ] DO NOT CONSENT
This Consent Form relates to the total principal amount of the Notes held of
record by the undersigned at the close of business on the Record Date.
The undersigned authorizes the Information Agent to deliver this Consent
Form and any proxy delivered in connection herewith to the Trustee as evidence
of the undersigned's action with respect to the Proposed Amendments.
1
<PAGE> 2
DESCRIPTION OF GUARANTEED SECURED NOTES DUE 2007
OF
POLYTAMA INTERNATIONAL FINANCE B.V.
IRREVOCABLY AND UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, INTEREST AND ADDITIONAL AMOUNTS, IF ANY, BY
P.T. POLYTAMA PROPINDO
(CUSIP NUMBER 73180UAAO)
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT OF NOTE(S)
WITH
RESPECT TO WHICH CONSENTS ARE
AGGREGATE PRINCIPAL GIVEN
NAME AND ADDRESS OF HOLDER CERTIFICATE NUMBER(S)(1) AMOUNT OF NOTE(S)(2) (IN US$)
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL AMOUNT OF NOTES CONSENTING.............................. US$
- -----------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
Remarks:
(1) Need not be completed by Holders whose Notes are held of record by
depositories.
(2) The Holder will be deemed to have consented in respect of the entire
aggregate principal amount indicated in the column labeled "Aggregate
Principal Amount of Note(s)." All principal amounts must be in multiples of
US$1,000.
2
<PAGE> 3
IMPORTANT -- READ CAREFULLY
IF THIS CONSENT FORM IS EXECUTED BY THE HOLDER, IT MUST BE EXECUTED IN
EXACTLY THE SAME MANNER AS THE NAME OF THE HOLDER APPEARS ON THE NOTES. AN
AUTHORIZED DTC PARTICIPANT MUST EXECUTE THIS CONSENT FORM EXACTLY AS ITS NAME
APPEARS ON DTC'S POSITION LISTING AS OF THE RECORD DATE. IF THE NOTES ARE HELD
OF RECORD BY TWO OR MORE JOINT HOLDERS, ALL SUCH HOLDERS MUST SIGN THE CONSENT
FORM. IF A SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN,
ATTORNEY-IN-FACT, OFFICER OF A CORPORATION OR OTHER HOLDER ACTING IN A FIDUCIARY
OR REPRESENTATIVE CAPACITY, SUCH PERSON SHOULD SO INDICATE WHEN SIGNING AND MUST
SUBMIT PROPER EVIDENCE SATISFACTORY TO THE INFORMATION AGENT OF SUCH PERSON'S
AUTHORITY TO SO ACT. IF THE NOTES ARE REGISTERED IN DIFFERENT NAMES, SEPARATE
CONSENT FORMS MUST BE EXECUTED COVERING EACH FORM OF REGISTRATION. IF A CONSENT
FORM IS EXECUTED BY A PERSON OTHER THAN THE HOLDER, THEN SUCH PERSON MUST HAVE
BEEN AUTHORIZED BY PROXY OR IN SOME OTHER MANNER ACCEPTABLE TO THE ISSUER TO
VOTE THE APPLICABLE NOTES ON BEHALF OF THE HOLDER.
DESCRIPTION OF 11 1/4% GUARANTEED SECURED NOTES DUE 2007
POLYTAMA INTERNATIONAL FINANCE B.V.
IRREVOCABLY AND UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, INTEREST AND ADDITIONAL AMOUNTS, IF ANY, BY
P.T. POLYTAMA PROPINDO
(CUSIP NUMBER 73180UAAO)
SIGN HERE
- --------------------------------------------------------------------------------
SIGNATURE(S) OF HOLDER(S)
- --------------------------------------------------------------------------------
DATE:
- --------------------------------------------------------------------------------
NAME(S) (PLEASE PRINT):
- --------------------------------------------------------------------------------
CAPACITY (FULL TITLE):
- --------------------------------------------------------------------------------
ADDRESS (INCLUDE ZIP CODE):
- --------------------------------------------------------------------------------
AREA CODE AND TELEPHONE NO.:
- --------------------------------------------------------------------------------
TAX IDENTIFICATION OR SOCIAL SECURITY NO:
- --------------------------------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED, SEE INSTRUCTIONS 5 AND 6 BELOW)
AUTHORIZED SIGNATURE:
- --------------------------------------------------------------------------------
NAME AND TITLE (PLEASE PRINT):
- --------------------------------------------------------------------------------
DATE:
- --------------------------------------------------------------------------------
NAME OF FIRM:
- --------------------------------------------------------------------------------
3
<PAGE> 4
INSTRUCTIONS FORMING PART
OF THE TERMS AND CONDITIONS OF THE CONSENT SOLICITATION
1. DELIVERY OF THIS CONSENT FORM.
Subject to the terms and conditions set forth herein and in the Consent
Solicitation Statement, a properly completed and duly executed copy of this
Consent Form and any other documents required by this Consent Form must be
received by the Information Agent (for delivery to the Trustee) at the addresses
or numbers set forth on the cover hereof on or prior to the Expiration Date
(provided that the expected original of each document sent by facsimile
transmission on or prior to the Expiration Date must be received by the
Information Agent at such addresses prior to 5:00 p.m., New York City time, on
the third business day following the Expiration Date). THE METHOD OF DELIVERY OF
THIS CONSENT FORM AND ALL OTHER REQUIRED DOCUMENTS TO THE INFORMATION AGENT IS
AT THE RISK OF THE HOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE INFORMATION AGENT. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ASSURE TIMELY DELIVERY. NO CONSENT FORM SHOULD BE SENT TO ANY
PERSON OTHER THAN THE INFORMATION AGENT.
Any beneficial owner of the Notes who is not a Holder of the Notes must
arrange with the person who is the Holder (e.g., held in the name of DTC or the
beneficial owner's broker, dealer, commercial bank, trust company or other
nominee institution) or such Holder's assignee or nominee to execute and deliver
this Consent Form on behalf of such beneficial owner.
2. EXPIRATION DATE.
The Consent Solicitation expires at 5:00 p.m., New York City time on August
10, 1998, unless the Issuer, in its discretion, extends the period during which
the Consent Solicitation is open, in which case the term "Expiration Date" shall
mean, with respect to the Consent Solicitation as so extended, the latest date
and time to which such Consent Solicitation is extended. In order to extend the
Expiration Date, the Issuer will give notice to all Holders as provided in the
Consent Solicitation Statement. The Issuer may extend the Consent Solicitation
on a daily basis or for a specified period of time.
3. QUESTIONS REGARDING VALIDITY, FORM, LEGALITY, ETC.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of consents and revocations of consents will be resolved
by the Issuer whose determinations will be binding. The Issuer reserves the
absolute right to reject any or all consents and revocations that are not in
proper form or the acceptance of which could, in the opinion of the Issuer's
counsel, be unlawful. The Issuer also reserves the right to waive any
irregularities in connection with deliveries which must be cured within such
time as the Issuer determines. None of the Issuer, the Guarantor, the Trustee,
the Information Agent or any other person shall have any duty to give
notification of any such irregularities or waiver, nor shall any of them incur
any liability for failure to give such notification. Deliveries of Consent forms
or notices of revocation will not be deemed to have been made until such
irregularities have been cured or waived. The Issuer's interpretation of the
terms and conditions of the Consent Solicitation (including this Consent Form
and the accompanying Consent Solicitation Statement and the instructions hereto
and thereto) will be binding on all parties.
4. HOLDERS ENTITLED TO CONSENT.
Only a Holder as defined herein (or its representative or attorney-in-fact)
or another person who has complied with the procedures set forth below may
execute and deliver a Consent Form. Any beneficial owner or registered holder of
the Notes who is not the Holder thereof (e.g., held in the name of DTC or the
beneficial owner's broker, dealer, commercial bank, trust company or other
nominee institution) must arrange with such Holder(s) on such Holder's assignee
or nominee to execute and deliver this Consent Form on behalf of such beneficial
owner. FOR PURPOSES OF THE CONSENT SOLICITATION, THE TERM "HOLDER" SHALL BE
DEEMED TO INCLUDE DTC PARTICIPANTS THROUGH WHICH A BENEFICIAL OWNER'S NOTES MAY
BE HELD OF RECORD AS OF THE RECORD DATE IN DTC. A consent by a Holder is a
continuing consent notwithstanding that ownership of a Note has been transferred
subsequent to the Record Date, unless the Holder timely revokes the prior
consent in accordance with the procedures set forth herein and in the Consent
Solicitation Statement.
4
<PAGE> 5
5. SIGNATURES ON THIS CONSENT FORM.
If this Consent Form is signed by the Holder(s) of the Notes with respect
to which this consent is given, the signature(s) of such Holder(s) must
correspond with the name(s) as contained on the books of the register maintained
by the Trustee or as set forth in DTC's position listing without alteration,
enlargement or any change whatsoever.
If any of the Notes with respect to which this consent is given were held
of record on the Record Date by two or more joint Holders, all such Holders must
sign this Consent Form. If any Notes with respect to which this Consent is given
have different Holders, it will be necessary to complete, sign and submit as
many separate copies of this Consent Form and any necessary accompanying
documents as there are different Holders.
If this Consent Form is signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should indicate such fact
when signing, and, unless waived by the Issuer, evidence satisfactory to the
Issuer of their authority to so act must be submitted with this Consent Form.
6. SIGNATURE GUARANTEES.
All signatures on this Consent Form must be guaranteed by a firm or other
entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, including (as such terms are defined therein): (a) a bank, (b) a
broker, dealer, municipal securities dealer, municipal securities broker,
government securities dealer or government securities broker; (c) a credit
union; (d) a national securities exchange, registered securities association or
clearing agency; or (e) a savings institution that is a participant in a
Securities Transfer Association recognized program (each an "Eligible
Institution"). However, signatures needed not be guaranteed if this Consent is
given by or for the account of an Eligible Institution. If the Holder of the
Notes is a person other than the signer of this Consent Form, see Instruction 5.
7. REVOCATION OF CONSENT.
Any Holder of the Notes as to which a consent has been given may revoke
such consent as to such Notes or any portion of such Notes (in integral
multiples of US$1,000) by delivering a written notice of revocation or a changed
Consent Form bearing a date later than the date of the prior Consent Form with
the Issuer at any time prior to the Requisite Consent Date. Each Holder of Notes
who delivers a consent agrees that it will not revoke its consent after receipt
by the Trustee of the Requisite Consents, and that until such time such Holder
will not revoke its consent except in accordance with the conditions and
procedures for revocation of consents provided herein. THE TRANSFER OF THE NOTES
AFTER THE RECORD DATE WILL NOT HAVE THE EFFECT OF REVOKING ANY CONSENT VALIDLY
GIVEN BEFORE SUCH TRANSFER BY A HOLDER OF SUCH NOTES, AND EACH PROPERLY
COMPLETED AND EXECUTED CONSENT FORM WILL BE COUNTED NOTWITHSTANDING ANY TRANSFER
OF THE NOTES TO WHICH SUCH CONSENT RELATES, UNLESS THE PROCEDURE FOR REVOKING
CONSENTS DESCRIBED BELOW HAS BEEN COMPILED WITH.
To be effective, a notice of revocation must be in writing, must contain
the name of the Holder, and the aggregate principal amount of the Notes to which
it relates and must be (a) signed in the same manner as the original Consent
Form or (b) accompanied by a duly executed proxy or other authorization (in the
form satisfactory to the Information Agent). Revocation of consents must be sent
to the Information Agent at the address set forth in this Consent Form.
To be effective, the revocation must be executed by the Holder of such
Notes in the same manner as the name of such holder appears on the books of the
register maintained by the Trustee or as set forth in DTC's position listing
without alteration, enlargement or any change whatsoever. If a revocation is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person must indicate such fact when signing and must submit with
the revocation appropriate evidence of authority to execute the revocation. A
REVOCATION OF A CONSENT WILL BE EFFECTIVE ONLY AS TO THE NOTES LISTED ON THE
REVOCATION AND ONLY IF SUCH REVOCATION COMPLIES WITH THE PROVISIONS OF THIS
CONSENT FORM AND THE CONSENT SOLICITATION STATEMENT. Only a Holder of the Notes
is entitled to revoke a consent previously given. A beneficial owner of the
Notes must arrange with the Holder to execute and deliver on its behalf a
revocation of any consent already given with respect to such Notes. A transfer
of Notes after the Record Date must be accompanied by a duly executed proxy from
the relevant Holder if the subsequent transferee is to have revocation rights
with respect to the relevant consent to the Proposed Amendments. A purported
notice of revocation that is not received by the Information Agent in a timely
fashion and accepted by the Information Agent as a valid revocation will not be
effective to revoke a consent previously given.
A REVOCATION OF A CONSENT MAY ONLY BE RESCINDED BY THE DELIVERY OF A
WRITTEN NOTICE OF REVOCATION OR THE EXECUTION AND DELIVERY OF A NEW CONSENT
FORM. A
5
<PAGE> 6
HOLDER WHO HAS DELIVERED A REVOCATION MAY THEREAFTER DELIVER A NEW CONSENT FORM
BY FOLLOWING ONE OF THE DESCRIBED PROCEDURES AT ANY TIME PRIOR TO THE EXPIRATION
DATE.
The Issuer reserves the right to contest the validity of any revocations.
8. WAIVER OF CONDITIONS.
The Issuer reserves the absolute right, subject to applicable law, to
amend, waive or modify the terms and conditions of the Consent Solicitation.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES.
Requests for assistance in completing and delivering Consent Forms or for
additional copies of the Consent Solicitation Statement, this Consent Form or
other related documents should be directed to the Information Agent at the
locations and numbers as set forth below:
The Information Agent:
Via Regular Mail or By Hand or Overnight Delivery
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
Contact Persons: Paul Hebert or Chris Dowd
Facsimile Transmission:
(201) 804-8693
(Originally executed consents must follow)
Confirm by Telephone
(201) 896-1900 or Call Toll Free (800) 346-7885
You may also contact your broker, dealer, commercial bank or trust company
or nominee for assistance concerning the Consent Solicitation.
6
<PAGE> 1
EXHIBIT T3E.3
POLYTAMA INTERNATIONAL FINANCE B.V.
P.T. POLYTAMA PROPINDO
SOLICITATION OF CONSENTS TO AMEND INDENTURE
RELATING TO
11 1/4% GUARANTEED SECURED NOTES DUE 2007
ISSUED BY
POLYTAMA INTERNATIONAL FINANCE B.V.
(US$200,000,000 PRINCIPAL AMOUNT OUTSTANDING)
IRREVOCABLY AND UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, INTEREST AND ADDITIONAL AMOUNTS, IF ANY, BY
P.T. POLYTAMA PROPINDO
July 13, 1998
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Polytama International Finance B.V. (the "Issuer") and P.T. Polytama
Propindo (the "Company") are soliciting consents (the "Consent Solicitation"),
upon the terms and subject to the conditions set forth in the enclosed Consent
Solicitation Statement dated July 13, 1998 (the "Statement") and the enclosed
form of Consent (the "Consent Form") from holders (the "Holders") of 11 1/4%
Guaranteed Secured Notes due 2007 (CUSIP Number 73180UAA0) (The "Notes") to the
proposed amendments (the "Amendments") of the Indenture relating to the Notes.
We are asking you to contact your clients for whom you hold the Notes
registered in your name or in the name of your nominee or who hold the Notes
registered in their own names.
The Issuer and the Company will not pay any fees or commissions to any
broker or dealer or other person for soliciting consents from Holders of the
Notes pursuant to the Consent Solicitation. You will be reimbursed for customary
mailing and handling expenses incurred by you in forwarding any of the enclosed
materials to your clients.
Enclosed is a copy of the following documents:
1. The Statement.
2. The Consent Form for your use and for the information of your
clients.
For purposes of the Consent Solicitation, the Depository Trust Company
("DTC") has authorized DTC Participants ("Participants") set forth in the
Position Listing of DTC as of the Record Date to execute consent forms as if
they were the Holders of the Notes held of record in the name of DTC or the name
of its nominee. Accordingly, for purposes of the Consent Solicitation, the term
"Holder" shall be deemed to include such Participants. Only those holders
appearing on the Participant Position Listing provided by the Depository Trust
Company should submit their consents to the Trustee.
Your prompt action is required. The Issuer and the Company will not be
making any payments in connection with the Consent Solicitation. Consents to the
Amendments may be revoked at any time prior to the execution of the First
Supplemental Indenture giving effect to the Amendments.
<PAGE> 2
Additional copies of the enclosed material may be obtained from the Trustee
or the Information Agent.
Very truly yours,
Polytama International Finance B.V.
P.T. Polytama Propindo
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON
AS AN AGENT OF THE ISSUER, THE COMPANY OR THE TRUSTEE, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM, EXCEPT FOR
STATEMENTS EXPRESSLY MADE IN THE STATEMENT OR THE ACCOMPANYING CONSENT FROM.
2
<PAGE> 1
EXHIBIT T3F
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
------- ------------
<S> <C>
310(a)(1)................................................... 7.10
(a)(2)................................................... 7.10
(a)(3)................................................... 7.12
(a)(4)................................................... N.A.
(b)...................................................... 7.08; 7.10
(c)...................................................... N.A.
311(a)...................................................... 7.11
(b)...................................................... 7.11
(c)...................................................... N.A.
312(a)...................................................... 2.05
(b)...................................................... 14.03
(c)...................................................... 14.03
313(a)...................................................... 7.06
(b)(1)................................................... N.A.
(c)(2)................................................... 7.06
(c)...................................................... 12.02
(d)...................................................... 7.06
314(a)...................................................... 4.02; 4.28;
...................................................... 14.02
(b)...................................................... N.A.
(c)(1)................................................... 14.04
(c)(2)................................................... 14.04
(c)(3)................................................... N.A.
(d)...................................................... 12.09(b)
(e)...................................................... 14.05
(f)...................................................... 4.27
315(a)...................................................... 7.01
(b)...................................................... 7.05; 14.02
(c)...................................................... 7.01
(d)...................................................... 7.01
(e)...................................................... 6.11
316(a)(last sentence)....................................... 14.06
(a)(1)(A)................................................ 6.05
(a)(1)(B)................................................ 6.04
(a)(2)................................................... N.A.
(b)...................................................... 6.07
317(a)(1)................................................... 6.08
(a)(2)................................................... 6.09
(b)...................................................... 2.04
318(a)...................................................... 14.01
</TABLE>
- ---------------
N.A. means Not Applicable
3
