SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 13, 1996
FREEPORT-McMoRan COPPER & GOLD INC.
(Exact name of registrant as specified in its charter)
Delaware 1-9916 72-2480931
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
1615 Poydras Street, New Orleans, Louisiana 70112
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 582-4000
Item 7. Financial Statements and Exhibits.
The exhibits set forth below are filed herewith. Exhibits 4.1 and
25.1 relate to the Registrant's Registration Statement on Form S-3,
Registration No. 333-2699. Exhibits 10.1-10.5 relate to the Registrant's
Registration Statements on Form S-3 Registration Nos. 333-2699, 33-45787,
33-52503, 33-66098 and 33-63376.
4.1 Form of Senior Indenture from Freeport-McMoRan Copper & Gold Inc. to
The Chase Manhattan Bank, as Trustee.
10.1 Amendment dated October 9, 1996, to the Credit Agreement dated June 30,
1995 among P.T. Freeport Indonesia Company ("PT-FI"), Freeport-McMoRan
Copper & Gold Inc. ("FCX"), First Trust of New York and The Chase
Manhattan Bank.
10.2 Amendment dated October 9, 1996, to Credit Agreement dated October 27,
1989 among PT-FI, Freeport-McMoRan Copper & Gold Inc., First Trust
of New York and The Chase Manhattan Bank.
10.3 Agreement dated October 11, 1996, to Amend and Restate Trust Agreement
among PT-FI, FCX, the RTZ Corporation PLC, P.T. RTZ-CRA Indonesia,
RTZ Indonesian Finance Limited, and First Trust of New York, National
Association, and the Chase Manhattan Bank (formerly Chemical Bank),
as Administrative Agent, JAA Security Agent and Security Agent.
10.4 Credit Agreement dated October 11, 1996, between PT-FI and RTZ
Indonesian Finance Limited.
10.5 Participation Agreement between PT-FI and P.T. RTZ-CRA Indonesia with
respect to a certain contract of work, dated October 11, 1996.
25.1 Statement of Eligibility under the Trust Indenture Act of 1939 of The
Chase Manhattan Bank on Form T-1, dated November 12, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
FREEPORT-McMoRan COPPER & GOLD INC.
By: /s/ Henry A. Miller
___________________________________
Name: Henry A. Miller
Dated: November 13, 1996 Title: Vice President and
General Counsel
FREEPORT-McMoRAN COPPER & GOLD INC., Issuer
and
The Chase Manhattan Bank, Trustee
SENIOR
INDENTURE
Dated as of November _, 1996
TABLE OF CONTENTS
Page
PARTIES...................................................... 1
RECITALS..................................................... 1
ARTICLE ONE - DEFINITIONS
SECTION 1.1
Certain Terms Defined................................... 1
Authenticating Agent.................................... 1
Authorized Newspaper.................................... 2
Authorized Signatory.................................... 2
Board of Directors...................................... 2
Board Resolution........................................ 2
Business Day............................................ 2
Commission.............................................. 2
Company Order........................................... 2
Corporate Trust Office.................................. 2
Coupon.................................................. 2
Debt.................................................... 2
Default................................................. 2
Defeasance.............................................. 2
Depositary.............................................. 3
Dollar.................................................. 3
ECU..................................................... 3
Event of Default........................................ 3
Exchange Act............................................ 3
Foreign Currency........................................ 3
Guarantee............................................... 3
Holder, Holder of Securities, Securityholder............ 3
Indenture............................................... 3
Insolvency Law.......................................... 3
Interest................................................ 3
Interest Payment Date................................... 3
Issuer.................................................. 3
Judgment Currency....................................... 3
Officers' Certificate................................... 4
Opinion of Counsel...................................... 4
Original issue date..................................... 4
Original Issue Discount Security........................ 4
Outstanding............................................. 4
Periodic Offering....................................... 5
Person.................................................. 5
Principal............................................... 5
Redemption Date......................................... 5
Redemption Price........................................ 5
Registered Global Security.............................. 5
Registered Security..................................... 5
Regular Record Date..................................... 5
Required Currency....................................... 5
Responsible Officer..................................... 5
SEC Reports............................................. 5
Securities Act.......................................... 5
Security or Securities.................................. 6
Security Registrar...................................... 6
Stated Maturity......................................... 6
Trust Indenture Act of 1939............................. 6
Trustee................................................. 6
Unregistered Security................................... 6
U.S. Government Obligations............................. 6
Yield to Maturity....................................... 6
ARTICLE TWO - ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES
SECTION 2.1 Forms Generally.............................. 6
SECTION 2.2 Form of Trustee's Certificate of
Authentication............................... 7
SECTION 2.3 Amount Unlimited; Issuable in Series......... 7
SECTION 2.4 Authentication and Delivery of Securities.... 10
SECTION 2.5 Execution of Securities...................... 12
SECTION 2.6 Certificate of Authentication................ 13
SECTION 2.7 Denomination and Date of Securities; Payments
of Interest.................................. 13
SECTION 2.8 Registration, Transfer and Exchange.......... 14
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and
Stolen Securities............................ 17
SECTION 2.10 Cancellation of Securities; Disposition
Thereof...................................... 18
SECTION 2.11 Temporary Securities......................... 18
ARTICLE THREE - COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest............ 19
SECTION 3.2 Offices for Payments, etc.................... 20
SECTION 3.3 Appointment to Fill a Vacancy in Office of
Trustee...................................... 21
SECTION 3.4 Paying Agents................................ 21
SECTION 3.5 Written Statement to Trustee................. 22
SECTION 3.6 Corporate Existence.......................... 22
SECTION 3.7 Luxembourg Publications...................... 22
ARTICLE FOUR - SECURITYHOLDERS' LISTS AND REPORTS BY THE ISSUER
AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders....... 22
SECTION 4.2 Preservation and Disclosure of
Securityholders' Lists....................... 23
SECTION 4.3 Reports by the Issuer........................ 23
SECTION 4.4 Reports by the Trustee....................... 23
ARTICLE FIVE - REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON
EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default ................. 24
SECTION 5.2 Collection of Debt by Trustee; Trustee May
Prove Debt................................... 27
SECTION 5.3 Application of Proceeds...................... 28
SECTION 5.4 Suits for Enforcement........................ 29
SECTION 5.5 Restoration of Rights on Abandonment of
Proceedings.................................. 29
SECTION 5.6 Limitations on Suits by Securityholders...... 30
SECTION 5.7 Unconditional Right of Securityholders to
Institute Certain Suits...................... 30
SECTION 5.8 Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default............... 30
SECTION 5.9 Control by Securityholders................... 31
SECTION 5.10 Waiver of Past Defaults...................... 31
SECTION 5.11 Trustee to Give Notice of Default, But May
Withhold in Certain Circumstances............ 32
SECTION 5.12 Right of Court to Require Filing of
Undertaking to Pay Costs..................... 32
ARTICLE SIX - CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default............. 32
SECTION 6.2 Certain Rights of the Trustee................ 33
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of
Proceeds Thereof............................. 34
SECTION 6.4 Trustee and Agents May Hold Securities or
Coupons; Collections, etc.................... 35
SECTION 6.5 Monies Held by Trustee....................... 35
SECTION 6.6 Compensation and Indemnification of Trustee
and Its Prior Claim.......................... 35
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc............................. 36
SECTION 6.8 Persons Eligible for Appointment as Trustee.. 36
SECTION 6.9 Resignation and Removal; Appointment of
Successor Trustee; Conflicting Interests..... 36
SECTION 6.10 Acceptance of Appointment by Successor
Trustee...................................... 38
SECTION 6.11 Merger, Conversion, Consolidation or
Succession to Business of Trustee............ 39
SECTION 6.12 Preferential Collection of Claims Against
the Issuer................................... 39
SECTION 6.13 Appointment of Authenticating Agent.......... 39
ARTICLE SEVEN - CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders.. 40
SECTION 7.2 Proof of Execution of Instruments and of
Holding of Securities........................ 40
SECTION 7.3 Holders to be Treated as Owners.............. 41
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding.................................. 42
SECTION 7.5 Right of Revocation of Action Taken.......... 42
SECTION 7.6 Record Date for Consents and Waivers......... 42
ARTICLE EIGHT - SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders.............................. 43
SECTION 8.2 Supplemental Indentures With Consent of
Securityholders.............................. 44
SECTION 8.3 Effect of Supplemental Indenture............. 46
SECTION 8.4 Documents to Be Given to Trustee............. 46
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures..................... 46
ARTICLE NINE - CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Covenant of the Issuer Not to Merge,
Consolidate, Sell or Convey Property Except
Under Certain Conditions..................... 46
SECTION 9.2 Successor Corporation Substituted............ 47
SECTION 9.3 Opinion of Counsel to Trustee................ 47
ARTICLE TEN - SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED
MONIES
SECTION 10.1 Satisfaction and Discharge of Indenture...... 48
SECTION 10.2 Application by Trustee of Funds Deposited
for Payment of Securities.................... 52
SECTION 10.3 Repayment of Monies Held by Paying Agent..... 52
SECTION 10.4 Return of Monies Held by Trustee and Paying
Agent Unclaimed for Two Years................ 52
SECTION 10.5 Indemnity for U.S. Government Obligations.... 53
ARTICLE ELEVEN - MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual
Liability.................................... 53
SECTION 11.2 Provisions of Indenture for the Sole Benefit
of Parties and Securityholders............... 53
SECTION 11.3 Successors and Assigns of Issuer Bound by
Indenture.................................... 53
SECTION 11.4 Notices and Demands on Issuer, the Trustee
and Securityholders.......................... 53
SECTION 11.5 Officers' Certificates and Opinions of
Counsel, Statements to Be Contained Therein.. 54
SECTION 11.6 Payments Due on Saturdays, Sundays and Legal
Holidays..................................... 55
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939.................. 55
SECTION 11.8 New York Law to Govern; Separability......... 55
SECTION 11.9 Counterparts................................. 55
SECTION 11.10 Effect of Headings........................... 56
SECTION 11.11 Securities in a Foreign Currency or in ECU... 56
SECTION 11.12 Judgment Currency............................ 56
ARTICLE TWELVE - REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Application of Article....................... 57
SECTION 12.2 Notice of Redemption......................... 57
SECTION 12.3 Payment of Securities Called for Redemption.. 58
SECTION 12.4 Mandatory and Optional Sinking Funds......... 59
TESTIMONIUM................................................... 62
SIGNATURES AND SEALS.......................................... 62
ACKNOWLEDGEMENTS.............................................. 63
-i-
CROSS REFERENCE SHEET*
Between
Provisions of Trust Indenture Act of 1939, as amended, and the Indenture
to be dated as of November ___, 1996 between Freeport-McMoRan Copper & Gold
Inc. and The Chase Manhattan Bank, as Trustee:
Section of the Act Section of Indenture
310(a)(1), (2) and (5)........................................6.8
310(a)(3) and (4)....................................Inapplicable
310(b)........................................6.9(a), (b) and (d)
310(c)...............................................Inapplicable
311(a) and (b)...............................................6.12
311(c)...............................................Inapplicable
312(a).............................................4.1 and 4.2(a)
312(b).....................................................4.2(b)
312(c).....................................................4.2(c)
313(a).....................................................4.4(a)
313(a)(5)..................................................4.4(b)
313(b).....................................................4.4(b)
313(c) ....................................................4.4(c)
313(d).....................................................4.4(d)
314(a)................................................3.5 and 4.3
314(b)...............................................Inapplicable
314(c).......................................................11.5
314(d)...............................................Inapplicable
314(e).......................................................11.5
314(f)...............................................Inapplicable
315(a), (c) and (d)...........................................6.1
315(b).......................................................5.11
315(e) ......................................................5.12
316(a)(1).....................................................5.9
316(a)(2)............................................Not required
316(a) (last sentence)........................................7.4
316(b)........................................................5.7
316(c)........................................................7.6
317(a)........................................................5.2
317(b)........................................................3.4
318(a).......................................................11.7
*This Cross Reference Sheet is not part of the Indenture.
-ii-
THIS INDENTURE, dated as of November __, 1996, by and between
Freeport-McMoRan Copper & Gold Inc. (the "Issuer"), a Delaware corporation,
and The Chase Manhattan Bank, a New York corporation, as trustee (the
"Trustee"),
WITNESSETH:
WHEREAS, the Issuer has duly authorized the issue from time to time of
its unsecured debentures, notes or other evidences of indebtedness to be
issued in one or more series (the "Securities") up to such principal amount
or amounts as may from time to time be authorized by the terms of this
Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication,
delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement of the Issuer according to its terms, have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the Holders thereof, the Issuer and the Trustee mutually covenant and
agree for the equal and proportionate benefit of the respective Holders
from time to time of the Securities and of the Coupons, if any appertaining
thereto, as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this
Section. All other terms used in this Indenture that are defined in the
Trust Indenture Act of 1939 or are defined in the Securities Act and
referred to in the Trust Indenture Act of 1939 (except as herein otherwise
expressly provided or unless the context otherwise requires), shall have
the meanings assigned to such terms in the Trust Indenture Act of 1939 and
in the Securities Act as in force at the date of this Indenture. All
accounting terms used herein and not expressly defined shall have the
meanings given to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" shall
mean generally accepted accounting principles in the United States which
are in effect on the date or time of any determination. The words
"herein", "hereof" and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or
other subdivision. The terms defined in this Article include the plural as
well as the singular.
"Authenticating Agent" shall have the meaning set forth in
Section 6.13.
"Authorized Newspaper" means a newspaper (which, in the case of
The City of New York, will, if practicable, be The Wall Street Journal
(Eastern Edition), in the case of London, will, if practicable, be the
Financial Times (London Edition) and, in the case of Luxembourg, will, if
practicable, be the Luxemburger Wort) published in an official language of
the country of publication customarily published at least once a day for at
least five days in each calendar week and of general circulation in the
City of New York, London or Luxembourg as applicable. If it shall be
impractical in the opinion of the Trustee to make any publication of any
notice required hereby in an Authorized Newspaper, any publication or other
notice in lieu thereof which is made or given with the approval of the
Trustee shall constitute a sufficient publication of such notice.
"Authorized Signatory" means any of the chairman of the Board of
Directors, the president, any vice president (whether or not designated by
a number or numbers or a word or words added before or after the title
"Vice President"), the treasurer or any assistant treasurer or the
secretary or any assistant secretary of any Person.
"Board of Directors" of any Person means the Board of Directors
of such Person or any committee of such Board duly formed and authorized to
act on its behalf.
"Board Resolution" of any Person means a copy of one or more
resolutions, certified by the secretary or an assistant secretary of such
Person to have been duly adopted or consented to by the Board of Directors
of such Person and to be in full force and effect, and delivered to the
Trustee.
"Business Day" means, with respect to a Security, a day that in
the city (or in any cities, if more than one) in which amounts are payable,
as specified in the form of such Security, which is not a day on which
banking institutions and trust companies are authorized by law or
regulation or executive order to close.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any
time after the execution and delivery of this Indenture such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, the body performing such duties on such date.
"Company Order" means a written statement, request or order of
the Issuer which is signed in the Issuer's name by the chairman of the
Board of Directors, the president, any executive vice president, any senior
vice president or any vice president of the Issuer.
"Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time,
be principally administered, which office is, at the date as of which this
Indenture is dated, located at 450 West 33rd Street, New York, New York
10001.
"Coupon" means any interest coupon appertaining to a Security.
"Debt" shall have the meaning set forth in Section 5.1.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Defeasance" shall have the meaning set forth in Section 10.1.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more
Registered Global Securities, the Person designated as the Depositary by
the Issuer pursuant to Section 2.3 until a successor Depositary shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such
Person, "Depositary" as used with respect to the Securities of any such
series shall mean the Depositary with respect to the Registered Global
Securities of that series; provided that any Person that is a Depositary
hereunder must be a clearing agency registered under the Exchange Act and
any other applicable statute or regulation.
"Dollar" means the coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public
and private debts.
"ECU" means The European Currency Unit as defined and revised
from time to time by the Council of European Communities.
"Event of Default" means any event or condition specified as such
in Section 5.1.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Foreign Currency" means a currency issued by the government of a
country other than the United States.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any indebtedness of any Person
and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such indebtedness of such Person (whether arising by virtue
of partnership arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for
purposes of assuring in any other manner the obligee of such indebtedness
of the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part); provided, however, that the term "guarantee"
shall not include endorsements for collection or deposit in the ordinary
course of business. The term "guarantee" used as a verb has a
corresponding meaning.
"Holder", "Holder of Securities", "Securityholder" or other
similar terms mean (a) in the case of any Registered Security, the Person
in whose name such Security is registered in the Security register kept by
the Issuer for that purpose in accordance with the terms hereof, and (b) in
the case of any Unregistered Security, the bearer of such Security, or any
Coupon appertaining thereto, as the case may be.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended
or supplemented or both, and shall include the forms and terms of
particular series of Securities established as contemplated hereunder.
"Insolvency Law" means any applicable bankruptcy, insolvency,
reorganization or similar law in any applicable jurisdiction.
"Interest" means, when used with respect to non-interest bearing
Securities, interest payable after maturity.
"Interest Payment Date" when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"Issuer" means Freeport-McMoRan Copper & Gold Inc., a Delaware
corporation, and, subject to Article Nine, its successors and assigns.
"Judgment Currency" shall have the meaning set forth in Section
11.12.
"Officers' Certificate" means a certificate signed by the
chairman of the board or the president or any vice president (whether or
not designated by a number or numbers or a word or words added before or
after the title "Vice President") and by the treasurer or any assistant
treasurer or the secretary or any assistant secretary of the Issuer and
delivered to the Trustee. Each such certificate shall include the
statements provided for in Section 11.5, if and to the extent required
hereby.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Issuer or such other
legal counsel who may be satisfactory to the Trustee. Each such opinion
shall include the statements provided for in Section 11.5, if and to the
extent required hereby.
"original issue date" of any Security (or portion thereof) means
the earlier of (a) the Issue Date of such Security or (b) the Issue Date of
any Security (or portion thereof) for which such Security was issued
(directly or indirectly) on registration of transfer, exchange or
substitution. For purposes of this definition, "Issue Date" means, with
respect to a Security, the date of original issuance thereof.
"Original Issue Discount Security" means any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant
to Section 5.1.
"Outstanding", when used with reference to Securities of any
series issued hereunder, shall, subject to the provisions of Section 7.4,
mean, as of any particular time, all Securities of such series
authenticated and delivered by the Trustee under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities (other than Securities of any series as to which
the provisions of Article 10 hereof shall not be applicable), or
portions thereof, for the payment or redemption of which monies or
U.S. Government Obligations (as provided for in Section 10.1) in the
necessary amount shall have been deposited in trust with the Trustee
or with any paying agent (other than the Issuer) or shall have been
set aside, segregated and held in trust by the Issuer (if the Issuer
shall act as its own paying agent), provided that if such Securities,
or portions thereto, are to be redeemed prior to the Stated Maturity
thereof, notice of such redemption shall have been given as herein
provided, or provision satisfactory to the Trustee shall have been
made for giving such notice; and
(c) Securities which shall have been paid or in substitution for
which other Securities shall have been authenticated and delivered,
pursuant to the terms of Section 2.9 (unless proof satisfactory to the
Trustee is presented that any of such Securities is held by a Person
in whose hands such Security is a legal, valid and binding obligation
of the Issuer).
In determining whether the Holders of the requisite principal amount of
Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding for such purposes shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the maturity thereof
pursuant to Section 5.1.
"Periodic Offering" means an offering of Securities of a series
from time to time, the specific terms of which Securities, including,
without limitation, the rate or rates of interest, if any, thereon, the
Stated Maturity or maturities thereof and the redemption provisions, if
any, with respect thereto, are to be determined by the Issuer or its agents
upon the issuance of such Securities.
"Person" means any individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or government or
any agency or political subdivision thereof.
"principal" whenever used with reference to the Securities of any
series or any portion thereof, shall be deemed to include "and premium, if
any".
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Global Security" means a Security evidencing all or a
part of a series of Registered Securities, issued to the Depositary for
such series in accordance with Section 2.4, and bearing the legend
prescribed in Section 2.4.
"Registered Security" means any Security registered on the
Security register of the Issuer, which Security shall be without Coupons.
"Regular Record Date" for interest payable on any Interest
Payment Date on the Registered Securities of any series means the date
specified for that purpose as contemplated by Section 2.3, or if no such
date is established, if such Interest Payment Date is the first day of a
calendar month, the fifteenth day of the next preceding calendar month or,
if such Interest Payment Date is the fifteenth day of a calendar month, the
first day of such calendar month, whether or not such Regular Record Date
is a Business Day.
"Required Currency" shall have the meaning set forth in Section
11.12.
"Responsible Officer", when used with respect to the Trustee
means any officer in the Corporate Trustee Administration Department (or
any successor group) of the Trustee, including any vice president,
assistant vice president, senior trust officer, trust officer, secretary or
any assistant secretary or any other officer or assistant officer of the
Trustee customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred at the Corporate Trust Office
because of his knowledge of and familiarity with the particular subject.
"SEC Reports" shall have the meaning set forth in Section 4.3.
"Securities Act" means the Securities Act of 1933, as amended.
"Security" or "Securities" has the meaning stated in the first
recital of this Indenture and more particularly means any Securities of any
series, authenticated and delivered under this Indenture.
"Security Registrar" means the Trustee or any successor Security
Registrar appointed by the Issuer.
"Stated Maturity" means, with respect to any Security, the date
specified in such Security as the fixed date on which the principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the Holder thereof upon the happening of any
contingency unless such contingency has occurred) and with respect to any
installment of interest upon such Security, the date specified in such
Security, or Coupon appertaining thereto, if applicable as the fixed date
on which such installment of interest is due and payable.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939 as in force at
the date as of which this Indenture was originally executed.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. "Trustee" shall also mean or include each
person who is then a trustee hereunder and if at any time there is more
than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the trustee with respect to the Securities of such
series.
"Unregistered Security" means any Security other than a
Registered Security.
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(A).
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of the issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series,
and calculated in accordance with generally accepted financial practice.
ARTICLE TWO
ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series and the
Coupons, if any, issued hereunder shall be substantially in such form and
bear such legends (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions of the Issuer
(as set forth in a Board Resolution of the Issuer or, to the extent
established pursuant to rather than set forth in a Board Resolution of the
Issuer, an Officers' Certificate of the Issuer detailing such
establishment) or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have
imprinted or otherwise reproduced thereon such legend or legends or
endorsements, not inconsistent with the provisions of this Indenture, as
may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to
conform to general usage, all as may be determined by the officers of the
Issuer executing such Securities and Coupons, if any, as evidenced by their
execution of such Securities and Coupons, if any. If temporary Securities
are issued as permitted by Section 2.11, the form thereof also shall be
established as provided in the preceding sentence.
The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in
any other manner, all as determined by the officers executing such
Securities and Coupons, if any, as evidenced by their execution of such
Securities and Coupons, if any.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
"This is one of the Securities of the series designated herein
referred to in the within-mentioned Senior Indenture.
The Chase Manhattan Bank, Trustee
By:
-----------------------------------
Authorized Officer"
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, the Securities of such series may have
endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially
the following form:
"This is one of the Securities of the series designated herein
referred to in the within-mentioned Senior Indenture.
The Chase Manhattan Bank, Trustee
By:
-----------------------------------
As Authenticating Agent
By:
-----------------------------------
Authorized Officer"
SECTION 2.3 Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered
under this Indenture is unlimited.
The Securities may be issued in one or more series and each such
series shall rank equally and pari passu with all other unsecured and
unsubordinated Debt of the Issuer. There shall be established in or
pursuant to one or more Board Resolutions of the Issuer (and to the extent
established pursuant to rather than set forth in a Board Resolution, in an
Officers' Certificate detailing such establishment) or in one or more
indentures supplemental hereto, prior to the initial issuance of Securities
of any series,
(1) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all
other series;
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9, 2.11, 8.5 or
12.3);
(3) if other than Dollars, the coin or currency in which the
Securities of that series are denominated (including, but not limited
to, any Foreign Currency or ECU);
(4) the date or dates on which the principal of the Securities of
the series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest
shall accrue, the Interest Payment Date on which any such interest
shall be payable and (in the case of Registered Securities) the
Regular Record Date for any interest payable on any Interest Payment
Date and/or the method by which such rate or rates or Regular Record
Date or Dates shall be computed or determined;
(6) the place or places where the principal of and any interest
on Securities of the series shall be payable (if other than as
provided in Section 3.2);
(7) the right, if any, of the Issuer or any Holder to redeem or
cause to be redeemed Securities of the series, in whole or in part, at
its option and the period or periods within which, the price or prices
at which, and the manner in which (if different from the provisions of
Article Twelve hereof), and any terms and conditions upon which
Securities of the series may be so redeemed, pursuant to any sinking
fund or otherwise and/or the method by which such price or prices
shall be determined;
(8) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities of the series, in whole or in part, pursuant to any
mandatory redemption, sinking fund or analogous provisions or at the
option of a Holder thereof and the price or prices (and/or the method
by which such price or prices shall be determined) at which and the
period or periods within which and the manner in which (if different
from the provisions of Article Twelve hereof) Securities of the series
shall be redeemed, purchased or repaid, in whole or in part, pursuant
to such obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof in the case of Registered Securities, or $1,000 and
$5,000 in the case of Unregistered Securities, the denominations in
which Securities of the series shall be issuable;
(10) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof;
(11) if other than the coin or currency in which the Securities
of that series are denominated, the coin or currency in which payment
of the principal of or interest on the Securities of such series shall
be payable;
(12) if the principal of or interest on the Securities of such
series are to be payable, at the election of the Issuer or a Holder
thereof, in a coin or currency other than that in which the Securities
are denominated, the period or periods within which, and the terms and
conditions upon which, such election may be made and the manner in
which the exchange rate with respect to such payments shall be
determined;
(13) if the amount of payments of principal of and/or interest on
the Securities of the series may be determined with reference to the
value or price of any one or more commodities, currencies or indices,
the manner in which such amounts will be determined;
(14) whether the Securities of the series will be issuable as
Registered Securities (and if so, whether such Securities will be
issuable as Registered Global Securities and, if so, the Depositary
therefor and the form of any legend in addition or in lieu of that
provided in Section 2.4 to be borne by such Registered Global
Security) or Unregistered Securities (with or without Coupons), or any
combination of the foregoing, any restrictions and procedures
applicable to the offer, sale or delivery of Unregistered Securities
or the payment of interest thereon, if other than as provided in
Section 2.8, and the terms upon which Unregistered Securities of any
series may be exchanged for Registered Securities of such series and
vice versa if other than provided in Section 2.8;
(15) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series to Holders or
certain Holders thereof in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether the
Issuer will have the option to redeem such Securities rather than pay
such additional amounts (and the terms of any such option);
(16) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
(17) any trustees, depositaries authenticating or paying agents,
transfer agents or registrars or any other agents with respect to the
Securities of such series;
(18) provisions, if any, granting specific rights to the Holders
of Securities of such series upon the occurrence of such events as may
be specified;
(19) any deletions from, modifications of or additions to the
Events of Default or covenants set forth herein (including any defined
terms relating thereto);
(20) the term and condition upon which and the manner in which
Securities of the series may be defeased or defeasible if different
from the provisions of Article Ten;
(21) whether the Securities will be issued as global Securities
and, if other than as provided in Section 2.8, the terms upon which
such global Securities may be exchanged for definitive Securities;
(22) offices at which presentation and demands may be made and
notices be served, if other than the Corporate Trust Office; and
(23) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and Coupons appertaining thereto, if
any, shall be substantially identical, except in the case of Registered
Securities as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officers' Certificate referred to above
or as set forth in any such indenture supplemental hereto. All Securities
of any one series need not be issued at the same time and may be issued
from time to time, consistent with the terms of this Indenture, if so
provided by or pursuant to such Board Resolution, such Officers'
Certificate or in any such indenture supplemental hereto.
SECTION 2.4 Authentication and Delivery of Securities. Upon the
execution and delivery of this Indenture, or from time to time thereafter,
Securities, including Coupons appertaining thereto, if any, may be executed
by the Issuer and delivered to the Trustee for authentication together with
the applicable documents referred to below in this section, and the Trustee
shall thereupon authenticate and deliver such Securities and Coupons
appertaining thereto, if any, to or upon the order of the Issuer (contained
in the Company Order referred to below in this section) or pursuant to such
procedures acceptable to the Trustee and to such recipients as may be
specified from time to time by a Company Order, without any further action
by the Issuer. The maturity date, original issue date, interest rate and
any other terms of the Securities of such series and Coupons, if any,
appertaining thereto shall be determined by or pursuant to such Company
Order or procedures authorized by such Company Order. If provided for in
such procedures, such Company Order may authorize authentication and
delivery of Securities pursuant to oral instructions from the Issuer or its
duly authorized agent, which instructions shall be promptly confirmed in
writing. In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in the case of subparagraphs 2, 3 and
4 below only at or before the time of the first request of the Issuer to
the Trustee to authenticate Securities of such series) and (subject to
Section 6.1) shall be fully protected in relying upon, unless and until
such documents have been superseded or revoked:
(1) a Company Order requesting such authentication and setting
forth delivery instructions if the Securities and Coupons, if any, are
not to be delivered to the Issuer, provided that, with respect to
Securities of a series subject to a Periodic Offering, (a) such
Company Order may be delivered by the Issuer to the Trustee prior to
the delivery to the Trustee of such Securities for authentication and
delivery, (b) the Trustee shall authenticate and deliver Securities of
such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to a Company Order or pursuant
to procedures acceptable to the Trustee as may be specified from time
to time by such Company Order, (c) the maturity date or dates,
original issue date or dates or interest rate or rates and any other
terms of Securities of such series shall be determined by a Company
Order or pursuant to such procedures and (d) if provided for in such
procedures, such Company Order may authorize authentication and
delivery of Securities pursuant to oral or electronic instructions
from the Issuer or its duly authorized agent or agents, which oral or
electronic instructions shall be promptly confirmed in writing, and
(e) after the original issuance of the first Security of such series
to be issued, any separate request by the Issuer that the Trustee
authenticate Securities of such series for original issuance will be
deemed to be a certification by the Issuer that it is in compliance
with all conditions precedent provided for in this Indenture relating
to the authentication and delivery of such Securities;
(2) any Board Resolution, Officers' Certificate and/or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or
pursuant to which the forms and terms of the Securities and Coupons,
if any, were established;
(3) an Officers' Certificate setting forth the form or forms and
terms of the Securities and stating that the form or forms and terms
of the Securities and Coupons, if any, have been established pursuant
to Sections 2.1 and 2.3 and comply with this Indenture, and covering
such other matters as the Trustee may reasonably request; and
(4) At the option of the Issuer, either an Opinion of Counsel of
the Issuer, or a letter addressed to the Trustee permitting it to rely
on an Opinion of Counsel of the Issuer, substantially to the effect
that:
(a) the forms of the Securities and Coupons, if any, have
been duly authorized and established in conformity with the
provisions of this Indenture;
(b) in the case of an underwritten offering, the terms of
the Securities have been duly authorized and established in con-
formity with the provisions of this Indenture, and, in the case
of a Periodic Offering, certain terms of the Securities have been
established pursuant to a Board Resolution of the Issuer, an
Officers' Certificate or a supplemental indenture in accordance
with this Indenture, and when such other terms as are to be
established pursuant to procedures set forth in a Company Order
shall have been established, all such terms will have been duly
authorized by the Issuer and will have been established in
conformity with the provisions of this Indenture;
(c) when the Securities and Coupons, if any, have been
executed by the Issuer and authenticated by the Trustee in
accordance with the provisions of this Indenture and delivered to
and duly paid for by the purchasers thereof, they will have been
duly issued under this Indenture and will be valid and legally
binding obligations of the Issuer, enforceable in accordance with
their respective terms, and will be entitled to the benefits of
this Indenture; and
(d) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under the Securities
and the Coupons, if any, will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of
the Issuer or any agreement or other instrument binding upon the
Issuer or any of the subsidiaries of the Issuer that is material
to the Issuer, considered as one enterprise with its
subsidiaries, or, to the best of such counsel's knowledge but
without independent investigation, any judgment, order or decree
of any governmental body, agency or court having jurisdiction
over the Issuer or any of its subsidiaries, and no consent,
approval or authorization of any governmental body or agency is
required for the performance by the Issuer of its obligations
under the Securities and Coupons, if any, except such as are
specified and have been obtained and such as may be required by
the securities or blue sky laws of the various states in
connection with the offer and sale of the Securities and Coupons,
if any.
In rendering such opinions, such counsel may qualify any opinions as
to enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, liquidation,
moratorium and other similar laws affecting the rights and remedies of
creditors and is subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law). Such counsel may rely upon opinions of other counsel (copies of
which shall be delivered to the Trustee), who shall be counsel reasonably
satisfactory to the Trustee, in which case the opinion shall state that
such counsel believes he and the Trustee are entitled so to rely. Such
counsel may also state that, insofar as such opinion involves factual
matters, he has relied, to the extent he deems proper, upon certificates of
officers of the Issuer and any of its subsidiaries and certificates of
public officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the
Issuer or if the Trustee in good faith by its Board of Directors or board
of trustees, executive committee, or a trust committee of directors or
trustees or Responsible Officers shall determine that such action would
expose the Trustee to personal liability to existing Holders or would
affect the Trustee's own rights, duties or immunities under the Securities,
this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that all or a
portion of the Securities of a series are to be issued in the form of one
or more Registered Global Securities, then the Issuer shall execute and the
Trustee shall, in accordance with this Section 2.4 and the Company Order
with respect to such series, authenticate and deliver one or more
Registered Global Securities that (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount of all or
a portion of the Securities of such series issued and not yet cancelled or
exchanged to be represented by such Registered Global Securities, (ii)
shall be registered in the name of the Depositary for such Registered
Global Security or Securities or the nominee of such Depositary, (iii)
shall be delivered by the Trustee to such Depositary or a nominee thereof
or a custodian therefor or pursuant to such Depositary's instructions and
(iv) shall bear a legend substantially to the following effect: "This
Security is a Registered Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee thereof. This Security may not be exchanged in
whole or in part for a Security registered, and no transfer of this
Security in whole or in part may be registered in the name of any Person
other than such Depositary or a nominee thereof, except in the limited
circumstances described in the Indenture."
SECTION 2.5 Execution of Securities. The Securities and, if
applicable, each Coupon appertaining thereto shall be signed on behalf of
the Issuer by the chairman of the Board of Directors, the president, any
vice president (whether or not designated by a number or numbers or a word
or words added before or after the title "Vice President") or the Treasurer
of the Issuer, under its corporate seal (except in the case of Coupons)
which may, but need not be, attested. Such signature may be the manual or
facsimile signature of the present or any future such chairman or officers.
The corporate seal of the Issuer may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the
Securities. Typographical and other minor errors or defects in any such
reproduction of any such signature shall not affect the validity or
enforceability of any Security that has been duly authenticated and
delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities or Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed shall be authenticated and delivered by the
Trustee or disposed of by the Issuer, such Security or Coupon nevertheless
may be authenticated and delivered or disposed of as though the Person who
signed such Security or Coupon had not ceased to be such officer of the
Issuer; and any Security or Coupon may be signed on behalf of the Issuer by
such Person as, at the actual date of the execution of such Security or
Coupon, shall be the proper officer of the Issuer, although at the date of
the execution and delivery of this Indenture any such Person was not such
officer.
SECTION 2.6 Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the
form set forth in Section 2.2, executed by the Trustee by the manual
signature of one of its authorized officers, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate by the Trustee upon any Security executed by the Issuer shall
be conclusive evidence that the Security and Coupons, if any, appertaining
thereto so authenticated have been duly authenticated and delivered
hereunder and that the Holder is entitled to the benefits of this
Indenture.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable as Registered
Securities or Unregistered Securities in denominations established as
contemplated by Section 2.3 or, with respect to the Registered Securities
of any series, if not so established, in denominations of $1,000 and any
integral multiple thereof. If denominations of Unregistered Securities of
any series are not so established, such Securities shall be issuable in
denominations of $1,000 and $5,000. The Securities of each series shall be
numbered, lettered or otherwise distinguished in such manner or in
accordance with such plan as the chairman or the officers of the Issuer
executing the same may determine with the approval of the Trustee, as
evidenced by the execution and authentication thereof.
Each Registered Security shall be dated the date of its
authentication. Each Unregistered Security shall be dated as provided in
or pursuant to the Board Resolution or Resolutions or indenture
supplemental hereto referred to in Section 2.3 or, if not so specified,
each such Unregistered Security shall be dated as of the date of issuance
of the first Unregistered Security of such series to be issued. The
Securities of each series shall bear interest, if any, from the date, and
such interest shall be payable on the Interest Payment Dates, established
as contemplated by Section 2.3.
The Person in whose name any Registered Security of any series is
registered at the close of business on any Regular Record Date applicable
to such series with respect to any Interest Payment Date for such series
shall be entitled to receive the interest, if any, payable on such Interest
Payment Date notwithstanding any transfer or exchange of such Registered
Security subsequent to such Regular Record Date and prior to such Interest
Payment Date, except if and to the extent the Issuer shall default in the
payment of the interest due on such Interest Payment Date for such series,
in which case such defaulted interest shall then cease to be payable to the
Holder on such Regular Record Date by virtue of having been such Holder and
shall be paid to the Persons in whose names Outstanding Registered
Securities for such series are registered at the close of business on a
subsequent record date (which shall be not less than five Business Days
prior to the date of payment of such defaulted interest) established by
notice given by mail by or on behalf of the Issuer to the Holders of
Registered Securities not less than 15 days preceding such subsequent
record date. Interest on any Unregistered Securities which is due on any
Interest Payment Date shall be paid to the Holder of the applicable Coupon
appertaining to such Unregistered Security.
SECTION 2.8 Registration, Transfer and Exchange. The Issuer will
cause to be kept at each office or agency to be maintained for the purpose
as provided in Section 3.2 for each series of Securities a register in
which, subject to such reasonable regulations as it may prescribe, it will
provide for the registration of Registered Securities of each series and
the registration of transfer of Registered Securities of such series. Such
register shall be in written form in the English language or in any other
form capable of being converted into such form within a reasonable time.
At all reasonable times such register or registers shall be open for
inspection by the Trustee. There may not be more than one register for
each series of Securities.
Upon due presentation for registration of transfer of any Registered
Security of any series at any such office or agency to be maintained for
the purpose provided in Section 3.2, the Issuer shall execute and the
Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Registered Security or Registered Securities of such
series, Stated Maturity, interest rate and original issue date in any
authorized denominations and of a like aggregate principal amount and
tenor.
Unregistered Securities (except for any temporary global Unregistered
Securities) and Coupons (except for Coupons attached to any temporary
global Unregistered Securities) shall be transferable by delivery.
At the option of the Holder thereof, any Security may be exchanged for
a Security of the same series, of like tenor, in authorized denominations
and in an equal aggregate principal amount upon surrender of such Security
at an office or agency to be maintained for such purpose in accordance with
Section 3.2 or as specified pursuant to Section 2.3, and the Issuer shall
execute, and the Trustee shall authenticate and deliver in exchange
therefor, the Security or Securities which the Holder making the exchange
shall be entitled to receive bearing a number or other distinguishing
symbol not contemporaneously outstanding. Subject to the foregoing, (i) a
Registered Security of any series (other than a Registered Global Security,
except as set forth below) may be exchanged for a Registered Security or
Securities of the same series; (ii) if the Securities of any series are
issued in both registered and unregistered form, except as otherwise
specified pursuant to Section 2.3, Unregistered Securities may be exchanged
for a Registered Security or Securities of the same series, but a
Registered Security may not be exchanged for an Unregistered Security or
Securities; and (iii) if Unregistered Securities of any series are issued
in more than one authorized denomination, except as otherwise specified
pursuant to Section 2.3, any such Unregistered Security or Securities may
be exchanged for an Unregistered Security or Securities of the same series;
provided that in connection with the surrender of any Unregistered
Securities that have Coupons attached, all unmatured Coupons and all
matured Coupons in default must be surrendered with the Securities being
exchanged. If the Holder of an Unregistered Security is unable to produce
any such unmatured Coupon or Coupons or matured Coupon or Coupons in
default, such exchange may be effected if the Unregistered Securities are
accompanied by payment in funds acceptable to the Issuer in an amount equal
to the face amount of such missing Coupon or Coupons, or the surrender of
such missing Coupon or Coupons may be waived by the Issuer and the Trustee
if there is furnished to them such security or indemnity as they may
require to save each of them and any paying agent harmless. If thereafter
the Holder of such Security shall surrender to any paying agent any such
missing Coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive from the Issuer the amount of such
payment; provided, however, that, except as otherwise provided in Section
3.2, interest represented by Coupons shall be payable only upon the
presentation and surrender of those Coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case an
Unregistered Security of any series is surrendered at any such office or
agency in exchange for a Registered Security of the same series of like
tenor after the close of business at such officer agency on (i) any Regular
Record Date and before the opening of business at such office or agency on
the relevant Interest Payment Date, or (ii) any subsequent record date and
the before the opening of business at such office or agency on such
subsequent date for the payment of interest in default, such Unregistered
Security shall be surrendered without the Coupon relating to such Interest
Payment Date or subsequent date for payment, as the case may be, and
interest or interest in default, as the case may be, will not be payable on
such Interest Payment Date or subsequent date for payment, as the case may
be, in respect of the Registered Security issued in exchange for such
Unregistered Security, but will be payable only to the Holder of such
Coupon when due in accordance with the provisions of this Indenture. All
Securities and Coupons surrendered upon any exchange or transfer provided
for in this Indenture shall be promptly cancelled and disposed of by the
Trustee and the Trustee will deliver a certificate of disposition thereof
to the Issuer.
All Registered Securities presented for registration of transfer,
exchange, redemption, repurchase or payment shall (if so required by the
Issuer or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Issuer
and the Trustee, duly executed by the Holder or his attorney duly
authorized in writing.
Each Registered Global Security authenticated under this Indenture
shall be registered in the name of the Depositary designated for such
Registered Global Security or a nominee thereof, and each such Registered
Global Security shall constitute a single security for all purposes of this
Indenture.
The Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
exchange or registration of transfer of Securities. No service charge
shall be made for any such transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days next preceding the
first mailing of notice of redemption of Securities of such series to be
redeemed, (b) any Securities selected, called or being called for
redemption in whole or in part, except in the case of any Security to be
redeemed in part, the portion thereof not so to be redeemed, (c) any
Security if the Holder thereof has exercised his right, if any, to require
the Issuer to repurchase such Security in whole or in part, except the
portion of such Security not required to be repurchased or (d) to exchange
any Unregistered Security so selected for redemption, except that such
Unregistered Security may be exchanged for a Registered Security of that
series and like tenor, provided that such Registered Security shall be
simultaneously surrendered for redemption.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Registered Global Security representing all or a portion
of the Securities of a series may not be transferred except as a whole by
the Depositary for such series to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor
Depositary for such series or a nominee of such successor Depositary.
If at any time the Depositary for any Registered Securities of a
series represented by one or more Registered Global Securities notifies the
Issuer that it is unwilling or unable to continue as Depositary for such
Registered Securities or is no longer eligible because it ceased to be a
clearing agency registered under the Exchange Act or any other applicable
statute or regulation, the Issuer shall appoint a successor Depositary with
respect to such Registered Securities. If a successor Depositary for such
Registered Securities is not appointed by the Issuer within 90 days after
the Issuer receives such notice or becomes aware of such ineligibility, the
Issuer's election pursuant to Section 2.3 that such Registered Securities
be represented by one or more Registered Global Securities shall no longer
be effective and the Issuer will execute, and the Trustee, upon receipt of
an Officers' Certificate of the Issuer for the authentication and delivery
of definitive Securities of such series, will authenticate and deliver,
Securities of such series in definitive registered form without Coupons, of
like tenor in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Registered Global Security or
Securities representing such Registered Securities in exchange for such
Registered Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Registered Securities of any series issued in the form of one or more
Registered Global Securities shall no longer be represented by a Registered
Global Security or Securities. In such event the Issuer will execute, and
the Trustee, upon receipt of an Officers' Certificate for the
authentication and delivery of definitive Securities of such series, will
authenticate and deliver, Securities of such series in definitive
registered form without Coupons, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Registered
Global Security or Securities representing such Registered Securities in
exchange for such Registered Global Security or Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Registered Global Security, the Depositary for
such Registered Global Security may surrender such Registered Global
Security in exchange in whole or in part for Securities of the same series
in definitive registered form on such terms as are acceptable to the Issuer
and such Depositary. Thereupon, the Issuer shall execute, and the Trustee
shall authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary a new Registered
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Registered Global Security; and
(ii) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Registered Global Security and the aggregate
principal amount of Registered Securities authenticated and delivered
pursuant to clause (i) above.
Upon the exchange of a Registered Global Security for Securities in
definitive registered form without Coupons, in authorized denominations,
such Registered Global Security shall be cancelled by the Trustee or an
agent of the Issuer or the Trustee. Securities in definitive registered
form without Coupons issued in exchange for a Registered Global Security
pursuant to this Section 2.8 shall be registered in such names and in such
authorized denominations as the Depositary for such Registered Global
Security, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee or an agent of the Issuer or the
Trustee. The Trustee or such agent shall deliver such Securities to or as
directed by the Persons in whose names such Securities are so registered.
None of the Issuer, the Trustee, any paying agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
All Securities issued upon any transfer or exchange of Securities
shall be valid and legally binding obligations of the Issuer, evidencing
the same debt, and entitled to the same benefits under this Indenture, as
the Securities surrendered upon such transfer or exchange.
Notwithstanding anything herein or in the terms of any series of
Securities to the contrary, none of the Issuer, the Trustee or any agent of
the foregoing (any of which, other than the Issuer, shall rely on an
Officers' Certificate and an Opinion of Counsel) shall be required to
exchange any Unregistered Security for a Registered Security if such
exchange would result in adverse federal income tax consequences to the
Issuer (such as, for example, the inability of the Issuer to deduct from
its income, as computed for federal income tax purposes, the interest
payable on the Unregistered Securities) under then applicable United States
federal income tax laws.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security or any Coupon
appertaining to any Security shall become mutilated, defaced or be
apparently destroyed, lost or stolen, the Issuer in its discretion may
execute, and upon the written request of any officer of the Issuer, the
Trustee shall authenticate and deliver a new Security of the same series,
of like tenor and in equal aggregate principal amount, bearing a number or
other distinguishing symbol not contemporaneously outstanding, in exchange
and substitution for the mutilated or defaced Security, or in lieu of and
in substitution for the Security so apparently destroyed, lost or stolen
with Coupons corresponding to the Coupons appertaining to the Securities so
mutilated, defaced, destsroyed, lost or stolen, or in exchange for the
Security to which a mutilated, defaced, destroyed, lost or stolen Coupon
appertained with Coupons appertaining thereto corresponding to the Coupons
so mutilated, defaced, destroyed, lost or stolen. In every case the
applicant for a substitute Security or Coupon shall furnish to the Issuer
and to the Trustee and any agent of the Issuer or the Trustee such security
or indemnity as may be required by them to indemnify and defend and to save
each of them harmless and, in every case of apparent destruction, loss or
theft, evidence to their satisfaction of the apparent destruction, loss or
theft of such Security or Coupon and of the ownership thereof. In the case
of a mutilated or defaced Security or Coupon, the applicant for a
substitute Security or Coupon shall surrender such mutilated or defaced
Security or Coupon to the Trustee or such agent.
Upon the issuance of any substitute Security or Coupon, the Issuer may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or its agent)
connected therewith. In case any Security or Coupon which has matured or
is about to mature or has been called for redemption in full shall become
mutilated or defaced or be apparently destroyed, lost or stolen, the Issuer
may, instead of issuing a substitute Security or Coupon, pay or authorize
the payment of the same or the relevant Coupon (without surrender thereof
except in the case of a mutilated or defaced Security or Coupon), if the
applicant for such payment shall furnish to the Issuer and to the Trustee
and any agent of the Issuer or the Trustee such security or indemnity as
any of them may require to save each of them harmless from all risks,
however remote, arising as a result of such payment and, in every case of
apparent destruction, loss or theft, the applicant shall also furnish to
the Issuer and the Trustee and any agent of the Issuer or the Trustee
evidence to their satisfaction of the apparent destruction, loss or theft
of such Security and of the ownership thereof.
Every substitute Security or Coupon of any series issued pursuant to
the provisions of this Section by virtue of the fact that any such Security
or Coupon is apparently destroyed, lost or stolen shall constitute an
additional contractual obligation of the Issuer, whether or not the
apparently destroyed, lost or stolen Security or Coupon shall be at any
time enforceable by anyone and shall be entitled to all the benefits of
(but shall be subject to all the limitations of rights set forth in) this
Indenture equally and proportionately with any and all other Securities or
Coupons of such series duly authenticated and delivered hereunder. All
Securities or Coupons shall be held and owned upon the express condition
that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced,
or apparently destroyed, lost or stolen Securities and Coupon and shall
preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities
without their surrender.
SECTION 2.10 Cancellation of Securities; Disposition Thereof. All
Securities and Coupons surrendered for payment, repurchase, redemption,
registration of transfer or exchange, or for credit against any payment in
respect of a sinking or analogous fund, if surrendered to the Issuer or any
agent of the Issuer or the Trustee or any agent of the Trustee, shall be
delivered to the Trustee or its agent for cancellation or, if surrendered
to the Trustee, shall be cancelled by it; and no Securities shall be issued
in lieu thereof except as expressly permitted by any of the provisions of
this Indenture. The Trustee or its agent shall dispose of cancelled
Securities and Coupons held by it and deliver a certificate of disposition
to the Issuer unless the Issuer shall direct that cancelled Securities be
returned to it. If the Issuer shall acquire any of the Securities or
Coupons, such acquisition shall not operate as a redemption or satisfaction
of the indebtedness represented by such Securities or Coupons unless and
until the same are delivered to the Trustee for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the
Trustee shall authenticate and deliver temporary Securities for such series
(printed, lithographed, typewritten or otherwise reproduced, in each case
in form satisfactory to the Trustee). Temporary Securities of any series
shall be issuable as Registered Securities without Coupons, or as
Unregistered Securities with or without Coupons attached thereto, of any
authorized denomination, and substantially in the form of the definitive
Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced
by the execution and authentication thereof. Temporary Securities may
contain such references to any provisions of this Indenture as may be
appropriate. Every temporary Security shall be executed by the Issuer and
be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities. Without unreasonable delay the Issuer shall execute and shall
furnish definitive Securities of such series and thereupon temporary
Registered Securities of such series may be surrendered in exchange
therefor without charge at each office or agency to be maintained by the
Issuer for that purpose pursuant to Section 3.2 and, in the case of
Unregistered Securities, at any agency maintained by the Issuer for such
purpose as specified pursuant to Section 3.2, and the Trustee shall
authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the
same series having authorized denominations and, in the case of
Unregistered Securities, having attached thereto any appropriate Coupons.
Until so exchanged, the temporary Securities of any series shall be
entitled to the same benefits under this Indenture as definitive Securities
of such series, unless otherwise established pursuant to Section 2.3. The
provisions of this Section are subject to any restrictions or limitations
on the issue and delivery of temporary Unregistered Securities of any
series that may be established pursuant to Section 2.3 (including any
provision that Unregistered Securities of such series initially be issued
in the form of a single global Unregistered Security to be delivered to a
depositary or agency located outside the United States and the procedures
pursuant to which definitive or global Unregistered Securities of such
series would be issued in exchange for such temporary global Unregistered
Security).
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer covenants
and agrees for the benefit of each series of Securities issued hereunder
that it will duly and punctually pay or cause to be paid the principal of
and interest on, each of the Securities of such series (together with any
additional amounts payable with respect to and pursuant to the terms of
such Securities) at the place or places, at the respective times and in the
manner provided in the Securities of such series and in the Coupons, if
any, appertaining thereto and in this Indenture. The interest on
Securities with Coupons attached (together with any additional amounts
payable with respect to such Securities) shall be payable only upon
presentation and surrender of the several Coupons for such interest
installments as are evidenced thereby as they severally mature. If any
temporary Unregistered Security provides that interest thereon may be paid
while such Security is in temporary form, the interest on any such
temporary Unregistered Security (together with any additional amounts
payable with respect to such Security) shall be paid, as to the
installments of interest evidenced by Coupons attached thereto, if any,
only upon presentation of such Securities for notation thereon of the
payment of such interest, in each case subject to any restrictions that may
be established pursuant to Section 2.3. The interest on Registered
Securities (together with any additional amounts payable with respect to
such Securities ) shall be payable only to or upon the written order of the
Holders thereof entitled thereto and, at the option of the Issuer, may be
paid by wire transfer (subject to the procedures of the paying agent) or by
mailing checks for such interest payable to or upon the written order of
such Holders at their last addresses as they appear on the registry books
of the Issuer.
SECTION 3.2 Offices for Payments, etc. So long as any Registered
Securities are authorized for issuance pursuant to this Indenture or remain
Outstanding, the Issuer will maintain in the Borough of Manhattan, The City
of New York, an office or agency where the Registered Securities of each
series may be surrendered for payment and where the Registered Securities
of each series may be surrendered for registration of transfer or exchange
as is provided in this Indenture.
The Issuer will maintain one or more offices or agencies in a city or
cities located outside the United States (including any city in which such
an office or agency is required to be maintained under the rules of any
stock exchange on which the Securities of such series are listed) where the
Unregistered Securities, if any, of each series and Coupons, if any,
appertaining thereto may be surrendered for payment or exchange. No
payment on or exchange of any Unregistered Security or Coupon will be made
upon surrender of such Unregistered Security or Coupon at an office or
agency of the Issuer within the United States nor will any payment be made
by transfer to an account in, or by mail to an address in, the United
States unless pursuant to applicable United States laws and regulations
then in effect such payment can be made without adverse tax consequences to
the Issuer. Notwithstanding the foregoing, payments in Dollars of
Unregistered Securities of any series and Coupons appertaining thereto
which are payable in Dollars may be made at an agency of the Issuer
maintained in The City of New York if such payment in Dollars at each
agency maintained by the Issuer outside the United States for payment on
such Unregistered Securities is illegal or effectively precluded by
exchange controls or other similar restrictions.
The Issuer will maintain in the Borough of Manhattan, the City of New
York, an office or agency where notices and demands to or upon the Issuer
in respect of the Securities of any series, the Coupons appertaining
thereto, or this Indenture may be served.
The Issuer will give to the Trustee prompt written notice of the
location of any such office or agency and of any change of location
thereof. The Issuer hereby initially designates the Corporate Trust Office
of the Trustee maintained in the City of New York as the office or agency
for each such purpose to be carried out in New York. The Issuer shall
designate an office or agency outside the United States for each such
purpose relating to Unregistered Securities prior to the issuance of any
Unregistered Securities. In case the Issuer shall fail to maintain any
such office or agency or shall fail to provide such notice of the location
or of any change in the location thereof, presentations and demands may be
made and notices may be served at the Corporate Trust Office.
The Issuer will cause to be kept a register at the office of the
Security Registrar in which, subject to such reasonable regulations as it
may prescribe, the Issuer will provide for the registration of Securities
and of transfers of Securities. The Trustee is hereby initially appointed
Security Registrar for the purpose of registering Securities and
transferring Securities as herein provided.
The Issuer may from time to time designate one or more additional
offices or agencies where the Securities of any series and any Coupons
appertaining thereto may be presented for payment, where the Securities of
that series may be presented for exchange as provided in this Indenture and
pursuant to Section 2.3 and where the Registered Securities of that series
may be presented for registration of transfer as in this Indenture
provided, and the Issuer may from time to time rescind any such
designation, as the Issuer may deem desirable or expedient; provided,
however, that no such designation or rescission shall in any manner relieve
the Issuer of its obligation to maintain the agencies provided for in the
first three paragraphs of this Section 3.2. The Issuer will give to the
Trustee prompt written notice of any such designation or rescission
thereof.
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 6.9, a Trustee, so
that there shall at all times be a Trustee with respect to each series of
Securities hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer shall appoint a
paying agent other than the Trustee with respect to the Securities of any
series, it will cause such paying agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent for
the payment of the principal of or interest on the Securities of such
series (whether such sums have been paid to it by the Issuer or by any
other obligor on the Securities of such series) in trust for the
benefit of the Holders of the Securities of such series or of the
Trustee;
(b) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities of such series) to
make any payment of the principal of or interest on the Securities of
such series when the same shall be due and payable;
(c) that it will, at any time during the continuance of any such
failure, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent; and
(d) that it will in all respects comply with the provisions of
the Trust Indenture Act of 1939 applicable to such paying agent.
The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent a
sum sufficient to pay such principal or interest so becoming due, such sum
to be held as provided in the Trust Indenture Act of 1939, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of
any failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the
principal of or interest on the Securities of such series, set aside,
segregate and hold in trust for the benefit of the Holders of the
Securities of such series or the Coupons appertaining thereto a sum
sufficient to pay such principal or interest so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein
provided. The Issuer will promptly notify the Trustee of any failure to
take such action.
Anything in this Section to the contrary notwithstanding, but subject
to Section 10.1, the Issuer may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to one or more or all series of
Securities hereunder or with respect to this Indenture or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust for
any such series by the Issuer or any paying agent hereunder, as required by
this Section, such sums to be held by the Trustee upon the trusts herein
contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to
the provisions of Sections 10.3 and 10.4.
SECTION 3.5 Written Statement to Trustee. The Issuer will deliver to
the Trustee on or before March 31 in each year (beginning with March 31,
1997) a brief certificate (which need not comply with Section 11.5) from
the Issuer, signed by its principal executive officer, principal financial
officer, or principal accounting officer, stating that in the course of the
performance by the signer of his duties as an officer of the Issuer, he
would normally have knowledge of any Default or non-compliance by the
Issuer in the performance or fulfillment of any covenant, agreement or
condition of the Issuer, contained in this Indenture, stating whether or
not he has knowledge of any such Default or non-compliance and, if so,
specifying each such Default or non-compliance of which the signer has
knowledge and the nature thereof.
SECTION 3.6 Corporate Existence. Subject to Article Nine, the Issuer
will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence, rights and franchises;
provided that the Issuer shall not be required to preserve any such right
or franchise if the Issuer shall determine that the preservation thereof is
no longer desirable in the conduct of its business and that the loss
thereof is not disadvantageous in any material respect to the Holders of
any series of Securities.
SECTION 3.7 Luxembourg Publications. In the event of the publication
of any notice pursuant to Section 5.11, 6.9, 6.10, 8.2, 10.4, 12.2 or 12.5,
the party making such publication in the City of New York and London shall
also, to the extent that notice is required to be given to Holders of
Securities of any series by applicable Luxembourg law or stock exchange
regulation, as evidenced by any Officers' Certificate delivered to such
party, make a similar publication in Luxembourg.
ARTICLE FOUR
SECURITYHOLDERS' LISTS AND
REPORTS BY THE ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer and any other obligor on the
Securities each covenants and agrees that it will furnish or cause to be
furnished to the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders of the Securities of each
series:
(a) semiannually and not more than 15 days after each Regular
Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request as of a
date not more than 15 days prior to the time such information is
furnished,
provided that if and so long as the Trustee shall be the Security Registrar
for such series and all of the Securities of any series are Registered
Securities, such list shall not be required to be furnished for such
series.
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of
the Holders of each series of Securities (i) contained in the most recent
list furnished to the Trustee as provided in Section 4.1, (ii) received by
the Trustee in its capacity as Security Registrar for such series, if so
acting, and (iii) filed with it within two preceding years pursuant to
Section 313(c)(2) of the Trust Indenture Act of 1939. The Trustee may
destroy any list furnished to it as provided in Section 4.1 upon receipt of
a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under any series of the
Securities, and the corresponding rights and duties of the Trustee, shall
be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Issuer and the Trustee that none of the Issuer, the
Trustee or any agent of any of the Issuer or the Trustee shall be held
accountable by reason of any disclosure of information as to names and
addresses of Holders made pursuant to the Trust Indenture Act of 1939.
SECTION 4.3 Reports by the Issuer. The Issuer shall file with the
Trustee and the Commission, and transmit to Holders, such information,
documents and other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act of 1939 at the times and in the manner
provided pursuant to such Act, provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act ("SEC Reports") shall be filed with
the Trustee within 15 days after the same is so required to be filed with
the Commission.
SECTION 4.4 Reports by the Trustee. (a) Within 60 days after May 15
of each year, commencing with the first May 15 following the first issuance
of Securities pursuant to Section 2.4, if required by Section 313(a) of the
Trust Indenture Act of 1939, the Trustee shall transmit, pursuant to
Section 313(c) of the Trust Indenture Act of 1939, a brief report dated as
of such May 15 with respect to any of the events specified in said Section
313(a) which may have occurred since the later of the immediately preceding
May 15 and the date of this Indenture.
(b) The Trustee shall transmit the reports required by Section
313(b) of the Trust Indenture Act and Section 5.11 hereof at the times
specified therein.
(c) Reports pursuant to this Section shall be transmitted in the
manner and to the Persons required by Section 313(c) of the Trust Indenture
Act of 1939.
(d) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange
upon which the Securities of any series are listed, with the Commission and
with the Issuer. The Issuer will promptly notify the Trustee when the
Securities of any series are listed on any stock exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default. "Event of Default," with respect to Securities of any
series wherever used herein, means one of the following events which shall
have occurred and be continuing (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or governmental
body):
(a) default in the payment of any installment of interest upon
any of the Securities of such series or any Coupon appertaining
thereto (together with any additional amounts payable with respect to
such Securities) as and when the same shall become due and payable,
and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal of
any of the Securities of such series as and when the same shall become
due and payable either at their Stated Maturity, upon any redemption
by declaration or otherwise; provided that, if such default is the
result of an optional redemption by the Holders of such Securities,
the amount thereof shall be in excess of $50,000,000 or the equivalent
thereof in any currency or composite currency; or
(c) failure on the part of the Issuer duly to comply with,
observe or perform any of the other covenants or agreements on the
part of the Issuer contained in, or provisions of, the Securities of
any series or this Indenture (other than a covenant or agreement which
is not applicable to the Securities of such series), but only if such
default shall not have been remedied for a period of 60 days after the
date on which written notice specifying such failure, stating that
such notice is a "Notice of Default" hereunder and demanding that the
Issuer remedy the same, shall have been given by registered or
certified mail, return receipt requested, to the Issuer by the
Trustee, or to the Issuer and the Trustee by the Holders of at least
25% in aggregate principal amount of the Outstanding Securities of
such series of Securities; or
(d) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Issuer in an
involuntary case or proceeding under any applicable Insolvency Law or
(B) a decree or order adjudging the Issuer a bankrupt or insolvent
under an applicable Insolvency Law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Issuer or of any substantial part of the property of
the Issuer or ordering the winding up or liquidation of the affairs of
the Issuer and the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period
of 60 consecutive days; or
(e) the commencement by the Issuer of a voluntary case or
proceeding under any applicable Insolvency Law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent
by the Issuer to the entry of a decree or order for relief in respect
of the Issuer in an involuntary case or proceeding under any
applicable Insolvency Law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Issuer or the filing by the
Issuer of a petition, answer or consent seeking reorganization or
relief under any applicable Insolvency Law, or the consent by the
Issuer to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Issuer or of any
substantial part of the property of the Issuer or the making by the
Issuer of an assignment for the benefit of creditors, or the admission
by the Issuer in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action (which shall
involve the passing of one or more Board Resolutions by the Issuer) in
furtherance of any such action,
(f) failure by the Issuer to make any payment at maturity (or
upon any redemption), including any applicable grace period, in
respect of indebtedness, which term as used herein means obligations
(other than the Securities of such series or nonrecourse obligations)
of, or guaranteed or assumed by, the Issuer for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments
("Debt") in an amount in excess of $50,000,000 or the equivalent
thereof in any other currency or composite currency and such failure
shall have continued for a period of thirty days after written notice
thereof shall have been given by registered or certified mail, return
receipt requested, to the Issuer by the Trustee, or to the Issuer and
the Trustee by the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities of such series affected thereby;
(g) a default with respect to any Debt, which default results in
the acceleration of Debt in an amount in excess of $50,000,000 or the
equivalent thereof in any other currency or composite currency without
such Debt having been discharged or such acceleration having been
cured, waived, rescinded or annulled for a period of thirty days after
written notice thereof shall have been given by registered or
certified mail, return receipt requested, to the Issuer by the
Trustee, or to the Issuer and the Trustee by the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities
of such series affected thereby; or
(h) any other Event of Default provided for with respect to
Securities of that series in the supplemental indenture under which
such series is issued or in the terms of Securities of such series;
provided that if any such failure, default or acceleration referred to in
clauses (f), (g) and (h) shall cease or be cured, waived, rescinded or
annulled, then the Event of Default hereunder by reason thereof, and any
acceleration under this Section 5.1 resulting solely therefrom, shall be
deemed likewise to have been thereupon cured, waived, rescinded or annulled
without further action on the part of either the Trustee or any of the
Securityholders.
If an Event of Default other than those specified in Section 5.1(d) or
(e) (if the Event of Default is with respect to less than all series of
Securities then Outstanding) occurs and is continuing, then, and in each
and every such case, except for any series of Securities the principal of
which shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of the
Securities of each such affected series then Outstanding hereunder (voting
as a single class) by notice in writing to the Issuer (and to the Trustee
if given by Securityholders), may declare the entire principal (or, if the
Securities of any such affected series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all Securities of all such affected series, and
the interest accrued thereon, if any (together with any additional amounts
payable with respect to such Securities), to be due and payable
immediately, and upon any such declaration, the same shall become
immediately due and payable. If an Event of Default other than those
specified in Section 5.1(d) or (e) (if the Event of Default is with respect
to all series of Securities then Outstanding), occurs and is continuing,
then and in each and every such case, unless the principal of all the
Securities shall have already become due and payable, either the Trustee or
the Holders of not less than 25% in aggregate principal amount of all the
Securities then Outstanding hereunder (treated as one class), by notice in
writing to the Issuer (and to the Trustee if given by Securityholders), may
declare the entire principal (or, if any Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in
the terms thereof) of all the Securities then Outstanding, and interest
accrued thereon, if any (together with any additional amounts payable with
respect to such Securities) to be due and payable immediately, and upon any
such declaration the same shall become immediately due and payable. If an
Event of Default specified in Section 5.1(d) or (e) occurs, the entire
principal (or, if any Securities are Original Issue Discount Securities,
such portion of the principal as may be specified in terms thereof) of all
the Securities then Outstanding, and interest accrued thereon, if any,
(together with any additional amounts payable with respect to such
Securities) shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Securityholder.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities of such series
are Original Issue Discount Securities, such portion of the principal as
may be specified in the terms thereof) of the Securities of any series
shall have been so declared due and payable, and before any judgment or
decree for the payment of the monies due shall have been obtained or
entered as hereinafter provided, the Issuer shall pay or shall deposit
with the Trustee a sum sufficient to pay all matured installments of
interest (together with any additional amounts payable with respect to such
Securities) upon all the Securities of such series and the principal of any
and all Securities of each such series which shall have become due
otherwise than by acceleration (with interest upon such principal and, to
the extent that payment of such interest is enforceable under applicable
law, on overdue installments of interest, (together with any additional
amounts payable with respect to such Securities) at the same rate as the
rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of each such series (or
the respective rates of interest or Yields to Maturity of all the
Securities, as the case may be, to the date of such payment or deposit) and
such amount as shall be sufficient to cover reasonable compensation to the
Trustee and each predecessor Trustee, its agents, attorneys and counsel,
and all other expenses and liabilities incurred, and all advances made, by
the Trustee and each predecessor Trustee except as a result of negligence
or bad faith, and if any and all Events of Default under the Indenture, other
than the non-payment of the principal of Securities which shall have become
due by acceleration, shall have been cured, waived or otherwise remedied as
provided herein -- then and in every such case the Holders of a majority in
aggregate principal amount of all the Securities of each such series or of
all the Securities, as the case may be, in each case voting as a single
class, then Outstanding, by written notice to the Issuer and the Trustee,
may waive all defaults with respect to such series and rescind and annul
such declaration and its consequences, but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Securities shall have been accelerated and
declared due and payable pursuant to the provisions hereof, then, from and
after such declaration, unless such declaration has been rescinded and
annulled, the principal amount of such Original Issue Discount Securities
shall be deemed, for all purposes hereunder, to be such portion of the
principal thereof as shall be due and payable as a result of such
acceleration, and payment of such portion of the principal thereof as shall
be due and payable as a result of such acceleration, together with accrued
interest, if any, thereon and all other amounts owing thereunder, shall
constitute payment in full of such Original Issue Discount Securities.
SECTION 5.2 Collection of Debt by Trustee; Trustee May Prove Debt.
The Issuer covenants that (a) in case Default shall be made in the payment
of any installment of interest on any of the Securities of any series when
such interest shall have become due and payable and such Default shall have
continued for a period of 30 days or (b) in case Default shall be made in
the payment of all or any part of the principal of any of the Securities of
any series when the same shall have become due and payable, whether upon
the Stated Maturity of the Securities of such series or upon any
redemption or by declaration or otherwise, other than a Default that is the
result of an optional redemption by the Holders of Securities of any
series, the amount of which is not in excess of $50,000,000 or the
equivalent thereof in any currency or composite currency, unless such
Default shall have continued for a period of 60 days after giving a notice
with respect thereto under Section 5.1(c), then upon demand of the Trustee,
the Issuer will pay to the Trustee for the benefit of the Holders of the
Securities of such series the whole amount that then shall have become due
and payable on all such Securities of such series, and such Coupons, if
any, for principal, or interest, as the case may be (with interest to the
date of such payment upon the overdue principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of interest or Yield
to Maturity (in the case of Original Issue Discount Securities) specified
in the Securities of such series); and in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, and
any expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of its negligence
or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of any series to the Holders,
whether or not the principal of and interest on Securities of such series
be overdue.
If an Event of Default occurs and is continuing, the Trustee, in its
own name and as trustee of an express trust, shall be entitled and empowered
to institute any action or proceedings at law or in equity to protect and
enforce its rights and the rights of the Holders by such appropriate
judicial proceeding as the Trustee may deem most effectual to protect and
enforce any such rights, and may prosecute any such action or proceedings to
judgment or final decree, and may enforce any such judgment or final decree
against the Issuer or any other obligor upon the Securities of such series
and collect in the manner provided by law out of the property of the
Issuer or any other obligor upon the Securities of such series, wherever
situated the monies adjudged or decreed to be payable.
In the case of any judicial proceeding relating to the Issuer or any
other obligor upon the Securities of such series, or the property or
creditors of the Issuer or any such obligor, the Trustee shall be entitled
and empowered, by intervention in such proceeding or otherwise, to take any
and all actions authorized under the Trust Indenture Act of 1939 in order
to have claims of the Holders and the Trustee allowed in any such
proceeding. In addition, unless prohibited by applicable law and
regulations, the Trustee shall be entitled and empowered to vote on behalf
of the Holders of Securities of any series in any election of a trustee or
a standby trustee in arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceeding or a Person providing similar functions
in comparable proceedings.
The Trustee shall be authorized to collect and receive any monies or
other property payable or deliverable on any such claims, and to distribute
all amounts received with respect to the claims of the Securityholders and
of the Trustee on their behalf, and any trustee, receiver, or liquidator,
custodian or other similar official is hereby authorized by each of the
Securityholders to make payments to the Trustee, and, in the event that the
Trustee shall consent to the making of payments directly to the
Securityholders, to pay to the Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Trustee, each predecessor Trustee
and their respective agents, attorneys and counsel, and all other expenses
and liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith and all
other amounts due to the Trustee or any predecessor Trustee pursuant to
Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof,
or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series or Coupons appertaining to such
series, may be prosecuted and enforced by the Trustee without the
possession of any of the Securities of such series or Coupons appertaining
to such series or the production thereof on any trial or other proceedings
relative thereto, and any such action or proceedings instituted by the
Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment, subject to the payment of the expenses,
disbursements, advances and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the Securities of such series or Coupons
appertaining thereto in respect of which action was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which
the Trustee shall be a party) the Trustee shall be held to represent all
the Holders of the Securities or Coupons appertaining to such Securities in
respect of which such action was taken, and it shall not be necessary to
make any Holders of such Securities or Coupons appertaining to such
Securities, parties to any such proceedings.
SECTION 5.3 Application of Proceeds. Any monies collected by the
Trustee pursuant to this Article in respect of any series shall be applied
in the following order at the date or dates fixed by the Trustee and, in
case of the distribution of such monies on account of principal or
interest, upon presentation of the several Securities and Coupons
appertaining thereto in respect of which monies have been collected and
stamping (or otherwise noting) thereon the payment, or issuing Securities
of the same series, of like tenor, in reduced principal amounts in exchange
for the presented Securities of like series if only partially paid, or upon
surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to the
Securities of such series in respect of which monies have been
collected, including any and all amounts due the Trustee under Section
6.6;
SECOND: In case the principal of the Securities of such series
in respect of which monies have been collected shall not have become
and be then due and payable, to the payment of interest on the
Securities of such series in default in the order of the maturity of
the installments of such interest, with interest (to the extent that
such interest has been collected by the Trustee) upon the overdue
installments of interest at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities)
specified in such Securities, such payments to be made ratably to the
Persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities of such series in
respect of which monies have been collected shall have become and
shall be then due and payable, to the payment of the whole amount then
owing and unpaid upon all the Securities of such series for principal
and interest, with interest upon the overdue principal; and (to the
extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of such series; and in case
such monies shall be insufficient to pay in full the whole amount so
due and unpaid upon the Securities of such series, then to the payment
of such principal and interest or Yield to Maturity, without
preference or priority of principal over interest or Yield to
Maturity, or of interest or Yield to Maturity over principal, or of
any installment of interest over any other installment of interest, or
of any Security of such series over any other Security of such series
ratably to the aggregate of such principal and accrued and unpaid
interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the Issuer
or any other Person lawfully entitled thereto.
SECTION 5.4 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such rights, either at
law or in equity or in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in
aid of the exercise of any power granted in this Indenture or to enforce
any other legal or equitable right vested in the Trustee by this Indenture
or by law.
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee or any Securityholder shall have proceeded to enforce any
right under this Indenture and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee or to such Securityholder, then and in every such
case, subject to any determination in such proceeding, the Issuer, the
Trustee and the Securityholders shall be restored severally and
respectively to their former positions and rights hereunder, and thereafter
all rights, remedies and powers of the Issuer, the Trustee and the
Securityholders shall continue as though no such proceedings had been
taken.
SECTION 5.6 Limitations on Suits by Securityholders. No Holder of
any Security of any series or of any Coupon appertaining thereto shall have
any right by virtue or by availing of any provision of this Indenture to
institute any action or proceeding, judicial or otherwise, at law or in
equity or in bankruptcy or otherwise upon or under or with respect to this
Indenture, or for the appointment of a trustee, receiver, liquidator,
custodian or other similar official or for any other remedy hereunder,
unless (i) such Holder previously shall have given to the Trustee written
notice of a continuing Event of Default as hereinbefore provided, (ii) the
Holders of not less than 25% in aggregate principal amount of the
Securities of such affected series then Outstanding, treated as a single
class, shall have made written request upon the Trustee to institute such
action or proceedings in its own name as trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby;
(iii) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity shall have failed to institute any such action or
proceedings; and (iv) no direction inconsistent with such written request
shall have been given to the Trustee pursuant to Section 5.9; it being
understood and intended, and being expressly covenanted by the Holder of
every Security or Coupon with every other Holder of the Securities of such
series or Coupons and the Trustee, that no one or more Holders of
Securities of such series shall have any right in any manner whatever by
virtue or by availing of any provision of this Indenture to affect, disturb
or prejudice the rights of any other Holder of Securities or Coupons
appertaining to such Securities, or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any right under
this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all Holders of Securities of the applicable
series and Coupons appertaining to such Securities. For the protection and
enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 5.7 Unconditional Right of Securityholders to Institute
Certain Suits. Notwithstanding any other provision in this Indenture and
any provision of any Security, the right of any Holder of any Security or
Coupon to receive payment of the principal of and interest on (together
with any additional amounts payable with respect to and pursuant to the
terms of such Securities) such Security or Coupon and any interest in
respect of a Default in the payment of any such amounts, on or after the
respective due dates expressed in such Security or Coupon or Redemption
Dates provided for therein or to institute suit for the enforcement of any
such payment rights on or after such respective dates shall not be impaired
or affected without the consent of such Holder.
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 2.9 and 5.6, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders
of Securities or Coupons is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of any of the
Securities or Coupons to exercise any right or power accruing upon any
Event of Default occurring and continuing as aforesaid shall impair any
such right or power or shall be construed to be a waiver of any such Event
of Default or an acquiescence therein; and, subject to Section 5.6, every
power and remedy given by this Indenture or by law to the Trustee or to the
Holders of Securities or Coupons may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the Holders of
Securities or Coupons.
SECTION 5.9 Control by Securityholders. The Holders of a majority in
aggregate principal amount of the Securities of any series affected at the
time Outstanding shall have the right to direct the time, method, and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee by this Indenture
with respect to or for the benefit of such Securities of such series;
provided that such direction shall not be otherwise than in accordance with
applicable law and the provisions of this Indenture and provided further
that (subject to the provisions of Section 6. 1) the Trustee shall have the
right to decline to follow any such direction if the Trustee, being advised
by counsel, shall determine that the action or proceeding so directed may
not be lawfully taken or that the action or proceeding so directed may
expose the Trustee to personal liability or if the Trustee in good faith by
its board of directors or the executive committee thereof shall so
determine that the actions or forbearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the
Securities of all series so affected not joining in the giving of said
direction, it being understood that (subject to Section 6.1) the Trustee
shall have no duty to ascertain whether or not such actions or forbearances
are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Securityholders.
SECTION 5.10 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Securities of any series as provided in
Section 5.1, the Holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding with respect to which an
Event of Default shall have occurred and be continuing may on behalf of the
Holders of all the Securities of such series waive any past Default or
Event of Default hereunder with respect to the Securities of such series
and its consequences, except a Default (a) in the payment of principal or
interest on any Security of such series or (b) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of
the Holder of each Security affected.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured, and not to have
occurred for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon. In the case of any such waiver, the Issuer, the
Trustee and the Holders of all such Securities shall be restored to their
former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right
consequent thereon.
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall, within ninety days after the
occurrence of a default with respect to the Securities of any series, give
notice of all defaults with respect to that series known to the Trustee (i)
if any Unregistered Securities of that series are then Outstanding, to the
Holders thereof, by publication at least once in an Authorized Newspaper in
the Borough of Manhattan, The City of New York and at least once in an
Authorized Newspaper in London (and, if required by Section 3.7, at least
once in an Authorized Newspaper in Luxembourg) and (ii) to all Holders of
Securities of such affected series in the manner and to the extent provided
in Section 4.4(c), unless such defaults shall have been cured before the
mailing or publication of such notice (the term "default" or "defaults" for
the purposes of this Section 5.11 being hereby defined to mean any event or
condition which is, or with notice or lapse of time or both would become,
an Event of Default); provided that, except in the case of default in the
payment of the principal of or interest on any of the Securities of such
series, or in the payment of any sinking or purchase fund installment on
such series, the Trustee shall be protected in withholding such notice if
and so long as the Board of Directors, the executive committee, or a trust
committee of directors or trustees and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in
the interests of the Securityholders.
SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit other than the Trustee of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit including the Trustee, having due regard to the
merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder or
group of Securityholders of any series holding in the aggregate more than
10% in aggregate principal amount of the Securities of such series
Outstanding, or to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of or interest on any Security
on or after the due date expressed in such Security or any date fixed for
redemption.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an
Event of Default with respect to the Securities of a particular series, and
after the curing or waiving of all Events of Default which may have
occurred with respect to such series, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case
an Event of Default with respect to the Securities of a particular series
has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect
to the Securities of any series and after the curing or waiving of all
such Events of Default with respect to such series which may have
occurred:
(i) the duties and obligations of the Trustee with respect
to the Securities of any series shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee;
and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of Holders pursuant to Section 5.9 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there shall be reasonable
ground for believing that the repayment of such funds or adequate indemnity
from the Issuer against such liability is not reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or
any other certificate, statement, instrument, opinion, report, notice,
request, direction. consent, order, bond, debenture, note, coupon,
security or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed), and any Board Resolution of the Issuer may
be evidenced to the Trustee by a copy thereof certified by the
secretary or assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any written advice
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in reliance thereon in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred upon
it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the Holders of not less than a
majority in aggregate principal amount of the Securities of all series
affected; provided that, if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
examination shall be paid by the Issuer or, if paid by the Trustee or
any predecessor trustee, shall be repaid by the Issuer upon demand;
and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Trustee shall
not be responsible for any misconduct or negligence on the part of any
such agent or attorney appointed with due care by it hereunder.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained
herein and in the Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuer and the
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for
the use or application by the Issuer of any of the Securities or of the
proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities or Coupons;
Collections, etc, The Trustee or any agent of the Issuer or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities or Coupons with the same rights it would have if it were not the
Trustee or such agent and, subject to Section 6.12 and Section 310(b) of
the Trust Indenture Act of 1939 may otherwise deal with the Issuer and
receive, collect, hold and retain collections from the Issuer with the same
rights it would have if it were not the Trustee or such agent.
SECTION 6.5 Monies Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all monies received by the Trustee shall, until used
or applied as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated from other funds except to
the extent required by mandatory provisions of law. Neither the Trustee
nor any agent of the Issuer or the Trustee shall be under any liability for
interest on any monies received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior
Claim. The Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust) and the Issuer covenants and agrees to
pay or reimburse the Trustee and each predecessor Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by
or on behalf of it in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other Persons not
regularly in its employ) except any such expense, disbursement or advance
as may arise from its negligence or bad faith. The Issuer also covenants
to indemnify the Trustee and each predecessor Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including but not limited to the costs and
expenses of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder. The obligations of the Issuer under this
Section to compensate and indemnify the Trustee and each predecessor
Trustee and to pay or reimburse the Trustee and each predecessor Trustee
for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of
this Indenture. Such additional indebtedness shall be a senior claim to
that of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the payment of principal of
or interest on particular Securities or Coupons, and the Securities are
hereby subordinated to such senior claim. Without prejudice to any other
rights available to the Trustee under applicable law, when the Trustee
incurs expenses or renders services in connection with an Event of Default
specified in Section 5.1 or in connection with Article Five hereof, the
expenses (including the reasonable fees and expenses of its counsel) and
the compensation for the services in connection therewith are intended to
constitute expenses of administration under any bankruptcy law.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the
trusts of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or
omitting any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered
to the Trustee, and such certificate, in the absence of negligence or bad
faith on the part of the Trustee, shall be full warrant to the Trustee for
any action taken, suffered or omitted by it under the provisions of this
Indenture upon the faith thereof.
SECTION 6.8 Persons Eligible for Appointment as Trustee ; Conflict
Interests. The Trustee for each series of Securities hereunder shall at
all times be a corporation organized and doing business under the laws of
the United States of America or of any State or the District of Columbia
having a combined capital and surplus of at least $50,000,000, and which is
authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by Federal, State or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. At no time shall the Trustee be an obligor, or
directly or indirectly, control, be controlled by, or under the common
control with any obligor upon any Securities issued hereunder. In case at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.9.
The provisions of this Section 6.8 are in furtherance of and subject
to Section 310(a) of the Trust Indenture Act of 1939.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act of 1939, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided
by, and subject to the provisions of the Trust Indenture Act of 1939 and
this Indenture. To the extent permitted by such Act, the Trustee shall not
be deemed to have a conflicting interest by virtue of being a trustee under
this Indenture with respect to Securities of more than one series or a
trustee under the Indenture dated as of April 15, 1994, among P. T. ALatief
Freeport Finance Company B. V., as issuer, Freeport-McMoRan Copper & Gold
Inc., as guarantor, and The Chase Manhattan Bank (formerly known as
Chemical Bank), as Trustee.
SECTION 6.9 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign with respect to one or more or all series of
Securities by giving written notice of resignation to the Issuer. Upon
receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by
written instrument in duplicate, executed by authority of the Board of
Directors of the Issuer, one copy of which instrument shall be delivered to
the resigning Trustee and one copy to the successor trustee or trustees.
If no successor trustee shall have been so appointed with respect to any
series and have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities
of the applicable series for at least six months may, subject to the
provisions of Section 5.12, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may
deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act of 1939 with respect to any
series of Securities after written request therefor by the Issuer or
by any Securityholder who has been a bona fide Holder of a Security or
Securities for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.8 or Section 310(a) of the Trust
Indenture Act of 1939 and shall fail to resign after written request
therefor by the Issuer or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a bankrupt
or insolvent, or a receiver or liquidator of the Trustee or of its
property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to
the applicable series of Securities and appoint a successor trustee for
such series by written instrument, in duplicate, executed by order of the
Board of Directors of the Issuer, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Section 5.12, any Securityholder who has
been a bona fide Holder of a Security or Securities for at least six months
may on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court
may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of
the Securities of each series at the time outstanding may at any time
remove the Trustee with respect to such series and appoint a successor
trustee with respect to such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 7. 1 of the action in that regard taken by
the Securityholders.
(d) Any resignation or removal of the Trustee with respect to
any series and any appointment of a successor trustee with respect to such
series pursuant to any of the provisions of this Section 6.9 shall become
effective upon acceptance of appointment by the successor trustee as
provided in Section 6.10.
(e) The Issuer shall give notice of each resignation and each
removal of the Trustee of each series of Securities by mailing written
notice of such an event by first-class mail, postage prepaid, to the
Holders of Registered Securities of such series as their names and
addresses appear in the Security register. If any Unregistered Securities
of a series affected are then Outstanding, notice of such resignation shall
be given to the Holders thereof, (i) by publication at least once in an
Authorized Newspaper in the Borough of Manhattan, the City of New York, and
at least once in an Authorized Newspaper in London (and, if required by
Section 3.7, at least once in an Authorized Newspaper in Luxembourg) and
(ii) by mailing notice to those Holders of Unregistered Securities who have
furnished their names and addresses to the Trustee for such purpose within
the two years preceding the giving of such notice.
SECTION 6.10 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.9 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or
removal of the predecessor trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall
become vested with all rights, powers, duties and obligations of its
predecessor hereunder with respect to such series, with like effect as if
originally named as trustee for such series hereunder; but, nevertheless,
on the written request of the Issuer or of the successor trustee, upon
payment of its charges then unpaid, the trustee ceasing to act shall,
subject to Section 10.4, pay over to the successor trustee all monies at
the time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Issuer shall
execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act as such shall, nevertheless, retain a
prior claim upon all property or funds held or collected by it to secure
any amounts then due to it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor Trustee and
each successor trustee with respect to the Securities of any applicable
series shall execute and deliver an indenture supplemental hereto which
shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the predecessor
Trustee with respect to the Securities of any series as to which the
predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such trustees co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts under separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6. 10 unless at the time of
such acceptance such successor trustee shall be qualified under the
provisions of Section 310(b) of the Trust Indenture Act of 1939 and
eligible under the provisions of Section 6.8 and Section 310(a) of the
Trust Indenture Act of 1939.
Upon acceptance of appointment by a successor trustee for a series of
Securities as provided in this Section 6. 10, the Issuer shall (i) mail
notice thereof by first-class mail to the Holders of Registered Securities
of such series at their last addresses as they shall appear in the Security
register, or (ii) in the case of Holders of Unregistered Securities of such
series, publish such notice once in an Authorized Newspaper in the Borough
of Manhattan, The City of New York, and at least once in an Authorized
Newspaper in London (and, if required by Section 3.7, at least once in an
Authorized Newspaper in Luxembourg) and mail such notice to those Holders
of Unregistered Securities of such series who have filed their names and
addresses with the Trustee for such purpose within two years preceding the
giving of such notice. Each such notice shall include the name of the
successor trustee for such series and the address of its Corporate Trust
Office. If the acceptance of appointment is substantially contemporaneous
with the resignation, then the notice called for by the preceding sentence
may be combined with the notice called for by Section 6.9. If the Issuer
fails to provide such notice within 10 days after acceptance of appointment
by the successor trustee, the successor trustee shall cause such notice to
be provided at the expense of the Issuer.
SECTION 6.11 Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all
of the corporate trust business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be qualified
under the provisions of Section 310(b) of the Trust Indenture Act of 1939
and eligible under the provisions of Section 6.8 and Section 310(a) of the
Trust Indenture Act of 1939, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall
have been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any predecessor
Trustee and deliver such Securities so authenticated; and, in case at that
time any of the Securities of any series shall not have been authenticated,
any successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the successor trustee;
and in all such cases such certificate shall have the full force which it
is anywhere in the Securities of such series or in this Indenture provided
that the certificate of the Trustee shall have; provided, that the right to
adopt the certificate of authentication of any predecessor Trustee or to
authenticate Securities of any series in the name of any predecessor
Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
SECTION 6.12 Preferential Collection of Claims Against the Issuer. If
and when the Trustee shall be or become a creditor of the Issuer (or any
other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act of 1939 regarding the collection of
claims against the Issuer (or any such other obligor).
SECTION 6.13 Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an
instrument in writing, appoint with the approval of the Issuer an
authenticating agent (the "Authenticating Agent") which shall be authorized
to act on behalf of the Trustee to authenticate Securities issued upon
exchange, registration of transfer, partial redemption or pursuant to
Section 2.9. Securities of each such series authenticated by such
Authenticating Agent shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by
the Trustee. Whenever reference is made in this Indenture to the
authentication and delivery of Securities of any series by the Trustee or
to the Trustee's Certificate of Authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by
an Authenticating Agent for such series and a Certificate of Authentication
executed on behalf of the Trustee by such Authenticating Agent. Such
Authenticating Agent shall at all times be a corporation organized and
doing business under the laws of the United States of America or of any
State, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $5,000,000 (determined as
provided in Section 6.9 with respect to the Trustee) and subject to
supervision or examination by Federal or State authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any Authen-
ticating Agent shall be a party, or any corporation succeeding to the
corporate agency business of any Authenticating Agent, shall continue to be
the Authenticating Agent with respect to all series of Securities for which
it served as Authenticating Agent without the execution or filing of any
paper or any further act on the part of the Trustee or such Authenticating
Agent. Any Authenticating Agent may at any time, and if it shall cease to
be eligible shall, resign by giving written notice of resignation to the
Trustee and to the Issuer.
The Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice thereof to the Authenticating Agent and to
the Issuer. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.13 with
respect to one or more series of Securities, the Trustee may upon receipt
of a Company Order appoint a successor Authenticating Agent and the Issuer
shall provide notice of such appointment to all Holders of Securities of
such series in the manner and to the extent provided in Section 11.4. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers, duties and responsibilities of
its predecessor hereunder, with like effect as if originally named as
Authenticating Agent. The Issuer agrees to pay to the Authenticating Agent
for such series from time to time reasonable compensation. The
Authenticating Agent for the Securities of any series shall have no
responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Sections 6.2, 6.3, 6.4 and, as agent of the Trustee, 7.3 shall be
applicable to any Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Securityholders
of any or all series may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders
in person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Sections 6.1
and 6.2) conclusive in favor of the Trustee and the Issuer, if made in the
manner provided in this Article.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any
instrument by a Securityholder or his agent or proxy may be proved in the
following manner:
(a) The fact and date of the execution by any Holder or his agent
or proxy of any instrument, or the authority of such an agent or proxy
to execute such instrument, may be proved by the certificate of any
notary public or other officer of any jurisdiction authorized to take
acknowledgments of deeds or administer oaths that the Person executing
such instruments acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution sworn to before any such
notary or other such officer. Where such execution is by or on behalf
of any legal entity other than an individual, such certificate or
affidavit shall also constitute sufficient proof of the authority of
the Person executing the same. The fact of the holding by any Holder
of an Unregistered Security of any series, and the identifying number
of such Security and the date of his holding the same, may be proved
by the production of such Security or by a certificate executed by any
trust company, bank, or recognized securities dealer wherever situated
satisfactory to the Trustee, if such certificate shall be deemed by
the Trustee to be satisfactory. Each such certificate shall be dated
and shall state that on the date thereof a Security of such series
bearing a specified identifying number was deposited with or exhibited
to such trust company, bank, or recognized securities dealer by the
Person named in such certificate. Any such certificate may be issued
in respect of one or more Unregistered Securities of one or more
series specified therein. The holding by the Person named in any such
certificate of any Unregistered Securities of any series specified
therein shall be presumed to continue for a period of one year from
the date of such certificate unless at the time of any determination
of such holding (1) another certificate bearing a later date issued in
respect of the same Securities shall be produced, or (2) the Security
of such series specified in such certificate shall be produced by some
other Person, or (3) the Security of such series specified in such
certificate shall have ceased to be Outstanding. Subject to Sections
6.1 and 6.2, the fact and date of the execution of any such instrument
and the amount and numbers of Securities of any series held by the
Person so executing such instrument and the amount and numbers of any
Security or Securities for such series may also be proven in
accordance with such reasonable rules and regulations as may be
prescribed by the Trustee for such series or in any other manner which
the Trustee for such series may deem sufficient.
(b) In the case of Registered Securities, the ownership of such
Securities shall be proved by the Security register or by a
certificate of the Security Registrar.
SECTION 7.3 Holders to be Treated as Owners. Prior to surrender of a
Security for registration of transfer, the Issuer, the Trustee and any
agent of the Issuer, or the Trustee may deem and treat the Person in whose
name any Registered Security shall be registered upon the Security register
as the absolute owner of such Security (whether or not such Security shall
be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the
principal of and, subject to the provisions of this Indenture, interest on
such Security and for all other purposes; and neither the Issuer, the
Trustee nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary. The Issuer, the Trustee and any agent of the
Issuer, or the Trustee may treat the Holder of any Unregistered Security
and the Holder of any Coupon as the absolute owner of such Unregistered
Security or Coupon (whether or not such Unregistered Security or Coupon
shall be overdue) for the purpose of receiving payment thereof or on
account thereof and for all other purposes and neither the Issuer, the
Trustee nor any agent of the Issuer, or the Trustee shall be affected by
notice to the contrary. All such payments so made to any such Person, or
upon his order, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for monies payable
upon any such Unregistered Security or Coupon.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount
of Outstanding Securities have concurred in any direction, consent or
waiver under this Indenture, Securities which are owned by the Issuer or
any other obligor on the Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control
with the Issuer or any other obligor on the Securities shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination,
except that for the purpose of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver only
Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Issuer or any other obligor upon the Securities
or any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer or any other obligor on
the Securities. In case of a dispute as to such right, the advice of
counsel shall be full protection in respect of any decision made by the
Trustee in accordance with such advice. Upon request of the Trustee, the
Issuer shall furnish to the Trustee promptly an Officers' Certificate
listing and identifying all Securities, if any, known by the Issuer to be
owned or held by or for the account of any of the above-described Persons;
and, subject to Sections 6.1 and 6.2, the Trustee shall be entitled to
accept such Officers' Certificate as conclusive evidence of the facts
therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Securities of any or all series, as the
case may be, specified in this Indenture in connection with such action,
any Holder of a Security the serial number of which is shown by the
evidence to be included among the serial numbers of the Securities the
Holders of which have consented to such action may, by filing written
notice at the Corporate Trust Office and upon proof of holding as provided
in this Article, revoke such action so far as concerns such Security.
Except as aforesaid any such action taken by the Holder of any Security
shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in
exchange or substitution therefor or on registration or transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon
any such Security. Any action taken by the Holders of the percentage in
aggregate principal amount of the Securities of any or all series, as the
case may be, specified in this Indenture in connection with such action
shall be conclusively binding upon the Issuer, the Trustee and the Holders
of all the Securities.
SECTION 7.6 Record Date for Consents and Waivers. The Issuer may,
but shall not be obligated to, direct the Trustee to establish a record
date for the purpose of determining the Persons entitled to (i) waive any
past Default with respect to the Securities of such series in accordance
with Section 5.10, (ii) consent to any supplemental indenture in accordance
with Section 8.2 of this Indenture or (iii) waive compliance with any term,
condition or provision of any covenant hereunder (if this Indenture should
expressly provide for such waiver). If a record date is fixed, the Holders
on such record date, or their duly designated proxies, and any such
Persons, shall be entitled to waive any such past Default, consent to any
such supplemental indenture or waive compliance with any such term,
condition or provision or revoke any such waiver or consent, whether or not
such Holder remains a Holder after such record date; provided, however,
that unless such waiver or consent is obtained from the Holders, or duly
designated proxies, of the requisite principal amount of Outstanding
Securities of such series prior to the date which is the 90th day after
such record date, any such waiver or consent previously given shall
automatically and without further action by any Holder be cancelled and of
no further effect.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any notice of Default, (ii) declaration
under Section 5.1, (iii) any request to institute proceedings referred to
in Section 5.6 or (iv) any direction referred to in Section 5.9, in each
case with respect to Securities of such series. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Securities of such
series on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction or to revoke the same,
whether or not such Holders remain Holders after such record date; provided
that no such action shall be effective hereunder unless taken on or prior
to the applicable expiration date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date.
Nothing in this paragraph shall be construed to prevent the Trustee from
setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be
cancelled and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of the
requisite principal amount of Outstanding Securities of the relevant series
on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Issuer's expense, shall
cause notice of such record date, the proposed action by Holders and the
applicable expiration date to be given to the Issuer in writing and to each
Holder of Securities of the relevant series in the manner set forth in
Section 11.4.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer when authorized by a Board Resolution (which
Resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to a Company Order) and the Trustee may from
time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of the execution thereof) for
one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any
property or assets;
(b) to evidence the succession of another entity to the Issuer or
successive successions, and the assumption by the successor entity of
the respective covenants, agreements and obligations of the Issuer
under this Indenture or any supplemental indenture;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions or to surrender any right,
power or option conferred by this Indenture on the Issuer as its Board
of Directors and the Trustee shall consider to be for the protection
or benefit of the Holders of all or any series of Securities or
Coupons of any series (and if such covenants are to be for the benefit
of less than all series of Securities, stating that such covenants are
being added solely for the benefit of such series), and to make the
occurrence, or the occurrence and continuance, of a Default in any
such additional covenants, restrictions, conditions or provisions an
Event of Default permitting the enforcement of all or any of the
several remedies provided in this Indenture as herein set forth;
provided, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may
provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such an
Event of Default or may limit the remedies available to the Trustee
upon such an Event of Default or may limit the right of the Holders of
a majority in aggregate principal amount of the Securities of such
series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make any other provisions in
regard to matters or questions under this Indenture or any
supplemental indenture as the Issuer may deem necessary or desirable,
provided, that no action under this clause (d) shall adversely affect
the interests of the Holders of the Securities or Coupons;
(e) to establish the form or terms of Securities of any series or
of the Coupons appertaining to such Securities as permitted by
Sections 2.1 and 2.3;
(f) to make any change to comply with any requirement of the
Commission in connection with the qualification of the Indenture under
the Trust Indenture Act of 1939, as amended; and
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee,
pursuant to the requirements of Section 6.10.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and
to accept the conveyance, transfer, assignment, mortgage or pledge of any
property thereunder, but the Trustee shall not be obligated to enter into
any such supplemental indenture which affects the Trustee's own rights,
duties, immunities or liabilities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions
of Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Article Seven) of the Holders of
not less than a majority in aggregate principal amount of the Securities at
the time Outstanding of any series affected by such supplemental indenture,
the Issuer, when authorized by a Board Resolution (which Resolution may
provide general terms or parameters for such action and may provide that
the specific terms of such action may be determined in accordance with or
pursuant to a Company Order) and the Trustee may, from time to time and at
any time, enter into an indenture or indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act of 1939 as in
force at the date of execution thereof) for the purpose of adding, any
provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of such
series or of the Coupons appertaining to such Securities; provided, that no
such supplemental indenture shall (a) extend the final maturity of any
Security, or reduce the principal amount thereof, or reduce the rate (or
alter the method of computation) of interest thereon, or reduce (or alter
the method of computation) any amount payable on redemption or repayment
thereof or extend the time for payment thereof, or make the principal
thereof (including any amount in respect of original issue discount), or
interest (together with any additional amounts payable with respect to, and
pursuant to the terms of, such Security) thereon payable in any coin or
currency other than that provided in the Securities and Coupons or in
accordance with the terms thereof, or reduce the amount of the principal of
an Original Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof pursuant to Section 5.1 or the amount
thereof provable in bankruptcy pursuant to Section 5.2, or alter the
provisions of Section 11.11 or 11.12 or impair or affect the right of any
Securityholder to institute suit for the payment thereof or, if the
Securities provide therefor, any right of repayment at the option of the
Securityholder, in each case without the consent of the Holder of each
Security so affected, provided, no consent of any Holder of any Security
shall be necessary under this Section 8.2 to permit the Trustee and the
Issuer to execute supplemental indentures pursuant to Section 8.1(e) of
this Indenture, or (b) reduce the aforesaid percentage of principal amount
of Securities of any series the consent of the Holders of which is required
for any such supplemental indenture to less than a majority, or reduce the
percentage of Securities of such series necessary to consent to waive any
past Default under this Indenture to less than a majority, or modify any of
the provisions of this Section or Section 5.10, except to increase any such
percentage or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Security so affected, in each case, without the consent of the Holder of
each Security so affected.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or of
Coupons appertaining to such Securities, or which modifies the rights of
Holders of Securities of such series with respect to such covenant or
provision, shall be deemed not to affect the rights under this Indenture of
the Holders of Securities of any other series or of the Coupons
appertaining to such Securities.
Upon the request of the Issuer, accompanied by a copy of a Board
Resolution of the Issuer (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to a Company Order)
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders and
other documents, if any, required by Section 7.1 the Trustee shall join
with the Issuer in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties, immunities
or liabilities under this Indenture or otherwise, in which case the Trustee
may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the
Issuer shall give notice thereof setting forth in general terms the
substance of such supplemental indenture, (i) to the Holders of the
Outstanding Registered Securities of each series affected thereby, by
mailing a notice thereof by first-class mail to such Holders at their
addresses as they shall appear on the security register, (ii) if any
Unregistered Securities of a series affected thereby are then Outstanding,
to the Holders thereof who have filed their names and addresses with the
Trustee for such purpose within two years preceding the giving of such
notice, by mailing a notice thereof by first-class mail to such Holders at
such addresses as were so furnished to the Trustee and (iii) if any
Unregistered Securities of a series affected thereby are then Outstanding,
to all Holders thereof, by publication of a notice thereof at least once in
an Authorized Newspaper in the Borough of Manhattan, The City of New York
and at least once in an Authorized Newspaper in London (and, if required by
Section 3.7, at least once in an Authorized Newspaper in Luxembourg). Any
failure of the Issuer to give such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Issuer, and
the Holders of Securities of each series affected thereby shall thereafter
be determined, exercised and enforced hereunder subject in all respects to
such modifications and amendments. and all the terms and conditions of any
such supplemental indenture shall be and be deemed to be part of the terms
and conditions of this Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any such
supplemental indenture executed pursuant to this Article Eight complies
with the applicable provisions of this Indenture and that the execution of
such supplemental indenture is authorized or permitted by this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series
as to any matter provided for by such supplemental indenture or as to any
action taken by Securityholders. If the Issuer or the Trustee shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Issuer, to any modification of this
Indenture contained in any such supplemental indenture may be prepared by
the Issuer, authenticated by the Trustee and delivered in exchange for the
Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Covenant of the Issuer Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain Conditions. The Issuer covenants that
it will not merge with or into or consolidate with any Person or sell,
convey, transfer, lease or otherwise dispose of all or substantially all of
its assets to any Person and the Issuer shall not permit any Person to
consolidate with or merge into the Issuer or sell, convey, transfer, lease
or otherwise dispose of all or substantially all of its assets to the
Issuer, unless (i) either the Issuer (in the case of a merger) shall be the
continuing corporation, or the successor corporation or the Person which
acquires by sale, conveyance, transfer, lease or disposition all or
substantially all of the assets of the Issuer (if other than the Issuer)
shall be a corporation organized under the laws of the United States of
America or any State thereof or the District of Columbia, and shall
expressly assume, by supplemental indenture, in form satisfactory to the
Trustee, executed and delivered to the Trustee by such corporation pursuant
to Article Eight hereof, all of the payment obligations of the Issuer
pursuant to this Indenture and the Securities of all series and Coupons, if
any, appertaining thereto and the due and punctual performance of every
covenant of this Indenture on the part of the Issuer to be performed or
observed; (ii) immediately after giving effect to such merger,
consolidation, sale, conveyance, transfer, lease or disposition and
treating any Debt which becomes an obligation of the Issuer as a result of
such transaction as having been incurred by the Issuer at the time of such
transaction, no Default or Event of Default shall have occurred and be
continuing.
SECTION 9.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer, lease or disposition,
and following such an assumption by the successor corporation, such
successor corporation shall succeed to and be substituted for the Issuer,
with the same effect as if it had been named herein. Except in the case of
coveyance by lease, when the successor entity assumes all obligations of
the Issuer hereunder and the procedures of Section 9.1 have been complied
with, all obligations and covenants of the Issuer hereunder or under the
Securities shall terminate.
Such successor corporation may cause to be signed, and may issue
either in its own name or in the name of the Issuer prior to such
succession any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the
Trustee; and, upon the order of such successor corporation, instead of the
Issuer, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities and Coupons appertaining thereto, if any, which previously shall
have been signed and delivered by the officers of the Issuer to the Trustee
for authentication, and any Securities together with any Coupons
appertaining thereto which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All of
the Securities so issued together with any Coupons appertaining thereto
shall in all respects have the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Securities had been
issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance, transfer,
lease or disposition such changes in phraseology and form (but not in
substance) may be made in the Securities and Coupons thereafter to be
issued as may be appropriate.
In the event of any sale, conveyance, transfer or disposition (other
than a conveyance by way of lease) covered by this Section 9.2, the Issuer
(or any successor corporation which shall theretofore have become such in
the manner described in this Article) shall be discharged from all
obligations and covenants under this Indenture and the Securities and may
be liquidated and dissolved.
SECTION 9.3 Opinion of Counsel to Trustee. The Trustee, subject to
the provisions of Sections 6.1 and 6.2, may receive an Opinion of Counsel
prepared in accordance with Section 11.5 as conclusive evidence that any
such consolidation, merger, sale, transfer, lease, disposition or
conveyance, and any such assumption, and any such liquidation or
dissolution complies with the applicable provisions of this Indenture.
ARTICLE TEN
SATISFACTION AND DISCHARGE
OF INDENTURE; UNCLAIMED MONIES
SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at any
time (a) the Issuer shall have paid or caused to be paid the principal of
and interest on all the Securities of any series Outstanding hereunder and
all unmatured Coupons appertaining thereto (other than any Securities of
such series and Coupons appertaining thereto which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.9), as and when the same shall have become due and
payable, or (b) the Issuer shall have delivered to the Trustee for
cancellation all Securities of such series theretofore authenticated and
all unmatured Coupons appertaining thereto (other than any Securities and
Coupons appertaining thereto of such series which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.9) or (c) in the case of any series of Securities
where the exact or maximum amount (including the currency of payment) of
principal of and interest due on which can be determined at the time of
making the deposit referred to in clause (ii) below, (i) all the Securities
of such series and all unmatured Coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation (x) shall have become
due and payable or (y) are by their terms to become due and payable within
one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption, and (ii) the Issuer shall have irrevocably deposited or caused
to be deposited with the Trustee as trust funds the entire amount in cash
(other than monies repaid by the Trustee or any paying agent to the Issuer
in accordance with Section 10.4), specifically pledged as security for, and
dedicated solely to the benefit of the Holders of the Securities of such
series and Coupons appertaining thereto, (x) cash in an amount, or (y) in
the case of any series of Securities the payments on which may only be made
in Dollars, direct obligations of the United States of America, backed by
its full faith and credit ("U.S. Government Obligations"), maturing as to
principal and interest at such times and in such amounts as will insure the
availability of cash not later than one day before the due date of payments
in respect of the Securities, or (z) a combination thereof, sufficient
(without investment of such cash or reinvestment of any interest or
proceeds from such U.S. Government Obligations) in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay the
principal of and interest on all Securities of such series and Coupons
appertaining thereto on each date that such principal or interest is due
and payable (whether at maturity or upon redemption (through operation of a
mandatory sinking fund or otherwise) including any redemption at the
option of the Holder); and if, in any such case, the Issuer shall also pay
or cause to be paid all other sums payable hereunder by the Issuer, all of
the Securities of such series and any Coupons appertaining thereto shall
be deemed paid and discharged and the provisions of this Indenture with
respect to such Securities and Coupons shall cease to be of further effect
(except as to (i) rights of registration of transfer, and exchange of
Securities of such series or Coupons appertaining thereto, and the Issuer's
right of optional redemption, if any, (ii) substitution of mutilated,
defaced or apparently destroyed, lost or stolen Securities or Coupons,
(iii) rights of the Holders of Securities and Coupons appertaining thereto
to receive from the property so deposited payments of principal thereof and
interest on the original stated due dates therefor (but not upon
acceleration) or the Redemption Date therefor, as the case may be and
remaining rights of Holders to receive mandatory sinking fund payments, if
any, (iv) the rights, obligations and immunities of the Trustee hereunder,
including any right to compensation, reimbursement of expenses and
indemnification under Section 6.6, (v) the rights of the Holders of
Securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the Trustee payable
to all or any of them and (vi) the obligations of the Issuer under Sections
3.2, 3.3 and 3.4, Article Ten and Article Twelve), and the Trustee, on
demand of the Issuer accompanied by an Officers' Certificate and an Opinion
of Counsel, which complies with Section 11.5, stating that the provisions
of this Section have been complied with and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging such satisfaction of
and discharging this Indenture; provided, that the rights of Holders of the
Securities and Coupons to receive amounts in respect of principal of and
interest on the Securities and Coupons held by them shall not be delayed
longer than required by then-applicable mandatory rules or policies of any
securities exchange upon which the Securities are listed. In addition, in
connection with the satisfaction and discharge pursuant to clause (c)(i)(y)
above, the Trustee shall give notice to the Holders of Securities of such
satisfaction and discharge. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the
Securities.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 6.6 shall survive.
(B) The following provisions shall apply to the Securities of
each series unless specifically otherwise provided in a Board Resolution of
the Issuer, Officers' Certificate or indenture supplemental hereto provided
pursuant to Section 2.3. In addition to discharge of the Indenture
pursuant to Section 10.1(A), in the case of any such series of Securities
the exact or maximum amounts (including the currency of payment) of
principal and interest due on which can be determined at the time of making
the deposit referred to in Clause 10.1(B)(x)(a) below: (x) the Issuer
shall be deemed to have paid and discharged the entire indebtedness on all
Securities of such a series and the Coupons appertaining thereto on the
91st day after the date of the deposit referred to in Clause 10.1(B)(x)(a)
below, and the provisions of this Indenture with respect to the Securities
of such series and Coupons appertaining thereto shall no longer be in
effect (except as to (i) rights of registration of transfer and exchange of
Securities of such series and Coupons appertaining thereto and the Issuer's
right of optional redemption, if any, (ii) substitution of mutilated,
defaced or apparently destroyed, lost or stolen Securities or Coupons,
(iii) rights of Holders of Securities or Coupons appertaining thereto to
receive from the property so deposited payments of principal thereof and
interest thereon on the original stated due dates therefor (but not on
acceleration) or the Redemption Date therefor, as the case may be, and
remaining rights of the Holders to receive mandatory sinking fund payments,
if any, (iv) the rights, obligations, duties and immunities of the Trustee
hereunder, including any right to compensation, reimbursement of expenses
and indemnification under Section 6.6, (v) the rights of the Holders of
Securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the Trustee payable
to all or any of them and (vi) the obligations of the Issuer and the rights
of the Holders of the Securities under Sections 3.2, 3.3 and 3.4, Article
Ten and Article Twelve), (hereinafter "defeasance"), and the Trustee, at
the expense of the Issuer, shall at the Issuer's request, execute proper
instruments acknowledging the same, if the Issuer notifies the Trustee that
the provisions of this Section 10.1(B) are being complied with solely to
effect a defeasance and if
(a) with reference to this provision the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as
trust funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Securities of such series and Coupons
appertaining thereto, (i) cash in an amount, or (ii) in the case of
any series of Securities the payments on which may only be in Dollars,
U.S. Government Obligations, maturing as to principal and interest at
such times and in such amounts as will insure (without investment of
such cash or reinvestment of any interest or proceeds from such U.S.
Government Obligations) the availability of cash or (iii) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay the
principal of and interest on all Securities of such series and Coupons
appertaining thereto on each date that such principal and interest is
due and payable (whether at maturity or upon redemption (through
operation of a mandatory sinking fund or otherwise) including any
redemption at the option of the Holder, provided, that, in connection
with any such redemption at the option of the Issuer, the Issuer shall
have made arrangements satisfactory to the Trustee for the giving of
notice of redemption and, in connection with any redemption at the
option of the Holder, optional redemption of all of the Securities of
such series on such redemption date);
(b) no Default or Event of Default with respect to the Securities
of such series shall have occurred and be continuing on the date of
such deposit or, insofar as Sections 5.1(d) and (e) are concerned, at
any time during the period ending on and including the 91st day after
the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period);
(c) such defeasance shall not cause the Trustee to have a
conflicting interest for purposes of the Trust Indenture Act of 1939
with respect to any securities of the Issuer;
(d) such defeasance shall not result in a breach or violation of,
or constitute a Default under, this Indenture or any Securities of
such series or any other agreement or instrument to which the Issuer
is a party or by which it is bound;
(e) the Issuer has delivered to the Trustee an Opinion of Counsel
to the effect, and such opinion shall confirm, (i) that, based on the
fact that (x) the Issuer has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the
date hereof, there has been a change in the applicable federal income
tax law, in either case, Holders of the Securities of such series and
the Coupons appertaining thereto will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to federal income tax on
the same amount and in the same manner and at the same times as would
have been the case if such deposit, defeasance and discharge had not
occurred; and (ii) that the trust arising from such deposit shall not
constitute an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment
Company Act of 1940, as amended; and
(f) the Issuer has paid or caused to be paid all other sums then
payable hereunder by the Issuer and the Issuer has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to the
defeasance contemplated by this provision have been complied with.
(C) The Issuer shall be released from its obligations under
Article Nine and any other covenants specified pursuant to Section 2.3 with
respect to the Securities of any series and any Coupons appertaining
thereto, other than the obligation to provide that any successor to the
Issuer, as a condition to such succession, assume the performance of any
covenant of this Indenture of the Issuer relating to the compensation,
reimbursement of expenses and indemnities of the Trustee and any
predecessor Trustee, on and after the date the conditions set forth below
are satisfied (hereinafter, "covenant defeasance"). For this purpose, such
covenant defeasance means that, with respect to the outstanding Securities
of the applicable series, the Issuer may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in
such Article or any such covenant, whether directly or indirectly by reason
of any reference elsewhere herein to such Article or any such covenant or
by reason of any reference in such Article to any other provision herein or
in any other document and such omission to comply shall not constitute an
Event of Default under Section 5.1, but the remainder of this Indenture and
such Securities and Coupons shall be unaffected thereby. The following
shall be the conditions to application of this subsection (C) of this
Section 10.1:
(a) the Issuer has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust funds in trust for the
purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
the Securities of such series and Coupons appertaining thereto, (i)
cash in an amount, or (ii) in the case of any series of Securities the
payment on which may only be made in Dollars, U.S. Government
Obligations maturing as to principal and interest at such times and in
such amounts as will insure (without investment of such cash or
reinvestment of any interest or proceeds from such U.S. Government
Obligations) the availability of cash in an amount or (iii) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay the
principal and interest on all Securities of such series and Coupons
appertaining thereto on each date that such principal or interest is
due and payable (whether at maturity or upon redemption (through
operation of a mandatory sinking fund or otherwise) including any
redemption at the option of the Holder, provided, that, in connection
with any such redemption at the option of the Issuer, the Issuer shall
have made arrangements satisfactory to the Trustee for the giving of
notice of redemption and, in connection with any redemption at the
option of the Holder, optional redemption of such series on such
redemption date);
(b) no Default or Event of Default or event which with notice or
lapse of time or both would become an Event of Default with respect to
the Securities shall have occurred and be continuing on the date of
such deposit or, insofar as subsections 5.1(d) and (e) are concerned,
at any time during the period ending on the 91st day after the date of
such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
(c) such covenant defeasance will not result in a breach or
violation of, or constitute a default under, this Indenture, or any
Securities issued hereunder or any agreement or instrument to which
the Issuer is a party or by which it is bound;
(d) such covenant defeasance shall not cause the Trustee to have
a conflicting interest as defined in Section 310(b) of the Trust
Indenture Act of 1939;
(e) such covenant defeasance shall not cause any Securities then
listed on any registered national securities exchange to be delisted;
(f) the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect (i) that the Holders of the Securities of such
series and Coupons appertaining thereto will not recognize income,
gain or loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred; and (ii)
that the trust arising from such deposit shall not constitute an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in The Investment Company Act of
1940, as amended; and
(g) the Issuer shall have paid or caused to be paid all other
sums then payable hereunder by the Issuer and the Issuer shall have
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the
covenant defeasance contemplated by this provision have been complied
with.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 10.4 all monies and securities deposited
with the Trustee pursuant to Section 10.1 shall be held in trust and
applied by it to the payment, either directly or through any paying agent
(including the Issuer acting as its own paying agent), to the Holders of
the particular Securities of such series and of Coupons appertaining
thereto for the payment or redemption of which such monies or securities
have been deposited with the Trustee, of all sums due and to become due
thereon for principal and interest; but such monies or securities need not
be segregated from other funds except to the extent required by law.
SECTION 10.3 Repayment of Monies Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Securities of any series or the defeasance thereof, all monies then held by
any paying agent under the provisions of this Indenture with respect to
such series shall, upon demand of the Issuer, be repaid to it or paid to
the Trustee and thereupon such paying agent shall be released from all
further liability with respect to such monies.
SECTION 10.4 Return of Monies Held by Trustee and Paying Agent
Unclaimed for Two Years. Any monies or U.S. Government Obligations
deposited with or paid to the Trustee or any paying agent for the payment
of the principal of and interest on any Security of any series or Coupons
attached thereto and not applied but remaining unclaimed for two years
after the date upon which such principal and interest shall have become due
and payable, shall, upon the written request of the Issuer and unless
otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Issuer by the Trustee
for such series or such paying agent, and the Holder of the Securities of
such series and of any Coupons appertaining thereto shall, unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to the Issuer for any payment
which such Holder may be entitled to collect, and all liability of the
Trustee or any paying agent with respect to such monies shall thereupon
cease; provided, however, that the Trustee or such paying agent, before
being required to make any such repayment with respect to monies deposited
with it for any payment (a) in respect of Registered Securities of any
series, shall at the expense of the Issuer, mail by first class mail to
Holders of such Securities at their addresses as they shall appear on the
Security register, and (b) in respect of Unregistered Securities of any
series the Holders of which have filed their names and addresses with the
Trustee for such purpose within two years preceding the giving of such
notice, shall at the expense of the Issuer, mail by first class mail to
such Holders at such addresses, and (c) in respect of Unregistered
Securities of any series, shall at the expense of the Issuer cause to be
published once, in an Authorized Newspaper in the City of New York and once
in an Authorized Newspaper in London (and, if required by Section 3.7, at
least once in an Authorized Newspaper in Luxembourg) notice, that such
monies remain unpaid and that, after a date specified therein, which shall
not be less than thirty days from the date of such mailing or publication,
any unclaimed balance of such money then remaining will be repaid to the
Issuer.
SECTION 10.5 Indemnity for U.S. Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.1 or the principal or interest received in respect
of such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability. No recourse shall be had for the
payment of the principal of, or interest on any Security or any Coupon
appertaining thereto, for any claim based thereon, or otherwise in respect
thereof, or based on or in respect of this Indenture or any indenture
supplement thereto, against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Issuer or any successor
corporation, either directly or through the Issuer, or any successor
corporation, whether by virtue of constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance of such Security and any Coupons
appertaining thereto and as part of the consideration for the issue
thereof, expressly waived and released.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Securityholders. Nothing in this Indenture or in the Securities or in
Coupons appertaining thereto, expressed or implied, shall give or be
construed to give to any Person, other than the parties hereto and their
successors and the Holders of the Securities or Coupons, if any, any legal
or equitable right, remedy or claim under this Indenture or under any
covenant or provision herein contained, all such covenants and provisions
being for the sole benefit of the parties hereto and their successors and
the Holders of the Securities or Coupons, if any.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture. All
covenants and agreements in this Indenture by the Issuer shall bind its
successors and assigns (whether by merger, consolidation or otherwise),
whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, the Trustee and
Securityholders. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or
by the Holders of Securities or Coupons to or on the Issuer may be given or
served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of
the Issuer is filed by the Issuer with the Trustee) to Freeport-McMoRan
Copper & Gold Inc., 1615 Poydras Street, New Orleans, Louisiana 70112,
Attention: Corporate Secretary. Any notice, direction, request or demand
by the Issuer or any Securityholder to or upon the Trustee shall be deemed
to have been sufficiently given or made, for all purposes, if in writing
and given or made at the Corporate Trust Office, Attention: Corporate
Trustee Administration Department.
Where this Indenture provides for notice to Holders of Registered
Securities, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder entitled thereto, at his last address as it appears
in the Security register. Where this Indenture provides for notice to
Holders of Unregistered Securities, notice shall be (i) mailed to those
Holders of Unregistered Securities who have filed their names and addresses
for this purpose with the Trustee within two preceding years of giving such
notice, with such notice being sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid,
to each Holder entitled thereto, at his last address as it appears in such
filing and (ii) published at least once in an Authorized Newspaper in the
City of New York, and at least once in an Authorized Newspaper in London
(and, if required by Section 3.7, at least once in an Authorized Newspaper
in Luxembourg). In any case where notice to such Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon
such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer and
Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall
be satisfactory to the Trustee shall be deemed to be a sufficient giving of
such notice.
SECTION 11.5 Officers' Certificate and Opinions of Counsel, Statements
to Be Contained Therein. Upon any application or demand by the Issuer to
the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need
be furnished.
Except as provided in Sections 3.5 and 12.5, each certificate or
opinion provided for in this Indenture and delivered to the Trustee with
respect to compliance with a condition or covenant provided for in this
Indenture shall include (a) a statement that the Person making such
certificate or providing such opinion has read such covenant or condition
and the definitions relating thereto, (b) a brief statement as to the
nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based,
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that
the certificate or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid
are erroneous, or in the exercise of reasonable care should know that the
same are erroneous. Any certificate, statement or opinion of counsel may
be based, insofar as it relates to factual matters, information with
respect to which is in the possession of the Issuer upon the certificate,
statement or opinion of or representations by an officer or officers of the
Issuer unless such counsel knows that the certificate, statement or opinion
or representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon
a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations
with respect to the accounting matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a
statement that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If the
date of maturity of interest on or principal of the Securities of any
series or any Coupons appertaining thereto or the date fixed for redemption
or repayment of any Security shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on
the date of maturity or the date fixed for redemption or repayment, and no
interest shall accrue for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If any provision hereof limits, qualifies or
conflicts with the duties imposed by any of Sections 310 through 317,
inclusive, of the Trust Indenture Act of 1939 or with another provision
hereof which is required to be included by any of Section 310 through 317,
inclusive, by operation of Section 318(c) thereof, such duties and required
provision shall control except as, and to the extent, such provision is
expressly excluded from this Indenture, as permitted by the Trust Indenture
Act of 1939.
SECTION 11.8 New York Law to Govern; Separability. This Indenture and
each Security shall each be deemed to be a contract under the laws of the
State of New York, and for all purposes shall be construed in accordance
with the laws of said State, except as may otherwise be required by
mandatory provisions of law.
In case any provision of this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
thereby.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 11.11 Securities in a Foreign Currency or in ECU. Unless
otherwise specified in an Officers' Certificate delivered pursuant to
Section 2.3 of this Indenture with respect to a particular series of
Securities, whenever for purposes of this Indenture any action may be taken
by the Holders of a specified percentage in aggregate principal amount of
Securities of all series or all series affected by a particular action at
the time outstanding and, at such time, there are Outstanding Securities of
any series which are denominated in a coin or currency other than Dollars
(including ECUs), then the principal amount of Securities of such series
which shall be deemed to be Outstanding for the purpose of taking such
action shall be that amount of Dollars that could be obtained for such
amount at the Market Exchange Rate. For purposes of this Section 11.11,
Market Exchange Rate shall mean the noon Dollar buying rate in New York
City for cable transfers of that currency as published by the Federal
Reserve Bank of New York; provided, however, in the case of ECUs, Market
Exchange Rate shall mean the rate of exchange determined by the Commission
of the European Communities (or any successor thereto) as published in the
Official Journal of the European Communities (such publication or any
successor publication, the "Journal"). If such Market Exchange Rate is not
available for any reason with respect to such currency, the Trustee shall
use, in its sole discretion and without liability on its part, such
quotation of the Federal Reserve Bank of New York or, in the case of ECUs,
the rate of exchange as published in the Journal, as of the most recent
available date, or quotations or, in the case of ECUs, rates of exchange
from one or more major banks in The City of New York or in the country of
issue of the currency in question, which for purposes of the ECU shall be
Brussels, Belgium, or such other quotations or, in the case of ECU, rates
of exchange as the Trustee shall deem appropriate. The provisions of this
paragraph shall apply in determining the equivalent principal amount in
respect of Securities of a series denominated in a currency other than
Dollars in connection with any action taken by Holders of Securities
pursuant to the terms of this Indenture including without limitation any
determination contemplated in Section 5.1(f) or (g).
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the
preceding paragraph shall be in its sole discretion and shall, in the
absence of manifest error, be conclusive to the extent permitted by law for
all purposes and irrevocably binding upon the Issuer and all Holders.
SECTION 11.12 Judgment Currency. The Issuer agrees, to the fullest
extent it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the
sum due in respect of the principal of or interest on the Securities of any
series (the "Required Currency") into a currency in which a judgment will
be rendered (the "Judgment Currency"), the rate of exchange used shall be
the rate at which in accordance with normal banking procedures the Trustee
could purchase in The City of New York the Required Currency with the
Judgment Currency on the day on which final unappealable judgment is
entered, unless such day is not a New York Banking Day, then, to the extent
permitted by applicable law, the rate of exchange used shall be the rate at
which in accordance with normal banking procedures the Trustee could
purchase in The City of New York the Required Currency with the Judgment
Currency on the New York Banking Day preceding the day on which final unap-
pealable judgment is entered and (b) its obligations under this Indenture
to make payments in the Required Currency (i) shall not be discharged or
satisfied by any tender, or any recovery pursuant to any judgment (whether
or not entered in accordance with subsection (a)), in any currency other
than the Required Currency, except to the extent that such tender or
recovery shall result in the actual receipt, by the payee, of the full
amount of the Required Currency expressed to be payable in respect of such
payments, (ii) shall be enforceable as an alternative or additional cause
of action for the purpose of recovering in the Required Currency the
amount, if any, by which such actual receipt shall fall short of the full
amount of the Required Currency so expressed to be payable and (iii) shall
not be affected by judgment being obtained for any other sum due under this
Indenture. For purposes of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The City of New York or
a day on which banking institutions in The City of New York are authorized
or required by law or executive order to close.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this Article
shall be applicable to the Securities of any series which are redeemable
before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption. Notice of redemption to the
Holders of Registered Securities to be redeemed as a whole or in part at
the option of the Issuer shall be given in the manner provided in Section
11.4, at least 30 days and not more than 60 days prior to the date fixed
for redemption to such Holders of Securities. Notice of redemption to all
Holders of Unregistered Securities shall be published in an Authorized
Newspaper in the Borough of Manhattan, the City of New York and in an
Authorized Newspaper in London (and, if required by Section 3.7, in an
Authorized Newspaper in Luxembourg), in each case, once in each of three
successive calendar weeks, the first publication to be not less than 30 nor
more than 60 days prior to the date fixed for redemption. Any notice which
is mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the Holder receives the notice.
Failure to give notice by mail, or any defect in the notice to the Holder
of any Security of a series designated for redemption as a whole or in
part, shall not affect the validity of the proceedings for the redemption
of any other Security of such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the Redemption Date, the applicable Redemption Price, and, if the
Redemption Price was required to be calculated according, or pursuant to a
formula or by reference to the value or price of any one or more
commodities, currencies, indices, instruments or other securities, the
method for such calculation and the basis for such Redemption Price, the
place or places of payment, that payment will be made upon presentation and
surrender of such Securities and, in the case of Securities with Coupons
attached thereto, of all Coupons appertaining thereto maturing after the
date fixed for redemption, that such redemption is pursuant to a mandatory
or optional sinking fund, or both, if such be the case, that interest
accrued to the Redemption Date will be paid as specified in said notice and
that on and after said Redemption Date interest thereon or on the portions
thereof to be redeemed will cease to accrue. In case any Security of a
series is to be redeemed in part only the notice of redemption shall state
the portion of the principal amount thereof to be redeemed and shall state
that on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities of such series in principal amount
equal to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the Redemption Date specified in the notice of redemption
given as provided in this Section, the Issuer will deposit with the Trustee
or with one or more paying agents (or, if the Issuer is acting as its own
paying agent, set aside, segregate and hold in trust as provided in Section
3.4) an amount of money sufficient to redeem on the Redemption Date all the
Securities of such series to be redeemed at the appropriate Redemption
Price, together with accrued interest to the Redemption Date. The Issuer
will deliver to the Trustee at least 70 days prior to the date fixed for
redemption an Officers' Certificate stating the aggregate principal amount
of Securities to be redeemed. In case of a redemption at the election of
the Issuer prior to the expiration of any restriction on such redemption or
subject to compliance with conditions precedent, the Issuer shall deliver
to the Trustee, prior to the giving of any notice of redemption to Holders
pursuant to this Section, an Officers' Certificate stating that such
restriction or condition has been complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such series to be redeemed in whole or in part. Securities
may be redeemed in part in multiples equal to the minimum authorized
denomination for Securities of such series or any multiple thereof. The
Trustee shall promptly notify the Issuer in writing of the Securities of
such series selected for redemption and, in the case of any Securities of
such series selected for partial redemption, the principal amount thereof
to be redeemed. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
of any series shall relate, in the case of any Security redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Security which has been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If notice
of redemption has been given as above provided, the Securities or portions
of Securities specified in such notice shall become due and payable on the
Redemption Date and at the place stated in such notice at the applicable
Redemption Price, together with interest accrued to the Redemption Date,
and on and after said Redemption Date (unless the Issuer shall default in
the payment of such Securities at the Redemption Price, together with
interest accrued to said Redemption Date) interest on the Securities or
portions of Securities so called for redemption shall cease to accrue, and
the unmatured Coupons, if any, appertaining thereto shall be void, and such
Securities shall cease from and after the Redemption Date to be entitled to
any benefit or security under this Indenture, and the Holders thereof shall
have no right in respect of such Securities to be redeemed except the right
to receive the applicable Redemption Price thereof and unpaid interest to
the Redemption Date. On surrender of such Securities at a place of payment
specified in said notice, together with all Coupons, if any, appertaining
thereto maturing after the Redemption Date, such Securities or the
specified portions thereof shall be paid and redeemed by the Issuer at the
applicable Redemption Price, together with interest accrued thereon to the
Redemption Date; provided that any payment of interest becoming due on or
prior to the Redemption Date shall be payable in the case of Securities
with Coupons attached thereto, to the Holders of the Coupons for such
interest upon surrender thereof, and in the case of Registered Securities,
registered as such on the relevant Regular Record Date subject to the terms
and provisions of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the Redemption Date at the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in such Security.
If any Security with Coupons attached thereto is surrendered for
redemption and is not accompanied by all appurtenant Coupons maturing after
the date fixed for redemption, the surrender of such missing Coupon or
Coupons may be waived by the Issuer and the Trustee, if there be furnished
to each of them such security or indemnity as they may require to save each
of them harmless.
Upon surrender of any Security redeemed in part only, the Issuer shall
execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities for such series, of authorized denominations, in principal
amount equal to the unredeemed portion of the Security so presented.
SECTION 12.4 Mandatory and Optional Sinking Funds. The minimum amount
of any sinking fund payment provided for by the terms of the Securities of
any series is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of
the Securities of any series is herein referred to as an "optional sinking
fund payment". The date on which a sinking fund payment is to be made is
herein referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at
its option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of
such series (not previously so credited) theretofore purchased or otherwise
acquired (except as aforesaid) by the Issuer and delivered to the Trustee
for cancellation pursuant to Section 2.10, (b) receive credit for optional
sinking fund payments (not previously so credited) made pursuant to this
Section, or (c) receive credit for Securities of such series (not
previously so credited) redeemed by the Issuer through any optional
redemption provision contained in the terms of such series. Securities so
delivered or credited shall be received or credited by the Trustee at the
sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officers'
Certificate (which need not contain the statements required by Section
11.5) (a) specifying the portion of the mandatory sinking fund payment to
be satisfied by payment of cash and the portion to be satisfied by credit
of Securities of such series and the basis for such credit, (b) stating
that none of the Securities of such series to be so credited has
theretofore been so credited, (c) stating that no defaults in the payment
of interest or Events of Default with respect to such series have occurred
(which have not been waived or cured) and are continuing and (d) stating
whether or not the Issuer intends to exercise its right to make an optional
sinking fund payment with respect to such series and, if so, specifying the
amount of such optional sinking fund payment which the Issuer intends to
pay on or before the next succeeding sinking fund payment date. Any
Securities of such series to be credited and required to be delivered to
the Trustee in order for the Issuer to be entitled to credit therefor as
aforesaid which have not theretofore been delivered to the Trustee shall be
delivered for cancellation pursuant to Section 2.10 to the Trustee with
such Officers' Certificate (or reasonably promptly thereafter if acceptable
to the Trustee). Such Officers' Certificate shall be irrevocable and upon
its receipt by the Trustee the Issuer shall become unconditionally
obligated to make all the cash payments or payments therein referred to, if
any, on or before the next succeeding sinking fund payment date. Failure
of the Issuer, on or before any such 60th day, to deliver or cause to be
delivered such Officers' Certificate and Securities (subject to the
parenthetical clause in the second preceding sentence) specified in this
paragraph, if any, shall not constitute a default but shall constitute, on
and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option
to deliver or credit Securities of such series in respect thereof and (ii)
that the Issuer will make no optional sinking fund payment with respect to
such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $50,000 (or the equivalent thereof in any Foreign Currency or
ECU) or a lesser sum in Dollars (or the equivalent thereof in any Foreign
Currency or ECU) if the Issuer shall so request with respect to the
Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of
such series at the sinking fund redemption price together with accrued
interest to the date fixed for redemption. If such amount shall be $50,000
(or the equivalent thereof in any Foreign Currency or ECU) or less and the
Issuer makes no such request then it shall be carried over until a sum in
excess of $50,000 (or the equivalent thereof in any Foreign Currency or
ECU) is available. The Trustee shall select, in the manner provided in
Section 12.2 and subject to the limitations in Section 12.4, for redemption
on such sinking fund payment date a sufficient principal amount of
Securities of such series to absorb said cash, as nearly as may be
practicable, and shall (if requested in writing by the Issuer) inform the
Issuer of the serial numbers of the Securities of such series (or portions
thereof) so selected. The Trustee, in the name and at the expense of the
Issuer (or the Issuer, if it shall so request the Trustee in writing) shall
cause notice of redemption of the Securities of such series to be given in
substantially the manner provided in Section 12.2 (and with the effect
provided in Section 12.3) for the redemption of Securities of such series
in part at the option of the Issuer. The amount of any sinking fund
payments not so applied or allocated to the redemption of Securities of
such series shall be added to the next cash sinking fund payment for such
series and, together with such payment, shall be applied in accordance with
the provisions of this Section. Any and all sinking fund monies held on
the stated maturity date of the Securities of any particular series (or
earlier, if such maturity is accelerated), which are not held for the
payment or redemption of particular Securities of such series shall be
applied, together with other monies, if necessary, sufficient for the
purpose, to the payment of the principal of, and interest on, the
Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all
interest accrued to the date fixed for redemption on Securities to be
redeemed on the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund monies or give any notice of redemption of
Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of
any Event of Default except that, where the giving of notice of redemption
of any Securities shall theretofore have been made, the Trustee shall
redeem or cause to be redeemed such Securities, provided that it shall have
received from the Issuer a sum sufficient for such redemption. Except as
aforesaid, any monies in the sinking fund for such series at the time when
any such default or Event of Default shall occur, and any monies thereafter
paid into the sinking fund, shall, during the continuance of such default
or Event of Default, be deemed to have been collected under Article Five
and held for the payment of all such Securities. In case such Event of
Default shall have been waived as provided in Section 5.10 or the default
cured on or before the sixtieth day preceding the sinking fund payment date
in any year, such monies shall thereafter be applied on the next succeeding
sinking fund payment date in accordance with this Section to the redemption
of such Securities.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of November ___, 1996.
FREEPORT-McMoRan Copper & Gold Inc.
By:
---------------------------------
Name:
Title:
[CORPORATE SEAL]
Attest:
By:
-----------------------------
Name:
Title:
The Chase Manhattan Bank, as Trustee
By:
-----------------------------------
Name:
Title:
[CORPORATE SEAL OF TRUSTEE]
Attest:
By:
-----------------------------
Name:
Title:
STATE OF LOUISIANA
PARISH OF ORLEANS
On this _____ day of November, 1996 before me personally came
_________________, to me personally known, who, being by me duly sworn, did
depose and say that he resides at ______________; that he is a
______________________ of Freeport-McMoRan Copper & Gold Inc., one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
[NOTARIAL SEAL]
______________________________
Notary Public
STATE OF NEW YORK
COUNTY OF NEW YORK
On this _____ day of November, 1996, before me personally came
_______________, to me personally known, who, being by me duly sworn, did
depose and say that he resides at _________________; that he is a
_____________ of The Chase Manhattan Bank, one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
[NOTARIAL SEAL]
___________________________
Notary Public
EXECUTION COPY
AMENDMENT dated as of October 9, 1996 (this "Amendment"), to the Credit
Agreement dated as of June 30, 1995 (as heretofore amended, the
"Credit Agreement"), among P.T. FREEPORT INDONESIA COMPANY, a limited
liability company organized under the laws of Indonesia and also
domesticated in Delaware ("FI"), FREEPORT-McMoRan COPPER & GOLD INC.,
a Delaware corporation ("FCX"), the undersigned financial institutions
(collectively, the "Banks"), FIRST TRUST OF NEW YORK, NATIONAL
ASSOCIATION, a national banking association, as trustee under the FI
Trust Agreement (in such capacity, the "FI Trustee"), THE CHASE
MANHATTAN BANK (formerly Chemical Bank), a New York banking
corporation ("Chase"), as administrative agent for the Banks (in such
capacity, the "Administrative Agent"), as security agent for the Banks
(in such capacity, the "Security Agent") under the Bank Security
Documents (as defined below), and as security agent for the Banks and
RTZ-IIL (in such capacity, the "JAA Security Agent") under the JAA
Fiduciary Transfer and the JAA Fiduciary Power (as defined below), and
THE CHASE MANHATTAN BANK (as successor to The Chase Manhattan Bank
(National Association)), as documentary agent for the Banks (in such
capacity, the "Documentary Agent"; the Administrative Agent, the
Security Agent, the JAA Security Agent and the Documentary Agent
being, collectively, the "Agents"). Capitalized terms used herein and
not defined herein shall have the meanings given such terms in the
Credit Agreement.
Section 10.17 of the Credit Agreement contemplates that the
Banks, FCX and FI shall agree on mutually satisfactory documentation
to implement the RTZ Transaction, including the Participation
Agreement, the RTZ Loan Agreement, the FI Intercreditor Agreement and
the Final FI Security Documents. FI, FCX, the Banks and the Agents
wish to enter into this Amendment to evidence their approval of the
documents to be entered into in connection with the RTZ Transaction,
to provide for certain amendments to the Credit Agreement to take into
account such documents and to make certain other arrangements in
connection with the RTZ Transaction.
By its execution and delivery of this Amendment, each Bank
also wishes, in connection with the RTZ Transactions, to:
(a) authorize the Agents, on behalf of such Bank and the
other Banks, to enter into the Agreement to Amend and Restate
Trust Agreement dated as of the RTZ Closing Date among FI, FCX,
RTZ, PT-RTZ, RTZ Lender, the Trustee, the Depositary, the
Documentary Agent, the Security Agent, the JAA Security Agent and
the Administrative Agent (the "AART") and the FI Intercreditor
Agreement, Operator Replacement Agreement and Restated Trust
Agreement referred to in the AART and to enter into the RTZ Side
Letter and the Early Closing Documents;
(b) authorize Chase to act as Security Agent for the Banks
under the Bank Security Agreement in the form attached as Exhibit
A hereto, the Bank Surat Kuasa in the form attached as Exhibit B
hereto and the Bank Fiduciary Assignment of Accounts Receivable
in the form attached as Exhibit E hereto;
(c) authorize Chase to act as JAA Security Agent for the
Banks and RTZ-IIL under the JAA Fiduciary Power in the form
attached as Exhibit F hereto and the JAA Fiduciary Transfer in
the form attached as Exhibit G hereto;
(d) approve the replacement of the Trustee as security agent
under the Interim Fiduciary Transfer and the Interim Fiduciary
Power by Chase in its capacity as Security Agent, together with
the amendment and restatement of the Interim Fiduciary Transfer
in the form attached as Exhibit C hereto and the Interim
Fiduciary Power in the form attached as Exhibit D hereto, such
amendments and restatements to be the Final Fiduciary Transfer
and the Final Fiduciary Power, respectively, for all purposes of
the Loan Documents;
(e) agree to submit to the exclusive jurisdiction of the
United States District Court for the Southern District of
New York and of any New York State court sitting in Manhattan
solely for the purposes of suits, actions or proceedings to
enforce the terms of the FI Intercreditor Agreement and authorize
the Administrative Agent (acting as Representative of the Banks
under the FI Intercreditor Agreement) to provide such submission
to New York jurisdiction for such Bank pursuant to Section 16 of
the FI Intercreditor Agreement;
(f) approve the release upon the RTZ Closing Date of the
Banks' security interests (and authorize the FI Trustee to
release such security interests) in the PT-RTZ Joint Venture
Interests (as defined in the AART) pursuant to the AART, in order
to permit their assignment to PT-RTZ pursuant to the
Participation Agreement, the AART and the PT-RTZ COW Assignment;
(g) approve the release of the Banks' security interests in
the rights of FI under the Contract of Work in respect of
Contract Block B (as defined in the Contract of Work) and in any
Greenfield Projects and Sole Risk Projects (as such terms are
defined in the Participation Agreement) in Contract Block A (as
defined in the Contract of Work) and authorize the Agents to
effectuate such release of security interests, including
instructing the FI Trustee to such effect; and
(h) authorize the Administrative Agent and the Documentary
Agent, acting on behalf of such Bank and the other Banks, to
subordinate the Banks' liens on the FIEC Interests (as defined in
the Restated Trust Agreement) to the RTZ Lender's lien on the
FIEC Interests on the terms of the FI Intercreditor Agreement.
Accordingly, FI, FCX, the Trustee, the Banks and the
Agents agree as follows:
SECTION 1. Amendments to the Credit Agreement. Effective
as of the Effective Date, the Credit Agreement is hereby amended as
follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by
substituting the following modified definitions for the equivalent
definitions which presently appear in such Section:
(i) "Contract of Work" means the Contract of Work made
December 30, 1991, between the Ministry of Mines of the
Government of the Republic of Indonesia, acting for and on behalf
of the Government of the Republic of Indonesia, and FI, together
with any related Implementation Agreement or Memorandum of
Understanding with such Ministry of Mines acting on behalf of the
Government of the Republic of Indonesia, after giving effect to
the PT-RTZ COW Assignment, as such agreement may be implemented,
supplemented or amended as permitted hereby from time to time.
(ii) "FI Intercreditor Agreement" means the Intercreditor
Agreement entered into as of the RTZ Closing Date among the
Administrative Agent on behalf of the Banks under the Corporate
Group Facility, RTZ Lender, PT-RTZ and the FI Trustee
substantially in the form attached to the AART as Exhibit B-1
thereto and attached hereto as Exhibit I, as such agreement may
be amended and in effect from time to time.
(iii) "FI Security Documents" means the FI Trust Agreement,
the Operator Replacement Agreement, the Surat Kuasa, the
Fiduciary Assignment, the JAA Fiduciary Transfer, the JAA
Fiduciary Power, the Bank Security Agreement, the Fiduciary
Transfer, the Bank Fiduciary Assignment, the Fiduciary Power, the
Bank Surat Kuasa and all Uniform Commercial Code financing
statements and their Indonesian equivalents required to be filed
hereunder or under the FI Security Documents.
(iv) "FI Trustee" means First Trust of New York, National
Association, or any successor trustee, as trustee for FI, PT-RTZ
and the Secured Creditors (including the Banks) pursuant to the
FI Trust Agreement and, in such capacity, also as party to the
Operator Replacement Agreement, the Surat Kuasa and the Fiduciary
Assignment.
(v) "Final FI Trust Agreement" means the Restated Trust
Agreement dated as of the RTZ Closing Date, among FI, PT-RTZ, the
Depositary, the FI Trustee, the Administrative Agent and RTZ
Lender, as amended and restated by the AART substantially in the
form attached as Exhibit A thereto and attached hereto as
Exhibit G-1, and as further amended and in effect from time to
time thereafter.
(vi) "Final Fiduciary Assignment" means the Fiduciary
Assignment of Accounts Receivable (Penyerahan Hak Atas Tagihan)
dated the RTZ Closing Date, granted by FI and PT-RTZ to the FI
Trustee substantially in the form attached to the AART as Exhibit
E thereto and attached hereto as Exhibit G-5, as amended and in
effect from time to time.
(vii) "Final Fiduciary Power" means the Second Amended and
Restated Power of Attorney to Establish Fiduciary Transfer (Kuasa
Untuk Memasang Penyerahan Hak Milik Fidusia) dated the RTZ
Closing Date, granted by FI to the Security Agent, substantially
in the form attached hereto as Exhibit G-4, and any additional or
separate Fiduciary Power granted by FI to the Banks, acting
through the Security Agent, with respect to specific or
additional assets, in each case as further amended and in effect
from time to time.
(viii) "Final Fiduciary Transfer" means the Second Amended and
Restated Fiduciary Transfer of Assets (Penyerahan Hak Secara
Fidusia) dated the RTZ Closing Date, granted by FI to the Banks,
acting through the Security Agent, substantially in the form
attached hereto as Exhibit G-3, and any additional or separate
Fiduciary Transfer granted by FI to the Banks, acting through the
Security Agent, with respect to specific or additional assets, in
each case as further amended and in effect from time to time.
(ix) "Final Surat Kuasa" means the Surat Kuasa (Power of
Attorney) dated the RTZ Closing Date, granted by FI and PT-RTZ to
the FI Trustee substantially in the form attached as Annex I to
the Operator Replacement Agreement and attached as Exhibit G-2
hereto, as amended and in effect from time to time.
(x) "Loan Documents" means the Amendment Agreement, the
Corporate Group Facility, the Corporate Group Notes, the FI
Intercreditor Agreement, the Side Letter, the Early Closing
Documents, the AART, the FI Security Documents and all other
agreements, certificates and instruments now or hereafter entered
into in connection with any of the foregoing, in each case as
amended and modified from time to time.
(xi) "Major Concentrate Sales Agreement" means any
Concentrate Sales Agreement providing for sales during the term
thereof of at least 75,000 metric tons of concentrate.
(xii) "Participation Agreement" means the Participation
Agreement dated the RTZ Closing Date between FI and PT-RTZ
substantially in the form attached to the AART as Exhibit J
thereto, as amended from time to time as permitted by
Section 5.3.
(xiii) "RTZ Collateral" means the FIEC Interests pledged to RTZ
Lender as contemplated by the RTZ Loan Agreement, the Final FI
Trust Agreement and the FI Intercreditor Agreement.
(xiv) "RTZ Interests" means the interests of PT-RTZ in the
Contract of Work and the Joint Account Assets (as such term is
defined in the Participation Agreement) pursuant to the
Participation Agreement and in the Concentrate Sales Agreements
pursuant to the Final FI Trust Agreement, in each case as
permitted by Section 5.3.
(xv) "RTZ Lender" means RTZ Indonesian Finance Limited, a
company organized under the laws of England and a wholly owned
subsidiary of RTZ.
(xvi) "RTZ Loan Agreement" means the Loan Agreement dated the
RTZ Closing Date between FI and RTZ Lender substantially in the
form attached to the AART as Exhibit K thereto, as amended from
time to time as permitted by Section 5.3.
(xvii) "RTZ Release" means the Indonesian release document
dated the RTZ Closing Date pursuant to which the Trustee releases
the PT-RTZ Joint Venture Interests (as such term is defined in
the Participation Agreement) from the Lien of the FI Security
Documents as in effect prior to the RTZ Closing Date.
(xviii) "RTZ Transactions" means the transactions contemplated
by the AART, the Participation Agreement, the Final FI Trust
Agreement, the Operator Replacement Agreement, the RTZ Loan
Agreement, the Side Letter, the Early Closing Documents, the RTZ
Release and the FI Intercreditor Agreement, in each case to the
extent permitted by Section 5.3.
(b) Section 1.1 of the Credit Agreement is hereby further amended
by adding the following defined terms in the appropriate alphabetical
order:
(i) "AART" means the Agreement to Amend and Restate Trust
Agreement dated as of the RTZ Closing Date among FI, FCX, RTZ,
PT-RTZ, RTZ Lender, the Trustee, the Administrative Agent, the
Security Agent, the JAA Security Agent, the Documentary Agent and
the Depositary.
(ii) "Bank Fiduciary Assignment" means the Second Amended and
Restated Fiduciary Assignment of Accounts Receivable (the
Penyerahan Hak Atas Tagihan) dated the RTZ Closing Date, granted
by FI to the Banks, acting through the Security Agent,
substantially in the form attached hereto as Exhibit G-8, and any
additional or separate Fiduciary Assignment granted by FI to the
Banks, acting through the Security Agent, with respect to
specific or additional accounts receivable, in each case as
further amended and in effect from time to time.
(iii) "Bank Security Agreement" means the Bank Security
Agreement dated as of the RTZ Closing Date between FI and the
Security Agent substantially in the form attached hereto as
Exhibit G-6, as amended and in effect from time to time.
(iv) "Bank Security Documents" means the Bank Security
Agreement, the Bank Surat Kuasa, the Fiduciary Transfer, the
Fiduciary Power and the Bank Fiduciary Assignment.
(v) "Bank Surat Kuasa" means the Surat Kuasa (Power of
Attorney) dated the RTZ Closing Date, granted by FI to the
Security Agent substantially in the form attached hereto as
Exhibit G-7, and any additional or separate Surat Kuasa granted
by FI to the Banks, acting through the Security Agent, with
respect to specific or additional assets, in each case as amended
and in effect from time to time.
(vi) "Early Closing Agreement" means the Early Closing
Agreement dated as of the RTZ Closing Date among FI, FCX, RTZ,
PT-RTZ (as a company in formation under the laws of Indonesia),
RTZ Jersey Investments One Limited, RTZ Jersey Nominees Limited,
the Trustee, the Administrative Agent, the Security Agent, the
JAA Security Agent and the Depositary, substantially in the form
attached to the AART as Exhibit B-2 and attached hereto as
Exhibit E.
(vii) "Early Closing Documents" means the (x) the Early
Closing Agreement, (y) the related Ratifying Agreement between
such parties in the form attached to such Early Closing Agreement
as Schedule 1 thereto and (z) any additional or further agreement
entered into on behalf of the Banks in connection with such
agreement by the Agents in such form as approved by the
Administrative Agent.
(viii) "FIEC Interests" means FI's interest in Incremental
Expansion Cashflow (as such term is defined in the Participation
Agreement) and FI's related rights pursuant to the Final FI Trust
Agreement under the Concentrate Sales Agreements.
(ix) "JAA Fiduciary Power" means the Power of Attorney to
Establish Fiduciary Transfer (Kuasa Untuk Memasang Penyerahan Hak
Milik Fidusia) for Joint Account Assets dated the RTZ Closing
Date, granted by FI and PT-RTZ to the Security Agent,
substantially in the form attached hereto as Exhibit G-9, and any
additional or separate Fiduciary Power granted by FI and PT-RTZ
to the Security Agent with respect to the Joint Account Assets,
in each case as further amended and in effect from time to time.
(x) "JAA Fiduciary Transfer" means the Fiduciary Transfer of
Assets (Penyerahan Hak Secara Fidusia) for Joint Account Assets
dated the RTZ Closing Date, granted by FI and PT-RTZ to the
Security Agent, substantially in the form attached hereto as
Exhibit G-10, and any additional or separate Fiduciary Transfer
granted by FI and PT-RTZ to the Security Agent with respect to
the Joint Account Assets, in each case as further amended and in
effect from time to time.
(xi) "JAA Security Agent" means Chase, not in its individual
capacity, but as JAA Security Agent for the Banks and RTZ under
the JAA Fiduciary Power and the JAA Fiduciary Transfer.
(xii) "Operator Replacement Agreement" means the Operator
Replacement Agreement dated as of the RTZ Closing Date among FI,
PT-RTZ, the Trustee and the Administrative Agent (in its capacity
as Operator Selection Representative) substantially in the form
attached to the AART as Exhibit D thereto, as further amended and
in effect from time to time.
(xiii) "Operator Selection Representative" means the
Administrative Agent acting as the Operator Selection
Representative under the Operator Replacement Agreement, pursuant
to its designation in Section 10.17 as Operator Selection
Representative, as confirmed in Annexes 1 and 2 to the Final FI
Trust Agreement.
(xiv) "PT-RTZ COW Assignment" means the Assignment Agreement
dated as of RTZ Closing Date between FI and PT-RTZ substantially
in the form of Exhibit C to the AART pursuant to which FI assigns
a partial undivided interest in the Contract of Work to PT-RTZ.
(xv) "Secured Creditors" means those secured lenders to FI
(including the Banks) referred to in the Annexes to the Final FI
Trust Agreement.
(xvi) "Security Agent" means Chase, not in its individual
capacity, but as Security Agent for the Banks under the Bank
Security Agreement, the Bank Surat Kuasa, the Bank Fiduciary
Assignment, the Final Fiduciary Power and the Final Fiduciary
Transfer.
(xvii) "Side Letter" means the agreement dated as of the RTZ
Closing Date between FI, RTZ, PT-RTZ, RTZ Lender, RTZ-IIL, the
Trustee, the JAA security Agent and certain secured creditors of
FI, substantially in the form attached to the AART as Exhibit B-3
and as attached hereto as Exhibit H, as further amended and in
effect from time to time.
(c) Section 2.1 of the Credit Agreement is hereby amended
by the substitution of the words "Base Production (as such term is
defined in the Final FI Trust Agreement) and, after the RTZ Lender
loan is repaid in full and so long as the Banks have a first priority
security interest in the FIEC Interests under the Final FI Trust
Agreement, the FIEC Interests" for the words "assets of FI" at the end
of the fourth sentence thereof.
(d) Section 5.l(h) of the Credit Agreement is hereby
amended by adding the words ", the Security Agent and the JAA Security
Agent, as applicable," after the words "FI Trustee" in each of the two
places in which "FI Trustee" is used in clause (i) thereof and by
amending clause (x) thereof to read as follows: "(x) the validity and
effectiveness of the powers of attorney granted by the Surat Kuasa,
the Bank Surat Kuasa, the Fiduciary Power and the JAA Fiduciary Power
and the fiduciary transfers effectuated by the Fiduciary Transfer, the
Fiduciary Assignment, the Bank Fiduciary Assignment and the JAA
Fiduciary Transfer".
(e) Section 5.2(i) of the Credit Agreement is hereby
amended by the addition of the words "after giving effect to the RTZ
Transactions" after the words "Closing Date" appearing therein.
(f) Section 5.2(l) of the Credit Agreement is hereby
amended by the addition of the words "and the guarantee provided in
Section 10(1) of the Implementation Agreement" after the words
"FCX/FMPO Guarantee" appearing in the proviso to such Section.
(g) Section 5.3 of the Credit Agreement is hereby amended
by:
(i) changing the clause subheadings "(i)" and "(ii)" in the
first sentence thereof to "(I)" and "(II)", respectively;
(ii) adding the words "(including the Financial and
Accounting Procedures thereunder)" following the first reference
to "Participation Agreement" in clause (y) of such resubheaded
clause (I) in such first sentence;
(iii) adding the words "(or could reasonably be expected to)"
after the words "which would" appearing in such resubheaded
clause (I) in such first sentence;
(iv) substituting the words "Section 7.5.1.1, 7.5.1.3 or 10.5
or Annex A" for the words "Section 10.5" in clause (i) in the
second sentence thereof;
(v) adding the words "or Section 7 of the Early Closing
Agreement" after the words "Implementation Agreement" in clause
(iv) in the second sentence thereof;
(vi) substituting ", (vi) agree to any reduction in annual
production from Contract Block A (as defined in the Contract of
Work), other than annual production from Greenfield Projects and
Sole Risk Ventures (as such terms are defined in the
Participation Agreement), which might foreseeably result in FI
receiving cashflow after payment of all Operating Costs
attributable to it which would not be sufficient to pay in full
all its obligations, including under the Privatization Agreements
(as such term is defined in the Participation Agreement) and the
Loan Documents, as and when they are likely to come due, (vii)
amend or agree to any amendment of any agreement to which the
Administrative Agent has not also agreed if, as a result of such
amendment, a term defined in the FI Intercreditor Agreement or
the Side Letter by reference to a term defined in such amended
agreement would be changed or (viii)" for the words "or (vi)" in
the second sentence thereof; and
(vii) substituting the words "Final FI Trust Agreement" for
the words "FI Trust Agreement" in the third sentence thereof.
(h) Section 6.1(c)(i) of the Credit Agreement is hereby
amended by the substitution of the words "G-4, G-5, G-6, G-7, G-8, G-9
and G-10" for the words "G-4 and G-5" appearing therein.
(i) Section 6.1(c)(v) of the Credit Agreement is hereby
amended by the substitution of the words "Jones, Walker, Waecter,
Poitevent, Carrere & Denegre, LLP" for the words "Liskow & Lewis"
appearing therein.
(j) Section 6.1(c)(vii)(C)(II) and Section
6.1(c)(vii)(C)(III) are each hereby amended by deleting the word
"specimen" appearing therein.
(k) Section 7.1 of the Credit Agreement is hereby amended
(i) by the substitution of the words ", 5.3 or 10.17" for the words
"or 5.3" in each of the two places appearing in paragraph (e) thereof
and (ii) by the addition in clause (iii) of such Section 7.1 of the
words ", including the giving of an Allocation Notice, Blockage Notice
or Enforcement Notice under the Final FI Trust Agreement and/or the
exercise by the Administrative Agent of its right pursuant to Section
10.17 to remove FI as Operator under the Contract of Work pursuant to
the Operator Replacement Agreement" after the words "FI Security
Documents" appearing therein.
(l) Section 8.1(a) of the Credit Agreement is hereby
amended to read as follows:
"(a) For convenience of administration and to expedite the
transactions contemplated by this Agreement, (i) Chase is hereby
appointed as Administrative Agent under this Agreement and the
other Loan Documents (including in its capacity as Operator
Selection Representative under the Operator Replacement
Agreement), (ii) Chase is hereby appointed as Security Agent for
the Banks under this Agreement and the Bank Security Documents,
(iii) Chase is hereby appointed as JAA Security Agent for the
Banks under this Agreement, the JAA Fiduciary Power and the JAA
Fiduciary Transfer, (iv) Chase is hereby appointed as the
Documentary Agent for the Banks under this Agreement and the
other Loan Documents and (vi) First Trust of New York, National
Association, is hereby appointed to act as FI Trustee for the
Banks under the FI Trust Agreement, the Operator Replacement
Agreement, the Surat Kuasa, the RTZ Release and the Fiduciary
Assignment. Each Bank (x) confirms and agrees to be bound by the
terms of the FI Trust Agreement, the FI Intercreditor Agreement
and the other Loan Documents and (y) agrees that the FI Trustee
in accepting its appointment and in acting under the FI Trust
Agreement, the Operator Replacement Agreement, the Surat Kuasa,
the RTZ Release and the Fiduciary Assignment shall be entitled to
all the rights, immunities, privileges, protections,
exculpations, indemnifications, liens and other benefits
applicable to its acting as trustee under the FI Trust Agreement.
None of the Agents shall have any duties or responsibilities
except those expressly set forth herein or in the other Loan
Documents. Each Bank, and each subsequent holder of any
Promissory Note by its acceptance thereof, hereby irrevocably
appoints and expressly authorizes the Agents, without hereby
limiting any implied authority, to take such action as the Agents
may deem appropriate on its behalf and to exercise such powers
under the Loan Documents as are specifically delegated to such
Person by the terms hereof and thereof, together with such powers
as are reasonably incidental thereto. The Administrative Agent
is hereby expressly authorized by the Banks, without hereby
limiting any implied authority, (A) to receive on behalf of the
Banks all payments of principal of and interest on the Loans and
all other amounts due to the Banks hereunder, and promptly to
distribute to each Bank its proper share of each payment so
received; (B) to give notice on behalf of the Banks to FI and FCX
of any Event of Default specified in this Agreement of which the
Administrative Agent has actual knowledge acquired in connection
with its agency hereunder or as directed by the Required Banks;
and (C) to distribute to each Bank copies of all notices,
financial statements and other materials delivered by FI or FCX
pursuant to this Agreement as received by the Administrative
Agent. Without limiting the generality of the foregoing, the
Security Agent and the JAA Security Agent are hereby expressly
authorized to execute any and all documents (including releases)
with respect to the collateral under the Bank Security Documents,
the JAA Fiduciary Power and the JAA Fiduciary Transfer (as
applicable) and the rights of the secured parties with respect
thereto, as contemplated by and in accordance with the provisions
of this Agreement and the Bank Security Documents. Each of the
Administrative Agent, the Security Agent and the JAA Security
Agent may exercise any of its duties hereunder by or through
their respective agents, officers or employees. In addition,
each Bank hereby irrevocably authorizes and directs (I) the
Administrative Agent to enter, on behalf of each of them, into
the AART, the Final FI Trust Agreement, the FI Intercreditor
Agreement, the Operator Replacement Agreement, the Early Closing
Documents and the Side Letter as contemplated pursuant to this
Agreement, (II) the Security Agent to enter, on behalf of each of
them, into the Bank Security Agreement, the Bank Surat Kuasa, the
Fiduciary Transfer, the Fiduciary Power, the Bank Fiduciary
Assignment, the FI Intercreditor Agreement, the Operator
Replacement Agreement, the Early Closing Documents and the Side
Letter, (III) the JAA Security Agent to enter, into on behalf of
each of them, into the JAA Fiduciary Power, into the JAA
Fiduciary Transfer, the Early Closing Documents and the Side
Letter, (IV) the FI Trustee to enter, on behalf of each of them,
into the Operator Replacement Agreement, the Surat Kuasa, the
Fiduciary Assignment, the Early Closing Documents, the RTZ
Release and the Side Letter and (V) the Documentary Agent to
enter, on behalf of each of them, into the AART, the Early
Closing Documents and the Side Letter, and in each case agrees to
be bound by the terms thereof."
(m) Section 8.1(c) of the Credit Agreement is hereby
amended by substituting the words "a party to the Operator Replacement
Agreement, the Surat Kuasa and the Fiduciary Assignment to the extent
representing the interests of the Banks" for the words "security agent
under the FI Security Documents" appearing in the parenthetical phrase
in the first sentence thereof.
(n) Sections 8.1(e), 8.1(f) and 8.1(g) of the Credit
Agreement are hereby amended by adding the words ", Security Agent,
JAA Security Agent" after the words "Administrative Agent" in each
place where such phrase appears in such Sections.
(o) Section 8.1(h) of the Credit Agreement is hereby
amended to read as follows:
"(h) Without the prior written consent of the Required
Banks but subject to Section 10.7(b), the Administrative Agent,
the Security Agent and the JAA Security Agent will not, except as
contemplated by Section 8.1(j), consent to any modification,
supplement or waiver of the FI Intercreditor Agreement, the Bank
Security Documents, the FI Trust Agreement, the Operator
Replacement Agreement, the JAA Fiduciary Power or the JAA
Fiduciary Transfer and the FI Trustee will not consent to any
modification, supplement or waiver of the FI Trust Agreement, the
Operator Replacement Agreement, the Surat Kuasa, the RTZ Release
or the Fiduciary Assignment."
(p) Section 8.1(j) of the Credit Agreement is hereby
amended by (x) substituting the following for the opening phrase
appearing prior to the existing clause (i) thereof:
"Notwithstanding any other provision of this Section 8.1, the
Administrative Agent will, at the request of FI, instruct the FI
Trustee and/or the Security Agent, as applicable, to release (or
to subordinate such interest) from the FI Trust Agreement and/or
the Bank Security Agreement and/or the other FI Security
Documents, as applicable (and enter into an amendment to the FI
Trust Agreement and/or the Bank Security Agreement and/or the
other FI Security Documents and execute such other instruments as
may be necessary in connection therewith), any interest of the FI
Trustee and/or the Security Agent, as applicable, in"
and (y) the deletion of clauses (i) and (ii) thereof and the
renumbering of clauses (iii), (iv) and (v) as (i), (ii)and (iii),
respectively, and by changing the reference to "clauses (iii) and
(iv)" in the last sentence thereof to a reference to "clauses (i) and
(ii)".
(q) Section 10.17 of the Credit Agreement is hereby amended
to read in its entirety as follows:
"SECTION 10.17 RTZ Transactions. The Agents and the Banks
acknowledge that FI and FCX have agreed pursuant to the
Implementation Agreement to enter into the RTZ Transactions. The
Banks, FI and FCX have, pursuant to the Amendment dated as of
October 9, 1996, to this Agreement, agreed upon and approved the
documentation to be entered into by FI in connection with the
foregoing as required by this Agreement as in effect prior to the
RTZ Closing Date. FI hereby (i) appoints the Administrative
Agent to be the Operator Selection Representative for all
purposes of the Final FI Trust Agreement, the Operator
Replacement Agreement and the Surat Kuasa and (ii) irrevocably
and unconditionally agrees that upon the occurrence of an Event
of Default, the Administrative Agent may, in addition to any
other remedy available hereunder or under any other Loan
Document, remove FI as Operator under the Contract of Work and
appoint a replacement Operator, which shall be PT-RTZ or an
Affiliate of PT-RTZ designated by PT-RTZ if PT-RTZ timely elects
to exercise its designation rights provided in Section 2(a) of
the Operator Replacement Agreement and meets the other conditions
to such designation right set forth in such Section 2(a). FI
also irrevocably and unconditionally agrees that the
Administrative Agent, acting as the Operator Selection
Representative under the Final FI Trust Agreement, the Operator
Replacement Agreement and the Surat Kuasa, shall also have the
right to designate a successor Operator under the circumstances
provided in Section 2(b) of the Operator Replacement Agreement.
FI further agrees that it will not appoint any other Operator
Selection Representative other than the Administrative Agent (or,
except as provided to PT-RTZ in the Participation Agreement,
grant any other Person the right to remove FI (or any successor
operator for the Project) as Operator under any circumstances)
and that it will not approve or enter into any management
agreement with a successor Operator appointed under the Operator
Replacement Agreement unless and until the Administrative Agent
has approved the terms of such management agreement. FI also
agrees that the Administrative Agent shall be entitled to
exercise FI's rights under the Participation Agreement (including
the financial and accounting procedures) referred to in Section
6(c) of the FI Intercreditor Agreement to the exclusion of FI
after the occurrence of an Event of Default, in addition to the
other rights and remedies available to the Agents and the Banks
under the Loan Documents and applicable law. Each of the Agents,
the Banks, FI and FCX acknowledge that the Final FI Trust
Agreement will not terminate prior to termination of the
Participation Agreement."
(r) The Final FI Trust Agreement in the form attached as
Exhibit A to the AART is hereby added to the Credit Agreement as
Exhibit G-1 thereto, the FI Intercreditor Agreement in the form
attached as Exhibit B-1 to the AART is hereby added to the Credit
Agreement as Exhibit I thereto, the Surat Kuasa in the form attached
as Exhibit I to the Operator Replacement Agreement is hereby added to
the Credit Agreement as Exhibit G-2 thereto, the Fiduciary Assignment
in the form attached as Exhibit E to the AART is hereby added to the
Credit Agreement as Exhibit G-3 thereto, the Early Closing Agreement
(including Schedule 1 thereto) in the form attached as Exhibit B-2 to
the AART are hereby added to the Credit Agreement as Exhibit E
thereto, the Side Agreement in the form attached as Exhibit B-3 to the
AART is hereby added to the Credit Agreement as Exhibit H thereto, and
Exhibits A, B, C, D and E to this Amendment are hereby added to the
Credit Agreement as Exhibits G-6, G-7, G-8, G-9 and G-10 thereto,
respectively.
SECTION 2. Authorizations to the Agents; Agreement to
Submit to Jurisdiction. (a) Each Bank hereby (i) authorizes the
Administrative Agent and Documentary Agent, acting on behalf of such
Bank and the other Banks, to enter into and perform the FI
Intercreditor Agreement, the Final FI Trust Agreement, the Operator
Replacement Agreement, the Side Letter, the Early Closing Documents
and the AART (including the subordination of the Banks' lien on the
FIEC Interests to RTZ Lender's lien on the FIEC Interests on the terms
of the FI Intercreditor Agreement), (ii) authorizes the Trustee to
release all the security interests of the Banks in the PT-RTZ Joint
Venture Interests upon the Closing pursuant to the AART and the RTZ
Release, in order to permit their assignment to PT-RTZ pursuant to the
Participation Agreement, the AART and the PT-RTZ COW Assignment,
(iii) appoints Chase as the Security Agent for such Bank and the other
Banks and authorizes the Security Agent to enter into and perform the
Bank Security Agreement, the Bank Surat Kuasa, the Fiduciary Transfer,
the Fiduciary Power and the Bank Fiduciary Assignment for the benefit
of such Bank and the other Banks, (iv) appoints Chase as the JAA
Security Agent for such Bank and the other Banks and authorizes the
JAA Security Agent to enter into and perform the JAA Fiduciary
Transfer, the JAA Fiduciary Power and the Side Letter for the benefit
of such Bank and the other Banks, (v) consents to RTZ Lender and the
Trustee (acting on behalf of RTZ Lender) taking Remedial Actions
against the RTZ Lender Collateral (as such terms are defined in the FI
Intercreditor Agreement) as provided in the RTZ Loan Agreement and the
Final FI Trust Agreement, and (vi) consents to FI entering into and
performing the transactions contemplated by the Transaction Documents
(as such term is defined in the AART) to which it is a party,
including the entry into and performance of the Participation
Agreement, the incurrence of the RTZ Loan and FI's granting the RTZ
Lender Lien to RTZ Lender on the terms of the Final FI Trust
Agreement, in accordance with Sections 5.3 and 10.17.
(b) Each Bank also hereby agrees to submit to the exclusive
jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in
Manhattan solely for the purposes of suits, actions or proceedings to
enforce the terms of the FI Intercreditor Agreement and authorizes the
Administrative Agent (acting as Representative of the Banks under the
FI Intercreditor Agreement) to provide such submission to New York
jurisdiction on behalf of such Bank pursuant to Section 16 of the FI
Intercreditor Agreement.
SECTION 3. Conditions to Effectiveness. (a) This
Amendment shall become effective on the date that each of the
following conditions shall have been satisfied (such date of
effectiveness being the "Effective Date"):
(a) receipt by Cravath, Swaine & Moore, special counsel for
the Banks, of executed counterparts of this Amendment which, when
taken together, bear the signatures of FI, FCX, the Trustee, the
Agents and each Bank;
(b) the representations and warranties on the part of FI
and FCX contained in Article IV of the Credit Agreement shall be
true and correct in all material respects at and as of the
Effective Date as though made on and as of such date;
(c) FI and FCX shall be in compliance with all the terms
and provisions set forth in this Amendment and the Credit
Agreement to be observed or performed on their part, and as of
the Effective Date, no Event of Default nor any event which upon
notice or lapse of time or both would constitute such an Event of
Default shall have occurred and be continuing;
(d) all legal matters incident to this Amendment shall be
satisfactory to Cravath, Swaine & Moore, special counsel for the
Banks; and
(e) the conditions to closing set forth in Section 6 of the
AART and in Section 6.1(c) of the FCX Credit Agreement shall have
duly occurred or been waived by the Required Banks;
provided, however, that FI shall not be entitled to borrow under the
Credit Agreement until FI shall provide the Administrative Agent with
a certified copy of the shareholders resolution referred to in Section
6(b) hereof, together with an opinion of counsel reasonably
satisfactory to the Administrative Agent as to the validity and
effectiveness of such resolution.
SECTION 4. Counterparts. This Amendment may be executed in
multiple counterparts, each of which shall constitute an original, but
all of which when taken together shall constitute but one instrument.
SECTION 5. Limited Effect of Amendment. Section 1 hereof
constitutes an amendment of the Credit Agreement effective as of the
Effective Date. Except as, and until, expressly amended by such
Section 1 as of the Effective Date, the Credit Agreement shall
continue in full force and effect in accordance with the provisions
thereof as in effect prior to the Effective Date. Except as expressly
set forth herein, this Amendment shall not by implication or otherwise
limit, impair, constitute a waiver of, or otherwise affect the rights
and remedies of the Banks and the Agents under the Credit Agreement,
nor alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the
Credit Agreement, all of which are ratified and affirmed in all
respects and shall continue in full force and effect. This Amendment
shall apply and be effective only with respect to the provisions of
the Credit Agreement specifically referred to in Section 1 hereof.
SECTION 6. Representations and Covenants. (a) FCX and FI
jointly represent and warrant to the Agents and the Banks that (i) at
a meeting to be held on October 11, 1996, the FI Board of
Commissioners will duly call an Extraordinary General Meeting of
Shareholders of FI to be held on October 21, 1996, for the purpose,
inter alia, of approving and ratifying the encumbrance of FI's assets
under the FI Security Documents executed at the Closing as security
for the Company's indebtedness, including indebtedness incurred under
the Corporate Group Facility; and (ii) FCX is the owner of 184,890 FI
shares, constituting 81.27% of the issued and outstanding shares
issued by FI, and which are sufficient to approve and ratify such
encumbrance without the vote of any other shareholder.
(b) FCX covenants and agrees with the Agents and the Banks
that an Extraordinary General Meeting of Shareholders of FI will be
held not later than November 11, 1996, at which FCX shall vote the
184,890 FI shares owned by it in favor of the resolution approving and
ratifying the encumbrance of FI's assets under the FI Security
Documents executed at the Closing as security for the Company's
indebtedness, including indebtedness incurred under the Corporate
Group Facility.
SECTION 7. APPLICABLE LAW. THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
SECTION 8. Expenses. FI and FCX jointly and severally
shall pay all out-of-pocket expenses incurred by the Agents in
connection with the preparation of this Amendment, including, but not
limited to, the reasonable fees and disbursements of Cravath, Swaine &
Moore, special counsel for the Agents, and Mochtar, Karuwin & Komar,
special Indonesian counsel to the Agents.
SECTION 9. Headings. The headings of this Amendment are
for reference only and shall not limit or otherwise affect the meaning
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers or agents
as of the date first above written.
P.T. FREEPORT INDONESIA COMPANY,
by /s/ R. Foster Duncan
-----------------------------------
Name: R. Foster Duncan
Title: Treasurer
FREEPORT-McMoRan COPPER & GOLD INC.,
by /s/ R. Foster Duncan
-----------------------------------
Name: R. Foster Duncan
Title: Treasurer
FIRST TRUST OF NEW YORK, NATIONAL
ASSOCIATION, as FI Trustee,
by /s/ Ward A. Spooner
-----------------------------------
Name: Ward A. Spooner
Title: Treasurer
THE CHASE MANHATTAN BANK, individually and as
Administrative Agent, Security Agent, JAA
Security Agent and Documentary Agent,
by /s/ James H. Ramage
-----------------------------------
Name: James H. Ramage
Title: Vice President
ABN AMRO BANK N.V., HOUSTON AGENCY,
by ABN AMRO NORTH AMERICA, INC., as
Agent for ABN AMRO BANK N.V.,
by /s/ H. Gene Sniels
-----------------------------------
Name: H. Gene Sniels
Title: V.P. and Director
by /s/ Mike Oakes
-----------------------------------
Name: Mike Oakes
Title: Vice President
ARAB BANKING CORPORATION (B.S.C.),
by /s/ Stephen A. Plauche
-----------------------------------
Name: Stephen A. Plauche
Title: Vice President
AUSTRALIA AND NEW ZEALAND BANKING GROUP
LIMITED, CAYMAN ISLANDS BRANCH,
by /s/ Paul Clifford
-----------------------------------
Name: Paul Clifford
Title: Vice President
BANK AUSTRIA AKTIENGESELLSCHAFT,
by /s/ J. Anthony Seay
-----------------------------------
Name: J. Anthony Seay
Title: Vice President
by /s/ Mark Nolan
-----------------------------------
Name: Mark Nolan
Title: Assistant Vice President
BANK OF AMERICA ILLINOIS,
by /s/ James E. Flough
-----------------------------------
Name: James E. Flough
Title: Managing Director
BANK OF MONTREAL,
by /s/ Michael P. Sassos
-----------------------------------
Name: Michael P. Sassos
Title: Director
THE BANK OF NOVA SCOTIA,
by /s/ F.C.H. Ashby
-----------------------------------
Name: F.C.H. Ashby
Title: Senior Manager Loan Operations
THE BANK OF TOKYO-MITSUBISHI, LTD. HOUSTON AGENCY,
by /s/ John W. McGhee
-----------------------------------
Name: John W. McGhee
Title: Vice President and Manager
BANQUE NATIONALE DE PARIS,
by /s/ John L. Stacy
-----------------------------------
Name: John L. Stacy
Title: Vice President
BANQUE PARIBAS,
by /s/ Brian Malone
-----------------------------------
Name: Brian Malone
Title: Vice President
by /s/ Marian Livingston
-----------------------------------
Name: Marian Livingston
Title: Vice President
BARCLAYS BANK PLC,
by /s/ Carol A. Cowan
-----------------------------------
Name: Carol A. Cowan
Title: Director
CHRISTIANIA BANK OG KREDITKASSE,
by /s/ Peter M. Dodge
-----------------------------------
Name: Peter M. Dodge
Title: First Vice President
by /s/ Hans Chr. Kjelsrud
-----------------------------------
Name: Hans Chr. Kjelsrud
Title: Vice President
DAI-ICHI KANGYO BANK, LTD.,
by /s/ Masayoshi Komaki
-----------------------------------
Name: Masayosji Komaki
Title: Assistant Vice President
DEUTSCHE BANK, AG, NEW YORK AND/OR CAYMAN
ISLANDS BRANCHES,
by
-----------------------------------
Name:
Title:
by
-----------------------------------
Name:
Title:
DEUTSCHE BANK, AG, SINGAPORE BRANCH,
by
-----------------------------------
Name:
Title:
by
-----------------------------------
Name:
Title:
DRESDNER BANK AG, NEW YORK BRANCH AND GRAND
CAYMAN BRANCH,
by /s/ P. Douglas Sherrod
-----------------------------------
Name: P. Douglas Sherrod
Title: Vice President
by /s/ Raymond F. Keenan
-----------------------------------
Name: Raymond F. Keenan
Title: Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
by /s/ George R. Schanz
-----------------------------------
Name: /s/ George R. Schanz
Title: Vice President
FIRST NATIONAL BANK OF COMMERCE,
by /s/ Joshua C. Cummings
-----------------------------------
Name: Joshua C. Cummings
Title: Relationship Manager
THE FUJI BANK, LIMITED, HOUSTON AGENCY,
by /s/ Yoshiaki Inque
-----------------------------------
Name: Yoshiaki Inque
Title: Vice President and Manager
HIBERNIA NATIONAL BANK,
by /s/ Steven D. Nance
-----------------------------------
Name: Steven D. Nance
Title: Banking Officer
THE INDUSTRIAL BANK OF JAPAN, LIMITED NEW
YORK BRANCH,
by /s/ Akijiro Yoshino
-----------------------------------
Name: Akijiro Yoshino
Title: Executive Vice President
HOUSTON OFFICE
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED,
by /s/ John J. Sullivan
-----------------------------------
Name: John J. Sullivan
Title: Joint General Manager
THE MITSUI TRUST AND BANKING COMPANY, LIMITED,
by /s/ Margaret Holloway
-----------------------------------
Name: Margaret Holloway
Title: Vice President and Manager
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
by /s/ Robert Bottamedi
-----------------------------------
Name: Robert Bottamedi
Title: Vice President
NATIONAL WESTMINSTER BANK PLC,
by /s/ Ian M. Plester
-----------------------------------
Name: Ian M. Plester
Title: Vice President
NATIONAL WESTMINSTER BANK PLC (NASSAU BRANCH),
by /s/ Ian M. Plester
-----------------------------------
Name: Ian M. Plester
Title: Vice President
THE NORINCHUKIN BANK, NEW YORK BRANCH,
by /s/ Takeshi Akinoto
-----------------------------------
Name: Takeshi Akinoto
Title: General Manager
PT BANK NEGARA INDONESIA (PERSERO),
by /s/ Dewa Suthapa
-----------------------------------
Name: Dewa Suthapa
Title: General Manager
P.T. BANK RAKYAT INDONESIA (PERSERO),
by /s/ Kemas M. Arief
-----------------------------------
Name: Kemas M. Arief
Title: General Manager
by /s/ David W. Opdyke
-----------------------------------
Name: David W. Opdyke
Title: Deputy General Manager
REPUBLIC NATIONAL BANK OF NEW YORK,
by /s/ Richard J. Ward
-----------------------------------
Name: Richard J. Ward
Title: Vice President
THE ROYAL BANK OF SCOTLAND PLC,
by /s/ Russell M. Gibson
-----------------------------------
Name: Russell M. Gibson
Title: Vice President & Deputy Manager
THE SAKURA BANK, LIMITED, HOUSTON AGENCY,
by /s/ Akira Hara
-----------------------------------
Name: Akira Hara
Title: General Manager
THE SANWA BANK LIMITED, DALLAS AGENCY,
by /s/ L. J. Perenyi
-----------------------------------
Name: L. J. Perenyi
Title: Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY,
by /s/ Elizabeth W. Hunter
-----------------------------------
Name: ELizabeth W. Hunter
Title: Vice President
THE SUMITOMO BANK, LIMITED, HOUSTON AGENCY,
by /s/ Toshiro Kubota
-----------------------------------
Name: Toshiro Kubota
Title: Joint General Manager
THE TOKAI BANK, LIMITED,
by /s/ Masaharu Muto
-----------------------------------
Name: Masaharu Muto
Title: Deputy General Manager
UNION BANK OF SWITZERLAND, HOUSTON AGENCY,
by /s/ Dan O'Boyle
-----------------------------------
Name: Dan O'Boyle
Title: Managing Director
by /s/ Cynthia A. P. Deere
-----------------------------------
Name: Cynthia A. P. Deere
Title: Vice President
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
by /s/ Richard R. Newman
-----------------------------------
Name: Richard R. Newman
Title: Vice President
by /s/ Salvatore Battinelli
-----------------------------------
Name: Salvatore Battinelli
Title: Vice President
Credit Department
YASUDA TRUST AND BANKING COMPANY,
by /s/ Makoto Tagawa
-----------------------------------
Name: Makoto Tagawa
Title: Deputy General Manager
EXECUTION COPY
AMENDMENT dated as of October 9, 1996 (this "Amendment"), to the Credit
Agreement dated as of October 27, 1989 (as heretofore amended, the
"Credit Agreement"), among P.T. FREEPORT INDONESIA COMPANY, a limited
liability company organized under the laws of Indonesia and also
domesticated in Delaware ("FI"), FREEPORT-McMoRan COPPER & GOLD INC.,
a Delaware corporation ("FCX"), the undersigned financial institutions
(collectively, the "Banks"), FIRST TRUST OF NEW YORK, NATIONAL
ASSOCIATION, a national banking association, as trustee under the FI
Trust Agreement (in such capacity, the "FI Trustee"), THE CHASE
MANHATTAN BANK (formerly Chemical Bank), a New York banking
corporation ("Chase"), as administrative agent for the Banks (in such
capacity, the "Administrative Agent"), as security agent for the Banks
(in such capacity, the "Security Agent") under the Bank Security
Documents (as defined below), and as security agent for the Banks and
RTZ-IIL (in such capacity, the "JAA Security Agent") under the JAA
Fiduciary Transfer and the JAA Fiduciary Power (as defined below), and
THE CHASE MANHATTAN BANK (as successor to The Chase Manhattan Bank
(National Association)), as documentary agent for the Banks (in such
capacity, the "Documentary Agent"; the Administrative Agent, the
Security Agent, the JAA Security Agent and the Documentary Agent
being, collectively, the "Agents"). Capitalized terms used herein and
not defined herein shall have the meanings given such terms in the
Credit Agreement.
Section 10.17 of the Credit Agreement contemplates that the
Banks, FCX and FI shall agree on mutually satisfactory documentation
to implement the RTZ Transaction, including the Participation
Agreement, the RTZ Loan Agreement, the FI Intercreditor Agreement and
the Final FI Security Documents. FI, FCX, the Banks and the Agents
wish to enter into this Amendment to evidence their approval of the
documents to be entered into in connection with the RTZ Transaction,
to provide for certain amendments to the Credit Agreement to take into
account such documents and to make certain other arrangements in
connection with the RTZ Transaction.
By its execution and delivery of this Amendment, each Bank
also wishes, in connection with the RTZ Transactions, to:
(a) authorize the Agents, on behalf of such Bank and the
other Banks, to enter into the Agreement to Amend and Restate
Trust Agreement dated as of the RTZ Closing Date among FI, FCX,
RTZ, PT-RTZ, RTZ Lender, the Trustee, the Depositary, the
Documentary Agent, the Security Agent, the JAA Security Agent and
the Administrative Agent (the "AART") and the FI Intercreditor
Agreement, Operator Replacement Agreement and Restated Trust
Agreement referred to in the AART and to enter into the RTZ Side
Letter and the Early Closing Documents;
(b) authorize Chase to act as Security Agent for the Banks
under the Bank Security Agreement in the form attached as Exhibit
A hereto, the Bank Surat Kuasa in the form attached as Exhibit B
hereto and the Bank Fiduciary Assignment of Accounts Receivable
in the form attached as Exhibit E hereto;
(c) authorize Chase to act as JAA Security Agent for the
Banks and RTZ-IIL under the JAA Fiduciary Power in the form
attached as Exhibit F hereto and the JAA Fiduciary Transfer in
the form attached as Exhibit G hereto;
(d) approve the replacement of the Trustee as security agent
under the Interim Fiduciary Transfer and the Interim Fiduciary
Power by Chase in its capacity as Security Agent, together with
the amendment and restatement of the Interim Fiduciary Transfer
in the form attached as Exhibit C hereto and the Interim
Fiduciary Power in the form attached as Exhibit D hereto, such
amendments and restatements to be the Final Fiduciary Transfer
and the Final Fiduciary Power, respectively, for all purposes of
the Loan Documents;
(e) agree to submit to the exclusive jurisdiction of the
United States District Court for the Southern District of
New York and of any New York State court sitting in Manhattan
solely for the purposes of suits, actions or proceedings to
enforce the terms of the FI Intercreditor Agreement and authorize
the Administrative Agent (acting as Representative of the Banks
under the FI Intercreditor Agreement) to provide such submission
to New York jurisdiction for such Bank pursuant to Section 16 of
the FI Intercreditor Agreement;
(f) approve the release upon the RTZ Closing Date of the
Banks' security interests (and authorize the FI Trustee to
release such security interests) in the PT-RTZ Joint Venture
Interests (as defined in the AART) pursuant to the AART, in order
to permit their assignment to PT-RTZ pursuant to the
Participation Agreement, the AART and the PT-RTZ COW Assignment;
(g) approve the release of the Banks' security interests in
the rights of FI under the Contract of Work in respect of
Contract Block B (as defined in the Contract of Work) and in any
Greenfield Projects and Sole Risk Projects (as such terms are
defined in the Participation Agreement) in Contract Block A (as
defined in the Contract of Work) and authorize the Agents to
effectuate such release of security interests, including
instructing the FI Trustee to such effect; and
(h) authorize the Administrative Agent and the Documentary
Agent, acting on behalf of such Bank and the other Banks, to
subordinate the Banks' liens on the FIEC Interests (as defined in
the Restated Trust Agreement) to the RTZ Lender's lien on the
FIEC Interests on the terms of the FI Intercreditor Agreement.
Accordingly, FI, FCX, the Trustee, the Banks and the
Agents agree as follows:
SECTION 1. Amendments to the Credit Agreement. Effective
as of the Effective Date, the Credit Agreement is hereby amended as
follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by
substituting the following modified definitions for the equivalent
definitions which presently appear in such Section:
(i) "Contract of Work" means the Contract of Work made
December 30, 1991, between the Ministry of Mines of the
Government of the Republic of Indonesia, acting for and on behalf
of the Government of the Republic of Indonesia, and FI, together
with any related Implementation Agreement or Memorandum of
Understanding with such Ministry of Mines acting on behalf of the
Government of the Republic of Indonesia, after giving effect to
the PT-RTZ COW Assignment, as such agreement may be implemented,
supplemented or amended as permitted hereby from time to time.
(ii) "FI Intercreditor Agreement" means the Intercreditor
Agreement entered into as of the RTZ Closing Date among the
Administrative Agent on behalf of the Banks under the Corporate
Group Facility, RTZ Lender, PT-RTZ and the FI Trustee
substantially in the form attached to the AART as Exhibit B-1
thereto and attached hereto as Exhibit I, as such agreement may
be amended and in effect from time to time.
(iii) "FI Security Documents" means the FI Trust Agreement,
the Operator Replacement Agreement, the Surat Kuasa, the
Fiduciary Assignment, the JAA Fiduciary Transfer, the JAA
Fiduciary Power, the Bank Security Agreement, the Fiduciary
Transfer, the Bank Fiduciary Assignment, the Fiduciary Power, the
Bank Surat Kuasa and all Uniform Commercial Code financing
statements and their Indonesian equivalents required to be filed
hereunder or under the FI Security Documents.
(iv) "FI Trustee" means First Trust of New York, National
Association, or any successor trustee, as trustee for FI, PT-RTZ
and the Secured Creditors (including the Banks) pursuant to the
FI Trust Agreement and, in such capacity, also as party to the
Operator Replacement Agreement, the Surat Kuasa and the Fiduciary
Assignment.
(v) "Final FI Trust Agreement" means the Restated Trust
Agreement dated as of the RTZ Closing Date, among FI, PT-RTZ, the
Depositary, the FI Trustee, the Administrative Agent and RTZ
Lender, as amended and restated by the AART substantially in the
form attached as Exhibit A thereto and attached hereto as
Exhibit G-1, and as further amended and in effect from time to
time thereafter.
(vi) "Final Fiduciary Assignment" means the Fiduciary
Assignment of Accounts Receivable (Penyerahan Hak Atas Tagihan)
dated the RTZ Closing Date, granted by FI and PT-RTZ to the FI
Trustee substantially in the form attached to the AART as Exhibit
E thereto and attached hereto as Exhibit G-5, as amended and in
effect from time to time.
(vii) "Final Fiduciary Power" means the Second Amended and
Restated Power of Attorney to Establish Fiduciary Transfer (Kuasa
Untuk Memasang Penyerahan Hak Milik Fidusia) dated the RTZ
Closing Date, granted by FI to the Security Agent, substantially
in the form attached hereto as Exhibit G-4, and any additional or
separate Fiduciary Power granted by FI to the Banks, acting
through the Security Agent, with respect to specific or
additional assets, in each case as further amended and in effect
from time to time.
(viii) "Final Fiduciary Transfer" means the Second Amended and
Restated Fiduciary Transfer of Assets (Penyerahan Hak Secara
Fidusia) dated the RTZ Closing Date, granted by FI to the Banks,
acting through the Security Agent, substantially in the form
attached hereto as Exhibit G-3, and any additional or separate
Fiduciary Transfer granted by FI to the Banks, acting through the
Security Agent, with respect to specific or additional assets, in
each case as further amended and in effect from time to time.
(ix) "Final Surat Kuasa" means the Surat Kuasa (Power of
Attorney) dated the RTZ Closing Date, granted by FI and PT-RTZ to
the FI Trustee substantially in the form attached as Annex I to
the Operator Replacement Agreement and attached as Exhibit G-2
hereto, as amended and in effect from time to time.
(x) "Loan Documents" means the Amendment Agreement, the
Corporate Group Facility, the Corporate Group Notes, the FI
Intercreditor Agreement, the Side Letter, the Early Closing
Documents, the AART, the FI Security Documents and all other
agreements, certificates and instruments now or hereafter entered
into in connection with any of the foregoing, in each case as
amended and modified from time to time.
(xi) "Major Concentrate Sales Agreement" means any
Concentrate Sales Agreement providing for sales during the term
thereof of at least 75,000 metric tons of concentrate.
(xii) "Participation Agreement" means the Participation
Agreement dated the RTZ Closing Date between FI and PT-RTZ
substantially in the form attached to the AART as Exhibit J
thereto, as amended from time to time as permitted by
Section 5.3.
(xiii) "RTZ Collateral" means the FIEC Interests pledged to RTZ
Lender as contemplated by the RTZ Loan Agreement, the Final FI
Trust Agreement and the FI Intercreditor Agreement.
(xiv) "RTZ Interests" means the interests of PT-RTZ in the
Contract of Work and the Joint Account Assets (as such term is
defined in the Participation Agreement) pursuant to the
Participation Agreement and in the Concentrate Sales Agreements
pursuant to the Final FI Trust Agreement, in each case as
permitted by Section 5.3.
(xv) "RTZ Lender" means RTZ Indonesian Finance Limited, a
company organized under the laws of England and a wholly owned
subsidiary of RTZ.
(xvi) "RTZ Loan Agreement" means the Loan Agreement dated the
RTZ Closing Date between FI and RTZ Lender substantially in the
form attached to the AART as Exhibit K thereto, as amended from
time to time as permitted by Section 5.3.
(xvii) "RTZ Release" means the Indonesian release document
dated the RTZ Closing Date pursuant to which the Trustee releases
the PT-RTZ Joint Venture Interests (as such term is defined in
the Participation Agreement) from the Lien of the FI Security
Documents as in effect prior to the RTZ Closing Date.
(xviii) "RTZ Transactions" means the transactions contemplated
by the AART, the Participation Agreement, the Final FI Trust
Agreement, the Operator Replacement Agreement, the RTZ Loan
Agreement, the Side Letter, the Early Closing Documents, the RTZ
Release and the FI Intercreditor Agreement, in each case to the
extent permitted by Section 5.3.
(b) Section 1.1 of the Credit Agreement is hereby further amended
by adding the following defined terms in the appropriate alphabetical
order:
(i) "AART" means the Agreement to Amend and Restate Trust
Agreement dated as of the RTZ Closing Date among FI, FCX, RTZ,
PT-RTZ, RTZ Lender, the Trustee, the Administrative Agent, the
Security Agent, the JAA Security Agent, the Documentary Agent and
the Depositary.
(ii) "Bank Fiduciary Assignment" means the Second Amended and
Restated Fiduciary Assignment of Accounts Receivable (the
Penyerahan Hak Atas Tagihan) dated the RTZ Closing Date, granted
by FI to the Banks, acting through the Security Agent,
substantially in the form attached hereto as Exhibit G-8, and any
additional or separate Fiduciary Assignment granted by FI to the
Banks, acting through the Security Agent, with respect to
specific or additional accounts receivable, in each case as
further amended and in effect from time to time.
(iii) "Bank Security Agreement" means the Bank Security
Agreement dated as of the RTZ Closing Date between FI and the
Security Agent substantially in the form attached hereto as
Exhibit G-6, as amended and in effect from time to time.
(iv) "Bank Security Documents" means the Bank Security
Agreement, the Bank Surat Kuasa, the Fiduciary Transfer, the
Fiduciary Power and the Bank Fiduciary Assignment.
(v) "Bank Surat Kuasa" means the Surat Kuasa (Power of
Attorney) dated the RTZ Closing Date, granted by FI to the
Security Agent substantially in the form attached hereto as
Exhibit G-7, and any additional or separate Surat Kuasa granted
by FI to the Banks, acting through the Security Agent, with
respect to specific or additional assets, in each case as amended
and in effect from time to time.
(vi) "Early Closing Agreement" means the Early Closing
Agreement dated as of the RTZ Closing Date among FI, FCX, RTZ,
PT-RTZ (as a company in formation under the laws of Indonesia),
RTZ Jersey Investments One Limited, RTZ Jersey Nominees Limited,
the Trustee, the Administrative Agent, the Security Agent, the
JAA Security Agent and the Depositary, substantially in the form
attached to the AART as Exhibit B-2 and attached hereto as
Exhibit E.
(vii) "Early Closing Documents" means the (x) the Early
Closing Agreement, (y) the related Ratifying Agreement between
such parties in the form attached to such Early Closing Agreement
as Schedule 1 thereto and (z) any additional or further agreement
entered into on behalf of the Banks in connection with such
agreement by the Agents in such form as approved by the
Administrative Agent.
(viii) "FIEC Interests" means FI's interest in Incremental
Expansion Cashflow (as such term is defined in the Participation
Agreement) and FI's related rights pursuant to the Final FI Trust
Agreement under the Concentrate Sales Agreements.
(ix) "JAA Fiduciary Power" means the Power of Attorney to
Establish Fiduciary Transfer (Kuasa Untuk Memasang Penyerahan Hak
Milik Fidusia) for Joint Account Assets dated the RTZ Closing
Date, granted by FI and PT-RTZ to the Security Agent,
substantially in the form attached hereto as Exhibit G-9, and any
additional or separate Fiduciary Power granted by FI and PT-RTZ
to the Security Agent with respect to the Joint Account Assets,
in each case as further amended and in effect from time to time.
(x) "JAA Fiduciary Transfer" means the Fiduciary Transfer of
Assets (Penyerahan Hak Secara Fidusia) for Joint Account Assets
dated the RTZ Closing Date, granted by FI and PT-RTZ to the
Security Agent, substantially in the form attached hereto as
Exhibit G-10, and any additional or separate Fiduciary Transfer
granted by FI and PT-RTZ to the Security Agent with respect to
the Joint Account Assets, in each case as further amended and in
effect from time to time.
(xi) "JAA Security Agent" means Chase, not in its individual
capacity, but as JAA Security Agent for the Banks and RTZ under
the JAA Fiduciary Power and the JAA Fiduciary Transfer.
(xii) "Operator Replacement Agreement" means the Operator
Replacement Agreement dated as of the RTZ Closing Date among FI,
PT-RTZ, the Trustee and the Administrative Agent (in its capacity
as Operator Selection Representative) substantially in the form
attached to the AART as Exhibit D thereto, as further amended and
in effect from time to time.
(xiii) "Operator Selection Representative" means the
Administrative Agent acting as the Operator Selection
Representative under the Operator Replacement Agreement, pursuant
to its designation in Section 10.17 as Operator Selection
Representative, as confirmed in Annexes 1 and 2 to the Final FI
Trust Agreement.
(xiv) "PT-RTZ COW Assignment" means the Assignment Agreement
dated as of RTZ Closing Date between FI and PT-RTZ substantially
in the form of Exhibit C to the AART pursuant to which FI assigns
a partial undivided interest in the Contract of Work to PT-RTZ.
(xv) "Secured Creditors" means those secured lenders to FI
(including the Banks) referred to in the Annexes to the Final FI
Trust Agreement.
(xvi) "Security Agent" means Chase, not in its individual
capacity, but as Security Agent for the Banks under the Bank
Security Agreement, the Bank Surat Kuasa, the Bank Fiduciary
Assignment, the Final Fiduciary Power and the Final Fiduciary
Transfer.
(xvii) "Side Letter" means the agreement dated as of the RTZ
Closing Date between FI, RTZ, PT-RTZ, RTZ Lender, RTZ-IIL, the
Trustee, the JAA Security Agent and certain secured creditors of
FI, substantially in the form attached to the AART as Exhibit B-3
and as attached hereto as Exhibit H, as further amended and in
effect from time to time.
(c) Section 2.1 of the Credit Agreement is hereby amended
by the substitution of the words "Base Production (as such term is
defined in the Final FI Trust Agreement) and, after the RTZ Lender
loan is repaid in full and so long as the Banks have a first priority
security interest in the FIEC Interests under the Final FI Trust
Agreement, the FIEC Interests" for the words "assets of FI" at the end
of the fourth sentence thereof.
(d) Section 5.l(h) of the Credit Agreement is hereby
amended by adding the words ", the Security Agent and the JAA Security
Agent, as applicable," after the words "FI Trustee" in each of the two
places in which "FI Trustee" is used in clause (i) thereof and by
amending clause (x) thereof to read as follows: "(x) the validity and
effectiveness of the powers of attorney granted by the Surat Kuasa,
the Bank Surat Kuasa, the Fiduciary Power and the JAA Fiduciary Power
and the fiduciary transfers effectuated by the Fiduciary Transfer, the
Fiduciary Assignment, the Bank Fiduciary Assignment and the JAA
Fiduciary Transfer," for the words "interests of the FI Trustee" in
clause (y) thereof.
(e) Section 5.2(i) of the Credit Agreement is hereby
amended by the addition of the words "after giving effect to the RTZ
Transactions" after the words "Closing Date" appearing therein.
(f) Section 5.2(l) of the Credit Agreement is hereby
amended by the addition of the words "and the guarantee provided in
Section 10(1) of the Implementation Agreement" after the words
"FCX/FMPO Guarantee" appearing in the proviso to such Section.
(g) Section 5.3 of the Credit Agreement is hereby amended
by:
(i) changing the clause subheadings "(i)" and "(ii)" in the
first sentence thereof to "(I)" and "(II)", respectively;
(ii) adding the words "(including the Financial and
Accounting Procedures thereunder)" following the first reference
to "Participation Agreement" in clause (y) of such resubheaded
clause (I) in such first sentence;
(iii) adding the words "(or could reasonably be expected to)"
after the words "which would" appearing in such resubheaded
clause (I) in such first sentence;
(iv) substituting the words "Section 7.5.1.1, 7.5.1.3 or 10.5
or Annex A" for the words "Section 10.5" in clause (i) in the
second sentence thereof;
(v) adding the words "or Section 7 of the Early Closing
Agreement" after the words "Implementation Agreement" in clause
(iv) in the second sentence thereof;
(vi) substituting ", (vi) agree to any reduction in annual
production from Contract Block A (as defined in the Contract of
Work), other than annual production from Greenfield Projects and
Sole Risk Ventures (as such terms are defined in the
Participation Agreement), which might foreseeably result in FI
receiving cashflow after payment of all Operating Costs
attributable to it which would not be sufficient to pay in full
all its obligations, including under the Privatization Agreements
(as such term is defined in the Participation Agreement) and the
Loan Documents, as and when they are likely to come due, (vii)
amend or agree to any amendment of any agreement to which the
Administrative Agent has not also agreed if, as a result of such
amendment, a term defined in the FI Intercreditor Agreement or
the Side Letter by reference to a term defined in such amended
agreement would be changed or (viii)" for the words "or (vi)" in
the second sentence thereof; and
(vii) substituting the words "Final FI Trust Agreement" for
the words "FI Trust Agreement" in the third sentence thereof.
(h) Section 7.1 of the Credit Agreement is hereby amended
(i) by the substitution of the words ", 5.3 or 10.17" for the words
"or 5.3" in each of the two places appearing in paragraph (e) thereof
and (ii) by the addition in clause (iii) of such Section 7.1 of the
words ", including the giving of an Allocation Notice, Blockage Notice
or Enforcement Notice under the Final FI Trust Agreement and/or the
exercise by the Administrative Agent of its right pursuant to Section
10.17 to remove FI as Operator under the Contract of Work pursuant to
the Operator Replacement Agreement" after the words "FI Security
Documents" appearing therein.
(i) Section 8.1(a) of the Credit Agreement is hereby
amended to read as follows:
"(a) For convenience of administration and to expedite the
transactions contemplated by this Agreement, (i) Chase is hereby
appointed as Administrative Agent under this Agreement and the
other Loan Documents (including in its capacity as Operator
Selection Representative under the Operator Replacement
Agreement), (ii) Chase is hereby appointed as Security Agent for
the Banks under this Agreement and the Bank Security Documents,
(iii) Chase is hereby appointed as JAA Security Agent for the
Banks under this Agreement, the JAA Fiduciary Power and the JAA
Fiduciary Transfer, (iv) Chase is hereby appointed as the
Documentary Agent for the Banks under this Agreement and the
other Loan Documents and (vi) First Trust of New York, National
Association, is hereby appointed to act as FI Trustee for the
Banks under the FI Trust Agreement, the Operator Replacement
Agreement, the Surat Kuasa, the RTZ Release and the Fiduciary
Assignment. Each Bank (x) confirms and agrees to be bound by the
terms of the FI Trust Agreement, the FI Intercreditor Agreement
and the other Loan Documents and (y) agrees that the FI Trustee
in accepting its appointment and in acting under the FI Trust
Agreement, the Operator Replacement Agreement, the Surat Kuasa,
the RTZ Release and the Fiduciary Assignment shall be entitled to
all the rights, immunities, privileges, protections,
exculpations, indemnifications, liens and other benefits
applicable to its acting as trustee under the FI Trust Agreement.
None of the Agents shall have any duties or responsibilities
except those expressly set forth herein or in the other Loan
Documents. Each Bank, and each subsequent holder of any
Promissory Note by its acceptance thereof, hereby irrevocably
appoints and expressly authorizes the Agents, without hereby
limiting any implied authority, to take such action as the Agents
may deem appropriate on its behalf and to exercise such powers
under the Loan Documents as are specifically delegated to such
Person by the terms hereof and thereof, together with such powers
as are reasonably incidental thereto. The Administrative Agent
is hereby expressly authorized by the Banks, without hereby
limiting any implied authority, (A) to receive on behalf of the
Banks all payments of principal of and interest on the Loans and
all other amounts due to the Banks hereunder, and promptly to
distribute to each Bank its proper share of each payment so
received; (B) to give notice on behalf of the Banks to FI and FCX
of any Event of Default specified in this Agreement of which the
Administrative Agent has actual knowledge acquired in connection
with its agency hereunder or as directed by the Required Banks;
and (C) to distribute to each Bank copies of all notices,
financial statements and other materials delivered by FI or FCX
pursuant to this Agreement as received by the Administrative
Agent. Without limiting the generality of the foregoing, the
Security Agent and the JAA Security Agent are hereby expressly
authorized to execute any and all documents (including releases)
with respect to the collateral under the Bank Security Documents,
the JAA Fiduciary Power and the JAA Fiduciary Transfer (as
applicable) and the rights of the secured parties with respect
thereto, as contemplated by and in accordance with the provisions
of this Agreement and the Bank Security Documents. Each of the
Administrative Agent, the Security Agent and the JAA Security
Agent may exercise any of its duties hereunder by or through
their respective agents, officers or employees. In addition,
each Bank hereby irrevocably authorizes and directs (I) the
Administrative Agent to enter, on behalf of each of them, into
the AART, the Final FI Trust Agreement, the FI Intercreditor
Agreement, the Operator Replacement Agreement, the Early Closing
Documents and the Side Letter as contemplated pursuant to this
Agreement, (II) the Security Agent to enter, on behalf of each of
them, into the Bank Security Agreement, the Bank Surat Kuasa, the
Fiduciary Transfer, the Fiduciary Power, the Bank Fiduciary
Assignment, the FI Intercreditor Agreement, the Operator
Replacement Agreement, the Early Closing Documents and the Side
Letter, (III) the JAA Security Agent to enter, on behalf of each
of them, into the JAA Fiduciary Power, into, the JAA Fiduciary
Transfer, the Early Closing Documents and the Side Letter,
(IV) the FI Trustee to enter, on behalf of each of them, into the
Operator Replacement Agreement, the Surat Kuasa, the Fiduciary
Assignment, the Early Closing Documents, the RTZ Release and the
Side Letter and (V) the Documentary Agent to enter, on behalf of
each of them, into the AART, the Early Closing Documents and the
Side Letter, and in each case agrees to be bound by the terms
thereof."
(j) Section 8.1(c) of the Credit Agreement is hereby
amended by substituting the words "a party to the Operator Replacement
Agreement, the Surat Kuasa and the Fiduciary Assignment to the extent
representing the interests of the Banks" for the words "security agent
under the FI Security Documents" appearing in the parenthetical phrase
in the first sentence thereof.
(k) Sections 8.1(e), 8.1(f) and 8.1(g) of the Credit
Agreement are hereby amended by adding the words ", Security Agent,
JAA Security Agent" after the words "Administrative Agent" in each
place where such phrase appears in such Sections.
(l) Section 8.1(h) of the Credit Agreement is hereby
amended to read as follows:
"(h) Without the prior written consent of the Required
Banks but subject to Section 10.7(b), the Administrative Agent,
the Security Agent and the JAA Security Agent will not, except as
contemplated by Section 8.1(j), consent to any modification,
supplement or waiver of the FI Intercreditor Agreement, the Bank
Security Documents, the FI Trust Agreement, the Operator
Replacement Agreement, the JAA Fiduciary Power or the JAA
Fiduciary Transfer and the FI Trustee will not consent to any
modification, supplement or waiver of the FI Trust Agreement, the
Operator Replacement Agreement, the Surat Kuasa, the RTZ Release
or the Fiduciary Assignment."
(m) Section 8.1(j) of the Credit Agreement is hereby
amended by (x) substituting the following for the opening phrase
appearing prior to the existing clause (i) thereof:
"Notwithstanding any other provision of this Section 8.1, the
Administrative Agent will, at the request of FI, instruct the FI
Trustee and/or the Security Agent, as applicable, to release (or
to subordinate such interest) from the FI Trust Agreement and/or
the Bank Security Agreement and/or the other FI Security
Documents, as applicable (and enter into an amendment to the FI
Trust Agreement and/or the Bank Security Agreement and/or the
other FI Security Documents and execute such other instruments as
may be necessary in connection therewith), any interest of the FI
Trustee and/or the Security Agent, as applicable, in"
and (y) the deletion of clauses (i) and (ii) thereof and the
renumbering of clauses (iii), (iv) and (v) as (i), (ii)and (iii),
respectively, and by changing the reference to "clauses (iii) and
(iv)" in the last sentence thereof to a reference to "clauses (i) and
(ii)".
(n) Section 10.17 of the Credit Agreement is hereby amended
to read in its entirety as follows:
"SECTION 10.17 RTZ Transactions. The Agents and the Banks
acknowledge that FI and FCX have agreed pursuant to the
Implementation Agreement to enter into the RTZ Transactions. The
Banks, FI and FCX have, pursuant to the Amendment dated as of
October 9, 1996, to this Agreement, agreed upon and approved the
documentation to be entered into by FI in connection with the
foregoing as required by this Agreement as in effect prior to the
RTZ Closing Date. FI hereby (i) appoints the Administrative
Agent to be the Operator Selection Representative for all
purposes of the Final FI Trust Agreement, the Operator
Replacement Agreement and the Surat Kuasa and (ii) irrevocably
and unconditionally agrees that upon the occurrence of an Event
of Default, the Administrative Agent may, in addition to any
other remedy available hereunder or under any other Loan
Document, remove FI as Operator under the Contract of Work and
appoint a replacement Operator, which shall be PT-RTZ or an
Affiliate of PT-RTZ designated by PT-RTZ if PT-RTZ timely elects
to exercise its designation rights provided in Section 2(a) of
the Operator Replacement Agreement and meets the other conditions
to such designation right set forth in such Section 2(a). FI
also irrevocably and unconditionally agrees that the
Administrative Agent, acting as the Operator Selection
Representative under the Final FI Trust Agreement, the Operator
Replacement Agreement and the Surat Kuasa, shall also have the
right to designate a successor Operator under the circumstances
provided in Section 2(b) of the Operator Replacement Agreement.
FI further agrees that it will not appoint any other Operator
Selection Representative other than the Administrative Agent (or,
except as provided to PT-RTZ in the Participation Agreement,
grant any other Person the right to remove FI (or any successor
operator for the Project) as Operator under any circumstances)
and that it will not approve or enter into any management
agreement with a successor Operator appointed under the Operator
Replacement Agreement unless and until the Administrative Agent
has approved the terms of such management agreement. FI also
agrees that the Administrative Agent shall be entitled to
exercise FI's rights under the Participation Agreement (including
the financial and accounting procedures) referred to in Section
6(c) of the FI Intercreditor Agreement to the exclusion of FI
after the occurrence of an Event of Default, in addition to the
other rights and remedies available to the Agents and the Banks
under the Loan Documents and applicable law. Each of the Agents,
the Banks, FI and FCX acknowledge that the Final FI Trust
Agreement will not terminate prior to termination of the
Participation Agreement."
(o) The Final FI Trust Agreement in the form attached as
Exhibit A to the AART is hereby added to the Credit Agreement as
Exhibit G-1 thereto, the FI Intercreditor Agreement in the form
attached as Exhibit B-1 to the AART is hereby added to the Credit
Agreement as Exhibit I thereto, the Surat Kuasa in the form attached
as Exhibit I to the Operator Replacement Agreement is hereby added to
the Credit Agreement as Exhibit G-2 thereto, the Fiduciary Assignment
in the form attached as Exhibit E to the AART is hereby added to the
Credit Agreement as Exhibit G-3 thereto, the Early Closing Agreement
(including Schedule 1 thereto) in the form attached as Exhibit B-2 to
the AART are hereby added to the Credit Agreement as Exhibit E
thereto, the Side Agreement in the form attached as Exhibit B-3 to the
AART is hereby added to the Credit Agreement as Exhibit H thereto, and
Exhibits A, B, C, D and E to this Amendment are hereby added to the
Credit Agreement as Exhibits G-6, G-7, G-8, G-9 and G-10 thereto,
respectively.
SECTION 2. Authorizations to the Agents; Agreement to
Submit to Jurisdiction. (a) Each Bank hereby (i) authorizes the
Administrative Agent and Documentary Agent, acting on behalf of such
Bank and the other Banks, to enter into and perform the FI
Intercreditor Agreement, the Final FI Trust Agreement, the Operator
Replacement Agreement, the Side Letter, the Early Closing Documents
and the AART (including the subordination of the Banks' lien on the
FIEC Interests to RTZ Lender's lien on the FIEC Interests on the terms
of the FI Intercreditor Agreement), (ii) authorizes the Trustee to
release all the security interests of the Banks in the PT-RTZ Joint
Venture Interests upon the Closing pursuant to the AART and the RTZ
Release, in order to permit their assignment to PT-RTZ pursuant to the
Participation Agreement, the AART and the PT-RTZ COW Assignment,
(iii) appoints Chase as the Security Agent for such Bank and the other
Banks and authorizes the Security Agent to enter into and perform the
Bank Security Agreement, the Bank Surat Kuasa, the Fiduciary Transfer,
the Fiduciary Power and the Bank Fiduciary Assignment for the benefit
of such Bank and the other Banks, (iv) appoints Chase as the JAA
Security Agent for such Bank and the other Banks and authorizes the
JAA Security Agent to enter into and perform the JAA Fiduciary
Transfer, the JAA Fiduciary Power and the Side Letter for the benefit
of such Bank and the other Banks, (v) consents to RTZ Lender and the
Trustee (acting on behalf of RTZ Lender) taking Remedial Actions
against the RTZ Lender Collateral (as such terms are defined in the FI
Intercreditor Agreement) as provided in the RTZ Loan Agreement and the
Final FI Trust Agreement, and (vi) consents to FI entering into and
performing the transactions contemplated by the Transaction Documents
(as such term is defined in the AART) to which it is a party,
including the entry into and performance of the Participation
Agreement, the incurrence of the RTZ Loan and FI's granting the RTZ
Lender Lien to RTZ Lender on the terms of the Final FI Trust
Agreement, in accordance with Sections 5.3 and 10.17.
(b) Each Bank also hereby agrees to submit to the exclusive
jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in
Manhattan solely for the purposes of suits, actions or proceedings to
enforce the terms of the FI Intercreditor Agreement and authorizes the
Administrative Agent (acting as Representative of the Banks under the
FI Intercreditor Agreement) to provide such submission to New York
jurisdiction on behalf of such Bank pursuant to Section 16 of the FI
Intercreditor Agreement.
SECTION 3. Conditions to Effectiveness. (a) This
Amendment shall become effective on the date that each of the
following conditions shall have been satisfied (such date of
effectiveness being the "Effective Date"):
(a) receipt by Cravath, Swaine & Moore, special counsel for
the Banks, of executed counterparts of this Amendment which, when
taken together, bear the signatures of FI, FCX, the Trustee, the
Agents and each Bank;
(b) the representations and warranties on the part of FI
and FCX contained in Article IV of the Credit Agreement shall be
true and correct in all material respects at and as of the
Effective Date as though made on and as of such date;
(c) FI and FCX shall be in compliance with all the terms
and provisions set forth in this Amendment and the Credit
Agreement to be observed or performed on their part, and as of
the Effective Date, no Event of Default nor any event which upon
notice or lapse of time or both would constitute such an Event of
Default shall have occurred and be continuing;
(d) all legal matters incident to this Amendment shall be
satisfactory to Cravath, Swaine & Moore, special counsel for the
Banks; and
(e) the conditions to closing set forth in Section 3(e) of
the Amendment dated as of October 9, 1996 to the Amendment
Agreement shall have duly occurred or been waived by the Required
Banks.
SECTION 4. Counterparts. This Amendment may be executed in
multiple counterparts, each of which shall constitute an original, but
all of which when taken together shall constitute but one instrument.
SECTION 5. Limited Effect of Amendment. Section 1 hereof
constitutes an amendment of the Credit Agreement effective as of the
Effective Date. Except as, and until, expressly amended by such
Section 1 as of the Effective Date, the Credit Agreement shall
continue in full force and effect in accordance with the provisions
thereof as in effect prior to the Effective Date. Except as expressly
set forth herein, this Amendment shall not by implication or otherwise
limit, impair, constitute a waiver of, or otherwise affect the rights
and remedies of the Banks and the Agents under the Credit Agreement,
nor alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the
Credit Agreement, all of which are ratified and affirmed in all
respects and shall continue in full force and effect. This Amendment
shall apply and be effective only with respect to the provisions of
the Credit Agreement specifically referred to in Section 1 hereof.
SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
SECTION 7. Expenses. FI and FCX jointly and severally
shall pay all out-of-pocket expenses incurred by the Agents in
connection with the preparation of this Amendment, including, but not
limited to, the reasonable fees and disbursements of Cravath, Swaine &
Moore, special counsel for the Agents, and Mochtar, Karuwin & Komar,
special Indonesian counsel to the Agents.
SECTION 8. Headings. The headings of this Amendment are
for reference only and shall not limit or otherwise affect the meaning
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers or agents
as of the date first above written.
P.T. FREEPORT INDONESIA COMPANY,
by /s/ R. Foster Duncan
-----------------------------------
Name: R. Foster Duncan
Title: Treasurer
FREEPORT-McMoRan COPPER & GOLD INC.,
by /s/ R. Foster Duncan
-----------------------------------
Name: R. Foster Duncan
Title: Treasurer
FIRST TRUST OF NEW YORK, NATIONAL
ASSOCIATION, as FI Trustee,
by /s/ Ward A. Spooner
-----------------------------------
Name: Ward A. Spooner
Title: Treasurer
THE CHASE MANHATTAN BANK, individually and as
Administrative Agent, Security Agent, JAA
Security Agent and Documentary Agent,
by /s/ James H. Ramage
-----------------------------------
Name: James H. Ramage
Title: Vice President
ABN AMRO BANK N.V., HOUSTON AGENCY,
by ABN AMRO NORTH AMERICA, INC., as
Agent for ABN AMRO BANK N.V.,
by /s/ H. Gene Sniels
-----------------------------------
Name: H. Gene Sniels
Title: V.P. and Director
by /s/ Mike Oakes
-----------------------------------
Name: Mike Oakes
Title: Vice President
ARAB BANKING CORPORATION (B.S.C.),
by /s/ Stephen A. Plauche
-----------------------------------
Name: Stephen A. Plauche
Title: Vice President
AUSTRALIA AND NEW ZEALAND BANKING GROUP
LIMITED, CAYMAN ISLANDS BRANCH,
by /s/ Paul Clifford
-----------------------------------
Name: Paul Clifford
Title: Vice President
BANK AUSTRIA AKTIENGESELLSCHAFT,
by /s/ J. Anthony Seay
-----------------------------------
Name: J. Anthony Seay
Title: Vice President
by /s/ Mark Nolan
-----------------------------------
Name: Mark Nolan
Title: Assistant Vice President
BANK OF AMERICA ILLINOIS,
by /s/ James E. Flough
-----------------------------------
Name: James E. Flough
Title: Managing Director
BANK OF MONTREAL,
by /s/ Michael P. Sassos
-----------------------------------
Name: Michael P. Sassos
Title: Director
THE BANK OF NOVA SCOTIA,
by /s/ F.C.H. Ashby
-----------------------------------
Name: F.C.H. Ashby
Title: Senior Manager Loan Operations
THE BANK OF TOKYO-MITSUBISHI, LTD. HOUSTON AGENCY,
by /s/ John W. McGhee
-----------------------------------
Name: John W. McGhee
Title: Vice President and Manager
BANQUE NATIONALE DE PARIS,
by /s/ John L. Stacy
-----------------------------------
Name: John L. Stacy
Title: Vice President
BANQUE PARIBAS,
by /s/ Brian Malone
-----------------------------------
Name: Brian Malone
Title: Vice President
by /s/ Marian Livingston
-----------------------------------
Name: Marian Livingston
Title: Vice President
BARCLAYS BANK PLC,
by /s/ Carol A. Cowan
-----------------------------------
Name: Carol A. Cowan
Title: Director
CHRISTIANIA BANK OG KREDITKASSE,
by /s/ Peter M. Dodge
-----------------------------------
Name: Peter M. Dodge
Title: First Vice President
by /s/ Hans Chr. Kjelsrud
-----------------------------------
Name: Hans Chr. Kjelsrud
Title: Vice President
DAI-ICHI KANGYO BANK, LTD.,
by /s/ Masayoshi Komaki
-----------------------------------
Name: Masayosji Komaki
Title: Assistant Vice President
DEUTSCHE BANK, AG, NEW YORK AND/OR CAYMAN
ISLANDS BRANCHES,
by
-----------------------------------
Name:
Title:
by
-----------------------------------
Name:
Title:
DEUTSCHE BANK, AG, SINGAPORE BRANCH,
by /s/ Raymond Lee Weng Fatt
-----------------------------------
Name: Raymond Lee Weng Fatt
Title: Head, Credit Department
by /s/ Thomas Lim Kheng Hock
-----------------------------------
Name: Thomas Lim Kheng Hock
Title: Manager, Corporate Banking Department
DRESDNER BANK AG, NEW YORK BRANCH AND GRAND
CAYMAN BRANCH,
by /s/ P. Douglas Sherrod
-----------------------------------
Name: P. Douglas Sherrod
Title: Vice President
by /s/ Raymond F. Keenan
-----------------------------------
Name: Raymond F. Keenan
Title: Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
by /s/ George R. Schanz
-----------------------------------
Name: /s/ George R. Schanz
Title: Vice President
FIRST NATIONAL BANK OF COMMERCE,
by /s/ Joshua C. Cummings
-----------------------------------
Name: Joshua C. Cummings
Title: Relationship Manager
THE FUJI BANK, LIMITED, HOUSTON AGENCY,
by /s/ Yoshiaki Inque
-----------------------------------
Name: Yoshiaki Inque
Title: Vice President and Manager
HIBERNIA NATIONAL BANK,
by /s/ Steven D. Nance
-----------------------------------
Name: Steven D. Nance
Title: Banking Officer
THE INDUSTRIAL BANK OF JAPAN, LIMITED NEW
YORK BRANCH,
by /s/ Akijiro Yoshino
-----------------------------------
Name: Akijiro Yoshino
Title: Executive Vice President
HOUSTON OFFICE
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED,
by /s/ John J. Sullivan
-----------------------------------
Name: John J. Sullivan
Title: Joint General Manager
THE MITSUI TRUST AND BANKING COMPANY, LIMITED,
by /s/ Margaret Holloway
-----------------------------------
Name: Margaret Holloway
Title: Vice President and Manager
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
by /s/ Robert Bottamedi
-----------------------------------
Name: Robert Bottamedi
Title: Vice President
NATIONAL WESTMINSTER BANK PLC,
by /s/ Ian M. Plester
-----------------------------------
Name: Ian M. Plester
Title: Vice President
NATIONAL WESTMINSTER BANK PLC (NASSAU BRANCH),
by /s/ Ian M. Plester
-----------------------------------
Name: Ian M. Plester
Title: Vice President
THE NORINCHUKIN BANK, NEW YORK BRANCH,
by /s/ Takeshi Akinoto
-----------------------------------
Name: Takeshi Akinoto
Title: General Manager
PT BANK NEGARA INDONESIA (PERSERO),
by /s/ Dewa Suthapa
-----------------------------------
Name: Dewa Suthapa
Title: General Manager
P.T. BANK RAKYAT INDONESIA (PERSERO),
by /s/ Kemas M. Arief
-----------------------------------
Name: Kemas M. Arief
Title: General Manager
by /s/ David W. Opdyke
-----------------------------------
Name: David W. Opdyke
Title: Deputy General Manager
REPUBLIC NATIONAL BANK OF NEW YORK,
by /s/ Richard J. Ward
-----------------------------------
Name: Richard J. Ward
Title: Vice President
THE ROYAL BANK OF SCOTLAND PLC,
by /s/ Russell M. Gibson
-----------------------------------
Name: Russell M. Gibson
Title: Vice President & Deputy Manager
THE SAKURA BANK, LIMITED, HOUSTON AGENCY,
by /s/ Akira Hara
-----------------------------------
Name: Akira Hara
Title: General Manager
THE SANWA BANK LIMITED, DALLAS AGENCY,
by /s/ L. J. Perenyi
-----------------------------------
Name: L. J. Perenyi
Title: Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY,
by /s/ Elizabeth W. Hunter
-----------------------------------
Name: ELizabeth W. Hunter
Title: Vice President
THE SUMITOMO BANK, LIMITED, HOUSTON AGENCY,
by /s/ Toshiro Kubota
-----------------------------------
Name: Toshiro Kubota
Title: Joint General Manager
THE TOKAI BANK, LIMITED,
by /s/ Masaharu Muto
-----------------------------------
Name: Masaharu Muto
Title: Deputy General Manager
UNION BANK OF SWITZERLAND, HOUSTON AGENCY,
by /s/ Dan O'Boyle
-----------------------------------
Name: Dan O'Boyle
Title: Managing Director
by /s/ Cynthia A. P. Deere
-----------------------------------
Name: Cynthia A. P. Deere
Title: Vice President
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
by /s/ Richard R. Newman
-----------------------------------
Name: Richard R. Newman
Title: Vice President
by /s/ Salvatore Battinelli
-----------------------------------
Name: Salvatore Battinelli
Title: Vice President
Credit Department
YASUDA TRUST AND BANKING COMPANY,
by /s/ Makoto Tagawa
-----------------------------------
Name: Makoto Tagawa
Title: Deputy General Manager
AGREEMENT to AMEND
and
RESTATE TRUST AGREEMENT
dated as of
October 11, 1996
among
P.T. FREEPORT INDONESIA COMPANY,
FREEPORT-McMoRan COPPER & GOLD INC.,
THE RTZ CORPORATION PLC,
P.T. RTZ-CRA INDONESIA,
RTZ INDONESIAN FINANCE LIMITED,
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION,
as Trustee,
THE CHASE MANHATTAN BANK (formerly Chemical Bank), as Administrative
Agent, as JAA Security Agent
and as Security Agent,
and
THE CHASE MANHATTAN BANK (as successor to The Chase Manhattan Bank
(National Association)),
as Documentary Agent
and as Depositary
TABLE OF CONTENTS
Section Page
Recitals.......................................2
1. Defined Terms, etc............................10
2. The Closing; The Closing Date;
Termination...................................11
3. Releases and Assignments......................12
4. Amendment of the Existing Trust Agreement;
Change of Security Agent for the Bank
Security Agreements...........................16
5. Representations and Warranties................17
6. Conditions to Closing.........................20
7. Amendment; Waiver.............................21
8. Counterparts..................................21
9. Applicable Law................................21
10. Expenses......................................21
11. References; Headings..........................22
12. Construction..................................22
13. Submission to Jurisdiction; Waiver of Jury
Trial; Commercial Obligations and
Immunity......................................22
14. Survival of Representations and
Warranties....................................23
Exhibit A Amended and Restated Trust Agreement
Exhibit B-1 Intercreditor Agreement
Exhibit B-2 Early Closing Agreement
Exhibit B-3 Side Letter
Exhibit C PT-RTZ COW Assignment
Exhibit D Operator Replacement Agreement
Annex I Surat Kuasa
Exhibit E Fiduciary Assignment of Accounts Receivable
Exhibit F-1 FI Bank Credit Agreement Amendment
Exhibit F-2 CDF Bank Credit Agreement Amendment
Exhibit A Bank Security Agreement
Exhibit B Bank Surat Kuasa
Exhibit C Amended and Restated Fiduciary Transfer
Exhibit D Amended and Restated Fiduciary Power
Exhibit E Bank Fiduciary Assignment of Accounts Receivable
Exhibit G Fiduciary Transfer of Joint Account Assets
Exhibit H Power of Attorney to Establish Fiduciary Transfer of
Joint Account Assets
Exhibit I Consent of Minister of Mines
Exhibit J Participation Agreement
Exhibit K RTZ Loan Agreement
AGREEMENT TO AMEND AND RESTATE TRUST AGREEMENT
dated as of October 11, 1996, among P.T. FREEPORT
INDONESIA COMPANY, a limited liability company
organized under the laws of Indonesia and also
domesticated in Delaware ("FI"), FREEPORT-McMoRan
COPPER & GOLD INC., a Delaware corporation ("FCX"), THE
RTZ CORPORATION PLC, a public limited company organized
under the laws of England ("RTZ"), P.T. RTZ-CRA
INDONESIA, a company in formation under the laws of the
Republic of Indonesia ("PT-RTZ"), RTZ INDONESIAN
FINANCE LIMITED, a company organized under the laws of
England and a wholly owned subsidiary of RTZ ("RTZ
Lender"), FIRST TRUST OF NEW YORK, NATIONAL
ASSOCIATION, not in its individual capacity but solely
as Trustee under the Trust Agreement referred to below,
THE CHASE MANHATTAN BANK (formerly Chemical Bank)
("Chase"), not in its individual capacity but solely as
(i) Administrative Agent for the Banks under the CDF
and FI Credit Agreement (in such capacity, the
"Administrative Agent"), (ii) security agent for the
Banks under the Bank Security Documents referred to
below (in such capacity, the "Security Agent") and
(iii) as security agent with respect to the Joint
Account Assets for RTZ Indonesian Investments Limited,
a company organized under the laws of England ("RTZ-
IIL"), and the Banks under the JAA Fiduciary Transfer
and the JAA Fiduciary Power (in such capacity, the "JAA
Security Agent"), and THE CHASE MANHATTAN BANK (as
successor to The Chase Manhattan Bank (National
Association)), not in its individual capacity but
solely as (i) depositary under the Trust Agreement (in
such capacity, the "Depositary") and (ii) Documentary
Agent for the Banks under the CDF and the FI Credit
Agreement (in such capacity the "Documentary Agent";
the Administrative Agent, the Security Agent and the
Documentary Agent being sometimes collectively referred
to herein as the "Bank Agents" and FI, FCX, RTZ, PT-
RTZ, RTZ Lender, the Trustee, the JAA Security Agent,
the Depositary and the Bank Agents being each referred
to herein as a "Transaction Party" and, collectively,
as the "Transaction Parties").
Recitals
I. By a letter of intent dated March 7, 1995 from FCX to
RTZ and signed by RTZ as of March 7, 1995 (the "Letter of Intent"),
FCX and RTZ confirmed their mutual intention with respect to, among
other things, the establishment of joint ventures and certain
financing arrangements in connection therewith, to explore and develop
within the Contract Area covered by the Contract of Work.
II. By an agreement dated as of May 2, 1995 made between
FCX and RTZ (the "Implementation Agreement"), FCX and RTZ recorded the
steps to be taken, subject to the satisfaction or waiver of
conditions, in order to implement the transactions referred to in the
Letter of Intent.
III. Among the steps so recorded in the Implementation
Agreement are:
(a) the execution by FI and PT-RTZ of a participation
agreement substantially in the form set out in
Schedule 1 to the Implementation Agreement,
providing for the participation of PT-RTZ in
certain operations under the Contract of Work on
the terms contained therein, with amendments
agreed between them; and
(b) the execution by FI and RTZ Lender of a loan
agreement substantially in the form set out in
Schedule 2 to the Implementation Agreement,
whereby RTZ Lender will make available to FI a
loan facility in a principal amount of up to
$450,000,000 on the terms contained therein, with
amendments agreed between them.
IV. It is the intention of FCX and RTZ, as reflected and
provided in the Letter of Intent and the Implementation Agreement and
agreements attached as Schedules thereto, that, among other things:
(a) all rights and interests of PT-RTZ in and under
the participation agreement referred to in clause
(a) of Recital III shall be assigned on an
unencumbered basis, free and clear of all liens,
security interests and other encumbrances
whatsoever; and
(b) FI shall assign to PT-RTZ a partial undivided
interest in the Contract of Work, which interest
shall be assigned on an unencumbered basis, free
and clear of all liens, security interests and
other encumbrances whatsoever; and
(c) the repayment of all advances made pursuant to the
loan agreement referred to in clause (b) of
Recital III shall be secured by a first priority
lien on 100% of FI's share of Incremental
Expansion Cashflow (as defined therein).
V. FI is party to (a) a Credit Agreement dated as of
October 27, 1989 (as amended, the "FI Credit Agreement"), among FI,
FCX, certain banks (the "Banks"), the Administrative Agent, the
Security Agent, the JAA Security Agent, the Trustee and the
Documentary Agent, providing for a $550,000,000 credit facility for
FI, and (b) a $450,000,000 Credit Agreement dated as of June 30, 1995
(as amended, the "CDF"), among FI, FCX, the Banks, the Administrative
Agent, the Security Agent, the JAA Security Agent, the Trustee and the
Documentary Agent, providing for a $450,000,000 credit facility for
FCX and FI.
VI. FI has granted to the Trustee for the benefit of the
Banks a first priority security interest in the Contract of Work and
substantially all its other assets pursuant to (a) a Trust Agreement
dated as of May 15, 1970 (as amended from time to time and as in
effect immediately prior to the Closing the "Existing Trust
Agreement"), among FI, the Trustee and the Depositary and (b) the
other FI Security Documents (as such term is defined in the Existing
Trust Agreement).
VII. In order to effect and permit the transactions referred
to in Recitals I through IV, the following, among other things, are
required:
(a) the release by the Banks of any security interest
that the Banks may now have or hereafter acquire
with respect to the rights and properties granted
or assigned to PT-RTZ pursuant to the
Participation Agreement, including, but not
limited to, (i) Sole Risk Ventures undertaken by
PT-RTZ; (ii) PT-RTZ's interest in Joint
Operations; (iii) PT-RTZ's interest in Joint
Account Assets; (iv) PT-RTZ's interest in
Incremental Expansion Cashflow from Block A, Net
Sales Revenues from Greenfield Projects in Block A
and Net Sales Revenues from Block B; (v) PT-RTZ's
interest under the Restated Trust Agreement in the
Concentrate Sales Agreements; (vi) PT-RTZ's
interest under the Restated Trust Agreement and
the Participation Agreement in Proceeds; and (vii)
PT-RTZ's interest in the Contract of Work (all of
the foregoing referred to as the "PT-RTZ Joint
Venture Interests"), in each such case only to the
extent necessary to grant to and vest in PT-RTZ
the PT-RTZ Joint Venture Interests free and clear
of any lien in favor of the Banks;
(b) the assignment by FI to PT-RTZ of a partial
undivided beneficial interest in the Contract of
Work (the "PT-RTZ COW Interest");
(c) the assignment by FI to RTZ Lender of a first
priority security interest (the "RTZ Lender Lien")
with respect to FI Incremental Expansion Cashflow
(and FI's related rights under the Contract of
Work and Concentrate Sales Agreements) (the "FIEC
Interests");
(d) the subordination by the Banks for the benefit of
RTZ Lender of any security interest that the Banks
may now have or hereafter acquire with respect to
the FIEC Interests until the RTZ Lender Loan is
repaid (the "Bank FIEC Lien"); and
(e) after giving effect to (i) the prior release of
the Banks' security interest in the PT-RTZ Joint
Venture Interests and (ii) the subordination to
the RTZ Lender Lien of the security interest of
the Banks with respect to the FIEC Interests, the
continuance of the security interests granted to
the Trustee for the benefit of the Banks pursuant
to the Existing Trust Agreement, the Restated
Trust Agreement and the other FI Security
Documents, including the Bank Security Documents.
VIII. In order to implement and give effect to various
provisions of the Participation Agreement, in particular the orderly
administration and collection of accounts receivable arising in
connection with the Concentrate Sales Agreements, PT-RTZ is willing
to, among other things, permit the Trustee to hold in trust, for the
benefit of PT-RTZ, the PT-RTZ CSA Interests (as defined below)
assigned by FI to the Trustee upon the terms and conditions of the
Restated Trust Agreement (as defined below).
IX. In order to perfect the RTZ Lender Lien and to provide
for the orderly administration and collection of accounts receivable,
RTZ Lender is willing to, among other things, permit the Trustee to
hold in trust, as security for the benefit of RTZ Lender and the
Banks, the FIEC Interests.
X. In order to accommodate and take into account all of the
foregoing transactions, FI and the Banks are willing to make certain
amendments to the CDF, the FI Credit Agreement and the FI Security
Documents pursuant to the Bank Credit Agreement Amendments, including
(i) replacement of the Trustee by Chase as security agent for the
Banks under the FI Security Documents (in the case of FI's interest in
Joint Account Assets, by Chase as JAA Security Agent) respect to all
assets and interests of FI other than the Contract of Work, the
Concentrate Sales Agreements and Proceeds (for which the Trustee will
continue to act as security trustee for the Banks pursuant to the
Restated Trust Agreement) and (ii) transfer of the Banks' security
interests in such other assets from the Existing Trust Agreement to
the Bank Security Agreement, and to give the undertakings contained in
this Agreement.
XI. In order to consummate the transactions referred to in
Recitals I through X, the Transaction Parties are entering into this
Agreement and the other Transaction Documents, effective as of the
Closing, as follows:
(a) FI, FCX, PT-RTZ, RTZ, RTZ Jersey Investments One
Limited, RTZ Jersey Nominees Limited, the Trustee,
the Bank Agents, the Depositary and the JAA
Security Agent are executing and delivering an
early closing agreement in the form of Exhibit B-2
hereto (such early closing agreement, as amended,
modified, supplemented and restated from time to
time, the "Early Closing Agreement");
(b) FI and PT-RTZ, pursuant to the Implementation
Agreement, are executing and delivering a
participation agreement in the form attached as
Exhibit J hereto (such participation agreement, as
amended, modified, supplemented and restated from
time to time, the "Participation Agreement");
(c) FI and RTZ Lender, pursuant to the Implementation
Agreement, are executing and delivering an RTZ
loan agreement in the form of Exhibit K hereto
(such RTZ loan agreement, as amended, modified,
supplemented and restated from time to time, the
"RTZ Loan Agreement");
(d) FI, PT-RTZ, the Depositary and the Trustee are
executing and delivering a Restated Trust
Agreement substantially in the form of Exhibit A
hereto (as amended, modified, supplemented and
restated from time to time, the "Restated Trust
Agreement"), which gives effect to, or as the case
may be is after giving effect to, (i) the release
herein by the Trustee on behalf of the Banks of
the security interest of the Banks in the PT-RTZ
Joint Venture Interests to the extent necessary to
grant to and vest in PT-RTZ the PT-RTZ Joint
Venture Interests, free and clear of such security
interest, (ii) the subordination for the benefit
of RTZ Lender of the security interest of the
Banks with respect to the FIEC Interests, (iii)
the grant by FI to the Trustee for the benefit of
RTZ Lender of the RTZ Lender Lien, (iv) the
assignment by FI to PT-RTZ of the PT-RTZ COW
Interest pursuant to the PT-RTZ COW Assignment,
(v) the absolute assignment by FI to the Trustee
of all FI's right, title and interest in and to
the Contract of Work (after giving effect to the
assignment referred to in clause (iv) above), the
Concentrate Sales Agreements and the Proceeds
(including the undivided beneficial interest in
the Concentrate Sales Agreements and the Proceeds
to be held for the benefit of PT-RTZ ("the PT-RTZ
CSA Interests") to be held in trust on the terms
of the Restated Trust Agreement), and (vi) certain
other arrangements as provided in the Restated
Trust Agreement, including arrangements for (1)
the receipt, allocation and payment of cashflow
resulting from the Contract of Work, the
Concentrate Sales Agreements and the Proceeds, and
(2) the continuance of the security interests
granted by FI to the Trustee for the benefit of
the Banks in all FI's retained right, title and
interest in and to the Contract of Work, the
Concentrate Sales Agreements and the Proceeds (in
the case of the FIEC Interests only, subject and
subordinate to the RTZ Lender Lien on the terms of
the Intercreditor Agreement);
(e) RTZ, PT-RTZ, RTZ Lender and the Bank Agents
(acting on behalf of the Banks) are executing and
delivering an intercreditor agreement
substantially in the form of Exhibit B-1 hereto
(as amended, modified, supplemented and restated
from time to time, the "Intercreditor Agreement"),
which provides for certain intercreditor
arrangements and agreements relating to, among
other things, (i) FI's interests in the Contract
of Work, Concentrate Sales Agreements, Proceeds,
Joint Account Assets and FI Available Assets, (ii)
the RTZ Lender Lien, (iii) the PT-RTZ CSA
Interests, and (iv) the PT-RTZ COW Interest;
(f) FI, RTZ, PT-RTZ, the Bank Agents, the JAA Security
Agent, the Depositary, the Trustee, RTZ Lender and
RTZ-IIL are executing and delivering an agreement
in the form of Exhibit B-3 hereto (as amended,
modified, supplemented and restated from time to
time, the "Side Letter"), which provides for
certain additional intercreditor arrangements and
agreements relating to, among other things, FI's
and PT-RTZ's respective interests in the accounts
receivable in relation to the Concentrate Sales
Agreements and the Proceeds and Joint Account
Assets;
(g) FI and PT-RTZ are executing and delivering an
assignment substantially in the form of Exhibit C
hereto (as amended, modified, supplemented and
restated from time to time, the "PT-RTZ COW
Assignment"), which provides for the assignment to
PT-RTZ of the PT-RTZ COW Interest;
(h) the parties thereto are executing and delivering
the Operator Replacement Agreement, substantially
in the form of Exhibit D hereto (as amended,
modified, supplemented and restated from time to
time, the "Operator Replacement Agreement");
(i) FI and PT-RTZ are executing and delivering a surat
kuasa substantially in the form attached as Annex
I to the Operator Replacement Agreement (as
amended, modified, supplemented and restated from
time to time, the "Surat Kuasa");
(j) for the purposes of providing the Trustee (i) for
the benefit of the Banks (subject to the interest
of RTZ Lender with respect to the FIEC Interests
only) a security interest in FI's accounts
receivable in relation to the Concentrate Sales
Agreements and the Proceeds and (ii) for the
benefit of RTZ-IIL a security interest in PT-RTZ's
interest in accounts receivable in relation to the
Concentrate Sales Agreements and the Proceeds, the
parties thereto are executing and delivering a
Fiduciary Assignment of Accounts Receivable
substantially in the form of Exhibit E hereto (as
amended, modified supplemented and restated from
time to time, the "Fiduciary Assignment of
Accounts Receivable");
(k) FI, the Bank Agents, the JAA Security Agent, the
Trustee and the Banks have executed and delivered
an FI Bank Credit Agreement Amendment
substantially in the form of Exhibit F-1 hereto
and a CDF Bank Credit Agreement Amendment
substantially in the form of Exhibit F-2 hereto
(as such agreements may be amended, modified,
supplemented and restated from time to time,
collectively the "Bank Credit Agreement
Amendments"), and, pursuant thereto the Bank Surat
Kuasa, Bank Fiduciary Assignment of Accounts
Receivable, Amended Fiduciary Transfer, Amended
Fiduciary Power and Bank Security Agreement are
being executed and delivered by the parties
thereto, all such documents to be effective as of
the Closing;
(l) for the purpose of providing the JAA Security
Agent (i) for the benefit of the Banks a security
interest in FI's interest in Joint Account Assets
and (ii) for the benefit of RTZ-IIL a security
interest in PT-RTZ's interest in Joint Account
Assets, the JAA Security Agent, FI and PT-RTZ are
executing and delivering a Fiduciary Transfer of
Joint Account Assets substantially in the form of
Exhibit G hereto (as amended, modified,
supplemented and restated from time to time, the
"JAA Fiduciary Transfer") and a Power of Attorney
to Establish Fiduciary Transfer of Joint Account
Assets substantially in the form of Exhibit H
hereto (as amended, modified, supplemented and
restated from time to time, the "JAA Fiduciary
Power");
(m) The Trustee shall release the PT-RTZ Joint Venture
Interests (as such term is defined in the
Participation Agreement) from the Lien of the FI
Security Documents as in effect prior to the RTZ
Closing Date pursuant to an Indonesian release
document dated the RTZ Closing Date (the "RTZ
Release").
In order to accomplish the arrangements described above and
certain related transactions, the Transaction Parties agree as
follows:
SECTION 1. Defined Terms, etc. The terms defined below in
this Section 1 shall for all purposes of this agreement have the
meanings specified below unless the context otherwise requires.
"Amended Fiduciary Power" means the amended and restated
fiduciary power substantially in the form of Exhibit D to the Bank
Credit Agreement Amendments.
"Amended Fiduciary Transfer" means the amended and restated
fiduciary transfer substantially in the form of Exhibit C to the Bank
Credit Agreement Amendments.
"Bank Fiduciary Assignment of Accounts Receivable" means the
fiduciary assignment of accounts receivable substantially in the form
of Exhibit E to the Bank Credit Agreement Amendments.
"Bank Lien" means any lien on any asset of FI or any of its
subsidiaries granted from time to time during the term of this
Agreement to the Trustee pursuant to the Restated Trust Agreement and
the Fiduciary Assignment of Accounts Receivable, to the JAA Security
Agent pursuant to the JAA Fiduciary Power and the JAA Fiduciary
Transfer or to the Security Agent pursuant to the Bank Security
Documents or any other agreement or instrument, in each case for the
benefit of the Banks, as security for the payment of the FI
Indebtedness owing to the Banks.
"Bank Security Agreement" means a security agreement
substantially in the form of Exhibit A to the Bank Credit Agreement
Amendments.
"Bank Security Documents" means the Bank Security Agreement,
the Bank Surat Kuasa, the Bank Fiduciary Assignment of Accounts
Receivable, the Amended Fiduciary Transfer and the Amended Fiduciary
Power.
"Bank Surat Kuasa" means a surat kuasa substantially in the
form of Exhibit B to the Bank Credit Agreement Amendments.
"Governmental Agency" means the Government of the Republic
of Indonesia (including the President and any Minister) and any
material state, provincial or local court or governmental agency,
authority, instrumentality or regulatory body of Indonesia or any
other country.
"Indonesian Notarized Documents" means the PT-RTZ COW
Assignment, the Surat Kuasa, the Fiduciary Assignment of AccAccounts
Receivable, the Bank Surat Kuasa, the Bank Fiduciary Assignment of
Accounts Receivable, the Amended Fiduciary Transfer, the Amended
Fiduciary Power, the JAA Fiduciary Power, the JAA Fiduciary Transfer,
the RTZ Release and the Side Letter.
"Remedial Action" means (a) any claim, proceeding or action
to foreclose upon, take possession or control of, sell, lease or
otherwise dispose of, or in any other manner realize, take steps to
realize or seek to realize upon, the whole or any part of the assets,
properties or interests of FI and its subsidiaries, whether pursuant
to the UCC, by foreclosure, by setoff, by self-help repossession, by
notification to account debtors, by deed in lieu of foreclosure, by
exercise of power of sale, by judicial action or otherwise, and (b)
any action taken to remove FI as Operator in accordance with the
Participation Agreement, the FI Credit Documents or the Operator
Replacement Agreement.
"Transaction Documents" means this Agreement, the Restated
Trust Agreement, the Participation Agreement, the RTZ Loan Agreement,
the Intercreditor Agreement, the Bank Credit Agreement Amendments, the
PT-RTZ COW Assignment, the Indonesian Notarized Documents, the Bank
Security Agreement, the Early Closing Agreement (including the related
Ratifying Agreement in the form attached to the Early Closing
Agreement as Schedule 1 thereto, which shall not be executed on the
Closing Date referred to in Section 2(b) below) and the Operator
Replacement Agreement.
"Trust Agreement" means, prior to the Closing, the Existing
Trust Agreement and, from and after the Closing, the Restated Trust
Agreement.
Capitalized terms used herein and not otherwise defined
herein (including in Section 1) shall have the meanings assigned to
such terms in, or by reference in, the Restated Trust Agreement
(including certain terms defined therein by reference to the
Participation Agreement).
SECTION 2. The Closing; The Closing Date. (a) The
transactions provided for in Sections 3 and 4 are being consummated
simultaneously at a closing (collectively, the "Closing") on the
Closing Date referred to in Section 2(b) (i) at the offices of Davis
Polk & Wardwell, New York, New York, for all Transaction Documents
other than the Indonesian Notarized Documentation and the PT-RTZ COW
Assignment (the "NY Closing"), and (ii) at the notary office of Ramah
Arie Soetardjo, Jakarta, Indonesia, for the Indonesian Notarized
Documents and the PT-RTZ COW Assignment (the "Indonesian Closing").
(b) The "Closing Date" shall be the date of execution of
this Agreement. All documentation to be executed and delivered at the
NY Closing shall have been finalized and duly executed prior to the
Closing Date and shall have been held in escrow pending completion of
the Indonesian Closing on the Closing Date (Jakarta time), whereupon
the documents held in escrow for the NY Closing shall have been
released from escrow on the Closing Date (New York City time) and the
Closing thereby deemed fully consummated in all respects. All
transactions constituting the Closing shall be deemed to have been
consummated on the Closing Date and, except for the sequencing of
certain transactions as expressly provided herein, all such
transactions shall be deemed to have occurred concurrently.
3. Releases and Assignments. (a) Effective upon the
Closing, the Administrative Agent hereby instructs the Trustee and the
Security Agent to release, and they shall be deemed to have hereby
released, any security interest that the Banks may now have or
hereafter acquire with respect to the PT-RTZ Joint Venture Interests.
The release of the Banks' security interests in the PT-RTZ Joint
Venture Interests shall be and become effective upon the Closing and
shall be further evidenced by the RTZ Release; provided that, without
derogation from the foregoing, to the extent that any of the PT-RTZ
Joint Venture Interests is created or comes into effect in accordance
with the Participation Agreement subsequent to the Closing Date, the
Banks shall at the Closing be deemed to have automatically released
any security interest they may then or thereafter have under the
Restated Trust Agreement or the Bank Security Documents in such
subsequently created or arising PT-RTZ Joint Venture Interests without
the necessity of any further act, document or instrument, with full
force and effect as if the Banks had specifically released their
security interests at such subsequent time. All FI's right, title and
interest in and to the Contract of Work, the Concentrate Sales
Agreements and the Proceeds which is not assigned to PT-RTZ pursuant
to the PT-RTZ COW Assignment or assigned to the Trustee pursuant to
the Restated Trust Agreement to be held for the benefit of PT-RTZ, as
applicable, and all of FI's other assets and interests heretofore
pledged to the Banks but not constituting PT-RTZ Joint Venture
Interests (collectively, the "FI Retained Interests") shall continue
to be retained by FI subject to the RTZ Lender Lien as to the FIEC
Interests only and the security interests of the Banks. Each of the
Transaction Parties acknowledges and agrees that, subject and
subordinate to the RTZ Lender Lien as to the FIEC Interests only, the
continuity, perfection, priority and validity of the Banks' security
interests in the FI Retained Interests shall not in any manner be
affected, interrupted, waived or released by the Banks' release of the
PT-RTZ Joint Venture Interests, the assignment by FI to PT-RTZ of the
PT-RTZ COW Interest or the assignment by FI to the Trustee of the PT-
RTZ CSA Interests to be held for the benefit of PT-RTZ.
(b) Effective as of the Closing and the concurrent release
of the Banks' security interests therein pursuant to Section 3(a) and
the RTZ Release, FI hereby assigns, sets over, transfers and conveys
to PT-RTZ the PT-RTZ COW Interest, to have and to hold the same unto
PT-RTZ on the terms, conditions and obligations contained in the
Participation Agreement. PT-RTZ hereby accepts the assignment of the
PT-RTZ COW Interest and covenants and agrees that it shall, at any
such time as PT-RTZ shall become Operator pursuant to the terms of the
Participation Agreement, be bound by, observe and perform all of the
provisions of the Contract of Work to be observed and performed by the
Operator under the Participation Agreement. Until it is replaced as
Operator in accordance with the Operator Replacement Agreement, FI
shall remain responsible to the Government of the Republic of
Indonesia for the conduct of all operations under the Contract of Work
and for all communications with the Government of the Republic of
Indonesia under the Contract of Work on behalf of itself and PT-RTZ.
In order to effect, confirm and evidence the assignment of the PT-RTZ
COW Interest to PT-RTZ, FI and PT-RTZ are executing and delivering the
PT-RTZ COW Assignment at the Indonesian Closing. Each of FI and PT-
RTZ covenants and agrees with each other that at the request of the
other it will execute such further documents and do all such further
acts as may reasonably be required for the purpose of vesting the PT-
RTZ COW Interest in PT-RTZ.
(c) Effective as of the Closing, FI hereby assigns, sets
over and transfers to the Trustee the Concentrate Sales Agreements and
the Proceeds to hold in trust for the benefit of FI (and the Secured
Creditors) and PT-RTZ on the terms and conditions set forth in the
Restated Trust Agreement (in the case of PT-RTZ, to the extent
necessary to grant to and vest in PT-RTZ the PT-RTZ Joint Venture
Interests listed in clauses (a)(iv)-(vi) of Recital VII
(collectively, the "PT-RTZ Revenue Interests")); provided that,
without derogation from the foregoing, to the extent that any PT-RTZ
Revenue Interest is created or comes into effect in accordance with
the Participation Agreement subsequent to the Closing Date, FI shall
be deemed to have automatically assigned, set over, transferred and
conveyed to the Trustee to hold in trust for the benefit of PT-RTZ a
further undivided beneficial interest in the Concentrate Sales
Agreements and Proceeds with respect thereto commensurate with such
subsequently created or arising PT-RTZ Revenue Interest without the
necessity of any further act, document or instrument, with full force
and effect as if FI had assigned, set over, transferred and conveyed
to the Trustee to hold in trust for the benefit of PT-RTZ (and the
Banks had concurrently released their security interest in) such
undivided beneficial interest in the Concentrate Sales Agreements and
Proceeds at such subsequent time and such undivided beneficial
interest shall be deemed to be a PT-RTZ CSA Interest for all purposes
of this Agreement, the Participation Agreement, the Concentrate Sales
Agreements and the Restated Trust Agreement. Such assignment of the
Concentrate Sales Agreements and the Proceeds to the Trustee pursuant
to the immediately preceding sentence is intended by FI, the Trustee
and the other parties hereto to be not merely a security assignment,
but rather a present and absolute assignment (subject to the Banks'
security interests therein) of the Concentrate Sales Agreements and
the Proceeds. The Trustee and PT-RTZ each hereby accepts the
assignment of the PT-RTZ CSA Interests and covenants and agrees that
it shall, at all times hereafter, be bound by, observe and perform all
of the provisions of the Restated Trust Agreement insofar as they
relate to the PT-RTZ CSA Interests. Each of FI and PT-RTZ covenants
and agrees with each other and the Trustee that, at the request of the
other or of the Trustee, it will execute such further documents and do
all such further acts as may reasonably be required for the purpose of
vesting the PT-RTZ CSA Interests in the Trustee for the benefit of PT-
RTZ under the Restated Trust Agreement. For the purposes of (i)
granting a security interest for the benefit of the Banks (subject to
the interest of RTZ Lender with respect to FIEC Interests only) in
FI's interest in accounts receivable in relation to the Concentrate
Sales Agreements and the Proceeds (and not by way of security for the
benefit of the Banks over PT-RTZ's interest therein) and (ii) granting
a security interest for the benefit of RTZ-IIL in PT-RTZ's interest in
accounts receivable in relation to the Concentrate Sales Agreements
and the Proceeds (and not by way of security for the benefit of RTZ
Lender or RTZ-IIL over FI's interest therein) the parties thereto have
executed and delivered the Fiduciary Assignment of Accounts Receivable
at the Closing.
(d) After giving effect to the releases by the Banks
contained in clause (a) of this Section 3 and the assignment by FI to
the Trustee for the benefit of PT-RTZ contained in clause (c) of this
Section 3, FI hereby assigns, sets over, transfers and conveys to the
Trustee, to be held on the terms and conditions of the Restated Trust
Agreement for the benefit of the various persons and interests
(including FI and the Secured Creditors) provided therein, FI's entire
right, title and interest in and to the Contract of Work, subject,
however, to the existing first priority perfected security interest
therein of the Banks, which in the case of the FIEC Interests only is
itself subject to the first priority security interests in favor of
RTZ Lender referred to in Section 3(f), such assignment, setting over,
transfer and conveyance being effective as of the Closing.
(e) Each of the Transaction Parties acknowledges and agrees
that the continuity, perfection, priority and validity of the Banks'
security interests in the Concentrate Sales Agreements and the
Proceeds shall not in any manner be affected, interrupted, waived or
released by the present and absolute assignment by FI of the
Concentrate Sales Agreements and the Proceeds to the Trustee; provided
that upon the effectiveness of such absolute and present assignment of
the Concentrate Sales Agreements and the Proceeds to the Trustee, the
Banks shall be deemed without the necessity of any further action or
instrument to have automatically released their security interests in
the PT-RTZ CSA Interests in order to permit the Trustee to hold the
PT-RTZ CSA Interests for the benefit of PT-RTZ on the terms and
conditions contained in the Restated Trust Agreement.
(f) FI hereby assigns, sets over and transfers to RTZ
Lender on the terms and conditions set forth in the RTZ Loan
Agreement, effective as of the Closing, as security for the RTZ Loan
Indebtedness outstanding from time to time pursuant to the RTZ Loan
Agreement, a first priority security interest in the FIEC Interests;
provided that, without derogation from the foregoing, to the extent
that any FIEC Interest is created or comes into effect in accordance
with the Participation Agreement subsequent to the Closing, FI shall
be deemed to have automatically assigned, set over, transferred and
conveyed to RTZ Lender a further first priority security interest in
such subsequently created or arising FIEC Interest without the
necessity of any further act, document or instrument, with full force
and effect as if FI had assigned, set over, transferred and conveyed
to RTZ Lender (and the Banks had concurrently subordinated their
security interest pursuant to the Intercreditor Agreement in) such
FIEC Interests at such subsequent time and such FIEC Interests shall
be deemed to be subject to the RTZ Lender Lien. Each of FI and RTZ
Lender covenants and agrees with each other and the Trustee that, at
the request of the other or of the Trustee, it will execute such
further documents and do all such further acts as may reasonably be
required for the purpose of vesting the RTZ Lender Lien in the Trustee
for the benefit of RTZ Lender under the Restated Trust Agreement.
(g) Notwithstanding the present and absolute assignment of
interests in the Contract of Work, the Concentrate Sales Agreements
and the Proceeds to the Trustee pursuant to the Restated Trust
Agreement, FI and PT-RTZ and each other party hereto agree that the
Trustee shall not be obligated to perform or see to the performance or
enforce the performance of any obligations or duties under the
Contract of Work or the Concentrate Sales Agreements and shall not
have any liability whatsoever thereunder.
SECTION 4. Amendment of the Existing Trust Agreement;
Change of Security Agent for the Bank Security Agreements. (a)
Effective as of the Closing and after giving effect to the releases of
security interests, assignments and transfers on the Closing Date
provided for or described in Section 3, the Existing Trust Agreement
(including the exhibits and schedules thereto) shall be amended and
restated in the form attached hereto as Exhibit A. The provisions of
Section 4.01 of the Existing Trust Agreement relating to
indemnification of the Trustee shall survive the amendment and
restatement of the Existing Trust Agreement. All security interests
granted under the Existing Trust Agreement in assets or interests of
FI (the "Other Security") other than the Contract of Work, the
Concentrate Sales Agreements, the Proceeds and the FIEC Interests are
hereby transferred as of the Closing to the Bank Security Agreement
and each of the Transaction Parties acknowledges and agrees that the
continuity, perfection, priority and validity of the Banks' security
interests in the Other Security shall not in any manner be affected,
interrupted, waived or released (i) by the transfer of such security
interests from the Existing Trust Agreement to the Bank Security
Agreement or (ii) as a result of Chase (in its capacity as Security
Agent for the Banks under the Bank Security Agreement) becoming the
successor to First Trust of New York, National Association (in its
capacity as Trustee under the Existing Trust Agreement), as the
secured party with respect to the Other Security.
(b) Chase has been appointed by the Banks as of the Closing
as Security Agent for the Banks under the Bank Security Agreement, the
Bank Surat Kuasa and the Bank Fiduciary Assignment of Accounts
Receivable and as successor Security Agent (in replacement of First
Trust of New York, National Association, acting as Trustee under the
Existing Trust Agreement) under the Amended Fiduciary Transfer and the
Amended Fiduciary Power. First Trust of New York, National
Association, has been appointed by the Banks and RTZ-IIL as of the
Closing as Security Agent for the Banks and RTZ-IIL under the
Fiduciary Assignment of Accounts Receivable with respect to accounts
receivable in relation to the Concentrate Sales Agreements and the
Proceeds. Chase has been appointed by the Banks and RTZ-IIL as of the
Closing as JAA Security Agent for the Banks and RTZ-IIL under the JAA
Fiduciary Transfer and the JAA Fiduciary Power with respect to Joint
Account Assets. First Trust of New York, National Association, shall
continue to be entitled to all the fees, immunities, indemnities and
protections provided to it as Security Agent under the FI Security
Documents, including under the CDF and the FI Credit Agreement
(including without limitation Article VIII and Section 10.4 thereof)
as well as under the FI Security Documents, for the period up to the
Closing Date, including in respect of any actions taken or omitted to
be taken by it while acting as Security Agent under the FI Security
Documents.
SECTION 5. Representations and Warranties. As of the
Closing Date (i) each Transaction Party represents and warrants with
respect to itself only (except for the Bank Agents, who act for
themselves both in their individual capacities and as agents on behalf
of the Banks), (ii) FCX and FI jointly and severally represent and
warrant with respect to FI, (iii) RTZ and PT-RTZ represent and warrant
jointly and severally with respect to PT-RTZ and (iv) RTZ and RTZ
Lender represent and warrant jointly and severally with respect to RTZ
Lender, in each case to each other Transaction Party as follows:
(a) Qualified, in the case of PT-RTZ, as to its status as a
company in formation, the representations and warranties by such
Transaction Party set forth in each Transaction Document entered into
on the Closing Date are true and correct in all material respects as
if made on and as of the Closing Date. Such Transaction Party is in
compliance with all the terms and conditions of each Transaction
Document to which it is a party (except, in the case of FI, for
satisfaction of the conditions set forth in Section 6(b) of the CDF),
and no default or event of default has occurred or is continuing with
respect to it under any Transaction Document to which it is a party.
(b) Qualified, in the case of PT-RTZ, as to its status as a
company in formation, such Transaction Party has the corporate power
and authority to enter into and perform this Agreement and each
Transaction Document to which it is a party. Qualified, in the case
of PT-RTZ, as to its status as a company in formation, the execution,
delivery and performance of this Agreement and each Transaction
Document to which it is a party (i) have been duly authorized by such
Transaction Party and each such Transaction Document constitutes the
legal, valid and binding obligation of such Transaction Party,
enforceable against such Transaction Party in accordance with its
terms (subject, as to the enforcement of remedies against it, to
applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting creditors' rights against it generally in
connection with its bankruptcy, reorganization or insolvency or a
moratorium or similar event relating to it), (ii) will not violate
(A) the Certificate of Incorporation, the Certificate of
Domestication, or the Articles of Association, as applicable, or the
By-laws of such Transaction Party or any other of its constituent
documents, (B) any Governmental Rule (as defined in the CDF) binding
upon such Transaction Party (except, in the case of FI, for any
Governmental Rule required to be satisfied in order to satisfy the
conditions set forth in Section 6(b) of the CDF) or (C) any provision
of any indenture, agreement or other instrument to which such
Transaction Party is a party or by which it or any of its properties
or assets are or may be bound, (iii) will not be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of
time or both) a default under any such indenture, agreement or other
instrument referred to in clause (ii)(C) above and (iv) will not
result in the creation or imposition of any Lien upon the assets of
such Transaction Party, except (i) in the case of FI, the liens of the
Restated Trust Agreement, the Surat Kuasa and the Fiduciary Assignment
of Account Receivables, the Bank Security Documents and the RTZ Loan
Agreement.
(c) The Bank Agents represent and warrant that each Bank
has (i) authorized the Bank Agents, acting on behalf of such Bank and
the other Banks, to enter into and perform the Early Closing
Agreement, the Intercreditor Agreement, the Restated Trust Agreement,
the Side Letter and this Agreement (including the subordination of the
Bank FIEC Lien to the RTZ Lender Lien on the terms of the
Intercreditor Agreement), (ii) authorized the Trustee to enter into
this Agreement, the Restated Trust Agreement, the Operator Replacement
Agreement, the Surat Kuasa, the Side Letter and the Fiduciary
Assignment of Accounts Receivable, the RTZ Release and the
transactions contemplated thereby and to release all the security
interests of the Banks in the PT-RTZ Joint Venture Interests upon the
Closing, pursuant to this Agreement, in order to permit their
unencumbered assignment to PT-RTZ pursuant to the Participation
Agreement, this Agreement, and the PT-RTZ COW Assignment, (iii)
authorized the Security Agent to enter into and perform the Bank
Security Documents for the benefit of such Bank and the other Banks,
(iv) authorized the JAA Security Agent to enter into and perform the
JAA Fiduciary Transfer, the JAA Fiduciary Power and the Side Letter
for the benefit of the Banks and RTZ-IIL, (v) consented to RTZ Lender
and the Trustee (acting on behalf of RTZ Lender) taking Remedial
Actions against the RTZ Lender Collateral as provided in the RTZ Loan
Agreement and the Restated Trust Agreement, and (vi) consented to FI
entering into and performing the transactions contemplated by the
Transaction Documents to which it is a party, including the entry into
and performance of the Participation Agreement, the incurrence of the
RTZ Loan Indebtedness and FI's granting the RTZ Lender Lien to RTZ
Lender on the terms of the Restated Trust Agreement; provided,
however, that the foregoing shall not be deemed vis-a-vis any of the
Freeport Entities in any manner to constitute a modification or waiver
of the full and timely performance of any of the obligations of any of
the Freeport Entities under the Amended Loan Documents in accordance
with the terms thereof.
(d) Each of PT-RTZ, RTZ and RTZ Lender acknowledges that it
has received a copy of each of the CDF and the FI Credit Agreement
(including the exhibits thereto) and hereby (i) consents to FI
entering into and performing the Amended Loan Documents, including the
grant by FI of the Bank Lien for the benefit of the Banks, (ii)
acknowledges the restrictions on FI under Sections 5.3 and 10.17 of
each of the CDF and the FI Credit Agreement with respect to certain
dealings with PT-RTZ, RTZ, RTZ-IIL and RTZ Lender, (iii) consents to
the assignment by FI to the Security Agent of all FI's right, title
and interest in and to the Participation Agreement, the Privatization
Agreements and the RTZ Loan Agreement; provided, however, that none of
the foregoing in this Section 5(d) shall be deemed to waive in any
manner vis-a-vis FI the full and timely performance by FI of the
obligations of FI under the Participation Agreement, the Restated
Trust Agreement or the RTZ Loan Agreement.
(e) FI represents and warrants with respect to itself that
it has authorized the Trustee to enter into this Agreement, the
Restated Trust Agreement, the Operator Replacement Agreement, the
Surat Kuasa, the Side Letter, the RTZ Release and the Fiduciary
Assignment of Accounts Receivable and the transactions contemplated
thereby and that (other than the Banks and the Trustee) there is no
other beneficiary under the Existing Trust Agreement or other Person
whose authorization or consent is required for the Trustee to enter
into the foregoing agreements and the transactions contemplated
thereby.
SECTION 6. Conditions to Closing. The following conditions
precedent have been satisfied prior to or simultaneously with the
execution of this Agreement:
(a) Consent of the Minister of Mines of the Government of
Indonesia, substantially in the form of Exhibit I, has been
obtained and is in full force and effect.
(b) All other consents, approvals and agreements necessary
or advisable in the judgment of each Transaction Party and its
counsel for consummation of the Closing have been obtained and
are in full force and effect and there is not any action, suit,
litigation or other proceeding at law or in equity or by or
before any court of any Governmental Agency pending which, in the
judgment of such Transaction Party or its counsel, is likely to
restrain, prevent or impose materially adverse conditions upon
the Closing or the transactions contemplated by the Transaction
Documents or the full and timely performance by the Transaction
Parties of their obligations under the Transaction Documents.
(c) No judgment, order or decree is outstanding, and no
action has been taken by any Governmental Agency, that, in the
reasonable judgment of a Transaction Party or its counsel, has or
is likely to have the effect of restraining, preventing or
imposing materially adverse conditions upon the transactions
contemplated by the Transaction Documents, or the full and timely
performance by the Transaction Parties of their obligations under
the Transaction Documents.
(d) The Trustee has received opinions to the effect that it
does not have to qualify to do business in Louisiana or Indonesia
by virtue of the Restated Trust Agreement or the activities
contemplated thereby.
(e) Copies of this Agreement which, when taken together,
bear the signatures of all the parties hereto have been received
by each Transaction Party.
(f) The Restated Trust Agreement has been executed by all
the parties thereto (including the Representative (as defined in
the Restated Trust Agreement) under each Financing Annex in
effect on the Closing Date) and is in full force and effect, and
a copy of such executed Restated Trust Agreement has been
delivered to each party thereto.
(g) All other Transaction Documents shall be or have been
executed and delivered by the relevant Transaction Parties and
shall be or are in full force and effect (with all conditions to
their effectiveness duly satisfied or waived).
(h) All UCC filings and other filings and registrations
required to perfect and accomplish the assignments and security
interests contemplated as of the Closing Date under the Restated
Trust Agreement and the Bank Security Documents have been made
and are in full force and effect.
SECTION 7. Amendment; Waiver. This Agreement may not be
amended nor any provision hereof waived except pursuant to a writing
signed by each Transaction Party or as otherwise provided herein. Any
amendment or waiver of the provisions hereof pursuant to such a
writing shall be binding upon each party hereto.
SECTION 8. Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but
all of which when taken together shall constitute but one instrument.
SECTION 9. APPLICABLE LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICT OF LAWS.
SECTION 10. Expenses. FI shall pay all out-of-pocket
expenses incurred by the Bank Agents and the JAA Security Agent in
connection with the preparation, review and negotiation of the
Transaction Documents and with the Closing, including, but not limited
to, the reasonable fees and disbursements of Cravath, Swaine & Moore,
special counsel for the Bank Agents, and Mochtar, Karuwin & Komar,
special Indonesian counsel to the Bank Agents and the JAA Security
Agent. The out-of-pocket expenses incurred by the Trustee, the
Depositary and their counsel in connection with the preparation,
review and negotiation of the Transaction Documents and the Closing
shall be paid by FI and PT-RTZ based on the allocation thereof
provided in the Restated Trust Agreement; provided that PT-RTZ shall
not be responsible for and shall have no liability for any costs
(including, without limitation, notary fees and taxes) incurred in
connection with the notarization of any Indonesian Notarized Documents
which are Bank Security Documents. Each other Transaction Party shall
be responsible for all its own expenses incurred in connection with
the preparation, review and negotiation of the Transaction Documents
and with the Closing.
SECTION 11. References; Headings. Unless otherwise stated,
Section, Recital, Exhibit and Schedule references made herein are to
Sections, Recitals, Exhibits and Schedules, as the case may be, of
this Agreement. The headings of this Agreement are for reference only
and shall not limit or otherwise affect the meaning hereof.
SECTION 12. Construction. This Agreement shall be deemed
jointly drafted by all the Transaction Parties equally and shall not
be specially construed against any Transaction Party based on any
claim that such Transaction Party or its counsel was the draftsman of
this Agreement.
SECTION 13. Submission to Jurisdiction; Waiver of Jury
Trial; Commercial Obligations and Immunity. Each Transaction Party
hereby submits to the exclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New
York State court sitting in Manhattan for the purposes of all suits,
actions or proceedings arising out of or relating to this Agreement or
the transactions contemplated hereby. Each Transaction Party
irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in such a court
and any claim that any such suit, action or proceeding brought in such
a court has been brought in an inconvenient forum. EACH TRANSACTION
PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. To the extent that any Transaction Party may now
or hereafter be entitled, in any jurisdiction in which judicial
proceedings may at any time be commenced with respect to this
Agreement, to claim for itself or its property, assets or revenues any
immunity (whether by reason of sovereignty or otherwise) from suit,
jurisdiction of any court, attachment prior to judgment, setoff,
execution of a judgment or from any other legal process or remedy, and
to the extent that there may be attributed to any Transaction Party
such an immunity (whether or not claimed), such Transaction Party
hereby irrevocably agrees as to itself not to claim and hereby
irrevocably waives such immunity.
SECTION 14. Survival of Representations and Warranties.
The provisions of Section 5 of this Agreement shall survive the
consummation of the Closing referred to herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers or agents
as of the date first above written.
P.T. FREEPORT INDONESIA COMPANY,
by /s/ R. Foster Duncan
-----------------------------------
Name: R. Foster Duncan
Title: Treasurer
FREEPORT-McMoRan COPPER & GOLD INC.,
by /s/ R. Foster Duncan
-----------------------------------
Name: R. Foster Duncan
Title: Vice President and Treasuer
THE RTZ CORPORATION PLC,
by /s/ Sandra Walker
-----------------------------------
Name: Sandra Walker
Title: Attorney-In-Fact
P.T. RTZ-CRA INDONESIA,
by /s/ Sandra Walker
-----------------------------------
Name: Sandra Walker
Title: Attorney-In-Fact
In anticipation of the completion of formation of P.T. RTZ-CRA
INDONESIA under the laws of the Republic of Indonesia, this Agreement
is also executed by RTZ Jersey Investments One Limited and RTZ Jersey
Nominees Limited, jointly and severally, the founding shareholders.
RTZ JERSEY INVESTMENTS ONE LIMITED,
by /s/Sandra Walker
-----------------------------------
Name: Sandra Walker
Title: Attorney-In-Fact
RTZ JERSEY NOMINEES LIMITED,
by /s/ Sandra Walker
------------------------------------
Name: Sandra Walker
Title: Attorney-In-Fact
RTZ INDONESIAN FINANCE LIMITED,
by /s/ Sandra Walker
------------------------------------
Name: Sandra Walker
Title: Attorney-In-Fact
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as
Trustee under the Trust Agreement,
by /s/ Ward A. Spooner
-----------------------------------
Name: Ward A. Spooner
Title: Vice President Corporate Trust
THE CHASE MANHATTAN BANK (formerly Chemical Bank),
not in its individual capacity, but solely as
Administrative Agent under the FI Credit Agreement
and the CDF, as Security Agent under the Bank
Security Documents and as JAA Security Agent under
the JAA Fiduciary Transfer and the JAA Fiduciary
Power,
by /s/ James H. Ramage
----------------------------------
Name: James H. Ramage
Title: Vice President
Global Natural Resources
THE CHASE MANHATTAN BANK (as successor to The
Chase Manhattan Bank (National Association)),
not in its individual capacity, but solely as
Documentary Agent under the FI Credit Agreement
and the CDF and as Depositary under the Trust
Agreement,
by /s/ James H. Ramage
-----------------------------------
Name: James H. Ramage
Title: Vice President
Global Natural Resources
Dated October 11, 1996
P.T. FREEPORT INDONESIA COMPANY
and
RTZ INDONESIAN FINANCE LIMITED
______________________________________
Credit Facility of up to $450,000,000
______________________________________
CONTENTS
Clause Page No.
INTERPRETATION........................................ 2
AMOUNT................................................ 8
PURPOSE............................................... 8
CONDITIONS PRECEDENT.................................. 9
AVAILABILITY OF ADVANCES.............................. 11
LENDER RETURN......................................... 12
REPAYMENT OF LOAN..................................... 15
UNDERTAKINGS.......................................... 16
ILLEGALITY............................................ 18
PAYMENTS.............................................. 18
DEFAULT............................................... 21
EXPENSES.............................................. 23
ASSIGNMENT............................................ 23
NOTICES............................................... 24
GOVERNING LAW......................................... 24
MISCELLANEOUS......................................... 25
SCHEDULE 1....................................... 27
Address for Notices to FI........................ 27
SCHEDULE 2....................................... 28
Form of Advance Request.......................... 28
THIS AGREEMENT is made October 11, 1996
BETWEEN
(1) P.T. FREEPORT INDONESIA COMPANY of Plaza 89, 5th Floor,
Jl.H.R. Rasuna Said Kav.X-7 No.6, Jakarta 12940 Indonesia
("FI") and
(2) RTZ INDONESIAN FINANCE LIMITED of 6 St. James's Square,
London SW1Y 4LD, England (the "RTZ Lender")
WHEREAS
(A) By a Contract of Work dated 30 December 1991 made between
The Government of the Republic of Indonesia (the
"Government") and FI, the Government appointed FI as the
sole contractor for the Government with respect to the
Contract Area, as defined in the Contract of Work, with the
sole rights to explore, mine, process, store, transport,
market, sell and dispose of Products (as defined in the
Contract of Work) in the Contract Area (defined as aforesaid)
(B) By a participation agreement of even date herewith between
FI and P.T. RTZ-CRA Indonesia, a company in formation under
the laws of the Republic of Indonesia ("PT-RTZ"), FI and PT-
RTZ agreed, inter alia, to participate in operations under
the Contract of Work (as defined below)
(C) RTZ Lender and PT-RTZ are both subsidiaries of The RTZ
Corporation PLC
(D) RTZ Lender has agreed to make available to FI a loan
facility of up to but not exceeding a maximum aggregate
principal amount to be advanced of $450,000,000, repayment
of which is to be discharged solely out of FI Incremental
Expansion Cashflow (as defined below)
IT IS AGREED as follows
INTERPRETATION
1. (1) In this Agreement
(a) "Additional Amounts" means such
additional amounts as may be required, after the
deduction or withholding of Applicable Taxes
(including Applicable Taxes with respect to any
Additional Amounts), to enable RTZ Lender to
receive from FI and retain an amount equal to the
full amount stated to be payable to RTZ Lender
under Clause 6 of this Agreement, subject to the
limit on the rate of Applicable Taxes as a result
of the proviso to the definition of "Applicable
Taxes"
(b) "Advance" means the principal amount of
each borrowing by FI under this Agreement
(c) "Advance Date" means, in relation to
each Advance, the date specified as such in the
relative Advance Request or, on and after the
making thereof, the date on which it was made
(d) "Advance Request" means a request,
substantially in the form of Schedule 2 to this
Agreement, made by FI to RTZ Lender in accordance
with Clause 5 for an Advance to be made by RTZ
Lender to FI under this Agreement
(e) "Applicable Taxes" means all present and
future Taxes (whether or not collectable by
deduction or withholding) imposed in the Republic
of Indonesia, the United States of America or any
jurisdiction through or out of which such payment
is made or any political subdivision or taxing
authority thereof on any payment (other than of
principal) by FI to RTZ Lender under this Agreement
(other than Taxes imposed, assessed, levied or
collected on or with respect to the net income of
RTZ Lender), provided that such Applicable Taxes
will, with respect to each taxing jurisdiction, be
at a rate which does not exceed the rate of
withholding on interest giving effect, in each
case, to any applicable Tax treaty, with RTZ Lender
qualified thereunder as a United Kingdom person and
"Applicable Tax" shall be construed accordingly
(f) "Approved Expansion Project" has the
meaning assigned to it in the Participation
Agreement
(g) "Approved Programme and Budget" has the
meaning assigned to it in the Participation
Agreement
(h) "Available Commitment" means at any time
$450,000,000 less the aggregate amount of the
Advances which have theretofore been made
(i) "Bank Credit Agreements" means together
the FI Credit Agreement and the CDF
(j) "Business Day" means a day on which
banks and foreign exchange markets are open for
business in London and New York City
(k) "CDF" means the Credit Agreement dated
as of 30 June 1995 (as amended) between FI,
Freeport-McMoRan Copper & Gold Inc. ("FCX"), the
banks party to the FI Credit Agreement, The Chase
Manhattan Bank (formerly Chemical Bank) as
Administrative Agent, JAA Security Agent and as
Security Agent, the Trustee and The Chase Manhattan
Bank (as successor to The Chase Manhattan Bank
(National Association)) as Documentary Agent
(l) "Commitment" means the obligation of RTZ
Lender under and subject to the terms of this
Agreement to make available to FI Advances of an
aggregate principal amount not exceeding the
Available Commitment
(m) "Contract Area Block A" has the meaning
assigned to it in the Participation Agreement
(n) "Contract of Work" means the Contract of
Work referred to in Recital (A)
(o) "Default" means any Event of Default and
any event which, with the giving of any notice
and/or the expiry of time and/or the fulfilment of
any other condition stated in Clause 11(1) below
would be or become an Event of Default
(p) "Dispose" has the meaning assigned to
that expression in the Participation Agreement
(q) "Early Closing Agreement" means the
agreement dated as of the date of this Agreement
between FI, FCX, PT-RTZ, The RTZ Corporation PLC,
RTZ Jersey Investments One Limited, RTZ Jersey
Nominees Limited, First Trust of New York, National
Association, as Trustee, The Chase Manhattan Bank
(formerly Chemical Bank), as Administrative Agent,
JAA Security Agent and Security Agent, and The
Chase Manhattan Bank (as successor to The Chase
Manhattan Bank (National Association)), as
Depositary and Documentary Agent.
(r) "Encumbrance" means any mortgage, deed
of trust or other trust arrangement for the purpose
of providing security, deed to secure debt or any
other security agreement or arrangement, pledge,
hypothecation, assignment for the purpose of
providing security, security interest, encumbrance,
lien or charge of any kind, whether voluntarily
incurred or arising by operation of law, by
statute, contract or otherwise, affecting any
property, including any power of attorney or
agreement to grant any of the foregoing, any
conditional sale or other title retention
agreement, any lease in the nature of a security
interest and/or the filing of or agreement to give
any financing statement (other than a precautionary
financing statement with respect to a lease that is
not in the nature of a security interest) under the
UCC or comparable law of any jurisdiction with
respect to any property
(s) "Enterprise Operations" has the meaning
assigned to it in the Participation Agreement
(t) "Event of Default" means any of the
events specified in Clause 11(1) below
(u) "Expansion" has the meaning assigned to
it in the Participation Agreement
(v) "Facility" means the credit facility
granted to FI by RTZ Lender in this Agreement
(w) "Feasibility Study" has the meaning
assigned to it in the Participation Agreement
(x) "FI Credit Agreement" means the Credit
Agreement dated as of 27 October 1989 (as amended)
between FI, FCX, certain banks, The Chase
Manhattan Bank (formerly Chemical Bank) as Ad-
ministrative Agent, JAA Security Agent and Security
Agent, the Trustee and The Chase Manhattan Bank
(the successor to The Chase Manhattan Bank
(National Association)) as Documentary Agent
(y) "FI Incremental Expansion Cashflow"
means FI's portion of Incremental Expansion
Cashflow under the Participation Agreement
(z) "Fiduciary Assignment of Accounts
Receivable" has the meaning assigned to it in the
Restated Trust Agreement
(aa) "Government" has the meaning assigned to
it in Recital (A)
(bb) "Governmental Agency" means the
Government (including the President and any
Minister), and any material state, provincial or
local court or governmental agency, authority,
instrumentality or regulatory body of Indonesia or
any other country
(cc) "Implementation Agreement" means the agreement
so designated between FCX and RTZ dated as of 2 May
1995
(dd) "Incremental Expansion Cashflow" has the
meaning assigned to it in the Participation
Agreement
(ee) "Incremental Expansion Revenues" has the
meaning assigned to it in the Participation
Agreement
(ff) "Intercreditor Agreement" means the agreement
dated as of the date of this Agreement between,
among others, RTZ Lender, The Chase Manhattan Bank
(formerly Chemical Bank), as Administrative Agent
and Security Agent, and The Chase Manhattan Bank
(as successor to The Chase Manhattan Bank (National
Association)), as Depositary and Documentary Agent
(gg) "Loan" means together the Relevant Approved
Expansion Project Loans
(hh) "Month" means a calendar month
(ii) "Operator" has the meaning assigned to it in
the Participation Agreement
(jj) "Participating Interest" has the meaning
assigned to it in the Participation Agreement
(kk) "Participation Agreement" means the
participation agreement referred to in Recital (B)
(ll) "Prescribed Rate" has the meaning assigned to
such expression in Clause 6(3)(a) below
(mm) "Programme" and "Budget" each has the meaning
assigned to it in the Participation Agreement
(nn) "Reference Banks" means together Morgan
Guaranty Trust Company of New York, Barclays Bank
PLC, Deutsche Bank AG, ABN-AMRO Bank N.V., The
Chase Manhattan Bank, and any bank mutually
selected by RTZ Lender and FI pursuant to Clause
6(3)(d) below to replace any of such banks and
"Reference Bank" means each and any of them
(oo) "Relevant Costs" means costs, expenses and
expenditures to be incurred as comprised in and
pursuant to one or more Approved Programmes and
Budgets and Applicable Taxes and Additional Amounts
payable from Advances as provided in this Agreement
(pp) "Relevant Approved Expansion Project" means an
Approved Expansion Project in or towards the
financing of which proceeds of Advances made under
this Agreement are or will be applied
(qq) "Relevant Approved Expansion Project Loan"
means the aggregate outstanding principal amount of
all Advances made to FI under this Agreement in
respect of the Relevant Approved Expansion Project
together with all interest and commitment fees
added thereto as provided in Clause 6(4) below
(rr) "Restated Trust Agreement" means the amended
and restated trust agreement dated as of the date
of this Agreement between, among others, FI, RTZ
Lender and the Trustee
(ss) "RTZ Lender Financing Annex" means the annex
to the Restated Trust Agreement and comprising a
part thereof pursuant to which FI Incremental
Expansion Cashflow (and FI's related rights under
the Concentrate Sales Agreements) are collaterally
assigned to the Trustee for the benefit of RTZ
Lender
(tt) "RTZ Lender Lien" means the first priority
security interest in FI Incremental Expansion
Cashflow (and FI's related rights under the
Concentrate Sales Agreements) granted to the
Trustee for the benefit of RTZ Lender pursuant to
this Agreement, the Restated Trust Agreement and
the Fiduciary Assignment of Accounts Receivable as
security for the payment of all amounts payable by
FI under this Agreement
(uu) "RTZ Lender's UK Group" means the group of
companies comprising The RTZ Corporation PLC and
its United Kingdom subsidiaries, where subsidiary
has the meaning assigned to it in Section 736 of
the Companies Act 1985 of Great Britain
(vv) "RTZ Loan Transaction Documents" means
together the Implementation Agreement, the
Participation Agreement, the Early Closing
Agreement and the other agreements and documents
referred to therein and the Side Letter
(ww) "Security Documents" means together the
Restated Trust Agreement, the Fiduciary Assignment
of Accounts Receivable and the RTZ Lender Financing
Annex
(xx) "Side Letter" means the agreement dated as of
the date hereof among FI, RTZ, PT-RTZ, The Chase
Manhattan Bank (formerly Chemical Bank), as
Administrative Agent, JAA Security Agent and
Security Agent, The Chase Manhattan Bank (as
successor to The Chase Manhattan Bank (National
Association)), as Documentary Agent and Depositary,
the Trustee, RTZ Indonesian Investments Limited and
RTZ Lender
(yy) "Taxes" includes all present and future income
and other taxes, levies, imposts, assessments,
duties, charges, deductions and withholdings
whatsoever together with interest thereon and
penalties with respect thereto and "Tax" and
"Taxation" shall be construed accordingly
(zz) "Trustee" means First Trust of New York,
National Association, trustee under the Trust
Agreement, and any successor trustee under the
Restated Trust Agreement
(aaa) "UCC" means the Uniform Commercial Code as in
effect from time to time in the State of New York
or, as appropriate, the Uniform Commercial Code (or
equivalent) as in effect from time to time in any
other relevant jurisdiction
(bbb) "U.S.A." means the United States of America,
any state or territory thereof and the District of
Columbia
(ccc) "Year" means a calendar year commencing 1
January
(ddd) "dollars" and "$" means the lawful currency
for the time being of the U.S.A.
(2) In this Agreement,
(a) the contents page hereof and the
headings in this Agreement are for convenience only
and shall be ignored in construing this Agreement
(b) references to a "person" shall include
an individual, company, corporation, firm,
partnership, joint venture, association, trust or
agency of a state (in each case, whether or not
having a separate legal personality)
(c) references to any document or agreement,
including, without limitation, the Contract of
Work, shall include such document or agreement as
amended, novated, substituted, varied, supplemented
or replaced from time to time
(d) references to a party to this Agreement
or to a Reference Bank or any other person
mentioned in this Agreement shall include such
party's or person's successors or permitted assigns
(e) references to this Agreement shall
include all schedules and annexes hereto.
AMOUNT
2. Subject to the terms of this Agreement, RTZ Lender grants to
FI a dollar loan facility whereby RTZ Lender, when requested by
FI pursuant to an Advance Request and subject as aforesaid, will
make to FI Advances denominated in dollars of an aggregate amount
not to exceed $450,000,000.
PURPOSE
3. The proceeds of each Advance shall be applied only in or
towards financing payment of Relevant Costs of one or more
Approved Expansion Projects (and FI undertakes so to apply each
such Advance) and no Advance shall be drawn by FI unless the
proceeds of such Advance are or will be so applied within thirty
days after the Advance Date.
CONDITIONS PRECEDENT
4. (1) The obligations of RTZ Lender to make the first Advance to
FI under this Agreement are subject to the condition that RTZ
Lender shall first have received all of the following in form and
substance satisfactory to it:
(a) a copy of a resolution of the board of
directors of FI approving the transactions and
matters to be implemented under the RTZ Loan
Transaction Documents to which it is to be party
and authorising a specified person or persons to
execute and deliver on its behalf the RTZ Loan
Transaction Documents to which it is to be party,
and to execute and deliver and/or despatch all
notices, certificates and other documents to be
executed and delivered and/or despatched in
connection with any of the RTZ Loan Transaction
Documents, such copies to be accompanied by a
certificate of FI signed by any authorised officer
on behalf of the board of directors confirming that
the utilisation by FI of such Advance would not
cause any borrowing limit contained in the Articles
of FI or in any other agreement or instrument to
which FI is a party to be exceeded
(b) a copy of the signatures of those
persons authorised to execute and deliver on behalf
of FI the RTZ Loan Transaction Documents to which
it is to be party and of those persons authorised
to execute and deliver and/or despatch on behalf of
FI all notices, certificates and other documents in
connection therewith
(c) a copy of each of the Security Documents
duly executed by FI and each of the other parties
to it (other than RTZ Lender) together with
evidence that the RTZ Lender Lien has been
perfected and all taxes, stamp duties and fees
payable in respect thereof have been duly paid
(d) a legal opinion of Ali Budiardjo,
Negroho & Reksodiputro, Indonesian legal advisers
to FI, addressed to RTZ Lender in form and
substance reasonably satisfactory to RTZ Lender
(e) a legal opinion of Davis Polk &
Wardwell, US Counsel to FI, addressed to RTZ Lender
in form and substance reasonably satisfactory to
RTZ Lender
(f) a copy of the Participation Agreement
duly executed by each of the parties to it
(g) a copy of the Intercreditor Agreement
duly executed by each of the other parties to it
and such other evidence that such agreement is in
full force and effect as RTZ Lender may reasonably
require
(h) a copy of the Early Closing Agreement
duly executed by each of the parties to it
(i) a copy of the Side Letter duly executed
by each of the parties to it.
(2) The obligations of RTZ Lender in respect of the making
of each Advance under this Agreement are subject to the further
conditions precedent that both at the time of the relative
Advance Request and at the Advance Date:
(a) no Event of Default under Clauses
11(1)(a), (e), (i), (j) or (k) shall have occurred
and be continuing or would result from or be in
existence immediately after the making of such
Advance which has not been waived by RTZ Lender
(b) no Event of Default, act of war,
insurrection, rebellion, earthquake or other event
of like impact has occurred as a result of which
RTZ Lender has determined that, in its reasonable
judgment, it is unlikely that the Relevant Approved
Expansion Project will proceed to completion, in
which event RTZ Lender will nevertheless make
Advances (not to exceed the Available Commitment)
to cover cash calls required to pay obligations in
respect of the Relevant Approved Expansion Project
outstanding at the time of the call which the
Participants are legally obliged to pay or which
are agreed between the Participants to be necessary
to pay the costs of suspending or terminating such
Relevant Approved Expansion Project
(c) such Advance shall not cause the
Available Commitment to be exceeded
(d) RTZ Lender shall have received in form
and substance satisfactory to it a certificate of
FI signed by any authorized officer on behalf of
the board of directors confirming that the
utilisation by FI of such Advance would not cause
any borrowing limit contained in the Articles of FI
or in any other agreement or instrument to which FI
is a party to be exceeded.
(3) If any event shall occur as a result of which RTZ Lender
(whether before or after Incremental Expansion Cashflow starts
being generated) shall cease to have access to 100% of FI
Incremental Expansion Cashflow, if any, (including the failure to
have the benefit of the Intercreditor Agreement, the Restated
Trust Agreement and the Side Letter, or comparable protection),
RTZ Lender's obligation to make Advances shall be suspended until
such time as RTZ Lender shall again have access to such FI
Incremental Expansion Cashflow, it being understood that RTZ
Lender and FI shall use their respective best efforts to cure the
event giving rise to such cessation of access to such FI
Incremental Expansion Cashflow.
AVAILABILITY OF ADVANCES
5. (1) Subject to the terms of this Agreement, FI may
require that an Advance be made to it under this Agreement by
delivering to RTZ Lender prior to 10am (London time) on the fifth
Business Day before the proposed Advance Date, a duly completed
Advance Request.
(2) Each Advance Request shall specify:
(a) the amount of the proposed Advance,
which shall not be in such an amount as to exceed
the Available Commitment
(b) (unless previously notified to RTZ
Lender in writing and not revoked in accordance
with this Agreement) the details of the bank and
account to which the proceeds of the proposed
Advance are to be made available
(c) the Relevant Approved Expansion Project,
together with, in the case of the first Advance
Request in respect of a Relevant Approved Expansion
Project, FI's best estimate, taken from the
Feasibility Study for the Relevant Approved
Expansion Project, of
(i) the aggregate of the projected
Relevant Costs of the Relevant Approved
Expansion Project
(ii) the period over which the projected Relevant
Costs of the Relevant Approved Expansion
Project will be incurred and
(iii) an assumed repayment schedule based upon the
application of 100% of FI Incremental Expansion
Cashflow, such schedule to be derived from the
related Feasibility Study
(d) reasonable details of the Relevant Costs
of the Relevant Approved Expansion Project in
question and that such sums fall due and that such
proceeds will be so applied within thirty days
after the proposed Advance Date.
(3) Subject to the terms of this Agreement, each Advance
Request shall be irrevocable. Each Advance Request shall be
based on a cash call (pursuant to paragraph 10.3 of the
Accounting Procedures constituting part of the Participation
Agreement) with respect to an Approved Expansion Project.
LENDER RETURN
6. (1) There shall be determined separately for each
Relevant Approved Expansion Project the rate of interest
applicable to Advances made to finance payment of Relevant Costs
of that Relevant Approved Expansion Project.
(2) The rate of interest applicable to a Relevant
Approved Expansion Project Loan shall be the rate per annum
determined by RTZ Lender in accordance with Clause 6(3) below to
be the Prescribed Rate for that Relevant Approved Expansion
Project.
(3) (a) Not later than the third Business Day
before the proposed Advance Date for the first
Advance under this Agreement in respect of each
Relevant Approved Expansion Project, RTZ Lender
shall select, at its absolute discretion, three of
the Reference Banks and ask each of the three
Reference Banks selected to provide RTZ Lender with
a quote of (1) the rate of interest at which such
Reference Bank would be prepared to make available
to a subsidiary of The RTZ Corporation PLC a loan
facility on the following basis:
(i) the loan would be in an amount
equal to the estimate given by FI pursuant to
Clause 5(2)(c)(i) in relation to the Relevant
Approved Expansion Project
(ii) the loan would be capable of being drawn over
the period estimated by FI pursuant to Clause
5(2)(c)(ii) in relation to the Relevant
Approved Expansion Project
(iii) the loan would have an assumed repayment
schedule based upon the application of 100% of
FI Incremental Expansion Cashflow, such
schedule to be derived from the related
Feasibility Study
(iv) the rate of interest should be a floating
rate, based on a margin over LIBOR, LIBOR being
the rate quoted by the Reference Bank in the
ordinary course of business in the London
Interbank Eurodollar Market at or about 11.00am
(London time) on the day the Reference Bank
supplies to RTZ Lender its rate for the
offering of dollar deposits for a period of up
to six months
(v) the loan would be
unconditionally guaranteed, as to principal and
interest, by The RTZ Corporation PLC
and (2) the rate of any commitment fee.
The Prescribed Rate for the Relevant
Approved Expansion Project Loan shall be the
arithmetic mean (rounded up, if necessary, to the
nearest fourth decimal place) of the respective
rates quoted to RTZ Lender, provided that if any of
the Reference Banks shall be unable or otherwise
fails to supply a rate by 1.00pm (London time) on
the date falling ten Business Days after the date
of RTZ Lender's request, RTZ Lender shall select
another Reference Bank or Banks to provide a quote
on the basis set out above and provided further
that if, by 1.00pm (London Time) on the date
falling two Business Days before the end of the
Month in which the first addition to the Relevant
Approved Expansion Project Loan is to be made
pursuant to Clause 6(4) below, RTZ Lender shall not
have received a rate from each of three of the
Reference Banks, the Prescribed Rate shall be
determined by RTZ Lender on the basis of the
quotations of each of the Reference Banks which
have supplied a rate.
The rate of any commitment fee
applicable to the Relevant Approved Expansion
Project Loan shall be the arithmetic mean (rounded
up, if necessary, to the nearest fourth decimal
place) of the respective rates or fees (as
appropriate) quoted by the Reference Banks whose
quotes of the rates of interest are used by RTZ
Lender in determining the Prescribed Rate
applicable to the Relevant Approved Expansion
Project Loan.
(b) RTZ Lender shall determine in accordance
with Clause 6(3)(a) above and notify to FI not
later than the Business Day before the end of the
Month in which the first addition to the Relevant
Approved Expansion Project Loan is to be made
pursuant to Clause 6(4) below the Prescribed Rate
and commitment fee applicable to the Relevant
Approved Expansion Project Loan.
(c) Each Relevant Approved Expansion Project
Loan (including, for the avoidance of doubt,
interest and commitment fee, previously or to be
added pursuant to Clause 6(4) below) shall accrue
interest at the Prescribed Rate applicable to that
Relevant Approved Expansion Project Loan.
(d) Should any of the Reference Banks cease
to carry on business as a bank, the parties shall
mutually select another bank with a credit rating
reasonably equivalent to that enjoyed at the date
of this Agreement by the Reference Bank in question
to replace such Reference Bank.
(4) There shall be added to and become part of each Relevant
Approved Expansion Project Loan on the last Business Day of each
Month the following amounts to the extent not paid:
(a) interest accrued thereon calculated in
accordance with Clauses 6(3)(a) above and 6(5)(a)
below and
(b) an amount equivalent to a commitment fee
in respect thereof calculated in accordance with
Clauses 6(3)(a) above and 6(5)(b) below.
(5) RTZ Lender shall, in respect of each Relevant Approved
Expansion Project Loan, calculate (on a basis of a 360 day year,
comprising 12 months of 30 days each) the interest and commitment
fee (if any) to be added to the Relevant Approved Expansion
Project Loan on the last Business Day of each Month by
multiplying
(a) in the case of the interest to be added,
the Relevant Approved Expansion Project Loan as at
the end of the Month in question (immediately prior
to the addition on the last Business Day of that
Month of any amounts pursuant to Clause 6(4)(a)) by
the Prescribed Rate applicable to the Relevant
Approved Expansion Project Loan, expressed as a
monthly rate, where such monthly rate shall be the
interest factor which, when compounded for 12
months, equals the Prescribed Rate applicable to
the Relevant Approved Expansion Project Loan
(b) in the case of the commitment fee to be
added, the difference between the estimate of the
Advance required in relation to the projected
Relevant Costs given by FI pursuant to Clause
5(2)(c)(i) in relation to the Relevant Approved
Expansion Project and the Relevant Approved
Expansion Project Loan as at the end of the Month
in question (immediately prior to the addition on
the last Business Day of that Month of any amounts
pursuant to Clause 6(4)(b)) by the rate of
commitment fee applicable to the Relevant Approved
Expansion Project Loan, expressed as a monthly
rate, where such monthly rate shall be the factor
which, when compounded for 12 months, equals the
rate of the commitment fee applicable to the
Relevant Approved Expansion Project Loan.
RTZ Lender shall, not later than the fifth Business Day after the
end of each Month, send to FI a statement showing the aggregate
amount of the Relevant Approved Expansion Project Loan
outstanding at the end of the previous Month (prior to the
addition of the sums mentioned next) together with the interest
and commitment fee applicable during and added to the Relevant
Approved Expansion Project Loan at the end of the Month and shall
give to FI such explanation regarding the calculation of the
interest and commitment fee added as FI may reasonably require.
(6) Each determination by RTZ Lender of the Prescribed Rate and
the rate of commitment fee applicable to a Relevant Approved
Expansion Project Loan and the amounts of interest accrued on the
Relevant Approved Expansion Project Loan and commitment fee
applicable thereto shall, in the absence of manifest error, be
conclusive.
REPAYMENT OF LOAN
7. (1) Except as otherwise provided in this Agreement, beginning
on the Sharing Commencement Date (as defined in the Participation
Agreement), FI will pay to (or, in the case of payments in
respect of Applicable Taxes and Additional Amounts, on behalf of)
RTZ Lender all the FI Incremental Expansion Cashflow (determined
in accordance with the Participation Agreement) until the Loan is
repaid in full. FI shall not be required to repay the Loan or
pay any other obligation under this Agreement from any of its
assets other than the FI Incremental Expansion Cashflow provided
that in any event the Loan shall mature and be repayable in full
on the earlier of the date which is 25 years after the date of
the first Advance under this Agreement and the date which is 15
years after the date of the last Advance under this Agreement and
provided further that, on such earlier date, FI may, in lieu of
repaying the Loan, at its option assign to RTZ Lender all of the
FI Incremental Expansion Cashflow in full and final satisfaction
of all FI's obligations hereunder and in no circumstances shall
FI require or have the right to require RTZ Lender to reassign
the same to FI.
(2) With effect from the Sharing Commencement Date (defined as
above), FI shall, not later than the twentieth Business Day after
the end of each Month, pay, or cause to be paid, to (or, in the
case of payments of Applicable Taxes and Additional Amounts, on
behalf of) RTZ Lender in dollars the whole of the FI Incremental
Expansion Cashflow for the immediately preceding Month
distributed to FI by the Operator in accordance with the terms of
the Participation Agreement. Each such payment shall be
accompanied by a statement containing details of the FI
Incremental Expansion Cashflow computation.
(3) Not later than 45 Business Days after the end of each Year
after the date of commissioning of the first Approved Expansion
Project, FI shall send to RTZ Lender a statement showing for the
previous Year (or part thereof) the FI Incremental Expansion
Cashflow, such statement to contain sufficient data to enable RTZ
Lender to verify the calculation thereof. If the annual
statement indicates an overpayment of FI Incremental Expansion
Cashflow, RTZ Lender shall pay to FI a sum equal to the excess
within 30 Business Days. If the annual statement indicates an
underpayment of FI Incremental Expansion Cashflow, FI shall pay
to RTZ Lender a sum equal to the shortfall within 30 Business
Days.
(4) Each payment under this Clause 7 shall be applied to
Relevant Approved Expansion Project Loans in the following order
of priority:
(i) first, to any Applicable Taxes
or Additional Amounts then payable;
(ii) secondly, to any amounts of commitment fee or
interest then payable, rateably;
(iii) thirdly, to the principal amount of the
Relevant Approved Expansion Project Loans in
the order in which the first Advance thereunder
is made so that no payment shall be applied to
the principal amount of any Relevant Approved
Expansion Project Loan other than the first
until the principal amount of the first has
been repaid in full and so on.
UNDERTAKINGS
8. (1) FI undertakes with RTZ Lender that, from the date of this
Agreement until all its liabilities under this Agreement have
been discharged:
(a) FI will notify RTZ Lender of any Default
promptly upon FI becoming aware of the same and of
any remedial action being taken
(b) FI will not take any action or fail to
take any action, including actions or failures to
act under the Contract of Work, the Participation
Agreement or any of the RTZ Loan Transaction
Documents to which it is a party, if the effect of
any such action or failure to act would have a
material adverse effect on the ability of FI to
carry out Enterprise Operations or affect
materially and adversely the access of RTZ Lender
to 100% of the FI Incremental Expansion Cashflow or
affect materially and adversely the rights of RTZ
Lender under the RTZ Loan Transaction Documents
(c) FI will give prompt notice to RTZ Lender
of any notice of default, lawsuit, proceeding,
action or damage of which it becomes aware which
might materially and adversely affect the ability
of FI to carry out Enterprise Operations or the
access of RTZ Lender to 100% of the FI Incremental
Expansion Cashflow or might materially and
adversely affect the rights of RTZ Lender under the
RTZ Loan Transaction Documents
(d) FI shall at all times maintain in full
force and effect for the benefit of RTZ Lender a
first priority lien with respect to 100% of the FI
Incremental Expansion Cashflow, free and clear of
all Encumbrances except for a subordinated lien in
favour of the secured creditors of FI that are
parties to the Intercreditor Agreement to the
extent provided for in the Intercreditor Agreement
and the Side Letter
(e) FI shall not Dispose of any part of its
share of Incremental Expansion Revenues without the
prior written consent of RTZ Lender and in the
event of any such Disposal, FI shall procure that
the transferee commits in writing to RTZ Lender to
be bound by the repayment provisions of this
Agreement to the extent of the Participating
Interest or such other interest transferred
(f) FI shall at its own expense execute any
and all further deeds, documents, agreements and
instruments, and take all such further actions as
may be required under applicable law or which RTZ
Lender may reasonably request in order to perfect
the transactions contemplated by this Agreement,
the Restated Trust Agreement and the Fiduciary
Assignment of Accounts Receivable, subject to the
Intercreditor Agreement and the Side Letter and in
order to grant, preserve, protect and perfect the
validity and first priority of the RTZ Lender Lien.
(2) RTZ Lender shall record in RTZ Lender's internal records
separately for each Relevant Approved Expansion Project Loan the
date and amount of each Advance from RTZ Lender to FI, the amount
of interest and other sums added to the Relevant Approved
Expansion Project Loan on the last Business Day of each Month and
the date each such amount is added, and the date and amount of
each payment by FI to RTZ Lender under this Agreement with
respect to the Relevant Approved Expansion Project Loan provided
that the failure of RTZ Lender to make or any error in any such
entries shall not affect the obligations of FI under this
Agreement.
ILLEGALITY
9. If any change in or the introduction of any law,
regulation, treaty or (whether or not having the force of law)
official directive or rule of any governmental, fiscal, monetary
or regulatory (including any self regulatory) authority,
organisation or agency of or in the United Kingdom, Indonesia or
the U.S.A., or any change in the interpretation, administration
or application thereof by the relevant courts or other authority,
organisation or agency in any such jurisdiction or compliance by
RTZ Lender therewith, shall make it unlawful or contrary to any
such regulation, treaty, official directive or rule for RTZ
Lender to make available or fund or maintain or to give effect to
its obligations as contemplated hereby, RTZ Lender may, by notice
thereof to FI, declare that, to the extent that they are so
unlawful or contrary to such regulation, treaty, official
directive or rule, RTZ Lender's obligations to FI hereunder shall
be suspended forthwith whereupon such obligations and RTZ
Lender's Commitment shall be so suspended until such time as such
condition is no longer operative. If and to the extent that the
continued lending thereof by RTZ Lender would cause RTZ Lender to
be in breach of such law, regulation, treaty, official directive
or rule, FI will co-operate with RTZ Lender with a view to
enabling RTZ Lender to transfer the Loan, its rights under the
Trust Agreement and its obligations under this Agreement to
another subsidiary of The RTZ Corporation PLC incorporated in a
jurisdiction where there is no such illegality provided that if
no such subsidiary acceptable to both FI and The RTZ Corporation
PLC is identified within a period of twelve months, RTZ Lender's
obligations to FI hereunder shall be terminated.
PAYMENTS
10. (1) All payments to be made by FI to RTZ Lender under
this Agreement shall be made in dollars in same day funds to such
account at such bank or office in New York City as RTZ Lender
shall designate by notice to FI given not less than five Business
Days prior to the date of such payment.
(2) All payments to be made by RTZ Lender to FI under
this Agreement shall be made in dollars in same day funds to such
account at such bank or office as FI may designate by notice to
RTZ Lender given not less than five Business Days prior to the
date of such payment or as FI shall designate in the relevant
Advance Request.
(3) (a) FI shall pay to or on behalf of RTZ Lender
from the sources specified below (the "Specified
Sources") an amount equal to all Applicable Taxes
with respect to amounts payable under this
Agreement, together with any Additional Amounts, in
accordance with Clause 10(3)(c). Payments from
Specified Sources shall mean:
(i) in the period before any
Incremental Expansion Cashflow is generated,
out of Advances (not to exceed the Available
Commitment) and should any proposed Advance in
respect of such payments otherwise cause the
Available Commitment to be exceeded, FI may, at
its option, either suspend claiming a deduction
for interest on the Loan (but this is without
prejudice to the accrual of interest under
Clause 6) or request an advance from RTZ Lender
for the excess which shall be granted on the
same terms as those applicable to Advances
under this Agreement but at a rate of interest
reflecting a loan to FI and not to The RTZ
Corporation PLC
(ii) in the period after Incremental Expansion
Cashflow begins to be generated, subject to
Clause 10(3)(c), first, from Incremental
Expansion Cashflow available at the time of
payment and secondly, to the extent that there
is insufficient to meet any payment, from
Advances (not to exceed the Available
Commitment) and should any proposed Advance in
respect of such payments otherwise cause the
Available Commitment to be exceeded, FI may, at
its option, either suspend claiming a deduction
for interest on the Loan (but this is without
prejudice to the accrual of interest under
Clause 6) or request an advance from RTZ Lender
for the excess which shall be granted on the
same terms as those applicable to Advances
under this Agreement but at a rate of interest
reflecting a loan to FI and not to The RTZ
Corporation PLC.
(b) FI shall from the Specified Sources
indemnify RTZ Lender against and reimburse RTZ
Lender upon demand for any Applicable Taxes or
Additional Amounts paid by RTZ Lender and any loss,
liability, claim or expenses (including interest,
penalties, fines, surcharges and legal fees) which
RTZ Lender may incur at any time arising out of or
in connection with any failure of FI to make any
payments of Applicable Taxes or Additional Amounts.
(c) FI shall pay or account to the relevant
taxation or other authorities from the Specified
Sources within the period permitted by applicable
law the full amount of any Applicable Tax or
Additional Amounts payable hereunder and within
thirty days after each payment by FI hereunder of
any such Applicable Tax or Additional Amounts, FI
shall deliver to RTZ Lender evidence (including
receipts where obtained within that period) that
such Applicable Tax or Additional Amounts have been
duly remitted to the appropriate authority. If any
such receipts are obtained after the expiry of such
thirty day period, FI shall furnish copies thereof
promptly to RTZ Lender.
FI shall promptly pay to RTZ Lender from
the Specified Sources the full amount of any
Applicable Taxes and Additional Amounts in respect
thereof upon receipt of notice from RTZ Lender of
the imposition and amount of such Applicable Tax
and Additional Amounts when such Applicable Tax and
Additional Amounts are imposed on any payment in
the hands of RTZ Lender.
(d) If, following the imposition of any
Applicable Tax or Additional Amount, under this
Clause 10(3), RTZ Lender determines in its absolute
discretion that it has obtained a refund of Tax
payable by it or obtained or used a credit or any
other relief against Tax on its profits or income
(any of the foregoing being a "Tax Credit") which
RTZ Lender in its absolute discretion is able to
quantify and identify as attributable to Applicable
Tax or the Additional Amounts paid by FI, then, if
RTZ Lender can do so without any adverse
consequences for itself or any other company in RTZ
Lender's Group, RTZ Lender shall treat as a payment
made pursuant to Clause 7 such proportion of that
Tax Credit as RTZ Lender in its absolute discretion
may determine will leave RTZ Lender and each other
company in RTZ Lender's Group (after that
reimbursement) in no better or worse position in
respect of their worldwide Tax liabilities than
they would have been in if no payment by FI of
Applicable Taxes or Additional Amounts had been
required. RTZ Lender shall have absolute
discretion as to whether to claim any Tax Credit
(and, if it does claim, the extent, order and
manner in which it does so) and whether any amount
is due from it under this Clause 10(3)(d) (and, if
so, what amount and when). RTZ Lender shall not be
obliged to disclose any information regarding its
Tax affairs and computations or those of any other
company in RTZ Lender's Group.
(e) RTZ Lender warrants to FI that RTZ
Lender is fully eligible for the benefits of the
"Interest" provision of the double taxation treaty
between the United Kingdom and the United States of
America and of the double taxation treaty between
the United Kingdom and The Republic of Indonesia.
Each of FI and RTZ Lender shall provide
to the other promptly and file with any relevant
taxation or other authority all information,
documents, certificates and returns reasonably
required by the other or necessary in order to
enable RTZ Lender and FI to claim the benefits of
any relevant double taxation treaty in respect of
the lower rate of withholding tax on payments other
than principal.
DEFAULT
11. (1) Each of the events set out below is an Event of Default
(whether or not caused by any reason whatsoever outside the
control of FI or any other person):
(a) if default is made in the payment of any
sum due under this Agreement on the due date and
otherwise in accordance with the provisions of this
Agreement and such failure shall continue for 30
days after notice by RTZ Lender; or
(b) if FI for any reason fails duly and
promptly to perform or observe any of its material
obligations under this Agreement or any of the
other RTZ Loan Transaction Documents to which it is
party and such failure shall continue for 30 days
after notice by RTZ Lender; or
(c) if any authorisation, approval or
consent necessary for FI to enter into or perform
this Agreement or any of the other RTZ Loan
Transaction Documents to which it is party or to
ensure that this Agreement or any of the other RTZ
Loan Transaction Documents is legal, valid and
enforceable is revoked or terminated or expires and
is not renewed; or
(d) if for any reason the Intercreditor
Agreement, the Side Letter or any of the Security
Documents shall cease to be valid, legally binding
and enforceable; or
(e) if the maturity of the indebtedness
under either of the Bank Credit Agreements has been
accelerated as a result of an Event of Default as
defined in and under such Bank Credit Agreements;
or
(f) if FI shall abandon or postpone
indefinitely or resolve to abandon or postpone
indefinitely Enterprise Operations in or relating
to Contract Area Block A or shall no longer be
entitled to carry on Enterprise Operations in or
relating to Contract Area Block A, whether because
of its default under or termination of the Contract
of Work or for any reason whatsoever; or
(g) if the Contract of Work shall be
terminated or otherwise fail to be in full force
and effect or shall be amended without the consent
of RTZ Lender in any manner which materially and
adversely affects the rights and benefits granted
to RTZ Lender under the RTZ Loan Transaction
Documents or the Minister of Mines and Energy of
Indonesia (or any successor entity) or the
Government shall take any action in contravention
of the Contract of Work or otherwise which
materially and adversely affects FI's ability to
perform its obligations under the RTZ Loan
Transaction Documents to which it is a party or the
rights and benefits granted to RTZ Lender under any
of the RTZ Loan Transaction Documents; or
(h) any Governmental Agency shall condemn,
seize, nationalise, consume the management of or
appropriate any material part of FI's Property,
assets or revenues (with or without payment of
compensation); or
(i) if a general meeting of shareholders of
FI resolves that FI be liquidated or FI suffers the
appointment of a receiver, liquidator,
administrator, assignee, custodian, trustee,
sequestrator or similar official for a substantial
part of its assets in a proceeding brought against
or initiated by it, and such appointment is neither
made ineffective nor discharged within ninety days
after the making thereof or such appointment is
consented to, requested by or acquiesced in by it;
or
(j) if FI commences a voluntary case under
any applicable bankruptcy, insolvency or similar
law now or hereafter in effect; or consents to the
entry of an order of relief in an involuntary case
under any such law or to the appointment of or
taking possession by a receiver, liquidator,
administrator, assignee, custodian, trustee,
sequestrator or other similar official of any
substantial part of its assets; or makes a general
assignment for the benefit of creditors; or
(k) if entry is made against FI of a
judgement, decree or order for relief by a court of
competent jurisdiction in an involuntary case
commenced against FI under any applicable
bankruptcy, insolvency or other similar law of any
jurisdiction now or hereafter in effect.
(2) In the case of any such event as is mentioned in Clause
11(1), and at any time thereafter if any such event shall then be
continuing, RTZ Lender may, by written notice to FI, (a) declare
that an Allocation Event (as defined in the Restated Trust
Agreement) shall have occurred under the Trust Agreement and/or
(b) exercise or cause the Trustee to exercise any or all of the
remedies available to RTZ Lender or the Trustee under the
Security Documents, the Intercreditor Agreement or the Side
Letter, including, without limitation, any action required to
enforce RTZ Lender's rights with respect to the FI Incremental
Expansion Cashflow.
EXPENSES
12. Each of FI and RTZ Lender shall bear its own costs
and expenses incurred in the preparation and negotiation of this
Agreement and the other Transaction Documents. Any and all
documentary taxes, assessments, notarial or other fees or charges
levied by any Governmental Authority by reason of the execution
and delivery of or in connection with the performance of this
Agreement or any of the other Transaction Documents shall be
borne equally between FI and RTZ Lender.
ASSIGNMENT
13. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors,
but is not assignable without the written consent of the other
party hereto provided that RTZ Lender may assign without such
consent of FI to a member of RTZ Lender's UK Group. Nothing in
this Agreement, express or implied, is intended to confer upon
any other person any rights or remedies under or by reason of
this Agreement. Except to the extent any provision of the
Intercreditor Agreement or the Side Letter would permit
otherwise, (i) any transfer by FI of any portion of its
Participating Interest in accordance with the Participation
Agreement, to the extent such assignment relates to its interests
in Incremental Expansion Cashflow, shall be subject to the terms
and provisions of the RTZ Loan Transaction Documents and in
particular, but without limitation, the RTZ Lender Lien, and (ii)
no such assignment or transfer shall be effective until there is
executed and delivered to RTZ Lender an instrument or instruments
in form and substance satisfactory to RTZ Lender evidencing the
agreement of the transferee to assume a proportionate share of
the payment obligations hereunder and to be bound by all of the
other liabilities and to perform all of the other obligations and
duties under this Agreement and the other RTZ Loan Transaction
Documents to which FI is party. No such assignment or transfer
shall relieve FI of its obligations under this Agreement.
NOTICES
14. (1) Except as otherwise stated herein, all notices,
demands or other communications hereunder to any party hereto
shall be made in writing and shall be deemed to be duly given or
made when delivered to such party addressed to it at its address
specified in the relevant part of Schedule 1 to this Agreement,
or at such other address as such party may hereafter specify for
such purpose to the others by notice.
(2) A notice or other communication received on a non-
working day or after 5.00pm on a working day in the place of
receipt shall be deemed to be served on the next following
working day in such place.
GOVERNING LAW
15. (1) This Agreement shall be governed and construed in
accordance with the laws of the State of New York without giving
effect to the conflicts of law principles thereof.
(2) Each of the parties irrevocably agrees that any suit,
action or proceedings (together in this Clause 15 referred to as
"Proceedings") arising out of or in connection with this
Agreement, except for Proceedings regarding enforcement which may
be brought in any jurisdiction, shall be brought in the courts of
the Borough of Manhattan in the State of New York and submits to
the exclusive jurisdiction of each such court.
(3) Each of the parties irrevocably waives any objection
which it may have now or hereafter to the laying of venue of any
Proceedings in any such court as is referred to in this Clause 15
and any claim that any such Proceedings have been brought in an
inconvenient forum. Each of the parties hereby to the fullest
extent permitted by law waives any right it may have to have any
Proceedings take the form of a trial by jury.
(4) Nothing contained in this Clause 15 shall limit the
rights of any party to take proceedings against any other party
in any other court of competent jurisdiction, nor shall the
taking of Proceedings in one or more jurisdictions preclude the
taking of Proceedings in any other jurisdiction, whether
concurrently or not.
MISCELLANEOUS
16. If any provision of this Agreement or the Security
Documents is prohibited or unenforceable in any jurisdiction such
prohibition or unenforceability shall not invalidate the
remaining provisions of this Agreement or the Security Documents
or affect the validity or enforceability of such provision in any
other jurisdiction.
(Signature page follows)
IN WITNESS whereof the parties have caused this Agreement to be
signed on the date first above written.
P.T. FREEPORT INDONESIA COMPANY
By: /s/ R. Foster Duncan
_____________________________
Name: R. Foster Duncan
Title: Treasurer
RTZ INDONESIAN FINANCE LIMITED
By: /s/ Sandra Walker
_____________________________
Name: Sandra Walker
Title: Attorney-In-Fact
SCHEDULE 1
Address for Notices to FI
P.T. Freeport Indonesia Company
Plaza 89, 5th Floor
Jl.H.R. Rasuna Said Kav.X-7 No.6
Jakarta 12940 Indonesia
Telephone: 62 21 850 4555
Telex: 44415 FIIJKTIA
Fax: 62 21 850 6736
Attention: President-Director
with a copy to: P.T. Freeport Indonesia Company
1615 Poydras Street
New Orleans, LA 70112
Telephone: 504 582 4000
Telex: 6275993
Fax: 504 585 3513
Attention: General Counsel
Address for Notices to RTZ Lender
6 St. James's Square
London SW1Y 4LD
Telephone: 0171 930 2399
Telex: 24639 RTZLDN G
Fax: 0171 930 3249
Attention: The Secretary
with a copy to: The Treasurer
The RTZ Corporation PLC
6 St. James's Square
London SW1Y 4LD
Fax: 0171 930 3249
SCHEDULE 2
Form of Advance Request
To: RTZ Indonesian Finance Limited
6 St. James's Square
London SW1Y4LD
Attention:
[Date]
REQUEST
Agreement dated [ ] 199[ ]
Dear Sirs
We refer to the Facility constituted by an agreement (the
"Agreement") dated [ ] 199[ ] made
between this Company as Borrower and RTZ Indonesian Finance
Limited as RTZ Lender. Terms defined in the Agreement have the
same meanings herein.
We hereby give you notice pursuant to Clause 5 of the Agreement
that we require an Advance to be made to us under the Agreement
as follows:
(a) Drawdown Date:
(b) Amount:
We set out below the Approved Expansion Project in or towards the
financing of which the proceeds of the Advance will be applied:
[ ]
[In the first Advance Request in respect of a Relevant Approved
Expansion Project only:
[Our best estimate, taken from the feasibility study for the
Approved Expansion Project referred to above approved pursuant to
Clauses 10 and 11 of the Participation Agreement, of
(i) the aggregate of the projected Relevant Costs of the
Approved Expansion Project is $
(ii) the period over which the projected Relevant Costs of the
Approved Expansion Project will be incurred is
years
(iii) we attach an assumed repayment schedule based on the
application of 100% of the FI Incremental Expansion Cashflow
based on the related Feasibility Study of the Approved
Expansion Project.]
We set out below details of the Relevant Costs in or towards the
financing of which the proceeds of the Advance will be applied
and confirm that such proceeds will be applied within thirty days
after the proposed Advance Date:
[ ]
We confirm that no Event of Default has occurred and is
continuing or would occur as a result of the making of the
proposed Advance which has not been waived.
Yours faithfully
Dated October 11, 1996
(1) P.T. FREEPORT INDONESIA COMPANY
(2) P.T. RTZ-CRA INDONESIA
PARTICIPATION AGREEMENT
with respect to the Contract Area
TABLE OF CONTENTS
1. DEFINITIONS.............................................. 1
1.2 Interpretation............................. 11
1.3 Headings................................... 11
2. PURPOSES AND TERM........................................ 11
2.1 General.................................... 11
2.2 Purposes................................... 12
2.3 Assignment of COW.......................... 12
2.4 Term....................................... 13
2.5 Termination................................ 13
3. RELATIONSHIP OF THE PARTICIPANTS......................... 14
3.1 Contribution of Use of Assets.............. 14
3.2 Obligations Several and Not Joint.......... 14
3.3 Not a Partnership.......................... 14
3.4 No Authority to Act for other Participants. 15
3.5 No Joint Receipt of Income................. 15
3.6 Area of Mutual Interest.................... 15
3.7 Other Business Opportunities............... 17
3.8 Waiver of Right to Partition............... 17
3.9 Employees.................................. 17
3.10 Title...................................... 17
4. REPRESENTATIONS AND WARRANTIES........................... 18
4.1 Capacity................................... 18
4.2 PT-FI Representations and Warranties....... 18
4.3 Disclosures................................ 20
5. EXPLORATION CONTRIBUTIONS BY PARTICIPANTS................ 20
5.1 Exploration Contribution by PT-RTZ......... 20
5.2 Additional Cash Contributions.............. 20
6. INTERESTS OF PARTICIPANTS................................ 21
6.1 Participating Interests.................... 21
6.2 Changes in Participating Interests......... 21
6.3 Default in Making Contributions............ 22
6.4 Continuing Liabilities Upon Adjustment
of the Participating Interests........... 26
7. COVENANTS AND RIGHTS..................................... 27
7.1 Mutual Covenants........................... 27
7.2 PT-FI Covenants............................ 28
7.3 PT-RTZ Covenant............................ 30
7.4 Power of Attorney.......................... 30
7.5 Retained PT-FI Rights...................... 31
8. COMMITTEES............................................... 33
8.1 Exploration Committees..................... 33
8.2 Operating Committee........................ 33
8.3 Other Committees........................... 34
8.4 Quorum..................................... 34
8.5 Decisions.................................. 34
8.6 Meetings................................... 35
8.7 Action Without Meeting..................... 36
8.8 Close-down................................. 36
9. OPERATOR................................................. 37
9.1 Appointment................................ 37
9.2 Powers and Duties of Operator.............. 37
9.3 No Fee..................................... 41
9.4 Standard of Care........................... 41
9.5 Resignation; Deemed Offer to Resign........ 41
9.6 Transactions With Affiliates............... 43
10. FEASIBILITY STUDY INTO EXPANSION........................ 43
11. GREENFIELD PROJECTS AND LATER EXPANSION PROJECTS........ 45
12. SOLE RISK............................................... 46
13. PROGRAMMES AND BUDGETS.................................. 48
14. TAXATION IN INDONESIA................................... 48
15. TRANSFER OF PARTICIPATING INTERESTS .................... 49
15.1 General.................................... 49
15.2 Limitations on Free Transferability........ 49
15.3 First Offer Right.......................... 51
15.4 Exceptions to First Offer Right............ 51
16. GENERAL PROVISIONS...................................... 52
16.1 Notices.................................... 52
16.2 Waiver..................................... 53
16.3 Modification............................... 53
16.4 Force Majeure.............................. 54
16.5 Governing Law.............................. 55
16.6 Penalties.................................. 56
16.7 Rule Against Perpetuities.................. 57
16.8 Further Assurances......................... 57
16.9 Confidentiality and Public Statements...... 57
16.10 Entire Agreement; Successors and Assigns... 58
16.11 Severability............................... 59
16.12 Indonesian Law Waiver...................... 59
16.13 Tax Covenant............................... 59
SCHEDULE 1.................................................. 62
Privatisation Agreements.................................. 62
SCHEDULE 2.................................................. 65
Deed of Assignment of Interest in COW..................... 65
SCHEDULE 3.................................................. 69
Exceptions to Representations and Warranties............. 69
ANNEX A..................................................... 70
Product Schedule.......................................... 70
ANNEX B..................................................... 72
Financial and Accounting Procedures....................... 72
ATTACHMENT X................................................ 1
THIS AGREEMENT is made October 11, 1996
BETWEEN:
(1) P.T. FREEPORT INDONESIA COMPANY, a limited liability company
organised under the laws of the Republic of Indonesia and
domesticated in the State of Delaware, U.S.A. ("PT-FI") and
(2) P.T. RTZ-CRA INDONESIA, a company in formation under the laws of
the Republic of Indonesia ("PT-RTZ"),
WHEREAS
(A) By a Contract of Work dated 30 December 1991 made between The
Government of the Republic of Indonesia (the "Government") and
PT-FI, the Government appointed PT-FI as the sole contractor for
the Government with respect to the Contract Area, as defined in
the Contract of Work, with the sole rights to explore, mine,
process, store, transport, market, sell, and dispose of
Products, as defined below, in the Contract Area (defined as
aforesaid)
(B) PT-FI desires PT-RTZ and PT-RTZ desires to participate in
operations under the COW (as defined below) on the terms and
conditions hereinafter appearing
IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1 In this Agreement (including the Schedules and
Annexes hereto), unless the context otherwise requires, the
following terms shall have the following meanings:
1.1.1 "Affiliate" or "Affiliates" of any
specified person means any such other person,
company, partnership, joint venture, or other form
of enterprise which directly or indirectly controls,
or is controlled by or is under common control with,
the specified person and, in the case of RTZ,
includes CRA Limited and the Affiliates of CRA
Limited. The term "control" as used herein means
possession, directly or indirectly, of the power to
direct or cause direction of management and policies
through ownership of voting securities, contract,
voting trust or otherwise;
1.1.2 "Agreement" means this Participation
Agreement, including all amendments and modifications
thereof, and all schedules and annexes hereto, which
are incorporated herein by this reference;
1.1.3 "Annual Budget Meeting" means the meeting
defined in Clause 8.6;
1.1.4 "Approved Expansion Project" means any
project of Expansion in Contract Area Block A which
has been approved by the boards of directors of PT-
FI, FCX and PT-RTZ or is otherwise an Approved
Expansion Project in accordance with Clause 10.3;
1.1.5 "Approved Programme and Budget" means a
Programme and Budget which has been approved by the
boards of directors of PT-FI and PT-RTZ upon the
recommendation of the relevant Exploration Committee
or the Operating Committee, as appropriate, as
provided in Clause 8.5 and paragraph 10.1 of the
Financial and Accounting Procedures;
1.1.6 "Area of Mutual Interest" has the meaning
assigned to that expression in Clause 3.6;
1.1.7 "Assignment" means the assignment
referred to in Clause 2.3;
1.1.8 "board of directors" of PT-FI or PT-RTZ
shall mean the respective board of directors and/or
board of commissioners (if any) of such entity and,
in the case of PT-RTZ during the period prior to
Completion of Formation, means the board of directors
and/or board of commissioners as constituted from
time to time pursuant to the Deed of Establishment of
PT-RTZ, whichever is the appropriate body (whether
pursuant to its constitutional documents or law) for
the decision or action in question;
1.1.9 "Budget" means a detailed estimate of all
costs to be incurred by the Participants with respect
to a Programme and an estimated schedule of cash
calls to be made therefor;
1.1.10 "Budgetary Period" means the budgetary
period established in a Programme and Budget;
1.1.11 "Chargeable Operations" has the meaning
assigned to that expression in the Financial and
Accounting Procedures;
1.1.12 "Close-down" means a decision by the
boards of directors of PT-FI, FCX and PT-RTZ, upon
the recommendation of the Operating Committee, to
cease all Mining and Processing in the Contract Area;
1.1.13 "Committee" means whichever committee
during the applicable time (be that the Exploration
Committee in respect of either Contract Area Block A
or Contract Area Block B or the Operating Committee
or a committee established pursuant to Clause 8.3) is
responsible for the subject matter under this
Agreement as provided in Clause 8;
1.1.14 "Completion of Formation" has the meaning
assigned to that expression in the Early Closing
Agreement;
1.1.15 "Confidential Information" means the
confidential information referred to in Clause 16.9;
1.1.16 "Contract Area" means the area defined as
such under the COW;
1.1.17 "Contract Area Block" means, as
appropriate or as the context requires, either
Contract Area Block A or Contract Area Block B;
1.1.18 "Contract Area Block A" has the meaning
assigned to that expression in the COW;
1.1.19 "Contract Area Block B" has the meaning
assigned to that expression in the COW;
1.1.20 "Cover Payment" means the payment
described in Clause 6.3.2.1;
1.1.21 "COW" means the Contract of Work referred
to in Recital (A) of this Agreement and includes any
other contract of work, whenever granted, for the
conduct of Exploration, Development or Mining in all
or any part of the Contract Area;
1.1.22 "Cut-off Date" means the last day of the
final Year covered in the Product Schedule, as the
same may be extended pursuant to Clause 16.4.2;
1.1.23 "Defaulting Participant" means the
Participant referred to in Clause 6.3;
1.1.24 "Development" has the meaning assigned to
that expression in the Financial and Accounting
Procedures;
1.1.25 "Dispose" means, in relation to any
relevant property, to sell, transfer, assign, declare
oneself a trustee of or part with the use or benefit
of or otherwise dispose of the relevant property (or
any interest therein);
1.1.26 "dollar" or "$" means a dollar being the
lawful currency of the United States of America;
1.1.27 "Early Closing Agreement" means the
agreement dated as of the date of this Agreement
between PT-FI, FCX, PT-RTZ, RTZ, RTZ Jersey
Investments One Limited, RTZ Jersey Nominees Limited,
First Trust Of New York, National Association, as
Trustee, The Chase Manhattan Bank (formerly Chemical
Bank), as Administrative Agent, JAA Security Agent
and Security Agent and The Chase Manhattan Bank (as
successor to The Chase Manhattan Bank (National
Association)), as Depositary and Documentary Agent;
1.1.28 "Effective Date" means the date of this
Agreement;
1.1.29 "Encumbrance" means any mortgage, pledge,
lien, charge, power of attorney, assignment for the
purpose of providing security, hypothecation,
security interest or trust arrangement for the
purpose of providing security and any other security
agreement or arrangement;
1.1.30 "Enterprise Operations" means all
operations within the Contract Area under the COW by
or on behalf of PT-FI or by or on behalf of PT-FI and
PT-RTZ, including the Mining of the 10-K Reserves and
Joint Operations, but excluding Sole Risk Ventures;
1.1.31 "Expansion" means a Development which is
designed to increase the productive capacity of
existing facilities (whether comprising PT-FI
Available Assets or Joint Account Assets and whether
Mining, milling and delivery facilities or related
infrastructure) for the obtaining of Products from
the aggregate resources in Contract Area Block A
(being both the 10-K Reserves and reserves other than
the 10-K Reserves) at an aggregate rate in excess of
the then existing production capacity of such
facility;
1.1.32 "Exploration" has the meaning assigned to
that expression in the Financial and Accounting
Procedures;
1.1.33 "Exploration Committee" means a committee
established under Clause 8.1;
1.1.34 "Exploration Costs" has the meaning
assigned to that expression in the Financial and
Accounting Procedures as the same may have been
amended or clarified with respect to specific costs
as set out in the Memorandum of Understanding
attached hereto and marked X and with such further
changes with respect to specific costs as shall from
time to time be approved in writing by the
Participants;
1.1.35 "Exploration Obligation" means the
obligation on the part of RTZ contained in Clause
6(1) of the Implementation Agreement as the same may
have been modified in the agreement of even date
herewith made between PT-FI, P.T. Irja Eastern
Minerals Corporation, FCX, RTZ and PT-RTZ, a copy of
which is annexed hereto and marked X and with such
further changes as shall from time to time be
approved in writing by the Participants;
1.1.36 "FCX" means Freeport-McMoRan Copper &
Gold Inc., a Delaware corporation;
1.1.37 "Feasibility Study" means a report
showing the economic viability of a proposed
Development project, which may relate to Expansion,
and shall include (i) reasonable assessment of the
size and quality of the minable reserves of Minerals,
(ii) reasonable assessments of the amenability of the
Minerals to metallurgical treatment, (iii) reasonable
description of the work, equipment, supplies and
permitting, if any, required to bring the prospective
deposit of Minerals into commercial production and
the estimated costs thereof, (iv) conclusions
regarding the economic viability of bringing the
prospective deposit of Minerals into commercial
production, (v) an analysis of the impact which such
project will have on the existing Enterprise
Operations and Sole Risk Programmes and (vi) such
other information as may be appropriate to allow
banking and other financial institutions familiar
with the mining business to make a firm decision
whether or not to advance funds sufficient to finance
the Development in whole or in part;
1.1.38 "Financial and Accounting Procedures"
means the document so entitled, in the form attached
to this Agreement as Annex B;
1.1.39 "Government" means the Government of the
Republic of Indonesia;
1.1.40 "Greenfield Project" means a Development
project which does not rely to any significant extent
on PT-FI Available Assets, the 10-K Reserves or the
Joint Account Assets constituting part of any prior
approved project;
1.1.41 "Implementation Agreement" means the
agreement so designated between FCX and RTZ dated as
of 2 May 1995;
1.1.42 "Incremental Expansion Cashflow" has the
meaning assigned to that expression in the Financial
and Accounting Procedures;
1.1.43 "Incremental Expansion Revenues" has the
meaning assigned to that expression in the Financial
and Accounting Procedures;
1.1.44 "Incremental Production" has the meaning
assigned to that expression in the Financial and
Accounting Procedures;
1.1.45 "Joint Account Assets" means
(i) all Products (in whatever form)
derived from Joint Operations prior to their
being sold and
(ii) all other real and personal property,
tangible and intangible, which is acquired as a
joint asset of the Participants or as a result
or for the purpose of Joint Operations or the
funding thereof (other than any thereof which is
distributed to the Participants or either of
them pursuant to the provisions of this
Agreement);
1.1.46 "Joint Operations" means the conduct of
the following activities:
(i) Approved Expansion Projects;
(ii) Exploration in the Contract Area;
(iii) Development and Mining in Contract Area Block B
and, after the Cut-off Date, if there has,
before such Date, been a first Approved
Expansion Project, also in Contract Area Block A
and
(iv) any other activities in or in
relation to the Contract Area which the
Participants agree to conduct jointly under the
terms of this Agreement, including Joint
Operations Greenfield Projects,
but excluding Sole Risk Ventures;
1.1.47 "Liabilities" or "Liability" means any
and all claims, demands, investigations, judgements,
losses, liabilities, costs and expenses, including
reasonable attorneys' fees;
1.1.48 "LIBOR" means a rate of interest which is
equal to three month U.S dollar Libor as published in
the London Financial Times;
1.1.49 "Memorandum Equity Account" means an
account established for each Participant pursuant to
paragraph 2 of the Financial and Accounting
Procedures;
1.1.50 "Minerals" has the meaning assigned to
that expression in the COW;
1.1.51 "Mining" means the mining, extracting,
producing, handling, milling or other processing of
Minerals and the marketing and selling of Products
therefrom;
1.1.52 "Non-defaulting Participant" means a
Participant which is not the Defaulting Participant
as described in Clause 6.3;
1.1.53 "Operating Committee" means the committee
established under Clause 8.2;
1.1.54 "Operator" means the person or entity
appointed under Clause 9.1 or any successor Operator;
1.1.55 "Operator Replacement Agreement" means
the agreement dated as of the date of this Agreement
between PT-FI, PT-RTZ, First Trust of New York,
National Association, as trustee under the Trust
Agreement and the Operator Selection Representative;
1.1.56 "Participation" means the business
arrangement of the Participants under this Agreement;
1.1.57 "Participants" means PT-FI and PT-RTZ and
their respective successors and permitted assigns and
"Participant" means any one of them;
1.1.58 "Participating Interest" means, at any
time, with respect to Contract Area Block A or
Contract Area Block B, the percentage interest then
applicable to each Participant with respect to such
Contract Area Block determined in accordance with
this Agreement (including the Financial and
Accounting Procedures), provided that, if such
expression is used with reference to assets, it shall
refer only to an interest in the Joint Account Assets
and Joint Operations, and if such expression is used
with reference to Products from Contract Area Block
A, to Sales Revenues from such Products or to
revenues from Contract Area Block A, it shall, until
the Cut-off Date, refer only to Incremental
Production, or, as the case may be, Incremental
Expansion Revenues;
1.1.59 "Privatisation Agreements" means the
agreements listed in Schedule 1 to this Agreement;
1.1.60 "Processing" has the meaning assigned to
that expression in the COW;
1.1.61 "Product Schedule" means the Product
Schedule annexed hereto as Annex A, setting out the
planned production of Products for each Year from
1995 to 2021 as the same may be amended pursuant to
Clause 16.4.2;
1.1.62 "Products" has the meaning assigned to
that expression in the COW;
1.1.63 "Programme" means a description in
reasonable detail of Joint Operations or Sole Risk
Ventures, as appropriate, to be conducted for a Year
or any longer period, which is prepared and approved
in accordance with paragraph 10.1 of the Financial
and Accounting Procedures;
1.1.64 "Proposing Participant" means the
Participant referred to in Clause 10.1;
1.1.65 "PT-FI Assets" means together
(i) the PT-FI Available Assets
(ii) the right, title and interest of PT-
FI in and under the COW and all authorisations
issued pursuant to the COW and
(iii) all other real and personal assets, tangible
and intangible, of PT-FI, including without
limitation, (A) cash, accounts receivable,
inventories and capital stock and indebtedness
of other corporations, including its interests
in the Gresik smelter and any assets in respect
of Sole Risk Ventures of PT-FI, but excluding
(B) all Joint Account Assets or interests
therein;
1.1.66 "PT-FI Available Assets" means together
(i) all real and personal property,
tangible and intangible, held by PT-FI from time
to time which are used or intended to be used
for Exploration, Development or Mining in the
Contract Area, including, without limitation,
mills and infrastructure, but excluding
(A) property which is produced by or
acquired pursuant to (1) Approved Expansion
Projects or (2) Sole Risk Ventures of PT-RTZ
which is held in the name of PT-FI as
Operator
(B) items specified in (i) and
(iii)(A) of Clause 1.1.65 (the definition of
PT-FI Assets) and
(C) all Joint Account Assets or
interests therein
(ii) the right, title and interest of PT-
FI in and to the Privatisation Agreements and;
(iii) except for the purpose of the Financial and
Accounting Procedures, capital replacements
hereafter of physical property subject to
Privatisation Agreements or otherwise
constituting PT-FI Available Assets under (i) of
this Clause 1.1.66;
1.1.67 "PT-RTZ Assets" means together
(i) the interest of PT-RTZ in and under
the COW pursuant to the Assignment
(ii) any assets in respect of Sole Risk
Ventures of PT-RTZ and
(iii) all other real and personal assets, tangible
and intangible, of PT-RTZ, but excluding all
Joint Account Assets or interests therein;
1.1.68 "RTZ" means The RTZ Corporation PLC, an
English company;
1.1.69 "RTZ Loan" has the meaning assigned to
the expression "Loan" in the RTZ Loan Agreement;
1.1.70 "RTZ Loan Agreement" means the facility
agreement of even date herewith between PT-FI and RTZ
Indonesian Finance Limited ("RTZ Lender") whereby RTZ
Lender agrees to make available to PT-FI a facility
of up to $450,000,000 to fund one or more Approved
Expansion Projects;
1.1.71 "Sales Revenues" has the meaning assigned
to that expression in the Financial and Accounting
Procedures;
1.1.72 "Sharing Commencement Date" has the
meaning assigned to that expression in the Financial
and Accounting Procedures;
1.1.73 "Sole Risk Programme" has the meaning
assigned to it in Clause 10.3;
1.1.74 "Sole Risk Venture" means any activity
carried out by a Participant in the Contract Area on
its own account pursuant to Clauses 10 and 12;
1.1.75 "Specified Area" means the area referred
to as such in Clause 10.1;
1.1.76 "subsidiary" has the meaning assigned to
it in the Implementation Agreement;
1.1.77 "Taxes" means all present and future
income and other taxes, levies, imposts, duties,
charges, deductions and withholdings whatsoever
together with interest thereon and penalties with
respect thereto;
1.1.78 "10-K Reserves" means the proved and
probable ore reserves as at 31 December 1994 in
Contract Area Block A being 1,125.6 million tonnes at
an average grade of 1.30% copper, 1.42 grams of gold
per tonne and 4.06 grams of silver per tonne;
1.1.79 "Trust Agreement" means the amended and
restated trust agreement dated as of the date of this
Agreement between, among others, PT-FI, PT-RTZ, The
Chase Manhattan Bank (as successor to The Chase
Manhattan Bank (National Association)), as
Depositary, First Trust of New York, National
Association, as Trustee, and certain Secured
Creditors of PT-FI (as defined therein);
1.1.80 "Year" means a calendar year commencing
on 1 January.
1.2 Interpretation
In this Agreement
1.2.1 References to any document or agreement,
including the COW, includes such document or
agreement as amended, novated, substituted, varied,
supplemented or replaced from time to time.
1.2.2 References to any Act of Parliament,
code, decree, regulation or ordinance or to any
provision thereof include any modification or re-
enactment thereof or any provision substituted
therefor and all statutory or other instruments
issued thereunder.
1.2.3 References to a party to this Agreement
or any other document or agreement include such
party's successors or permitted assigns.
1.3 Headings
Headings to Clauses, sub-clauses, Schedules or
Annexes are for convenience only and shall not affect the
interpretation of this Agreement.
2. PURPOSES AND TERM
2.1 General
PT-FI and PT-RTZ hereby agree that all of their
rights and obligations as between themselves relating to
Joint Operations, Sole Risk Ventures and other operations
within the Contract Area shall be subject to and governed by
this Agreement.
2.2 Purposes
This Agreement is entered into for the following
purposes and for no others, and shall serve as the exclusive
means by which the Participants, or either of them,
accomplish such purposes:
2.2.1 to conduct Exploration within the
Contract Area, including the evaluation of
Development or Mining opportunities within the
Contract Area;
2.2.2 to engage in Development and Mining
within the Contract Area if so decided in the manner
provided in this Agreement;
2.2.3 to engage in the Disposal of Products
derived from Joint Operations;
2.2.4 to allocate costs of and revenues derived
from Joint Operations;
2.2.5 to regulate as between the parties the
conduct of Joint Operations and Sole Risk Ventures in
the Contract Area;
2.2.6 to regulate as between the parties to the
extent provided herein the conduct by PT-FI of its
activities in the Contract Area, other than in
respect of Joint Operations, using the PT-FI
Available Assets, the Joint Account Assets, and the
Participants' right, title and interest in and under
the COW and all authorisations issued pursuant to the
COW;
2.2.7 to regulate the procedures for making a
Close-down decision and for implementing that
decision; and
2.2.8 to perform any other operation or
activity necessary, appropriate or incidental to any
of the foregoing.
2.3 Assignment of COW
Simultaneously with signature of this Agreement, PT-
FI and PT-RTZ shall execute an assignment of interests in
the COW in the form set out in Schedule 2 to this Agreement
or in such other form as PT-RTZ may reasonably require
provided that such interests shall be reassigned by PT-RTZ
to PT-FI in the circumstances provided for in Clause 6(2) of
the Implementation Agreement.
2.4 Term
The term of this Agreement shall commence on the
Effective Date and shall continue until the occurrence of
any of the following events:
2.4.1 the termination of the COW and the
termination of all rights of the Participants to
conduct Exploration, Development and Mining in the
Contract Area and completion of a final accounting
between the Participants as provided in Clause 2.5.2;
or
2.4.2 the agreement by the Participants
permanently to cease Joint Operations and terminate
this Agreement and completion of a final accounting
between the Participants as provided in Clause 2.5.2;
or
2.4.3 the reduction of the Participating
Interest of one of the Participants in both Contract
Area Block A and Contract Area Block B to zero
(including a reduction pursuant to the operation of
the proviso to Clause 2.3); or
2.4.4 the Disposal of all Joint Account Assets
and the completion of a final accounting between the
Participants as provided in Clause 2.5.2; or
2.4.5 the bankruptcy, dissolution or withdrawal
of any Participant, unless all of the remaining
Participants agree to continue this Agreement, and
completion of a final accounting between the
Participants as provided in Clause 2.5.2.
2.5 Termination
Upon expiry of the term of this Agreement:
2.5.1 all unpaid Liabilities properly incurred
arising out of Joint Operations during the term of
this Agreement shall be paid by the Participants as
provided in this Agreement
2.5.2 the Operator shall take all action
necessary to wind up the activities of the
Participation, and all costs and expenses incurred in
connection with the termination of the Participation
shall be expenses chargeable to the Participants.
Where the term of this Agreement expires pursuant to
Clauses 2.4.1, 2.4.2, 2.4.4 or 2.4.5, the Joint
Account Assets shall be paid, applied, or distributed
in satisfaction of all Liabilities of the
Participation arising out of Joint Operations to
third parties. Thereafter, all other Joint Account
Assets shall be sold and the proceeds, together with
any remaining cash, shall be distributed to the
Participants in proportion to their Participating
Interests in Contract Area Block A or, as
appropriate, Contract Area Block B at the time of
such distribution, subject as provided in Clause 6.1
or the Financial and Accounting Procedures, after
first satisfying out of a Participant's share any
Liabilities owed by that Participant to the other
2.5.3 the Participants shall enter into such
other agreements and arrangements as may be necessary
or appropriate in the circumstances to regulate the
conduct of any Sole Risk Ventures in the Contract
Area which are to continue after expiry of the term
of this Agreement.
3. RELATIONSHIP OF THE PARTICIPANTS
3.1 Contribution of Use of Assets
3.1.1 PT-FI agrees to make available in
accordance with the terms of this Agreement the PT-FI
Available Assets, and each of PT-FI and PT-RTZ agrees
to make available in accordance with the terms of
this Agreement the Joint Account Assets, in each case
for the purposes of Enterprise Operations without
charge to the Participants except as otherwise
provided in this Agreement.
3.1.2 PT-FI and PT-RTZ agree that their
respective rights under the COW will be made
available to the Participants without charge for the
purposes of Joint Operations.
3.2 Obligations Several and Not Joint
The liability of the Participants shall be several
and not joint nor joint and several. Each Participant shall
be liable to the other only for its obligations as set out
in this Agreement.
3.3 Not a Partnership
Nothing contained in this Agreement shall be deemed
to constitute either Participant the partner of the other,
nor, except as otherwise herein expressly provided, to
constitute either Participant the agent or legal
representative of the other or to create any fiduciary
relationship between them.
3.4 No Authority to Act for other Participants
No Participant shall have any authority to act for or
to assume any obligation or responsibility on behalf of the
other Participant, except as otherwise expressly provided
herein. Each Participant shall indemnify, defend and hold
harmless the other Participant and its Affiliates
(including, without limitation, direct and indirect parent
companies), and its or their respective directors,
commissioners, officers, shareholders, employees, agents and
attorneys, from and against any Liabilities which may be
imposed upon, asserted against or incurred by any of them
and which arise out of or result from any act of or any
assumption of Liability by the indemnifying Participant, or
any of its directors, commissioners, officers, shareholders,
employees, agents, attorneys and Affiliates, done or
undertaken, or apparently done or undertaken, on behalf of
the other Participant, except pursuant to the authority
expressly granted herein or as otherwise agreed in writing
between the Participants.
3.5 No Joint Receipt of Income
The Participants acknowledge that it is not their
intention to receive income jointly as a result of the
Participation.
3.6 Area of Mutual Interest
3.6.1 General Any exploration permit, contract
of work, mineral lease, right or interest, including
an equity interest or option to acquire an equity
interest in an entity owning any of the foregoing,
including rights and interests which do not directly
involve Mining but which may be useful in connection
with the Joint Operations (collectively, "Mining
Rights") acquired during the term of this Agreement
by or on behalf of a Participant or an Affiliate of a
Participant (the "Acquirer") which is situated in the
province of Irian Jaya, Indonesia (the "Area of
Mutual Interest") shall be subject to the terms and
provisions of this Clause 3.6, except Mining Rights
acquired pursuant to an Approved Programme and Budget
or Sole Risk Ventures.
3.6.2 Notice Within 30 days after acquisition
of Mining Rights or the right to acquire any Mining
Rights wholly or partially within the Area of Mutual
Interest, the Participant being the Acquirer or an
Affiliate of the Acquirer ("Acquirer's Participant")
shall notify the other Participant of such
acquisition. The Acquirer's Participant's notice
shall describe in detail the acquisition, the Mining
Rights covered thereby and the cost thereof and the
Acquirer's Participant shall procure that there is
made available for inspection by the other
Participant any and all information available to the
Acquirer (subject to any confidentiality
restrictions) concerning the Mining Rights.
3.6.3 Option Exercised Within 30 days after
receiving the Acquirer's Participant's notice, the
other Participant shall elect, by notice to the
Acquirer's Participant, that an Affiliate of such
other Participant shall:
(a) accept an interest in the Mining
Rights equal to the other Participant's
Participating Interest at the date of this
Agreement; or
(b) not acquire an interest in the Mining
Rights.
If a Participant entitled to make an election under this
Clause 3.6.3 fails to give notice within the time
allotted, such failure shall be deemed an election by
such Participant not to accept an interest in the
Mining Rights and the Mining Rights shall not be
subject to the same terms, mutatis mutandis, as this
Agreement. If a Participant entitled to make an
election under this Clause 3.6.3 makes a timely
election to accept an interest in the Mining Rights,
the Acquirer's Participant shall procure that the
Acquirer shall, subject to all necessary Governmental
consents, convey to an Affiliate of the other
Participant nominated by the other Participant, by
appropriate instrument, an undivided interest in the
Mining Rights equal to such Participant's
Participating Interest at the date of this Agreement.
If such Participant has elected that an Affiliate
shall accept an interest in Mining Rights pursuant to
this Clause 3.6.3, the Mining Rights shall be held on
the same terms as this Agreement, mutatis mutandis to
those with respect to Contract Area Block B, unless
the Participants agree otherwise. The Participant
which is not the Acquirer's Participant shall procure
that its Affiliate acquiring the interest in the
Mining Rights shall promptly pay to the Acquirer its
proportionate share of the latter's actual out-of-
pocket acquisition costs.
3.7 Other Business Opportunities
Except as expressly provided in Clause 3.6, each
Participant shall have the right independently to engage in
and receive full benefits from business activities outside
the Contract Area, whether or not in competition with the
Enterprise Operations, without consulting the other.
Except as expressly provided in Clause 3.6, no Participant
shall have any obligation to the other under this Agreement
with respect to any opportunity to acquire any property
outside the Contract Area at any time, or within the
Contract Area after the termination of this Agreement.
Except as otherwise agreed by the Participants, whether in
this Agreement or subsequently, neither Participant shall
conduct any activity inside the Contract Area other than
Enterprise Operations, Sole Risk Ventures and activities
which do not adversely affect the carrying out of the
Enterprise Operations and any Sole Risk Ventures, without
the prior written approval of the other.
3.8 Waiver of Right to Partition
The Participants hereby waive and release all rights
of partition, or of sale in lieu thereof, or other division
of Joint Account Assets, including any rights provided by
law.
3.9 Employees
Employees of one Participant are not and shall not be
employees of the other Participant or of the Participation.
3.10 Title
All Joint Account Assets acquired by the Operator for
Joint Operations may be held in the name of PT-FI but,
subject to any mandatory provisions of applicable law, the
beneficial interest therein shall be for the benefit of PT-
FI and PT-RTZ severally in proportion to their respective
Participating Interests. Subject to any mandatory
provisions of applicable law, each of the Participants
agrees to execute appropriate documents to reflect any
changes in Participating Interests which may occur hereunder
from time to time and to execute, and register with the
appropriate Governmental authorities, the necessary
document(s) to effect the transfer of any property as
contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES
4.1 Capacity
Subject, in the case of PT-RTZ, to the matters stated
in Schedule 3, each of the parties represents, warrants and
undertakes to the other(s) as follows:
4.1.1 it is a company duly incorporated and in
good standing in its place of incorporation and that
it is qualified to do business and is in good
standing in those jurisdictions where necessary in
order to carry out the purposes of this Agreement;
4.1.2 it has the capacity to enter into and
perform its obligations under this Agreement and, in
the case of PT-FI, the Assignment and all
transactions contemplated herein or (as appropriate)
therein and that all corporate and, except as
mentioned in Schedule 3 to this Agreement, other
actions required to authorise it to enter into and
perform its obligations under this Agreement and, in
the case of PT-FI, the Assignment have been properly
and duly taken;
4.1.3 this Agreement constitutes, and, in the
case of PT-FI, the Assignment will constitute its
legal, valid and binding obligation, save as
enforcement may be limited by bankruptcy,
reorganisation, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights
generally and subject to any limitations acts and to
general equitable principles;
4.1.4 the execution, delivery and performance
by it of this Agreement and, in the case of PT-FI,
the Assignment and the transactions implemented
hereunder or (as appropriate) thereunder do not and
will not contravene, conflict with or constitute a
default under (a) any law or regulation or any
official or judicial order, judgment, injunction or
decree applicable to it or (b) its constitutional
documents or (c) any agreement or document to which
it is a party or which is binding upon it or any of
its assets.
4.2 PT-FI Representations and Warranties
Subject to the matters stated in Schedule 3 and in
addition to the representations, warranties and undertakings
contained in Clause 4.1, PT-FI represents, warrants and
undertakes to PT-RTZ as follows:
4.2.1 the shareholders in PT-FI are FCX, as to
81.28%, the Government as to 9.36% and PT Indocopper
Investama Corporation as to 9.36%;
4.2.2 it has all authorisations, consents and
licences necessary to conduct its activities in the
Contract Area as presently conducted;
4.2.3 it is up to date on all payments,
filings, or other requirements in respect of the COW
and there are no existing or threatened actions,
suits, claims or proceedings in relation thereto, and
PT-FI has not received any notice of violation or
claim alleging any violation of any law, rule,
regulation, or permit, including without limitation
any environmental law, rule, regulation or permit, in
connection with the COW except any thereof where such
violation or claim would not, individually or in the
aggregate, have a material adverse effect on the
rights of PT-FI and PT-RTZ under the COW;
4.2.4 it has delivered to or made available to
PT-RTZ or its Affiliates all geological data and
other similar information in PT-FI's possession or
control derived from its activities in the Contract
Area which any person interested in acquiring a
Participating Interest in the Contract Area would
reasonably be expected to wish to see and all other
information or copies thereof reasonably requested by
them concerning the COW, its operations in the
Contract Area and the disposal of Products,
including, but not limited to, true and correct
copies of all contracts relating to the COW and the
Contract Area of which PT-FI has knowledge;
4.2.5 all activities by PT-FI under the COW up
to the date of this Agreement have in all material
respects been in accordance with the requirements of
the Government and Indonesian law and there has been
no breach by PT-FI of any of the provisions of the
COW or of any other agreement binding upon it the
breach of which might have a material adverse effect
on the ability of PT-FI to carry out the Enterprise
Operations;
4.2.6 there has been no material breach by the
Government of any of the provisions of the COW and
PT-FI has not received any indication from the
Government that the Government is seeking to re-
negotiate any of the terms of the COW;
4.2.7 to the best of PT-FI's knowledge, there
has been no material breach by any third party of any
material contract with PT-FI in relation to PT-FI's
activities under the COW or the sale of Products;
4.2.8 there are no material litigation,
arbitration or administrative proceedings or claims
currently in progress or, so far as PT-FI is aware,
pending or threatened against PT-FI or any of its
assets under the COW or any material contract to
which PT-FI is a party in relation to PT-FI's
activities under the COW or the sale of Products;
4.2.9 PT-FI is not a party to any agreement or
under any other obligation under or pursuant to which
it has created or given or permitted to subsist or is
obliged or bound to create or give or permit to
subsist in favour of any third party any Encumbrance
over PT-RTZ's share of the Joint Account Assets or
over any revenues allocated to PT-RTZ (or to which
PT-RTZ is entitled) under this Agreement;
4.2.10 PT-RTZ's interest in the COW pursuant to
the Assignment is not subject to any Encumbrance
created or given by PT-FI in favour of any third
party.
4.3 Disclosures
Each of the parties represents and warrants to the
other(s) that it is unaware of any facts or circumstances
which have not been disclosed in this Agreement and which
should have been disclosed to the other party in order to
prevent the representations and warranties given by it in
this Clause 4 from being materially misleading.
5. EXPLORATION CONTRIBUTIONS BY PARTICIPANTS
5.1 Exploration Contribution by PT-RTZ
PT-RTZ shall pay, in accordance with paragraph 10.3
of the Financial and Accounting Procedures, all Exploration
Costs approved by an Exploration Committee after the
Effective Date until the Exploration Obligation has been
satisfied, including the expenditure of not less than
$40,000,000 in respect of Contract Area Block A.
5.2 Additional Cash Contributions
After the Exploration Obligation has been satisfied,
the Participants shall contribute funds for Approved
Exploration Programmes and Budgets in proportion to their
respective Participating Interests, subject to their rights
to conduct Sole Risk Ventures.
6. INTERESTS OF PARTICIPANTS
6.1 Participating Interests
6.1.1 At the date of this Agreement, except as
otherwise provided in this Agreement (including the
Financial and Accounting Procedures), the
Participating Interests of the Participants in
Contract Area Block A and in Contract Area Block B
are:
PT-FI sixty per cent (60%)
PT-RTZ forty per cent (40%).
The Participating Interests of the
Participants shall not be changed except as provided
in this Agreement (including the Financial and
Accounting Procedures) and each Participant's
Participating Interest in Contract Area Block A may,
as provided in this Agreement and the Financial and
Accounting Procedures, be different from its
Participating Interest in Contract Area Block B.
6.1.2 There shall be allocated to the
Participants the revenues and shares thereof
calculated in accordance with the Financial and
Accounting Procedures.
6.1.3 All costs and liabilities incurred in or
attributable to Chargeable Operations in the Contract
Area shall be allocated to and borne by the
Participants in accordance with the Financial and
Accounting Procedures.
6.1.4 Participating Interests shall be
calculated to three decimal places and rounded to two
(e.g. 1.519% rounded to 1.52%). Decimals of .005 and
less shall be rounded down.
6.2 Changes in Participating Interests
A Participant's Participating Interest may be changed
as follows:-
6.2.1 in the event of default by a Participant
in making its agreed upon contribution to an Approved
Programme and Budget, followed by an election by the
other Participant to invoke Clause 6.3.2.3; or
6.2.2 transfer by a Participant of less than
all its Participating Interest in accordance with
Clause 15; or
6.2.3 acquisition of less than all of the
Participating Interest of the other Participant,
however arising.
In the event of a change in a Participant's
Participating Interest with respect to either Contract Area
Block A or Contract Area Block B, there will, subject to
obtaining any necessary Governmental approval, be a
corresponding and proportionate change in the Participant's
interest in the COW with respect to Contract Area Block A
(subject to PT-FI's rights with respect to the 10-K Reserves
and PT-FI Assets) or the COW with respect to Contract Area
Block B, as the case may be.
6.3 Default in Making Contributions
If a Participant defaults in its obligation to pay a
contribution or cash call properly payable or made under
this Agreement (including the Financial and Accounting
Procedures), (such Participant being a "Defaulting
Participant"),
6.3.1 All rights of the Defaulting Participant
to receive its proportionate share of the Incremental
Expansion Cashflow of Approved Expansion Projects, or
the revenues from Contract Area Block B, Joint
Operations Greenfield Projects in Contract Area Block
A or, as the case may be, in any Year after the Cut-
off Date, the revenues from Joint Operations, shall
be suspended until such time as the default has been
remedied and until such time, such proportionate
share shall go to the Non-Defaulting Participant(s),
who shall apply such share of the relevant revenues
or (as the case may be) Incremental Expansion
Cashflow first, to make any contribution or meet any
cash calls not made or met by the Defaulting
Participant or made or met on its behalf, and second,
to pay the indebtedness and unpaid and accrued
interest thereon then owing by the Defaulting
Participant to such Non-Defaulting Participant
pursuant to Clause 6.3.2. The right of a Defaulting
Participant to receive its proportionate share of the
relevant revenues or (as the case may be) the
Incremental Expansion Cashflow shall be reinstated at
the first time when such Participant is not in
default in its obligation to make a contribution or
meet a cash call and all indebtedness and interest
thereon arising out of the making by the Non-
Defaulting Participant of Cover Payments has been
paid in full.
6.3.2.1 The other Participant, by notice to the
Defaulting Participant, may at any time, but
shall not be obliged to, elect to make such
contribution or meet such cash call on behalf
of the Defaulting Participant (a "Cover
Payment"). If more than one Cover Payment is
made by the other Participant in relation to
the same Contract Area Block, such Cover
Payments shall be aggregated and the rights and
remedies described herein pertaining to an
individual Cover Payment shall be read to apply
to the aggregated Cover Payments.
6.3.2.2 Each Cover Payment shall constitute
indebtedness due from the Defaulting
Participant to the Non-Defaulting Participant,
which indebtedness, together with interest
(calculated from the date of the Cover Payment
at the rate specified in paragraph 10.3.3 of
the Financial and Accounting Procedures) shall
be payable upon demand.
6.3.2.3 If a Cover Payment shall have been made, upon
the giving of not less than 5 days' prior
notice to the Defaulting Participant, whether
or not payment thereof has been demanded under
Clause 6.3.2.2, the Non-Defaulting Participant
may, but shall not be obliged to, elect to
effect an adjustment of the Defaulting
Participant's Participating Interest in the
relevant Contract Area Block pursuant to this
Clause 6.3.2.3; provided, however, that if
within such 5 day period the Defaulting
Participant shall evidence to the reasonable
satisfaction of the Non-Defaulting Participant
that it will have the funds to, and will,
within 10 days of the expiry of such 5 day
period, pay the indebtedness constituted by the
Cover Payment together with interest accrued
thereon pursuant to Clause 6.3.2.2 owing by the
Defaulting Participant to the Non-Defaulting
Participant, then such adjustment of
Participating Interest may not be effected
until the end of such additional 10 day period.
If such election is made and such indebtedness
has not been paid, at the expiration of such 5
day period, or, if applicable, at the end of
such additional 10 day period, an amount equal
to 125% times the Cover Payment shall be
deducted from the Defaulting Participant's
relevant Memorandum Equity Account for the
relevant Contract Area Block and added to the
relevant Memorandum Equity Account for that
Contract Area Block of the Non-Defaulting
Participant and the Participating Interests of
the Participants shall be recalculated based on
the relevant adjusted Memorandum Equity
Accounts.
6.3.2.4 Notwithstanding anything to the contrary
contained in this Agreement, failure by PT-FI
to make a contribution or respond to a cash
call shall not constitute a default hereunder
or give rise to any adjustment of PT-FI's or
PT-RTZ's Memorandum Equity Account if such
failure occurs prior to the time an aggregate
sum of $750,000,000 has been spent on one or
more Approved Expansion Projects and is
attributable to the failure by PT-FI to receive
advances under the RTZ Loan Agreement.
6.3.3 If as a consequence of the adjustment of
a Defaulting Participant's relevant Memorandum Equity
Account under Clause 6.3.2.3 its recalculated
Participating Interest in Contract Area Block A or,
as the case may be, Contract Area Block B is less
than 10% (such adjustment being a "Forced Sale
Adjustment"), then
6.3.3.1 the Defaulting Participant shall be deemed to
have elected to withdraw from participation in
Joint Operations in Contract Area Block A or,
as the case may be, Contract Area Block B
6.3.3.2 the Defaulting Participant shall sell to the
Non-Defaulting Participant and the Non-
Defaulting Participant shall buy all of the
Defaulting Participant's Participating Interest
in Contract Area Block A or, as the case may
be, Contract Area Block B for a price equal to
the Fair Market Value of the Defaulting
Participant's Participating Interest in
Contract Area Block A or, as the case may be,
Contract Area Block B as at the date on which
its Participating Interest first reduces below
10%
6.3.3.3 completion of the sale and purchase under
Clause 6.3.3.2 shall take place within 90 days
after establishment of the Fair Market Value.
The Defaulting Participant shall be liable for
all costs and expenses of the sale and purchase
(other than the purchase price) and shall
indemnify the Non-Defaulting Participant
against all adverse tax consequences of the
sale and purchase
6.3.3.4 for the purposes of Clause 6.3.3.2, the Fair
Market Value of the Defaulting Participant's
Participating Interest in Contract Area Block A
or, as the case may be, Contract Area Block B
means the amount determined by the
Participants. Should the Participants be
unable within 30 days after a Forced Sale
Adjustment to agree as to the Fair Market Value
of the Defaulting Participant's Participating
Interest to be sold pursuant to Clause 6.3.3.2,
the Participants shall, within 10 days after
the expiration of such 30 day period, attempt
to select one reasonably acceptable,
internationally recognised independent
investment bank to determine the Fair Market
Value of the Defaulting Participant's
Participating Interest, which determination
shall be binding on all Participants. Should
the Participants be unable to agree upon a
mutually acceptable investment bank within such
10 day period, each of the Participants shall
have 10 additional days to select one
internationally recognised investment bank to
determine the Fair Market Value of the
Defaulting Participant's Participating
Interest. Each such investment bank or, in
default of selection by either Participant, the
sole investment bank so selected shall, within
30 days of being requested to do so, determine
the Fair Market Value of the Defaulting
Participant's Participating Interest provided
however that, where two such investment banks
are so selected, the Fair Market Value of such
interest shall be the average of their
respective determinations if and only if the
lower of the two determinations is at least 90%
of the higher of the two determinations. If it
is not, then such two investment banks shall
select a third internationally recognised
investment bank to determine the Fair Market
Value of the Defaulting Participant's
Participating Interest, and the Fair Market
Value of such interest (i) shall be such third
determination if such third determination is a
figure between the two previous determinations;
(ii) shall be the lower of the two previous
determinations if the third determination is
lower than both the two previous
determinations; and (iii) shall be the higher
of the two previous determinations if the third
determination is higher than both the two
previous determinations. The Participants
shall each pay 50% of the costs of the services
and expenses of the investment bank(s)
6.3.3.5 upon completion of the sale and purchase
under Clause 6.3.3.2 the Defaulting Participant
shall cease to conduct any activities in
Contract Area Block A or, as the case may be,
Contract Area Block B (other than then existing
Sole Risk Ventures and other than, in the case
of PT-FI, PT-FI's rights with respect to the
10-K Reserves and any retained rights referred
to in Clause 7.5) and shall surrender to the
Non-Defaulting Participant the right to conduct
all such activities
6.3.3.6 each of the Participants appoints the other
its attorney, such appointment becoming
effective upon its becoming a Defaulting
Participant, with power in its name or
otherwise to do all such things and sign or
execute all such deeds or documents as may be
necessary or desirable to complete any of the
transactions referred to in this Clause 6.3.3,
and (without limitation) for that purpose to
appear in the name of the Defaulting
Participant before any notary or other
Government official in Indonesia; provided that
such power of attorney shall not be deemed to
apply to each Participant's rights under Clause
6.3.3.4.
6.4 Continuing Liabilities Upon Adjustment of the
Participating Interests
Any reduction of a Participant's Participating
Interest under this Clause 6 shall not relieve such
Participant of its share of any Liability, whether it
accrues before or after such reduction, arising out of Joint
Operations in Contract Area Block A or, as the case may be,
Contract Area Block B conducted after the Effective Date and
prior to such reduction. For purposes of this Clause 6,
such Participant's share of such Liability shall, subject to
Clause 6.1 and the Financial and Accounting Procedures, be
equal to its Participating Interest in the relevant Contract
Area Block at the time such Liability was incurred. The
increased Participating Interest accruing to a Participant
as a result of the reduction of the other Participant's
Participating Interest shall be free from Encumbrances
arising by, through or under such other Participant, except
those to which both Participants have given their written
consent or are otherwise subject (including, without
limitation, royalties payable under the COW). Each
Participant's Participating Interest shall be shown in the
books of the Operator.
7. COVENANTS AND RIGHTS
7.1 Mutual Covenants
Each of the Participants covenants and agrees with
the other that:
7.1.1 it will give prompt notice to the other
Participant of any notice of default, lawsuit,
proceeding, action or damage of which it becomes
aware and which might affect the Joint Account
Assets, the Contract Area or the COW
7.1.2 it will only conduct operations within or
relating to the Contract Area in accordance with the
provisions of the COW and this Agreement and, without
prejudice to the foregoing, not at any time do or
cause or permit to be done any act or omission which
results or might result in a breach of the provisions
of the COW, this Agreement or any other agreement
binding upon it a breach of which might have a
material adverse effect on Joint Operations.
7.1.3 to the extent required by any law, rule,
regulation, decree, consent, contractual arrangement
or otherwise by any Indonesian Governmental Agency,
there shall be no sale or other transfer of any
interest in the Contract of Work by PT-FI or PT-RTZ
without the prior consent of the Ministry of Mines
and Energy of the Republic of Indonesia.
7.2 PT-FI Covenants
PT-FI covenants and agrees with PT-RTZ that it will:
7.2.1 At all times comply with and perform all
its obligations under the Privatisation Agreements
and exercise its rights under the Privatisation
Agreements in consultation with PT-RTZ and in a
manner which does not adversely affect the carrying
out of the Joint Operations and will not enter into
any other agreements in the nature of Privatisation
Agreements (other than as listed in Schedule 1)
except in consultation with PT-RTZ;
7.2.2 Prepare its annual financial statements
in accordance with accounting principles generally
accepted in the U.S.A. except as otherwise stated
therein and based on accounting policies consistently
applied in all respects except as otherwise stated
therein and at the time of the issue thereof send to
PT-RTZ copies of the same;
7.2.3 As and when required by PT-RTZ furnish to
PT-RTZ promptly such financial or other information,
data or maps relating to the Contract Area and the
Enterprise Operations therein and thereon as PT-RTZ
may from time to time require;
7.2.4 Furnish to PT-RTZ a copy of each material
return and report (and each other return and report
requested specifically by PT-RTZ) submitted to the
Government under the COW and, with respect to major
returns and reports (as determined from time to time
by the Participants), do so within a reasonable time
before the latest day for such submission to permit
time for review by PT-RTZ provided that tax returns
shall not be included in this sub-Clause 7.2.4;
7.2.5 Not, without the prior written consent of
PT-RTZ, create or permit to exist any Encumbrance on
or Dispose, except in the ordinary course of
business, of the whole or any part of the PT-FI
Available Assets or its right, title and interest in
and under the COW or any authorisations issued
pursuant to the COW or the Joint Account Assets,
other than, with respect to Dispositions, sales
otherwise permitted by this Agreement and, with
respect to Encumbrances, (i) the security in favour
of RTZ Lender referred to in the RTZ Loan Agreement,
(ii) Encumbrances in favour of the existing bank
lenders to PT-FI or the lenders under any replacement
or refinancing thereof, (iii) Encumbrances in favour
of lenders on PT-FI Available Assets or on PT-FI's
share of the Joint Account Assets or, with PT-RTZ's
consent, on all of the Joint Account Assets, (iv)
Encumbrances on replacements of assets under
Privatisation Agreements and (v) Encumbrances on
replacements of PT-FI Available Assets provided that
the lenders holding Encumbrances referred to in (ii)
and (iii) above shall have executed documents
recognising PT-RTZ's rights to the same extent as
have PT-FI's existing bank lenders in connection with
this Agreement;
7.2.6 Do and cause to be done all things
necessary to preserve and keep in full force and
effect its rights and authorisations with respect to
the COW and the Contract Area, at all times comply
with and cause to be complied with all applicable
laws, the violation of which would be materially
adverse to the Enterprise Operations and obtain and
maintain in full force and effect all authorisations,
approvals, consents, licences and exemptions with
respect to the COW and the Contract Area, in each
case where the failure to obtain or maintain which
would be materially adverse to Enterprise Operations,
promptly effect all filings, registrations and
notarisations and promptly comply with all other
requirements in any such case which may at any time
be required with respect to or under this Agreement,
the COW and Enterprise Operations, and the continued
due performance of its obligations hereunder or
thereunder or the validity or enforceability of this
Agreement and the COW, and PT-RTZ shall provide to
PT-FI all such information in relation to PT-RTZ's
participation in Joint Operations as PT-FI may
reasonably require and which is not otherwise
available to PT-FI in order to enable PT-FI to
fulfill its obligations under this Clause 7.2.6;
7.2.7 Notify PT-RTZ immediately upon becoming
aware of the actual or threatened revocation or
variation of any such authorisation as is referred to
in Clause 7.2.6;
7.2.8 Without the prior written consent of PT-
RTZ, not agree to any waiver or amendment of the
terms of the COW which would have a material adverse
effect on PT-RTZ's Participating Interest;
7.2.9 Not take any action, including actions
using the PT-FI Available Assets, which would
prejudice either the institution, completion or
operation of any first Approved Expansion Project as
described in Clause 10.5 and any projects of
Expansion thereafter or any activity of PT-FI
authorised hereunder;
7.2.10 Make available the PT-FI Available Assets
and its right, title and interest in and under the
COW and all authorisations issued pursuant to the COW
for their use in Joint Operations on a first priority
basis with respect to any PT-FI Available Assets
which are not, at the time, being employed with
respect to activities permitted by Clause 7.5, and on
a shared basis that reflects equitably the needs of
the parties with respect to other PT-FI Available
Assets;
7.2.11 Without prejudice to any other provisions
of this Agreement, not take any action or permit any
action to be taken which will affect materially and
adversely PT-RTZ's Participating Interest but PT-FI
shall not be deemed to be in breach of this Clause
merely because it exercises any right contained in
Clauses 6.3 and 15 of this Agreement.
7.3 PT-RTZ Covenant
PT-RTZ covenants and agrees with PT-FI that, without
the prior written consent of PT-FI, it will not create or
permit to exist any Encumbrance on or Dispose, except in the
ordinary course of business, of the whole or any part of the
interests assigned in the Assignment or the Joint Account
Assets, or violate any applicable law if the effect thereof
would be materially adverse to the Enterprise Operations
provided that PT-RTZ may create Encumbrances in favour of
project lenders on PT-RTZ's share of the Joint Account
Assets or, with PT-FI's consent, on all of the Joint Account
Assets.
7.4 Power of Attorney
Each of the Participants hereby appoints the other
Participant its attorney in its name or otherwise to do all
such things and sign or execute all such deeds or documents
as may be necessary or desirable to cure any and each
default by that Participant under the COW or, in the case of
PT-RTZ, its assigned interest in the COW and (without
limitation) to appear in the name of the appointor before
any notary or other Government official in Indonesia.
7.5 Retained PT-FI Rights
7.5.1 Existing Operations
7.5.1.1 Subject to Clause 7.5.1.2, PT-FI shall have
the right, without the need to obtain the
consent of PT-RTZ, to continue to carry on
Mining activities with the use of the PT-FI
Available Assets, including activities which,
through optimisation or fine tuning of its
operations and facilities, may result in
treatment of ore at a rate in excess of 118,000
tonnes per day and shall have the right to use
and make changes to the PT-FI Available Assets
so long as such activities do not prejudice the
undertaking of the first Approved Expansion
Project at the current millsite, as described
in Clause 10.5.
7.5.1.2 PT-FI will not undertake any Expansion
project (as opposed to optimisation or fine
tuning) in Contract Area Block A other than as
part of Joint Operations or take any other
action which will prejudice the undertaking of
the first Approved Expansion Project at the
current millsite, provided that, if no project
for Expansion which meets the criteria
specified in, or agreed pursuant to,
Clause 10.5 has been proposed by PT-RTZ to the
Operating Committee before the tenth
anniversary of the Effective Date, the
following provisions shall apply:
(i) the foregoing limitation on PT-
FI's ability to enter into an Expansion
project other than as part of Joint
Operations shall no longer be applicable,
(ii) PT-FI shall be entitled to
enter into such a project either as a Sole
Risk Venture or, if it elects at its
option to offer PT-RTZ a right of
participation and PT-RTZ accepts such
offer, as part of Joint Operations, in
which latter event, RTZ Lender shall
remain obliged to make available the loan
funds contemplated by the RTZ Loan
Agreement, and
(iii) except as set out in the immediately
preceding item (ii), PT-RTZ will not have
a right to participate in any revenues
from nor will it be obliged to contribute
to any costs in respect of Contract Area
Block A, even after the Cut-off Date,
except with respect to Joint Operations
Greenfield Projects and Sole Risk Ventures
in Contract Area Block A in which PT-RTZ
has participated.
7.5.1.3 PT-FI shall be entitled to receive and retain
100% of all revenues, including Sales Revenues,
from Contract Area Block A:
(i) prior to the Sharing
Commencement Date, except for any revenues
from Joint Operations Greenfield Projects
and Sole Risk Ventures in which PT-RTZ shall
have participated, and
(ii) from the Sharing Commencement Date until
the Cut-Off Date, except for Incremental
Expansion Revenues and any revenues from
Joint Operations Greenfield Projects and
Sole Risk Ventures in which PT-RTZ shall
have participated.
7.5.2 Privatisation Agreements Without
prejudice and subject to the covenants on the part of
PT-FI contained in Clause 7.2, PT-FI shall have the
right, without the need to obtain the consent of PT-
RTZ, to conduct activities in accordance with the
Privatisation Agreements existing on the Effective
Date or described in Schedule 1 provided that the
consent of PT-RTZ shall be obtained prior to any
material change in the terms thereof which results in
an increase in the burdens of PT-FI thereunder, other
than as described in Schedule 1. The Participants
will discuss the possibility of future agreements in
the nature of Privatisation Agreements on the basis
of the financial requirements of the Participants.
If PT-FI wishes to sell and lease back further of the
PT-FI Available Assets (as part of such future
agreements or otherwise) or to sell any part thereof
reasonably deemed by it to be surplus to its
requirements in relation to Enterprise Operations, it
shall be permitted to do so provided such action does
not affect materially and adversely the institution,
completion or operation of any Approved Expansion
Projects or the availability of the use of such
assets, if required, for Joint Operations.
8. COMMITTEES
8.1 Exploration Committees
The Participants will, not later than thirty days
after the Effective Date, establish both an Exploration
Committee for Contract Area Block A and an Exploration
Committee for Contract Area Block B, in each case to
determine overall policies, objectives, procedures, methods
and actions for incurring the Exploration Costs. Until the
Exploration Obligation has been satisfied, each Participant
may appoint two members to each of the Exploration
Committees. Once the Exploration Obligation has been
satisfied, PT-FI may appoint an additional member to each of
the Exploration Committees. Each Participant may appoint
one or more alternates to act in the absence of a regular
member. Any alternate so acting shall be deemed a member.
Appointments shall be made or changed by written notice to
the other Participant.
8.2 Operating Committee
PT-FI shall establish an Operating Committee to,
among other things:
(i) receive reports on all operations within the
Contract Area, including Joint Operations,
(ii) design for presentation to the boards of
directors of PT-FI and PT-RTZ appropriate actions
respecting the Joint Operations,
(iii) develop plans and make recommendations to the board of
directors of PT-FI,
(iv) monitor execution of plans approved by the
board of directors of PT-FI, and
(v) subject to the control of the board of
directors of PT-FI, be involved generally in directing
day-to-day operations of the business of PT-FI, but will
not determine policies, objectives, procedures, methods
and actions for incurring Exploration Costs, which will
continue to be determined by the relevant Exploration
Committee. The Operating Committee will have three members,
comprising the Chief Operating Officer of PT-FI as Chairman,
the General Manager (Mining Operations) of PT-FI and one
member appointed by PT-RTZ. Each of PT-FI and PT-RTZ may
appoint one or more alternates to act in the absence of the
regular member appointed by it. Any alternate so acting
shall be deemed a member. Appointments shall be made or
changed by written notice to the other Committee members.
8.3 Other Committees
A special Tax Committee will be established to
administer the provisions of Clause 16.13 of this Agreement.
Other committees may be established as required on which PT-
FI shall be entitled to have majority representation
provided that, on any committee established in respect of a
Sole Risk Programme undertaken by PT-RTZ, PT-RTZ shall be
entitled to have majority representation and that PT-FI and
PT-RTZ shall be entitled to have equal representation on the
special Tax Committee.
8.4 Quorum
At any Committee meetings, a quorum will exist if a
representative of each Participant is present at the
meeting. If at the time a meeting is convened, a quorum is
not present, the meeting may, upon notice to the parties
entitled to be represented at the meeting, be adjourned to a
date no sooner than twenty nor later than thirty days
following such originally scheduled meeting. Those members
who attend the rescheduled meeting shall be deemed to
constitute a quorum and may adopt any resolutions or take
any other action not inconsistent with the provisions of
this Agreement.
8.5 Decisions
Each party entitled to be represented, acting through
its appointed members, shall have a vote on a Committee.
Each member of a Committee shall have one vote. With
respect to the approval of an Approved Expansion Project or
of Programmes and Budgets, the function of the Operating
Committee will be to recommend the same for the approval of
the boards of directors of, in the case of an Approved
Expansion Project, PT-FI, FCX and PT-RTZ and, in the case of
Programmes and Budgets, PT-FI and PT-RTZ. No project for
Expansion shall be an Approved Expansion Project unless and
until it has been approved by the boards of directors of PT-
FI, FCX and PT-RTZ (and each project of Expansion shall be
an Approved Expansion Project if and when it has been so
approved) or is otherwise an Approved Expansion Project in
accordance with Clause 10.3 and no Programme and Budget
shall be an Approved Programme and Budget unless and until
it has been approved by the boards of directors of PT-FI and
PT-RTZ. Subject to the foregoing, all decisions of each
Committee shall be taken by simple majority vote of members
present in person or by proxy except that all decisions
relating to Approved Expansion Projects, including a
decision regarding a material departure from the scope or
cost of any Approved Expansion Project, shall, subject to
Clause 10.3, require the approval of representatives of both
Participants.
8.6 Meetings
The Operator shall call the first meetings of the
Exploration Committees within thirty days of the formation
thereof. The purpose of such first meetings shall be to
propose and agree the first Programme and Budget for the
remainder of that Year provided that until such a first
Programme and Budget has been agreed, Exploration activities
will be conducted in accordance with the Exploration
programme for 1995 in existence at the date of the
Implementation Agreement or, if this Agreement is executed
after 31 December 1995, the then existing Exploration
programme of PT-FI which does not cover a period in excess
of 12 months. Thereafter the Exploration Committees and the
Operating Committee shall hold at least four meetings per
Year, one of which shall be in December to propose the
relevant Programme and Budget for the subsequent calendar
year (the "Annual Budget Meeting"). The Operator shall give
thirty days' notice to the Participants of each meeting.
Additionally, any Participant or the Operator may call a
special meeting upon fifteen days' notice to the other
Participant(s) and to the Operator if the Operator is not
calling the meeting. In case of emergency, reasonable
notice of a special meeting shall suffice. All meetings
shall be held in a mutually agreed place, failing which in
New Orleans. Each notice of a meeting shall include an
itemised agenda prepared by the Operator in the case of a
regular meeting, or by the Participant calling the meeting
in the case of a special meeting, but any matters may be
considered with the consent of the Participants. The
Operator shall prepare minutes of all meetings and shall
distribute copies of such minutes to the Participants within
thirty days after the meeting. The minutes, when signed by
all Participants (and no signature shall be unreasonably
withheld or delayed), shall be the official record of the
decisions made by a Committee and shall be binding on the
Participants and on the Operator. Each of the Participants
shall bear its own costs of attendance at meetings of
Committees. The Operator shall be entitled to be present at
all meetings of a Committee unless such Committee otherwise
resolves but the Operator shall not be counted in the quorum
or be entitled to vote in its capacity as Operator.
8.7 Action Without Meeting
In lieu of meetings, a Committee may hold telephone
conferences, so long as all decisions are immediately
confirmed in writing and signed by all the parties entitled
to be represented at meetings of that Committee, and a
member appointed by each party entitled to be represented at
meetings of that Committee has a reasonable opportunity to
be included in any such conference.
8.8 Close-down
8.8.1 If either Participant shall determine
that, in its best judgment, Close-down shall occur
within 11 years thereafter, it shall notify the other
Participant and the Operator. Within 30 days after
receipt of notice of such determination, the other
Participant shall notify the first Participant
whether or not it agrees with such determination. If
there is a disagreement as to such determination, the
Participants shall seek to achieve a mutually agreed
expected date of Close-down (an "Anticipated Close-
down Date"). In the absence of such an agreement,
the dispute shall be referred to the firm of
independent mining consultants which has most
recently reviewed and confirmed the reserves in the
Contract Area for Form 10-K reporting purposes, whose
determination as to the Anticipated Close-down Date
shall be binding on both Participants.
8.8.2 Within 90 days after a final
determination of the Anticipated Close-down Date, the
Operator shall deliver to the Participants its best
estimate of the anticipated Close-down Costs. In
December of the Year in which such determination of
the Anticipated Close-down Date shall have been
finally determined, and in December of each of the
nine subsequent Years, each Participant shall secure
the payment of 10% of the Close-down Costs payable by
such Participant (in accordance with the Financial
and Accounting Procedures), by such methods as shall
be determined by agreement of the Participants or, in
the absence of agreement, by (i) the purchase of
bonds with an investment rating of A (or the then
equivalent rating) or better and (ii) the delivery of
such bonds to the Trustee under the Trust Agreement
or such other trustee as shall be agreed by the
Participants. The proceeds of such bonds or other
form of security shall be made available, as
required, to pay such Close-down Costs.
8.8.3 In the case of a Sole Risk Venture, the
Participant undertaking the Sole Risk Venture shall
provide for the anticipated Close-down Costs as
provided in Clauses 8.8.1 and 8.8.2, unless an
alternate method of funding Close-down Costs has been
approved by the non-Participating Participant(s).
9. OPERATOR
9.1 Appointment
Except as provided in Clauses 9.5 and 12.2, PT-FI
shall be the Operator for all operations under the COW or
this Agreement. The Operator shall report to the
Committees.
9.2 Powers and Duties of Operator
Subject to the provisions of this Agreement and other
agreements which the Participants have agreed to be binding
with respect to all or part of Enterprise Operations, the
Operator shall, in addition to those powers and duties
contained elsewhere in this Agreement, have the following
powers and duties which shall be discharged in accordance
with each Programme and Budget:
9.2.1 The Operator shall manage, direct and
conduct Enterprise Operations.
9.2.2 The Operator shall prepare and present to
each member of the appropriate Committee proposed
Programmes and Budgets in accordance with paragraph
10.1 of the Financial and Accounting Procedures.
9.2.3 The Operator shall make cash calls as
provided in paragraph 10.3 of the Financial and
Accounting Procedures and on receipt of amounts from
the Participants pursuant to paragraph 10.3 of the
Financial and Accounting Procedures shall make all
expenditures necessary to carry out Approved
Programmes and Budgets and shall promptly advise the
relevant Committee if it lacks sufficient funds to
carry out its responsibilities under this Agreement.
Any payments made by the Operator pursuant to this
Agreement shall be for the account of the
Participants and the Operator shall not be required
as Operator to advance its own funds for the purposes
of conducting Joint Operations.
9.2.4 The Operator shall make distributions of
cashflow as provided in this Agreement (including the
Financial and Accounting Procedures) and should the
Operator default in making any such distributions and
the default continues for 30 days after (i) (in the
absence of any dispute or, in the event of a dispute,
as regards the undisputed amount) notice from any
Participant of non-payment or (ii) (in the event of a
dispute, as to the disputed amount) final
determination of such amount as provided in the
Financial and Accounting Procedures, any Participant
shall have the right to declare an Allocation Event
(as defined in the Trust Agreement).
9.2.5 The Operator shall implement Approved
Expansion Projects and other Expansions.
9.2.6 The Operator shall sell on behalf of the
Participants with an interest in such Products, the
Products derived from Enterprise Operations on terms
which shall be discussed with such Participants. In
carrying out its obligations pursuant to Clause
9.2.6, the Operator shall conduct such hedging and
other price protection activities as are authorised
by the relevant Participant with an interest in such
Products. However, the costs and benefits of such
price protection activities shall be specifically
allocated to and borne solely by the authorising
Participant.
9.2.7 The Operator shall:
(a) purchase or otherwise acquire all
material, supplies, equipment, water, utility
and transportation services required for
operations, such purchases and acquisitions to
be made on such terms as the Operator shall
prudently approve, taking into account all of
the circumstances, including the existence of
prior agreements and arrangements;
(b) obtain such customary warranties and
guarantees as are available in connection with
such purchases and acquisitions, taking into
account all of the circumstances; and
(c) keep the Joint Account Assets free
and clear of all Encumbrances, except for those
existing at the time of, or created concurrent
with, the acquisition of such Joint Account
Assets and those which are otherwise permitted
by this Agreement, including Clause 7.2.5, or
with the consent of the Participants.
9.2.8 The Operator shall: (a) make or arrange
for all payments required by the COW, leases, claims,
grants, permits, licences, concessions, contracts and
other agreements related to the Joint Account Assets;
(b) pay all Taxes, assessments and like charges on
Enterprise Operations and Joint Account Assets except
Taxes determined or measured by a Participant's net
income subject to the provisions of Clause 14 and (c)
do all other acts reasonably necessary to maintain
the Joint Account Assets and the COW.
9.2.9 The Operator shall: (a) apply for all
necessary permits, licences and approvals; (b) comply
with applicable laws and regulations; (c) notify
promptly the relevant Committee of any allegations of
substantial violation thereof; and (d) prepare and
file all reports or notices required for Joint
Operations. The Operator shall not be in breach of
this provision if a violation has occurred in spite
of the Operator's good faith efforts to comply, and
the Operator has in a timely manner cured or disposed
of such violation.
9.2.10 The Operator shall prosecute and defend,
but shall not initiate without consulting the
Participants any litigation or administrative
proceedings arising out of Joint Operations. The
Participants shall have the right to participate, at
their own expense, in such litigation or
administrative proceedings.
9.2.11 The Operator shall maintain for the
account of the Participants with respect to the Joint
Operations such basic insurance as it shall
reasonably deem to be necessary for prudent operation
(details of which it shall supply to each
Participant) and, to the extent practicable, shall
also make available, at the individual Participant's
cost and for the individual Participant's benefit,
such additional insurance, including business
interruption insurance, as the individual
Participants shall desire. The premium for such
basic insurance will be a charge to the Participation
and for such additional insurance to the
Participant(s) requesting the same. No other
insurance shall be provided for the benefit of the
Participants. However, after consultation with the
other Participant, any Participant may procure and
maintain at its cost and expense such other insurance
as it shall determine and such other insurance shall
be solely for the benefit of the Participant
procuring the same and the premium therefor shall not
be a charge to the Participation. Further, such
insured Participant shall indemnify the other
Participants not named as insured in such additional
insurance policy against any claim of the insurer by
subrogation or otherwise.
9.2.12 Except where the Operator is expressly
permitted to Dispose of Joint Account Assets by the
terms of this Agreement, the Operator may not Dispose
of Joint Account Assets, whether by sale, assignment,
abandonment or other transfer, except in the ordinary
course of business or with the agreement of the
Participants.
9.2.13 The Operator shall have the right
(subject to Clause 9.6) to carry out its
responsibilities hereunder through agents, Affiliates
or independent contractors.
9.2.14 The Operator shall keep and maintain all
accounting and financial records in accordance with
the Financial and Accounting Procedures.
9.2.15 The persons employed in the Joint
Operations will not be employees of the
Participation.
9.2.16 At all reasonable times, the Operator
shall provide the relevant Committee or the
representative of any Participant, upon request,
access to, and the right to inspect and copy all
information acquired in Joint Operations, including,
but not limited to, maps, drill logs, core tests,
reports, surveys, assays, analyses, production
reports, operations, technical, accounting and
financial records. In addition, the Operator shall
allow each Participant, at its sole risk and expense,
and subject to reasonable safety regulations, to
inspect the Joint Account Assets and observe
Enterprise Operations at all reasonable times, so
long as the inspecting Participant does not
unreasonably interfere with Enterprise Operations.
9.2.17 The Operator shall undertake all other
activities reasonably necessary to fulfill the
foregoing.
The Operator shall not be in default of its duties
under this Clause 9.2 if its inability to perform results
from the failure of either Participant to perform acts or to
contribute amounts required of it by this Agreement, but
this shall not relieve any Participant which is the Operator
of any liability in its capacity as a Participant.
9.3 No Fee
Except as otherwise agreed or provided for in the
Financial and Accounting Procedures, the Operator shall not
be entitled to any fee or other compensation for acting as
Operator.
9.4 Standard of Care
The Operator shall conduct all Enterprise Operations
(including the marketing of Products) in a good, workmanlike
and efficient manner, in accordance with sound mining and
other applicable industry standards and practices, and in
accordance with applicable laws, the terms and provisions of
the COW and any leases, licences, permits, contracts and
other agreements pertaining to the Joint Account Assets.
Without prejudice to the generality of the foregoing, the
Operator shall maintain in good working order all material
assets taken as a whole from time to time used in Enterprise
Operations or Sole Risk Ventures. The Operator shall not be
liable to any Participant for any act or omission in its
capacity as Participant (insofar as such act or omission
relates to conduct of operations in the Contract Area) or as
Operator resulting in damage or loss except to the extent
caused by or attributable to its wilful misconduct or gross
negligence.
9.5 Resignation; Deemed Offer to Resign
The Operator may resign upon 90 days' prior notice.
In addition, the Operator shall be deemed to have resigned
forthwith upon an Event of Resignation, as defined below
and, as provided in the Operator Replacement Agreement, PT-
RTZ shall, if at the time of such Event of Resignation, PT-
RTZ is not the Operator and is an indirect or direct
subsidiary of RTZ, have the right to become substitute
Operator in succession to PT-FI with respect to the COW.
Similarly, if the Operator shall resign upon 90 days' prior
notice, PT-RTZ will have the right to become Operator in
succession to PT-FI with respect to the COW if PT-RTZ is not
then the Operator and shall at the time be a direct or
indirect subsidiary of RTZ. For the purposes of this
Agreement, an Event of Resignation shall mean one of the
following occurrences:
9.5.1 an Event of Default shall have occurred
under an FI Credit Document (as defined in the Trust
Agreement) which gives the Operator Selection
Representative a right under the Operator Replacement
Agreement to cause PT-FI to resign as Operator and
such Operator Selection Representative has elected to
exercise such right; or
9.5.2 the Government has given PT-FI a notice
of default under Article 20 of the COW and PT-FI has
not within 30 days (unless the default relates to
failure to make payments pursuant to Article 12 or 13
of the COW, in which event 20 days) after receipt
thereof either corrected such default or obtained the
withdrawal or stay of such notice, unless the
question has been submitted to arbitration, in which
event it shall be an Event of Resignation if PT-FI
has not corrected such default within 10 days after
affirmation of such default by arbitration; or
9.5.3 FCX and its Affiliates shall cease to own
at least such number of shares of the capital stock
of PT-FI as shall permit FCX and its Affiliates to
elect a majority of the board of directors and of the
board of commissioners of PT-FI; or
9.5.4 any person shall, except with the consent
of RTZ, acquire such number of shares of the capital
stock of FCX as shall permit such person to elect a
majority of the board of directors of FCX; or
9.5.5 a general meeting of shareholders of the
Operator resolves that the Operator be liquidated or
the Operator suffers the appointment of a receiver,
liquidator, administrator, assignee, custodian,
trustee, sequestrator or similar official for a
substantial part of its assets in a proceeding
brought against or initiated by it, and such
appointment is neither made ineffective nor
discharged within ninety days after the making
thereof or such appointment is consented to,
requested by or acquiesced in by it; or
9.5.6 the Operator commences a voluntary case
under any applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or consents
to the entry of an order of relief in an involuntary
case under any such law or to the appointment of or
taking possession by a receiver, liquidator,
administrator, assignee, custodian, trustee,
sequestrator or other similar official of any
substantial part of its assets; or makes a general
assignment for the benefit of creditors; or
9.5.7 entry is made against the Operator of a
judgment, decree or order for relief by a court of
competent jurisdiction in an involuntary case
commenced against the Operator under any applicable
bankruptcy, insolvency or other similar law of any
jurisdiction now or hereafter in effect.
9.6 Transactions With Affiliates
If the Operator engages an Affiliate of either
Participant to provide services hereunder or to perform any
of the obligations of the Operator, it shall do so on terms
no more favourable to the Affiliate than would be the case
with an unrelated person in an arm's length transaction
provided that arrangements with Affiliates consistent with
the Management Services Agreement presently in existence
between Freeport-McMoRan Inc. and PT-FI or between FCX and
PT-FI, and substitute arrangements no more onerous to PT-FI,
shall not constitute a violation of the foregoing.
10. FEASIBILITY STUDY INTO EXPANSION
10.1 At such time (whether before or after the Effective Date)
as a Participant is of the good faith and reasonable opinion
that an economically viable project of Expansion or
Development may be possible in any area of the Contract Area
(the "Specified Area") (the "Expansion Project"), such
Participant (the "Proposing Participant") may propose that a
Feasibility Study be prepared to assess the economic
viability of such Expansion Project. Such proposal (the
"Proposal") shall be made to the Operating Committee and
shall detail the information upon which the Proposing
Participant has based its opinion. The Specified Area shall
be defined in terms of a three-dimensional physical
description.
Within 30 days following the Operating Committee's
receipt of the Proposal, the Operating Committee shall vote
whether to authorise the Operator to conduct a Feasibility
Study relating to such Proposal, except that, if the
Proposal relates to an Expansion Project which satisfies the
criteria specified in, or agreed pursuant to, Clause 10.5
and would be the first Approved Expansion Project, such
approval shall be deemed to have been given. If the
Operating Committee approves the Proposal, the Operator
shall conduct a Feasibility Study relating thereto. If the
Operating Committee does not approve the Proposal, the
Proposing Participant may, at its sole risk and expense,
proceed with the project as described in the Proposal as a
Sole Risk Programme, to which the provisions of this
Agreement relating to Sole Risk Programmes and Sole Risk
Ventures shall apply.
10.2 Upon completion of any such Feasibility Study as is
referred to in Clause 10.1 (including any initiated before
the Effective Date and completed after the Effective Date),
the Operator will deliver a copy of the results thereof to
the Operating Committee and to the boards of directors of
FCX, PT-FI and PT-RTZ respectively. Within 90 days
following receipt of such results or, if the Expansion
Project does not involve project financing on a joint basis
and is not to be financed through the proceeds of the RTZ
Loan Agreement, then within such additional reasonable
period of time, not exceeding six months, as shall be
necessary for either Participant to receive assurance of
necessary financing, the boards of directors of FCX and PT-
FI, on one hand, and of PT-RTZ, on the other, shall either
10.2.1 approve, and authorise the commencement
of construction of, the Expansion Project in
accordance with its terms;
10.2.2 agree in principle that the Expansion
Project be carried out as Joint Operations but
disagree as to scope or related Budget; or
10.2.3 decline to approve the Expansion Project.
10.3 Notwithstanding any other provision of this Agreement to
the contrary, for a period of ten years from the date
hereof, PT-RTZ shall have the sole right (i) to propose as
the subject of a Feasibility Study an Expansion Project
which satisfies the criteria specified in, or agreed
pursuant to, Clause 10.5 and which would be the first
Approved Expansion Project and (ii) to determine that the
Expansion Project which is the subject of such Feasibility
Study shall be the first Approved Expansion Project, for
which purpose the approval of the board of directors of PT-
FI shall be deemed to have been given. Accordingly, whether
or not the board of directors of PT-FI or the board of
directors of FCX approve such Expansion Project, such
Expansion Project shall, provided it is approved by the
board of directors of PT-RTZ, be an Approved Expansion
Project for all purposes of this Agreement.
10.4 Except in relation to the Expansion Project falling within
Clause 10.3 as to which the provisions of Clause 10.3 shall
apply, if the boards of directors of FCX, PT-FI and PT-RTZ
do not agree on the scope and Budget of an Expansion Project
as mentioned in Clause 10.2.2, the matter shall be left open
for an additional period of 30 days to allow for further
discussion. If the boards of directors shall decline to
approve the Expansion Project within such 30 day period, the
board of directors of the Proposing Participant may, within
a further period of 30 days thereafter by notice to the
other Participant and the Operator elect, subject, in the
case of PT-FI, to the limitation specified in Clause
7.5.1.2, to carry out such Expansion Project as a sole risk
venture (a "Sole Risk Programme") and, unless the other
Participant, within a further period of 30 days after
receipt of the Proposing Participant's notice of election,
elects by written notice to the Proposing Participant and
the Operator to join in such Sole Risk Programme (in which
case the Expansion Project shall become part of Joint
Operations), the Proposing Participant shall have the right
to carry out the Expansion Project as a Sole Risk Venture
provided that it commences work within one year after the
date of its written election to carry out such Expansion
Project as a Sole Risk Venture, and provided further that,
in the case of any Sole Risk Programme carried out by PT-
RTZ, unless PT-RTZ has obtained the prior written consent of
PT-FI, the Sole Risk Programme is not based to any
significant degree on the accelerated mining of the 10-K
Reserves.
10.5 No project shall be capable of being the first Approved
Expansion Project unless it is a project for Expansion
which is (a) based on the aggregate of (i) the 10-K Reserves
and (ii) New Reserves of not less than 400,000,000 tonnes
containing an average of 0.5% copper and 0.5 grammes/tonne
of gold (or the economic equivalent thereof), unless FCX and
PT-RTZ shall agree that a smaller reserve would suffice and
(b) designed to result in the treatment of ore mined from
the aggregate resources in Contract Area Block A (being both
the 10-K Reserves and the above-mentioned New Reserves) at
an aggregate rate in excess of 118,000 tonnes per day. In
this Clause 10.5, "New Reserves" means proved and probable
ore reserves situated in Contract Area Block A which are
additional to the 10-K Reserves.
11. GREENFIELD PROJECTS AND LATER EXPANSION PROJECTS
11.1 The Participants will plan together, in accordance with the
procedures set out in Clause 10, the Development of any new
Greenfield Project in Contract Area Block A or Contract Area
Block B, and any project of Expansion which is to be funded
wholly without the use of the proceeds of the RTZ Loan and
the related direct investment by PT-RTZ. The procedures
outlined in Clause 10 and the Financial and Accounting
Procedures will be applicable.
11.2 If any project referred to in Clause 11.1 is to be
developed as part of Joint Operations, the financing of such
project, insofar as it is not to be funded by way of the RTZ
Loan and the related direct investment by PT-RTZ, will be
either on a joint basis, in which event the financing costs
will be part of the Operating Costs for purposes of the
Financial and Accounting Procedures, or on an individual
basis, in which event each Participant will be solely liable
for its financing costs but will be entitled to determine
the form which such financing will take, including, if such
Participant so desires, sale and leaseback transactions so
long as such transactions relate solely to such
Participant's interest in the Joint Account Assets and do
not prejudice or unduly interfere with the carrying on of
Enterprise Operations or previously established Sole Risk
Ventures. The costs and benefits of any such project
carried on as part of Joint Operations will, subject to the
above provisions of this Clause 11.2 and Clause 6.1 and the
Financial and Accounting Procedures, be borne by the
Participants in proportion to their respective Participating
Interests in Contract Area Block A or Contract Area Block B,
as the case may be.
11.3 If, pursuant to the procedures set out in Clause 10, any
project referred to in Clause 11.1 is not to be developed as
part of Joint Operations, either Participant may treat the
project as a Sole Risk Venture under the provisions of
Clauses 10 and 12.
12. SOLE RISK
12.1 If a Proposing Participant shall proceed with a Sole Risk
Programme and unless otherwise agreed by the Participants,
for so long as the Sole Risk Programme continues or the
Proposing Participant continues to conduct operations on its
own account in the Specified Area:
12.1.1 the Specified Area shall not be eligible
for Joint Operations and the Proposing Participant
shall have the exclusive right to carry out the Sole
Risk Programme and any subsequent work programmes as
it may think fit in the Specified Area at its sole
risk and cost and the other Participant shall, to the
extent necessary and so far as it is able and without
prejudice to the existing Enterprise Operations,
provide full rights of ingress, egress and regress
to, from and over the Specified Area and the
remainder of the Contract Area so that the Proposing
Participant may exercise such right. Without
prejudice to the generality of the foregoing, to the
extent that the Sole Risk Venture requires the use of
PT-FI Available Assets PT-FI support services or
Joint Account Assets, and the use of these assets and
support services does not prejudice then or later the
conduct of Enterprise Operations, each of PT-FI and
PT-RTZ (as appropriate) will make available and
charge to the Sole Risk Venture the direct and
allocable costs of providing such assets and
services;
12.1.2 the Participant which is not the
Proposing Participant shall cease to have any rights
to the production of Minerals or proceeds therefrom
from operations in the Specified Area provided that
the rights of the Proposing Participant will relate
solely to the obtaining of exclusive rights to the
proved and probable reserves in the three-dimensional
physical area of the Specified Area, as described in
the Feasibility Study with respect to the project in
question, to the extent such reserves constitute the
basis for the project, as presented to the
Participants pursuant to Clause 10, but will not
thereby obtain rights with respect to any other
reserves. Any further Expansion within the Specified
Area, but not constituting part of the Sole Risk
Programme, will be subject to the procedure provided
in Clause 11 for approval of Programmes, but with
protections afforded to the holder of the Sole Risk
Programme which are comparable to those afforded PT-
FI with respect to the 10-K Reserves and the related
PT-FI Available Assets.
12.2 All Sole Risk Programmes shall be conducted by the Operator
appointed under this Agreement, unless it declines to act as
operator with respect thereto, in which event the operator
with respect thereto shall be the person designated as
operator by the Participant for whose account the Sole Risk
Venture is being conducted, subject to the reasonable
approval of PT-FI. The Operator or other operator shall
have, with respect to the Sole Risk Venture, the same
powers, rights and obligations as are applicable to the
Operator's activities with respect to Enterprise Operations.
In the event of any conflict between the conduct of
Enterprise Operations and a Sole Risk Programme, the
Operator shall give priority to Enterprise Operations.
12.3 Should the Operator conduct a Sole Risk Programme on behalf
of a Participant which is not also the Operator, the charges
provided for in the Financial and Accounting Procedures with
respect to such Sole Risk Programme shall be payable or
repayable to the Operator upon demand. The Operator shall
be authorised to establish such procedures as are reasonably
necessary to obtain such payments from revenues otherwise
payable to such Participant or to issue cash calls with
respect thereto to such Participant.
12.4 Should the board of directors of any Participant determine,
in any Year, not to participate in the proposed Exploration
Programme for such Year as recommended by the Exploration
Committee, or if no Programme is recommended by the
Committee, the board of directors of either Participant may
elect, upon 30 days' notice after having submitted a
proposed Exploration Programme to the other Participant, to
carry out such Programme as a Sole Risk Venture, unless
within such period the other Participant elects to join in
such Programme. If no such election by the other
Participant is made,
(a) if the proposed Programme is in Contract Area
Block B, the declining Participant shall not be
entitled to participate in that or any subsequent
Exploration Programmes or in any subsequent Development
Projects in Contract Area Block B other than any
Development Projects already begun or pursuant to
Exploration Programmes and subsequent Development
Projects based on Feasibility Studies which have
theretofore been approved, and
(b) if the proposed Programme is in Contract Area
Block A, the absence of any such election by the other
Participant shall not affect that other Participant's
rights to participate in any subsequent Exploration
Programmes or in any subsequent Development Projects
except that if the Participant which carries out the
Programme as a Sole Risk Programme subsequently puts
forward a proposal for Development based on such Sole
Risk Programme, the other Participant shall not, in
reaching a decision whether or not to participate in
such Development Project, be entitled to see or use any
data relating to such Exploration Sole Risk Programme.
13. PROGRAMMES AND BUDGETS
Joint Operations shall be conducted, expenses shall be incurred and
Joint Account Assets shall be acquired pursuant only to Approved
Programmes and Budgets. The Financial and Accounting Procedures
contains, among other things, provisions concerning the
preparation, review and approval of Programmes and Budgets.
14. TAXATION IN INDONESIA
It is the intention of the Participants that each of the Participants
should be liable for Indonesian Taxes on income separately
according to its participation in Joint Operations and any of
its Sole Risk Ventures (and with respect to PT-FI, its interest
in the 10-K Reserves and the other Enterprise Operations). Each
Participant shall be directly responsible for and shall directly
pay all such Taxes applicable to such Participant in Indonesia.
Each Participant shall individually and timely file its own
Indonesian Tax returns with the relevant authorities and
independently file pertinent claims and recover Tax credits to
the extent permitted by applicable law. Each Participant shall
provide to the other promptly all such information reasonably
requested by the other to enable such other to comply with its
obligations under this Clause 14.
Failure by a Participant to make any payment of Indonesian Income Tax
which is due and payable by the Participant and which would
result in a default under the COW shall entitle the Operator
after 3 business days' notice to the Participant to make the
required payment on behalf of the Participant and withhold such
amount from sums otherwise due to such Participant under this
Agreement.
15. TRANSFER OF PARTICIPATING INTERESTS
15.1 General
Subject to the provisions of this Clause 15, a
Participant shall have the right to transfer, grant, assign,
and otherwise commit or dispose (all such rights to be
referred to as "transfer" in this Clause 15) to any third
party all or any part of its Participating Interest.
15.2 Limitations on Free Transferability
The transfer right of a Participant in Clause 15.1
shall be subject to the following terms and conditions:
15.2.1 no transferee (other than a transferee
taking the Participating Interest or part thereof for
the purpose of securing the payment or repayment of
any indebtedness, or enforcement thereof, or the
taking of title by a party secured thereby or an
Affiliate (including any representative thereof and
the Trustee acting on its behalf under the Restated
Trust Agreement), and prior to the assumption of the
position of a Participant in substitution for a
Participant under the Participation Agreement) of all
or part of its Participating Interest shall have the
rights of a Participant unless and until the
transferring Participant has provided to the other
Participants notice of the transfer, and the
transferee (other than a transferee as aforesaid), as
of the effective date of the transfer, has committed
in writing to be bound by this Agreement to the same
extent and nature as the transferring Participant;
15.2.2 no transfer permitted by this Clause 15
shall relieve the transferring Participant of its
share of any Liability, whether accruing before or
after such transfer, which arises out of Joint
Operations conducted after the Effective Date and
prior to such transfer;
15.2.3 the transferring Participant and (unless
the transferee is taking the Participating Interest
or part thereof by way of security) the transferee
shall indemnify the other Participant against all
adverse tax consequences of the transfer;
15.2.4 no transfer shall be made of less than a
10% Participating Interest (unless it is the balance
of the transferor's Participating Interest) and no
such transfer shall result in the transferring
Participant retaining less than a 10% Participating
Interest provided that a Participant will be
entitled, in connection with the financing of a Sole
Risk Programme or an Approved Programme and Budget,
subject to the other sub-clauses of this Clause 15.2,
to transfer a partial interest of less than a 10%
Participating Interest, or a partial interest that
relates only to a specific geographic area, so long
as such transfer and such financing do not materially
and adversely affect any Joint Operations;
15.2.5 no transfer shall be made to a person
which is bankrupt, insolvent, liable to be wound up,
which is not of good financial standing or which is
otherwise objectionable on reasonable grounds from
the viewpoint of the interests of the Participation;
15.2.6 subject to Clause 15.4.4, such transfer
shall be subject to a first offer right in favour of
the other Participant as provided in Clause 15.3;
15.2.7 such transfer shall in no case affect the
rights of the non-transferring Participant under the
COW;
15.2.8 such transfer shall include the right to
receive revenues from Enterprise Operations to the
extent enjoyed by the transferor, but shall not
include the right to participate in any Committees
described in Clause 8 of this Agreement or in
Clause 2 of the Implementation Agreement or to be an
Operator as described in Clause 9 of this Agreement,
unless the non-transferring Participants consent to
the transfer of the right in question, which consent
may be withheld for any reason; and
15.2.9 such transfer shall be subject to prior
Government approval.
In addition, until the RTZ Loan has been repaid in full, no
transferee of the whole or any part of PT-FI's Participating
Interest in Incremental Expansion Cashflow (together with
PT-FI's related rights under the COW and agreements for the
sale of Products derived from Joint Operations) shall have
the rights of a Participant unless and until it has
committed in writing to be bound by the repayment provisions
of the RTZ Loan Agreement and acknowledged and consented to
the Intercreditor Agreement (as defined in the RTZ Loan
Agreement).
15.3 First Offer Right
Except as otherwise provided in Clause 15.4, if a
Participant desires to transfer all or any part of its
Participating Interest, including an interest therein that
relates only to a specific geographic area, it shall first
offer to sell such part to the other Participant on terms to
be agreed. The Participants shall thereupon use all
reasonable endeavours to agree the terms of the sale. If
despite using all such reasonable endeavours, the
Participants fail to agree on the terms of the sale within a
period of 60 days after the date of the offer referred to in
this Clause 15.3, the Participant desiring to sell shall
have the right for the period of 180 days following the
expiry of such 60 day period to sell such part of its
Participating Interest to a third party. If the Participant
desiring to sell shall fail to consummate such a sale to any
third party within 180 days after such Participant shall
become entitled hereunder to sell to such third party, no
sale or transfer may thereafter be made by such Participant
without again complying with the provisions of this Clause
15.3.
15.4 Exceptions to First Offer Right
Clause 15.3 shall not apply to the following
transfers:
15.4.1 transfer by a Participant of all or any
part of its interest in this Agreement or any
Participating Interest to an Affiliate;
15.4.2 corporate merger, consolidation,
amalgamation or reorganisation of a Participant for
the purposes of a financial reconstruction;
15.4.3 transfers among Participants which are
expressly required or permitted by the provisions of
this Agreement;
15.4.4 transfers by way of security or an
enforcement or foreclosure thereof or the taking of
title by a secured party or an Affiliate (including
any representative thereof and the Trustee acting on
its behalf under the Restated Trust Agreement) but
not a subsequent transferee.
16. GENERAL PROVISIONS
16.1 Notices
All notices, payments and other required
communications hereunder ("Notice") between the parties
shall be in writing and shall be addressed, respectively, as
follows: All Notices shall be given (a) by personal
delivery to each of the other parties, or (b) by electronic
communication, with a confirmation sent by registered or
certified mail, return receipt requested. All Notices shall
be effective and shall be deemed delivered (i) if by
personal delivery on the date of delivery and (ii) if by
electronic communication on the date of receipt of the
electronic communication. A party may change its address
from time to time by Notice to the other parties.
If to PT-FI: P. T. Freeport Indonesia Company
1615 Poydras Street
New Orleans, LA 70161
Attention: Treasurer
Tel.: (504) 582-4628
Fax: (504) 582-4511
If to PT-RTZ: P.T. RTZ-CRA Indonesia
14th floor, World Trade Centre
Jalan Jend. Sudirman Kav. 29-31
Jakarta 12920
Indonesia
Tel: (6221) 521 1752
Fax: (6221) 521 1760
Attention: President Director
with a copy to: The RTZ Corporation PLC
6 St. James's Square
London SW1Y 4LD
England
Tel: 0171 930 2399
Fax: 0171 930 3249
Attention: The Secretary
16.2 Waiver
The failure of a party to insist on the strict
performance of any provision of this Agreement or to
exercise any right, power or remedy upon a breach hereof
shall not constitute a waiver of any provision of this
Agreement or limit the party's right thereafter to enforce
any provision or exercise any right.
16.3 Modification
No modification or amendment of this Agreement shall
be valid unless made in writing and duly signed by all the
parties. If, in the event of experience gained through the
operation of this Agreement, the parties agree that
application of any of its provisions results in a material
inequity to (a) party(ies), then the parties agree that they
will meet to discuss possible changes in such provision(s)
proposed by one or more parties as a means of obviating such
inequity.
16.4 Force Majeure
16.4.1 The obligations of the Operator and of a
Participant, other than the payment of money provided
hereunder, shall be suspended and any period of time
mentioned in this Agreement shall be extended to the
extent and for the period that performance or the
ability of the Operator or (as the case may be) one
or both of the Participants to exercise rights or
carry out obligations or otherwise act as permitted
by or in accordance with this Agreement is prevented
by any cause, whether foreseeable or unforeseeable,
beyond its reasonable control, including, without
limitation, labour disputes (however arising and
whether or not employee demands are reasonable or
within the power of the Participant to grant); acts
of God; laws, regulations, orders, proclamations,
instructions or requests of any government or
governmental entity; judgments or orders of any
court; inability to obtain on reasonably acceptable
terms any public or private exploration or
exploitation, right, licence, permit or concession;
curtailment or suspension of activities to remedy or
avoid an actual or alleged, present or prospective
violation of federal, state or local environmental
standards; acts of war or conditions arising out of
or attributable to war, whether declared or
undeclared; riot, civil strife, insurrection or
rebellion; fire, explosion, earthquake, storm, flood,
sink holes, drought or other adverse weather
condition; delay or failure by suppliers or
transporters of materials, parts supplies, services
or equipment or by contractors or sub-contractors'
shortage of, or inability to obtain, labour,
transportation, materials, machinery, equipment,
supplies, utilities, or services; accidents;
breakdown of equipment, machinery or facilities; or
any other cause, whether similar or dissimilar to the
foregoing. The affected Participant shall promptly
give notice to the other Participant of the
suspension of performance, stating therein the nature
of the suspension, the reasons therefor and the
expected duration thereof. The affected Participant
shall resume performance as soon as reasonably
possible. During the period of suspension, the
obligations of the Participants to advance funds
pursuant to paragraph 10.3 of the Financial and
Accounting Procedures shall be reduced to levels
consistent with the Joint Operations which are
capable of being carried on in the circumstances.
16.4.2 Should any of the causes referred to in
Clause 16.4.1 result in the actual production of
Products from Enterprise Operations (other than
Greenfield Projects) in Contract Area Block A in any
Year (the "Actual Production") falling short of the
planned production of such Products for the Year as
shown in the then current programme and budget
(which, in the case of Joint Operations, shall be the
Approved Programme and Budget) for that Year (the
"Planned Production"), the Product Schedule shall be
amended as follows:
(i) The scheduled production of Products
for the Year in question as shown in the Product
Schedule shall be reduced in accordance with the
following formula:
D = A x C,
B
where D is the revised scheduled
production for the Year in question, A is the
Actual Production, B is the Planned Production
and C is the scheduled production of Products
for that Year as shown in the Product Schedule
prior to the occurrence of the cause and the
production which is D shall be substituted in
the Product Schedule as the scheduled production
of Products for the Year in question.
(ii) The shortfall in production being C -
D (as defined in (i) above) shall be added to
the final Year of production as shown by the
Product Schedule prior to the occurrence of the
cause or causes. If, in the final Year, the
scheduled production as so revised would exceed
the production which would result from a daily
rate of 118,000 tonnes per day, the excess shall
be carried forward to the subsequent Year (and
the Cut-off Date shall be extended accordingly)
and appropriate adjustments made to the
production of recovered metal for that Year.
16.5 Governing Law
16.5.1 This Agreement shall be governed by and
construed in accordance with the laws of the State of
New York.
16.5.2 Each of the parties irrevocably agrees
that any suit, action or proceedings (together in
this Clause 16.5 referred to as "Proceedings")
arising out of or in connection with this Agreement
shall be brought in any United States Federal or New
York State court sitting in the borough of Manhattan,
City of New York and, except for the purposes of or
Proceedings regarding enforcement, which may take
place in any relevant jurisdiction, submits to the
exclusive jurisdiction of the courts in such borough.
16.5.3 Each of the parties irrevocably waives
any objection which it may have now or hereafter to
the laying of venue of any Proceedings in any such
court as is referred to in this Clause 16.5 and any
claim that any such Proceedings have been brought in
an inconvenient forum. Each of the parties hereby to
the fullest extent permitted by law waives any right
it may have to have any Proceedings take the form of
a trial by jury.
16.5.4 Each of the parties hereby irrevocably
designates, appoints and empowers, in the case of the
United States Federal Courts in New York and the New
York State courts, CT Corporation System, having
offices at the date hereof at 1633 Broadway, New
York, N.Y. 10019, U.S.A. to receive, for and on
behalf of itself, service of process in such
jurisdictions in any legal action or proceedings with
respect to this Agreement or any judgment in
connection herewith and agrees that failure by such
process agent to give notice of such service of
process to it shall not impair or affect the validity
of such service or of any judgment based thereon.
16.6 Penalties
It is agreed between the parties that, while the
percentage and rate set out in Clause 6.3.2.3 and paragraph
10.3.3 of the Financial and Accounting Procedures are
considered fair and reasonable and a genuine pre-estimate of
the loss to the non-Defaulting Participants, if it should be
found that either of such percentage and rate be
unenforceable as going beyond what is fair and reasonable or
a genuine pre-estimate in the circumstances and if by
substituting a different percentage or rate for the
percentage or rate set out in Clause 6.3.2.3 or paragraph
10.3.3 of the Financial and Accounting Procedures it would
be enforceable, then there shall be substituted such next
high percentage or rate as shall render Clause 6.3.2.3 or
paragraph 10.3.3 of the Financial and Accounting Procedures
valid and enforceable.
16.7 Rule Against Perpetuities
Any right or option to acquire any interest in real
or personal property under this Agreement must be exercised,
if at all, so as to vest such interest in the acquirer
within twenty-one years less one day after the death of the
last known descendent of Queen Victoria alive on the
Effective Date.
16.8 Further Assurances
Each of the Participants agrees that it shall take
from time to time such actions and sign or execute such
additional instruments as may be reasonably necessary or
convenient to implement and carry out the intent and purpose
of this Agreement.
16.9 Confidentiality and Public Statements
Except as otherwise provided in this Clause 16.9, the
terms and conditions of this Agreement, and all data,
reports, records and other information of any kind
whatsoever developed or acquired by any Participant in
connection with this Participation, shall be treated by the
Participants as confidential (hereinafter called
"Confidential Information"), and no Participant shall reveal
or otherwise disclose such Confidential Information to third
parties without the prior written consent of the other
Participant(s). The foregoing restrictions shall not apply
to the disclosure of Confidential Information (i) pursuant
to the terms of the COW or the request of the Government,
the laws, rules and regulations administered by the
Securities & Exchange Commission or the rules of any stock
or securities exchange on which the shares or stock of
either of the Participants or any of its Affiliates may from
time to time be listed or (ii) to any Affiliate, to any
public or private financing agency or institution, to any
contractors or subcontractors which the Participants may
engage and to employees and consultants of the Participants
or to any third party to which a Participant contemplates
the transfer, sale, assignment, encumbrance or other
disposition of all or part of its Participating Interest
pursuant to Clause 15; provided that, in any such case under
this (ii), only such Confidential Information as such third
party shall have a legitimate business need to know shall be
disclosed, and the person or company to whom disclosure is
made shall first undertake in writing to protect the
confidential nature of such information at least to the same
extent as the parties are obligated under this Clause 16.9.
In addition, (a) the foregoing restrictions shall not apply
to Confidential Information which otherwise comes into the
public domain and (b) notwithstanding anything to the
contrary in this Clause 16.9, each Participant is permitted
to use and disclose data arising from the Participation in
its annual audited financial statements and notes thereto.
In the event that a Participant is required to
disclose Confidential Information to any government and
appropriate agencies and departments thereof, to the extent
required by law or in response to a legitimate request for
such Confidential Information, the Participant so required
shall immediately and prior to any disclosure notify the
other Participants hereto of such requirement and the terms
thereof prior to such submission.
The provisions of this Clause 16.9 shall apply during
the term of this Agreement and shall continue to apply to
any Participant which forfeits, surrenders, assigns,
transfers or otherwise disposes of its Participating
Interest for one year following the date of such occurrence.
Except as may be required by applicable law or any
listing agreement with any national securities exchange or
the rules of any stock exchange on which the shares or stock
of either of the Participants or any of its Affiliates may
from time to time be listed, no party to this Agreement
shall issue any press release or make any public
announcement or public disclosure with regard to the
Participation or its financial performance or condition,
including Confidential and non-Confidential Information,
unless either (i) a draft of the proposed press release has
been provided to the other party hereto at least twenty-four
hours prior to its proposed release in order to permit such
party to comment thereon or (ii) such press release or other
public statement contains factual information (or discussion
or analysis of or comment based upon such factual
information) previously provided to such party by the other
party provided that neither will present projections or
forward-looking information that is attributed to the other
party or any of its Affiliates without the prior written
consent of the other party.
16.10 Entire Agreement; Successors and Assigns
This Agreement, together with the Implementation
Agreement and the other documents referred to therein and
the Early Closing Agreement and the other documents referred
to therein, contains the entire understanding of the parties
and supersedes all prior agreements and understandings
between the parties relating to the subject matter hereof.
This Agreement shall be binding upon and inure to the
benefit of the respective successors and permitted assigns
of the parties.
16.11 Severability
If part of this Agreement is rendered illegal,
invalid or unenforceable under applicable law, the remaining
clauses of this Agreement shall continue in force.
16.12 Indonesian Law Waiver
Each of the Participants waives those provisions of
Article 1266 of the Civil Code of the Republic of Indonesia
(if and to the extent that, notwithstanding Clause 16.5,
that Article is applicable to this Agreement) which would
otherwise require the order of a court as a precondition to
termination of this Agreement.
16.13 Tax Covenant
In recognition of the fact that the Participants and
the transactions contemplated by this Agreement may be
affected adversely over the life of the Chargeable
Operations, by the interaction of the laws relating to Taxes
under multiple taxing jurisdictions, the Participants agree
that they will cooperate with a view to minimizing the
adverse tax impact of the various jurisdictions on the
Participants to the extent such can be accomplished without
material adverse affect on the conduct of the Chargeable
Operations and the other Participant. The Participants will
consult and work together to ensure that neither party takes
any action which prejudices the Tax position of the other.
The Participants hereby agree that each will endeavour to
make such adjustments in the way in which Chargeable
Operations are conducted, or in the terms of this Agreement,
or in their other relationships, as may be reasonably
requested by the other Participant to avoid or minimize any
adverse tax impact on such Participant while taking into
account any adverse tax or operational impact on Chargeable
Operations and on the other Participant.
(Signature pages follow)
IN WITNESS WHEREOF the authorised representatives of the parties
hereto have signed this Agreement as of the date first above written.
P.T. FREEPORT INDONESIA COMPANY
By: /s/ R. Foster Duncan
_____________________________
Name: R. Foster Duncan
Title: Treasurer
P.T. RTZ-CRA INDONESIA
By: /s/ Sandra Walker
_____________________________
Name: Sandra Walker
Title: Attorney-In-Fact
In anticipation of the completion of formation of P.T. RTZ-CRA
Indonesia under the laws of the Republic of Indonesia, this
Agreement is also executed by RTZ Jersey Investments One Limited and
RTZ Jersey Nominees Limited, jointly and severally, the founding
shareholders.
RTZ JERSEY INVESTMENTS ONE LIMITED
By: /s/ Sandra Walker
________________________________
Name: Sandra Walker
Title: Attorney-In-Fact
RTZ JERSEY NOMINEES LIMITED
By: /s/ Sandra Walker
________________________________
Name: Sandra Walker
Title: Attorney-In-Fact
SCHEDULE 1
Privatisation Agreements
1. Joint Venture Agreement dated as of March 11, 1993 between
P.T. ALatieF Nusakarya Corporation ("ANC") and PT-FI (the
"ALatief J.V. Agreement").
The ALatief J.V. Agreement provides for the sale and purchase of
US$270 million of infrastructure assets consisting primarily of
warehouses, a hotel, housing (single and multi-family and
dormitories), and food service, medical, retail and recreational
facilities.
Master Services Agreement, dated December 15, 1993 between Alatief
Freeport Infrastructure Corporation ("AFIC") and PT-FI regarding
the operation and management of certain non-mining
infrastructure assets for the benefit of PT-FI, as amended April
15, 1994 and April 19, 1994.
Master Services Agreement, dated August 11, 1994, between AFIC and
PT-FI regarding the operation and management of certain non-
mining infrastructure assets for the benefit of PT-FI.
Master Services Agreement, dated August 11, 1994 between Alatief
Freeport Hotel Corporation ("AFHC") and PT-FI regarding the
provision of hotel management services for the Sheraton Inn at
Timika.
Management Contract, dated October 28, 1993 between PT-FI and Indo-
Pacific Sheraton Limited regarding the management of the
Sheraton Inn at Timika which was assigned by Indo-Pacific
Sheraton Limited to Sheraton Overseas Management Corporation on
October 28, 1993. By Assignment, dated August 11, 1994 PT-FI
assigned its rights and obligations under such Contract and
other hotel privatisation agreements to AFHC.
As of February 1996, transactions involving the sale of approximately
US$198 million of infrastructure assets have been closed with
P.T. ALatief Freeport Infrastructure Company ("AFIC") purchasing
approximately US$156 million and P.T. ALatief Freeport Hotel
Company ("AFHC") purchasing US$42 million. AFIC and AFHC are
each owned 2/3rds by ANC and 1/3rd by PT-FI.
ANC and PT-FI are currently discussing amending the ALatief J.V.
Agreement to add additional infrastructure assets, thereby
increasing the total amount of the infrastructure sales provided
for in the ALatief J.V. Agreement to approximately US$350-450
million, and to restructure financing for the transaction on
more favourable terms.
2. Asset Purchase Agreement dated as of December 26, 1994 between
P.T. Puncakjaya Power ("PTPJP") and PT-FI (the "Asset Purchase
Agreement").
The Asset Purchase Agreement provides for the sale and purchase of
US$215 million of infrastructure assets consisting primarily of
electric power generation and transmission facilities. The
final closing under the Asset Purchase Agreement occurred in
December 1995.
Power Sales Agreement, dated as of December 27, 1994 between P.T.
Puncakjaya Power ("Seller") and P.T. Freeport Indonesia Company
("Buyer") providing for Seller to make available, sell and
deliver to Buyer and to certain designees of Buyer, and for
Buyer to purchase from Seller, certain electric capacity and
electricity.
Operation, Maintenance and Management Agreement, dated and effective
as of January 30, 1995, between P.T. Puncakjaya Power ("Owner")
and P.T. Nusantara Power Services ("Operator") providing for
Operator to furnish certain services to Owner on a cost
reimburable basis for the operation, maintenance and management
of the Mill Site Facility, the Timika Facility, the New Town
Facility, the Milepost 38/39 Facility and the Port Site
Facility.
3. Purchase and Sale Agreement dated as of March 22, 1995 between
ANC, P&O Singapore Pte. Ltd., P.T. ALatief P&O Port Development
Company and PT-FI (the "Purchase and Sale Agreement").
Master Services Agreement, dated March 22, 1995 between P.T. Alatief
P & O Port Development Company ("PTAPPDC") and PT-FI regarding
the operation and management of the port, marine and logistics
assets by PTAPPDC for the benefit of PT-FI.
The Purchase and Sale Agreement provides for the purchase and sale of
US$100 million of infrastructure assets consisting primarily of
tugboats, motorised barges, wharfs and warehouses, cranes and
other cargo handling equipment, concentrate drying equipment,
heavy trucks and maintenance facilities. This transaction was
closed on March 22, 1995.
4. Joint Venture Agreement dated as of March 18, 1994 among P.T.
Airfast Indonesia, P.T. Giga Haksa and PT-FI (the "Aviation J.V.
Agreement").
The Aviation J.V. Agreement provides for the sale and purchase of
approximately US$48 million of infrastructure assets consisting
primarily of aircraft and helicopters, spare parts and aviation
support facilities. This transaction was closed in 1995.
5. PT-FI is currently negotiating with an Indonesian company
concerning the sale and purchase of infrastructure assets
constituting essentially all of PT-FI's potable water treatment
and distribution facilities and sewerage treatment and
collection facilities. PT-FI expects to enter into agreements
resulting in the closing of a sale of such assets in 1996 or
1997.
6. PT-FI is currently negotiating with an Indonesian company
concerning the sale and purchase of infrastructure assets
constituting essentially all of PT-FI's solid waste treatment,
storage and disposal facilities. PT-FI expects to enter into
agreements resulting in the closing of a sale of such assets in
1996 or 1997.
7. PT-FI is currently negotiating with certain Indonesian
companies concerning the sale and purchase of infrastructure
assets constituting a steel fabrication shop and industrial
gases plant. PT-FI expects to enter into agreements resulting
in the closing of a sale of such assets in 1996 or 1997.
8. PT-FI has formed a service company named P.T. Mining Services
International Company ("MSIC"). It is expected that in 1996
MSIC will enter into agreements for the provision of certain
mining related services to PT-FI, PT-IRJA, other related
companies, and potentially third parties. It is not anticipated
that any significant amount of assets will be transferred to the
MSIC, although PT-FI personnel may be transferred to MSIC.
9. PT-FI is currently negotiating with an Indonesian company
concerning the sale and purchase of its existing and proposed
new beef production and processing facilities and its proposed
new poultry and egg production and processing facilities. PT-FI
expects to enter into agreements resulting in the closing of a
sale of such assets in 1996 or 1997.
10. PT-FI is currently negotiating with various persons concerning
the sale and purchase of its existing and proposed single and
multi-family housing facilities and certain existing and
proposed retail and commercial facilities located at Kuala
Kencana. PT-FI expects to enter into a series of agreements
resulting in the closing of sales of such assets in 1996 through
2000.
SCHEDULE 2
Deed of Assignment of Interest in COW
ASSIGNMENT OF INTEREST
THIS AGREEMENT is made the 11th day of October, 1996 between P.T.
Freeport Indonesia Company, a corporation organised and existing
under the laws of Indonesia (hereinafter referred to as the
"Assignor") and P.T. RTZ-CRA INDONESIA, a company in formation under
the laws of the Republic of Indonesia (hereinafter referred to as the
"Assignee").
WHEREAS, the Assignor has a 100% undivided ownership interest in and
to the Contract of Work made 30 December 1991 between the Minister of
Mines and Energy of the Republic of Indonesia, acting for and on
behalf of the Government of the Republic of Indonesia, and the
Assignor (hereinafter referred to as the "Contract of Work");
AND WHEREAS, under the terms of the Contract of Work the Assignor is
now conducting certain development, mining and processing activities
in the Contract Area Block A (as defined in the Contract of Work) and
is implementing a plan for expansion of the capacity of its
facilities for treatment of ore mined from Contract Area Block A to a
design rate of 118,000 metric tonnes per day (hereinafter, together
with all assets and rights reserved to PT-FI pursuant to the terms of
the Participation Agreement (including Clause 7.5.1.3 thereof),
referred to as the "Existing Project");
AND WHEREAS under the terms of a Participation Agreement made
October 11, 1996, between the Assignor and the Assignee (hereinafter
called the "Participation Agreement") the Assignee is entitled at
this time to an assignment of a 40% undivided ownership interest in
and to the Contract of Work excluding the Existing Project, subject
to adjustment from time to time as set out in the Participation
Agreement.
NOW, THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
mutual covenants and agreements herein contained and subject to the
terms and conditions hereinafter set out, the Parties hereto agree as
follows:
1. The Assignor does hereby assign, set over, transfer and convey
unto the Assignee a 40% undivided ownership interest in and to
the Contract of Work and all benefit and advantage derived or to
be derived therefrom (excluding the Existing Project), subject
to adjustment from time to time, as set out in the Participation
Agreement (hereinafter called the "Assigned Interest"), to have
and to hold the same unto the Assignee on the terms, conditions
and obligations contained in the Contract of Work insofar as
they relate to the Assigned Interest. This Assignment is
subject to all terms and conditions of the Participation
Agreement.
2. The Assignee hereby accepts the assignment of the Assigned
Interest and covenants and agrees that it shall, at all times
hereafter be bound by, observe and perform all of the provisions
of the Contract of Work to be observed and performed by the
Assignor, insofar as they relate to the Assigned Interest, to
the same extent as if the Assignee had been a party thereto in
the place and stead of the Assignor in respect of the Assigned
Interest.
3. The Assignor shall remain responsible to the Government of the
Republic of Indonesia for the conduct of all operations under
the Contract of Work and for all communications with the
Government of the Republic of Indonesia under the Contract of
Work on behalf of itself and the Assignee.
4. The undivided ownership interest in and to the Contract of
Work as at the Effective Date after giving effect to the
assignment of the Assigned Interest and subject to the rights
and obligations of the parties in relation to the Existing
Project as set out in the Participation Agreement shall be as
follows:
(i) P.T. Freeport Indonesia Company 60%
(ii) P.T. RTZ-CRA Indonesia 40%
5. Each of the Assignor and the Assignee covenants and agrees
with the other of them that at the request of the other it will
execute such further assurances and do all such further acts as
may reasonably required for the purpose of vesting the Assigned
Interest in the Assignee.
6. The address of the Assignee for notices shall be:
14th floor, World Trade Centre
Jalan Jend. Sudirman Kav. 29-31
Jakarta 12920
Indonesia
7. This Assignment shall enure to the benefit of and be binding
on the Parties hereto and their respective successors and
assigns.
(Signature page follows)
IN WITNESS WHEREOF the authorised representatives of the parties
hereto have signed this Agreement as of the date first above written.
P.T. FREEPORT INDONESIA COMPANY
By:
_____________________________
Name:
Title:
P.T. RTZ-CRA INDONESIA
By: _____________________________
Name: Michael A. Noakes
Title: President Director
In anticipation of the completion of formation of P.T. RTZ-CRA
Indonesia under the laws of the Republic of Indonesia, this
assignment is also executed by RTZ Jersey Investments One Limited
and RTZ Jersey Nominees Limited, jointly and severally, the founding
shareholders.
RTZ JERSEY INVESTMENTS ONE LIMITED
By: ________________________________
Name:
Title:
RTZ JERSEY NOMINEES LIMITED
By: ________________________________
Name:
Title:
SCHEDULE 3
Exceptions to Representations and Warranties
A. PT-FI
4.2.3
1. Tom Beanal v. Freeport-McMoRan Inc. and Freeport-McMoRan
Copper & Gold Inc., Civ. No. 96-1474 (E.D. La. filed Apr. 29,
1996) and Yosefa Alomang v. Freeport-McMoRan Inc. and Freeport-
McMoRan Copper & Gold Inc., Civ. No. 96-9962 (Orleans Civ. Dist.
Ct. La. filed June 19, 1996) and Civ. No. 96-2139 (E.D. La.
removed June 24, 1996).
In both actions, the plaintiffs allege substantially
identical environmental, human rights and social/cultural
violations in Indonesia. Tom Beanal seeks $6 billion in
monetary damages and other equitable relief and Yosefa Alomang
seeks unspecified monetary damages and other equitable relief.
FCX denies the allegations, which have been refuted by a series
of independent examinations of the Indonesian mining operations
of PT-FI. FCX believes that the actions are baseless and will
vigorously defend such actions.
4.2.9 and 4.2.10
1. Assignment of the Contract of Work pursuant to the
Trust Agreement dated as of May 15, 1970, as amended and
restated, between PT-FI and First Trust, National
Association (successor to Morgan Guaranty Trust Company of
New York).
2. Assignment to Privatisation counterparties specified
in Schedule 1 of rights to use, occupy and construct
facilities on certain parcels of land on which
infrastructure assets are situated which have been sold by
PT-FI to such entities, and rights to pass over other land
as reasonably necessary to gain ingress and egress to such
parcels.
B. PT-RTZ
4.1.1, 4.1.2 and 4.1.3
1. Qualified, in the case of PT-RTZ, as to its status as
being in formation.
ANNEX A
Product Schedule
Recovered Metal in Concentrate
Year Cu (mil. Au (000 oz.) Ag (000 oz.)
lbs)
1995 1,029 1,318 2,872
1996 1,085 1,379 2,828
1997 1,140 1,791 2,969
1998 1,033 1,365 3,275
1999 1,165 1,503 3,822
2000 1,069 1,262 4,103
2001 1,132 1,397 3,943
2002 1,090 1,375 3,795
2003 1,082 1,610 4,045
2004 1,052 1,657 3,703
2005 1,082 1,695 3,730
2006 1,099 1,653 3,934
2007 1,099 1,631 4,045
2008 1,110 1,614 4,158
2009 1,107 1,589 4,203
2010 1,099 1,567 4,296
2011 1,049 1,269 4,138
2012 1,035 1,283 4,010
2013 1,066 1,471 4,268
2014 1,066 1,461 4,277
2015 1,057 1,493 4,156
2016 1,044 1,529 3,768
2017 1,008 1,589 3,359
2018 1,008 1,589 3,359
2019 1,024 1,589 3,396
2020 1,027 1,593 3,405
2021 219 344 716
TOTAL 28,076 39,616 98,573
ANNEX B
Financial and Accounting Procedures
1. Accounting Definitions
Terms which are not defined in this Annex shall have the meaning
ascribed to them in the Agreement of which this Annex B is a
part.
1.1 Definitions Applicable to Contract Area Block A and
Contract Area Block B
A. "AFE" means an authorisation for
expenditures in relation to a capital expenditure
project.
B. "Capital Costs" means all expenditures
incurred in connection with or allocable to a capital
project including fully loaded labour, materials,
equipment and contractors' costs, engineering,
procurement, including freight costs and handling,
construction and management costs, allocated owners'
cost, infrastructure and logistic support, support
costs, Taxes other than those imposed on net income
of the Participants, general and administrative
costs, land acquisition and preparation costs (if
any), legal and regulatory costs, pre-stripping and
pre-production costs, initial fill, spares and
consumables, capitalised finance costs, and any
associated working capital, but excluding
depreciation, non-cash charges, interest (other than
capitalised finance costs), payments in the nature of
principal and interest under Privatisation
Agreements, and accounting provisions and reserves.
Capital Costs shall not include any Exploration
Costs.
C. "Chargeable Operations" means operations,
including support activities, related to Mining and
Processing of Minerals and marketing and delivery of
Products produced from the Contract Area and
excluding (i) any operations or activities of PT-FI
not related to or associated with the Contract Area
and (ii) any operations or activities of parties
subject to the Privatisation Agreements to the extent
that they are operations or activities of third
parties unconnected with Enterprise Operations.
D. "Close-down Costs" means all costs
incurred in or allocable to Close-down, including
without limitation, rehabilitation of the
environment, the removal of buildings, equipment,
infrastructure and other tangible property, costs
incurred in terminating equipment, supply, service
and employment contracts, and costs incurred in
terminating and surrendering the COW. Close-down
Costs shall include all such costs incurred within
the period ten Years prior to the Anticipated Close-
down Date and prior to such date all such costs shall
be treated as Operating Costs.
E. "Development" means all preparation for
the removal and recovery of Products, including the
construction or installation of a mine or heap leach
facilities, ore and waste handling facilities, mining
equipment, or any other improvement to be used for
Mining, handling, transportation or milling of
Minerals or other processing or marketing of
Products, including infrastructure and logistic
support facilities associated therewith. It is
acknowledged that certain expenditures may involve
activities that relate to both Exploration and
Development. In such cases, the primary purpose of
the activity related to such expenditure shall govern
its classification as Exploration or Development.
F. "Eastern Minerals COW" means the contract
of work dated 15 August 1994 made between the
Government and P.T. IRJA Eastern Minerals Corporation
with respect to the Contract Area as therein defined.
G. "Exploration" means all activities,
excluding Development and Mining, directed towards
ascertaining or appraising the existence, location,
quantity, quality or commercial value of deposits of
Minerals (other than the 10-K Reserves) and the
feasibility of Development or Mining in relation to
those deposits. It is acknowledged that certain
expenditures may involve activities that relate to
both Exploration and Development. In such cases, the
primary purpose of the activity related to such
expenditure shall govern its classification as
Exploration or Development.
H. "Exploration Costs" means all labour,
supplies, equipment, contract costs and other costs
directly attributable or allocable to Exploration
including fully loaded labour, logistical support
costs, facility and other miscellaneous costs
required to support these activities.
I. "Operating Costs" means the aggregate of:
(a) expenditure, adjusted for changes in
inventory, that is either directly incurred or
allocable to Chargeable Operations, including
but not limited to production, maintenance and
repair costs, logistical support and freight and
handling costs, infrastructure and support
facility costs (including similar expenditures
under Privatisation Agreements), Taxes (other
than those imposed on net income of the
Participants), and general and administrative
costs of the kind identified in PT-FI's annual
financial statements for the period ended 31
December 1994 under the heading "General and
Administrative Costs", but excluding
depreciation, non-cash charges, interest,
payments in the nature of principal and interest
under Privatisation Agreements, and accounting
provisions and reserves;
(b) Replacement Capital Costs in carrying
out Chargeable Operations (including such
expenditures under Privatisation Agreements);
and
(c) the cash element of specific
accounting provisions incurred in the normal
course of business in conducting Chargeable
Operations.
Exploration Costs, Taxes on net income of
the Participants, and financing costs in connection
with any financing arrangement entered into
separately by a Participant (including without
limitation, payments in the nature of principal and
interest under Privatisation Agreements undertaken
separately) shall not be treated as Operating Costs
incurred in carrying out Chargeable Operations.
Financing costs (including without limitation,
payments in the nature of principal and interest
under Privatisation Agreements) in connection with
any financing arrangement entered into jointly by the
Participants shall be included in Operating Costs.
J. "Replacement Capital Costs" means Capital
Costs incurred other than for Expansion, a Greenfield
Project or a Sole Risk Venture.
K. "Sales Revenues" means the value of
Products sold based on actual prices realised (or
which would have been realised but for any hedging
and other price protection activities), net of
smelting and refining charges, royalties and other
selling expenses.
1.2 Definitions Applicable to Approved Expansion Projects
Only
A. "Expansion Share of Costs" in any Year
means that proportion of the Operating Costs in
respect of Contract Area Block A in that Year which
is represented by a fraction the numerator of which
is the Incremental Expansion Revenues for that Year
and the denominator of which is Total Sales Revenues
from Contract Area Block A in that Year, and in any
Year where Incremental Expansion Revenues is nil or
deemed to be nil, "Expansion Share of Costs" shall be
nil or be deemed to be nil.
Operating Costs and Sales Revenues from
Greenfield Projects and Sole Risk Ventures shall be
excluded from this calculation.
B. "Incremental Expansion Cashflow" in any
Year means Incremental Expansion Revenues in that
Year less Expansion Share of Costs in that Year.
C. "Incremental Expansion Revenues" in any
Year means the Sales Revenues in respect of
Incremental Production sold in that Year or part
thereof in which sales of Incremental Production
occurred, with sales from inventory deemed to be sold
on a first-in, first-out basis, and any negative
value of "Incremental Expansion Revenues" in any Year
shall be deemed to be nil with respect to such period
but shall be carried forward to the next Year in
which there are Incremental Expansion Revenues.
D. "Incremental Production" in any Year
means the excess of:
(i) the actual production in that Year of
Products from Contract Area Block A, including
actual production resulting from Approved
Expansion Projects, but excluding actual
production resulting from Greenfield Projects
and Sole Risk Ventures; over
(ii) the scheduled production of Products
for such Year as shown in the Product Schedule
(as such schedule may be adjusted pursuant to
Clause 16.4.2 of the Agreement).
Production of Products from Contract Area
Block A at any time prior to the Sharing Commencement
Date shall not be treated as Incremental Production.
E. "Sharing Commencement Date" means the
date following the commissioning of the first
Approved Expansion Project on which the first Sales
Revenues from such project are accrued.
F. "Total Sales Revenues" in any Year means
the Sales Revenues of all Products produced from
Contract Area Block A (excluding Greenfield Projects
and Sole Risk Ventures) sold in that Year.
2. Memorandum Equity Accounts
A separate Memorandum Equity Account will be established by the
Operator for each Participant for each of Contract Area Block A
and Contract Area Block B. Each such Memorandum Equity Account
shall be credited with such Participant's contribution to
Capital Costs (other than Replacement Capital Costs and Capital
Costs for Sole Risk Ventures) attributable to such Contract Area
Block. The Memorandum Equity Account of each Participant shall
be credited with such Participant's contributions to Capital
Costs, regardless of how such contributions were financed by a
Participant (it being understood that PT-FI will be credited
with contributions funded under the RTZ Loan), but such
Memorandum Equity Accounts shall not be credited for
contributions to Capital Costs financed jointly by the
Participants through project financing which encumbers the
interests of both Participants. Specifically:
(A) Approved Expansion Projects up to $750,000,000. The
first $750,000,000 of Capital Costs incurred pursuant to
AFE's for Approved Expansion Projects shall be credited 60%
to PT-FI's Memorandum Equity Account and 40% to PT-RTZ'S
Memorandum Equity Account, with funding for PT-FI's
proportionate share of such Capital Costs being provided
pursuant to the RTZ Loan.
(B) Approved Expansion Projects in Excess of
$750,000,000. All Capital Costs incurred pursuant to AFE's
for Approved Expansion Projects in excess of $750,000,000
shall be credited to the Memorandum Equity Account of each
Participant in proportion to its contribution to such
Capital Costs.
3. Exploration Activities
3.1 General Separate accounts will be maintained for
Exploration Costs incurred in respect of Contract Area Block
A and Contract Area Block B and in respect of the Contract
Area as defined in the Eastern Minerals COW ("Eastern
Area").
3.2 Joint Operations Exploration Costs PT-RTZ will pay
all Exploration Costs approved by the relevant Exploration
Committee for Exploration in Contract Area Block A and
Contract Area Block B until the Exploration Obligation has
been satisfied, including the expenditure of not less than
$40,000,000 in respect of Contract Area Block A.
Thereafter, the Participants will pay all Exploration Costs
in proportion to their respective Participating Interests in
Contract Area Block A and Contract Area Block B.
3.3 Exploration Costs for Sole Risk Ventures All
Exploration Costs for a Sole Risk Venture in Exploration
shall be paid by the Participant undertaking such Sole Risk
Venture.
3.4 Statements of Exploration Costs Monthly statements
of Joint Operations Exploration Costs and Sole Risk Venture
Exploration Costs will be prepared by the Operator and
submitted to the Exploration Committee or the Participant
undertaking the Sole Risk Venture, as appropriate, so that
actual Exploration Costs may be monitored.
3.5 Payment for Exploration Costs Exploration Costs will
be included in the monthly cash calls made pursuant to
paragraph 10.3 of this Annex.
4. Feasibility Studies
4.1 General Separate accounts will be maintained for
each Feasibility Study and will be reported by the Operator
to the relevant Exploration Committee or Operating
Committee, or to the Participant undertaking a Sole Risk
Venture, as appropriate.
4.2 Joint Operations Feasibility Studies Prior to the
date any AFE is approved as a result of a Feasibility Study,
the costs of the Feasibility Study shall be Exploration
Costs. In the event that an AFE is approved as a result of
the Feasibility Study, then from and after the date that
such AFE is approved, any additional Feasibility Study costs
shall be Capital Costs of the project rather than
Exploration Costs.
4.3 Sole Risk Feasibility Studies All costs of a
Feasibility Study of a Sole Risk Venture shall be paid by
the Participant undertaking the Feasibility Study as a Sole
Risk Venture. There shall however be no reimbursement to
the non-participating Participant of previously incurred
costs.
4.4 Statements of Feasibility Study Costs Monthly
statements of the costs of each Joint Operations Feasibility
Study and Sole Risk Venture Feasibility Study will be
prepared by the Operator and submitted to the relevant
Exploration Committee or Operating Committee or the
Participant undertaking the Sole Risk Venture, as
appropriate, so that actual costs of the Feasibility Study
may be monitored.
4.5 Payment of Feasibility Study Costs The costs of each
Feasibility Study will be included as Exploration Costs or,
as appropriate, Capital Costs, in the monthly cash calls
made pursuant to paragraph 10.3 of this Annex.
5. Joint Operations in Contract Area Block A
5.1 Pre-Expansion Period "Pre-Expansion Period" means
the period commencing on the Effective Date and continuing
until the date that the first Approved Expansion Project in
Contract Area Block A has been approved by the boards of
directors of FCX, PT-FI, and PT-RTZ or, pursuant to
Clause 10.3, approved by the board of directors of PT-RTZ.
During the Pre-Expansion Period, all revenues from
and all Capital Costs and Operating Costs in respect of
Contract Area Block A are attributable 100% to PT-FI except
for revenues, Capital Costs and Operating Costs in respect
of Joint Operations Greenfield Projects (as to which
paragraphs 5.4 and 6 of this Annex shall apply) and Sole
Risk Ventures undertaken by PT-RTZ, if any (as to which,
subject to any express provision to the contrary in this
Annex or the Agreement, PT-RTZ shall be entitled to all
revenues attributable).
5.2 Development Period
5.2.1 "Development Period" means the period
commencing with the date that the first Approved
Expansion Project in Contract Area Block A has been
approved by the boards of directors of FCX, PT-FI and
PT-RTZ or, pursuant to Clause 10.3, approved by the
board of directors of PT-RTZ and continuing until the
Sharing Commencement Date.
During the Development Period, all
revenues from Contract Area Block A are attributable
100% to PT-FI except for revenues in respect of Joint
Operations Greenfield Projects (as to which
paragraphs 5.4 and 6 of this Annex shall apply) and
Sole Risk Ventures undertaken by PT-RTZ, if any (as
to which, subject to any express provision to the
contrary in this Annex or the Agreement, PT-RTZ shall
be entitled to all revenues attributable).
During the Development Period, all
Capital Costs and all Operating Costs in respect of
Contract Area Block A are attributable 100% to PT-FI
except for:
(i) all Capital Costs attributable to
Approved Expansion Projects, as to which the
provisions of 5.2.2 of this Annex shall apply
(ii) all Capital Costs and Operating Costs
attributable to or in respect of Joint
Operations Greenfield Projects as to which the
provisions of paragraphs 5.4 and 6 of this Annex
shall apply
(iii) all costs of Sole Risk Ventures
undertaken by PT-RTZ, all of which shall,
subject to any express provision to the contrary
in this Annex or the Agreement, belong to and be
borne by PT-RTZ.
5.2.2 Approved Expansion Projects
5.2.2.1 General For each Approved Expansion
Project, an AFE will be prepared detailing
budgeted expenditures of Capital Costs
anticipated to be incurred. Separate accounts
will be maintained for each AFE.
5.2.2.2 Allocation of Approved Expansion
Project Development Costs
(a) Approved Expansion Projects up
to $750,000,000 Until such time as
aggregate Capital Costs for Approved
Expansion Projects reach $750,000,000,
these Capital Costs will be allocated to
and be borne by the Participants in
proportion to their respective
Participating Interests in Contract Area
Block A and PT-FI's share will be funded
through the RTZ Loan.
(b) Approved Expansion Projects in
Excess of $750,000,000 Capital Costs for
Approved Expansion Projects after
aggregate Capital Costs for Approved
Expansion Projects exceed $750,000,000
will be allocated to and be borne by the
Participants in proportion to their
respective Participating Interests in
Contract Area Block A.
5.2.3 Statements of Approved Expansion Project
Development Costs Monthly statements of Approved
Expansion Project Development costs will be prepared
by the Operator and submitted to the Operating
Committee so that actual Development costs may be
monitored.
5.2.4 Payment for Development Costs Payment
for Development costs will be included in the monthly
cash calls made pursuant to paragraph 10.3 of this
Annex.
5.3 Production Period
5.3.1 "Production Period" means the period
commencing on the Sharing Commencement Date for the
first Approved Expansion Project and continuing
thereafter for so long as Joint Operations are
producing Products from Contract Area Block A.
During the Production Period, the
revenues from Contract Area Block A shall be
allocated between the Participants as follows:
(a) until and including the Cut-off Date
PT-RTZ shall be entitled to such share as is
proportionate to its Participating Interest in
Contract Area Block A of all Incremental
Expansion Revenues and of revenues related to
Joint Operations Greenfield Projects as provided
in paragraphs 5.4 and 6 of this Annex
(b) after the Cut-off Date, PT-RTZ shall
be entitled to such share as is proportionate to
its Participating Interest in Contract Area
Block A of all revenues derived from Joint
Operations in Contract Area Block A
(c) PT-RTZ shall be entitled to all
revenues attributable to Sole Risk Ventures
undertaken by PT-RTZ
(d) PT-FI shall be entitled, as between
the Participants, to all revenues from Contract
Area Block A other than those allocated to PT-
RTZ pursuant to sub-paragraphs (a), (b) and (c)
above.
During the Production Period, the costs
of or attributable to Contract Area Block A (other
than Exploration Costs as to which paragraph 3 shall
apply) shall be allocated to and borne by the
Participants as between themselves as follows:
(i) until and including the Cut-off Date,
PT-RTZ shall be obliged to contribute such share
of the following costs as is proportionate to
its Participating Interest in Contract Area
Block A:
(A) Expansion Share of Costs
(B) Capital Costs of Approved
Expansion Projects only
(C) Joint Operations Greenfield
Projects
(ii) after the Cut-off Date, PT-RTZ shall
be obliged to contribute such share of Operating
Costs and of Capital Costs of Joint Operations
in Contract Area Block A other than Sole Risk
Ventures as is proportionate to its
Participating Interest in Contract Area Block A
(iii) the costs of or attributable to each
Sole Risk Venture in Contract Area Block A
undertaken by PT-RTZ shall be allocated to and
borne by PT-RTZ
(iv) all costs of or attributable to
operations in Contract Area Block A other than
those allocated to and borne by PT-RTZ pursuant
to sub-paragraphs (i), (ii) or (iii) above
shall, as between the Participants, be allocated
to and borne by PT-FI.
5.3.2 General Each month during the Production
Period prior to the Cut-off Date, Incremental
Expansion Cashflow shall be computed by the Operator
and distributed to the Participants in proportion to
their Participating Interests in Contract Area Block
A; provided however, PT-FI shall assign to RTZ Lender
all of its interest in such distributions of
Incremental Expansion Cashflow pursuant to the RTZ
Loan Agreement until such RTZ Loan has been repaid
(including, for the avoidance of doubt, all interest
under the RTZ Loan Agreement). Each month during the
Production Period from and after the Cut-off Date,
all revenues and costs in respect of Joint Operations
in Contract Area Block A shall be considered in
determining the amount to be distributed to the
Participants in proportion to their Participating
Interests in Contract Area Block A.
(a) Incremental Expansion Revenue Each
month during the Production Period, Incremental
Expansion Revenue will be computed by the
Operator and included in the computation of
Incremental Expansion Cashflow for such month.
(b) Expansion Share of Costs Each month
during the Production Period, Expansion Share of
Costs will be computed by the Operator and
included in the computation of Incremental
Expansion Cashflow for such month.
(c) Incremental Expansion Cashflow Each
month during the Production Period, Incremental
Expansion Cashflow will be computed by the
Operator and distributed to the Participants or,
in the case of PT-FI, its assignee for the time
being, in the proportions attributable to each
not later than the 20th business day after the
end of the month. The amount distributed will
be based on the best estimate of Incremental
Expansion Revenue less Expansion Share of Costs
for such month.
(d) Statements of Incremental Expansion
Cashflow Monthly statements will be prepared by
the Operator showing details of the Incremental
Expansion Cashflow computation. A copy of the
statements will be distributed to the
Participants not later than the 20th business
day after the end of the month.
(e) Adjustment Any adjustment that is
determined to be required at any time shall be
included in the next monthly statement.
(f) Annual Adjustment Not later than 45
business days after the end of each Year during
the Production Period, a statement of the
previous Year's Incremental Expansion Cashflow
shall be prepared by the Operator and
distributed. If the annual settlement statement
indicates an overpayment of Incremental
Expansion Cashflow, each Participant shall pay
the Operator its share of such overpayment
within 30 business days. If the annual
settlement statement indicates an underpayment
of Incremental Expansion Cashflow, the Operator
shall pay to each Participant its share of such
underpayment within 30 business days.
5.4 Joint Operations Greenfield Projects in Contract Area
Block A Joint Operations Greenfield Projects in Contract
Area Block A will be accounted for in a manner comparable to
that provided in paragraph 6 of this Annex in respect of
Joint Operations in Contract Area Block B. All costs,
including allocable costs, of and revenue related to
Greenfield Projects in Contract Area Block A will be
excluded from costs of and revenues derived from other
operations in Contract Area Block A.
6. Joint Operations in Contract Area Block B
6.1 Development Phase "Development Phase" means the
period commencing with the date on which the first Joint
Operations Greenfield Project in Contract Area Block B has
been approved by the boards of directors of PT-FI and PT-RTZ
and continuing until the date following commissioning of
such project on which the first Sales Revenues from such
project are accrued.
6.1.1 General For each Joint Operations
Development project, an AFE will be prepared by the
Operator detailing budgeted expenditures of Capital
Costs anticipated to be incurred. Separate accounts
will be maintained for each AFE.
6.1.2 Allocation of Joint Operations
Development Costs All Capital Costs incurred in
Joint Operations in Contract Area Block B will be
allocated to and borne by the Participants in
proportion to their respective Participating
Interests in Contract Area Block B and included in
monthly cash calls made pursuant to paragraph 10.3 of
this Annex.
6.1.3 Statements of Development Costs Monthly
statements will be prepared by the Operator showing
details of Joint Operations Development costs. These
statements will be submitted to the Operating
Committee not later than the 20th business day after
the end of the month so that actual Joint Operations
Development costs may be monitored.
6.1.4 Payment for Development Costs Payment
for Development costs will be included in the monthly
cash calls made pursuant to paragraph 10.3 of this
Annex.
6.2 Production Phase "Production Phase" means the period
commencing on the date following commissioning of the first
Joint Operations Greenfield Project on which the first Sales
Revenues from such project are accrued and continuing for so
long as Joint Operations are producing Products from
Contract Area Block B.
6.2.1 General During the Production Phase, all
revenues and costs in respect of Joint Operations in
Contract Area Block B shall be allocated to and be
borne by the Participants in proportion to their
Participating Interests in Contract Area Block B.
All revenues and costs in respect of Joint Operations
in Contract Area Block B shall be considered in
determining the amount to be distributed to the
Participants in proportion to their respective
Participating Interests in Contract Area Block B.
(a) Revenue Each month during the
Production Phase, the revenues that result from
Joint Operations in Contract Area Block B will
be computed by the Operator and included in the
computation of cashflow from Joint Operations in
Contract Area Block B for such month.
(b) Operating Costs Each month during
the Production Phase, the Operating Costs that
result from Joint Operations in Contract Area
Block B will be computed by the Operator and
included in the computation of cashflow from
Joint Operations in Contract Area Block B for
such month.
(c) Cashflow Each month during the
Production Phase, the cashflow will be computed
by the Operator by subtracting Operating Costs
that result from Joint Operations in Contract
Area Block B from revenues that result from
Joint Operations in Contract Area Block B and
the net amount of this calculation will be
distributed to the Participants in the
proportions to which they are entitled not later
than the 20th business day after the end of the
month. The amount distributed will be based on
the best estimate of revenues and Operating
Costs from Contract Area Block B for such month.
(d) Statements of Cashflow Monthly
statements will be prepared by the Operator
showing details of the cashflow computation and
delivered to the Participants not later than the
20th business day after the end of the month.
(e) Adjustment Any adjustment that is
determined to be required at any time shall be
included in the next monthly statement.
(f) Annual Adjustment Not later than 45
business days after the end of each Year during
the Production Phase, a statement of the
previous Year's cashflow shall be prepared by
the Operator and distributed. If the annual
settlement statement indicates an overpayment of
cashflow, each Participant shall pay the
Operator its share of such overpayment within 30
business days. If the annual settlement
statement indicates an underpayment of cashflow,
the Operator shall pay to each Participant its
share of such underpayment within 30 business
days.
7. Accounting for Sole Risk Ventures
7.1 Conduct of Operations Upon the establishment of a
Sole Risk Venture, the Operator, as determined pursuant to
the Agreement, or some other entity selected as operator of
the Sole Risk Venture in accordance with the Agreement (also
in this Annex referred to as the Operator), will be
responsible for the conduct of the operations of such
venture, including its accounting requirements, and will be
paid a reasonable fee for such services by the applicable
Participant.
7.2 Determination of Costs and Revenues Separate
accounts will be maintained for each Sole Risk Venture. All
costs, including allocable costs, of and revenue related to
Sole Risk Ventures will be excluded from the costs of and
revenues derived from Enterprise Operations.
7.3 Use of PT-FI Available Assets To the extent that the
Sole Risk Venture requires the use of PT-FI Available
Assets, PT-FI support services or Joint Account Assets, and
the use of these assets and support services does not
prejudice then or later the conduct of Enterprise
Operations, each of PT-FI and PT-RTZ (as appropriate) will
make available and charge to the Sole Risk Venture the full
direct and allocable costs, including financing and capital
costs, under Privatisation Agreements, of providing such
assets and services.
7.4 Sole Risk Venture Revenues and Costs All revenues
and costs derived from any Sole Risk Venture will be
directly attributed by the Operator to the Participant
undertaking the Sole Risk Venture. The net amount of
revenues less costs will be included in the monthly cash
call made pursuant to paragraph 10.3 of this Annex for
settlement (in the case of a negative amount) or
distribution (in the case of a positive amount) to the
Participant undertaking the Sole Risk Venture as
appropriate.
7.5 Sole Risk Venture Reports The Operator will
summarise each month all costs, including charges associated
with the use of PT-FI Available Assets and support services,
and revenues derived from the Sole Risk Venture during that
month and deliver this report to the Participant undertaking
the Sole Risk Venture not later than the 20th business day
after the end of the month.
7.6 Programmes and Budgets Programme and Budgets for
Sole Risk Ventures shall be approved and administered in a
manner comparable to that provided in paragraph 10.1 of this
Annex.
7.7 Co-operation Each Participant shall provide in a
timely manner to the Operator all information that is within
such Participant's knowledge, possession or control which
the Operator may require in order to perform its accounting
responsibilities for Sole Risk Ventures.
If the Operator is not PT-FI, the Operator shall
provide in a timely manner to PT-FI all information that is
within such Operator's knowledge, possession or control
which PT-FI may require in connection with fulfilling its
obligations under the COW.
8. Accounting for Hedging Activities
The revenues allocated to the Participants shall be adjusted to
allocate to the authorising Participant the costs and benefits
of any hedging and other price protection activities authorised
by either Participant pursuant to Clause 9.2.6 of the Agreement.
Prior to entering into any hedging or other price protection
activities authorised in writing by any Participant, the
Participant authorising such activities shall make appropriate
arrangements, satisfactory to the Operator, whereby the Operator
is protected from and assured that it will never be required to
use its own funds in connection with the placing or maintaining
of any such hedging or other price protection activities.
9. Accounting Records, Inspection of Books
9.1 Required Records & Accounts
(A) The Operator shall keep comprehensive and
accurate records and accounts of all Exploration
Costs, Operating Costs, costs in respect of
Feasibility Studies, and costs in respect of
Development which are capable of separate
identification, with respect to:
(i) Approved Expansion Projects,
(ii) Joint Operations with respect to
Contract Area Block A,
(iii) Joint Operations Greenfield Projects
with respect to Contract Area Block A,
(iv) Joint Operations with respect to
Contract Area Block B,
(v) Sole Risk Ventures,
(vi) Chargeable Operations and any other
operations within the Contract Area any part of
the costs of which are borne by either
Participant.
The costs of support and infrastructure
facilities and activities shall be allocated to the
activities for which they are utilised. The costs of
support and infrastructure facilities and activities
which are located in one Contract Area Block, but
utilised in support of activities in one or more
Contract Area Block, shall be allocated to the
activities in the Contract Area Blocks in accordance
with actual utilisation.
(B) The records and accounts in respect of
activities in Contract Area Block A shall be capable
of identifying Incremental Expansion Revenue and
other revenues, those attributable to Joint
Operations other than Approved Expansion Projects and
those attributable to all other activities in
Contract Area Block A, and costs attributable to the
activities, sub-divided as above.
The records and accounts in respect of
activities in Contract Area Block B shall show
separately the costs and revenues of each project.
Activity attributable to Sole Risk
Ventures by either Participant within the Contract
Area shall likewise be separately identifiable within
the records and accounts.
The records and accounts in respect of
Greenfield Projects in Contract Area Block A,
activities in Contract Area Block B and Sole Risk
Ventures will separately identify direct costs of
these projects from costs otherwise allocated
thereto.
(C) All records and accounts referred to
above shall be prepared and maintained in accordance
with generally accepted accounting principles in the
United States.
Accordingly, revenues recognised and
costs incurred shall include, in the normal course of
business, accruals to appropriately reflect the
operations of the business conducted during a given
month or year.
All accounting terms used in this Annex
will, except to the extent otherwise expressly
provided for, be determined in accordance with
generally accepted accounting principles in the
United States.
(D) Subject to compliance with the express
provisions of this Annex, the Operator's basic
accounting systems and accounting practices, policies
and procedures will apply.
(E) All such records and accounts shall be
retained for a period of 10 years or as required for
compliance with tax or other regulatory requirements
or as otherwise agreed to by the Participants.
9.2 Audits
(A) The Operator shall order an annual
examination of the accounting and financial records
kept by it in respect of activities in the Contract
Area for each Year.
(B) The audits shall be conducted by a firm
of accountants of international standing selected by
the Operator and approved by the Operating Committee
and such accountants shall provide certification that
the records and accounts have been properly
maintained in accordance with the provisions of this
Agreement and that the revenues and costs have been
properly calculated and allocated to the Participants
in accordance with the provisions of this Annex and
the Agreement.
9.3 Right of Participants to Inspect Records
Without prejudice to any other provision of this
Annex or the Agreement, and subject in any case to Clause
16.9 of the Agreement, representatives of each Participant
(including for this purpose its accountants or another
appointed firm of accountants and the Secured Creditors (as
defined in the Trust Agreement)) shall be entitled upon
reasonable prior notice at all reasonable times during
normal working hours to inspect and obtain copies of all
documents, records and accounts under the control of the
Operator relating to Enterprise Operations or the
Participation provided always that the frequency and
duration of inspections shall be without undue hindrance to
the proper conduct of Enterprise Operations or the
activities of the Operator. Without prejudice to the above,
but subject to the proviso, the Operator shall also give to
the Participants and their accountants during normal working
hours such access to the Operator's books and records and
such explanation of the same as the Participants or their
accountants may reasonably require in order to verify the
revenues from Sole Risk Ventures undertaken by such
Participants, Contract Area Block B, Incremental Expansion
Cashflow, Joint Operations Greenfield Projects in Contract
Area Block A and, after the Cut-off Date, revenues from
Joint Operations in the Contract Area and costs attributable
to the same.
9.4 Right of Participants to Conduct Audit
(A) Without prejudice to any other provision
of this Annex or the Agreement, and subject in any
case to Clause 16.9 of the Agreement, representatives
of each Participant (including for this purpose its
accountants or another appointed firm of accountants
and the Secured Creditors (as defined in the Trust
Agreement)) will be entitled, upon reasonable notice
and at its own cost, to conduct an audit of the
accounting and financial records of operations to
which these Financial and Accounting Procedures apply
for any Year, provided, however, that any such audit
shall be conducted within eighteen months after the
end of the Year to which the audit pertains and any
claim for an adjustment must be made within thirty-
six months after the end of the Year to which such
adjustment pertains.
(B) Should such audit reveal an alleged error
in the statement of revenues and costs or in the
calculation of the revenues and costs allocated to
each Participant, notice of the alleged error shall
be given promptly to each Participant and the
Participants shall thereupon use all reasonable
endeavours to reconcile any differences.
(C) Should the Participants be unable to
reconcile the differences to their mutual
satisfaction within a period of 60 days following the
notice referred to above, the dispute shall be
referred to an independent firm of accountants of
international standing appointed by agreement between
the Participants or in default of such agreement
within a period of 30 days following the expiry of
the period of 60 days referred to above, by the
President for the time being of the American
Institute of Certified Public Accountants on the
application of either of the Participants.
(D) Such independent firm of accountants
shall act as an expert and not as an arbitrator and
it shall be directed to find for one Participant or
the other. Its costs shall be borne by the
Participant losing the issue in question and its
determination shall be final and binding upon the
Participants and the Operator.
(E) If it is agreed between the Participants
or determined by the expert that an error has been
made to the calculation of the revenues and costs
from operations to which these Financial and
Accounting Procedures apply, such payments or
reimbursements as shall be appropriate to correct
such error shall be made by the Participants and the
Operator shall make any and all necessary entries and
corrections to the relevant Memorandum Equity
Accounts of each Participant.
9.5 Fair clause
The Participants agree that if any of the methods for
determining charges and credits applicable to operations
under the Agreement set out above prove to be unfair or
inequitable to either party, the Participants will in good
faith endeavour to agree on changes deemed necessary.
10. Other Financial and Accounting Matters
10.1 Programmes and Budgets
10.1.1 Joint Operations Pursuant to Programmes
and Budgets Joint Operations shall be conducted,
expenses shall be incurred and Joint Account Assets
shall be acquired only pursuant to Approved
Programmes and Budgets.
10.1.2 Preparation of Programmes and Budgets
The Operator shall, not less than one month prior to
the Annual Budget Meeting (which shall be held
annually in December as provided in Clause 8.6 of the
Agreement), prepare and submit to the relevant
Committee for recommendation to the boards of
directors of the Participants for the next ensuing
Budgetary Period separate proposed Programmes and
Budgets for Exploration and for Development and
Mining. Any Programme which includes the undertaking
of an Approved Expansion Project (or the relevant
part of it) shall be based upon the programme for
implementation thereof contained in the Feasibility
Study relating thereto.
Each Programme and/or Budget, as proposed
and approved, shall contain, as appropriate, a
breakdown on a quarterly basis of the following:
(a) a reasonably detailed description of
the Joint Operations to be undertaken with
respect to each of Contract Area Block A and
Contract Area Block B;
(b) an itemised estimate of the Capital
Costs and Operating Costs to be incurred,
distinguishing between Replacement Capital Costs
and new Capital Costs and between Exploration
and Development and Mining and between Contract
Area Block A and Contract Area Block B;
(c) itemised schedules of estimated
production of Products;
(d) itemised estimates of revenues;
(e) estimates of the amounts and timing
of expected cash requirements from the
Participants; and
(f) such other items as the Operator may
deem necessary or desirable or as either
Participant may reasonably require.
10.1.3 Review and Approval of Proposed
Programmes and Budgets
(a) At the Annual Budget Meeting, the
relevant Exploration Committee or Operating
Committee shall review the Operator's proposed
Programme and Budget and either submit it
unchanged to the boards of directors of PT-FI
and PT-RTZ for their approval or instruct the
Operator to make specified revisions and submit
the revised proposal to such boards for their
approval.
(b) Revisions, modifications and
amendments to Programmes and Budgets may be
initiated by the Operator, the relevant
Exploration or Operating Committee or the board
of directors of PT-FI or PT-RTZ, provided that
no material revision, modification or amendment
shall be made without the approval of both such
boards of directors.
(c) Any Programme and Budget, or any
revision modification and amendment thereto,
shall be deemed to be approved by any board of
directors which does not, within thirty days
after receipt, disapprove the same and notify
the other board of directors and relevant
Exploration or Operating Committee of its
disapproval (including explanation thereof in
reasonable detail).
(d) Except as otherwise specified in the
Agreement or this Annex, unbudgeted AFEs, and
budgeted AFEs in excess of amounts fixed from
time to time by the relevant Exploration or
Operating Committee, shall be submitted by the
Operator and subject to the approval by such
Committee, provided that any AFE which is in
excess of amounts fixed from time to time by the
boards of directors of PT-FI and PT-RTZ or which
requires unbudgeted expenditure in excess of 5%
of any Programme and Budget (whether
individually or as part of a group of related
expenditures) shall also be subject to the
approval of such boards of directors in the
manner set out in paragraph 10.1.3(c).
(e) Except as provided in Clause 10.3 of
the Agreement, should the board of directors of
PT-FI or PT-RTZ disapprove any Programme and
Budget or any revision, modification or
amendment thereto, both boards of directors and
the relevant Exploration Committee or Operating
Committee shall endeavour in good faith to
resolve the difference(s) and reach mutual
agreement on the applicable Programme and Budget
as soon as possible.
10.1.4 Budget Overruns; Programme Changes The
Operator shall immediately notify the relevant
Committee of any material departure from an Approved
Programme and Budget. As soon as practicable
following the Operator becoming aware that the costs
to be incurred under an Approved Budget are likely to
be exceeded by more than 10%, then unless such excess
is directly caused by an emergency or unexpected
expenditure made pursuant to paragraph 10.2 of this
Annex or otherwise authorised by the Participants,
the Operator shall prepare a revised Programme and
Budget for that Year and submit it as soon as
practicable to the relevant Committee for review, and
if needed, for recommendation for approval by the
boards of directors of the Participants.
10.2 Emergency or Unexpected Expenditures In case of
emergency, the Operator may take such action it deems
necessary to protect life, limb or property, to protect the
Enterprise Operations or Sole Risk Ventures or to comply
with law or government regulation. Likewise, the Operator
may make expenditures for unexpected events which are beyond
its reasonable control and which do not result from a breach
by it of its standard of care. In the case of either an
emergency or unexpected expenditures, the Operator shall
promptly notify the Participants of the emergency or
unexpected expenditure, and the Operator shall be reimbursed
therefor by the Participants as provided in Clause 6.1 of
the Agreement and this Annex.
10.3 Cash Calls
10.3.1 On the basis of the Approved Programme
and Budget or revision thereof, the Operator shall
submit to each Participant prior to the fifth
business day of each calendar month, a billing for
estimated cash requirements for the next following
calendar month, taking into consideration any cash
the Operator has on hand from Joint Operations and
any timing differences of actual expenditures from
the Approved Programme and Budget, and identifying
the separate contribution obligations of each
Participant in accordance with the provisions of this
Annex and the Agreement and any reimbursement
obligations under Clause 12 of the Agreement relating
to Sole Risk Ventures.
10.3.2 Prior to the first business day of the
month for which the funds are requested, each
Participant shall pay to the Operator by wire
transfer to the bank account designated by the
Operator, its share of the estimated amount as is
shown in the billing unless the share of the amount
shown therein is manifestly incorrect.
10.3.3 Time is of the essence of payment of each
billing. A Participant that fails to meet cash calls
in the amount and at the times specified in this
paragraph 10.3 shall be in default, and the amount of
the defaulted cash call shall bear interest from the
date due at an annual rate equal to 5% above LIBOR as
published in the London Financial Times on the
business day immediately prior to the date of
default.
10.3.4 All funds in excess of immediate cash
requirements shall be invested in interest-bearing
accounts, for the benefit of the Participants
provided that (i) all funds representing the
Exploration Obligation shall be so invested solely
for the benefit of PT-RTZ and (ii) funds for any Sole
Risk Venture shall be so invested solely for the
benefit of the applicable Participant.
10.3.5 Should the Operator be required to pay
large sums of money on behalf of the Participants
which were unforeseen at the time of providing the
monthly cash call, the Operator may make written
request for special advances which shall be payable
not later than the fifth business day after receipt
of such notice.
10.4 Close-down Costs
10.4.1 Close-down Costs directly attributable to
a Sole Risk Venture shall be allocated to and borne
by the Participant undertaking the Sole Risk Venture.
10.4.2 Notwithstanding any other provision to
the contrary in this Annex or the Agreement but
subject to paragraph 10.4.1 above, each Participant
agrees to pay and shall be liable to pay in respect
of Close-down, that proportion of Close-down Costs
which the value of Products sold by or for such
Participant over the life of the COW bears to the
value of all Products sold by or for the Participants
over the life of the COW.
Final salvage shall be credited to the
Participants in the same proportion as Close-down
Costs are allocated to them.
10.4.3 For purposes of paragraph 10.4.2, "value"
is determined by reference to the actual realised
price of Products sold (or which would have been
realised but for any price protection activities),
adjusted for inflation, net of smelting and refining
charges, royalties, and other selling expenses.
ATTACHMENT X
1
- ---------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 304(b)(2)
------------------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
-------------------------------------------------------
Freeport-McMoRan Copper & Gold Inc.
(Exact name of obligor as specified in its charter)
Delaware 74-2480931
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1615 Poydras Street
New Orleans, LA 70112
(Address of principal executive offices) (Zip Code)
-------------------------------------
Debt Securities
(Title of the indenture securities)
-------------------------------------
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
New York State Banking Department, State House, Albany, New
York 12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.,
20429
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliates with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now
in effect, including the Organization Certificate and the Certificates
of Amendment dated February 17, 1969, August 31, 1977, December 31,
1980, September 9, 1982, February 28, 1985, December 2, 1991 and July
10, 1996 (see Exhibit 1 to Form T-1 filed in connection with
Registration Statement No. 333-06249, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to
Commence Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by
reference. On July 14, 1996, in connection with the merger of
Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4
to Form T-1 filed in connection with Registration Statement No. 333-
06249, which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the
Act (see Exhibit 6 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July
14, 1996, in connection with the merger of Chemical Bank and The Chase
Manhattan Bank (National Association), Chemical Bank, the surviving
corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or
examining authority. (On July 14, 1996, in connection with the merger
of Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939
the Trustee, The Chase Manhattan Bank, a corporation organized and
existing under the laws of the State of New York, has duly caused this
statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New York
and State of New York, on the 12th day of November, 1996.
THE CHASE MANHATTAN BANK
By: /s/ P. Kelly
------------------------------------
P. Kelly
Vice President
EXHIBIT 7 TO FORM T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1996, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act
DOLLAR
AMOUNTS
IN
MILLIONS
ASSETS ----------
- ------
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin..... $ 4,167
Interest-bearing balances.............................. 5,094
Securities:
Held to maturity securities.............................. 3,367
Available for sale securities............................ 27,786
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold .................................... 7,204
Securities purchased under agreements to resell........ 136
Loans and lease financing receivables:
Loans and leases, net of unearned income..... $ 67,215
Less: Allowance for loan and lease losses.... 1,768
Less: Allocated transfer risk reserve........ 75
---------
Loans and leases, net of unearned income, allowance,
and reserve......................................... 65,372
Trading assets........................................... 28,610
Premises and fixed assets (including capitalized leases). 1,326
Other real estate owned.................................. 26
Investments in unconsolidated subsidiaries and
associated companies................................... 68
Customer's liability to this bank on acceptances
outstanding............................................ 995
Intangible assets........................................ 309
Other assets............................................. 6,993
----------
TOTAL ASSETS............................................. $ 151,453
==========
LIABILITIES
- -----------
Deposits:
In domestic offices.................................... $ 46,917
Noninterest-bearing.......................... $ 16,711
Interest-bearing............................. 30,206
---------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's............................................ 31,577
Noninterest-bearing.................................... $ 2,197
Interest-bearing....................................... 29,380
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge and Agreement
subsidiaries, and in IBF's:
Federal funds purchased................................ 12,155
Securities sold under agreements to repurchase......... 8,536
Demand notes issued to the U.S. Treasury................. 1,000
Trading liabilities...................................... 20,914
Other Borrowed money:
With a remaining maturity of one year or less.......... 10,018
With a remaining maturity of more than one year........ 192
Mortgage indebtedness and obligations under
capitalized leases..................................... 12
Bank's liability on acceptances executed and
outstanding............................................ 1,001
Subordinated notes and debentures........................ 3,411
Other liabilities........................................ 8,091
TOTAL LIABILITIES........................................ 143,824
----------
EQUITY CAPITAL
- --------------
Common stock............................................ 620
Surplus................................................. 4,664
Undivided profits and capital reserves.................. 2,970
Net unrealized holding gains (Losses) on available-
for-sale securities................................... (633)
Cumulative foreign currency translation adjustments..... 8
TOTAL EQUITY CAPITAL.................................... 7,629
----------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK AND
EQUITY CAPITAL........................................ $ 151,453
==========
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank,
do hereby declare that this Report of Condition has been prepared
in conformance with the instructions issued by the appropriate
Federal regulatory authority and is true to the best of my knowledge
and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us,
and to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the appropriate Federal
regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )Directors
THOMAS G. LABRECQUE )
