BONTANG IV
TRUSTEE AND PAYING AGENT AGREEMENT
among
PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA
(PERTAMINA)
VIRGINIA INDONESIA COMPANY
OPICOIL HOUSTON, INC.
VIRGINIA INTERNATIONAL COMPANY
ULTRAMAR INDONESIA LIMITED
UNION TEXAS EAST KALIMANTAN LIMITED
UNIVERSE GAS & OIL COMPANY, INC.
TOTAL INDONESIE
UNOCAL INDONESIA, LTD.
INDONESIA PETROLEUM, LTD.
and
CONTINENTAL BANK INTERNATIONAL
Dated as of August 26, 1991
TABLE OF CONTENTS
PAGE
ARTICLE 1: DEFINED TERMS . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2: RECEIPT OF PAYMENTS WITH RESPECT TO LNG . . . . . .15
2.1 Designation of Bontang IV Trustee and
Bontang IV General Account . . . . . . . . . . . . . . . .15
2.2 Bontang IV Trust Funds. . . . . . . . . . . . . . . . . .15
2.3 Allocation of Amounts Received. . . . . . . . . . . . . . . 16
ARTICLE 3: POWER TO BORROW AND ENTER INTO INTEREST
RATE SWAPS. . . . . . . . . . . . . . . . . . . . .17
3.1 Enumeration of Powers . . . . . . . . . . . . . . .17
3.2 Accumulation of Debt Service. . . . . . . . . . . .19
3.3 Payment of Debt Service . . . . . . . . . . . . . .25
3.4 Borrowing Instructions. . . . . . . . . . . . . . .31
3.5 Disbursement Trust; Payment Instructions. . . . . .32
3.6 Duties of Bontang IV Trustee with
Respect to Instructions . . . . . . . . . . . . . .34
3.7 Bontang IV Depositaries . . . . . . . . . . . . . .34
ARTICLE 4: ESTABLISHMENT OF BONTANG IV PAYMENT ACCOUNT . . . .35
4.1 Bontang IV Payment Account. . . . . . . . . . . . .35
4.2 Funds to be Deposited . . . . . . . . . . . . . . .36
ARTICLE 5: DISBURSEMENTS WITH RESPECT TO PROCESSING CHARGES. .36
5.1 Submission and Payment. . . . . . . . . . . . . . .36
5.2 Payment Procedures. . . . . . . . . . . . . . . . .36
ARTICLE 6: DISBURSEMENTS WITH RESPECT TO OTHER CHARGES . . . .37
6.1 Submission and Payment. . . . . . . . . . . . . . .37
6.2 Payment Procedures. . . . . . . . . . . . . . . . .37
ARTICLE 7: DISBURSEMENTS WITH RESPECT TO SHARING
PERCENTAGES . . . . . . . . . . . . . . . . . . . .37
7.1 Approved Level of Working Capital; Sharing
Percentages . . . . . . . . . . . . . . . . . . . .37
7.2 Charging of Amounts Payable; Payment of Excess. . .38
7.3 Accountants . . . . . . . . . . . . . . . . . . . .38
7.4 Arrangements for Payment. . . . . . . . . . . . . .40
PAGE
7.5 Special Disbursement Instructions . . . . . . . . .40
7.6 Payment Procedures. . . . . . . . . . . . . . . . 41
7.7 Receipt of Special Disbursements. . . . . . . . . .41
ARTICLE 8: PROCEDURES RESPECTING ACCOUNTS UNDER
THIS AGREEMENT. . . . . . . . . . . . . . . . . . .41
8.1 Accounting for Assets . . . . . . . . . . . . . . .41
8.2 Reports . . . . . . . . . . . . . . . . . . . . . .42
8.3 Producer Accounts . . . . . . . . . . . . . . . . .43
ARTICLE 9: INVESTMENT OF FUNDS HELD IN ACCOUNTS UNDER
THIS AGREEMENT. . . . . . . . . . . . . . . . . . .43
9.1 Permitted Investments . . . . . . . . . . . . . . .43
9.2 Prudence and Yield. . . . . . . . . . . . . . . . .45
9.3 Interest Allocation . . . . . . . . . . . . . . . .45
ARTICLE 10: CONCERNING THE BONTANG IV TRUSTEE. . . . . . . .45
10.1 Duties. . . . . . . . . . . . . . . . . . . . . . .45
10.2 Compensation. . . . . . . . . . . . . . . . . . . .46
10.3 Resignation . . . . . . . . . . . . . . . . . . . .46
10.4 Appointment of Successor. . . . . . . . . . . . . .47
10.5 Application to Court. . . . . . . . . . . . . . . .47
10.6 Successor Vested with Rights. . . . . . . . . . . .47
10.7 Payments After Notice . . . . . . . . . . . . . . .47
10.8 Indemnification . . . . . . . . . . . . . . . . . .48
10.9 Trustee in Individual Capacity. . . . . . . . . . .48
ARTICLE 11: DEBT SERVICE ALLOCATION. . . . . . . . . . . . .48
11.1 Debt Service Allocation Definitions . . . . . . . .48
11.2 Estimated Debt Service Percentages. . . . . . . . .51
11.3 Aggregate Dollar Share. . . . . . . . . . . . . . .52
11.4 Pro Rata Treatment. . . . . . . . . . . . . . . . .53
11.5 Income From the Disbursement Trust. . . . . . . . .53
ARTICLE 12: MISCELLANEOUS. . . . . . . . . . . . . . . . . .53
12.1 Counterparts; Term. . . . . . . . . . . . . . . . .53
12.2 Disputes. . . . . . . . . . . . . . . . . . . . . .53
12.3 Notices . . . . . . . . . . . . . . . . . . . . . .54
12.4 Incumbency Certificates; Notices. . . . . . . . . .56
12.5 No Amendment Exception Writing. . . . . . . . . . .58
12.6 Governing Law . . . . . . . . . . . . . . . . . . .58
BONTANG IV
TRUSTEE AND PAYING AGENT AGREEMENT
THIS AGREEMENT, made as of the 26th day of August, 1991 among
PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA ("Pertamina");
VIRGINIA INDONESIA COMPANY ("Vico"), OPICOIL HOUSTON, INC.,
VIRGINIA INTERNATIONAL COMPANY, ULTRAMAR INDONESIA LIMITED,
UNION
TEXAS EAST KALIMANTAN LIMITED, UNIVERSE GAS & OIL COMPANY, INC.,
TOTAL INDONESIE ("Total"), UNOCAL INDONESIA, LTD. ("Unocal"), and
INDONESIA PETROLEUM, LTD. ("Inpex"); and CONTINENTAL BANK
INTERNATIONAL (the "Bontang IV Trustee"), as Trustee and Paying
Agent;
W I T N E S S E T H
WHEREAS, Pertamina, in collaboration with the Contractors
(such expression and certain other capitalized expressions used in
these Recitals have the meanings set forth in Article 1 hereof) has
executed the LNG Sales Contract;
WHEREAS, the LNG Sales Contract provides that the Buyers shall
pay amounts due thereunder to a bank in, the United States
designated by Pertamina;
WHEREAS, under the Supply Agreements:
(i) each of the Contractors has agreed to make
available, for sale and delivery by Pertamina under the LNG Sales
Contract, a portion of the LNG sold thereunder;
(ii) Pertamina has assigned to each Contractor a
percentage of certain amounts paid or payable by the Buyers
thereunder;
(iii) Pertamina and the Contractors have agreed that
certain payments made by the Buyers shall be remitted directly to
a bank in the United States selected by Pertamina and the
Contractors which will serve as Trustee and Paying Agent for the
purposes of causing the due payment in an orderly administrative
manner of certain costs and expenses of Pertamina and of each
Contractor incurred in the processing and sale of the LNG of each
such party;
WHEREAS, Pertamina and the Contractors wish to authorize the
Bontang IV Trustee to borrow funds from time to time to pay for
certain costs incurred and to be incurred in connection with
Financed Capital Projects;
WHEREAS, Pertamina, the Contractors and Continental Bank
International have previously entered into certain trustee and
paying agent agreements and may in the future enter into other such
agreements; and
WHEREAS, Pertamina and the Contractors wish to set forth
arrangements whereby certain amounts paid with respect to the LNG
Sales Contract and certain other agreements will be received, held,
managed and disbursed by the Bontang IV Trustee upon the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINED TERMS
The following defined terms shall have the meanings set forth
below, such meanings to be applicable to both the singular and the
plural forms of such expressions:
"Accountants" shall have the meaning set forth in Section 7.3.
"Affected Lender" shall mean any Lender with respect to which
the Bontang IV Trustee has received a Notice of Mandatory
Prepayment. An Affected Lender shall continue to be such for
purposes of this Agreement until the entire amount of the Mandatory
Prepayment payable to it has been paid in full.
"Agent" shall mean The Chase Manhattan Bank, N.A., as agent
for the Lenders under the Loan Agreement, or any successor thereto
appointed pursuant to Section 8.10 thereof.
"Anticipated Loan Amounts" shall have the meaning set forth in
Section 3.2(b)(iii).
"Approved Level of Working Capital" shall have the meaning set
forth in Section 7.1.
"Availability Period" shall have the meaning set forth in
Section 1 of the Loan Agreement.
"Bontang Excess Sales Trust Agreement" shall mean the Bontang
Excess Sales Trustee and Paying Agent Agreement, originally dated
as of November 1, 1986, as amended and restated as of February 9,
1988, among the Producers and Continental Bank International, as
hereafter amended.
"Bontang I Trust Agreement" shall mean the Badak Trustee and
Paying Agent Agreement, originally dated as of July 15, 1974, as
amended and restated as of February 9, 1988, among the Producers
and Continental Bank International, as hereafter amended.
"Bontang I Trustee" shall mean the trustee and paying agent
under the Bontang I Trust Agreement.
"Bontang Plant" shall mean the natural gas liquefaction plant
at Bontang Bay on the east coast of Kalimantan, Indonesia,
including all related facilities, such as natural gas processing
plants for the production of LNG and liquefied petroleum gas
consisting of propane and butane, utilities, storage tanks, loading
lines and arms, harbor, docks, berths, tug boats, residential
community, workshops, offices, fixed plant and equipment and
communication systems, together with replacements, improvements,
additions and expansions of all such facilities, together also with
natural gas transmission lines extending from "Delivery Points" as
defined in the Processing Agreement, and from other such points in
other fields from which natural gas is supplied to the said natural
gas liquefaction plant (including associated knock-out drums but
excluding natural gas gathering pipelines within fields).
"Bontang II Trust Agreement" shall mean the Badak Expansion
Trustee and Paying Agent Agreement, originally dated as of July 15,
1981, as amended and restated as of July 15, 1991, among the
Producers and Continental Bank International, as hereafter amended.
"Bontang II Trustee" shall mean the trustee and paying agent
under the Bontang II Trust Agreement.
"Bontang III Trust Agreement" shall mean the Bontang III
Trustee and Paying Agent Agreement, dated as of February 9, 1988,
among the Producers and Continental Bank International, as
hereafter amended.
"Bontang III Trustee" shall mean the trustee and paying agent
under the Bontang III Trust Agreement.
"Bontang IV Depositary" shall mean the United States
headquarters or a United States branch of the following financial
institutions appointed pursuant to Section 3.7 as a depositary of
funds, properties and rights in the Debt Service Account and the
Reserve Account for the purposes of safekeeping, investment or
disbursement thereof:
(a) any branch or affiliate of Continental Bank
International with the power to act as a Bontang IV Depositary, or
(b) any other bank, trust company or financial
institution (in each case with trust powers) which (i) has a net
worth in excess of $100,000,000.00 or (ii) has outstanding debt
securities rated A or better by Standard and Poor's Corporation or
its equivalent by Moody's Investors Service or another nationally
recognized rating agency in the United States.
"Bontang IV General Account" shall have the meaning set forth
in Section 2.1.
"Bontang IV Payment Account" shall mean a trust account of the
Bontang IV Trustee established as a subaccount of the Bontang IV
General Account pursuant to Section 4.1.
"Bontang IV Trustee" shall mean Continental Bank International
as trustee and paying agent under this Agreement, or a successor
thereto.
"Bontang IV Trust Funds" shall have the meaning set forth in
Section 2.2.
"Bontang IV Trust Funds Accounts" shall mean the accounts
referred to in Section 8.3.
"Borrowed Amounts" shall mean any amounts borrowed pursuant to
the first sentence of Section 2.2(b) of the Loan Agreement.
"Buyer" shall mean each of (i) Osaka Gas Co., Ltd., a
corporation organized under the laws of Japan, (ii) Tokyo Gas Co.,
Ltd., a corporation organized under the laws of Japan and (iii)
Toho Gas Co., Ltd., a corporation organized under the laws of
Japan, each as a buyer under the LNG Sales Contract and their
respective successors and assigns thereunder.
"Capital Payment Dates" shall mean the dates determined
pursuant to Section 3.2(a).
"Contractor" shall mean any member of the Vico Group, the
Total Group or the Unocal Group and in each case its predecessors
and successors in interest (collectively, the "Contractors").
"Contractor Group" shall mean any of the Vico Group, Total
Group and Unocal Group.
"Debt Coverage Ratio" shall have the meaning set forth in
Section 1 of the Loan Agreement.
"Debt Coverage Reserve Account" shall mean a trust account of
the Bontang IV Trustee established as a sub-account of the Reserve
Account pursuant to Section 3.2(c), and such term shall include all
sub-accounts thereof.
"Debt Service" shall mean payments into the Debt Service
Account and the Reserve Account, together with payments made by one
or more Producers and identified to the Bontang IV Trustee as "Debt
Service" under the Debt Service Allocation Agreement.
"Debt Service Account" shall mean a trust account of the
Bontang IV Trustee established as a subaccount of the Bontang IV
General Account pursuant to Section 3.2(c), which may be
established and maintained at the offices of the Bontang IV
Trustee, or any Bontang IV Depositary as permitted in accordance
with the terms hereof and such term shall include all sub-accounts
thereof.
"Debt Service Allocation Agreement" shall mean the Amended and
Restated Debt Service Allocation Agreement, dated as of February 9,
1988, among the Producers, as hereafter amended.
"Deferred Principal" shall mean any amount of principal due to
the Lenders (other than any Affected Lenders) under the Loan
Agreement and the Notes, the payment of which is deferred pursuant
to Section 2.10(b) of the Loan Agreement.
"Disbursement Trust Agreement" shall mean a disbursement
trustee and paying agent agreement entered into in the manner
specified in Section 3.5 under which the Loan Proceeds (other than
amounts referred to in Sections 3.2(d), (e) and (f) and
3.4(b)(iii)(y)) shall be maintained until use thereof is required,
as thereafter amended.
"Disbursement Trustee" shall mean Continental Bank
International acting as disbursement trustee and paying agent under
the Disbursement Trust Agreement or a successor thereto.
"Effective Date" shall mean the date specified as such in the
Loan Agreement.
"Encumbrance" shall mean any lien, security interest,
mortgage, deed of trust, pledge, charge or any other encumbrance of
any kind, including, without limitation, the rights of a vendor,
lessor or similar party under any conditional sale agreement or
other title retention agreement or lease substantially equivalent
thereto, any production payment, and, with respect to any property
or assets, any other right of or arrangement with any creditor to
have its claim satisfied out of any such property or assets, or the
proceeds therefrom, prior to the general creditors of the owner
thereof.
"Financed Capital Project" shall have the meaning specified in
the Processing Agreement.
"Gross Invoice Amount" shall mean the sum of (i) the amounts
payable to the Bontang IV Trustee pursuant to the LNG Sales
Contract in respect of LNG purchased or, if not taken, required to
be purchased but not taken thereunder, (ii) amounts payable to the
Bontang IV Trustee pursuant to Section 6.3 of each Supply Agreement
and (iii) all amounts payable to the Bontang IV Trustee on account
of interest due by reason of the late payment of invoices for LNG
under Section 10.3 of the LNG Sales Contract; provided that the
Gross Invoice Amount shall not be reduced by any rebate, setoff,
reduction or discount given or agreed to by one or more parties to
the LNG Sales Contract from such amount payable as so defined,
adjusted and calculated, and provided further, that if the Bontang
IV Trustee is authorized and requested by the Producers (which
authorization and request may be given pursuant to Section 1.16(b)
of the Producers Agreement) to execute and deliver an agreement
providing for the amendment of this definition of Gross Invoice
Amount, and if the Agent on behalf of the Lenders also executes and
delivers such agreement, this definition of Gross Invoice Amount
shall be deemed amended for all purposes of this Agreement as set
forth in such agreement.
"Guarantee" by any Person shall mean any obligation,
contingent or otherwise, of such Person guaranteeing any
Indebtedness or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase
or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, 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 the purpose of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof
(in whole or in part); provided that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary
course of business.
"Indebtedness" shall mean, with respect to any Person, (i) all
indebtedness or obligations of such Person for borrowed money, (ii)
all indebtedness or obligations of such Person evidenced by bonds,
debentures, notes, swap agreements or other similar instruments or
agreements, and all securities issued by such Person providing for
mandatory payments of money, whether or not contingent, (iii) all
obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the
ordinary course of business, (iv) all obligations of such Person as
lessee under capital leases, (v) all obligations of such Person to
purchase securities (or other property) which arise out of or in
connection with the sale of the same or substantially similar
securities or property, (vi) all non-contingent obligations of such
Person to reimburse any Person in respect of amounts paid under a
letter of credit or similar instrument to the extent that such
reimbursement obligations remain outstanding five business days
after they become non-contingent, (vii) Indebtedness of others
secured by an Encumbrance on any assets of such Person, whether or
not such Indebtedness is assumed by such Person, or (viii) all
Guarantees by such Person of or with respect to the Indebtedness of
another Person.
"Inpex" is defined in the title paragraph hereof.
"Interest" shall mean all amounts of interest, including
interest on Scheduled Principal, Deferred Principal and overdue
amounts, payable to the Lenders (other than any Affected Lenders)
under Sections 2.3 and 2.7(a) of the Loan Agreement and under the
Notes.
"Interest Period" shall have the meaning set forth in Section
1 of the Loan Agreement.
"Lender" shall mean each of the banks and other financial
institutions named under the caption "Lenders" on the signature
pages of the Loan Agreement, any transferee pursuant to and subject
to the conditions stated in Section 10.4 of the Loan Agreement and
their respective permitted successors and assigns.
"Lenders Fees and Expenses" shall mean any amounts payable to
the Agent or any of the Lenders (other than any Affected Lenders)
under Sections 2.8 and 10.6 of the Loan Agreement and under the
Letter Agreement.
"Letter Agreement" shall have the meaning set forth in Section
1 of the Loan Agreement.
"LNG" shall mean natural gas in a liquid state at or below its
boiling point and at a pressure of approximately one atmosphere.
"LNG Sales Contract" shall mean the Badak IV LNG Sales
Contract, dated as of October 23, 1990, between Pertamina and each
of the Buyers, as heretofore and hereafter amended, including any
extension or renewal thereof.
"Loan Account" shall mean a trust account of the Bontang IV
Trustee established as a sub-account of the Debt Service Account
pursuant to Section 3.2(c).
"Loan Agreement" shall mean the Loan Agreement among the
Bontang IV Trustee, as borrower thereunder, the banks and financial
institutions named therein as Coordinators, Arrangers,
Co-Arrangers, Lead Managers, Managers, Co-Managers and Lenders, the
Co-Agents and the Agent parties thereto, to be entered into
pursuant to Section 3.1(a), as hereafter amended.
"Loan Percentage" shall mean, for any Affected Lenders at any
time, the percentage determined by dividing the principal amount of
such Affected Lenders' Notes outstanding at such time by the
aggregate principal amount outstanding at such time under all
Lenders' Notes.
"Loan Proceeds" shall mean any funds disbursed by the Lenders
pursuant to the Loan Agreement.
"Majority Lenders" shall mean at any time Lenders holding in
excess of 66-2/3% of the aggregate unpaid principal amount of the
advances under the Loan Agreement, or if no such advances are at
the time outstanding, Lenders having in excess of 66-2/3% of the
aggregate amount of the commitments to lend to the Bontang IV
Trustee under the Loan Agreement.
"Mandatory Prepayment Account" shall mean a trust account of
the Bontang IV Trustee established as a sub-account of the Debt
Service Account pursuant to Section 3.2(c).
"Mandatory Prepayment" shall mean any required prepayment of
the entire outstanding principal of a Lender's Note, together with
all other amounts due to such Lender thereunder and under the Loan
Agreement and the Letter Agreement, the payment of which is
mandatorily accelerated under Section 3.4(a) of the Loan Agreement.
"Mobil" shall mean Mobil Oil Indonesia, Inc.
"Note" shall mean a promissory note issued by the Bontang IV
Trustee as borrower under the Loan Agreement to a Lender to
evidence such Lender's advances to the Bontang IV Trustee as
borrower under the Loan Agreement.
"Notice of Acceleration" shall have the meaning set forth in
Section 3.3(d).
"Notice of Mandatory Prepayment" shall have the meaning set
forth in Section 3.3(c).
"Notice of Start-up" shall mean a notice from Pertamina to the
Bontang IV Trustee that Start-up has occurred.
"Other Trust Agreements" shall mean the Bontang I, Bontang II
and Bontang III Trust Agreements and the Bontang Excess Sales Trust
Agreement and any other relevant agreements of this type entered
into from time to time by Pertamina and the trustees parties
thereto, among others, as hereafter amended.
"Pari Passu Swap Indebtedness" shall mean Indebtedness of the
Bontang IV Trustee contemplated by Section 3.1(c).
"Person" shall mean and include any individual, corporation,
juridical entity, association, statutory body, partnership, joint
venture, trust, estate, unincorporated organization or government,
state or any political subdivision, instrumentality, agency or
authority thereof.
"Pertamina" is defined in the title paragraph hereof.
"Processing Agreement" shall mean the Amended and Restated
Bontang Processing Agreement, dated as of February 9, 1988, among
the Producers on the one hand and P.T. Badak on the other, as
hereafter amended.
"Producers" shall mean Pertamina (and its successors) and the
Contractors.
"Producers Agreement" shall mean the agreement so entitled of
even date herewith among the Producers, the Agent and the Lenders,
as hereafter amended.
"Production Sharing Contract" shall mean:
(i) as to Pertamina and the Vico Group, (i) until August
8, 1998, the Amended and Restated Production Sharing Contract dated
April 23, 1990, as hereafter amended, between Pertamina, on the one
hand, and the members of the Vico Group on the other, and (ii)
effective August 8, 1998, the Production Sharing Contract dated
April 23, 1990, as hereafter amended, between Pertamina, on the one
hand, and the members of the Vico Group, on the other;
(ii) as to Pertamina and the Total Group, (i) until March
31, 1997, the Amended and Restated Production Sharing Contract
dated January 11, 1991, as hereafter amended, between Pertamina, on
the one hand, and the members of the Total Group, on the other, and
(ii) effective March 31, 1997, the Production Sharing Contract
dated January 11, 1991, as hereafter amended, between Pertamina, on
the one hand, and the members of the Total Group, on the other;
(iii) as to Pertamina and the Unocal Group, (i) until
October 24, 1998, the Amended and Restated Production Sharing
Contract dated January 11, 1991, as hereafter amended, between
Pertamina, on the one hand, and Unocal on the other, and (ii)
effective October 25, 1998, the Production Sharing Contract dated
January 11, 1991, as hereafter amended, between Pertamina, on the
one hand, and Unocal, on the other; and
(iv) as to Pertamina and Inpex, effective March 31, 1997,
the Production Sharing Contract dated March 28, 1991, as hereafter
amended, between Pertamina, on the one hand, and Inpex, on the
other.
"P.T. Badak" shall mean P.T. Badak Natural Gas Liquefaction
Company, a corporation organized under laws of the Republic of
Indonesia.
"Quarterly Period" shall mean the period from and including
the making of the initial borrowing under the Loan Agreement to and
including September 30, 1991 and thereafter each subsequent period
of approximately three calendar months ending on the next to occur
of December 31, March 31, June 30 or September 30, as the case may
be, provided that if the last day of a Quarterly Period would be a
day which is not a Business Day under the Loan Agreement such
Quarterly Period will end on the immediately preceding such
Business Day and that each subsequent Quarterly Period will begin
on the calendar day (whether or not such a Business Day)
immediately following the last day of the preceding Quarterly
Period.
"Regular Reserve Account" shall mean a trust account of the
Bontang IV Trustee established as a sub-account of the Reserve
Account pursuant to Section 3.2(c), and such term shall include all
sub-accounts thereof.
"Reserve Account" shall mean a trust account of the Bontang IV
Trustee established as a sub-account of the Bontang IV General
Account pursuant to Section 3.2(c), which may be established at the
offices of the Bontang IV Trustee, or any Bontang IV Depositary, as
permitted in accordance with the terms hereof, and such term shall
include all sub-accounts thereof.
"Scheduled Principal" shall mean the amount of principal
regularly scheduled to be payable to the Lenders (other than any
Affected Lenders) under Section 2.10(a) of the Loan Agreement and
under the Notes.
"Sharing Percentages" shall have the meaning set forth in
Section 7.1.
"Source of Debt Service" shall mean:
(i) in respect of each amount payable to the Bontang IV
Trustee for LNG purchased, or for LNG required to be purchased but
not taken, under the LNG Sales Contract, or payable to the Bontang
IV Trustee pursuant to the Supply Agreements or otherwise pursuant
to the LNG Sales Contract (without duplication) the portion, if
any, of the amount so payable equal to the percentage specified
below of the Gross Invoice Amount payable (x) under each invoice
rendered with respect to each cargo purchased, or in the case of
LNG required to be purchased but not taken under each invoice
rendered with respect to the same quantity not taken, and (y)
otherwise in respect of each cargo, plus the same percentage of all
indemnities and additional amounts payable by each of the Buyers
under the LNG Sales Contract (other than any refunds of demurrage
payable under Section 4.13(c) thereof) without any reduction or
set-off from any such amounts; provided that if the Bontang IV
Trustee is authorized and requested by the Producers (which
authorization and request may be given pursuant to Section 1.16(b)
of the Producers Agreement) to execute and deliver an agreement
providing for the amendment of this definition of Source of Debt
Service, and if the Agent on behalf of the Lenders also executes
and delivers such agreement, this definition of Source of Debt
Service shall be deemed amended for all purposes of this Agreement
as set forth in such agreement; and
(ii) in respect of any period the aggregate amount of the
Source of Debt Service payable during such period.
The percentage referred to above means (i) at any time on or
prior to the twentieth Maturity Date under the Loan Agreement, 70%,
and (ii) at any time thereafter, 65%.
"Special Disbursement Amount" means an amount paid by the
Bontang IV Trustee pursuant to a Special Disbursement Instruction
or an amount received by the Bontang IV Trustee from the trustee
and paying agent under any of the Other Trust Agreements which such
trustee and paying agent has notified the Bontang IV Trustee is a
Special Disbursement Amount, as the case may be.
"Special Disbursement Instruction" is defined in Section 7.5.
"Special Payment Account" shall mean a trust account of the
Bontang IV Trustee established as a subaccount of the Debt Service
Account pursuant to Section 3.2(c).
"Special Payments" shall mean (i) any amounts of or with
respect to taxes, increased costs arising from regulatory changes,
funding costs and losses, indemnities and any other amounts payable
to any of the Lenders (other than any Affected Lenders) under
Sections 2.7(b), 3.3 and 3.4(b) of the Loan Agreement and (ii) any
other amounts (other than Lenders Fees and Expenses, Interest,
Deferred Principal, Scheduled Principal and Mandatory Prepayments)
payable to any of the Lenders (other than any Affected Lenders)
under the Loan Agreement and the Notes. For the avoidance of
doubt, it is expressly agreed that the term "Special Payments" does
not include or refer to prepayments of principal of the Advances,
whether pursuant to Section 3.4, Section 3.5 or Section 3.6 of
the Loan Agreement or otherwise pursuant thereto.
"Start-up" shall mean the first delivery of LNG under the LNG
Sales Contract.
"Subordinated Indebtedness" shall mean Indebtedness of the
Bontang IV Trustee contemplated by Section 3.1(b).
"Successor" shall have the meaning set forth in Section 10.4.
"Supply Agreements" shall mean:
(i) Badak IV LNG Sales Contract Supply Agreement dated
August 12, 1991, but effective as of October 23, 1990, by and
between Pertamina, on the one hand, and Total and Inpex, on the
other hand, as hereafter amended;
(ii) Badak IV LNG Sales Contract Supply Agreement dated
August 12, 1991, but effective as of October 23, 1990, by and
between Pertamina, on the one hand, and the members of the Vico
Group, on the other hand, as hereafter amended;
(iii) Badak IV LNG Sales Contract Supply Agreement
for Unocal Contract Area dated August 12, 1991, but effective as of
October 23, 1990, between Pertamina, on the one hand, and Unocal,
on the other hand, as hereafter amended; and
(iv) Badak IV LNG Sales Contract Supply Agreement for
INPEX Contract Area dated August 12, 1991, but effective as of
October 23, 1990, between Pertamina, on the one hand, and Unocal
and Inpex, on the other hand, as hereafter amended.
"Total" is defined in the title paragraph hereof.
"Total Group" shall mean Total and Inpex, and their successors
in interest.
"Train F" shall have the meaning set forth in Section 1 of the
Loan Agreement.
"Trustee's Office" shall mean the office of the Bontang IV
Trustee, the address of which is set out in Section 12.3 or any
other office of the Bontang IV Trustee in the United States the
address of which is notified to the Producers by the Bontang IV
Trustee pursuant to Section 12.3 or the office specified in an
instrument, delivered by the Successor pursuant to Section 10.4.
"Unocal" is defined in the title paragraph hereof.
"Unocal Group" shall mean Unocal and Inpex, and their
successors in interest.
"Vico" is defined in the title paragraph hereof.
"Vico Group" shall mean Vico, Virginia International Company,
OPICOIL Houston, Inc., Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, and Universe Gas & Oil Company, Inc. and their
successors in interest.
ARTICLE 2
RECEIPT OF PAYMENTS WITH RESPECT TO LNG
2.1 Designation of Bontang IV Trustee and Bontang IV General
Account. Pursuant to the relevant provisions of the Supply
Agreements and Section 10.4 of the LNG Sales Contract, Pertamina
hereby designates, and each of the Contractors hereby agrees to the
designation of, the Bontang IV Trustee named herein, to establish
immediately and maintain at the Trustee's Office an account, to be
designated as the "Bontang IV General Account," which Pertamina
hereby agrees to designate, and each of the Contractors hereby
agrees to such designation of, as the account with a bank in the
United States to which the amounts which become due and payable
under the LNG Sales Contract shall be paid.
2.2 Bontang IV Trust Funds. All such amounts that shall have
been received in the Bontang IV General Account pursuant to Section
2.1 and any other amounts the Bontang IV Trustee may receive under
the terms of this Agreement (together with any securities acquired
by the Bontang IV Trustee pursuant to Article 9 and all interest
thereon) are herein referred to as the "Bontang IV Trust Funds."
The respective Sharing Percentages of each Producer of all Bontang
IV Trust Funds shall be credited to the respective Bontang IV Trust
Funds Accounts of each Producer, to be held in trust, however, for
the benefit of those having a right, to the extent provided in this
Agreement, to receive disbursements and distributions hereunder.
Immediately upon the Bontang IV Trustee's receipt of any funds
designated "Bontang IV Sales," "Badak IV," or otherwise
unambiguously representing amounts payable to the Bontang IV
Trustee with respect to the LNG Sales Contract, such funds shall be
impressed with the trust created hereby and become a part of the
Bontang IV Trust Funds and shall be deposited in the Bontang IV
General Account.
2.3 Allocation of Amounts Received. All amounts received by
the Bontang IV Trustee and designated as representing amounts
payable for LNG delivered, or for LNG required to be purchased, but
not taken, under the LNG Sales Contract, all amounts paid on
account of interest due by reason of the late payment of invoices,
and all demurrage payment refunds paid by any of the Buyers,
shall be deemed to be attributable to sales under the LNG Sales
Contract. In the event the Bontang IV Trustee receives any amount
from any Buyer which amount is not designated for the Bontang IV
General Account or for any accounts established or to be
established under the Other Trust Agreements, it shall first
contact the remitting party in order to determine the proper
designation for the amounts received, and shall solicit and, if
possible, obtain from the remitting party such documentation as the
Bontang IV Trustee deems appropriate as evidence of such
designation. In the event the remitting party is unable to provide
appropriate evidence of such designation, the Bontang IV Trustee
shall notify the Producers and, if an Other Trust Agreement
involving Mobil is concerned, Mobil, of the amount received, the
date of receipt and any other information relevant to such amount
known to the Bontang IV Trustee. The Bontang IV Trustee shall
thereupon request instructions as to the proper allocation of the
amount received and shall allocate such amounts between the Bontang
IV General Account and any accounts established under the Other
Trust Agreements in accordance with instructions given jointly by
the Producers and, as appropriate, Mobil.
ARTICLE 3
POWER TO BORROW AND ENTER INTO INTEREST RATE SWAPS
3.1 Enumeration of Powers.
(a) In addition to its other powers hereunder, the
Bontang IV Trustee shall have the power to borrow money from time
to time from the Lenders upon the terms and conditions set forth
below:
(i) Upon its receipt of notice from the Producers
that they have determined that a credit facility for borrowing by
the Bontang IV Trustee to pay for a portion of the capital costs
incurred, or to be incurred, in connection with the construction or
financing of Train F is desirable, the Bontang IV Trustee, at the
direction of the Producers, shall undertake to obtain such credit
facility, which shall be evidenced by the Loan Agreement, the Notes
and the Letter Agreement.
(ii) The Bontang IV Trustee shall have the power to
enter into or modify the Loan Agreement, the Notes and the Letter
Agreement upon its receipt of notice from Pertamina and each of the
Contractors that they have approved the form and terms of such
agreements or modifications and that they authorize and request the
Bontang IV Trustee to enter into such agreements or modifications.
The Bontang IV Trustee shall have the power to obtain and repay
Indebtedness and to pay other amounts and to perform other
obligations under the Loan Agreement, the Notes and the Letter
Agreement. Notwithstanding the provisions of Section 12.3, neither
the representatives of the Contractor Groups nor any other
individual or entity shall have authority to give any approval
under this Section 3.1(a) for any Contractor other than itself,
unless such Contractor shall give notice to the Bontang IV Trustee
that it has appointed such representative or other individual or
entity to give such approval.
(iii) The Loan Agreement, the Notes and the
Letter Agreement shall contain provisions acceptable to the Bontang
IV Trustee to the effect that no recourse may be had nor any claim
thereunder made against Continental Bank International in its
individual capacity other than for breach of a representation or
warranty made in its individual capacity or for gross negligence or
willful misconduct.
(b) In addition to its other powers hereunder, the
Bontang IV Trustee shall have the power at any time to incur
Indebtedness that is payable out of amounts of the Source of Debt
Service only after the Bontang IV Trustee shall have accumulated
amounts in the Debt Service Account and the Reserve Account during
each Interest Period required to be accumulated therein pursuant to
Section 3.2 or 3.3(d), as applicable ("Subordinated Indebtedness"),
as follows. Upon its receipt of notice from the Producers that
they have determined that Subordinated Indebtedness in the form of
a credit facility for borrowing by the Bontang IV Trustee to pay
for a portion of the capital costs incurred, or to be incurred, in
connection with a Financed Capital Project is desirable, the
Bontang IV Trustee, at the direction of the Producers, shall
undertake to obtain and enter into one or more appropriate
agreements relating to such Subordinated Indebtedness and, in
connection therewith, shall enter into an appropriate amendment to
this Agreement to make provision for making payments under the
agreements relating to such Subordinated Indebtedness to the extent
provided in the preceding sentence.
(c) In addition to its other powers hereunder, the
Bontang IV Trustee shall have the power to incur Indebtedness
(other than Subordinated Indebtedness) in respect of interest rate
swap arrangements of the Bontang IV Trustee entered into solely for
the purpose of exchanging floating interest rate obligations of the
Bontang IV Trustee under the Loan Agreement into fixed interest
rate obligations if such Indebtedness is only payable out of Source
of Debt Service and is pari passu in right of payment and does not
benefit from any Encumbrance other than equally and ratably with,
or subordinate to, the Indebtedness owed to the Lenders under the
Loan Agreement, the Notes and the Letter Agreement ("Pari Passu
Swap Indebtedness"). Upon its receipt of notice from the Producers
that they have determined that such Pari Passu Swap Indebtedness is
desirable, the Bontang IV Trustee, at the direction of the
Producers, shall undertake to obtain and enter into one or more
appropriate agreements relating to such Pari Passu Swap
Indebtedness; provided that (i) any such agreement shall be in form
and substance in accordance with Section 6.4 of the Loan Agreement
and (ii) the Bontang IV Trustee shall enter into an amendment to
this Agreement which complies with the provisions of Section 6.4 of
the Loan Agreement and shall promptly deliver to the Agent a copy
of such amendment.
(d) The provisions contained in the last sentence of
Section 3.1(a)(ii) and in Section 3.1(a)(iii) relating to the Loan
Agreement shall apply equally to any agreements relating to
Subordinated Indebtedness or Pari Passu Swap Indebtedness to be
entered into by the Bontang IV Trustee pursuant to Section 3.1(b)
or 3.1(c).
3.2 Accumulation of Debt Service.
(a) The Loan Agreement shall provide that all payment
dates for payment of principal and interest thereunder shall be
uniform end of calendar quarter dates, subject to any option
provided for in the Loan Agreement permitting the borrower
thereunder to elect Interest Periods for the calculation of
interest which are six months in length and which end on an end of
calendar quarter date (each such date ending a three-month or
six-month Interest Period for payment of principal or interest, a
"Capital Payment Date").
(b) (i) The Loan Agreement shall provide for the
Bontang IV Trustee to receive, at the time of the initial and each
subsequent borrowing thereunder in each case in respect of the
Quarterly Period in which such borrowing occurs and on or about the
first day of each Quarterly Period after the initial borrowing, a
notice from the Agent of the amounts of Scheduled Principal,
Deferred Principal, regularly scheduled Interest and regularly
scheduled Lenders Fees and Expenses payable on the Capital Payment
Date occurring at the end of such Quarterly Period.
(ii) The Loan Agreement shall provide for the
Bontang IV Trustee to receive notice from the Agent of other
amounts payable under the Loan Agreement, the Notes and the Letter
Agreement as the same shall become due and payable, specifying
whether such amounts constitute principal, Lenders Fees and
Expenses, Interest, Special Payments or Mandatory Prepayments.
(iii) The Loan Agreement shall provide for the
Bontang IV Trustee to receive, on or about the first day of each
Quarterly Period at the end of which a payment of principal is to
be made, a notice from the Agent of the sum of (such sum, the
"Anticipated Loan Amounts") the Scheduled Principal and Deferred
Principal to be payable to the Lenders (other than Affected
Lenders) on each of the two Capital Payment Dates next succeeding
the Capital Payment Date occurring at the end of such Quarterly
Period plus Interest to accrue during the two Quarterly Periods
next succeeding such Quarterly Period plus Lenders Fees and
Expenses reasonably anticipated to be payable during such next two
Quarterly Periods.
(iv) The Loan Agreement shall provide for the
Bontang IV Trustee to receive, at the commencement of the first
three Quarterly Periods during 1994, a notice from the Agent of the
Anticipated Loan Amounts in respect of the two Capital Payment
Dates to occur at the end of December, 1994 and March, 1995,
respectively.
(v) The Bontang IV Trustee, without any action or
approval being required of Pertamina or the Contractors, shall be
entitled to rely conclusively on each such statement in the absence
of manifest error.
(c) On the Effective Date, the Bontang IV Trustee shall
open in its own name, as Bontang IV Trustee, at the Trustee's
Office, two sub-accounts of the Bontang IV General Account, one
designated as the "Debt Service Account" (which term shall include
all sub-accounts thereof), and the other designated as the "Reserve
Account" (which term shall include all sub-accounts thereof), on
the Effective Date, the Bontang IV Trustee shall also open in its
own name at the Trustee's Office (i) three separate sub-accounts of
the Debt Service Account (such sub-accounts to be designated as the
"Loan Account", the "Special Payment Account", and the "Mandatory
Prepayment Account", respectively) and (ii) two separate
sub-accounts of the Reserve Account (such sub-accounts to be
designated as the "Regular Reserve Account" and the "Debt Coverage
Reserve Account", respectively), all such sub-accounts to be used
for the receipt, administration and payment of principal, interest
and other amounts due or to become due under the Loan Agreement.
(d) If the Bontang IV Trustee, as borrower under the
Loan Agreement, elects to borrow amounts thereunder, as permitted
thereby, for the purpose of paying any Lenders Fees and Expenses
due thereunder as specified in all notices received by the Bontang
IV Trustee of the type referred to in Sections 3.2(b)(i) and (ii),
without duplication, the amounts borrowed for such purpose shall be
immediately deposited into the Loan Account.
(e) If the Bontang IV Trustee, as borrower under the
Loan Agreement, elects to borrow amounts thereunder, as permitted
thereby, for the purpose of paying any Interest due thereunder as
specified in all notices received by the Bontang IV Trustee of the
type referred to in Sections 3.2(b)(i) and (ii), without
duplication, the amounts borrowed for such purpose shall be
immediately deposited into the Loan Account.
(f) If the Bontang IV Trustee, as borrower under the
Loan Agreement, elects to borrow amounts thereunder, as permitted
thereby, for the purpose of paying any Special Payments due
thereunder as specified in all notices received by the Bontang IV
Trustee of the type referred to in Section 3.2(b)(ii), without
duplication, the amounts borrowed for such purpose shall be
immediately deposited into the Special Payment Account.
(g) For each of the first three Quarterly Periods during
1994, the entire amount of any Source of Debt Service received in
the Bontang IV General Account during each such Quarterly Period
shall be paid over to the Reserve Account for deposit in the
Regular Reserve Account so long as and to the extent that the
amount accumulated in the Regular Reserve Account is less than the
aggregate of the amount of Interest payable on the Capital Payment
Date occurring at the end of such Quarterly Period and all
Anticipated Loan Amounts in respect of the first two Capital
Payment Dates to occur at the end of December, 1994 and March,
1995, respectively.
(h) Subject to Section 3.3(d), commencing on the first
day of the initial Quarterly Period commencing after the end of the
Availability Period under the Loan Agreement, and for each
Quarterly Period thereafter under the Loan Agreement, and
continuing until the date of payment of all amounts due thereunder,
the Bontang IV Trustee shall, upon receipt, promptly pay over to
the Debt Service Account with respect to each such Quarterly Period
for deposit in the appropriate sub-account all amounts of the
Source of Debt Service received in the Bontang IV General Account
in the following amounts and in the following order of priority:
(1) First, if any Notice of Mandatory Prepayment
shall have been given with respect to any one or more Affected
Lenders, and with respect to each such Notice, to the Mandatory
Prepayment Account an amount equal to the Loan Percentage for such
Affected Lenders of each payment of Source of Debt Service received
by the Bontang IV Trustee after receipt of such Notice of Mandatory
Prepayment and until the aggregate of all amounts of Mandatory
Prepayments due and payable, as specified in such Notice of
Mandatory Prepayment and to the extent not previously paid pursuant
to Section 3.3(c), have been paid in full;
(2) Second, to the Loan Account, the amounts of
Lenders Fees and Expenses, if any, due and payable by the Bontang
IV Trustee on the Capital Payment Date occurring at the end of such
Quarterly Period (and on any prior Capital Payment Date to the
extent not previously paid), as specified in all notices received
by the Bontang IV Trustee of the type referred to in Sections
3.2(b)(i) and (ii), without duplication, until the aggregate amount
accumulated in the Loan Account shall be sufficient to pay the
aggregate of all such amounts of Lenders Fees and Expenses;
(3) Third, to the Loan Account, the amounts of
Interest due and payable by the Bontang IV Trustee on the Capital
Payment Date occurring at the end of such Quarterly Period (and on
any prior Capital Payment Date to the extent not previously paid),
as specified in all notices received by the Bontang IV Trustee of
the type referred to in Sections 3.2(b)(i) and (ii), without
duplication, until the aggregate amount accumulated in the Loan
Account (in excess of the amounts referred to in clause (2) above)
shall be sufficient to pay the aggregate of all such amounts of
Interest; provided that with respect to any six-month Interest
Period, the amount of the Source of Debt Service to be paid over to
the Loan Account in respect of all Interest due on the Capital
Payment Date occurring at the end of such Interest Period shall, in
the first three months of such Interest Period, be an amount equal
to one half of all such Interest due, and in the second three
months of such Interest Period, be an amount equal to the other
half of all such Interest due;
(4) Fourth, to the Special. Payment Account, the
amounts of Special Payments, if any, due and payable by the Bontang
IV Trustee on the Capital Payment Date occurring at the end of such
Quarterly Period (and on any prior Capital Payment Date to the
extent not previously paid), as specified in all notices received
by the Bontang IV Trustee of the type referred to in Section
3.2(b)(ii), without duplication, until the aggregate amount
accumulated in the Special Payment Account shall be sufficient to
pay the aggregate of all such amounts of Special Payments;
(5) Fifth, to the Loan Account, the amounts of
Deferred Principal, if any, due and payable by the Bontang IV
Trustee on the Capital Payment Date occurring at the end of such
Quarterly Period (and on any prior Capital Payment Date to the
extent not previously paid), as specified in all notices received
by the Bontang IV Trustee of the type referred to in Section
3.2(b)(i), without duplication, until the aggregate amount
accumulated in the Loan Account (in excess of the amounts referred
to in clauses (2) and (3) above) shall be sufficient to pay the
aggregate of all such amounts of Deferred Principal;
(6) Sixth, to the Loan Account, the amounts of
Scheduled Principal due and payable by the Bontang IV Trustee on
the Capital Payment Date occurring at the end of such Quarterly
Period (and on any prior Capital Payment Date to the extent not
previously paid), as specified in all notices received by the
Bontang IV Trustee of the type referred to in Sections 3.2(b)(i)
and (ii), without duplication, until the aggregate amount
accumulated in the Loan Account (in excess of the amounts referred
to in clauses (2), (3) and (5) above) shall be sufficient to pay
the aggregate of all such amounts of Scheduled Principal; and
(7) Seventh, to the Mandatory Prepayment Account
until the aggregate of all amounts of Mandatory Prepayments due and
payable, as specified in any applicable Notices of Mandatory
Prepayment and to the extent not previously paid pursuant to
Section 3.3(c), have been paid in full.
(i) Subject to Section 3.3(d), for each Quarterly Period
referred to in Section 3.2(h), after all amounts of Source of Debt
Service required to be paid into the Debt Service Account pursuant
to Section 3.2(h) with respect to such Quarterly Period have been
so paid, the Bontang IV Trustee shall, upon receipt, promptly pay
over to the Reserve Account with respect to each such Quarterly
Period for deposit in the appropriate subaccount all additional
amounts of the Source of Debt Service received in the Bontang IV
General Account in the following amounts and in the following order
of priority:
(1) First, to the Regular Reserve Account until the
aggregate amount accumulated therein shall be sufficient to pay the
Anticipated Loan Amounts specified for such Quarterly Period in all
notices received by the Bontang IV Trustee of the type referred to
in Section 3.2(b)(iii), without duplication; and
(2) Second, if such Quarterly Period commences on
or after October 1, 1994 and if as of the commencement of such
Quarterly Period the certificate delivered to the Lenders under
Section 6.1(b) of the Loan Agreement with respect to such Quarterly
Period indicates that the Debt Coverage Ratio is below 1.3, to the
Debt Coverage Reserve Account.
(j) Subject to Sections 3.3(c) and (d), if the Producers
have previously advised the Bontang IV Trustee, in writing, to
contest payment of any amounts of Special Payments, such contested
amounts of the Source of Debt Service accumulated in the Special
Payment Account shall remain on deposit therein until such time as
Pertamina and the Contractors have approved the use thereof for
payment of such amounts or, if earlier, such time as the Bontang IV
Trustee may be legally compelled to pay such amounts to the Lenders
through the exercise by such Lenders of the legal or equitable
remedies available to them.
3.3 Payment of Debt Service.
(a) Subject to Sections 3.3(c) and (d), on each Capital
Payment Date, the Bontang IV Trustee shall pay the following
amounts in the following order of priority:
(i) First, all amounts of Lenders Fees and Expenses
then due and payable, as specified in all notices received by the
Bontang IV Trustee of the type referred to in Sections 3.2(b)(i)
and (ii), without duplication, shall be paid to the Agent for the
account of the Lenders to the extent of and out of amounts then
held in the Loan Account; provided that all amounts of Lenders Fees
and Expenses then due and payable under Section 10.6(a) or Section
10.6(c) of the Loan Agreement, as specified in all notices received
by the Bontang IV Trustee of the type referred to in Sections
3.2(b)(i) and (ii), without duplication, shall be paid to the Agent
for the account of the Lenders on the earlier of (x) the date of
the first borrowing by the Bontang IV Trustee under the Loan
Agreement and (y) the thirtieth day following the Effective Date
under the Loan Agreement, to the extent of and out of amounts then
held in the Loan Account;
(ii) Second, all amounts of Interest then due and
payable, as specified in all notices received by the Bontang IV
Trustee of the type referred to in Sections 3.2(b)(i) and (ii),
without duplication, shall be paid to the Agent for the account of
the Lenders, to the extent of and out of amounts then held in the
Loan Account;
(iii) Third, subject to Section 3.2(j), all
amounts of Special Payments then due and payable, as specified in
all notices received by the Bontang IV Trustee of the type referred
to in Section 3.2(b)(ii), without duplication, shall be paid to the
Agent for the account of the Lenders to the extent of and out of
amounts then held in the Special Payment Account;
(iv) Fourth, all amounts of Deferred Principal then
due and payable, as specified in all notices received by the
Bontang IV Trustee referred to in Section 3.2(b)(i), without
duplication, shall be paid to the Agent for the account of the
Lenders to the extent of and out of amounts then held in the Loan
Account; and
(v) Fifth, all amounts of Scheduled Principal then
due and payable, as specified in all notices received by the
Bontang IV Trustee of the type referred to in Section 3.2(b)(i),
without duplication, shall be paid to the Agent for the account of
the Lenders to the extent of and out of amounts then held in the
Loan Account.
(b) (i) Subject to Sections 3.3(c) and (d), to the
extent that on any Capital Payment Date the amounts held in any
sub-account of the Debt Service Account are not sufficient to pay
in full all amounts payable under the Loan Agreement, the Notes and
the Letter Agreement on such Capital Payment Date that are to be
paid out of amounts then held in such sub-account, any amounts then
held in the Regular Reserve Account shall be applied to make such
payments in the order of priority set forth in Section 3.3(a).
(ii) Subject to Sections 3.3(c) and (d) and the
foregoing clause (i) of this Section 3.3(b), if on any Capital
Payment Date there shall be an amount in the Debt Coverage Reserve
Account the same shall be applied in its entirety on such Capital
Payment Date as a prepayment of principal of the Notes in the
manner prescribed in the Loan Agreement for the making of prepay-
ments from the Debt Coverage Reserve Account.
(c) (i) The Loan Agreement provides for Mandatory
Prepayments to be made with respect to the Notes of any one or more
of the Lenders in circumstances involving illegality with respect
thereto. Notwithstanding Sections 3.3(a) and (b), but subject to
Section 3.3(d), upon receipt by the Bontang IV Trustee of any
notice pursuant to Section 3.2 (b)(ii) that any Mandatory
Prepayments have become due and payable to one or more Affected
Lenders (a "Notice of Mandatory Prepayment"), the Bontang IV
Trustee, without any action or approval being required of Pertamina
or the Contractors, shall:
(1) Immediately pay to the Agent for the
account of such Affected Lenders, to the extent necessary to
pay the entire amount of the Mandatory Prepayments payable to
such Affected Lenders in full, (x) the Loan Percentage for
such Affected Lenders of all amounts then held in the Debt
Service Account and (y) the Loan Percentage for such Affected
Lenders of all amounts then held in the Regular Reserve
Account and the Debt Coverage Reserve Account; and
(2) Immediately upon deposit of any amounts in
the Mandatory Prepayment Account pursuant to Section 3.2(h),
pay all such amounts to the Agent for the account of such
Affected Lenders, to the extent the amount of such Mandatory
Prepayments shall not have been previously paid.
(ii) All amounts paid to the Agent for the account
of the Affected Lenders pursuant to Section 3.3(c)(i) shall be
applied in the following order of priority:
(1) First, to the payment of all Lenders Fees
and Expenses due and payable at the time of payment to the
Affected Lenders as specified in the applicable Notices of
Mandatory Prepayment;
(2) Second, to the payment of all Interest due
and payable at the time of payment to the Affected Lenders as
specified in the applicable Notices of Mandatory Prepayment;
(3) Third, to the payment of all principal
then due and payable to the Affected Lenders as specified in
the applicable Notices of Mandatory Prepayment; and
(4) Fourth, to the payment of all Special
Payments due and payable at the time of payment to the
Affected Lenders as specified in the applicable Notices of
Mandatory Prepayment.
(d) The Loan Agreement may provide for the acceleration
of the advances outstanding under the Loan Agreement.
Notwithstanding Sections 3.3(a), (b) and (c), upon receipt by the
Bontang IV Trustee of any notice of acceleration (a "Notice of
Acceleration") from the Agent, the Bontang IV Trustee, without any
action or approval being required of the Producers, shall:
(i) Immediately apply all amounts then held in all
sub-accounts of the Debt Service Account and the Reserve Account to
the payment of the following amounts in the following order of
priority, to the extent not previously paid:
(1) First, all amounts of Lenders Fees and
Expenses due and payable at the time of payment, as specified
in the Notice of Acceleration or in any notices received by
the Bontang IV Trustee of the type referred to in Section
3.2(b)(ii), without duplication, shall be paid to the Agent
for the account of the Lenders;
(2) Second, all amounts of Interest due and
payable at the time of payment, as specified in the Notice of
Acceleration or in any notices received by the Bontang IV
Trustee of the type referred to in Section 3.2(b)(ii), without
duplication, shall be paid to the Agent for the account of the
Lenders;
(3) Third, all amounts of principal then due
and payable under the Loan Agreement and the Notes, as
specified in the Notice of Acceleration or in any notices
received by the Bontang IV Trustee of the type referred to in
Sections 3.2(b)(i) and (ii), without duplication, shall be
paid to the Agent for the account of the Lenders; and
(4) Fourth, all amounts of Special Payments
due and payable at the time of payment, as specified in the
Notice of Acceleration or in any notices received by the
Bontang IV Trustee of the type referred to in Section
3.2(b)(ii), without duplication, shall be paid to the Agent
for the account of the Lenders;
(ii) Promptly upon receipt pay over to the Debt
Service Account all amounts of Source of Debt Service received in
the Bontang IV General Account following receipt of the Notice of
Acceleration; and
(iii) Immediately upon deposit of any amounts in
the Debt Service Account pursuant to Section 3.3(d)(ii), make the
payments referred to in Section 3.3(d)(i), to the extent not
previously paid.
(e) The Loan Agreement may provide for the exercise of
choices or taking or refraining from taking any action by the
Bontang IV Trustee as to certain matters, including, but not
limited to, length of Interest Period, acceptance of alternate
interest rates, and optional prepayment of loans. If the exercise
of such a choice or the taking of any other action with respect
thereto is required of or permitted to the Bontang IV Trustee
pursuant to the terms of such Loan Agreement which is not otherwise
specifically provided for in this Article 3, the Bontang IV Trustee
shall take no action with respect thereto except such action as it
has been specifically authorized and directed to take, in writing,
by the Producers.
(f) The Loan Agreement may provide for the delivery of
information and certificates to the Lenders. To the extent the
information to be furnished is produced by the Bontang IV Trustee
in the performance of its duties under this Agreement, the Bontang
IV Trustee shall supply such information and certificates to the
Lenders as and when required, without any action being required on
the part of the Producers. Otherwise, the Bontang IV Trustee, as
between itself and the Producers, shall have no obligation to
provide such information and certificates unless and until such
time as such information and certificates have been provided to the
Bontang IV Trustee by the Producers, which, together with
information produced by the Bontang IV Trustee in the performance
of its duties hereunder, will enable the Bontang IV Trustee to
provide to such Lenders the information and, certificates required
under the Loan Agreement.
(g) In furtherance of the foregoing provisions of this
Section 3.3, the Bontang IV Trustee shall provide to the Producers
a copy of each notice and declaration received by it from the
Lenders under the Loan Agreement promptly after receipt thereof by
the Bontang IV Trustee.
(h) All notices, approvals, instructions, and other
communications to be provided by the Producers to the Bontang IV
Trustee pursuant to this Section 3.3 shall be given or made as
provided in Section 12.3.
(i) The Bontang IV Trustee shall promptly give notice to
the Allocation Trustees (as defined in Section 11.1) of
(1) each payment into the Debt Service Account or
Reserve Account made by the Bontang IV Trustee,
(2) each payment of Debt Service of which the
Bontang IV Trustee has been notified made by a Producer
pursuant to the Producers Agreement,
(3) each transfer to the Bontang IV Payment Account
of excess funds in the Regular Reserve Account pursuant to
Section 4.2,
(4) each distribution of excess funds in the Debt
Service Account and Reserve Account pursuant to Section
3.3(k),
(5) each receipt of amounts from the Disbursement
Trustee to which the Producers are entitled pursuant to
Section 3.5(c); and
(6) the portion of each such payment of Debt
Service, whether made by the Bontang IV Trustee or a Producer,
borne by each Producer.
Solely for the purposes of this Section 3.3(i), the
portion of each such payment of Debt Service "borne by such
Producer" shall be the portion of each such payment under (1) above
(other than payments made from Borrowed Amounts) which is charged
to such Producer's account pursuant to Section 7.2, plus the sum of
any payments under (2) above of which the Bontang IV Trustee has
received notice from such Producer less the portion of each
transfer and distribution of excess funds referred to in (3) and
(4) above, and each amount received referred to in (5) above, which
is credited to such Producer's account pursuant to Section 7.2.
(j) The Bontang IV Trustee shall furnish the Accountants
with such information as they may from time to time request (with
a copy to the Producers), to the extent such information is in the
possession of the Bontang IV Trustee, as to Debt Service and other
matters stated by the Accountants to be necessary to enable them to
perform their functions under the Debt Service Allocation Agreement
in a timely manner.
(k) After the date of payment of the final installment
of principal of and accrued interest on the loans made pursuant to
the Loan Agreement and the payment of all other amounts due
thereunder and under the Notes and the Letter Agreement, at the
time such final installments are paid the Bontang IV Trustee shall
forthwith convert to cash any investments then held in the Debt
Service Account and Reserve Account and promptly give notice to the
Accountants of the amount held in such account after the receipt of
such cash proceeds. Upon receipt of instructions from the
Accountants, which shall state that they are issued pursuant to
provisions of the Debt Service Allocation Agreement relating to
final distribution of the Debt Service Account and Reserve Account,
the Bontang IV Trustee shall distribute the funds then held in the
Debt Service Account and Reserve Account, as specified in such
instructions, and thereafter close the relevant accounts.
3.4 Borrowing Instructions.
(a) Prior to any borrowing under the Loan Agreement,
Pertamina shall give the Bontang IV Trustee written notice of each
entity and individual authorized to give borrowing instructions to
the Bontang IV Trustee with respect to the Loan Agreement. No
other entity or individual shall be authorized to give such
borrowing instructions. Any such entity or individual may be
changed by subsequent written notice from Pertamina to the Bontang
IV Trustee.
(b) Each borrowing instruction shall specify (i) that
the borrowing is to be made under the Loan Agreement, (ii) the date
and amount thereof and (iii) the persons to whom the Loan Proceeds
should be paid, which (x) in the case of amounts still to be ap-
plied to the design, engineering, procurement and construction of
or otherwise relating to Train F shall be a disbursement trust fund
of the type referred to in Section 3.5 hereof, (y) in the case of
reimbursement of costs previously incurred for the design,
engineering, procurement and construction of or otherwise relating
to Train F shall be to such persons as the borrowing instruction
shall specify, and (z) in the case of Borrowed Amounts, shall be as
provided in Sections 3.2(d), (e) and (f).
(c) In the event any borrowing instruction does not
include all of the information required by subsection (b) above,
the Bontang IV Trustee shall promptly so notify the instructing
entity by telex, cable or facsimile transmission (with a copy to
the Producers) and shall not comply with such incomplete
instructions.
(d) The Bontang IV Trustee shall take such action as is
required to effect the specified borrowing under the Loan
Agreement.
3.5 Disbursement Trust; Payment Instructions.
(a) Subject to Sections 3.2(d), (e) and (f) and
3.4(b)(iii)(y), all Loan Proceeds shall be disbursed directly into
a disbursement trust fund pursuant to a Disbursement Trust
Agreement for Train F having the following features:
(i) The disbursement trust fund will be maintained
by Continental Bank International, as Disbursement Trustee.
(ii) The parties to the Disbursement Trust Agreement
shall be the Disbursement Trustee and the Bontang IV Trustee.
(iii) The Bontang IV Trustee shall have the
power to enter into or modify the Disbursement Trust Agreement upon
its receipt of notice from the Producers that they have approved
the form and terms of such agreement or modification and that they
authorize and request the Bontang IV Trustee to enter into such
agreement or modification. Notwithstanding the provisions of
Section 12.3, the representative of a Contractor shall not have
authority to give such approval for any Contract or other than
itself.
(b) (i) Pertamina shall, at the time the Disbursement
Trust Agreement is executed and delivered, give the Bontang IV
Trustee written notice of each entity and individual authorized to
give payment instructions to the Bontang IV Trustee with respect to
the Disbursement Trust Agreement. No other entity or individual
shall be authorized to give such payment instructions. Any such
entity or individual may be changed by subsequent written notice
from Pertamina to the Bontang IV Trustee.
(ii) Each payment instruction shall be transmitted
by telex or facsimile to the Bontang IV Trustee, with a copy by
hand delivery or by telex or facsimile to the Producers, and shall
include the following information:
(1) the Disbursement Trust Agreement under
which the payment is to be made;
(2) the name of the payee and the place and
manner of payment;
(3) the amount of such payment and the
currency to be used; and
(4) a brief description of the purpose of such
payment, together with the relevant invoice number or
designation of other relevant payment documentation.
(iii) In the event any payment instruction does
not include all of the information required by subsection (ii)
above, the Bontang IV Trustee shall promptly so notify the
instructing entity by telex or facsimile transmission (with a copy
to the Producers) and shall not comply with such incomplete
instructions.
(iv) Except in the case of payments to be made as
provided in Section 3.4(b) for costs previously incurred or as
provided in Sections 3.2(d), (e) and (f), the Bontang IV Trustee
shall forward each payment instruction to the Disbursement Trustee.
(c) (i) With respect to the Disbursement Trust
Agreement and the investment income earned from amounts held
thereunder in each calendar year, the Producers shall, on or after
February 15 in each year, cause the Accountants to notify the
Bontang IV Trustee (with a copy to the Producers) of the amount of
such investment income earned during the previous calendar year
(and not disbursed pursuant to payment instructions) and the
portions due each of the Producers. Upon receipt of each such
notice, the Bontang IV Trustee shall promptly send the same to the
Disbursement Trustee, which notices shall include a payment
instruction for the Disbursement Trustee to pay such amount to the
Bontang IV Trustee.
(ii) From time to time, the Producers may notify the
Bontang IV Trustee that all Financed Capital Projects to be paid
for under the Disbursement Trust Agreement have been completed.
Any such notice shall contain the following information:
(1) With respect to Loan Proceeds still held
under the Disbursement Trust Agreement, the portion thereof to
be repaid to the Lenders, the portion thereof to be paid to
the Bontang IV Trustee for the account of the Producers and
the portion thereof to which each of the Producers is
entitled.
(2) With respect to investment income earned
under the Disbursement Trust Agreement and not previously
distributed, the portion thereof to be paid to the Bontang IV
Trustee for the account of the Producers and the portion
thereof to which each of the Producers is entitled.
Upon receipt of such notice, the Bontang IV Trustee shall
send the same to the Disbursement Trustee together with an
instruction to terminate the disbursement trust under, and to make
payment of all amounts then held under, the Disbursement Trust
Agreement in conformity with the notice referred to above in this
clause (ii) and the terms of the Disbursement Trust Agreement.
3.6 Duties of Bontang IV Trustee with Respect to
Instructions. In acting on any borrowing instruction or forwarding
any payment instruction hereunder or any Notice of Borrowing under
the Loan Agreement, the Bontang IV Trustee shall not have any
responsibility for determining whether or not the borrowing being
incurred or the payment being made is being properly incurred or
made in accordance with the provisions of any agreement or any
understandings among the Producers or any other parties, it being
understood that the Bontang IV Trustee's sole responsibility in
such circumstances shall be to take such action with respect to
such instruction as specified in Section 3.4 or Section 3.5(b), as
the case may be.
3.7 Bontang IV Depositaries. The Bontang IV Trustee shall,
upon the authorization and request of the Producers, and in
accordance with the Loan Agreement, appoint or remove any Bontang
IV Depositary as set forth below.
(a) The Bontang IV Trustee may entrust any Bontang IV
Depositary with the exclusive custody and possession of any funds,
properties and rights in the Debt Service Account or the Reserve
Account or both. The Bontang IV Trustee's responsibility with
respect to the funds, properties and rights held by a Bontang IV
Depositary shall be only to maintain and administer the accounting
of the Debt Service Account or the Reserve Account or both. Each
Bontang IV Depositary shall have the exclusive custody and
possession of the funds, properties and rights held by it.
(b) It shall be a condition to the appointment of any
Bontang IV Depositary hereunder that the bank, trust company or
financial institution so appointed shall conform to the definition
of "Bontang IV Depositary" set forth herein and shall agree to hold
the funds, properties and rights held by it in trust on the same
basis, and subject to the same rights and obligations, as are set
forth in this Agreement with respect to the Bontang IV Trustee, and
upon such agreement such rights and obligations shall be enjoyed by
and binding upon such Bontang IV Depositary. The terms of
appointment of any Bontang IV Depositary shall not be inconsistent
with the provisions of this Agreement.
(c) Without the written consent of the Producers and the
Agent on behalf of the Majority Lenders pursuant to the Loan
Agreement, no funds, properties or rights shall be transferred from
the custody and possession of the Bontang IV Trustee to the custody
and possession of the Bontang IV Depositary nor, except in the case
such transfer shall be required for effecting payments necessary
hereunder, shall any such funds, properties or rights be
transferred from a Bontang IV Depositary to the Bontang IV Trustee
without such consent.
ARTICLE 4
ESTABLISHMENT OF BONTANG IV PAYMENT ACCOUNT
4.1 Bontang IV Payment Account. On the Effective Date, a
sub-account of the Bontang IV General Account designated as the
"Bontang IV Payment Account" shall be opened by the Bontang IV
Trustee at the Trustee's Office.
4.2 Funds to be Deposited. Commencing on the date of the
first receipt by the Bontang IV Trustee under Article 2 and
continuing throughout the term of this Agreement the Bontang IV
Trustee shall, promptly after receipt by it of any amount hereunder
(other than Loan Proceeds), deposit in the Bontang IV Payment
Account all amounts in the Bontang IV General Account other than
Source of Debt Service and all amounts of Source of Debt Service in
the Bontang IV General Account not required to be paid over into
the Debt Service Account or the Reserve Account pursuant to the
provisions of Sections 3.2 and 3.3. In addition, in respect of
each Quarterly Period, the Bontang IV Trustee shall, promptly after
the written statement setting forth the Debt Coverage Ratio to be
delivered in such Quarterly Period pursuant to Section 6.1(b) of
the Loan Agreement shall have been delivered to the Lenders,
deposit in the Bontang IV Payment Account the amount, if any, by
which the amount then in the Regular Reserve Account exceeds the
Anticipated Loan Amounts applicable for such Quarterly Period in
accordance with Section 3.2(i)(1).
ARTICLE 5
DISBURSEMENTS WITH RESPECT TO PROCESSING CHARGES
5.1 Submission and Payment. The Producers shall submit to
the Bontang IV Trustee debit notes received from P.T. Badak on
account of LNG processing charges. To the extent that funds are
then held in the Bontang IV Payment Account the Bontang IV Trustee
shall, promptly upon receipt of notice from the Producers that any
such debit note has been approved for payment, pay to P.T. Badak
from the Bontang IV Payment Account the amount of such debit note,
pursuant to procedures to be agreed upon pursuant to Section 5.2.
5.2 Payment Procedures. The Producers shall agree with P.T.
Badak on appropriate procedures for the payment of funds payable to
P.T. Badak pursuant to Section 5.1, and shall advise the Bontang IV
Trustee of such procedures, which shall include a requirement that
P.T. Badak furnish the Bontang IV Trustee with an acknowledgment
that each payment by the Bontang IV Trustee hereunder fully
satisfies the liabilities of the Producers with respect to the
debit note to which the payment relates.
ARTICLE 6
DISBURSEMENTS WITH RESPECT TO OTHER CHARGES
6.1 Submission and Payment. It is contemplated that other
charges with respect to the production, sale or delivery of LNG
sold under the LNG Sales Contract will from time to time be payable
from the Bontang IV Payment Account. Any Producer may submit to
the Bontang IV Trustee payment orders or instructions, or invoices
or other statements, received by it with respect to such charges.
To the extent that funds are then held in the Bontang IV Payment
Account, the Bontang IV Trustee shall, promptly upon receipt of
notice from the Producers that any such payment order, instruction,
invoice or statement has been approved for payment, pay to the
person entitled thereto from the Bontang IV Payment Account the
amount thereof, pursuant to procedures to be agreed upon pursuant
to Section 6.2.
6.2 Payment Procedures. The Producers shall agree with the
person submitting any invoice or statement payable pursuant to
Section 6.1 on appropriate procedures for the payment thereof, and
shall advise the Bontang IV Trustee of such procedures, which shall
include a requirement that the person receiving payment furnish the
Bontang IV Trustee with an acknowledgment that each payment by the
Bontang IV Trustee hereunder fully satisfies the liabilities of the
Producers with respect to the invoice or statement to which the
payment relates.
ARTICLE 7
DISBURSEMENTS WITH RESPECT TO SHARING PERCENTAGES
7.1 Approved Level of Working Capital; Sharing Percentages.
For the purposes of this Agreement the "Approved Level of Working
Capital" shall be that amount, if any, specified to the Bontang IV
Trustee in a notice from the Producers, and the respective "Sharing
Percentages" of each Producer shall be the percentages set forth in
the most recent certificates furnished to the Bontang IV Trustee
pursuant to Section 7.3.
7.2 Charging of Amounts Payable; Payment of Excess. The
respective Sharing Percentages of each Producer of all amounts
required to be paid into the Debt Service Account and the Reserve
Account under Sections 3.2 and 3.3, and of all amounts required to
be paid under Articles 5 and 6 and Sections 7.5 and 10.2, shall be
charged to each such Producer's Bontang IV Trust Fund Account. The
(i) respective Sharing Percentages of each Producer of any excess
funds transferred from the Regular Reserve Account pursuant to
Section 4.2, (ii) amount of any excess funds distributed to each
Producer from the Debt Service Account and Reserve Account pursuant
to Section 3.3(k), and (iii) portion due each Producer from any
amounts received by the Bontang IV Trustee from the Disbursement
Trustee pursuant to Section 3.5(c), shall be credited to each such
Producer's Bontang IV Trust Fund Account. Whenever and to the
extent that the amount held in the Bontang IV Payment Account at
the end of any business day of the Bontang IV Trustee in the City
of New York is in excess of the Approved Level of Working Capital,
after having deducted all amounts then required to be paid into the
Debt Service Account and the Reserve Account under Sections 3.2 and
3.3, and all amounts then payable by the Bontang IV Trustee under
Articles 5 and 6 and Sections 7.5 and 10.2, then, except as
otherwise provided in Section 7.3 or Article 11, such excess shall
be immediately paid out to the Producers in accordance with their
respective Sharing Percentages, as specified in the most recent
certificate for the current year furnished pursuant to Section 7.3.
7.3 Accountants. The Producers shall mutually appoint a firm
of independent public accountants to act as the accountants
hereunder (the "Accountants") and shall promptly advise the Bontang
IV Trustee of such appointment.
The Accountants shall be directed to furnish to the Bontang IV
Trustee (with a copy to the Producers) a certificate on or before
the 15th day of December in each calendar year (initially for 1991
on or before the date hereof) setting forth the respective Sharing
Percentages of each Producer for the following calendar year (for
1991 in the case of the first such certificates).
The Sharing Percentages shall be calculated as provided in the
respective Supply Agreements and the respective Production Sharing
Contracts, based upon actual or estimated production and costs as
required thereby.
The Accountants shall also be directed to furnish to the
Bontang IV Trustee (with a copy to the Producers) on or before the
15th day of March, June and September in each calendar year a
revision of the certificate furnished for such year setting forth
the respective Sharing Percentages of each Producer based upon
revised estimates of production and costs for such year.
In addition, the Accountants shall be directed to furnish to
the Bontang IV Trustee (with a copy to the Producers) on or before
the 15th day of February in each calendar year, commencing February
15, 1992, a final version of the certificate for the previous year
setting forth the respective Sharing Percentages of each Producer
based upon actual production and costs for the previous year.
Every revised and final certificate shall specify the amount,
if any, by which the aggregate amount paid by the Bontang IV
Trustee to each Producer pursuant to the initial certificate and
any earlier revisions thereof under this Article 7 was greater or
less than the amount that would have been paid to each on the basis
of the Sharing Percentages which are certified therein and shall
specify the amount that will be required to be paid to any
underpaid Producer, in order to bring the total amount paid to it
into equitable relation to the amount paid to any overpaid
Producers so that the payments, as adjusted, would be in accordance
with such Sharing Percentages. In the event that any such
certificate indicates that any of the Producers has been underpaid,
the Bontang IV Trustee, after receipt of the certificate, shall pay
to any such Producers pro rata in proportion to the amount by which
each such Producer was underpaid, all amounts otherwise payable
under this Article 7 to the Producers which have been overpaid
until each such underpaid Producer shall have received the entire
amount stated in the certificate as required to be paid to such
underpaid Producer. After each such Producer has received the
entire amount it is entitled to receive as aforesaid, the Bontang
IV Trustee shall make all future payments to the Producers out of
the funds remitted in respect of the LNG Sales Contract in
accordance with the Sharing Percentages specified in the most
recent certificate relating thereto furnished to Bontang IV Trustee
pursuant to this Section 7.3.
7.4 Arrangements for Payment. Each Producer shall make such
reasonable arrangements with the Bontang IV Trustee as it shall
deem appropriate for the payment to it of amounts payable to it
under the terms of this Article 7. Except as otherwise provided in
Section 7.5, each Contractor shall make its own arrangements with
respect to such payments directly with the Bontang IV Trustee and,
notwithstanding the provisions of Section 12.3, the representative
of any Contractor Group shall have no authority to act for any
Contractor other than itself in making such arrangements.
7.5 Special Disbursement Instructions. The Producers
acknowledge that from time to time it may be necessary for amounts
which would otherwise be paid to Producers pursuant to Section 7.2
to be paid instead to (a) persons who have submitted invoices or
other statements for charges with respect to the production, sale
or delivery of LNG or LPG from the Bontang Plant under sales
contracts other than the LNG Sales Contract, (b) the trustee under
any trust established to pay charges of the type described in (a)
above, (c) the trustee under any of the Other Trust Agreements or
(d) Mobil, in order to satisfy certain obligations of the Producers
having interests in the Bontang IV Payment Account. Accordingly,
notwithstanding the payment arrangements made with the Bontang IV
Trustee pursuant to Section 7.4, each Contractor hereby authorizes
the representative of any of the Contractor Groups of which it is
a member, as designated in or pursuant to Section 12.3, to give to
the Bontang IV Trustee from time to time on its behalf such Special
Disbursement Instructions as such representative may deem necessary
or appropriate to authorize such payments. Each representative
shall give copies of any such Special Disbursement Instruction to
the members of its Contractor Group contemporaneously with the
transmission thereof to the Bontang IV Trustee, by the same means
of transmission. As used herein, a "Special Disbursement Instruc-
tion" means an instruction so entitled which (i) is given by the
Producers as provided in Section 12.3, (ii) instructs the Bontang
IV Trustee to pay to persons described in clauses (a), (b), (c) or
(d) above any amount which would otherwise be paid to Producers
pursuant to Section 7.2, and (iii) specifies the funds from which
such payment is to be made. Any Special Disbursement Instruction
requiring payment to another trustee shall also specify the account
or accounts to which such funds are to be credited and direct the
Bontang IV Trustee to notify such trustee that such payment is a
Special Disbursement Amount for the account or accounts so
specified. The inclusion of this Section 7.5 shall have no effect
on the authority of the Bontang IV Trustee to act and rely upon any
other special disbursement or transfer instruction which does not
comply with this Section 7.5 so long as such instruction is given
in an instrument executed by all of the Producers.
7.6 Payment Procedures. The Producers shall agree with the
persons specified in Section 7.5(a) on appropriate procedures for
the payment of the relevant invoices or statements, and shall
advise the Bontang IV Trustee of such procedures which shall
include a requirement that the person receiving payment furnish the
Bontang IV Trustee with an acknowledgement that each payment by the
Bontang IV Trustee hereunder fully satisfies the liabilities of the
person to whom such invoice or statement is addressed with respect
thereto.
7.7 Receipt of Special Disbursements. The Bontang IV Trustee
may from time to time receive Special Disbursement Amounts from the
trustee under any of the Other Trust Agreements. Immediately upon
the Bontang IV Trustee's receipt of any funds identified as a
Special Disbursement Amount, such funds shall be impressed with the
trust created hereby and become a part of the Bontang IV Trust
Funds. Any such amounts received by the Bontang IV Trustee shall
be deposited in the account hereunder specified by the remitting
trustee.
ARTICLE 8
PROCEDURES RESPECTING ACCOUNTS UNDER THIS AGREEMENT
8.1 Accounting for Assets. All assets under the jurisdiction
and control of the Bontang IV Trustee and held from time to time in
the Bontang IV Trust Funds shall be accounted for within the
Bontang IV General Account specifying the sub-account to which such
assets may be allocated, the bank or banks at which cash deposits
may be maintained and the place or places at which investment
securities may be held in custody for the account of the Bontang IV
Trustee. The Bontang IV Trustee shall maintain such books of
account and other records as may be necessary to ensure full and
proper segregation of the funds credited to such accounts as may be
established by the Bontang IV Trustee hereunder. It shall also
segregate, and keep such accounts separate, from any accounts which
may be established by it as trustee and paying agent under the
Other Trust Agreements. Such books of account shall be open to
inspection by the duly authorized representatives of any of the
Producers at all reasonable times.
8.2 Reports. The Bontang IV Trustee shall furnish to each of
the Producers the following reports:
(a) As soon as practicable (and not later than 45 days)
after the close of each calendar year, a statement prepared by the
Bontang IV Trustee, setting forth the amount and source (by
category) of funds received pursuant to this Agreement and the dis-
bursement of such funds as disclosed by the records and accounts
kept by the Bontang IV Trustee pursuant to Section 8.1 during such
preceding calendar year, and a statement of the cash and
investments held in the accounts under this Agreement as of the end
of such period.
(b) Within 20 days after the close of each calendar
quarter, a statement prepared by the Bontang IV Trustee setting
forth the amount and source (by category) of funds received
pursuant to this Agreement and the disbursements of such funds as
disclosed by the records and accounts kept by the Bontang IV
Trustee pursuant to Section 8.1 during such preceding calendar
quarter and a statement of the cash and investments held in the
accounts under this Agreement as of the end of such period.
(c) Promptly after its receipt or disbursement of any
funds pursuant to this Agreement, the Bontang IV Trustee shall
notify the Producers by telex or facsimile transmission of such
transactions specifying the amount and the source (by category) of
the funds received and disbursed and the amounts credited or
charged to the Bontang IV General Account or any sub-account
thereof.
Notwithstanding the provisions of Section 12.3 respecting the
representatives of the Contractor Groups, each of the reports
required by clauses (a) and (b) of this Section 8.2 shall be
furnished by the Bontang IV Trustee directly to each Contractor at
its address specified pursuant to Section 12.3.
8.3 Producer Accounts. The Bontang IV Trustee shall maintain
separate accounts for each Producer which are sufficient to reflect
each such Producer's interest in the assets, liabilities, receipts
and disbursements of the Bontang IV Trust Funds, and its right to
distributions therefrom (the "Bontang IV Trust Funds Accounts").
It is the intention of each Producer that the trust created hereby
be a security trust of the type described in Treas. Reg. 1.61-13(b)
and I.T. 1942, III-1 C.B. 11 (1924). Accordingly, each Producer
agrees for U.S. income tax purposes to account for its share of the
receipts and disbursements made pursuant to this Agreement as if it
had received such amounts directly and made such disbursements
directly, and the Bontang IV Trustee agrees for United States
income tax purposes, unless advised by the U.S. Internal Revenue
Service to the contrary, to treat such receipts and disbursements
in a manner consistent with its status as the agent for each such
party, or if so advised by the Bontang IV Trustee's counsel, as the
trustee of a separate grantor trust for each such party within the
meaning of Section 671 of the U.S. Internal Revenue Code of 1986,
as amended, and the regulations thereunder.
ARTICLE 9
INVESTMENT OF FUNDS HELD IN ACCOUNTS UNDER THIS AGREEMENT
9.1 Permitted Investments. The Bontang IV Trustee shall
invest amounts held by it from time to time in the Bontang IV
Payment Account, the Debt Service Account and the Reserve Account
solely in:
(i) Eurodollar bank time deposits or Eurodollar
certificates of deposit with banks or both whose deposits are rated
"P-l" by Moody's Bank Credit Report Service and "A-l+" by Standard
and Poor's Corporation CD Ranking Service; or
(ii) such other types of short-term interest-bearing
bank time deposits and certificates of deposit (x) as to which
there is applicable a sovereign guarantee of repayment of principal
or other evidence of sovereign support in respect of such repayment
as approved by the Producers and, with respect to amounts, if any,
held in the Debt Service Account or the Reserve Account or any
sub-account thereof for the Lenders under the Loan Agreement,
approved by the Majority Lenders; and (y) issued by banks having at
least $100,000,000.00 (or its equivalent) of capital and earned
surplus (or equivalent accounts) as reflected in the then current
financial statements of the issuing banks; or
(iii) if, due to the relatively small amount of
funds to be invested, the unconventional period during which such
funds are to be invested or similar factors, investments of the
type authorized by clauses (i) and (ii) above are not generally
available for such funds, the Bontang IV Trustee may invest such
funds in short-term Eurodollar time deposits, Eurodollar
certificates of deposit or Eurodollar repurchase agreements, or any
combination of the foregoing, in each case with any bank or banks
each having at least $100,000,000.00 (or its equivalent) of capital
and earned surplus (or equivalent accounts) as reflected in the
then current financial statements of such bank or banks; provided,
however, that the aggregate principal amount of such funds so
invested shall not exceed $1,000,000.00 at any one time.
In no event shall the aggregate amount invested by the Bontang
IV Trustee pursuant to the foregoing provisions in time deposits or
certificates of deposit with, or issued by, respectively, any one
bank exceed 10% of such bank's capital and earned surplus (or
equivalent accounts) as reflected in the bank's then current
financial statements. For purposes of investments pursuant to
clause (ii) above, the Bontang IV Trustee shall request the
approval of the Producers in accordance with Section 12.5 and, as
applicable, the Majority Lenders by giving notice, which request
shall specify the type of investment proposed and the nature of any
sovereign guarantee or support applicable thereto. The Bontang IV
Trustee shall use its best efforts to assure that the final
maturity of any such investment does not extend beyond the time
when the amounts used to acquire such investments would be required
for any other application hereunder.
9.2 Prudence and Yield. In making any investments pursuant
to Section 9.1 the Bontang IV Trustee shall be guided by the
standards of a prudent investor seeking the maximum yield available
consistent with security of principal at all times.
9.3 Interest Allocation. Interest or any other income
arising out of investment of the Bontang IV Trust Funds shall be
and become a part of the Bontang IV Trust Funds, allocated to the
account for which such investment was made. Interest or any other
income arising out of investment of funds in a sub-account of the
Debt Service Account or the Reserve Account shall be allocated to
the sub-account for which such investment was made.
ARTICLE 10
CONCERNING THE BONTANG IV TRUSTEE
10.1 Duties. In connection with its duties, rights and powers
under this Agreement (including in relation to transactions it may
enter into pursuant hereto), the Bontang IV Trustee shall be
subject to the following:
(a) The Bontang IV Trustee shall be entitled to act upon
any notice, certificate, request, direction, waiver, receipt or
other document which it in good faith believes to be genuine; and
it shall be entitled to rely upon the due execution, validity and
effectiveness, and the truth and acceptability of any provisions
contained therein.
(b) The Bontang IV Trustee shall not be liable for any
error of judgment or for any act done or omitted by it in good
faith or for any mistake of fact or law, or for anything which it
may do or refrain from doing, except for its own gross negligence
or willful misconduct.
(c) The Bontang IV Trustee may consult with, and obtain
advice from, accounting and legal advisers and it shall incur no
liability or loss and shall be fully protected in acting in good
faith in accordance with the opinion and advice of such advisers.
(d) The Bontang IV Trustee shall have no duties other
than those specifically set forth or provided for in this
Agreement. The Bontang IV Trustee shall have no obligation to
familiarize itself with and shall have no responsibility with
respect to any agreement to which it is not a party relating to the
transactions contemplated by this Agreement nor any obligation to
inquire whether any notice, instruction, statement or calculation
is in conformity with the terms of any such agreement, except for
those irregularities, errors or mistakes apparent on the face of
such document or to the knowledge of the Bontang IV Trustee. If,
however, any remittance or communication received by the Bontang IV
Trustee appears erroneous or irregular on its face, the Bontang IV
Trustee shall be under a duty to make prompt inquiry to the person
or party originating such remittance or communication in order to
determine whether clerical error or inadvertent mistake has
occurred.
10.2 Compensation. The Bontang IV Trustee shall be entitled
to reasonable compensation to be agreed upon from time to time
among the parties for the services to be performed by it hereunder
and to be reimbursed for all reasonable out-of-pocket expenses
incurred by the Bontang IV Trustee in connection therewith. The
Bontang IV Trustee may charge such agreed compensation and expenses
to the Bontang IV Payment Account, providing the Producers with
such evidence as to the nature and amount of such expenses as any
of the Producers may reasonably require. If the balance in the
Bontang IV Payment Account is insufficient therefor, each Producer
shall pay such compensation and expenses to the Bontang IV Trustee,
provided, however, that the obligation of each respective
Contractor with respect to this Section 10.2 shall be pro rata in
accordance with its respective Sharing Percentage.
10.3 Resignation. The Bontang IV Trustee may, at any time, by
notice to the Producers and the Agent tender its resignation as
Trustee and Paying Agent under this Agreement. The Producers may,
at any time by notice jointly given by them, terminate the Bontang
IV Trustee's appointment hereunder. Such resignation or
termination shall be effective as from the appointment of a
successor as hereinafter provided.
10.4 Appointment of Successor. Within 60 days of receipt of
a notice of resignation or issuance of a notice of termination, the
Producers shall jointly appoint a successor, being a bank in the
United States acceptable to the Producers. The proposed successor
bank (the "Successor") shall promptly give notice of its ap-
pointment to the Bontang IV Trustee and shall execute and deliver
to each of the parties hereto an instrument in writing accepting
its appointment hereunder which shall specify the office of the
Successor in the United States which is to be the Trustee's Office
for the purpose of this Agreement.
10.5 Application to Court. If in any case a Successor shall
not be appointed pursuant to the foregoing provisions of this
Article 10 within the 60 days aforesaid, the Bontang IV Trustee may
apply to any court of competent jurisdiction to appoint a
Successor, notwithstanding the provisions of Section 12.2. Such
court may thereupon, in any case, after such notice, if any, as
such court may deem proper and prescribe, appoint a Successor.
10.6 Successor Vested with Rights. Upon and from the
execution and delivery of its acceptance in writing as aforesaid,
the Successor without any further act or deed shall become fully
vested with all the rights, powers and duties and subject to all
the obligations of the Bontang IV Trustee hereunder, but the
Bontang IV Trustee, upon payment of all sums due it and on the
written request of the Producers shall execute and deliver an
instrument transferring to the Successor the Bontang IV Trust
Funds, including all funds held in the Bontang IV Payment Account,
the Debt Service Account and the Reserve Account and assigning to
the Successor all its rights hereunder and under any Bontang IV
Disbursement Trust Agreements and all of its rights with respect to
any Bontang IV Depositary.
10.7 Payments After Notice. Upon and from the date of
notification from any Successor, any person required to pay amounts
to the Bontang IV Trustee under this Agreement shall pay the
Successor at its office specified as aforesaid all amounts
described herein as payable to the Bontang IV Trustee.
10.8 Indemnification. The Producers hereby agree to indemnify
the Bontang IV Trustee for, and to hold it harmless against any
loss, liability, claim, judgment, settlement, compromise or
reasonable expense incurred or suffered without gross negligence or
willful misconduct on the part of the Bontang IV Trustee, arising
out of or in connection with its entering into this Agreement and
carrying out its duties or exercising its rights hereunder,
including the cost and expenses of defending itself against any
claim of liability in the premises.
10.9 Trustee in Individual Capacity. Each of the parties
hereto acknowledges and consents that the Bontang IV Trustee, in
its individual capacity, or any affiliate thereof shall have the
same rights, powers and authority to enter into any deposit
agreement, loan agreement or any other banking or business
relationship permitted by law with any of the Producers, the
Lenders or the Agent (without having to account therefor to any of
the Producers) as though it were not the Trustee and Paying Agent
under this Agreement.
ARTICLE 11
DEBT SERVICE ALLOCATION
11.1 Debt Service Allocation Definitions. In addition to and
in amendment of the terms defined elsewhere in this Agreement, the
following terms shall, solely for purposes of this Article 11, have
the meanings set forth below:
"Aggregate Dollar Share" shall have the meaning set forth in
Section 11.3.
"Allocation Trust Agreements" shall mean this Agreement, the
Bontang III Trust Agreement, the Bontang II Trust Agreement, the
Bontang Excess Sales Trust Agreement and the Bontang LPG Trust
Agreement.
"Allocation Trustees" shall mean all of the trustees under the
Allocation Trust Agreements, collectively, and "Allocation
Trustee" shall mean one of such Allocation Trustees as the context
may require.
"Bontang LPG Trust Agreement" shall mean the Bontang LPG
Trustee and Paying Agent Agreement, dated as of August 1, 1988,
among the Producers and Continental Bank International, as
hereafter amended.
"Bontang LPG Trustee" shall mean the trustee and paying agent
under the Bontang LPG Trust Agreement.
"Borrowing Trustees" shall mean those Trustees which are a
party to any of the Financing Agreements and "Borrowing Trustee"
shall mean one of such Borrowing Trustees as the context may
require.
"Contingent Support" shall have the meaning set forth in
Article 1 of the Bontang III Trust Agreement.
"Contingent Support Trustees" shall mean all of the trustee
and paying agents under the Bontang Excess Sales Trust Agreement
and any Special Long Term Sales Trust Agreements of which the
Bontang IV Trustee has been notified by Pertamina, collectively,
and "Contingent Support Trustee" shall mean one of such Contingent
Support Trustees as the context may require.
"Debt Service" shall mean (i) amounts paid into any Debt
Service Account by a Borrowing Trustee (other than amounts so paid
from the proceeds of any borrowing under a Financing Agreement or
by the Bontang III Trustee from Contingent Support), (ii) amounts
which any Borrowing Trustee has been notified as having been paid
by one or more Producers and identified to such Borrowing Trustee
as "Debt Service" under the Debt Service Allocation Agreement with
respect to indebtedness of such Borrowing Trustee, (iii) Contingent
Support paid by any Contingent Support Trustee to the Bontang III
Trustee and (iv) trustee's fees and expenses of the Bontang I
Trustee incurred in connection with Financing Agreement No. 1 or
Financing Agreement No. 2 which are charged to the Badak Current
Account under the Bontang I Trust Agreement.
"Debt Service Accounts" shall mean all accounts, including any
sub-accounts thereof, which a Borrowing Trustee opens and into
which it transfers LNG revenues or other funds in anticipation of
payments of, or as a reserve for possible payments of, principal,
interest and other fees and expenses pursuant to any of the
Financing Agreements and "Debt Service Account" shall mean one of
such Debt Service Accounts as the context may require.
"Estimated Debt Service Percentages" shall have the meaning
set forth in Section 11.2.
"Financing Agreement No. 1" shall mean Bontang Capital
Projects Loan Agreement No. 1 dated as of September 10, 1986, as
heretofore and hereafter amended, entered into by the Bontang I
Trustee.
"Financing Agreement No. 2" shall mean Bontang Capital
Projects Loan Agreement No. 2 dated as of June 9, 1987, as
heretofore and hereafter amended, entered into by the Bontang I
Trustee.
"Financing Agreement No. 3" shall mean Bontang III Loan
Agreement dated as of February 9, 1988, as hereafter amended,
entered into by the Bontang III Trustee.
"Financing Agreement No. 4" shall mean Bontang IV Loan
Agreement dated as of the date hereof, as hereafter amended,
entered into by the Bontang IV Trustee.
"Financing Agreements" shall mean Financing Agreement No. 1,
Financing Agreement No. 2, Financing Agreement No. 3, Financing
Agreement No. 4 and any other agreement designated as a "Financing
Agreement" in a notice to the Bontang IV Trustee from the
Producers.
"Producers Agreement" shall mean any agreement so entitled
among the Producers, or any of them, and lenders under a Financing
Agreement, as heretofore and hereafter amended.
"Provisional Debt Service" shall mean, with respect to any
Debt Service, payments by any Allocation Trustee to reimburse
Producers which have borne more than their respective Estimated
Debt Service Percentages of such Debt Service, together with
interest on the Reimbursement Amount from and including the date of
such Debt Service payment to, but not including, the date of such
reimbursement, at the rate equal to the weighted average of the
interest rates in effect under Financing Agreement No. 3 on the
date of such reimbursement.
"Reimbursement Amount" shall mean the amount of any
Provisional Debt Service payment other than the portion thereof
attributable to interest on said reimbursement amount.
"Special Long Term Sales Trust Agreements" shall have the
meaning set forth in Article 1 of the Bontang III Trust Agreement.
"Trust Agreements" shall mean, collectively, this Agreement
and all Other Trust Agreements, and "Trust Agreement" shall mean
one of such Trustee Agreements as the context may require.
"Trustees" shall mean the trustee and paying agents under the
Trust Agreements, and "Trustee" shall mean one of such Trustees as
the context may require.
11.2 Estimated Debt Service Percentages. The Debt Service
Allocation Agreement requires that the Accountants calculate, and
deliver to the Allocation Trustees from time to time certificates
setting forth, the Estimated Debt Service Percentages for each
Producer of the estimated amounts of each type of Debt Service to
be paid by the Borrowing Trustees and the Contingent Support
Trustees (the percentages last so certified as to each period for
each Producer being its "Estimated Debt Service Percentages").
Each Trust Agreement to which a Borrowing Trustee is a party
provides that such Borrowing Trustee shall promptly give notice to
the Allocation Trustees of (i) each payment into a Debt Service
Account made by such Borrowing Trustee specifying any amounts so
paid from the proceeds of any borrowing under a Financing Agreement
and, in the case of the Bontang III Trustee, from Contingent
Support, (ii) each transfer, payment or distribution from a Debt
Service Account, or any disbursement trust pursuant to a Financing
Agreement, of funds in excess of the amount required to be held
therein from time to time, (iii) each payment of Debt Service of
which such Borrowing Trustee has been notified made by a Producer
pursuant to a Producers Agreement, and (iv) the portion of each
such payment of Debt Service, whether made by such Borrowing
Trustee or a Producer, borne by each Producer, after taking into
account such Producer's interest in any excess funds transferred,
paid or distributed from any Debt Service Account, or any
disbursement trust pursuant to a Financing Agreement, to or for the
account of any Producers. Each Trust Agreement to which a
Contingent Support Trustee is a party provides for similar notices.
In the event that such notices received by the Bontang IV
Trustee, together with the notices referred to in the last sentence
of this paragraph and all similar notices received from the other
Allocation Trustees, considered in the aggregate, show at any time
that any Producers have borne more than their Estimated Debt
Service Percentages of Debt Service ("underpaid Producers"), the
Bontang IV Trustee shall thereafter make Provisional Debt Service
payments to the underpaid Producers, pro rata in proportion to the
excess amount borne by each such Producer, out of all amounts
otherwise payable under Article 7 to the Producers which have borne
less than their Estimated Debt Service Percentages of such Debt
Service until the Reimbursement Amount of the aggregate Provisional
Debt Service payments received by each of the underpaid Producers
from the Allocation Trustees equals the excess amount of Debt
Service borne by such Producer. The Bontang IV Trustee shall
promptly advise each other Allocation Trustee of each such
Provisional Debt Service payment made by it.
11.3 Aggregate Dollar Share. The Debt Service Allocation
Agreement also requires that the Accountants calculate, and deliver
to the Allocation Trustees from time to time certificates setting
forth, the portion of Debt Service each Producer should have borne
of the Debt Service paid by the Borrowing Trustees and the
Contingent Support Trustees (the amount last so certified as to
each period for each Producer being its "Aggregate Dollar Share")
and the portion thereof which has actually been borne by each
Producer. In the event that any such calculations indicate that
any Producers have borne more than their Aggregate Dollar Shares of
Debt Service during the period in question ("underpaid Producers"),
the Accountants are required to instruct the Bontang IV Trustee to
pay to the underpaid Producers, pro rata in proportion to the
excess amount borne by each such Producer, all amounts otherwise
payable under Article 7 to the Producers which have borne less than
their Aggregate Dollar Shares for the period in question until the
aggregate amount received by each of the underpaid Producers from
the Allocation Trustees (as shown by the notices referred to in the
last sentence of this paragraph and all similar notices received
from the other Allocation Trustees) equals the amount stated in
such instructions to be the excess amount borne by such Producer.
The Bontang IV Trustee shall promptly advise each other Allocation
Trustee of each such payment pursuant to this Section 11.3.
Upon receipt of any such instructions the Bontang IV Trustee
shall give effect thereto commencing with the next payments to
Producers pursuant to Article 7.
11.4 Pro Rata Treatment. In the event that the funds
available for making the payments required by Sections 11.2 and
11.3 shall not be sufficient to make the payments therein required
in full, such funds shall be paid to the Producers entitled to
payments pursuant to such Sections pro rata in proportion to the
amounts payable to each such Producer thereunder.
11.5 Income From the Disbursement Trust. In order to
implement the provisions of Section 2.4 of the Debt Service
Allocation Agreement, upon receipt of instructions from the
Accountants, which shall state that they are issued pursuant to
said Section, and receipt from the Disbursement Trustee of the
funds specified in such instructions, the Bontang IV Trustee shall
distribute the funds so received as specified in such instructions.
ARTICLE 12
MISCELLANEOUS
12.1 Counterparts; Term. This Agreement may be executed in
any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts together shall
constitute one and the same instrument. Complete sets of
counterparts shall be lodged with the Bontang IV Trustee. This
Agreement shall be effective as of the date hereof, and shall
remain in effect until the Producers shall have notified the
Bontang IV Trustee that this Agreement shall terminate.
12.2 Disputes. All disputes arising among the parties
relating to this Agreement or the interpretation or performance
thereof, shall be finally settled by arbitration conducted in the
English language in Paris, France, by three arbitrators under the
rules of arbitration of the International Chamber of Commerce.
Judgment upon the award rendered may be entered in any court having
jurisdiction, or application be made to such court for a judicial
acceptance of the award and an order of enforcement as the case may
be. Any award made under this Section 12.2 shall be binding upon
all parties concerned.
12.3 Notices. All notices, approvals, instructions, and other
communications for purposes of this Agreement shall be in writing,
which shall include transmission by cable, telex, or facsimile
transmission. All communications given by mail, cable, telex, or
facsimile transmissions shall be directed as set forth below,
provided that in the event any communication is received by the
Bontang IV Trustee from a cable, telex or facsimile number other
than those set forth below, its responses thereto may be directed
to the number from which such communication was received.
(a) To Pertamina at the following mail, cable,
telex and facsimile addresses, in each case to the attention of the
Director of Finance:
Perusahaan Partambangan Minyak dan Gas Bumi Negara
(Pertamina)
Jalan Medan Mardeka Timur 1A
Jakarta, Indonesia
Cable: Pertamina Jakarta, Indonesia via RCA
Telex No.: 44441/44134
(Answerback): PTMJKT 1A)
Facsimile No.: 62-21 343 882
(b) To the Contractors comprising the Vico Group at
the following mail, telex and facsimile addresses:
Virginia Indonesia Company
6-llth Floor
Kuningan Plaza-South Tower
Jalan H.R. Rasuna Said
Kav. C 11-14
Jakarta Selatan, Indonesia
Telex No. 79644421/7964457
(Answerback: VICO IA)
Facsimile No.: 62-21 380 0037
(c) To the Contractors comprising the Total Group
at the following mail, cable, telex and facsimile addresses:
Total Indonesie
P.O. Box 1010
Jakarta 10010
Indonesia
Cable: Totalindo Jakarta
Telex No.: 44108
(Answerback: TOTAL JKT)
Facsimile No.: 62-21 520 0834
(d) To the Contractors comprising the Unocal Group
at the following mail, telex and facsimile addresses:
Unocal Indonesia, Ltd.
Ratu Plaza Office Tower, 7th Floor
Jalan Jenderal Sudirman
Jakarta, Indonesia
Telex No.: 47335
(Answerback: UNOCAL IA)
Facsimile No.: 62-21 720 4499
(e) To the Bontang IV Trustee or the trustee under
any Other Trust Agreement at the following mail, telex and
facsimile addresses, in each case to the attention of the LNG/LPG
Division:
Continental Bank International
520 Madison Avenue
New York, New York 10022
Telex No.: RCA 232304/ITT 420177
(Answerback: CBI UR/CBI UI)
Facsimile No.: 1-212 605 1014/319 0676
(f) To Mobil at the following mail, cable, telex
and facsimile addresses:
Mobil Oil Indonesia Inc.
P.O. Box 400
Jakarta, Indonesia
Cable: Mobiloil Jakarta
Telex No.: 47431
(Answerback: MOI JKT)
Facsimile No.: 62-21 715 295
Each of Vico, Total and Unocal is hereby designated the sole
representative of the Contractors comprising its respective
Contractor Group for the giving and receipt of notices, approvals,
instructions and other communications to or from the Contractors
under this Agreement and, to the extent Contractors are entitled to
give or receive notices, approvals or instructions thereunder, the
Other Trust Agreements. For purposes of the foregoing, unless
specifically provided otherwise, each reference in this Agreement
to the Producers or the Contractors, shall insofar as the
Contractors are concerned, require notices, approvals and other
communications to and from such representatives. A new or
successor representative may be designated by notice to such effect
signed by all the Contractors comprising a Contractor Group given
to the parties to this Agreement 10 days in advance of any such
change. Until receipt of any such notice, the parties to this
Agreement and the Other Trust Agreements may rely on any notice,
approval, instruction or other communication from or to the
representative of a Contractor Group as binding upon each of the
Contractors in such Contractor Group; provided that except as
otherwise provided in Section 7.5, nothing in this Agreement is
intended to grant the representative of a Contractor Group (or any
successor representative designated pursuant to this Section 12.3)
any power or authority as among the Contractors in such Contractor
Group themselves.
The parties may designate additional addresses for particular
communications as required from time to time, and may change any
address, by notice given ten days in advance of such additions or
changes. Immediately upon receiving communications by cable, telex
or facsimile transmission, a party may request a repeat transmittal
of the entire communication or confirmation of particular matters.
Any notice to or from the Agent under the Loan Agreement shall
be given in accordance with this Section 12.3, addressed, if to the
Agent at the address set forth in the Loan Agreement.
12.4 Incumbency Certificates; Notices.
(a) Pertamina and each representative of a Contractor
Group (or any successor representative of a Contractor Group
designated pursuant to Section 12.3) shall each furnish the Bontang
IV Trustee, from time to time, with duly executed incumbency
certificates showing the names, titles and specimen signatures of
the persons authorized on behalf of such party to give the
notifications and approvals required by this Agreement.
(b) The Producers shall arrange for the Accountants to
provide the Bontang IV Trustee from time to time with a
notification signed by two of its partners, advising the Bontang IV
Trustee of the name and title, and furnishing a specimen signature,
of the person or persons authorized to execute the certificates and
other documents required by this Agreement.
(c) The Producers shall arrange for Mobil to furnish the
Bontang IV Trustee, from time to time, with duly executed
incumbency certificates showing the names, titles and specimen
signatures of the persons authorized on behalf of Mobil to give the
notification and approvals required by this Agreement.
(d) Each of the Contractors shall furnish the Bontang IV
Trustee, from time to time, with such certificates or other
evidence as the Bontang IV Trustee may reasonably require showing
the names, titles, and specimen signatures of the persons
authorized on behalf of such party to make the payment arrangements
contemplated by Section 7.4. Each Contractor shall also furnish
the Bontang IV Trustee, from time to time, with its address to
which the reports required by Section 8.2 shall be sent.
(e) The Bontang IV Trustee shall furnish the Producers
with notice of the officers of the Bontang IV Trustee who are
authorized to act on its behalf in the performance by the Bontang
IV Trustee of its duties under this Agreement.
(f) The Producers and the Accountants the Bontang IV
Trustee upon "test-key" arrangements for the purpose of
authenticating communications between them respectively which
authorize, accomplish, direct or otherwise deal with the transfer
of money under this Agreement. If the Bontang IV Trustee or any
Producer receives such a communication which does not comply with
such arrangements, such recipient shall notify the sender of such
failure to comply, requesting correction thereof, and shall take no
action in accordance with such communication until such correction
is effected.
12.5 No Amendment Except in Writing. This Agreement may not
be revoked, amended, modified, varied or supplemented except by an
instrument in writing signed by all of the parties hereto.
12.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York,
United States of America applicable to agreements made and to be
performed entirely within such state.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized
signatories as of the date first above written.
PERUSAHAAN PERTAMBANGAN MINYAK
DAN GAS BUMI NEGARA (PERTAMINA)
By /s/
Name:
Title:
VIRGINIA INDONESIA COMPANY UNION TEXAS EAST
KALIMANTAN LIMITED
By /s/ By /s/
Name: Name:
Title: Title:
VIRGINIA INTERNATIONAL UNIVERSE GAS & OIL
COMPANY COMPANY, INC.
By /s/ By /s/
Name: Name:
Title: Title:
OPICOIL HOUSTON, INC. TOTAL INDONESIE
By /s/ By /s/
Name: Name:
Title: Title:
ULTRAMAR INDONESIA LIMITED UNOCAL INDONESIA, LTD.
By /s/ By /s/
Name: Name:
Title: Title:
INDONESIA PETROLEUM, LTD.
By /s/
Name:
Title:
CONTINENTAL BANK INTERNATIONAL
By /s/
Name:
Title:
APPOINTMENT OF ACCOUNTANTS
UNDER
BONTANG IV TRUSTEE AND PAYING AGENT AGREEMENT
Reference is made to the Bontang IV Trustee and Paying Agent
Agreement dated as of August 26, 1991 (the "Bontang IV Trustee and
Paying Agent Agreement"), among the undersigned parties and
Continental Bank International. Terms defined in the Bontang IV
Trustee and Paying Agent Agreement shall have the same meanings
herein as so defined.
Pursuant to Section 7.3 of the Bontang IV Trustee and Paying
Agent Agreement the independent public accounting firm of Hanadi
Sudjendro & Co., Member firm of Klynveld Peat Marwick Goerdeler,
and its successors from time to time, is hereby appointed to act as
the Accountants thereunder. In preparation of the certificates
required pursuant to Section 7.3 of the Bontang IV Trustee and
Paying Agent Agreement such Accountants are authorized to rely upon
confirmations from the auditors of the Total Group and the Unocal
Group with respect to the percentages in which natural gas produced
under their respective Production Sharing Contracts is shared among
such Contractor Groups and Pertamina.
Dated _______________________, 1991.
PERUSAHAAN PERTAMBANGAN MINYAK
DAN GAS BUMI NEGARA (PERTAMINA)
By /s/
Name:
Title:
VIRGINIA INDONESIA COMPANY UNION TEXAS EAST
KALIMANTAN LIMITED
By /s/ By /s/
Name: Name:
Title: Title:
VIRGINIA INTERNATIONAL UNIVERSE GAS & OIL
COMPANY COMPANY, INC.
By /s/ By /s/
Name: Name:
Title: Title:
OPICOIL HOUSTON, INC. TOTAL INDONESIE
By /s/ By /s/
Name: Name:
Title: Title:
ULTRAMAR INDONESIA LIMITED UNOCAL INDONESIA, LTD.
By /s/ By /s/
Name: Name:
Title: Title:
INDONESIA PETROLEUM LTD.
By /s/
Name:
Title: