BONTANG III LOAN AGREEMENT
_______________________
$316,000,000.00
CONTINENTAL BANK INTERNATIONAL
as Trustee
under the Bontang III Trustee and
Paying Agent Agreement
as Borrower,
TRAIN-E FINANCE CO., LTD.
as Tranche A Lender,
the banks named herein as Lead Managers
and Tranche B Lenders
and
THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY
as Agent
for the Tranche B Lenders named herein
__________________
Dated as of February 9, 1988
LOAN AGREEMENT
AGREEMENT dated as of February 9, 1988 among
(i) CONTINENTAL BANK INTERNATIONAL, not in its individual
capacity but solely as Trustee under the Bontang III Trustee and
Paying Agent Agreement among it and PERUSAHAAN PERTAMBANGAN
MINYAK DAN GAS BUMI NEGARA, ROY M. HUFFINGTON, INC., HUFFINGTON
CORPORATION, VIRGINIA INTERNATIONAL COMPANY, VIRGINIA INDONESIA
COMPANY, ULTRAMAR INDONESIA LIMITED, UNION TEXAS EAST
KALIMANTAN
LIMITED, UNIVERSE TANKSHIPS, INC., TOTAL INDONESIE, UNOCAL
INDONESIA, LTD and INDONESIA PETROLEUM, LTD., dated as of the
date hereof;
(ii) TRAIN-E FINANCE CO., LTD., as Tranche A Lender;
(iii) THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY, THE
BANK OF TOKYO, LTD., THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED
and BANQUE INDOSUEZ, as Lead Managers;
(iv) the banks and other financial institutions named under
the caption "Tranche B Lenders" on the signature pages hereof;
and
(v) THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY, as Agent
for the Tranche B Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Tranche A Lender and
the Tranche B Lenders to make advances to the Borrower upon the
terms and subject to the conditions of this Agreement in an
aggregate principal amount of $189,600,000.00 for Tranche A and
$126,400,000.00 for Tranche B, respectively, for the purpose of
paying (i) the costs incurred or to be incurred in connection
with the design, engineering, procurement and construction of or
otherwise relating to Train E and (ii) interest, fees, expenses,
taxes and other amounts payable by the Borrower pursuant to
Sections 2.3, 2.7, 2.8, 3.3, 3.4(b) and 10.6 hereof;
WHEREAS, the Tranche A and Tranche B Lenders are prepared,
severally, and not jointly or jointly and severally, to make such
advances to the Borrower on a pro rata basis
upon the terms and subject to the conditions of this Agreement;
and
WHEREAS, no recourse shall be had for any amount due under
this Agreement against Continental Bank International in its
individual capacity, with certain proceeds from the sale of
liquefied natural gas being the sole source of repayment
hereunder of all such amounts, except as specifically provided
herein.
NOW, THEREFORE, in consideration of the mutual promises
contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement,'the following capitalized
expressions shall have the following respective meanings, such
meanings to be applicable to both the singular and the plural
forms of such expressions:
"Advance" means, with respect to Tranche A, each advance by
the Tranche A Lender, and, with respect to Tranche B, each
advance by a Tranche B Lender, in each case to the Borrower
hereunder on a Borrowing Date or, where the context so requires,
the amount of such advance from time to time outstanding.
"Agent" means The Industrial Bank of Japan Trust Company
acting in its capacity as agent for the Tranche B Lenders
hereunder, or any successor thereto appointed pursuant to Section
8.10 hereof.
"Applicable Margin" means for Advances with respect to
Tranche B (including any Deferred Portion thereof) and with
respect to any Deferred Portion of Tranche A (i) on any date
during the period beginning on the Effective Date and ending on
the Completion Date, 1%, (ii) on any date during the period
beginning on the date following the Completion Date and ending on
the date that is the fifth anniversary of the Completion Date,
7/8%, and (iii) on any date following such fifth anniversary date
while this Agreement is in effect, 1%.
"Assumed Interest Rate" means the interest rate per annum
agreed by the Borrower and the Majority Lenders on or prior to
the date hereof; provided, however, that at any time and from
time to time following the date hereof upon the reasonable
request of the Borrower, the Tranche A Lender or the Agent on
behalf of the Majority Tranche B Lenders, then the Borrower, the
Tranche A Lender and the Agent on behalf of the Majority Tranche
B Lenders shall negotiate in good faith to reach agreement on an
interest rate per annum to serve as the Assumed Interest Rate
which is acceptable to the Borrower, the Tranche A Lender and the
Agent on behalf of the Majority Tranche B Lenders. If agreement
cannot be reached on such interest rate within 30 days following
a request for such negotiations, then the Assumed Interest Rate
shall be the interest rate per annum specified in good faith by
the Tranche A Lender and the Agent on behalf of the Majority
Tranche B Lenders.
"Availability Period" means the period beginning on the
Effective Date and ending on the earlier of (i) the date six
months following the Completion Date or (ii) September 30, 1990.
"Basic Agreements" means the agreements listed on Schedule 1
hereto.
"Bontang Excess Sales Account (KCO Quantities)" has the
meaning set forth in Article 1 of the Bontang Excess Sales Trust
Agreement.
"Bontang Excess Sales Account (Yokkaichi Trade)" has the
meaning set forth in Article 1 of the Bontang Excess Sales Trust
Agreement.
"Bontang Excess Sales Trust Agreement" has the meaning set
forth in Article 1 of the Trust Agreement.
"Bontang I Trust Agreement" has the meaning set forth in
Article 1 of the Trust Agreement.
"Bontang Plant" means 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 (including Train E), together
also with natural gas transmission lines extending from "Delivery
Points" as defined in the Processing Agreement, and from such
other 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 III Payment Account" has the meaning set forth in
Article 1 of the Trust Agreement.
"Borrowed Amounts" means any amounts borrowed pursuant to
the first sentence of Section 2.2(b) hereof.
"Borrower" means Continental Bank International, solely as
Trustee under the Trust Agreement and not in its individual
capacity. The term "Borrower" does not include Continental Bank
International in any other capacity or any one or more of the
Producers.
"Borrowing" means a borrowing hereunder consisting of
Advances of a Tranche made to the Borrower at the same time by
all then participating Lenders severally.
"Borrowing Date" means (i) a Business Day prior to February
18, 1988 specified in a Notice of Borrowing as a date on which
the Borrower will make a Borrowing hereunder, (ii) thereafter
each March 31, June 30, September 30 and December 31 during the
Availability Period and (iii) the last day of the Availability
Period; provided that if a Borrowing Date would otherwise occur
on a date which is not a Business Day, such Borrowing Date shall
be the immediately preceding Business Day.
"Business Day" means any day on which (i) dealings in Dollar
deposits are carried on in the London interbank market and (ii)
commercial banks are not authorized or required to close in any
of London, the City of New York or Tokyo.
"Buyer" means Chinese Petroleum Corporation, a corporation
organized under the laws of the Republic of China, as buyer under
the LNG Sales Contract.
"Chubu Sales Contract" means the LNG Sales and Purchase
Contract (Yokkaichi LNG Trade) between Pertamina and Nusantara
Gas Services Company, Inc. ("Nusantara"), dated August 28, 1987,
as heretofore and hereafter amended, including any extension or
renewal thereof, as supplemented by the Agreement Regarding
Incentive Volumes between Pertamina and Chubu Electric Power Co.,
Inc., dated August 28, 1987, as heretofore and hereafter amended,
and by the Side Letter to LNG Sales and Purchase Contract
(Yokkaichi LNG Trade) between Pertamina and Nusantara, dated
August 28, 1987, as heretofore and hereafter amended.
"Commitment" means, with respect to each Lender, the
principal amount set forth opposite such Lender's name under the
caption "Commitment" on the signature pages hereof, as such
amounts may be reduced from time to time pursuant to Section 3.7
hereof, or such Lender's commitment to lend such amounts, as the
context may require.
"Completion Date" means the date on which each of the
Tranche A Lender and the Agent shall have received a written
notice from the Borrower as required by Section 6.1(e) hereof, to
which is attached a notice from Pertamina to the effect that:
(i) the construction of Train E has been completed in
accordance with the Development Plan and Train E has been fully
and finally accepted by Pertamina under the Construction
Agreement;
(ii) Train E has demonstrated processing capabilities
consistent with those contained in the Development Plan and at
least 170,000 metric tons of LNG meeting the quality
specifications set forth in the LNG Sales Contract have been
produced over a period of 30 consecutive days and delivered to
storage during such period; and
(iii) actual aggregate shipments after the Start-up of
at least two full cargoes of LNG have been made to the Receiving
Facilities pursuant to the LNG Sales Contract during the 30-day
period referred to in clause (ii) above.
"Completion of the Receiving Facilities" means the first
date on which the Buyer is able to receive LNG at the Receiving
Facilities on a continuing basis so as to be in a position to
perform its obligations to purchase and receive LNG under the LNG
Sales Contract.
"Construction Agreement" means the Bontang LNG Expansion
Project Train E Agreement (Contract No. B30-JMC-001) to be
entered into prior to the initial Borrowing among Pertamina,
Chiyoda Chemical Engineering & Construction Co., Ltd. and
Mitsubishi Corporation, as thereafter amended.
"Contingent Reserve Account" has the meaning set forth in
Article I of the Trust Agreement.
"Contingent Support" means any or all of the First,, Second
or Third Contingent Supports.
"Contingent Support Account" means each of the Bontang
Excess Sales Account (KCO Quantities), Bontang Excess Sales
Account (Yokkaichi Trade) and each Future Long Term
Sales Contingent Support Account, Future Spot Sales Contingent
Support Account, Special Spot Contingent Support Account and the
relevant account for Contingent Support under each Special Long
Term Sales Trust Agreement.
"Contingent Support Agreements" means the agreements listed
on Schedule 2 hereto.
"Contingent Support Period" means any of the First, Second
or Third Contingent Support Periods.
"Contingent Support Trust Agreements" means the Bontang
Excess Sales Trust Agreement, the Bontang I Trust Agreement and
any Special Long Term Sales Trust Agreement.
"Debt Coverage Ratio" means:
(i) during the Availability Period, an amount determined as
the product of (a) (i) the sum of (x) the present value as of the
later of June 30, 1990 or the time of calculation (determined by
discounting by the Discount Rate at the time of calculation) of
the Source of Debt Service reasonably anticipated to be payable
from such later date to the Final Maturity Date plus (y) the
amount held in the Reserve Account at the time of calculation,
divided by (ii) the total Commitments, multiplied by (b) 100; and
(ii) thereafter, an amount determined as the product of (a)
(i) the sum of'(x) the present value as of the time of
calculation (determined by discounting by the Discount Rate at
the time of calculation) of the Source of Debt Service reasonably
anticipated to be payable from the time of calculation to the
Final Maturity Date plus (y) the amount held in the Reserve
Account at the time of calculation, divided (ii) by the
outstanding principal amount of the Notes at the time of
calculation, multiplied by (b) 100.
During any Contingent Support Period, the references to "the
Source of Debt Service reasonably anticipated to be payable to
the Final Maturity Date" contained in this definition of Debt
Coverage Ratio shall be deemed to mean the amounts of Contingent
Support reasonably anticipated to be payable during such
Contingent Support Period (taking into account the amounts of
Source of Contingent Support reasonably anticipated to be payable
during such Contingent Support Period) plus, if it is reasonably
anticipated that such Contingent Support Period will end, any
Source of Debt Service reasonably anticipated to be payable after
the end thereof to the Final Maturity Date.
For purposes of calculating the Debt Coverage Ratio,
whenever (i) a quarterly calculation of the Debt Coverage Ratio
is required pursuant to Section 6.1(b) hereof, (ii) the Tranche A
Lender or the Agent on behalf of the Majority Tranche B Lenders
requests a calculation in accordance with Section 6.1(c) hereof,
or (iii) at any time the Borrower reasonably requests, the
Borrower, the Tranche A Lender and the Agent shall negotiate in
good faith to reach agreement on assumptions necessary for
calculating the Debt Coverage Ratio which are acceptable to the
Borrower, the Tranche A Lender and the Agent on behalf of the
Majority Tranche B Lenders. If the Borrower, the Tranche A
Lender and the Agent on behalf of the Majority Tranche B Lenders
cannot reach agreement on such assumptions within 10 days prior
to the date a quarterly statement is due under Section 6.1(b)
hereof or within 30 days following a request by one to the others
for such negotiations, whichever is earlier, then the assumptions
used for purposes of the relevant calculation or calculations
shall be those specified in good faith by the Tranche A Lender
and the Agent on behalf of the Majority Tranche B Lenders.
"Debt Coverage Reserve Account" has the meaning set forth in
Article 1 of the Trust Agreement.
"Debt Service Account" has the meaning set forth in Article
1 of the Trust Agreement.
"Deferred Portion" means any portion of the outstanding
principal amount of a Tranche, the payment of which has been
deferred pursuant to Section 2.10(b) hereof.
"Development Plan" means the Development Plan for Train E
entitled BADAK LNG III (TRAIN E) PROJECT DEVELOPMENT PLAN dated
December 1987, as heretofore and hereafter amended.
"Discount Rate" means at any time the weighted average
(based on principal amounts then outstanding) of (i) with respect
to Tranche A, 11-1/2% per annum and (ii) the Assumed Interest
Rate as if it were the interest rate applicable to Tranche B.
"Disputed Force Majeure Account Agreement" means the
agreement so entitled, dated as of March 19, 1987, between
Pertamina, the Buyer and Chemical Bank, as heretofore and
hereafter amended.
"Dollars" and the sign "$" mean such coin or currency of the
United States of America as is, at the relevant time, legal
tender for the payment of public and private debts.
"Drawdown Schedule" means the schedule of Borrowings on each
of the Borrowing Dates in accordance with Schedule 3 hereto as
amended or supplemented pursuant to Section 2.2(b) hereto.
"Effective Date" means the date this Agreement is fully
executed by all of the parties hereto.
"Encumbrance" means 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.
"Escrow Agreement" means the Badak Escrow and Trust
Agreement dated as of July 15, 1974 among Pertamina, The
Industrial Bank of Japan, Limited and Japan Indonesia LNG Co.,
Ltd., as heretofore and hereafter amended.
"Event of Default" means any of the events specified in
Section 7 hereof.
"Excluded Taxes" means:
(i) with respect to Tranche A, (x) any Taxes imposed by
Japan or any department, agency or political subdivision or
taxing authority thereof or therein and (y) the additional amount
of any Taxes that may be imposed upon or with respect to a
Payment arising solely by reason of the fact that the Tranche A
Lender changes the source of the funds it uses to make or
maintain Advances from that contemplated as of the date of this
Agreement, for any reason other than a change in the source of
funding made in connection with maintaining any Overdue Amounts
or any Deferred Portion of Tranche A; and
(ii) with respect to Tranche B, (x) any Taxes (including
withholdings) based upon gross or net income payable by a Tranche
B Lender or the Agent to the jurisdiction of such Lender's
incorporation or the jurisdictions in which such Lender capital
has its principal executive office or in which its Lending Office
is located, or any department, agency or other political
subdivision or taxing authority in any of such jurisdictions and
(y) the additional amount of any Taxes (other than Taxes
described in the preceding clause (x) prior to a change in the
Lending Office) that may be imposed upon or with respect to a
Payment arising solely by reason of the facts that the Lender is
a foreign corporation or other non-resident person within the
meaning of the Internal Revenue Code of 1986, as amended, and the
Lending office receiving such Payment is not located in the
United States of America. Solely for purposes of the preceding
sentence, the term "Lending Office" shall mean, in addition to
the definition set forth below in this Section 1, a branch or
office of a Tranche B Lender which has physical custody of a
Tranche B Note, this Agreement or the Letter Agreement or which
conducts the activities that are the responsibilities of a
Tranche B Lender described in this Agreement or, solely in the
event that a taxing jurisdiction asserts a tax by reason of the
fact that a branch or office of a Tranche B Lender previously had
(but no longer has) such custody or conducted (but no longer
conducts) such activities, such other branch or office.
"Final Maturity Date" means the fortieth Maturity Date
occurring following the last day of the Availability Period.
"First Contingent Support" means amounts from time to time
held in the Contingent Support Accounts (other than the Special
Spot Contingent Support Accounts) under the Bontang Excess Sales
Trust Agreement, which amounts are (a) 100% of (i) the gross
invoice amount payable under the Chubu Sales Contract, any Future
Long Term Sales Contract and any Future Spot Sales, on a cargo by
cargo basis, and received by the Bontang Excess Sales Trustee
under the Bontang Excess Sales Trust Agreement, less any relevant
Permitted Amounts, plus (ii) any relevant Related Amounts, and
(b) all amounts received by the Bontang Excess Sales Trustee
under the Bontang Excess Sales Trust Agreement from the Trustee
under the Bontang I Trust Agreement relating to the Korean
Carry-Over Quantities. With respect to the First Contingent
Support Period referred to in clause (i) of the definition
thereof, there are no Future Long Term Sales Contracts or Future
Spot Sales.
"First Contingent Support Period" means each of (i) if
Start-up does not occur prior to January 1, 1990, the period
commencing on January 1, 1990 and ending on the earlier to occur
of (x) Start-up and (y) September 30, 1990, (ii) if Completion of
the Receiving Facilities does not occur on or before September
30, 1990, the period commencing on October 1, 1990 and ending on
the date of Completion of the Receiving Facilities, (iii) if
Pertamina exercises its right to suspend deliveries under Section
10.5 of the LNG Sales Contract, the period of such suspension,
and (iv) the periods referred to in clauses (ii) and (iii) of the
definition of Third Contingent Support Period contained herein.
"Future Long Term Sales Contracts" means, with respect to
any First Contingent Support Period referred to in clauses (ii),
(iii) and (iv) of the definition thereof, all Long Term Sales
Contracts, other than Special Long Term Sales Contracts, in
effect and with respect to which payment or performance or both
are not yet completed (and any proceeds of which have not been
deposited in the relevant Contingent Support Account under the
Bontang Excess Sales Trust Agreement) at the time of commencement
of such First Contingent Support Period.
"Future Long Term Sales Contingent Support Accounts" has the
meaning set forth in Article 1 of the Bontang Excess Sales Trust
Agreement.
"Future Spot Sales" means, with respect to any First
Contingent Support Period referred to in clauses (ii), (iii) and
(iv) of the definition thereof, all Spot Sales, other than
Special Spot Sales, pursuant to agreements in effect and with
respect to which payment or performance or both are not yet
completed (and any proceeds of which have not been deposited in
the relevant Contingent Support Account under the Bontang Excess
Sales Trust Agreement) at the time of commencement of such First
Contingent Support Period.
"Future Spot Sales Contingent Support Accounts" has the
meaning set forth in Article 1 of the Bontang Excess Sales Trust
Agreement.
"Gross Invoice Amount" means the sum of (i) the amounts
payable to the Borrower 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
Borrower pursuant to Section 6.3 of each Supply Agreement or
Section 23 of the Transportation Agreement (with respect to
amounts payable to Pertamina), (iii) all amounts payable to the
Borrower pursuant to Section 5 of the Disputed Force Majeure
Account Agreement, (iv) all amounts payable to the Borrower on
account of interest due by reason of the late payment of invoices
for LNG under Section 10.3(c) of the LNG Sales Contract and (v)
all demurrage payable to the Borrower by the Buyer under Section
4.4(c) 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.
"Guarantee" by any Person means 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" means, 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 asset 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.
"Interest Payment Date" means the last day of each Interest
Period.
"Interest Period" means (except in the case of the initial
Interest Period), with respect to Tranche A, a period of three
months, and, with respect to Tranche B, a period of three or six
months selected or deemed selected by the Borrower as provided in
Section 2.4 hereof, and, in each case, determined as follows:
(i) The initial Interest Period for each Borrowing will
begin on the date of such Borrowing and will end on the March 31,
June 30, September 30 or December 31 next occurring within three
months thereafter, and each subsequent Interest Period for such
Borrowing will begin on the Interest Payment Date ending the
previous Interest Period and end on the June 30, September 30,
December 31 or March 31 next occurring three or six months
thereafter, as the case may be, subject to clauses (ii), (iii)
and (iv) of this definition.
(ii) Subject to clause (iv) of this definition, all
Borrowings with respect to Tranche B for which Interest Periods
end on the same Interest Payment Date shall be consolidated so
that all subsequent elections of Interest Periods for such
Borrowings of such Tranche shall apply to all such Borrowings so
consolidated.
(iii) If any Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall end
on the immediately preceding Business Day.
(iv) If the Borrower wishes to elect an Interest Period of
six months for Borrowings of Tranche B and if the aggregate
outstanding principal amount of the Borrowings of Tranche B for
which a Notice of Interest Period is then to be given is greater
than the amount of the repayment installment of such Tranche due
to the Tranche B Lenders on a Maturity Date approximately three
months following the date of the proposed election, then, for
purposes of calculating interest, such Borrowings shall be
divided and henceforth treated as two separate Borrowings of such
Tranche (such division to be pro rata as to each Tranche B
Lender's Advances), one of an amount equal to the amount of the
repayment installment of such Tranche due to the Tranche B
Lenders on such Maturity Date (the Interest Period for which will
end on such Maturity Date) and the other of an amount equal to
the remainder of such-consolidated Borrowings of such Tranche.
The Borrower's election of a six month Interest Period shall only
apply to such remainder of the consolidated Borrowings of such
Tranche.
(v) Notwithstanding the foregoing provisions of this
definition, no election of one or more Interest Periods may be
made which would cause the aggregate number of all Interest
Periods then in effect for both Tranches to exceed 10.
"Invoice Settlement Agreements" means the Invoice Settlement
Agreement for 1973 LNG Sales Contract dated as of March 31, 1987
between Pertamina and the buyers under the 1973 LNG Sales
Contract, as heretofore and hereafter amended, including any
extension or renewal thereof, and the Invoice Settlement
Agreement for 1981 LNG Sales Contract dated as of March 31, 1987
between Pertamina and the buyers under the 1981 LNG Sales
Contract, as heretofore and hereafter amended, including any
extension or renewal thereof.
"Japanese Business Day" means any day on which commercial
banks are not authorized or required to close in Tokyo.
"KCO General Account" has the meaning set forth in the
Bontang I Trust Agreement.
"Korean Carry-over Quantities" has the meaning set forth in
the Korean Quantities Agreement.
"Korean Quantities Agreement" means the Tripartite Agreement
dated January 29, 1988, effective as of the 12th day of August,
1983, among the Producers and Mobil Oil Indonesia Inc., as
heretofore and hereafter amended, including any extension or
renewal thereof.
"Korean Quantities Supplemental Memorandum" means the
Supplemental Memorandum dated January 29, 1988, among the
Producers relating to the Korean Carry-Over Quantities, as
heretofore and hereafter amended.
"Korean Sales Contract" means the LNG Sales and Purchase
Contract (Arun III Trade) between Pertamina and Korea Electric
Power Corporation, dated August 12, 1983, as assigned to Korea
Gas Corporation pursuant to an agreement dated August 13, 1984,
as heretofore and hereafter amended, including any extension or
renewal thereof.
"Lead Managers" means the financial institutions named under
the caption "Lead Managers" on the signature pages hereof.
"Legal Requirements" means all applicable (i) laws, rules,
regulations, ordinances, orders, decrees, permits, licenses,
authorizations, directions and requirements of all governments
and governmental departments, commissions, boards, authorities
and agencies, (ii) court and governmental administrative agency
judgments and injunctions, (iii) arbitral awards and (iv)
requirements of courts and arbitral tribunals.
"Lenders" means the Tranche A Lender and each of the Tranche
B Lenders.
"Lending Office" means (i) initially for each Lender its
office or branch located as of the date hereof at its address set
forth on the signature pages hereof and (ii) subsequently for
each Lender such other office or branch of such Lender as such
Lender may designate by notice in writing to the Borrower and the
Agent as the office or branch from or at which such Lender's
Advances with respect to a Tranche will thereafter be made or
maintained and for the account of which all payments of principal
of and interest on the relevant Notes and all other payments to
such lender under this Agreement will thereafter be made;
provided that the designation of a new Lending Office shall be
subject to the conditions stated in Section 10.4 hereof.
"Letter Agreement" has the meaning set forth in Section
2.8(b) hereof.
"LIBOR" has the meaning set forth in Section 2.5 hereof.
"LNG" has the meaning set forth in Article 1 of the
Processing Agreement.
"LNG Sales Contract" means the Badak III LNG Sales Contract,
dated as of March 19, 1987, between Pertamina and the Buyer, as
heretofore and hereafter amended, including any extension or
renewal thereof.
"Long Term Sales Contracts" means contracts entered into by
Pertamina to sell two or more cargoes of LNG from the Bontang
Plant, as thereafter amended, including any extension or renewal
thereof. Long Term Sales Contracts do not include the LNG Sales
Contract, the Chubu Sales Contract, the Korean Quantities
Agreement, the Korean Sales Contract, the 1981 LNG Sales
Contract, the 1973 LNG Sales Contract or the Invoice Settlement
Agreements.
"Majority Lenders" means the Tranche A Lender and the
Majority Tranche B Lenders.
"Majority Tranche B Lenders" means at any time Tranche B
Lenders holding in excess of 66-2/3% of the aggregate unpaid
principal amount of the Advances of Tranche B, or if no such
Advances are at the time outstanding, Tranche B Lenders having in
excess of 66-2/3% of the aggregate amount of the Commitments with
respect to Tranche B.
"Maturity Date" means the first March 31, June 30, September
30 or December 31 to occur at least three months following the
last day of the Availability Period and, thereafter, each March
31, June 30, September 30 and December 31 occurring three months
following the last of the same to occur, each of which shall be
an Interest Payment Date; provided, however, that if any such
date is not a Business Day, such Maturity Date shall be the
immediately preceding Business Day.
"1973 LNG Sales Contract" means the LNG Sales Contract,
dated as of December 3, 1973, between Pertamina and The Chubu
Electric Power Co., Inc., The Kansai Electric Power Co., Inc.,
Kyushu Electric Power Co., Inc., Nippon Steel Corporation and
Osaka Gas Company, Ltd. as heretofore and hereafter amended,
including any extension on renewal thereof, as supplemented by
the Memorandum of Agreement between Pertamina and The Chubu
Electric Power Co., Inc., The Kansai Electric Power Co., Inc. and
Kyushu Electric Power Co., Inc., dated as of January 1, 1983, as
heretofore and hereafter amended, including any extension or
renewal thereof.
"1981 LNG Sales Contract" means the LNG Sales Contract dated
as of April 14, 1981, between Pertamina and The Chubu Electric
Power Co., Inc., The Kansai Electric Power
Co., Inc., Osaka Gas Company, Ltd. and Toho Gas Company, Ltd., as
heretofore and hereafter amended, including any extension or
renewal thereof.
"Note" means any one of the Tranche A Note or Tranche B
Notes provided for in Section 2.9 hereof.
"Notice of Borrowing" means a notice from the Borrower to
each of the Tranche A Lender and the Agent substantially in the
form of Exhibit A hereto.
"Notice of Deferral" means a notice from the Borrower to
each of the Tranche A Lender and the Agent substantially in the
form of Exhibit B-1 hereto.
"Notice of Interest Period" means a notice from the Borrower
to the Agent substantially in the form of Exhibit B-2 hereto.
"Notice of Start-up" means the notice that Start-up has
occurred given by Pertamina to the Tranche A Lender, the Agent
and the Borrower.
"Overdue Tranche A Amounts" means any overdue principal of
the Tranche A Note and any other overdue amounts owing pursuant
to this Agreement with respect to Tranche A and the Tranche A
Note.
"Pari Passu Swap Indebtedness" has the meaning set forth in
Section 6.4 hereof.
"Payments" has the meaning set forth in Section 3.3 hereof.
"Permitted Amounts" means, with respect to each Contingent
Support Trust Agreement, (i) all freight, charterhire and costs
payable by Pertamina for transport of LNG pursuant to the
transportation agreement, if any, relating to sales of LNG giving
rise to any Source of Contingent Support which will constitute
Contingent Support under such Contingent Support Trust Agreement,
(ii) processing charges payable with respect to such LNG under
the Processing Agreement, (iii) Permitted Marketing Fees, if any,
with respect to such Source of Contingent Support, (iv) any other
charges with respect to the sale or delivery of LNG giving rise
to the Source of Contingent Support, and any fees and expenses of
the trustee under such Contingent Support Trust Agreement, in an
aggregate amount not to exceed $25,000 per calendar quarter, (v)
in the case of the Bontang Excess Sales Trust Agreement only, an
Approved Level of Working Capital (as defined therein) not to
exceed $50,000 at any one time, and (vi) in the case of the
Bontang I Trust Agreement only, amounts required to be set aside
and paid pursuant to Article 2 and Sections 4.1 and 14.2 of the
Bontang I Trust Agreement; provided, however, Permitted Amounts
shall not include amounts referred to in clauses (i), (ii) or
(iii) of this definition with respect to amounts received by the
Bontang Excess Sales Trustee under the Bontang Excess Sales Trust
Agreement from the Trustee under the Bontang I Trust Agreement
relating to the Korean CarryOver Quantities.
"Permitted Marketing Fees" means, with respect to Source of
Contingent Support arising under the Chubu Sales Contract or any
Future or Special Long Term Sales Contract, fees payable for
marketing services incurred in connection with LNG sold under
such Contract, but only if Pertamina shall have furnished the
Tranche A Lender and the Agent promptly upon receipt copies of
all agreements and invoices relating to such fees.
"Person" means and includes 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" means Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, a State Enterprise of the Republic of Indonesia,
which is wholly owned by the Republic of Indonesia, and its
successors and assigns permitted under the Producers Agreement.
"Plant Use Agreement" means the Agreement for Use and
operation of Plant dated as of July 1, 1983 between Pertamina and
P.T. Badak, as heretofore and hereafter amended.
"Processing Agreement" means the Amended and Restated
Bontang Processing Agreement, dated as of the date hereof, among
the Producers on the one hand and P.T. Badak on the other, as
hereafter amended.
"Producers" means Pertamina, Roy M. Huffington, Inc.,
Huffington Corporation, Virginia International Company, Virginia
Indonesia Company, Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Tankships, Inc., Total Indonesie,
Unocal Indonesia, Ltd., and Indonesia Petroleum, Ltd. and Persons
succeeding to their interests in the manner permitted by Section
6.3 of the Producers Agreement.
"Producers Agreement" means the Bontang III Producers
Agreement of even date herewith among the Producers, the Tranche
A Lender, the Agent and the Tranche B Lenders, as hereafter
amended.
"P.T. Badak" means P.T. Badak Natural Gas Liquefaction
Company, a corporation organized under the laws of the Republic
of Indonesia.
"Quarterly Debt Service" has the meaning set forth in
Section 9.1 hereof.
"Receiving Facilities" means "Receiving Facility" as set
forth in Article 1 of the LNG Sales Contract.
"Reference Banks" means The Industrial Bank of Japan,
Limited, London Branch, Morgan Guaranty Trust Company of New
York, London Branch, and The Bank of Tokyo, Ltd., London Branch.
"Regular Reserve Account" has the meaning set forth in
Article 1 of the Trust Agreement.
"Related Amounts" means, with respect to the 1973 Sales
Contract (insofar as they relate to the Korean CarryOver
Quantities), the Chubu Sales Contract, Future Spot Sales, Future
Long Term Sales Contracts, Special Long Term Sales Contracts and
Special Spot Sales, as relevant, amounts payable to Pertamina
relating to such contracts or shipments of LNG thereunder that
are comparable to amounts described in clauses (ii), (iii), (iv)
and (v) in the definition of Gross Invoice Amount contained
herein.
"Reserve Account" has the meaning set forth in Article 1 of
the Trust Agreement.
"Reserves" has the meaning set-forth in Section 2.6 hereof.
"Responsible Officer of the Borrower" means the chairman and
vice chairman of the board of directors, the chairman of the
executive committee of the board of directors, the president, any
executive vice president, any senior vice president or any vice
president of Continental Bank International.
"Second Contingent Support" means amounts from time to time
held in the Special Spot Contingent Support Accounts under the
Bontang Excess Sales Trust Agreement, which amounts are 100% of
(i) the gross invoice amount payable under any Special Spot
Sales, on a cargo by cargo basis, and received by the Bontang
Excess Sales Trustee under the Bontang Excess Sales Trust
Agreement, less any relevant Permitted Amounts, plus (ii) any
relevant Related Amounts.
"Second Contingent Support Period" means each of (i) the
period referred to in clause (ii) of the definition of First
Contingent Support Period contained herein and (ii) the periods
referred to in clauses (ii) and (iii) of the definition of Third
Contingent Support contained herein.
"Side Letter" means the Side Letter to the LNG Sales
Contract, dated March 19, 1987, from Pertamina to the Buyer, as
heretofore and hereafter amended.
"Source of Contingent Support" means any amounts payable
pursuant to a Contingent Support Agreement and any Related
Amounts relating thereto that will constitute Contingent Support
and, without duplication, any amounts payable pursuant to the
Bontang I Trust Agreement that will constitute Contingent
Support.
"Source of Debt Service" means
(I) in respect of each amount payable to the Borrower for
LNG purchased, or for LNG required to be purchased but not taken,
under the LNG Sales Contract, or payable to the Borrower pursuant
to the Disputed Force Majeure Account Agreement, the Supply
Agreements or the Transportation Agreement or otherwise pursuant
to the LNG Sales Contract (without duplication), the portion, if
any, of the amount so payable equal to 50% of the Gross Invoice
Amount payable (i) 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 (ii) otherwise in respect of
each cargo, plus 50% of all indemnities and additional amounts
payable by the Buyer under the LNG Sales Contract, without any
reduction or set-off from any such amounts; provided, however,
that if the Borrower 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 Tranche A Lender and the Agent
on behalf of the Tranche B Lenders also execute and deliver 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.
"Special Long Term Sales Contracts" means Long Term Sales
Contracts entered into at any time during any Third Contingent
Support Period.
"Special Long Term Sales Trust Agreement" means any Special
Long Term Sales Trustee and Paying Agent Agreement in form and
substance satisfactory to the Majority Lenders entered into prior
to the time the first payments are due from the buyer or buyers
under the related Special Long Term Sales Contract, which shall
provide for the trustee thereunder to receive amounts payable
under such Special Long Term Sales Contract and any relevant
Related Amounts and provide that, upon notice from Pertamina as
provided in section 1.18 hereof, amounts of Third Contingent
Support held pursuant thereto shall be payable to the Borrower
under the Trust Agreement.
"Special Spot Contingent Support Accounts" has the meaning
set forth in Article 1 of the Bontang Excess Sales Trust
Agreement.
"Special Spot Sales" means Spot Sales, the proceeds of which
are payable at any time during any Second Contingent Support
Period.
"Spot Sale" means any sale made by Pertamina of a single
cargo of LNG to be supplied from the Bontang Plant. Spot Sales
do not include any sales under the LNG Sales Contract, the Chubu
Sales Contract, the Korean Quantities Agreement, the Korean Sales
Contract, the 1981 LNG Sales Contract, the 1973 LNG Sales
Contract, any Long Term Sales Contract or the Invoice Settlement
Agreements.
"Start-up" means the first date on which the Buyer is able
to receive and Pertamina is able to deliver LNG at the Receiving
Facilities on a continuing basis so as to be in a position to
perform their respective obligations to purchase and receive and
to sell and deliver LNG under the LNG Sales Contract.
"Subordinated Indebtedness" has the meaning set forth in
Section 6.4 hereof.
"Supply Agreements" means:
(i) Supply Agreement for Badak III LNG Sales Contract,
dated October 19, 1987, by and between Pertamina, on the one
hand, and Total Indonesie and Indonesia Petroleum,
Ltd., on the other hand, as heretofore and hereafter amended;
(ii) Badak III LNG Sales Contract Supply Agreement, dated
October 19, 1987, by and between Pertamina, on the one hand, and
Roy M. Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company, Ultramar
Indonesia Limited, Union Texas East Kalimantan Limited and
Universe Tankships, Inc., on the other hand, as heretofore and
hereafter amended; and
(iii) Supply Agreement for Badak III Sales Contract
(Attaka Field), dated October 19, 1987, by and between Pertamina,
on the one hand, and Unocal Indonesia, Ltd. and Indonesia
Petroleum, Ltd., on the other hand, as heretofore and hereafter
amended.
"Taxes" means any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other
charges of whatsoever nature, that may now or hereafter be
imposed or asserted by any jurisdiction or any political
subdivision thereof or any taxing authority therein and all
interest, penalties or similar liabilities with respect thereto.
"Third Contingent Support" means amounts from time to time
held under all Special Long Term Sales Trust Agreements, which
amounts, with respect to each Special Long Term Sales Trust
Agreement, are such percentage of (i) the gross invoice amount
payable under the Special Long Term Sales Contract to which such
Special Long Term Sales Trust Agreement relates, on a cargo by
cargo basis, and received by the trustee under such Special Long
Term Sales Trust Agreement, less any relevant Permitted Amounts
plus (ii) any relevant Related Amounts, as shall result in an
initial Debt Coverage Ratio of 200% as of the date on which the
first payments are due from the buyer or buyers under such
Special Long Term Sales Contract, or if such percentage of such
amounts would exceed 100%, then (x) 100% of the amount payable,
on a cargo by cargo basis, and received by such trustee, less any
relevant Permitted Amounts plus (y) any relevant Related Amounts.
"Third Contingent Support Period" means each of (i) if
Start-up does not occur on or before September 30, 1991, the
period commencing on October 1, 1991 and ending on the date of
Start-up, (ii) if the LNG Sales Contract is terminated or
repudiated (whether by notice or in fact) by the Buyer, the
period after such termination or repudiation and (iii) if any
Event of Force Majeure under Section 15.1 of the LNG Sales
Contract excuses performance by the Buyer thereunder for 42
consecutive months, the period commencing at the end of such
42-month period and continuing for so long as such performance by
the Buyer is excused as a result of such Event of Force Majeure.
"Train E" means the additional gas liquefaction and
processing facility known as Train E and facilities related to or
used in connection therewith, to be completed in accordance with
the Development Plan.
"Tranche" means Tranche A or Tranche B and "Tranches" means
Tranche A and Tranche B.
"Tranche A" means Advances of the Tranche A Lender in an
aggregate maximum principal amount not exceeding $189,600,000.00.
"Tranche A Lender" means Train-E Finance Co., Ltd. and its
successors and assigns hereunder.
"Tranche A Note" has the meaning set forth in Section 2.9
hereof.
"Tranche B" means Advances of the Tranche B Lenders in an
aggregate maximum principal amount not exceeding $126,400,000.00.
"Tranche B Lender" means each of the banks and other
financial institutions named under the caption "Tranche B
Lenders" on the signature pages hereof and their respective
successors and assigns.
"Tranche B Note" has the meaning set forth in Section 2.9
hereof.
"Transportation Agreement" means the LNG Vessel Time Charter
Party Badak III (New Build) Hull No. 2011 dated as of May 1, 1987
among Cometco Shipping Inc., PT Humpuss and Pertamina, as
heretofore and hereafter amended.
"Trust Agreement" means the Bontang III Trustee and Paying
Agent Agreement among Continental Bank International, as Trustee,
and the Producers, dated as of the date hereof, as hereafter
amended.
SECTION 2. THE ADVANCES
2.1 The Commitments. Upon the terms and subject to the
conditions set forth in this Agreement, the Tranche A Lender
agrees to make Advances to the Borrower of Tranche A, and each
Tranche B Lender severally, and not jointly or jointly and
severally, agrees to make Advances to the Borrower of Tranche B,
in each case in Dollars through its Lending Office. The Advances
shall be made by each Lender on the Borrowing Dates and in the
amounts provided for in Section 2.2 hereof, but in no event in an
amount that exceeds the aggregate amount of its Commitment;
provided that such Commitment has not theretofore been terminated
or canceled pursuant to Section 3.4(a) hereof or Section 3.7
hereof or otherwise.
2.2 Manner of Borrowing.
(a) The Borrower shall give to each of the Tranche A
Lender and the Agent, in each case not later than noon, New York
time, on or prior to the eleventh Business Day preceding each
Borrowing Date, a Notice of Borrowing, in writing or by telex,
which shall be in accordance with the Drawdown Schedule; provided
that notice to the Tranche A Lender with respect to each
Borrowing Date shall be deemed timely if received by the Tranche
A Lender not later than noon Tokyo time on the date ten Business
Days preceding such Borrowing Date. The amount to be drawn down
on any Borrowing Date shall be $1,000,000.00 or an integral
multiple thereof. The total amount to be drawn down on any
Borrowing Date shall be apportioned 60% to the Tranche A Lender
and 40% to the Tranche B Lenders, and the amount apportioned to
the Tranche B Lenders shall be apportioned by the Agent on a pro
rata basis among the outstanding Commitments of the Tranche B
Lenders. A Notice of Borrowing, once received by the Tranche A
Lender and the Agent, shall not be revocable by the Borrower.
(b) On or prior to the last day of the Availability
Period, the Borrower shall have the right to elect to borrow from
the Lenders on each relevant Borrowing Date, in addition to the
amounts set forth on the Drawdown Schedule, an amount equal to
(i) the amount of interest, fees, expenses, taxes and other
amounts payable by the Borrower pursuant to Sections 2.3, 2.7,
2.8, 3.3, 3.4(b) and 10.6 hereof, plus (ii) the difference
between such amount and the next highest amount that is
$1,000,000.00 or an integral multiple thereof. Such election
shall be exercised by including the amount to be borrowed in the
Notice of Borrowing given pursuant to Section 2.2(a) hereof. The
amount of such Borrowings shall thereafter be added to the
outstanding principal of the Advances and shall bear interest as
specified in Sections 2.3, 2.4, 2.5, 2.6 and 2.7 hereof. Except
as provided in Section 3.7 hereof, no changes to the Drawdown
Schedule will be permitted, except changes that (i) are requested
in a written notice delivered to both the Tranche A Lender and
the Agent seeking an alteration of $1,000,000.00 or an integral
multiple of $1,000,000.00 in the Drawdown Schedule, (ii) do not
increase the amount of the Commitments and (iii) are approved in
writing by the Tranche A Lender (and notified to the Borrower and
the Agent). If the Commitments shall be canceled in part, or
other such changes to the Drawdown Schedule are made, the Tranche
A Lender and the Agent shall promptly deliver to the Borrower a
revised Drawdown Schedule appropriately reflecting such changes.
The Borrower shall promptly deliver to the Tranche A Lender and
the Agent pursuant to Section 3.3(f) of the Trust Agreement a
notice either confirming that it agrees with the revised Drawdown
Schedule or indicating that it does not agree and specifying the
reasons therefor. Upon confirmation by the Borrower that it
agrees with the revised Drawdown Schedule, such revised Drawdown
Schedule shall be effective.
(c) With respect to each Notice of Borrowing received
by the Tranche A Lender, upon and subject to the terms and
conditions of this Agreement, before 1:00 p.m. New York time on
the Borrowing Date identified therein the Tranche A Lender shall
make available in Dollars to the Borrower to the account in New
York City specified with respect to Tranche A in such Notice of
Borrowing on such Borrowing Date the amount of funds requested of
the Tranche A Lender by the Borrower in such Notice of Borrowing
in same day settlement funds by credit of Federal or other
immediately available funds.
(d) Upon receipt of a Notice of Borrowing, the Agent
shall forthwith notify each Tranche B Lender of the Borrowing
Date identified therein. Before 11:00 a.m. New York time on such
Borrowing Date each Tranche B Lender will make available in
Dollars the amount of such Tranche B Lender's Advance to be made
on such Borrowing Date in same day settlement funds by credit of
Federal or other immediately available funds satisfactory to the
Agent to the account of the Agent (account no. 631-21-359) at
Morgan Guaranty Trust Company of New York located at 23 Wall
Street, New York, New York 10005, U.S.A. for the account of the
Borrower or at such other office or bank in New York, New York or
elsewhere as the Agent may from time to time designate by telex
(to be confirmed by letter) to the Tranche B Lenders. Upon and
subject to the terms and conditions of this Agreement, before
1:00 p.m. New York time on such Borrowing Date the Agent shall
make available to the Borrower to the account in New York City as
shall have been specified with respect to Tranche B by the
Borrower in such Notice of Borrowing on such Borrowing Date the
funds made available to the Agent pursuant to the next preceding
sentence in the same funds as received by the Agent.
(e) The failure of a Lender to make an Advance to be
made by it on the date specified therefor shall not relieve any
other Lender of its obligation to make its Advance hereunder on
such date, and no Lender shall be responsible for the failure of
any other Lender to make an Advance to be made by such other
Lender on the date specified therefor. Unless the Agent shall
have been notified by a Tranche B Lender prior to a Borrowing
Date (which notice shall be effective only upon receipt) that
such Tranche B Lender does not intend to make available to it
such Tranche B Lender's Advance with respect to Tranche B to be
made on such date, the Agent may assume that such Tranche B
Lender has made such Tranche B Lender's Advance available to it
on such date, and the Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding
amount. If the Tranche B Lender's Advance is not in fact made
available to the Agent by such Tranche B Lender, the Agent shall
be entitled to recover such amount either on demand from such
Tranche B Lender or on demand and in accordance with the
provisions of Section 3.9 hereof from the Borrower together with
interest thereon at a rate per annum representing the interest
cost to the Agent (as determined by the Agent using reasonable
efforts to minimize such cost) of funding the amount in question
until reimbursement thereof to the Agent; provided that to the
extent such amount is recovered from the Borrower, interest paid
thereon by the Borrower shall not exceed the rate or rates per
annum then applicable to the Advances made with respect to
Tranche B.
2.3 Interest. The Borrower shall pay interest on the
unpaid principal amount of all Advances outstanding from time to
time at the applicable interest rates determined in accordance
with Section 2.5 or 2.6 hereof, as the case may be, with respect
to each Interest Period. Such interest payable with respect to
each Interest Period shall be paid on the Interest Payment Date
at the end of such Interest Period. Interest on the Advances
shall be calculated from and including the relevant Borrowing
Date up to but not including the date of actual repayment and
shall be computed on the basis of a year of 365 days with respect
to Tranche A (other than any Overdue Tranche A Amounts and any
Deferred Portion thereof) and a year of 360 days with respect to
Tranche B (including any Deferred Portion thereof), any Deferred
Portion of Tranche A and any Overdue Tranche A Amounts, and shall
be payable in each case for the actual number of days elapsed.
2.4 Election of Interest Periods for Tranche B. The
Borrower shall have the option to elect an Interest Period of
three months or six months to apply to the entire amount of the
Borrowings outstanding with respect to Tranche B for which an
Interest Period is then to be determined, except (i) for the
initial Interest Period referred to in clause (i) of the
definition of Interest Period; (ii) for each other Interest
Period during the Availability Period, each of which shall be a
three-month Interest Period; (iii) with respect to any amounts of
principal coming due in approximately three months, to which a
three-month Interest Period shall apply as provided in clause
(iv) of the definition of Interest Period; and (iv) with respect
to any Deferred Portion of such Tranche, to which a three-month
Interest Period shall apply. Such option shall be exercised by
delivery to the Agent of a written or telexed Notice of Interest
Period and the Agent shall promptly notify the Tranche B Lenders
of the Interest Period so elected. If a Notice of Interest
Period in respect of any Interest Period is not received by the
Agent at least five Business Days prior to the commencement of
such Interest Period, the Borrower shall be deemed to have
elected an Interest Period of three months' duration.
2.5 Interest Rates.
(a) The interest rate applicable to Tranche A (other
than any Overdue Tranche A Amounts and any Deferred Portion of
Tranche A) for each Interest Period shall be 11-1/2% per annum.
(b) On the date which is two days, during which banks
are open for dealings in interbank Dollar deposits in London,
prior to the commencement of each Interest Period, the Agent
shall fix the interest rate for the Advances with respect to
Tranche B and any Deferred Portion of Tranche A or Tranche B to
be outstanding with respect to and during such Interest Period at
the rate per annum equal to the sum of the Applicable Margin plus
the London Interbank Offered Rate (the London Interbank Offered
Rate is referred to as "LIBOR"). LIBOR for each such Interest
Period shall be the average (rounded upward, if necessary, to the
nearest 1/16 of 1%) of the respective rates per annum at which
deposits in Dollars are offered to each of the Reference Banks in
the London interbank market as of approximately 11:00 a.m.,
London time, on such date for a period comparable to such
Interest Period and in an amount approximately equal to one-third
(1/3) of the aggregate amount of the Advances with respect to
Tranche B and any Deferred Portion of Tranche A or Tranche B to
be outstanding during such Interest Period. The Agent, whose
determination shall be conclusive in the absence of manifest
error, shall determine the interest rate on the above basis as
soon as practicable thereafter, New York time. If for any reason
no quotation is furnished by one or more of the Reference Banks
to the Agent, the Agent shall determine such interest rate on the
basis of the quotations furnished by the remaining Reference
Banks or Reference Bank.
2.6 Alternative Interest Rates. If, on any date on which
an interest rate is to be fixed pursuant to Section 2.5(b)
hereof, (i) none of the Reference Banks is able to furnish a
quotation to the Agent for purposes of determining an interest
rate pursuant to Section 2.5(b) hereof or (ii) the Agent is
notified by all the Reference Banks that deposits in Dollars in
an amount equal to the amount of the applicable Advances and any
Deferred Portions, to which such Interest Period relates, during
such Interest Period are not being offered to the Reference Banks
in the London interbank market or (iii) the Agent is notified by
the Majority Tranche B Lenders, or the Tranche A Lender with
respect to any Deferred Portion of Tranche A with respect to
which the Tranche A Lender's cost of funding includes costs
associated with Reserves (as defined below), that the rates at
which Dollar deposits are being offered to the Reference Banks in
the London interbank market plus all costs associated with
reserves, special deposits, deposit insurance or similar
requirements to be maintained or paid in accordance with the
regulations or other requirements of the Federal Reserve System,
the Federal Deposit Insurance Corporation or any other
department, agency or instrumentality of the United States of
America or any state thereof (collectively, "Reserves") in effect
on the date of this Agreement do not adequately reflect the cost
to the relevant Lenders of making or maintaining for the next
succeeding Interest Period their respective Advances with respect
to Tranche B, any Deferred Portion of Tranche B and any Deferred
Portion of Tranche A with respect to which the Tranche A Lender's
cost of funding includes costs associated with Reserves, then the
Agent shall promptly give notice of such fact to the Borrower and
the relevant Lenders. During the 30 days next succeeding the
giving of such notice, the Borrower and the relevant Lenders
shall negotiate in good faith in order to arrive at a mutually
satisfactory interest rate which shall be applicable to such
Advances and Deferred Portions to be outstanding during such
Interest Period instead of LIBOR. If within such 30-day period
the Borrower and the relevant Lenders agree in writing upon an
alternative interest rate, such rate shall be substituted for
LIBOR and shall be effective with respect to the relevant amounts
from the commencement of such Interest Period. The Borrower
shall pay to the relevant Lenders interest on such Advances and
Deferred Portions calculated based upon such alternative interest
rate plus the Applicable Margin during such Interest Period. If
the Borrower and the relevant Lenders fail to agree upon such an
alternative interest rate within such 30-day period, the interest
rate during such Interest Period, applicable to each relevant
Tranche B Lender's Advance and each relevant Lender's Deferred
Portion and effective from the commencement of such Interest
Period shall be such rate as such Lender shall determine (in a
certificate delivered by such Lender to the Agent setting forth
the basis of the computation of such rate, which certificate
shall in the absence of manifest error be conclusive and binding
on the Borrower) to be necessary to compensate each such Lender
for its actual out-of-pocket cost, and costs associated with such
Reserves (determined in good faith using reasonable efforts to
minimize the interest cost to the Borrower, rounded upward, if
necessary, to the nearest 1/16 of 1% and disregarding for such
purposes all costs of Reserves in effect on the date of this
Agreement), as of the commencement of such Interest Period, of
funds for such Interest Period in an amount equal to the
aggregate principal amount of each relevant Tranche B Lender's
Advances and each relevant Lender's Deferred Portion to which
such Interest Period relates plus the Applicable Margin. The
Agent shall notify the Borrower of such determination as promptly
as practicable. After the Agent shall have notified the Borrower
of such determination and during the period such interest rate
continues to be applicable, the Borrower may elect to prepay any
one or more of the relevant Tranche B Notes or the Deferred
Portion of the Tranche A Note without premium or penalty (except
as provided in Sections 2.7(c) hereof) in accordance with the
provisions of Section 3.5 hereof.
2.7 Interest Rate on Overdue Amounts; Other Indemnities.
(a) The Borrower shall pay interest on overdue
principal of the Tranche A Note or any Tranche B Note and, so far
as may be lawful, on any other overdue amount owing pursuant to
this Agreement, the Notes and the Letter Agreement, from and
including, the date the payment thereof was due to, but not
including, the day of actual payment, at a rate per annum which
shall be 2% over the average (rounded upward, if necessary, to
the nearest 1/16 of 1%) of the respective rates at which deposits
in Dollars with maturities of longer than six days and shorter
than six months, as the Agent may elect, are offered to each of
the Reference Banks in the London interbank market as of
approximately 11:00 a.m., London time, on the day such rate of
interest is determined in an amount equal to the aggregate amount
of such overdue payment due to the Lenders. If for any of the
reasons specified in clauses (i), (ii) or (iii) of Section 2.6
hereof an alternative interest rate would be determined pursuant
thereto, then such alternative interest rate shall be determined
and the Borrower shall pay to the relevant Lenders interest on
such overdue principal or other amounts at a rate per annum that
shall be 2% over such alternative interest rate without the
addition of the Applicable Margin.
(b) To the extent permitted by applicable law, without
prejudice to the other rights of the Tranche A Lender under
Sections 2.7(a), 2.7(c) and 10.6(b) hereof, the Borrower shall
promptly pay to the Tranche A Lender in the event of any
prepayment of any Advance, or any Event of Default resulting in
acceleration, an amount in each case calculated in accordance
with the following formula:
The amount due from the Borrower shall be X.
X = X1 + the Dollar equivalent determined by the
Tranche A Lender of X2
X1 = NPV1 of E (P1 x 1/4 x e1)
X2 = NPV2 of E (P2 x 1/4 x e2)
NPV1 means the net present value determined by the Tranche A
Lender by discounting the relevant amount of
interest for the periods from and including the
date of prepayment or acceleration, as the case
may be, to the date the relevant amount of
interest was originally scheduled to be due
pursuant to this Agreement (the "Periods"),
utilizing a discount rate per annum equal to the
effective yield to maturity on United States
Treasury securities purchasable on the date of
prepayment or acceleration, as the case may be,
and with maturities comparable to the relevant
Periods (but adjusting such yield from a
semi-annual to a quarterly basis) (such yield so
determined = a%).
P1 means each portion of the amount prepaid or accelerated, as
the case may be, which would have been outstanding
during the relevant Period had no such prepayment or
acceleration occurred.
e1 means the excess of 11-1/2% over a% (other than those
intended to be covered by the provisions of Section
2.7(b) hereof).
NPV2 means the net present value determined by the Tranche A
Lender by discounting the relevant amounts of
interest for the relevant Periods, utilizing a
discount rate per annum equal to the effective
yield to maturity on Japanese government bonds
purchasable on the date of prepayment or
acceleration, as the case may be, and with
maturities comparable to the relevant Periods (but
adjusting such yield to a quarterly basis).
P2 means an amount in Japanese yen determined by the Tranche A
Lender to be equivalent to P1 and calculated using the
weighted average rates of exchange used for conversion
of Japanese yen into Dollars for each Advance.
e2 means the excess of b% over 4.6%.
b% means the Japanese long term prime rate per annum prevailing
on the date of prepayment or acceleration, as the case
may be, plus 0.5%.
(c) To the extent permitted by applicable law, without
prejudice to the other rights of the Lenders under Sections
2.7(a), 2.7(b) and 10.6(b) hereof, the Borrower shall indemnify,
without duplication, each such Lender against, hold each such
Lender harmless from and promptly pay to the Tranche A Lender or
the Agent on behalf of each Tranche B Lender, as the case may be,
all out-of-pocket costs, losses (excluding loss of profit) or
expenses which each such Lender may sustain or incur (other than
the items to be indemnified for as contemplated by the provisions
of Section 2.7(b) hereof) as a consequence of (i) any prepayment
of any Advance with respect to Tranche B (including any Deferred
Portion thereof) or any Deferred Portion of Tranche A or (ii) the
failure by the Borrower to pay when due the principal of or
interest on any Note or any other amount payable under this
Agreement or the Letter Agreement, including but not limited to
funding costs and any amounts payable by such Lender in order to
maintain its Advances with respect to Tranche B (including any
Deferred Portion thereof), and any Deferred Portion of Tranche A
(until the end of the relevant Interest Period in the event of
prepayment or until payment of all amounts then due by
acceleration or otherwise in the event of a failure to pay), but
excluding any such costs, losses or expenses resulting from
prepayment on an Interest Payment Date of amounts for which an
Interest Period ends on such Interest Payment Date as permitted
in accordance with Section 3.6 hereof. In each case involving a
prepayment (other than a prepayment under Section 3.6 hereof for
which no costs, losses or expenses are payable), each Lender
shall act in good faith and use reasonable efforts to minimize
the costs, losses and expenses payable by the Borrower hereunder.
(d) A certificate of any Lender setting forth in
reasonable detail the basis for the determination of the amounts
necessary to indemnify such Lender pursuant to Section 2.7(b) or
(c) shall be conclusive as to the determination of such amounts
in the absence of manifest error.
2.8 Fees.
(a) The Borrower hereby agrees to pay a non-refundable
management fee in the amount specified in and otherwise in
accordance with the letter agreement between the Borrower and the
Lead Managers of even date herewith (the "Management Fee Letter
Agreement"). The allocation of such fee shall not be the
responsibility of the Borrower or the Producers.
(b) The Borrower hereby agrees to pay a non-refundable
agency fee in the amount specified in and otherwise in accordance
with the agency fee letter agreement between the Borrower and the
Agent of even date herewith (the "Agency Fee Letter Agreement"
and, collectively with the Management Fee Letter Agreement, the
"Letter Agreement").
(c) The Borrower agrees to pay to the Agent for the
account of each Tranche B Lender a commitment fee at the rate of
1/4 of 1% per annum on the daily undrawn amount of such Tranche B
Lender's Commitment during the period from and including the
Effective Date to and including the last day of the Availability
Period. Such fee will be calculated on an estimated basis on the
first day of each Interest Period in accordance with the undrawn
amount of such Tranche B Lender's Commitment on that day and
amounts in respect thereof shall be accumulated for payment and
paid in accordance with Sections 3.2 and 3.3 of the Trust
Agreement, subject to adjustment when any Advance is made
hereunder. Such commitment fee shall be calculated on the basis
of the actual number of days elapsed and a 360-day year and shall
be paid, in accordance with Section 3.2 hereof, initially on the
first March 31, June 30, September 30 or December 31 to occur
within three months after the Effective Date and thereafter
quarterly in arrears, with the final payment on the Interest
Payment Date on or immediately following the last day of the
Availability Period.
2.9 The Notes. The Tranche A Lender's Advances shall be
evidenced by a single promissory note of the Borrower (the
"Tranche A Note"), substantially in the form of Exhibit C-1
hereto, and each Tranche B Lender's Advances shall be evidenced
by a single promissory note of the Borrower (a "Tranche B Note"),
substantially in the form of Exhibit C-2 hereto, each payable to
the order of such Lender for the account of its Lending Office in
an amount equal to such Lender's Commitment or, if less, the
aggregate unpaid principal amount of such Lender's Advances.
Each Note shall be dated the date of its delivery pursuant to
Section 5.1 hereof, shall have the blanks therein appropriately
completed, and shall bear interest as specified in Sections 2.3,
2.4, 2.5, 2.6 and 2.7 hereof. Each Lender shall, and is hereby
irrevocably authorized by the Borrower to, endorse on the
schedule attached to its Note or on a continuation of such
schedule attached to and made a part of such Note an appropriate
notation evidencing the date and amount of each Advance made by
such Lender and the date and amount of each payment, prepayment
or deferral of principal made by the Borrower with respect
thereto. The failure so to record any such amount or any error
in so recording any such amount shall not, however, limit or
otherwise affect the obligations of the Borrower hereunder or
under any of the Notes to repay the principal amount of all
Advances thereunder together with all interest accruing thereon.
2.10 Repayment on Maturity Dates; Deferral.
(a) Subject to Section 2.10(b), on each Maturity Date
the Borrower shall repay with respect to each Tranche, as
provided in Section 3.1 hereof, an amount of principal equal to
the percentage of the principal amount of such Tranche
outstanding at the end of the Availability Period set forth
immediately below; provided that on the Final Maturity Date the
Borrower shall repay in full the amount of the aggregate Advances
of both Tranches then outstanding.
Percentage of
Maturity Date Advance Payable
1st to 14th 2.0% each
15th to 26th 2.5% each
27th to 40th 3.0% each
(b) If after application of amounts to the payment of
interest and other amounts payable with respect to both Trenches
on any Maturity Date other than the Final Maturity Date, the
aggregate of the amounts held in the Debt Service Account and the
Reserve Account will be insufficient on such Maturity Date to pay
all or a portion of the principal payable on such Maturity Date
with respect to both Tranches, then the Borrower may elect (by
giving not later than noon New York time on or prior to the
seventh Business Day preceding such Maturity Date a Notice of
Deferral to the Tranche A Lender and the Agent, who shall
promptly notify the Tranche B Lenders thereof; provided that
notice to the Tranche A Lender with respect to such Maturity Date
shall be deemed timely if received by the Tranche A Lender not
later than noon Tokyo time on the date six Business Days
preceding such Maturity Date) to defer to the next succeeding
Maturity Date payment of the amount of principal for which such
funds will be insufficient (pro rata for the account of each
Lender to the unpaid principal amount of the Notes) (such amount
referred to as the "Deferred Portion"), subject to the following
being true on the Maturity Date on which such insufficiency
exists:
(i) The Borrower shall not have previously deferred
payments of any principal in accordance with this Section 2.10(b)
either (x) on the four consecutive Maturity Dates immediately
preceding such Maturity Date or (y) on a total of 15 previous
Maturity Dates, whether or not consecutive;
(ii) The LNG Sales Contract shall be in full force and
effect;
(iii) No material breach or default under the LNG
Sales Contract shall exist and no notice of incipient material
breach or default shall have been given by either party thereto;
(iv) No authorization or approval required for the
continued validity and enforceability of the LNG Sales Contract
shall have been revoked or suspended; and
(v) No Event of Default shall have occurred and be
continuing or would occur with the giving of notice or the lapse
of time.
2.11 Notices. The Tranche A Lender or the Agent, as
appropriate with respect to the Tranche A Note and the Tranche B
Notes, respectively, shall promptly give the Borrower, and the
Agent shall promptly give the Tranche A Lender or the Tranche B
Lenders or each of them, as appropriate, with respect to their
Notes (i) notice of each interest rate (or interest rates)
determined pursuant to Sections 2.5, 2.6 or 2.7 hereof, the date
of each of the next Interest Payment Dates with respect to which
the interest payable is then calculable, the date of the next
Maturity Date and the amount of principal interest on the
relevant Tranche, as the case may be, the amount of commitment
fees estimated in accordance with Section 2.8(c) hereof to be
paid to the Tranche B Lenders on each of such dates and the
amount of the fee referred to in Section 2.8(b) hereof, (ii) as
otherwise provided in this Agreement, notice of other relevant
amounts due and payable hereunder, and (iii) the notices to the
Borrower by the Tranche A Lender or the Agent or both that
Section 3.2(b) of the Trust Agreement requires this Agreement to
provide for. The Tranche A Lender or the Agent, as appropriate,
shall provide the foregoing information to the Borrower at the
time and in the manner specified in Section 3.2(b) of the Trust
Agreement; provided that no failure or delay in the giving of
such notice shall discharge or excuse the Borrower from or permit
the Borrower to delay making any payment hereunder.
SECTION 3. PAYMENTS
3.1 Allocation of Amounts; Substitute Payment.
(a) Unless otherwise provided in this Agreement, all
payments by the Borrower to the Tranche A Lender and the Agent
for the account of the Tranche B Lenders shall be allocated as
provided for in Section 3.3 of the Trust Agreement. All payments
by the Borrower of commitment fees shall be made to the Agent for
the account of the Tranche B Lenders, pro rata to their
respective Commitments. All payments referred to in this Section
3.1 which are received by the Agent in the manner provided in
Section 3.2 hereof shall be deemed to have been made to the
Tranche B Lenders, and such payments to the Agent shall discharge
the Borrower from any further liability to make such payments to
such Tranche B Lenders.
(b) Notwithstanding anything to the contrary contained
in this Agreement or in any Note, but subject always to the
provisions of Section 9 hereof, if the Agent shall have notified
the Borrower that it shall have become unlawful or, in the
opinion of the Agent, impracticable for any payment to be made as
aforesaid, the Borrower shall pay to each Tranche B Lender for
its own account in such funds as are required by Section 3.2
hereof or in such other manner as may be agreed between the
Borrower and the relevant Tranche B Lender and to such account as
may be specified by the relevant Tranche B Lender to the
Borrower, the amount of the relevant Tranche B Lender's portion
of the payment in question. Each such Tranche B Lender shall
keep the Agent fully informed as to all amounts received by it
and as to all agreements made between it and the Borrower as
referred to above.
3.2 Funds of Payment.
(a) Each payment made by the Borrower under this
Agreement with respect to Tranche A or under the Tranche A Note
shall be made in Dollars and in same day settlement funds by
credit of Federal or other immediately available funds
satisfactory to the Tranche A Lender (or such funds as may from
time to time be customary for the settlement in New York City of
international banking transactions in Dollars) not later than
10:00 a.m. Tokyo time on the Japanese Business Day immediately
following the day on which such payment is due to, as applicable,
the account of the Tranche A Lender in Tokyo, Japan (Account No.
228-02-01-041735005) at The Industrial Bank of Japan, Limited,
Head Office, or to such other account of the Tranche A Lender in
Tokyo, Japan as the Tranche A Lender may at any time or from time
to time designate by written notice to the Borrower, and payment
in such manner shall fully discharge the Borrower's obligations
with respect to the amount paid.
(b) Each payment made by the Borrower under this
Agreement with respect to Tranche B, the Tranche B Notes and the
Letter Agreement shall be made in Dollars and in same day
settlement funds by credit of Federal or other immediately
available funds satisfactory to the Agent (or such funds as may
from time to time be customary for the settlement in New York
City of transactions in Dollars) not later than 11:00 a.m. New
York time on the Business Day on which such payment is due by
credit to the account of the Agent (Account No. 631-21-359) at
Morgan Guaranty Trust Company of New York, 23 Wall Street, New
York, New York 10005 U.S.A. or to such other account of the Agent
as the Agent may at any time or from time to time designate by
written notice to the Borrower. The Agent will promptly cause
each such payment received by it to be distributed to each
Tranche B Lender (in each case for the account of such Tranche B
Lender's Lending Office) in like funds with respect to each
payment received by such Agent for the account of such Tranche B
Lenders or the holders of the Tranche B Notes.
(c) Whenever any payment hereunder or under any Note falls
due on a day which is not a Business Day, the due date for such
payment shall be advanced to the next succeeding Business Day,
unless the next succeeding Business Day falls in another calendar
month, in which case such payment shall be advanced to the
immediately preceding Business Day.
3.3 Set-Off, Counterclaim and Taxes. The Borrower will (i)
pay all amounts of principal of and interest on the Notes and all
other amounts payable under this Agreement, the Notes and the
Letter Agreement ("Payments") without set-off or counterclaim,
and, to the extent permitted by law, free and clear of, and
without deduction or withholding for or on account of, any Taxes,
and (ii) pay to, indemnify for and hold each of the Lenders
harmless from and against any Taxes which are stamp or like taxes
imposed directly or indirectly with respect to the preparation,
execution, delivery, registration, filing or recording of this
Agreement, the Notes, the Producers Agreement, the Trust
Agreement, the Letter Agreement or any document connected
herewith or therewith and any Taxes which are imposed directly or
indirectly on any Lender or the Agent, with respect to this
Agreement, the Notes, the Producers Agreement, the Trust
Agreement, the Letter Agreement, any document connected herewith
or therewith or the transactions contemplated by any of the
foregoing documents or any Payments. Notwithstanding the
foregoing, the provisions of the first sentence of this Section
3.3 shall not require the Borrower to pay any Excluded Taxes. If
any Taxes (other than Excluded Taxes) are required by law to be
deducted or withheld from any Payment, the Borrower will increase
the amount of such Payment to the Tranche A Lender or the Agent
or both, and the Tranche B Lenders through the Agent, to the
extent necessary in order that the net amount received by the
Tranche A Lender and Agent, and the Tranche B Lenders through the
Agent, after deduction of all Taxes required to be deducted or
withheld with respect to such Payment as so increased and any
other Taxes payable by the Lenders with respect to the amount of
such increase, will equal the full amount of the Payment due and
payable to the relevant Lender or Lenders. The Borrower will
furnish to each Lender, in such number of copies as such Lender
shall request, certified copies of tax receipts or other
appropriate evidence of payment, satisfactory to such Lender,
evidencing the payment of all Taxes levied or imposed upon any
Payment within 45 days after the date any such payment is due
pursuant to applicable law. If any Taxes (other than Excluded
Taxes) are imposed on or with respect to any Payment or are
required to be paid by the Tranche A Lender, the Agent or any
Tranche B Lender on or with respect to any Payment or in
connection with this Agreement or the Notes, the Borrower will
pay or otherwise indemnify and hold the Tranche A Lender, the
Agent and each Tranche B Lender harmless from any such Taxes or
will reimburse to the Tranche A Lender, the Agent and each
Tranche B Lender on demand, subject to the provisions of Section
3.9 hereof, such amounts as may be necessary in order that the
net amount received by the Tranche A Lender, the Agent and each
Tranche B Lender pursuant to such indemnity or reimbursement,
after deduction of all Taxes required to be deducted, withheld or
otherwise paid by the Tranche A Lender, the Agent and the Tranche
B Lenders with respect to such amount, shall equal the amount of
such Taxes so imposed or otherwise subject to indemnity and
reimbursement.
If a Lender shall receive a refund of any Taxes paid by the
Borrower pursuant to this Section 3.3 by reason of the fact that
such Taxes were not correctly or legally asserted, the Lender
shall within 45 days after receipt of such refund pay to the
Borrower the amount of such refund, as determined solely by the
Lender; provided, however, that in no event shall the amount paid
by the Lender to the Borrower pursuant to this sentence exceed
the amount of Taxes originally paid by the Borrower; and further
provided that no Lender shall have any obligation under this
Agreement to claim or otherwise seek to obtain any such refund.
3.4 Change of Law.
(a) Notwithstanding any other provision in this
Agreement to the contrary, if any change in any applicable law,
rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any
Tranche B Lender (or its Lending Office) with any new request,
interpretation or directive of any relevant central bank or other
governmental authority, shall make it unlawful for any Tranche B
Lender (or its Lending Office) to (i) maintain its Commitment,
then such Commitment of such Tranche B Lender shall thereupon
terminate, or (ii) maintain or fund its Advances, then such
Commitment of such Tranche B Lender shall thereupon terminate,
and the principal amount of such Tranche B Lender's Note then
outstanding shall be repaid, together with interest accrued
thereon and any other amounts payable to such Tranche B Lender
under this Agreement, such Tranche B Lender's Note or the Letter
Agreement, commencing immediately as an accelerated mandatory
prepayment in accordance with Sections 3.2 and 3.3 of the Trust
Agreement; provided, however, that all such amounts shall be paid
on or prior to the Final Maturity Date. Upon the occurrence of
any such change or request making it unlawful for a Tranche B
Lender to maintain its Commitment as aforesaid, such Tranche B
Lender shall promptly forward to the Agent in writing, and the
Agent shall promptly forward to the Borrower, evidence certified
by such Tranche B Lender as to such change or request.
(b) If any change in any applicable law, rule or
regulation or in the interpretation or administration thereof, or
compliance, by any Tranche B Lender or by the Tranche A Lender
with respect to any Deferred Portion or any Overdue Tranche A
Amounts, with any new request (whether or not having the force of
law) of any relevant central bank or other governmental
authority, shall change the basis of taxation of payments to any
such Lender (or its Lending Office) of the principal of or
interest on any of the Notes or any other amounts payable under
this Agreement or the Letter Agreement (except for Excluded
Taxes) or shall impose, modify or deem applicable any similar new
requirement in respect of Reserves against assets of, deposits
with or for the account of, or credit extended by, or the
Commitment of, any such Lender (or its Lending Office) (except
for Reserves in effect on the date of this Agreement), or shall
impose on any such Lender (or its Lending Office) or the London
interbank market any other new condition directly affecting this
Agreement, any of the Notes, the Letter Agreement or the Advances
and the result of any of the foregoing is to increase the cost to
any Tranche B Lender of maintaining its Commitment or making or
maintaining its Advances, to increase the cost to the Tranche A
Lender of maintaining any Deferred Portion of its Advances or any
Overdue Tranche A Amounts, or to reduce the amount of any such
amount received or receivable by any such Lender (or its Lending
Office) hereunder, by an amount deemed by such Lender to be
material, then the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for
such additional cost or reduction. Such additional amount or
amounts shall, subject to Section 3.9 hereof, be paid on the
Interest Payment Date for the Interest Period to which such costs
relate. Each Lender agrees that it will promptly notify the
Borrower of any event which will entitle such Lender to an
additional amount pursuant to this Section 3.4(b). A certificate
of such Lender setting forth the basis in reasonable detail for
the determination of such additional amount necessary to
compensate such Lender as aforesaid shall be conclusive as to the
determination of such amount in the absence of manifest error.
After the receipt of any notice from any Lender indicating that
such Lender is entitled to an additional amount pursuant to this
Section 3.4(b), the Borrower may elect to prepay the relevant
Tranche B Note of such Lender or the Deferred Portion of the
Tranche A Note without premium or penalty (except as provided in
Section 2.7(c) hereof) in accordance with the provisions of
Section 3.5 hereof; provided that any such prepayment may be made
only if the amounts set forth in the certificate described in the
preceding sentence are paid by the Borrower prior to or
simultaneously with such prepayment.
(c) Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 3.4(a) or (b)
hereof with respect to such Lender, it will, if requested by the
Borrower, and in consultation with the Agent, use reasonable
efforts to designate another Lending Office for its Commitment or
its Advances; provided that such designation is made on such
terms that such Lender and its Lending Office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of Section
3.4(a) or (b) hereof. Nothing in this Section 3.4(c) shall
affect or postpone any of the obligations of the Borrower or the
rights of the Lenders provided in Section 3.4(a) or (b) hereof.
3.5 Certain Prepayments. Whenever the Borrower has elected
to prepay any relevant Note or Notes or any Deferred Portion
thereof pursuant to Section 2.6 or 3.4(b) hereof, the Borrower
shall give the Tranche A Lender and the Agent notice of such
prepayment at least five Business Days in advance thereof
(provided that such notice to the Tranche A Lender shall be
deemed timely if received by the Tranche A Lender in Tokyo at
least four Business Days in advance thereof), and on the date
specified in such notice (which shall be a Business Day and a
single date) the principal then outstanding of the affected Note
or Notes (or, in the case of the Tranche A Note, only the
Deferred Portion thereof) shall be repaid in full, together with
interest accrued thereon and, to the extent then ascertainable,
any other amount (other than non-deferred principal of the
Tranche A Note) payable under this Agreement to the Lender or
Lenders holding such Note or Notes. Any notice of prepayment
under this Section 3.5 hereof shall be irrevocable.
3.6 Other Prepayments. Subject to the prior written
consent of the Tranche A Lender, the Borrower may, upon not less
than eleven Business Days' irrevocable prior notice to the
Tranche A Lender and the Agent (provided that such notice to the
Tranche A Lender shall be deemed timely if received by the
Tranche A Lender in Tokyo at least ten Business Days prior to
prepayment), prepay the Notes in whole or in part on a pro rata
basis (based on outstanding principal amount) on any Interest
Payment Date for the Notes being prepaid, and if in part in an
amount which is equal to $1,000,000.00 or an integral multiple of
$1,000,000.00. Whenever the Borrower seeks such consent, the
Borrower shall give the Agent written notice thereof at the same
time it gives notice to the Tranche A Lender with respect
thereto. Each partial prepayment of any Notes made pursuant to
this Section 3.6 shall be applied to the installments of
principal due thereunder in the inverse order of maturity.
Except as provided in Sections 2.7(b) and (c) hereof, such
prepayments shall be without premium or penalty; provided that
the right to prepay without premium or penalty shall not apply to
any amounts declared forthwith due and payable in accordance with
Section 7 hereof. All prepayments permitted pursuant to this
Section 3.6 shall be made together with payment of accrued
interest on the principal amount prepaid, and, to the extent then
ascertainable, any other amount payable under this Agreement or
the Notes.
3.7 Cancellation of Commitments. The Borrower may without
premium or penalty (a) upon not less than 30 days' irrevocable
prior notice to the Tranche A Lender and the Agent, cancel the
Commitments of the Lenders in whole or in part, and if in part in
an aggregate amount of $1,000,000.00 or an integral multiple of
$1,000,000.00, by reducing amounts to be drawn down pursuant to
the Drawdown Schedule in inverse order, all such cancellations to
be on a pro rata basis as among the Lenders based on their
respective Commitments, or (b) upon not less than five Business
Days' irrevocable prior notice to the Agent, cancel the
Commitment of any Lender whose Note is prepaid in accordance with
the provisions of Section 3.5 hereof.
3.8 No Reborrowing. The Commitments are not revolving in
nature, and no amount repaid or prepaid under this Agreement may
be reborrowed hereunder.
3.9 Payments to be Made at End of Interest Period. Except
for amounts owing pursuant to Sections 3.4(a), 7 and 10.6 hereof
which become payable as provided in such Sections, and
notwithstanding any provision of any Section other than Sections
3.4(a), 7 and 10.6 hereof to the contrary, in view of the nature
of the Borrower and the nature of the Source of Debt Service and
Contingent Support from which payments hereunder will be made,
all amounts becoming payable hereunder, which would otherwise be
due on a date which does not fall on an Interest Payment Date
instead shall be due on the Interest Payment Date next to occur
thereafter and prior to which the Borrower is notified that such
amount is payable, subject in each such case to the relevant
provisions of Sections 3.2 and 3.3 of the Trust Agreement;
provided, however, that all amounts due and payable under this
Agreement and the Notes shall be paid on or prior to the Final
Maturity Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower and, only to the extent expressly stated to be
in its individual capacity, Continental Bank International,
represent and warrant to the Lenders that:
4.1 Power and Authority. The Borrower has full power,
authority and legal right to incur the Indebtedness and other
obligations provided for in this Agreement, the Notes and the
Letter Agreement, to execute and deliver this Agreement, the
Notes, the Trust Agreement and the Letter Agreement and the other
documents contemplated hereby or referred to herein to which the
Borrower is a party, to borrow, pay and repay hereunder and under
the Notes and the Letter Agreement and to perform and observe the
terms and provisions hereof and thereof. Continental Bank
International, in its individual capacity, is a banking
corporation duly organized and validly existing in good standing
under the laws of the United States of America and has the full
power, authority and legal right to execute, deliver and perform
this Agreement, the Notes, the Trust Agreement and the Letter
Agreement as Trustee.
4.2 Legal Action. All necessary legal action has been
taken to authorize the Borrower (i) to execute and deliver this
Agreement, the Notes, the Trust Agreement, the Letter Agreement
and the other documents contemplated hereby or referred to herein
to which the Borrower is a party, (ii) to borrow, pay and repay
hereunder and under the Notes and the Letter Agreement and (iii)
to perform and observe the terms and provisions of this
Agreement, the Notes, the Trust Agreement and the Letter
Agreement.
4.3 Restrictions. There is no Legal Requirement and no
contractual or other obligation binding on the Borrower or
Continental Bank International in its individual capacity, that
is or will be contravened (or, in the case of a contractual
obligation, in respect of which a breach has occurred or will
occur) by reason of the execution and delivery of this Agreement,
the Notes, the Trust Agreement, the Letter Agreement or any of
the other documents contemplated hereby or referred to herein to
which the Borrower is a party, the making of Borrowings by the
Borrower hereunder or the performance or observance by the
Borrower of any of the terms or provisions hereof or thereof in
each case in the manner contemplated hereby and thereby.
4.4 Registration and Approvals. No registrations,
declarations or filings with, or consents, licenses, approvals or
authorizations of, any legislative body, governmental department
or governmental authority necessary under any applicable laws are
required of the Borrower or Continental Bank International in its
individual capacity for the due execution and delivery by the
Borrower, or for the performance by the Borrower, of this
Agreement, the Notes, the Trust Agreement, the Letter Agreement
or any of the other documents contemplated hereby or referred to
herein to which the Borrower is a party, or to authorize the
Borrowings hereunder or to assure the validity or enforceability
hereof or thereof, except in each case for those as have been
made or obtained and copies of which have been furnished to the
Tranche A Lender and the Agent and which are in full force and
effect.
4.5 Agreement Binding. This Agreement, the Trust Agreement
and the Letter Agreement constitute, and the Notes when executed
and delivered pursuant hereto for value will constitute, the
legal, valid and binding obligations of the Borrower enforceable
against the Borrower to the extent specified in Section 9 hereof
in accordance with its and their respective terms, subject in the
case of enforcement to any applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and to equitable principles of
general application.
4.6 Ranking of Advances; Encumbrances. The Borrower has no
outstanding Indebtedness charging or to be paid out of the Source
of Debt Service, Source of Contingent Support, Contingent Support
or Borrowed Amounts other than the obligations and liabilities of
the Borrower hereunder and under the Notes and the Letter
Agreement and any Indebtedness permitted by Section 6.4 hereof.
The Borrower has not created, incurred or suffered to exist (i)
any Encumbrance on the Source of Debt Service, Source of
Contingent Support or any Contingent Support, in each case
received or receivable by it prior to its deposit in the Bontang
III Payment Account, or (ii) any Encumbrance on any Borrowed
Amounts, in each case under clause (i) or (ii) resulting from any
act of the Borrower or any failure by the Borrower to perform any
of its obligations under this Agreement or the Trust Agreement or
any of its duties thereunder, except any Encumbrance permitted
pursuant to Section 6.2 hereof.
4.7 Litigation. There is no suit, action, proceeding or
investigation pending against the Borrower or, to the knowledge
of the Borrower, threatened against the Borrower, which (a)
questions the validity of this Agreement, any Note, the Trust
Agreement or the Letter Agreement, or any action taken or to be
taken by the Borrower pursuant hereto or thereto, (b) affects or
is likely to affect the amount of the Source of Debt Service or
Contingent Support received by it or to the best of the
Borrower's knowledge, receivable by it, or (c) would or is likely
to affect adversely the Borrower's ability to perform its
obligations under this Agreement, the Notes, the Trust Agreement
or the Letter Agreement or any other agreement to which it is a
party or by which it or its properties or assets is bound.
4.8 Compliance With Other Instruments, etc. Continental
Bank International in its individual capacity is not in violation
of any term of its charter or by-laws. The Borrower is not in
violation of any term of any agreement or any instrument to which
it is a party or by which it or any of its properties or assets
is bound or of any Legal Requirement, which violation would or is
likely to have an adverse effect on the Borrower's ability to
perform its obligations under this Agreement, the Notes, the
Trust Agreement, the Letter Agreement or any other agreement to
which it is a party or by which it or its property or assets are
bound.
4.9 No Defaults. No Event of Default referred to in
Sections 7(a) through 7(e) hereof has occurred and is continuing
and no event has occurred or failed to occur, the occurrence or
non-occurrence of which, with the giving of notice or lapse of
time or both, would constitute such an Event of Default, and the
Borrower is not in violation of any of its obligations under the
Trust Agreement.
4.10 Trust Agreement. The copy of the Trust Agreement
delivered to the Lenders on the Effective Date is a true,
complete and correct copy thereof as in effect on the Effective
Date.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions Precedent to the Initial Advances. Except
as the Majority Lenders may otherwise consent, the obligation of
each Lender to make the initial Advance to be made by such Lender
hereunder is subject to the condition precedent that the Tranche
A Lender and the Agent shall have one Business Day prior to the
date of the initial Advance received the following, all in form
and, as to Sections 5.1(a) to (p) inclusive and 5.1(r) and (s)
hereof and as to the Indonesian governmental authorizations and
consents referred to in Section 5.1(t) hereof, in substance
satisfactory to the Lenders:
(a) in the case of the Tranche A Lender only, the
Tranche A Note payable to the order of the Tranche A Lender
complying with the requirements of Section 2.9 hereof;
(b) in the case of the Agent only, a Tranche B Note
payable to the order of each Tranche B Lender complying with the
requirements of Section 2.9 hereof;
(c) a signed copy of an opinion of Kelley Drye &
Warren, counsel to the Borrower and the trustees under the
Bontang Excess Sales Trust Agreement and the Bontang I Trust
Agreement, substantially in the form of Exhibit D-1 hereto, dated
one Business Day prior to the date of such Advance;
(d) a signed copy of an opinion of in-house counsel to
the Borrower, substantially in the form of Exhibit D-2 hereto,
dated one Business Day prior to the date of such Advance;
(e) a signed copy of an opinion of the Special Legal
Advisor to the President Director of Pertamina, substantially in
the form of Exhibit E-1 hereto, dated at least one but not more
than five Business Days prior to the date of such Advance;
(f) a signed copy of an opinion of Baker & Botts,
special counsel to Roy M. Huffington, Inc., Huffington
Corporation, Virginia International Company, Virginia Indonesia
Company, Ultramar Indonesia Limited, and Union Texas East
Kalimantan Limited, substantially in the form of Exhibit E-2
hereto, dated one Business Day prior to the date of such Advance;
(g) a signed copy of an opinion of White & Case,
special New York counsel to Pertamina, substantially in the form
of Exhibit E-3 hereto, dated one Business Day prior to the date
of such Advance;
(h) signed copies of opinions of counsel for each of
the Producers other than Pertamina, dated at least one but not
more than five Business Days prior to the date of such Advance;
(i) a signed copy of an opinion of Paul, Weiss,
Rifkind, Wharton & Garrison, special counsel to the Tranche A
Lender, the Agent and the Tranche B Lenders, substantially in the
form of Exhibit F-I hereto, dated one Business Day prior to the
date of such Advance;
(j) a signed copy of an opinion of Tsar & Tsai,
special Taiwan counsel to the Tranche A Lender, the Agent and the
Tranche B Lenders, substantially in the form of Exhibit F-2
hereto, dated one Business Day prior to the date of such Advance;
(k) a signed copy of an opinion of Johnson, Stokes &
Master, special counsel to the Tranche A Lender, the Agent and
the Tranche B Lenders, dated one Business Day prior to the date
of such Advance;
(l) a copy of the Trust Agreement with all amendments
to the date of the initial Advance certified by the Borrower;
(m) a copy of a notice from the Producers to the
Borrower that they have approved the form and terms of this
Agreement and authorizing and requesting the execution and
delivery of this Agreement by the Borrower as contemplated by
Section 3.1 of the Trust Agreement;
(n) copies of the Bontang Excess Sales Trust Agreement
and the Bontang I Trust Agreement, in each case with all
amendments to the date of such Advance certified by the trustees
party thereto;
(o) a copy of the executed and delivered Construction
Agreement with all amendments to the date of such Advance
certified by Pertamina, but not including Exhibits A and B
thereto;
(p) a certificate of Pertamina and, with respect to
each such agreement to which each representative referred to in
Section 13.3 of the Trust Agreement is a party, of such
representative, to the effect that the copies of (i) the
Development Plan, (ii) the Basic Agreements, (iii) the Chubu
Sales Contract, (iv) the 1973 LNG Sales Contract, (v) the Korean
Quantities Agreement, (vi) the Korean Quantities Supplemental
Memorandum, (vii) the Korean Sales Contract, (viii) the Bank
Indonesia Relending Agreement dated as of August 26, 1975 between
the Republic of Indonesia and Pertamina, (ix) the Loan Agreement
for Badak dated as of May 17, 1974, between Pertamina and Japan
Indonesia LNG Co., Ltd., (x) the Badak Escrow and Trust Agreement
dated as of July 15, 1974 among Pertamina, The Industrial Bank of
Japan, Limited and Japan Indonesia LNG Co., Ltd., (xi) the
Transportation Agreement dated as of September 23, 1973 between
Burmast East Shipping Corporation and Pertamina, (xii) the Supply
Agreement for "Korean Carry-Over Quantities" dated as of December
30, 1987 by and between Pertamina, on the one hand, and Roy M.
Huffington, Inc., Huffington Corporation, Virginia International
Company, Virginia Indonesia Company, Ultramar Indonesia Limited,
Union Texas East Kalimantan Limited and Universe Tankships, Inc.,
on the other hand, (xiii) the Supply Agreement for "Korean
Carry-Over Quantities" dated as of December 30, 1987 by and
between Pertamina, on the one hand, and Total Indonesie and
Indonesia Petroleum, Ltd., on the other hand, (xiv) the Supply
Agreement for "Korean Carry-over Quantities" dated as of December
30, 1987 by and between Pertamina, on the one hand, and Unocal
Indonesia, Ltd. and Indonesia Petroleum, Ltd., on the other hand,
(xv) the Bontang Excess Sales Trust Agreement and (xvi) the
Bontang I Trust Agreement, in each case as amended, provided to
the Tranche A Lender and the Agent on the date hereof were true,
correct and complete copies of such documents with all amendments
and that no change has been made in such documents since the date
of this Agreement, except for such changes as are permitted
without the consent of the Majority Lenders pursuant to the
Producers Agreement;
(q) a copy of the most recent statements, entitled
"Certificate of Gas Reserves Nilam Field, East Kalimantan,
Indonesia, as of January 31, 1986," "Certificate of Gas Reserves
Badak Field, East Kalimantan, Indonesia, as of January 31, 1986,"
"Certificate of Gas Reserves, Bekapai, Handil, and Tambora Fields
Operated by Total Indonesie, East Kalimantan, Indonesia, as of
January 31, 1986," "Certificate of Gas Reserves, Tunu Field, East
Kalimantan, Indonesia, as of January 31, 1986," and "Certificate
of Gas Reserves, Attaka Field, East Kalimantan, Indonesia, as of
January 31, 1986," each of which has been prepared by DeGolyer
and MacNaughton, relating to the gas reserves in the Badak and
certain other East Kalimantan fields;
(r) a certificate of Pertamina to the effect that (i)
Property Insurance Policy No. N 76020 dated June 1, 1987,
together with any amendments, issued by P.T. Tugu Pratama
Indonesia in favor of Pertamina, among others, covering the
Bontang Plant (excluding Train E) and (ii) Contractors "All
Risks" Insurance Policy No. E 71031, dated January 25, 1988,
together with any amendments, issued by P.T. Tugu Pratama
Indonesia in favor of Pertamina, among others, covering Train E
have been delivered to the Tranche A Lender and the Agent prior
to the date hereof and, except as permitted by Section 1.11 of
the Producers Agreement, remain in full force and effect in
compliance with Section 1.11 of the Producers Agreement;
(s) copies certified by the Borrower to be true and
correct as of the date of the initial Advance of (i) the
designation of each entity and individual authorized to give
borrowing instructions under Section 3.4(a) of the Trust
Agreement, (ii) the borrowing instructions to the Borrower from
an entity and individual so designated, and (iii) specimen
signatures of the persons who are authorized to act for the
Borrower under and in accordance with the terms of this
Agreement, the Notes, the Trust Agreement and the Letter
Agreement;
(t) certified copies of all required or appropriate
authorizations and consents of all relevant governmental
authorities of Indonesia (certified by Pertamina) and Japan
(certified by the Tranche A Lender), if any, in connection with
the transactions contemplated by this Agreement, the Notes, the
Letter Agreement and the Producers Agreement.
All legal matters in connection with the transactions con-
templated hereby and the making of the initial Advances, and all
documents and instruments evidencing such matters or incident
thereto including, but not limited to, the documents delivered
pursuant to Sections 5.1(a) to (p) inclusive and 5.1(r), (s) and
(t) hereof (but excluding the documents delivered pursuant to
Section 5.1(q) hereof and the Japanese governmental
authorizations and consents referred to in Section 5.1(t) hereof)
shall be satisfactory in form and substance to special counsel to
the Lenders, and special counsel to the Lenders shall have
received all such other documents and instruments, or copies
thereof, certified if requested, as they may reasonably request
in order to enable them to pass upon such matters.
5.2 Conditions Precedent to the Initial and Subsequent
Advances. Except as the Majority Lenders may otherwise consent,
the obligation of each Lender to make each Advance to be made by
such Lender hereunder (including the initial such Advance) is
subject to the further conditions precedent (i) that the Tranche
A Lender and the Agent shall have received a Notice of Borrowing
in accordance with the provisions of Section 2.2(a) hereof, (ii)
that on the date of the making of such Advance and after giving
effect thereto (A) no Event of Default shall have occurred and be
continuing and no event shall have occurred or failed to occur
the occurrence or non-occurrence of which, with the giving of
notice or lapse of time or both would constitute, an Event of
Default, and (B) the representations and warranties of the
Borrower contained in this Agreement and of the Producers
contained in the Producers Agreement shall be true and correct on
and as of the date of the making of such Advance with the same
effect as though such representations and warranties had been
made on and as of such date, (iii) that the Tranche A Lender and
the Agent shall have received from the Borrower a statement from
the Producers conforming to the requirements of Section 6.1(b)
hereof indicating that the Debt Coverage Ratio is not less than
200%, (iv) that there shall have been no material adverse change
(x) since December 31, 1987, in the business, assets, financial
condition or results of operation of the Borrower or any of the
Producers which affects materially and adversely, or would be
likely to affect materially and adversely, the performance by
Pertamina of or the ability of Pertamina to perform its
obligations under the LNG Sales Contract, or (y) in the operation
of the Bontang Plant, (v) that the authorizations and consents
described in Section 5.1(t) hereof shall be in full force and
effect and (vi) no event shall have occurred or circumstance
exist that renders impracticable any of the events set forth in
clauses (i), (ii) or (iii) of the definition of Completion Date
in Section 1 hereof.
5.3 Representations. The making of each Borrowing
hereunder shall be deemed to be a representation and warranty by
the Borrower as of the date of such Borrowing that the facts
specified in Section 5.2(ii)(A) hereof as to Sections 7(a)
through 7(e) hereof only, Section 5.2(ii)(B) hereof and Section
5.2(iv) hereof in each case as to the Borrower only are true and
correct on the date of such Borrowing.
SECTION 6. COVENANTS
Until payment in full of all of the Notes, and of all other
amounts due and owing under this Agreement at the time the Notes
are paid in full, unless compliance with the provisions of this
Section shall have been waived by the Majority Lenders, the
Borrower covenants and agrees with the Lenders that:
6.1 Information. The Borrower shall provide or cause to be
provided to the Tranche A Lender and the Agent:
(a) as soon as possible and in any event within 45
days after the end of the first three calendar quarters in each
year commencing with the quarter ending March 31, 1988, for each
such quarter, and within 45 days after the end of each calendar
year, for such year and for the final calendar quarter thereof, a
statement setting forth for the relevant period or periods (i)
the Gross Invoice Amount invoiced under the LNG Sales Contract,
(ii) the amount of such Gross Invoice Amount received by the
Borrower, (iii) during any Contingent Support Period, the amount
of any Contingent Support received by the Borrower, (iv) during
any Contingent Support Period, a copy of any notice received from
Pertamina setting forth the amount of Source of Contingent
Support invoiced under the relevant Contingent Support Agreements
and received by the relevant trustees and (v) the debits and
credits from the Debt Service Account and Reserve Account and all
subaccounts thereof (as provided in the Trust Agreement);
(b) as soon as possible and in any event within 45
days after the end of each calendar quarter, a statement in
writing setting forth (i) the Source of Debt Service reasonably
anticipated to be payable in each calendar quarter to the Final
Maturity Date (or during any Contingent Support Period, the
amounts of Contingent Support reasonably anticipated to be
payable during such Contingent Support Period, taking into
account the amounts of Source of Contingent Support reasonably
anticipated to be payable during such Contingent Support Period)
plus, if it is reasonably anticipated that such Contingent
Support Period will end, any Source of Debt Service reasonably
anticipated to be payable after the end thereof to the Final
Maturity Date, (ii) the aggregate principal, interest and other
amounts reasonably anticipated to be payable during each calendar
quarter to the Final Maturity Date under this Agreement, the
Notes and the Letter Agreement, (iii) the Debt Coverage Ratio
(calculated both including and excluding any amounts held in the
Debt Coverage Reserve Account), (iv) if the Debt Coverage Ratio
is less than 120%, the amount required to be held in the Debt
Coverage Reserve Account in order for the Debt Coverage Ratio to
be at least equal to 120%, and (v) the reasonably anticipated
Gross Invoice Amount under the LNG Sales Contract in each
calendar quarter to the Final Maturity Date, such statement to be
prepared using the most recent assumptions approved by the
Tranche A Lender, the Agent and the Majority Tranche B Lenders
for purposes of such calculation, which approval shall be
obtained in accordance with the last paragraph of the definition
of Debt Coverage Ratio in Section 1 hereof;
(c) information of the type referred to in clauses (a)
and (b) of this Section 6.1 at such times other than those
specified above as the Tranche A Lender or the Agent may
reasonably request;
(d) as soon as a Responsible officer of the Borrower
obtains actual knowledge thereof, notice of each Event of Default
and each event which has occurred or failed to occur, the
occurrence or non-occurrence of which with the giving of notice
or lapse of time would constitute an Event of Default; and
(e) as soon as the Borrower receives notice from
Pertamina that the events set forth in clauses (i), (ii), and
(iii) of the definition of Completion Date have occurred, a
written notice together with the original copy of the notice of
Pertamina certifying that such events have occurred.
The Agent shall forthwith cause a copy of all
information provided under this Section 6.1 to be distributed to
each Tranche B Lender.
6.2 Negative Pledge. The Borrower will not create, incur
or suffer to exist any Encumbrance on the Source of Debt Service,
Source of Contingent Support or any Contingent Support received
or receivable by it prior to its deposit in the Bontang III
Payment Account, or any Encumbrance on any Borrowed Amounts, in
each case resulting from any act or any failure to perform any
obligation of the Borrower under this Agreement or of the Bontang
III Trustee under the Trust Agreement or any duty as Bontang III
Trustee, except any Encumbrance, if any, (i) arising pursuant to
the Trust Agreement or in favor of the holders of Indebtedness
permitted in accordance with Section 6.4 hereof or (ii) arising
pursuant to statute or otherwise by operation of law, and not
pursuant to any agreement, which is discharged in the ordinary
course of business and which is not enforced by attachment or
levy.
6.3 No Consent to Changes. The Borrower will not terminate
or revoke the Trust Agreement or amend, modify, revise,
supplement or waive any of the provisions of (a) Article 1, 4 or
10 or Section 2.1, 2.2, 2.4, 2.5, 3.1, 3.2, 3.3, 3.7 or 6.1, or
the second sentence of Section 8.2 of the Trust Agreement, in
each case other than to permit the Borrower to enter into
Subordinated Indebtedness, or (b) any other provision of the
Trust Agreement if any such amendment, modification, revision,
supplement or waiver would or would be likely to affect adversely
the trust created under such Trust Agreement, the rights of the
Lenders under or the ability of the Borrower to perform its
obligations under this Agreement, the Notes or the Letter
Agreement. Any consent of the Majority Lenders necessary to
permit any action otherwise prohibited by this Section 6.3 shall
not be unreasonably withheld. The Borrower shall promptly
provide to the Tranche A Lender and the Agent copies of any
agreement or document evidencing any revocation, amendment,
modification or revision of the Trust Agreement or any provision
thereof not requiring the consent of the Majority Lenders under
this Section 6.3.
6.4 Indebtedness. The Borrower shall not create, assume or
become liable for, directly or indirectly, any Indebtedness
charging or to be paid out of the Source of Debt Service, Source
of Contingent Support or Contingent Support, except for (i) all
obligations and liabilities under this Agreement, the Notes or
the Letter Agreement, (ii) any Indebtedness (a) that shall be
payable out of amounts of the Source of Debt Service and
Contingent Support only after the 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 Sections 7 and 9 hereof and (b) the proceeds of which
shall be applied solely in connection with the Bontang Plant (the
"Subordinated Indebtedness") and (iii) with respect to Source of
Debt Service only, obligations (other than Subordinated Indebt-
edness) in respect of interest rate swap arrangements of the
Borrower entered into solely for the purpose of exchanging
floating interest rate obligations with respect to Tranche B for
fixed interest rate obligations, if such Indebtedness 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 this Agreement,
the Notes and the Letter Agreement and if the terms and
conditions of such arrangements are approved as to form and
substance by the Majority Lenders ("Pari Passu Swap
Indebtedness"), such approval not to be unreasonably withheld;
provided that the withholding of such consent by the Majority
Lenders shall be deemed reasonable if the Borrower and the
Majority Lenders are unable to agree with respect to (x)
amendments to this Agreement, including without limitation
amendments to the definitions of "Debt Coverage Ratio" and
"Discount Rate," with respect to such Pari Passu Swap
Indebtedness, (y) amendments to the Trust Agreement relating to
such Pari Passu Swap Indebtedness or (z) such other changes to
the terms and conditions, including the Events of Default, of the
Trust Agreement, the Producers Agreement and this Agreement as
the Majority Lenders shall request in connection with such Pari
Passu Swap Indebtedness. The Borrower shall not create, assume
or become liable for, directly or indirectly, any Indebtedness
charging or to be paid oui of any Borrowed Amounts, except for
Indebtedness for which such Borrowed Amounts were borrowed.
6.5 Notice at End of Availability Period. After the end of
the Availability Period, the Tranche A Lender and the Agent shall
deliver to the Borrower a notice setting forth the outstanding
amounts of principal and interest as of the final Borrowing Date
and a repayment schedule. The Borrower shall either promptly
confirm that it agrees with such amounts and such schedule by
signing and returning to each of the Tranche A Lender and the
Agent a copy of such notice or promptly deliver to the Tranche A
Lender and the Agent a notice indicating that it does not agree
and specifying the reasons therefor. The delivery or lack of
delivery of such notice to the Borrower shall in no way affect
any of the obligations of the Borrower pursuant to this Agreement
other than those set forth in this Section 6.5.
SECTION 7. EVENTS OF DEFAULT
If any one or more of the following events ("Events of
Default") shall occur and be continuing:
(a) (i) failure to make any payment of the principal of any
of the Notes with respect to either or both of the Tranches
within two days following, or interest on any of the Notes with
respect to either or both of the Tranches within three days
following, the date when due and payable in accordance with the
terms hereof and thereof (provided that for the purposes of this
clause (i) a deferral of payment of an amount of principal
pursuant to Section 2.10(b) hereof shall not be deemed to be a
failure to make such payment), or (ii) failure to pay any other
amounts payable under this Agreement, any of the Notes or the
Letter Agreement within seven days following the date when due in
accordance with the terms of this Agreement, including Section
3.9 hereof; or
(b) any representation or warranty made or deemed made by
or on behalf of the Borrower in Section 4 or Section 5.3 of this
Agreement or in any certificate delivered to the Tranche A
Lender, the Agent or the Tranche B Lenders pursuant hereto shall
prove to have been incorrect or misleading in any material
respect as of the date when made; or
(c) failure by the Borrower to perform or observe any term,
covenant or agreement contained in Section 6.2, 6.3 or 6.4
hereof; or
(d) failure by the Borrower to perform its obligations
under Section 6.1(d) hereof for seven days after written notice
of such failure shall have been given to the Borrower by the
Tranche A Lender or by the Agent at the request of any Tranche B
Lender; or
(e) any failure by the Borrower to perform or observe any
term, covenant or agreement contained in this Agreement (other
than those referred to in clauses (a), (b), (c) or (d) of this
Section 7), or any failure by the Borrower or any Producer to
perform or observe any term, covenant or agreement contained in
the Trust Agreement, for 30 days after written notice of such
failure shall have been given to the Borrower by the Tranche A
Lender or by the Agent at the request of any Tranche B Lender; or
(f) a Default as defined in the Producers Agreement shall
have occurred thereunder; then the Tranche A Lender and the Agent
shall, upon the written request of the Majority Lenders, by
notice of default given to the Borrower, (i) declare the
Commitment of each Lender to be forthwith terminated and/or (ii)
declare all the Notes outstanding hereunder to be forthwith due
and payable, whereupon the then outstanding principal amount of
such Notes, together with accrued interest thereon and any and
all other amounts due under this Agreement and the Letter Agree-
ment, shall forthwith become due and payable without diligence,
presentment, demand, protest, notice of dishonor, or other notice
of any kind, all of which are hereby expressly waived by the
Borrower.
Should the principal amount of the Notes be declared or
become due and payable in the foregoing manner, the entire amount
of the Source of Debt Service and the Contingent Support received
by the Borrower thereafter shall to the extent provided by the
Trust Agreement, as and when received by the Borrower, be
accumulated and paid to the Tranche A Lender and the Agent for
application to the amounts owing by the Borrower under this
Agreement, the Notes which were declared to be or which became
due and payable and the Letter Agreement until all principal of
and interest on such Notes and all other amounts then due and
payable under this Agreement, the relevant Notes and the Letter
Agreement shall have been paid in full.
SECTION 8. AGENT
The Tranche B Lenders, the Agent, and the Lead Managers
agree among themselves and, where the context of Section 8.9 or
8.10 so requires, with the Borrower as follows:
8.1 Appointment and Authority.
(a) Each Tranche B Lender, and each subsequent holder
of any Tranche B Note by its acceptance thereof, irrevocably
authorizes the Agent to receive all payments of principal,
interest and other amounts due to such Tranche B Lender or such
holder under this Agreement and the Tranche B Notes and to take
all other actions on behalf of such Tranche B lender or such
holder and to exercise such powers hereunder as are specifically
delegated to such Agent by the terms hereof, together with all
other such powers as shall be reasonably incidental thereto.
(b) The relationship between each of the Tranche B
Lenders and the Agent is and shall be that of agent and principal
only, and nothing herein shall be construed to constitute the
Agent a trustee for any holder of a Tranche B Note or of a
participation therein nor to impose on the Agent duties and
obligations other than those expressly provided for herein nor to
confer upon the Agent any relationship of agency or trust with
the Borrower. Neither the Agent, nor any of its directors,
officers, employees or agents shall be liable to any of the
Tranche B Lenders for any action taken or omitted to be taken by
it or them hereunder or in connection herewith, whether as a
result of any conflicts affecting or involving the Agent and the
Lead Managers resulting from their responsibilities relating to
Tranche B or otherwise, except for its own or their own gross
negligence or willful misconduct. Each of the Tranche B Lenders,
and each subsequent holder of any Tranche B Note by its
acceptance thereof, agrees (which agreement shall survive payment
of the Tranche B Notes) to indemnify the Agent (to the extent not
reimbursed by the Borrower) and the Lead Managers, in amounts
which are pro rata to the respective Commitments of such Tranche
B Lenders and, in the case of a subsequent holder of any Tranche
B Notes, of the Tranche B Lender from whom such holder acquired
(directly or indirectly) such Tranche B Notes, from and against
any and all losses, claims, damages, liabilities and expenses of
any kind which may be imposed on, incurred by or asserted against
the Agent or the Lead Managers (in their capacities as such) in
any way related to or arising out of this Agreement or any
Advances with respect to Tranche B or any action taken or omitted
by such Agent or the Lead Managers under this Agreement whether
as a result of any conflicts affecting or involving the Agent and
the Lead Managers resulting from their responsibilities relating
to Tranche B or otherwise, except (i) normal administrative
expenses incidental to the performance of their duties as such
Agent and Lead Managers hereunder and (ii) any losses, claims,
damages, liabilities or expenses resulting from its or their
gross negligence or willful misconduct.
8.2 Agent May Rely on Documents. The Agent shall be
entitled to rely on any communication, instrument or document
reasonably believed by it to be genuine and correct and to have
been signed or sent by the proper Person or Persons, and with
respect to all legal matters shall be entitled to rely on the
advice of legal and other professional advisors selected by it
from time to time concerning all matters relating to this
Agreement, the Tranche B Notes and its duties hereunder and
thereunder, and shall not be liable to any of the Tranche B
Lenders for the consequences of such reliance.
8.3 No Amendment to Duties of Agent Without Consent. The
Agent shall not be bound by any waiver, amendment, supplement or
modification of this Agreement which affects its duties under
this Agreement unless it shall have given its prior written
consent, as Agent, thereto.
8.4 Responsibilities of Agent and Lead Managers. The Agent
may treat the payee of any Tranche B Note as the holder thereof
until written notice of the transfer thereof shall have been
received by it. Neither the Agent nor any of the Lead Managers
makes any warranty or representation to any Tranche B Lender, nor
shall any of them be responsible for any recitals, statements,
representations or warranties herein or in any document prepared
by or given by the Borrower or any other Person to the Tranche B
Lenders in connection herewith (or for the accuracy or
completeness of any such document) or for the execution,
effectiveness, genuineness, validity or enforceability of this
Agreement or the Tranche B Notes or any other document, agreement
or instrument delivered in connection herewith or related hereto,
or be liable for failing to make any inquiry concerning the
performance or observance of any of the terms, provisions or
conditions of this Agreement or any Tranche B Note or any other
document, agreement or instrument delivered in connection
herewith or related hereto. The Agent and each Lead Manager
shall be entitled to retain for its own use any amounts paid to
it in its capacity as such. The Agent shall not be deemed to
have known of the occurrence of an Event of Default or other
event the occurrence or non-occurrence of which with the giving
of notice or lapse of time or both would become an Event of
Default or comparable event under any other agreement unless the
Agent has received written notice from a Tranche B Lender or the
Borrower specifying such Event of Default or other event and
stating that such notice is a "Notice of Default" or from any
other relevant Person so specifying. If (i) the Agent receives a
notification pursuant to the preceding sentence, or (ii) the
Borrower fails to pay in accordance with the terms hereof to the
Agent when due the principal of or interest on any Tranche B Note
or any commitment fee payable to any Tranche B Lender hereunder,
the Agent shall promptly give written notice thereof to the
Tranche B Lenders. The Agent may decline to take any action
except upon the written direction of the Majority Tranche B
Lenders and the Agent may obtain a ratification by such Majority
Tranche B Lenders of any action taken by it under this Agreement
or any other document, agreement or instrument delivered in
connection herewith or related hereto. The Agent shall have no
liability to the Lead Managers or Tranche B Lenders for any
action taken by it upon the direction of the Majority Tranche B
Lenders or if ratified by the Majority Tranche B Lenders, nor
shall the Agent have any such liability for any failure to act
unless such Agent has been instructed to act by the Majority
Tranche B Lenders. The action of the Majority Tranche B Lenders
shall in each case bind all of the Tranche B Lenders hereunder.
The Agent shall not be required to take any action which exposes
such Agent to personal liability (unless indemnified to its
satisfaction for any and all consequences of such action) or
which is contrary to this Agreement or any Legal Requirement.
8.5 Funding Costs of Agent. If at any time the Agent makes
available to a Tranche B Lender amounts due from the Borrower
hereunder which the Borrower has failed to make available to the
Agent, then the Tranche B Lender shall on first demand forthwith
refund such amounts to the Agent together with interest thereon
at the rate offered by the Agent for overnight Dollar deposits in
the New York Federal Funds market.
8.6 Agent in Individual Capacity. The Agent and its
affiliates in their capacities as Tranche B Lenders shall have
the same rights and powers hereunder as any Tranche B Lender and
may exercise such rights and powers as though the Agent were not
the Agent. The Agent and its affiliates may (without having to
account therefor to any Tranche B Lender) accept deposits from,
lend money to and generally engage in any kind of banking, trust
or other business with the Borrower, any of the Borrower's
affiliates, the Producers and any of the Producers' affiliates,
as if such Agent were not acting in such capacity hereunder.
Each of the Tranche B Lenders other than the Agent hereby
expressly agrees and consents to the Agent's or an affiliate of
the Agent acting as trustee under the Escrow Agreement during the
term of this Agreement.
8.7 Credit Decision. Each Tranche B Lender represents,
warrants and acknowledges that it has, independently and without
reliance upon the Agent, the Lead Managers or any other Lender,
and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Tranche B Lender also acknowledges
that it will, independently and without reliance upon the Agent,
the Lead Managers or any other Lender, and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking any action under this Agreement.
8.8 Lead Managers. Nothing in this Agreement shall impose
on the Lead Managers, in their capacity as such, any duties or
obligations whatsoever.
8.9 Change of Administrative Office of Agent. The Agent
may at any time or from time to time by written notice to the
Borrower and to each Tranche B Lender designate a different
office from which its duties as Agent will thereafter be
performed; provided that no such change to a location outside of
the City of New York shall be made without the Borrower's
consent, which consent shall not be unreasonably withheld.
8.10 Successor Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the
Tranche B Lenders and to the Borrower. The Agent may be removed
at any time with or without cause by the Majority Tranche B
Lenders. Upon any such resignation or removal, such Majority
Tranche B Lenders shall have the right to appoint such successor
Agent. If no successor Agent shall have been so appointed by
such Majority Tranche B Lenders and shall have accepted such
appointment within 30 days after any such retiring Agent's giving
of notice of resignation, then such retiring Agent may appoint
such successor Agent. No successor Agent shall be appointed
without the consent of the Borrower, which consent shall not be
unreasonably withheld or delayed. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with
all the rights,
powers, privileges and duties of such retiring Agent, and such
retiring Agent shall be discharged from its duties and
obligations hereunder. After any such retiring Agent's
resignation hereunder as Agent, the provisions of this Section 8
shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
any such Agent hereunder.
SECTION 9. SOURCE OF DEBT SERVICE; CONTINGENT SUPPORT; RECOURSE
9.1 Accumulation for Debt Service. Pursuant to Sections 3.2
and 3.3 of the Trust Agreement and except as therein stated, the
Borrower shall pay into the Debt Service Account the entire
amount of all Borrowed Amounts immediately upon receipt thereof,
and, starting with the commencement of each Interest Period, the
Borrower shall pay into the Debt Service Account the entire
amount of each payment of the Source of Debt Service and
Contingent Support, as and when actually received by the
Borrower, until the aggregate amount accumulated in the Debt
Service Account shall be sufficient to pay the principal of and
interest due on all of the Notes, as well as all other amounts
due and payable under this Agreement, the Notes and the Letter
Agreement, in each case during such Interest Period; provided,
however, that for any six-month Interest Period, the amount of
the Source of Debt Service and Contingent Support paid over to
and accumulated in the Debt Service Account for principal and
interest due during such Interest Period shall be in accordance
with Sections 3.2 and 3.3 of the Trust Agreement. All such
principal, interest and other amounts due during any Interest
Period are referred to herein as the "Quarterly Debt Service" for
such Interest Period.
9.2 Accumulation in Regular Reserve Account.
(a) Pursuant to Sections 3.2 and 3.3 of the Trust
Agreement, during each Interest Period, after all amounts of
Source of Debt Service and Continent Support required to be paid
into the Debt Service Account pursuant to Section 9.1 hereof with
respect to such Interest Period have been so paid, the Borrower
shall pay into the Regular Reserve Account the entire remaining
amount of each payment of the Source of Debt Service and
Contingent Support, as and when actually received by the
Borrower, until the aggregate amount accumulated in such Regular
Reserve Account shall equal 100% of the amount of Quarterly Debt
Service reasonably anticipated to be due (i) during the three
Interest Periods next succeeding such Interest Period, if such
Interest Period commences during the first seven years after the
Notice of Start-up, and (ii) during the two Interest Periods next
succeeding such Interest Period, if such Interest Period
commences more than seven years after such Notice. For purposes
of determining such amounts of Quarterly Debt Service, the
interest rate applicable to Tranche B (including any Deferred
Portion thereof) and any Deferred Portion of Tranche A shall be
deemed to be the Assumed Interest Rate.
(b) Notwithstanding the foregoing, if there is any Source
of Debt Service during the Availability Period, the Borrower
shall pay the full amount thereof into the Regular Reserve
Account pursuant to Section 3.2 of the Trust Agreement.
9.3 Accumulation in Debt Coverage Reserve Account.
Pursuant to Section 3.2 of the Trust Agreement, if at any time
the Debt Coverage Ratio falls below 120%, then for each Interest
Period then in effect or thereafter occurring, after all amounts
of Source of Debt Service and Contingent Support required to paid
into the Debt Service Account and the Regular Reserve Account
pursuant to Sections 9.1 and 9.2 hereof with respect to such
Interest Period have been so paid, the Borrower shall pay into
the Debt Coverage Reserve Account the entire remaining amount of
each payment of the Source of Debt Service or Contingent Support,
as and when actually received by the Borrower, until the Debt
Coverage Ratio equals 120%. All amounts will be paid out of the
Debt Coverage Reserve Account and transferred into the Bontang
III Payment Account when the Debt Coverage Ratio (excluding in
the calculation thereof for such purpose all amounts contained in
the Debt Coverage Reserve Account) shall equal or exceed 130%.
9.4 Accumulation in Contingent Reserve Account.
Pursuant to Section 3.2 of the Trust Agreement, if the
Borrower does not receive the Notice of Start-up before January
1, 1990, the Borrower shall pay into the Contingent Reserve
Account the entire amount of any Contingent Support, as and when
actually received by the Borrower during the period commencing on
January 1, 1990 and ending on the earlier to occur of (i) receipt
by the Borrower of the Notice of Start-up and (ii) September 30,
1990. Upon the receipt by the Borrower of the Notice of
Start-up, the outstanding amount held in the Contingent Reserve
Account shall be transferred into the Regular Reserve Account to
the extent required in Sections 9.1, 9.2 and 9.3 hereof, and the
excess shall be transferred into the Bontang III Payment Account.
9.5 Payments Made from Debt Service Account and Reserve
Account. Except for any personal liability of the Borrower
arising as specifically provided in this Agreement, all payments
to be made by the Borrower under this Agreement, the Notes and
the Letter Agreement, including in each case, without limitation,
payments due on the Final Maturity Date, shall be made only from
the Debt Service Account as the same as defined in, and as at any
applicable time the same shall be funded under, Sections 3.2 and
3.3 of the Trust Agreement; provided, however, that if amounts
held in the Debt Service Account are insufficient to pay all such
amounts when due, any amounts then held (i) first, in the
Contingent Reserve Account, (ii) second, in the Regular Reserve
Account and (iii) third, in the Debt Coverage Reserve Account
shall be applied to make such payments to the extent provided in
Section 3.3 of the Trust Agreement. Except in accordance with
the preceding sentence with respect to any personal liability of
the Borrower, the Borrower shall only be obligated to make
payments under this Agreement, the Notes and the Letter
Agreement, including in each case, without limitation, payments
due on the Final Maturity Date, out of amounts of the Source of
Debt Service, Contingent Support and Borrowed Amounts received by
it. The Borrower agrees that, as long as moneys are held in such
Debt Service Account and such subaccounts of the Reserve Account,
the Lenders, to the extent necessary to make payments in
accordance with the terms of the Trust Agreement of principal,
interest and other amounts due under this Agreement, the Notes
and the Letter Agreement, are among those having a right as
provided under Section 2.2 of the Trust Agreement to receive
disbursements thereunder.
9.6 No Recourse. In furtherance of Sections 9.1 to 9.5
hereof, each of the Tranche A Lender, the Agent, the Lead
Managers, the Tranche B Lenders and each holder of a Note, by its
acceptance thereof, agrees that, except as provided in Section
9.5, it will look solely to the Source of Debt Service,
Contingent Support and Borrowed Amounts to the extent provided in
Section 9.5 hereof for all payments to be made by the Borrower
under this Agreement, the Notes and the Letter Agreement, as
provided therein or herein, including in each case, without
limitation, payments due on the Final Maturity Date, and that no
recourse shall be had for the payment of the principal of or
interest on the Notes or the payment of any other amounts due
under this Agreement or the Letter Agreement, or shall be had for
any claim based on any provision hereof or thereof, against
Continental Bank International (or any entity acting as successor
trustee under the Trust Agreement) in its individual capacity, or
against any past, present or future stockholder, officer,
director, employee or agent of Continental Bank International (or
any entity so acting), or against the grantors, settlors or
beneficiaries of any trust under the Trust Agreement, either
directly or through the Borrower or any successor of any thereof,
under any constitution, statute or rule of law or by the
enforcement of any assessment, or otherwise, and neither
Continental Bank International (or any such entity acting as such
successor trustee) nor any such other Person shall have any
personal obligation, liability or duty whatsoever to the Tranche
A Lender, the Agent, the Lead Managers or the Tranche B Lenders
or any holders of the Notes or anyone else for or with respect to
any such payment or for the performance of or compliance with any
covenant or agreement contained in any of said documents or for
the truth, accuracy or completeness of any statement or
representation made in any such document, except only in the case
of Continental Bank International (or any such entity acting as
successor trustee) for any material breach of a representation or
warranty expressly made by it under Section 4 or Section 5.3
hereof in its individual capacity and such liability as may arise
under this Agreement for gross negligence or willful misconduct
in acting hereunder. In such connection the Borrower (a) 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 in any of the
foregoing so received, (b) may consult with, and obtain advice
from qualified accounting and legal advisers in connection with
the performance of its obligations and it shall incur no
liability and shall be fully protected in acting in good faith in
accordance with the opinion and advice of such advisers, and (c)
shall have no duties other than those specifically set forth or
provided for herein nor any obligation to familiarize itself with
nor any responsibility with respect to any other agreement
relating to the transactions contemplated by this Agreement to
which it is not a party.
9.7 Not to Limit Remedies. Nothing contained in this
Section 9 shall be construed to limit the exercise and
enforcement, in accordance with the terms of this Agreement, the
Notes or the Letter Agreement, of the rights and remedies of the
Tranche A Lender, the Agent, the Lead Managers or the Tranche B
Lenders or any holders of the Notes against the Borrower
hereunder to the extent of the Source of Debt Service, Contingent
Support and Borrowed Amounts as provided herein.
SECTION 10. MISCELLANEOUS
10.1 Notices. Any notice required or permitted to be given
hereunder shall be in writing and shall be (a) personally
delivered, (b) transmitted by postage prepaid registered mail,
return receipt requested, (c) transmitted by telex (with postage
prepaid mail confirmation) or (d) sent by facsimile transmission
to the parties as follows (as elected by the party giving such
notice):
To the Borrower: Continental Bank International,
as Trustee under the Bontang III
Trust Agreement dated as of February 9, 1988
520 Madison Avenue
New York, New York 10022
Attention: Securities Division
Telex: RCA 232304/ITT 420177
Answerback: CBI UR/ CBI UI
Telecopier: (212) 605-2999
To the Tranche A Lender: Train-E Finance Co., Ltd.
Toranomon 37 Mori Building
9th Floor
5-1, Toranomon 3-chome
Minato-ku
Tokoyo, Japan
Attention: Treasurer
Telex: (0) 2428181
Answerback: TEFCO J
Telecopier: (03) 578-0353
To the Agent: The Industrial Bank of Japan Trust Company
245 Park Avenue
New York, New York 10167
Attention: Loan Department
Telex: 425754 (ITT)
Answerback: IBJTC UI
Telecopier: (212) 557-3581
To the Tranche B Lenders: As provided on the signature pages
hereof
Any notice relating to a Borrowing or a prepayment shall only be
effective on receipt of a legible copy thereof. Except as
otherwise specified in this Agreement, all notices and other
communications shall be deemed to have been duly given on (i) the
date of delivery if delivered personally, (ii) five days
following posting if transmitted by mail, (iii) the date of
transmission with confirmed answerback if transmitted by telex or
(iv) the date of receipt of a legible copy thereof if sent by
facsimile transmission, whichever shall first occur. Any party
may change its address for purposes hereof by notice to the other
parties.
10.2 No Waiver; Remedies Cumulative. No failure to exercise
and no delay in exercising, on the part of the Tranche A Lender,
the Agent, the Tranche B Lenders or the holders of any Note, any
right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. Subject always to the provisions of Section 9 hereof,
the rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law. The
provisions of this Agreement shall inure to the benefit of any
subsequent holder of the Notes.
10.3 Use of English Language. All documents or notices to
be delivered pursuant to or in connection with this Agreement
shall be in the English language. English shall be the official
language for construction and interpretation of this Agreement,
the Notes, the Letter Agreement and all agreements, notices,
documents and instruments. If the original of any such document
or notice is not in the English language, an English translation
thereof shall be delivered.
10.4 Assignment; Successors and Assigns; Participations.
This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Tranche A Lender, the Lead Managers, the
Tranche B Lenders, the Agent and their respective successors and
permitted assigns. The Borrower may not assign any of its rights
or delegate any of its obligations hereunder without the written
consent of all of the Lenders. Any Lender may at any time sell,
assign, transfer, negotiate, or otherwise dispose of, in whole or
in part, with the prior written consent (such consent not to be
unreasonably withheld) of the Borrower, its rights and
obligations under this Agreement or the Notes, provided that the
withholding of such consent by the Borrower shall be deemed
reasonable if the proposed sale, assignment, transfer,
negotiation or other disposition by a Lender would increase the
Borrower's tax indemnification obligations under Section 3.3
hereof. The exercise of such right by any Lender is, however,
subject to the conditions that immediately thereafter such Lender
shall have given written notice of any such transfer to the Bor-
rower and, in the case of a Tranche B Lender only, the Agent, and
the transferee shall (a) not have, or shall have effectively
waived, any right pursuant to Section 3.4(b) hereof to claim from
the Borrower any additional amounts above and beyond those which
could have been claimed by the transferor and (b) not have any
right pursuant to Section 3.4(a) hereof not possessed by the
transferor. The Borrower may treat each Lender, and the Agent
may treat each Tranche B Lender, as the holder of the Note drawn
to its order and delivered to such Lender until written notice of
transfer shall have been received by it. All agreements,
representations and warranties made herein shall survive the
making of any such transfer hereunder by any Lender.
Notwithstanding the foregoing, each Lender may grant
participations which do not create or purport to create binding
obligations of the Borrower, in whole or in part, in its rights
under this Agreement and the Note without any restriction and
without notice to the Borrower.
10.5 Amendments. Any provision of this Agreement or the
Notes may be amended or waived if, and only if, such amendment or
waiver shall be in writing and signed (including the form of
signatures on any telex, cable or facsimile) by the Tranche A
Lender (except with respect to Section 8 hereof), the Majority
Tranche B Lenders and, if the Agent's rights or duties as agent
are affected, the Agent; provided that any such amendment must
also be signed by the Borrower; and provided further that no such
amendment or waiver shall, unless signed by the Tranche A Lender
and each Tranche B Lender, do any of the following: (a) increase
or decrease the Commitment of any Lender or subject any Lender to
any additional obligation hereunder; (b) reduce the amount or
postpone the date of any payment of principal, interest or other
amount hereunder with respect to a Tranche; (c) with respect to
Tranche B only, reduce the percentage of the amount of the
Commitments with respect to Tranche B or the Advances with
respect to Tranche B, specified in the definition of "Majority
Tranche B Lenders" or otherwise required to take any action
hereunder; or (d) amend or waive any provision of this Section
10.5. Any such amendment or waiver shall be signed by the Tranche
A Lender and by the Agent on behalf of the relevant Tranche B
Lenders if the Agent has been so authorized in writing or by
telex, cable or facsimile transmission by the Majority Tranche B
Lenders or all of the Tranche B Lenders, as the case may be. Any
amendment or waiver signed by the Agent in accordance with the
preceding sentence shall be binding upon the Tranche B Lenders
and any holder of a Tranche B Note. Any action that the Agent
may take on behalf of the Majority Tranche B Lenders under this
Agreement and that the Agent in fact so takes shall be binding on
all of the Tranche B Lenders.
10.6 Expenses; Indemnification.
(a) Whether or not the transactions contemplated by
this Agreement shall be consummated, the Borrower agrees (i) to
pay, or reimburse the Tranche A Lender and the Agent, on behalf
of the Tranche B Lenders, for, all reasonable disbursements,
charges and fees of the Lenders' special New York and Taiwan
counsel and (ii) to pay, or reimburse the Agent, on behalf of the
Lead Managers, for, all other reasonable out-of-pocket expenses
of the Lead Managers, including, but not limited to, travel and
photocopying expenses, in each case in connection with the
preparation, negotiation and signing of, and the initial
disbursement under, this Agreement. Upon the making of the
initial Advance under this Agreement, the Borrower shall pay such
amounts on the date of such Advance.
(b) The Borrower agrees (i) to pay, or reimburse the
Tranche A Lender or the Agent or both, as the case may be, for
all reasonable out-of-pocket expenses, including, but not limited
to, travel expenses, legal fees, disbursements and other charges
of Lenders' counsel incurred by the Tranche A Lender or the Agent
or both in connection with any amendment or supplement to, or
modification or waiver of, this Agreement, the Trust Agreement,
the Producers Agreement or other related documents after this
Agreement has been fully executed and (ii) whether or not amounts
due under this Agreement, any of the Notes or the Letter
Agreement are accelerated, upon the occurrence of an Event of
Default or an event the occurrence or non-occurrence of which
would, with notice or lapse of time or both constitute an Event
of Default (but only if such event later becomes an Event of
Default), (1) to pay, or reimburse the holder of the Tranche A
Note for, all expenses of such holder arising in connection with
such Event of Default or the enforcement of this Agreement, such
Tranche A Note, the Letter Agreement or the Producers Agreement,
including but not limited to the fees and expenses of counsel
employed by such holder and (2) to pay, or reimburse the Agent
for, all expenses of the Agent and each holder of any Tranche B
Notes arising in connection with such Event of Default or the
enforcement of this Agreement, such Tranche B Notes, the Letter
Agreement or the Producers Agreement, including but not limited
to the fees and expenses of counsel employed by the Agent or such
holder.
10.7 Sharing of Set-Off and Other Payments. In the event
that any Tranche B Lender shall have received an amount in excess
of its ratable share of payments hereunder or under the Tranche B
Notes through the exercise of any lien, set-off or similar right
or any voluntary payment by the Borrower, such Tranche B Lender
shall promptly (and in any event within 15 days) purchase for
cash without recourse that portion of each other Tranche B
Lender's Advances as will result in each Tranche B Lender
receiving its ratable share of the amount of such lien, set-off
or similar right, or voluntary payment; provided that to the
extent that such excess amount or any portion thereof is
subsequently recovered from the purchasing Tranche B Lender, its
purchases from the other Tranche B Lenders shall be rescinded and
the price repaid without interest; and provided further that if,
after acceleration of the maturity of the relevant Tranche B
Notes pursuant to Section 7 hereof, any Tranche B Lender shall
commence an action or proceeding in any court to enforce the
relevant Tranche B Notes held by such Tranche B Lender and as a
result thereof, or in connection therewith, shall receive an
excess payment on such Tranche B Notes, such Tranche B Lender
shall not be required to share any portion of such excess payment
with a Tranche B Lender which has received sufficient notice to
enable it to and which, has the legal right to, but does not,
join such action or proceeding or commence and diligently
prosecute a separate action or proceeding to enforce its Tranche
B Notes in another court. Nothing herein contained shall in any
way affect (a) expenses pursuant to Section 2.7(c) hereof,
prepayments pursuant to Section 3.4 hereof and interest payments
calculated in accordance with the provisions of the fifth
sentence of Section 2.6 hereof and (b) the right of any Lender to
obtain payment of indebtedness of the Borrower other than
Indebtedness under this Agreement, the Notes and the Letter
Agreement.
10.8 Counterparts. 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 Tranche A Lender,
the Agent and the Borrower.
10.9 Table of Contents and Section Headings. The table of
contents and the section headings in this Agreement are inserted
for convenience of reference only and shall be ignored in
construing this Agreement.
10.10 Governing Law. This Agreement and the Notes shall
be governed by and construed in accordance with the laws of the
State of New York, United States of America, applicable to
agreements made and to be performed entirely within such State.
10.11 Severability. If any one or more of the
provisions contained in this Agreement or any document executed
in connection herewith shall be invalid, illegal or unenforceable
in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired.
10.12 Term of Agreement. The term of this Agreement
shall commence on the Effective Date and shall end on the
termination of all of the Lenders' Commitments or payment in full
of all of the Notes and all other amounts payable under this
Agreement and the Letter Agreement, whichever is later. The
agreements of the Borrower to pay expenses and indemnities
pursuant to Sections 3 and 10.6 of this Agreement shall survive
the repayment of the Advances and the cancellation of all of the
Notes until all amounts payable thereunder are paid in full.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective duly authorized
signatories as of the Effective Date.
The Borrower:
CONTINENTAL BANK INTERNATIONAL,
as Trustee aforesaid
By /s/ Andries H. J. Jansma
Name: Andries H. J. Jansma
Title: Vice President
Commitment Tranche A Lender:
$189,600,000.00 TRAIN-E FINANCE CO., LTD.
By /s/ Rintaro Hara
Name: Rintaro Hara
Title: Executive Vice President
Lending Office:
Toranomon 37 Mori Building
9th Floor
5-1, Toranomon 3-chome
Minato-ku
Tokoyo, 105 Japan
Attention: Treasurer
Telex: (0) 2428181
Answerback: TEFCO J
Telecopier No.: (03) 578-0353
Lead Managers:
THE INDUSTRIAL BANK OF JAPAN TRUST
COMPANY
By /s/ Yoshiro Teranaka
Name: Yoshiro Teranaka
Title: Executive Vice President
THE BANK OF TOKYO, LTD.
NEW YORK AGENCY
By /s/ Takefumi Murata
Name: Takefumi Murata
Title: Attorney-in-Fact
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED
NEW YORK BRANCH
By /s/ Kenichi Amano
Name: Kenichi Amano
Title: Deputy General Manager
BANQUE INDOSEUZ
By /s/ Yves G. Gaden
Name: Yves G. Gaden
Title: First Vice President
Attorney-in-Fact
Agent:
THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY
By /s/ Yoshiro Teranaka
Name: Yoshiro Teranaka
Title: Executive Vice President
Commitment Tranche B Lenders:
$10,600,000.00 THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY
By /s/ Yoshiro Teranaka
Name: Yoshiro Teranaka
Title: Executive Vice President
Lending Office:
245 Park Avenue
New York, New York 10167
Attention: Loan Department
Telex: 425754
Answerback: IBJTC UI
Telecopier No.: (212) 557-3581
Commitment
$10,600,000.00 THE BANK OF TOKYO, LTD.
NEW YORK AGENCY
By /s/ Takefumi Murata
Name: Takefumi Murata
Title: Attorney-in-Fact
Lending Office:
100 Broadway
New York, New York 10005
Attention: Mr. Takefumi Murata
Telex: 229049
Answerback: NBD NY-UR
Telecopier No.: (212) 732-1678
Commitment
$10,600,000.00 THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED
NEW YORK BRANCH
By /s/Kenichi Amano
Name: Kenichi Amano
Title: Deputy General Manager
Lending Office:
140 Broadway, 23rd Floor
New York, New York 10005
Attention: Mr. Ken-ichi Amano
Telex: 425722
Answerback: LTCB UI
Telecopier No.: (212) 797-1184
Commitment
$10,600,000.00 BANQUE INDOSUEZ
NEW YORK BRANCH
By /s/ Yves G. Gaden
Name: Yves G. Gaden
Title: Attorney-in-Fact
Lending Office:
1270 Avenue of the Americas
Rockefeller Center
New York, New York 10020
Attention: Mr. Fred Schmidt -
Loan Department
Telex: RCA 220898
Answerback: ISNYUR
Telecopier No.: (212) 408-5757
with a copy to:
Mme F. Struxiano-Auffray - D.I.F.S.
Banque Indosuez
44, Rue de Courcelles
75008 Paris - France
Tel. (33.1.) 45.61.23.77
Telex: Paris 650409 INSU X
Commitment
$7,000,000.00 THE DAI-ICHI KANGYO BANK,
LIMITED
NEW YORK BRANCH
By /s/ Munetoshi Matsumoto
Name: Munetoshi Matsumoto
Title: Vice President
Lending Office:
One World Trade Center
Suite 4911
New York, New York 10048
Attention: Mr. Munetoshi Matsumoto
Vice President
Business Department I
Telex: ITT 420720, 422581
RCA 232988
Answerback: DKB UI
DKB UR
Telecopier No.: (212) 524-0579
Commitment
$7,000,000.00 THE DAIWA BANK, LIMITED
NEW YORK BRANCH
By /s/ Hiroyuki Doi
Name: Hiroyuki Doi
Title: Manager
Lending Office:
75 Rockefeller Plaza
New York, New York 10019
Attention: Mr. Hiroyuki Doi
Telex: RCA 232246, ITT 422391
Answerback: NEWDAIWA
Telecopier No.: (212) 397-9317
Commitment
$7,000,000.00 THE FUJI BANK AND TRUST COMPANY
By /s/ Mitsuhiro Nogahama
Name: Mitsuhiro Nogahama
Title: Vice President
Lending Office:
One World Trade Center
92nd Floor
New York, New York 10048
Attention: Mr. Yoshihiro Sawada
Senior Vice President
Telex: 425777
Answerback: FUJTR
Telecopier No.: (212) 524-0853
Commitment
$7,000,000.00 THE MUTSUBISHI BANK, LIMITED
NEW YORK BRANCH
By /s/ Takeshi Yokokawa
Name: Takeshi Yokokawa
Title: Manager
Lending Office:
One World Trade Center
Suite 8527
New York, New York 10048
Attention: Mr. Takeshi Yokokawa
Manager, Planning
and Administration
Department
Telex: 232328
Answerback: MIT UR
Telecopier No.: (212) 432-1157
Commitment
$7,000,000.00 THE MUTSUBISHI TRUST AND BANKING
CORPORATION
NEW YORK BRANCH
By /s/ Ryoichi Mizukami
Name: Ryoichi Mizukami
Title: Manager
Lending Office:
520 Madison Avenue
25th Floor
New York, New York 10022
Attention: Mr. Ryoichi Mizukami
Manager
Telex: 23425078
Answerback: MTBA UI
Telecopier No.: (212) 755-2349
Commitment
$7,000,000.00 THE MITSUI BANK, LTD.
NEW YORK BRANCH
By /s/Ken-Ichi Sato
Name: Ken-Ichi Sato
Title: Senior Vice President
Lending Office:
277 Park Avenue
New York, New York 10172-0121
Attention: Mr. Mitsushige Kanameda
Telex: RCA 232962
Answerback: 232962 MTUI UR
Telecopier No.: (212) 644-9565
Commitment
$7,000,000.00 THE MITSUI TRUST & BANKING CO.,
LTD.
NEW YORK BRANCH
By /s/ Kazuo Yasuda
Name: Kazuo Yasuda
Title: Deputy General Manager
Lending Office:
One World Financial Center
200 Liberty Street
New York, New York 10281
Attention: Mr. Hirohisa Gotoda
Assistant Vice President
Telex: 222401
Answerback: MBCOUR
Telecopier No.: (212) 945-4171
(212) 945-4170
Commitment
$7,000,000.00 THE SAITAMA BANK, LTD.
NEW YORK BRANCH
By /s/ Takayoshi Tasaka
Name: Takayoshi Tasaka
Title: Senior Manager
Lending Office:
44 Wall Street
New York, New York 10005
Attention: Mr. Takayoshi Tasaka
Telex: 233410/424019
Answerback: SAIB UR/SAIB UI
Telecopier No.: (212) 825-9033
Commitment
$7,000,000.00 THE SANWA BANK, LIMITED
NEW YORK BRANCH
By /s/ Toshihiko Yoshizawa
Name: Toshihiko Yoshizawa
Title: Vice President
Lending Office:
200 Park Avenue
New York, New York 10166
Attention: Mr. Toshihiko Yoshizawa
Vice President
Telex: 232423
Answerback: SWB UR
Telecopier No.: (212) 557-0185
Commitment
$7,000,000.00 THE SUMITOMO BANK, LIMITED
NEW YORK BRANCH
By /s/ Kazuyoshi Ogawa
Name: Kazuyoshi Ogawa
Title: Vice President
Lending Office:
One World Trade Center
Suite 9651
New York, New York 10048
Attention: International Finance
Section
Telex: 420515 (ITT); 232407 (RCA)
Answerback: SMBK-UR
Telecopier No.: (212) 524-0612
Commitment
$7,000,000.00 THE TOKAI BANK, LIMITED
NEW YORK BRANCH
By /s/Toshikazu Nakano
Name: Toshikzau Nakano
Title: Vice President
Lending Office:
One World Trade Center
Suite 8763
New York, New York 10048
Attention: Mr. Toshikazu Nakano
Vice President and Manager
International Finance and
Loan
Administration
Telex: 422857
Answerback: TOKAI
Telecopier No.: (212) 524-0224
Commitment
$7,000,000.00 THE TOYO TRUST & BANKING CO., LTD.
NEW YORK BRANCH
By /s/ Robert J. Tse
Name: Robert J. Tse
Title: Vice President
Lending Office:
437 Madison Avenue
New York, New York 10022
Attention: Mr. Robert Tse
Vice President
Telex: 23-222675
Answerback: TTBC UR
Telecopier No.: (212) 371-4963
List of omitted Exhibits and Schedules to Bontang III Loan
Agreement, dated February 9, 1988, among Continental Bank
International as Trustee, Train-E Finance Co., Ltd., as Tranche A
Lender and The Industrial Bank of Japan Trust Company as Agent
for the Tranche B Lenders and as Tranche B Lender.
Exhibit Description
Exhibit A Form of Notice of Borrowing
Exhibit B-1 Form of Notice of Deferral
Exhibit B-2 Form of Notice of Interest Period
Exhibit C-1 Form of Tranche A Note
Exhibit C-2 Form of Tranche B Note
Exhibit D-1 Form of Legal Opinion of Kelley Drye &
Warren, Counsel for the Borrower
Exhibit D-2 Form of Legal Opinion of In-House
Counsel to the Borrower
Exhibit E-1 Form of Legal Opinion of the Special
Legal Advisor to the President Director
of Pertamina
Exhibit E-2 Form of Legal Opinion of Baker & Botts,
Special Counsel to Certain Members of
the Huffco Group
Exhibit E-3 Form of Legal Opinion of White & Case,
Special New York Counsel to Pertamina
Exhibit F-1 Form of Legal Opinion of Paul, Weiss,
Rifkind, Wharton & Garrison, Special
Counsel to the Tranche A Lender, the
Agent and the Tranche B Lender
Exhibit F-2 Form of Legal Opinion of TSAR & TSAI,
Special Taiwanese Counsel to the Tranche
A Lender, the Agent and Tranche B
Lenders
Schedule Description
Schedule 1 Basic Agreements
Schedule 2 Contingent Support Agreements
Schedule 3 Drawdown Schedule
TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . 1
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . 2
2. THE ADVANCES. . . . . . . . . . . . . . . . . . . . 17
2.1 The Commitments . . . . . . . . . . . . . . . . 17
2.2 Manner of Borrowing . . . . . . . . . . . . . . 17
2.3 Interest. . . . . . . . . . . . . . . . . . . . 19
2.4 Election of Interest Periods for Tranche B. . . 19
2.5 Interest Rates. . . . . . . . . . . . . . . . . 19
2.6 Alternative Interest Rates. . . . . . . . . . . 20
2.7 Interest Rate on Overdue Amounts; Other Indemnities
21
2.8 Fees. . . . . . . . . . . . . . . . . . . . . . 23
2.9 The Notes . . . . . . . . . . . . . . . . . . . 23
2.10 Repayment on Maturity Dates; Deferral. . . . . 24
2.11 Notices. . . . . . . . . . . . . . . . . . . . 25
3. PAYMENTS. . . . . . . . . . . . . . . . . . . . . . 25
3.1 Allocation of Amounts; Substitute Payment . . . 25
3.2 Funds of Payment. . . . . . . . . . . . . . . . 26
3.3 Set-Off, Counterclaim and Taxes . . . . . . . . 26
3.4 Change of Law . . . . . . . . . . . . . . . . . 27
3.5 Certain Prepayments . . . . . . . . . . . . . . 29
3.6 Other Prepayments . . . . . . . . . . . . . . . 29
3.7 Cancellation of Commitments . . . . . . . . . . 29
3.8 No Reborrowing. . . . . . . . . . . . . . . . . 29
3.9 Payments to be Made at End of Interest Period . 29
4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. . . 30
4.1 Power and Authority . . . . . . . . . . . . . . 30
4.2 Legal Action. . . . . . . . . . . . . . . . . . 30
4.3 Restrictions. . . . . . . . . . . . . . . . . . 30
4.4 Registration and Approvals. . . . . . . . . . . 30
4.5 Agreement Binding . . . . . . . . . . . . . . . 31
4.6 Ranking of Advances; Encumbrances . . . . . . . 31
4.7 Litigation. . . . . . . . . . . . . . . . . . . 31
4.8 Compliance with Other Instruments, etc. . . . . 31
4.9 No Defaults . . . . . . . . . . . . . . . . . . 31
4.10 Trust Agreement. . . . . . . . . . . . . . . . 32
5. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . 32
5.1 Conditions Precedent to the Initial Advances. . 32
5.2 Conditions Precedent to the Initial and Subsequent
Advances. . . . . . . . . . . . . . . . . . . . . . 35
5.3 Representations . . . . . . . . . . . . . . . . 35
6. COVENANTS . . . . . . . . . . . . . . . . . . . . . 35
6.1 Information . . . . . . . . . . . . . . . . . . 35
6.2 Negative Pledge . . . . . . . . . . . . . . . . 37
6.3 No Consent to Changes . . . . . . . . . . . . . 37
6.4 Indebtedness. . . . . . . . . . . . . . . . . . 37
6.5 Notice at End of Availability Period. . . . . . 38
7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . 38
8. AGENT . . . . . . . . . . . . . . . . . . . . . . . 39
8.1 Appointment and Authority . . . . . . . . . . . 39
8.2 Agent May Rely on Documents . . . . . . . . . . 40
8.3 No Amendment to Duties of Agent Without Consent 40
8.4 Responsibilities of Agent and Lead Managers . . 40
8.5 Funding Costs of Agent. . . . . . . . . . . . . 41
8.6 Agent in Individual Capacity. . . . . . . . . . 41
8.7 Credit Decision . . . . . . . . . . . . . . . . 41
8.8 Lead Managers . . . . . . . . . . . . . . . . . 41
8.9 Change of Administrative Office of Agent. . . . 42
8.10 Successor Agent. . . . . . . . . . . . . . . . 42
9. SOURCE OF DEBT SERVICE; CONTINGENT SUPPORT; RECOURSE. . . 42
9.1 Accumulation for Debt Service . . . . . . . . . 42
9.2 Accumulation in Regular Reserve Account . . . . 42
9.3 Accumulation in Debt Coverage Reserve Account . 43
9.4 Accumulation in Contingent Reserve Account. . . 43
9.5 Payments Made from Debt Service Account and Reserve
Account . . . . . . . . . . . . . . . . . . . . . . 43
9.6 No Recourse . . . . . . . . . . . . . . . . . . 44
9.7 Not to Limit Remedies . . . . . . . . . . . . . 45
10. MISCELLANEOUS
10.1 Notices. . . . . . . . . . . . . . . . . . . . 45
10.2 No Waiver; Remedies Cumulative . . . . . . . . 46
10.3 Use of English Language. . . . . . . . . . . . 46
10.4 Assignment; Successors and Assigns; Participations
46
10.5 Amendments . . . . . . . . . . . . . . . . . . 47
10.6 Expenses; Indemnification. . . . . . . . . . . 47
10.7 Sharing of Set-Off and Other Payments. . . . . 48
10.8 Counterparts . . . . . . . . . . . . . . . . . 48
10.9 Table of Contents and Section Headings . . . . 48
10.10 Governing Law . . . . . . . . . . . . . . . . 48
10.11 Severability. . . . . . . . . . . . . . . . . 48
10.12 Term of Agreement . . . . . . . . . . . . . . 49