Dated October 11, 1996
P.T. FREEPORT INDONESIA COMPANY
and
RTZ INDONESIAN FINANCE LIMITED
______________________________________
Credit Facility of up to $450,000,000
______________________________________
CONTENTS
Clause Page No.
INTERPRETATION........................................ 2
AMOUNT................................................ 8
PURPOSE............................................... 8
CONDITIONS PRECEDENT.................................. 9
AVAILABILITY OF ADVANCES.............................. 11
LENDER RETURN......................................... 12
REPAYMENT OF LOAN..................................... 15
UNDERTAKINGS.......................................... 16
ILLEGALITY............................................ 18
PAYMENTS.............................................. 18
DEFAULT............................................... 21
EXPENSES.............................................. 23
ASSIGNMENT............................................ 23
NOTICES............................................... 24
GOVERNING LAW......................................... 24
MISCELLANEOUS......................................... 25
SCHEDULE 1....................................... 27
Address for Notices to FI........................ 27
SCHEDULE 2....................................... 28
Form of Advance Request.......................... 28
THIS AGREEMENT is made October 11, 1996
BETWEEN
(1) P.T. FREEPORT INDONESIA COMPANY of Plaza 89, 5th Floor,
Jl.H.R. Rasuna Said Kav.X-7 No.6, Jakarta 12940 Indonesia
("FI") and
(2) RTZ INDONESIAN FINANCE LIMITED of 6 St. James's Square,
London SW1Y 4LD, England (the "RTZ Lender")
WHEREAS
(A) By a Contract of Work dated 30 December 1991 made between
The Government of the Republic of Indonesia (the
"Government") and FI, the Government appointed FI as the
sole contractor for the Government with respect to the
Contract Area, as defined in the Contract of Work, with the
sole rights to explore, mine, process, store, transport,
market, sell and dispose of Products (as defined in the
Contract of Work) in the Contract Area (defined as aforesaid)
(B) By a participation agreement of even date herewith between
FI and P.T. RTZ-CRA Indonesia, a company in formation under
the laws of the Republic of Indonesia ("PT-RTZ"), FI and PT-
RTZ agreed, inter alia, to participate in operations under
the Contract of Work (as defined below)
(C) RTZ Lender and PT-RTZ are both subsidiaries of The RTZ
Corporation PLC
(D) RTZ Lender has agreed to make available to FI a loan
facility of up to but not exceeding a maximum aggregate
principal amount to be advanced of $450,000,000, repayment
of which is to be discharged solely out of FI Incremental
Expansion Cashflow (as defined below)
IT IS AGREED as follows
INTERPRETATION
1. (1) In this Agreement
(a) "Additional Amounts" means such
additional amounts as may be required, after the
deduction or withholding of Applicable Taxes
(including Applicable Taxes with respect to any
Additional Amounts), to enable RTZ Lender to
receive from FI and retain an amount equal to the
full amount stated to be payable to RTZ Lender
under Clause 6 of this Agreement, subject to the
limit on the rate of Applicable Taxes as a result
of the proviso to the definition of "Applicable
Taxes"
(b) "Advance" means the principal amount of
each borrowing by FI under this Agreement
(c) "Advance Date" means, in relation to
each Advance, the date specified as such in the
relative Advance Request or, on and after the
making thereof, the date on which it was made
(d) "Advance Request" means a request,
substantially in the form of Schedule 2 to this
Agreement, made by FI to RTZ Lender in accordance
with Clause 5 for an Advance to be made by RTZ
Lender to FI under this Agreement
(e) "Applicable Taxes" means all present and
future Taxes (whether or not collectable by
deduction or withholding) imposed in the Republic
of Indonesia, the United States of America or any
jurisdiction through or out of which such payment
is made or any political subdivision or taxing
authority thereof on any payment (other than of
principal) by FI to RTZ Lender under this Agreement
(other than Taxes imposed, assessed, levied or
collected on or with respect to the net income of
RTZ Lender), provided that such Applicable Taxes
will, with respect to each taxing jurisdiction, be
at a rate which does not exceed the rate of
withholding on interest giving effect, in each
case, to any applicable Tax treaty, with RTZ Lender
qualified thereunder as a United Kingdom person and
"Applicable Tax" shall be construed accordingly
(f) "Approved Expansion Project" has the
meaning assigned to it in the Participation
Agreement
(g) "Approved Programme and Budget" has the
meaning assigned to it in the Participation
Agreement
(h) "Available Commitment" means at any time
$450,000,000 less the aggregate amount of the
Advances which have theretofore been made
(i) "Bank Credit Agreements" means together
the FI Credit Agreement and the CDF
(j) "Business Day" means a day on which
banks and foreign exchange markets are open for
business in London and New York City
(k) "CDF" means the Credit Agreement dated
as of 30 June 1995 (as amended) between FI,
Freeport-McMoRan Copper & Gold Inc. ("FCX"), the
banks party to the FI Credit Agreement, The Chase
Manhattan Bank (formerly Chemical Bank) as
Administrative Agent, JAA Security Agent and as
Security Agent, the Trustee and The Chase Manhattan
Bank (as successor to The Chase Manhattan Bank
(National Association)) as Documentary Agent
(l) "Commitment" means the obligation of RTZ
Lender under and subject to the terms of this
Agreement to make available to FI Advances of an
aggregate principal amount not exceeding the
Available Commitment
(m) "Contract Area Block A" has the meaning
assigned to it in the Participation Agreement
(n) "Contract of Work" means the Contract of
Work referred to in Recital (A)
(o) "Default" means any Event of Default and
any event which, with the giving of any notice
and/or the expiry of time and/or the fulfilment of
any other condition stated in Clause 11(1) below
would be or become an Event of Default
(p) "Dispose" has the meaning assigned to
that expression in the Participation Agreement
(q) "Early Closing Agreement" means the
agreement dated as of the date of this Agreement
between FI, FCX, PT-RTZ, The RTZ Corporation PLC,
RTZ Jersey Investments One Limited, RTZ Jersey
Nominees Limited, First Trust of New York, National
Association, as Trustee, The Chase Manhattan Bank
(formerly Chemical Bank), as Administrative Agent,
JAA Security Agent and Security Agent, and The
Chase Manhattan Bank (as successor to The Chase
Manhattan Bank (National Association)), as
Depositary and Documentary Agent.
(r) "Encumbrance" means any mortgage, deed
of trust or other trust arrangement for the purpose
of providing security, deed to secure debt or any
other security agreement or arrangement, pledge,
hypothecation, assignment for the purpose of
providing security, security interest, encumbrance,
lien or charge of any kind, whether voluntarily
incurred or arising by operation of law, by
statute, contract or otherwise, affecting any
property, including any power of attorney or
agreement to grant any of the foregoing, any
conditional sale or other title retention
agreement, any lease in the nature of a security
interest and/or the filing of or agreement to give
any financing statement (other than a precautionary
financing statement with respect to a lease that is
not in the nature of a security interest) under the
UCC or comparable law of any jurisdiction with
respect to any property
(s) "Enterprise Operations" has the meaning
assigned to it in the Participation Agreement
(t) "Event of Default" means any of the
events specified in Clause 11(1) below
(u) "Expansion" has the meaning assigned to
it in the Participation Agreement
(v) "Facility" means the credit facility
granted to FI by RTZ Lender in this Agreement
(w) "Feasibility Study" has the meaning
assigned to it in the Participation Agreement
(x) "FI Credit Agreement" means the Credit
Agreement dated as of 27 October 1989 (as amended)
between FI, FCX, certain banks, The Chase
Manhattan Bank (formerly Chemical Bank) as Ad-
ministrative Agent, JAA Security Agent and Security
Agent, the Trustee and The Chase Manhattan Bank
(the successor to The Chase Manhattan Bank
(National Association)) as Documentary Agent
(y) "FI Incremental Expansion Cashflow"
means FI's portion of Incremental Expansion
Cashflow under the Participation Agreement
(z) "Fiduciary Assignment of Accounts
Receivable" has the meaning assigned to it in the
Restated Trust Agreement
(aa) "Government" has the meaning assigned to
it in Recital (A)
(bb) "Governmental Agency" means the
Government (including the President and any
Minister), and any material state, provincial or
local court or governmental agency, authority,
instrumentality or regulatory body of Indonesia or
any other country
(cc) "Implementation Agreement" means the agreement
so designated between FCX and RTZ dated as of 2 May
1995
(dd) "Incremental Expansion Cashflow" has the
meaning assigned to it in the Participation
Agreement
(ee) "Incremental Expansion Revenues" has the
meaning assigned to it in the Participation
Agreement
(ff) "Intercreditor Agreement" means the agreement
dated as of the date of this Agreement between,
among others, RTZ Lender, The Chase Manhattan Bank
(formerly Chemical Bank), as Administrative Agent
and Security Agent, and The Chase Manhattan Bank
(as successor to The Chase Manhattan Bank (National
Association)), as Depositary and Documentary Agent
(gg) "Loan" means together the Relevant Approved
Expansion Project Loans
(hh) "Month" means a calendar month
(ii) "Operator" has the meaning assigned to it in
the Participation Agreement
(jj) "Participating Interest" has the meaning
assigned to it in the Participation Agreement
(kk) "Participation Agreement" means the
participation agreement referred to in Recital (B)
(ll) "Prescribed Rate" has the meaning assigned to
such expression in Clause 6(3)(a) below
(mm) "Programme" and "Budget" each has the meaning
assigned to it in the Participation Agreement
(nn) "Reference Banks" means together Morgan
Guaranty Trust Company of New York, Barclays Bank
PLC, Deutsche Bank AG, ABN-AMRO Bank N.V., The
Chase Manhattan Bank, and any bank mutually
selected by RTZ Lender and FI pursuant to Clause
6(3)(d) below to replace any of such banks and
"Reference Bank" means each and any of them
(oo) "Relevant Costs" means costs, expenses and
expenditures to be incurred as comprised in and
pursuant to one or more Approved Programmes and
Budgets and Applicable Taxes and Additional Amounts
payable from Advances as provided in this Agreement
(pp) "Relevant Approved Expansion Project" means an
Approved Expansion Project in or towards the
financing of which proceeds of Advances made under
this Agreement are or will be applied
(qq) "Relevant Approved Expansion Project Loan"
means the aggregate outstanding principal amount of
all Advances made to FI under this Agreement in
respect of the Relevant Approved Expansion Project
together with all interest and commitment fees
added thereto as provided in Clause 6(4) below
(rr) "Restated Trust Agreement" means the amended
and restated trust agreement dated as of the date
of this Agreement between, among others, FI, RTZ
Lender and the Trustee
(ss) "RTZ Lender Financing Annex" means the annex
to the Restated Trust Agreement and comprising a
part thereof pursuant to which FI Incremental
Expansion Cashflow (and FI's related rights under
the Concentrate Sales Agreements) are collaterally
assigned to the Trustee for the benefit of RTZ
Lender
(tt) "RTZ Lender Lien" means the first priority
security interest in FI Incremental Expansion
Cashflow (and FI's related rights under the
Concentrate Sales Agreements) granted to the
Trustee for the benefit of RTZ Lender pursuant to
this Agreement, the Restated Trust Agreement and
the Fiduciary Assignment of Accounts Receivable as
security for the payment of all amounts payable by
FI under this Agreement
(uu) "RTZ Lender's UK Group" means the group of
companies comprising The RTZ Corporation PLC and
its United Kingdom subsidiaries, where subsidiary
has the meaning assigned to it in Section 736 of
the Companies Act 1985 of Great Britain
(vv) "RTZ Loan Transaction Documents" means
together the Implementation Agreement, the
Participation Agreement, the Early Closing
Agreement and the other agreements and documents
referred to therein and the Side Letter
(ww) "Security Documents" means together the
Restated Trust Agreement, the Fiduciary Assignment
of Accounts Receivable and the RTZ Lender Financing
Annex
(xx) "Side Letter" means the agreement dated as of
the date hereof among FI, RTZ, PT-RTZ, The Chase
Manhattan Bank (formerly Chemical Bank), as
Administrative Agent, JAA Security Agent and
Security Agent, The Chase Manhattan Bank (as
successor to The Chase Manhattan Bank (National
Association)), as Documentary Agent and Depositary,
the Trustee, RTZ Indonesian Investments Limited and
RTZ Lender
(yy) "Taxes" includes all present and future income
and other taxes, levies, imposts, assessments,
duties, charges, deductions and withholdings
whatsoever together with interest thereon and
penalties with respect thereto and "Tax" and
"Taxation" shall be construed accordingly
(zz) "Trustee" means First Trust of New York,
National Association, trustee under the Trust
Agreement, and any successor trustee under the
Restated Trust Agreement
(aaa) "UCC" means the Uniform Commercial Code as in
effect from time to time in the State of New York
or, as appropriate, the Uniform Commercial Code (or
equivalent) as in effect from time to time in any
other relevant jurisdiction
(bbb) "U.S.A." means the United States of America,
any state or territory thereof and the District of
Columbia
(ccc) "Year" means a calendar year commencing 1
January
(ddd) "dollars" and "$" means the lawful currency
for the time being of the U.S.A.
(2) In this Agreement,
(a) the contents page hereof and the
headings in this Agreement are for convenience only
and shall be ignored in construing this Agreement
(b) references to a "person" shall include
an individual, company, corporation, firm,
partnership, joint venture, association, trust or
agency of a state (in each case, whether or not
having a separate legal personality)
(c) references to any document or agreement,
including, without limitation, the Contract of
Work, shall include such document or agreement as
amended, novated, substituted, varied, supplemented
or replaced from time to time
(d) references to a party to this Agreement
or to a Reference Bank or any other person
mentioned in this Agreement shall include such
party's or person's successors or permitted assigns
(e) references to this Agreement shall
include all schedules and annexes hereto.
AMOUNT
2. Subject to the terms of this Agreement, RTZ Lender grants to
FI a dollar loan facility whereby RTZ Lender, when requested by
FI pursuant to an Advance Request and subject as aforesaid, will
make to FI Advances denominated in dollars of an aggregate amount
not to exceed $450,000,000.
PURPOSE
3. The proceeds of each Advance shall be applied only in or
towards financing payment of Relevant Costs of one or more
Approved Expansion Projects (and FI undertakes so to apply each
such Advance) and no Advance shall be drawn by FI unless the
proceeds of such Advance are or will be so applied within thirty
days after the Advance Date.
CONDITIONS PRECEDENT
4. (1) The obligations of RTZ Lender to make the first Advance to
FI under this Agreement are subject to the condition that RTZ
Lender shall first have received all of the following in form and
substance satisfactory to it:
(a) a copy of a resolution of the board of
directors of FI approving the transactions and
matters to be implemented under the RTZ Loan
Transaction Documents to which it is to be party
and authorising a specified person or persons to
execute and deliver on its behalf the RTZ Loan
Transaction Documents to which it is to be party,
and to execute and deliver and/or despatch all
notices, certificates and other documents to be
executed and delivered and/or despatched in
connection with any of the RTZ Loan Transaction
Documents, such copies to be accompanied by a
certificate of FI signed by any authorised officer
on behalf of the board of directors confirming that
the utilisation by FI of such Advance would not
cause any borrowing limit contained in the Articles
of FI or in any other agreement or instrument to
which FI is a party to be exceeded
(b) a copy of the signatures of those
persons authorised to execute and deliver on behalf
of FI the RTZ Loan Transaction Documents to which
it is to be party and of those persons authorised
to execute and deliver and/or despatch on behalf of
FI all notices, certificates and other documents in
connection therewith
(c) a copy of each of the Security Documents
duly executed by FI and each of the other parties
to it (other than RTZ Lender) together with
evidence that the RTZ Lender Lien has been
perfected and all taxes, stamp duties and fees
payable in respect thereof have been duly paid
(d) a legal opinion of Ali Budiardjo,
Negroho & Reksodiputro, Indonesian legal advisers
to FI, addressed to RTZ Lender in form and
substance reasonably satisfactory to RTZ Lender
(e) a legal opinion of Davis Polk &
Wardwell, US Counsel to FI, addressed to RTZ Lender
in form and substance reasonably satisfactory to
RTZ Lender
(f) a copy of the Participation Agreement
duly executed by each of the parties to it
(g) a copy of the Intercreditor Agreement
duly executed by each of the other parties to it
and such other evidence that such agreement is in
full force and effect as RTZ Lender may reasonably
require
(h) a copy of the Early Closing Agreement
duly executed by each of the parties to it
(i) a copy of the Side Letter duly executed
by each of the parties to it.
(2) The obligations of RTZ Lender in respect of the making
of each Advance under this Agreement are subject to the further
conditions precedent that both at the time of the relative
Advance Request and at the Advance Date:
(a) no Event of Default under Clauses
11(1)(a), (e), (i), (j) or (k) shall have occurred
and be continuing or would result from or be in
existence immediately after the making of such
Advance which has not been waived by RTZ Lender
(b) no Event of Default, act of war,
insurrection, rebellion, earthquake or other event
of like impact has occurred as a result of which
RTZ Lender has determined that, in its reasonable
judgment, it is unlikely that the Relevant Approved
Expansion Project will proceed to completion, in
which event RTZ Lender will nevertheless make
Advances (not to exceed the Available Commitment)
to cover cash calls required to pay obligations in
respect of the Relevant Approved Expansion Project
outstanding at the time of the call which the
Participants are legally obliged to pay or which
are agreed between the Participants to be necessary
to pay the costs of suspending or terminating such
Relevant Approved Expansion Project
(c) such Advance shall not cause the
Available Commitment to be exceeded
(d) RTZ Lender shall have received in form
and substance satisfactory to it a certificate of
FI signed by any authorized officer on behalf of
the board of directors confirming that the
utilisation by FI of such Advance would not cause
any borrowing limit contained in the Articles of FI
or in any other agreement or instrument to which FI
is a party to be exceeded.
(3) If any event shall occur as a result of which RTZ Lender
(whether before or after Incremental Expansion Cashflow starts
being generated) shall cease to have access to 100% of FI
Incremental Expansion Cashflow, if any, (including the failure to
have the benefit of the Intercreditor Agreement, the Restated
Trust Agreement and the Side Letter, or comparable protection),
RTZ Lender's obligation to make Advances shall be suspended until
such time as RTZ Lender shall again have access to such FI
Incremental Expansion Cashflow, it being understood that RTZ
Lender and FI shall use their respective best efforts to cure the
event giving rise to such cessation of access to such FI
Incremental Expansion Cashflow.
AVAILABILITY OF ADVANCES
5. (1) Subject to the terms of this Agreement, FI may
require that an Advance be made to it under this Agreement by
delivering to RTZ Lender prior to 10am (London time) on the fifth
Business Day before the proposed Advance Date, a duly completed
Advance Request.
(2) Each Advance Request shall specify:
(a) the amount of the proposed Advance,
which shall not be in such an amount as to exceed
the Available Commitment
(b) (unless previously notified to RTZ
Lender in writing and not revoked in accordance
with this Agreement) the details of the bank and
account to which the proceeds of the proposed
Advance are to be made available
(c) the Relevant Approved Expansion Project,
together with, in the case of the first Advance
Request in respect of a Relevant Approved Expansion
Project, FI's best estimate, taken from the
Feasibility Study for the Relevant Approved
Expansion Project, of
(i) the aggregate of the projected
Relevant Costs of the Relevant Approved
Expansion Project
(ii) the period over which the projected Relevant
Costs of the Relevant Approved Expansion
Project will be incurred and
(iii) an assumed repayment schedule based upon the
application of 100% of FI Incremental Expansion
Cashflow, such schedule to be derived from the
related Feasibility Study
(d) reasonable details of the Relevant Costs
of the Relevant Approved Expansion Project in
question and that such sums fall due and that such
proceeds will be so applied within thirty days
after the proposed Advance Date.
(3) Subject to the terms of this Agreement, each Advance
Request shall be irrevocable. Each Advance Request shall be
based on a cash call (pursuant to paragraph 10.3 of the
Accounting Procedures constituting part of the Participation
Agreement) with respect to an Approved Expansion Project.
LENDER RETURN
6. (1) There shall be determined separately for each
Relevant Approved Expansion Project the rate of interest
applicable to Advances made to finance payment of Relevant Costs
of that Relevant Approved Expansion Project.
(2) The rate of interest applicable to a Relevant
Approved Expansion Project Loan shall be the rate per annum
determined by RTZ Lender in accordance with Clause 6(3) below to
be the Prescribed Rate for that Relevant Approved Expansion
Project.
(3) (a) Not later than the third Business Day
before the proposed Advance Date for the first
Advance under this Agreement in respect of each
Relevant Approved Expansion Project, RTZ Lender
shall select, at its absolute discretion, three of
the Reference Banks and ask each of the three
Reference Banks selected to provide RTZ Lender with
a quote of (1) the rate of interest at which such
Reference Bank would be prepared to make available
to a subsidiary of The RTZ Corporation PLC a loan
facility on the following basis:
(i) the loan would be in an amount
equal to the estimate given by FI pursuant to
Clause 5(2)(c)(i) in relation to the Relevant
Approved Expansion Project
(ii) the loan would be capable of being drawn over
the period estimated by FI pursuant to Clause
5(2)(c)(ii) in relation to the Relevant
Approved Expansion Project
(iii) the loan would have an assumed repayment
schedule based upon the application of 100% of
FI Incremental Expansion Cashflow, such
schedule to be derived from the related
Feasibility Study
(iv) the rate of interest should be a floating
rate, based on a margin over LIBOR, LIBOR being
the rate quoted by the Reference Bank in the
ordinary course of business in the London
Interbank Eurodollar Market at or about 11.00am
(London time) on the day the Reference Bank
supplies to RTZ Lender its rate for the
offering of dollar deposits for a period of up
to six months
(v) the loan would be
unconditionally guaranteed, as to principal and
interest, by The RTZ Corporation PLC
and (2) the rate of any commitment fee.
The Prescribed Rate for the Relevant
Approved Expansion Project Loan shall be the
arithmetic mean (rounded up, if necessary, to the
nearest fourth decimal place) of the respective
rates quoted to RTZ Lender, provided that if any of
the Reference Banks shall be unable or otherwise
fails to supply a rate by 1.00pm (London time) on
the date falling ten Business Days after the date
of RTZ Lender's request, RTZ Lender shall select
another Reference Bank or Banks to provide a quote
on the basis set out above and provided further
that if, by 1.00pm (London Time) on the date
falling two Business Days before the end of the
Month in which the first addition to the Relevant
Approved Expansion Project Loan is to be made
pursuant to Clause 6(4) below, RTZ Lender shall not
have received a rate from each of three of the
Reference Banks, the Prescribed Rate shall be
determined by RTZ Lender on the basis of the
quotations of each of the Reference Banks which
have supplied a rate.
The rate of any commitment fee
applicable to the Relevant Approved Expansion
Project Loan shall be the arithmetic mean (rounded
up, if necessary, to the nearest fourth decimal
place) of the respective rates or fees (as
appropriate) quoted by the Reference Banks whose
quotes of the rates of interest are used by RTZ
Lender in determining the Prescribed Rate
applicable to the Relevant Approved Expansion
Project Loan.
(b) RTZ Lender shall determine in accordance
with Clause 6(3)(a) above and notify to FI not
later than the Business Day before the end of the
Month in which the first addition to the Relevant
Approved Expansion Project Loan is to be made
pursuant to Clause 6(4) below the Prescribed Rate
and commitment fee applicable to the Relevant
Approved Expansion Project Loan.
(c) Each Relevant Approved Expansion Project
Loan (including, for the avoidance of doubt,
interest and commitment fee, previously or to be
added pursuant to Clause 6(4) below) shall accrue
interest at the Prescribed Rate applicable to that
Relevant Approved Expansion Project Loan.
(d) Should any of the Reference Banks cease
to carry on business as a bank, the parties shall
mutually select another bank with a credit rating
reasonably equivalent to that enjoyed at the date
of this Agreement by the Reference Bank in question
to replace such Reference Bank.
(4) There shall be added to and become part of each Relevant
Approved Expansion Project Loan on the last Business Day of each
Month the following amounts to the extent not paid:
(a) interest accrued thereon calculated in
accordance with Clauses 6(3)(a) above and 6(5)(a)
below and
(b) an amount equivalent to a commitment fee
in respect thereof calculated in accordance with
Clauses 6(3)(a) above and 6(5)(b) below.
(5) RTZ Lender shall, in respect of each Relevant Approved
Expansion Project Loan, calculate (on a basis of a 360 day year,
comprising 12 months of 30 days each) the interest and commitment
fee (if any) to be added to the Relevant Approved Expansion
Project Loan on the last Business Day of each Month by
multiplying
(a) in the case of the interest to be added,
the Relevant Approved Expansion Project Loan as at
the end of the Month in question (immediately prior
to the addition on the last Business Day of that
Month of any amounts pursuant to Clause 6(4)(a)) by
the Prescribed Rate applicable to the Relevant
Approved Expansion Project Loan, expressed as a
monthly rate, where such monthly rate shall be the
interest factor which, when compounded for 12
months, equals the Prescribed Rate applicable to
the Relevant Approved Expansion Project Loan
(b) in the case of the commitment fee to be
added, the difference between the estimate of the
Advance required in relation to the projected
Relevant Costs given by FI pursuant to Clause
5(2)(c)(i) in relation to the Relevant Approved
Expansion Project and the Relevant Approved
Expansion Project Loan as at the end of the Month
in question (immediately prior to the addition on
the last Business Day of that Month of any amounts
pursuant to Clause 6(4)(b)) by the rate of
commitment fee applicable to the Relevant Approved
Expansion Project Loan, expressed as a monthly
rate, where such monthly rate shall be the factor
which, when compounded for 12 months, equals the
rate of the commitment fee applicable to the
Relevant Approved Expansion Project Loan.
RTZ Lender shall, not later than the fifth Business Day after the
end of each Month, send to FI a statement showing the aggregate
amount of the Relevant Approved Expansion Project Loan
outstanding at the end of the previous Month (prior to the
addition of the sums mentioned next) together with the interest
and commitment fee applicable during and added to the Relevant
Approved Expansion Project Loan at the end of the Month and shall
give to FI such explanation regarding the calculation of the
interest and commitment fee added as FI may reasonably require.
(6) Each determination by RTZ Lender of the Prescribed Rate and
the rate of commitment fee applicable to a Relevant Approved
Expansion Project Loan and the amounts of interest accrued on the
Relevant Approved Expansion Project Loan and commitment fee
applicable thereto shall, in the absence of manifest error, be
conclusive.
REPAYMENT OF LOAN
7. (1) Except as otherwise provided in this Agreement, beginning
on the Sharing Commencement Date (as defined in the Participation
Agreement), FI will pay to (or, in the case of payments in
respect of Applicable Taxes and Additional Amounts, on behalf of)
RTZ Lender all the FI Incremental Expansion Cashflow (determined
in accordance with the Participation Agreement) until the Loan is
repaid in full. FI shall not be required to repay the Loan or
pay any other obligation under this Agreement from any of its
assets other than the FI Incremental Expansion Cashflow provided
that in any event the Loan shall mature and be repayable in full
on the earlier of the date which is 25 years after the date of
the first Advance under this Agreement and the date which is 15
years after the date of the last Advance under this Agreement and
provided further that, on such earlier date, FI may, in lieu of
repaying the Loan, at its option assign to RTZ Lender all of the
FI Incremental Expansion Cashflow in full and final satisfaction
of all FI's obligations hereunder and in no circumstances shall
FI require or have the right to require RTZ Lender to reassign
the same to FI.
(2) With effect from the Sharing Commencement Date (defined as
above), FI shall, not later than the twentieth Business Day after
the end of each Month, pay, or cause to be paid, to (or, in the
case of payments of Applicable Taxes and Additional Amounts, on
behalf of) RTZ Lender in dollars the whole of the FI Incremental
Expansion Cashflow for the immediately preceding Month
distributed to FI by the Operator in accordance with the terms of
the Participation Agreement. Each such payment shall be
accompanied by a statement containing details of the FI
Incremental Expansion Cashflow computation.
(3) Not later than 45 Business Days after the end of each Year
after the date of commissioning of the first Approved Expansion
Project, FI shall send to RTZ Lender a statement showing for the
previous Year (or part thereof) the FI Incremental Expansion
Cashflow, such statement to contain sufficient data to enable RTZ
Lender to verify the calculation thereof. If the annual
statement indicates an overpayment of FI Incremental Expansion
Cashflow, RTZ Lender shall pay to FI a sum equal to the excess
within 30 Business Days. If the annual statement indicates an
underpayment of FI Incremental Expansion Cashflow, FI shall pay
to RTZ Lender a sum equal to the shortfall within 30 Business
Days.
(4) Each payment under this Clause 7 shall be applied to
Relevant Approved Expansion Project Loans in the following order
of priority:
(i) first, to any Applicable Taxes
or Additional Amounts then payable;
(ii) secondly, to any amounts of commitment fee or
interest then payable, rateably;
(iii) thirdly, to the principal amount of the
Relevant Approved Expansion Project Loans in
the order in which the first Advance thereunder
is made so that no payment shall be applied to
the principal amount of any Relevant Approved
Expansion Project Loan other than the first
until the principal amount of the first has
been repaid in full and so on.
UNDERTAKINGS
8. (1) FI undertakes with RTZ Lender that, from the date of this
Agreement until all its liabilities under this Agreement have
been discharged:
(a) FI will notify RTZ Lender of any Default
promptly upon FI becoming aware of the same and of
any remedial action being taken
(b) FI will not take any action or fail to
take any action, including actions or failures to
act under the Contract of Work, the Participation
Agreement or any of the RTZ Loan Transaction
Documents to which it is a party, if the effect of
any such action or failure to act would have a
material adverse effect on the ability of FI to
carry out Enterprise Operations or affect
materially and adversely the access of RTZ Lender
to 100% of the FI Incremental Expansion Cashflow or
affect materially and adversely the rights of RTZ
Lender under the RTZ Loan Transaction Documents
(c) FI will give prompt notice to RTZ Lender
of any notice of default, lawsuit, proceeding,
action or damage of which it becomes aware which
might materially and adversely affect the ability
of FI to carry out Enterprise Operations or the
access of RTZ Lender to 100% of the FI Incremental
Expansion Cashflow or might materially and
adversely affect the rights of RTZ Lender under the
RTZ Loan Transaction Documents
(d) FI shall at all times maintain in full
force and effect for the benefit of RTZ Lender a
first priority lien with respect to 100% of the FI
Incremental Expansion Cashflow, free and clear of
all Encumbrances except for a subordinated lien in
favour of the secured creditors of FI that are
parties to the Intercreditor Agreement to the
extent provided for in the Intercreditor Agreement
and the Side Letter
(e) FI shall not Dispose of any part of its
share of Incremental Expansion Revenues without the
prior written consent of RTZ Lender and in the
event of any such Disposal, FI shall procure that
the transferee commits in writing to RTZ Lender to
be bound by the repayment provisions of this
Agreement to the extent of the Participating
Interest or such other interest transferred
(f) FI shall at its own expense execute any
and all further deeds, documents, agreements and
instruments, and take all such further actions as
may be required under applicable law or which RTZ
Lender may reasonably request in order to perfect
the transactions contemplated by this Agreement,
the Restated Trust Agreement and the Fiduciary
Assignment of Accounts Receivable, subject to the
Intercreditor Agreement and the Side Letter and in
order to grant, preserve, protect and perfect the
validity and first priority of the RTZ Lender Lien.
(2) RTZ Lender shall record in RTZ Lender's internal records
separately for each Relevant Approved Expansion Project Loan the
date and amount of each Advance from RTZ Lender to FI, the amount
of interest and other sums added to the Relevant Approved
Expansion Project Loan on the last Business Day of each Month and
the date each such amount is added, and the date and amount of
each payment by FI to RTZ Lender under this Agreement with
respect to the Relevant Approved Expansion Project Loan provided
that the failure of RTZ Lender to make or any error in any such
entries shall not affect the obligations of FI under this
Agreement.
ILLEGALITY
9. If any change in or the introduction of any law,
regulation, treaty or (whether or not having the force of law)
official directive or rule of any governmental, fiscal, monetary
or regulatory (including any self regulatory) authority,
organisation or agency of or in the United Kingdom, Indonesia or
the U.S.A., or any change in the interpretation, administration
or application thereof by the relevant courts or other authority,
organisation or agency in any such jurisdiction or compliance by
RTZ Lender therewith, shall make it unlawful or contrary to any
such regulation, treaty, official directive or rule for RTZ
Lender to make available or fund or maintain or to give effect to
its obligations as contemplated hereby, RTZ Lender may, by notice
thereof to FI, declare that, to the extent that they are so
unlawful or contrary to such regulation, treaty, official
directive or rule, RTZ Lender's obligations to FI hereunder shall
be suspended forthwith whereupon such obligations and RTZ
Lender's Commitment shall be so suspended until such time as such
condition is no longer operative. If and to the extent that the
continued lending thereof by RTZ Lender would cause RTZ Lender to
be in breach of such law, regulation, treaty, official directive
or rule, FI will co-operate with RTZ Lender with a view to
enabling RTZ Lender to transfer the Loan, its rights under the
Trust Agreement and its obligations under this Agreement to
another subsidiary of The RTZ Corporation PLC incorporated in a
jurisdiction where there is no such illegality provided that if
no such subsidiary acceptable to both FI and The RTZ Corporation
PLC is identified within a period of twelve months, RTZ Lender's
obligations to FI hereunder shall be terminated.
PAYMENTS
10. (1) All payments to be made by FI to RTZ Lender under
this Agreement shall be made in dollars in same day funds to such
account at such bank or office in New York City as RTZ Lender
shall designate by notice to FI given not less than five Business
Days prior to the date of such payment.
(2) All payments to be made by RTZ Lender to FI under
this Agreement shall be made in dollars in same day funds to such
account at such bank or office as FI may designate by notice to
RTZ Lender given not less than five Business Days prior to the
date of such payment or as FI shall designate in the relevant
Advance Request.
(3) (a) FI shall pay to or on behalf of RTZ Lender
from the sources specified below (the "Specified
Sources") an amount equal to all Applicable Taxes
with respect to amounts payable under this
Agreement, together with any Additional Amounts, in
accordance with Clause 10(3)(c). Payments from
Specified Sources shall mean:
(i) in the period before any
Incremental Expansion Cashflow is generated,
out of Advances (not to exceed the Available
Commitment) and should any proposed Advance in
respect of such payments otherwise cause the
Available Commitment to be exceeded, FI may, at
its option, either suspend claiming a deduction
for interest on the Loan (but this is without
prejudice to the accrual of interest under
Clause 6) or request an advance from RTZ Lender
for the excess which shall be granted on the
same terms as those applicable to Advances
under this Agreement but at a rate of interest
reflecting a loan to FI and not to The RTZ
Corporation PLC
(ii) in the period after Incremental Expansion
Cashflow begins to be generated, subject to
Clause 10(3)(c), first, from Incremental
Expansion Cashflow available at the time of
payment and secondly, to the extent that there
is insufficient to meet any payment, from
Advances (not to exceed the Available
Commitment) and should any proposed Advance in
respect of such payments otherwise cause the
Available Commitment to be exceeded, FI may, at
its option, either suspend claiming a deduction
for interest on the Loan (but this is without
prejudice to the accrual of interest under
Clause 6) or request an advance from RTZ Lender
for the excess which shall be granted on the
same terms as those applicable to Advances
under this Agreement but at a rate of interest
reflecting a loan to FI and not to The RTZ
Corporation PLC.
(b) FI shall from the Specified Sources
indemnify RTZ Lender against and reimburse RTZ
Lender upon demand for any Applicable Taxes or
Additional Amounts paid by RTZ Lender and any loss,
liability, claim or expenses (including interest,
penalties, fines, surcharges and legal fees) which
RTZ Lender may incur at any time arising out of or
in connection with any failure of FI to make any
payments of Applicable Taxes or Additional Amounts.
(c) FI shall pay or account to the relevant
taxation or other authorities from the Specified
Sources within the period permitted by applicable
law the full amount of any Applicable Tax or
Additional Amounts payable hereunder and within
thirty days after each payment by FI hereunder of
any such Applicable Tax or Additional Amounts, FI
shall deliver to RTZ Lender evidence (including
receipts where obtained within that period) that
such Applicable Tax or Additional Amounts have been
duly remitted to the appropriate authority. If any
such receipts are obtained after the expiry of such
thirty day period, FI shall furnish copies thereof
promptly to RTZ Lender.
FI shall promptly pay to RTZ Lender from
the Specified Sources the full amount of any
Applicable Taxes and Additional Amounts in respect
thereof upon receipt of notice from RTZ Lender of
the imposition and amount of such Applicable Tax
and Additional Amounts when such Applicable Tax and
Additional Amounts are imposed on any payment in
the hands of RTZ Lender.
(d) If, following the imposition of any
Applicable Tax or Additional Amount, under this
Clause 10(3), RTZ Lender determines in its absolute
discretion that it has obtained a refund of Tax
payable by it or obtained or used a credit or any
other relief against Tax on its profits or income
(any of the foregoing being a "Tax Credit") which
RTZ Lender in its absolute discretion is able to
quantify and identify as attributable to Applicable
Tax or the Additional Amounts paid by FI, then, if
RTZ Lender can do so without any adverse
consequences for itself or any other company in RTZ
Lender's Group, RTZ Lender shall treat as a payment
made pursuant to Clause 7 such proportion of that
Tax Credit as RTZ Lender in its absolute discretion
may determine will leave RTZ Lender and each other
company in RTZ Lender's Group (after that
reimbursement) in no better or worse position in
respect of their worldwide Tax liabilities than
they would have been in if no payment by FI of
Applicable Taxes or Additional Amounts had been
required. RTZ Lender shall have absolute
discretion as to whether to claim any Tax Credit
(and, if it does claim, the extent, order and
manner in which it does so) and whether any amount
is due from it under this Clause 10(3)(d) (and, if
so, what amount and when). RTZ Lender shall not be
obliged to disclose any information regarding its
Tax affairs and computations or those of any other
company in RTZ Lender's Group.
(e) RTZ Lender warrants to FI that RTZ
Lender is fully eligible for the benefits of the
"Interest" provision of the double taxation treaty
between the United Kingdom and the United States of
America and of the double taxation treaty between
the United Kingdom and The Republic of Indonesia.
Each of FI and RTZ Lender shall provide
to the other promptly and file with any relevant
taxation or other authority all information,
documents, certificates and returns reasonably
required by the other or necessary in order to
enable RTZ Lender and FI to claim the benefits of
any relevant double taxation treaty in respect of
the lower rate of withholding tax on payments other
than principal.
DEFAULT
11. (1) Each of the events set out below is an Event of Default
(whether or not caused by any reason whatsoever outside the
control of FI or any other person):
(a) if default is made in the payment of any
sum due under this Agreement on the due date and
otherwise in accordance with the provisions of this
Agreement and such failure shall continue for 30
days after notice by RTZ Lender; or
(b) if FI for any reason fails duly and
promptly to perform or observe any of its material
obligations under this Agreement or any of the
other RTZ Loan Transaction Documents to which it is
party and such failure shall continue for 30 days
after notice by RTZ Lender; or
(c) if any authorisation, approval or
consent necessary for FI to enter into or perform
this Agreement or any of the other RTZ Loan
Transaction Documents to which it is party or to
ensure that this Agreement or any of the other RTZ
Loan Transaction Documents is legal, valid and
enforceable is revoked or terminated or expires and
is not renewed; or
(d) if for any reason the Intercreditor
Agreement, the Side Letter or any of the Security
Documents shall cease to be valid, legally binding
and enforceable; or
(e) if the maturity of the indebtedness
under either of the Bank Credit Agreements has been
accelerated as a result of an Event of Default as
defined in and under such Bank Credit Agreements;
or
(f) if FI shall abandon or postpone
indefinitely or resolve to abandon or postpone
indefinitely Enterprise Operations in or relating
to Contract Area Block A or shall no longer be
entitled to carry on Enterprise Operations in or
relating to Contract Area Block A, whether because
of its default under or termination of the Contract
of Work or for any reason whatsoever; or
(g) if the Contract of Work shall be
terminated or otherwise fail to be in full force
and effect or shall be amended without the consent
of RTZ Lender in any manner which materially and
adversely affects the rights and benefits granted
to RTZ Lender under the RTZ Loan Transaction
Documents or the Minister of Mines and Energy of
Indonesia (or any successor entity) or the
Government shall take any action in contravention
of the Contract of Work or otherwise which
materially and adversely affects FI's ability to
perform its obligations under the RTZ Loan
Transaction Documents to which it is a party or the
rights and benefits granted to RTZ Lender under any
of the RTZ Loan Transaction Documents; or
(h) any Governmental Agency shall condemn,
seize, nationalise, consume the management of or
appropriate any material part of FI's Property,
assets or revenues (with or without payment of
compensation); or
(i) if a general meeting of shareholders of
FI resolves that FI be liquidated or FI suffers the
appointment of a receiver, liquidator,
administrator, assignee, custodian, trustee,
sequestrator or similar official for a substantial
part of its assets in a proceeding brought against
or initiated by it, and such appointment is neither
made ineffective nor discharged within ninety days
after the making thereof or such appointment is
consented to, requested by or acquiesced in by it;
or
(j) if FI commences a voluntary case under
any applicable bankruptcy, insolvency or similar
law now or hereafter in effect; or consents to the
entry of an order of relief in an involuntary case
under any such law or to the appointment of or
taking possession by a receiver, liquidator,
administrator, assignee, custodian, trustee,
sequestrator or other similar official of any
substantial part of its assets; or makes a general
assignment for the benefit of creditors; or
(k) if entry is made against FI of a
judgement, decree or order for relief by a court of
competent jurisdiction in an involuntary case
commenced against FI under any applicable
bankruptcy, insolvency or other similar law of any
jurisdiction now or hereafter in effect.
(2) In the case of any such event as is mentioned in Clause
11(1), and at any time thereafter if any such event shall then be
continuing, RTZ Lender may, by written notice to FI, (a) declare
that an Allocation Event (as defined in the Restated Trust
Agreement) shall have occurred under the Trust Agreement and/or
(b) exercise or cause the Trustee to exercise any or all of the
remedies available to RTZ Lender or the Trustee under the
Security Documents, the Intercreditor Agreement or the Side
Letter, including, without limitation, any action required to
enforce RTZ Lender's rights with respect to the FI Incremental
Expansion Cashflow.
EXPENSES
12. Each of FI and RTZ Lender shall bear its own costs
and expenses incurred in the preparation and negotiation of this
Agreement and the other Transaction Documents. Any and all
documentary taxes, assessments, notarial or other fees or charges
levied by any Governmental Authority by reason of the execution
and delivery of or in connection with the performance of this
Agreement or any of the other Transaction Documents shall be
borne equally between FI and RTZ Lender.
ASSIGNMENT
13. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors,
but is not assignable without the written consent of the other
party hereto provided that RTZ Lender may assign without such
consent of FI to a member of RTZ Lender's UK Group. Nothing in
this Agreement, express or implied, is intended to confer upon
any other person any rights or remedies under or by reason of
this Agreement. Except to the extent any provision of the
Intercreditor Agreement or the Side Letter would permit
otherwise, (i) any transfer by FI of any portion of its
Participating Interest in accordance with the Participation
Agreement, to the extent such assignment relates to its interests
in Incremental Expansion Cashflow, shall be subject to the terms
and provisions of the RTZ Loan Transaction Documents and in
particular, but without limitation, the RTZ Lender Lien, and (ii)
no such assignment or transfer shall be effective until there is
executed and delivered to RTZ Lender an instrument or instruments
in form and substance satisfactory to RTZ Lender evidencing the
agreement of the transferee to assume a proportionate share of
the payment obligations hereunder and to be bound by all of the
other liabilities and to perform all of the other obligations and
duties under this Agreement and the other RTZ Loan Transaction
Documents to which FI is party. No such assignment or transfer
shall relieve FI of its obligations under this Agreement.
NOTICES
14. (1) Except as otherwise stated herein, all notices,
demands or other communications hereunder to any party hereto
shall be made in writing and shall be deemed to be duly given or
made when delivered to such party addressed to it at its address
specified in the relevant part of Schedule 1 to this Agreement,
or at such other address as such party may hereafter specify for
such purpose to the others by notice.
(2) A notice or other communication received on a non-
working day or after 5.00pm on a working day in the place of
receipt shall be deemed to be served on the next following
working day in such place.
GOVERNING LAW
15. (1) This Agreement shall be governed and construed in
accordance with the laws of the State of New York without giving
effect to the conflicts of law principles thereof.
(2) Each of the parties irrevocably agrees that any suit,
action or proceedings (together in this Clause 15 referred to as
"Proceedings") arising out of or in connection with this
Agreement, except for Proceedings regarding enforcement which may
be brought in any jurisdiction, shall be brought in the courts of
the Borough of Manhattan in the State of New York and submits to
the exclusive jurisdiction of each such court.
(3) Each of the parties irrevocably waives any objection
which it may have now or hereafter to the laying of venue of any
Proceedings in any such court as is referred to in this Clause 15
and any claim that any such Proceedings have been brought in an
inconvenient forum. Each of the parties hereby to the fullest
extent permitted by law waives any right it may have to have any
Proceedings take the form of a trial by jury.
(4) Nothing contained in this Clause 15 shall limit the
rights of any party to take proceedings against any other party
in any other court of competent jurisdiction, nor shall the
taking of Proceedings in one or more jurisdictions preclude the
taking of Proceedings in any other jurisdiction, whether
concurrently or not.
MISCELLANEOUS
16. If any provision of this Agreement or the Security
Documents is prohibited or unenforceable in any jurisdiction such
prohibition or unenforceability shall not invalidate the
remaining provisions of this Agreement or the Security Documents
or affect the validity or enforceability of such provision in any
other jurisdiction.
(Signature page follows)
IN WITNESS whereof the parties have caused this Agreement to be
signed on the date first above written.
P.T. FREEPORT INDONESIA COMPANY
By: /s/ R. Foster Duncan
_____________________________
Name: R. Foster Duncan
Title: Treasurer
RTZ INDONESIAN FINANCE LIMITED
By: /s/ Sandra Walker
_____________________________
Name: Sandra Walker
Title: Attorney-In-Fact
SCHEDULE 1
Address for Notices to FI
P.T. Freeport Indonesia Company
Plaza 89, 5th Floor
Jl.H.R. Rasuna Said Kav.X-7 No.6
Jakarta 12940 Indonesia
Telephone: 62 21 850 4555
Telex: 44415 FIIJKTIA
Fax: 62 21 850 6736
Attention: President-Director
with a copy to: P.T. Freeport Indonesia Company
1615 Poydras Street
New Orleans, LA 70112
Telephone: 504 582 4000
Telex: 6275993
Fax: 504 585 3513
Attention: General Counsel
Address for Notices to RTZ Lender
6 St. James's Square
London SW1Y 4LD
Telephone: 0171 930 2399
Telex: 24639 RTZLDN G
Fax: 0171 930 3249
Attention: The Secretary
with a copy to: The Treasurer
The RTZ Corporation PLC
6 St. James's Square
London SW1Y 4LD
Fax: 0171 930 3249
SCHEDULE 2
Form of Advance Request
To: RTZ Indonesian Finance Limited
6 St. James's Square
London SW1Y4LD
Attention:
[Date]
REQUEST
Agreement dated [ ] 199[ ]
Dear Sirs
We refer to the Facility constituted by an agreement (the
"Agreement") dated [ ] 199[ ] made
between this Company as Borrower and RTZ Indonesian Finance
Limited as RTZ Lender. Terms defined in the Agreement have the
same meanings herein.
We hereby give you notice pursuant to Clause 5 of the Agreement
that we require an Advance to be made to us under the Agreement
as follows:
(a) Drawdown Date:
(b) Amount:
We set out below the Approved Expansion Project in or towards the
financing of which the proceeds of the Advance will be applied:
[ ]
[In the first Advance Request in respect of a Relevant Approved
Expansion Project only:
[Our best estimate, taken from the feasibility study for the
Approved Expansion Project referred to above approved pursuant to
Clauses 10 and 11 of the Participation Agreement, of
(i) the aggregate of the projected Relevant Costs of the
Approved Expansion Project is $
(ii) the period over which the projected Relevant Costs of the
Approved Expansion Project will be incurred is
years
(iii) we attach an assumed repayment schedule based on the
application of 100% of the FI Incremental Expansion Cashflow
based on the related Feasibility Study of the Approved
Expansion Project.]
We set out below details of the Relevant Costs in or towards the
financing of which the proceeds of the Advance will be applied
and confirm that such proceeds will be applied within thirty days
after the proposed Advance Date:
[ ]
We confirm that no Event of Default has occurred and is
continuing or would occur as a result of the making of the
proposed Advance which has not been waived.
Yours faithfully