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EXHIBIT 10.5
BONTANG VI
TRUSTEE AND PAYING AGENT AGREEMENT
among
PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA
(PERTAMINA)
TOTAL INDONESIE
VIRGINIA INTERNATIONAL COMPANY
LASMO SANGA SANGA LIMITED
UNION TEXAS EAST KALIMANTAN LIMITED
OPICOIL HOUSTON, INC.
VIRGINIA INDONESIA COMPANY
UNIVERSE GAS & OIL COMPANY, INC.
INDONESIA PETROLEUM, LTD.
UNOCAL INDONESIA COMPANY
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
Dated as of March 4, 1997
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 RECEIPT OF PAYMENTS WITH RESPECT TO LNG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1 Designation of Bontang VI Trustee and Bontang VI General Account . . . . . . . . . . . . . . . . . . 15
2.2 Bontang VI Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.3 Allocation of Amounts Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.4 Proceeds of Cargo Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.5 Payment Under Transportation Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 3 POWER TO BORROW AND ENTER INTO INTEREST RATE SWAPS . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.1 Enumeration of Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Power to Borrow from the Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Power to Incur Subordinated Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Power to Incur Pari Passu Swap Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 19
(d) Application of Certain Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.2 Accumulation of Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Capital Payment Dates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) Establishment of Debt Service Account
and Reserve Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) Depositing of Borrowings for Lenders
Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(e) Depositing of Borrowings for Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(f) Depositing of Borrowings for Special Payments. . . . . . . . . . . . . . . . . . . . . . . 21
(g) Depositing of Borrowing for Regular Reserve Account. . . . . . . . . . . . . . . . . . . . 21
(h) Depositing of Borrowings for Selected Qualified Bank. . . . . . . . . . . . . . . . . . . . 21
(i) Depositing of Source of Debt Service Before
Amortization Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(j) Depositing of Source of Debt Service in Loan
Account and Special Payment Account During
Amortization Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(k) Depositing of Source of Debt Service in Reserve
Account, Mandatory Prepayment Account and
Payment Account During Amortization Period . . . . . . . . . . . . . . . . . . . . . . . . 23
(l) Contested Special Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.3 Payment of Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(a) Payments from Loan Account and Special
Payment Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(b) Payments from Reserve Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(c) Mandatory Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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(d) Payments Upon Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.4 Choices; Delivery of Information and Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 30
(a) Choices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(b) Delivery of Information and Certificates to Lenders. . . . . . . . . . . . . . . . . . . . 30
(c) Copies to Producers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(d) Method of Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(e) Notices to Allocation Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(f) Information to Accountants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.5 Closing of Debt Service Account and Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . 31
3.6 Borrowing Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(a) Notice of Authorized Signatory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(b) Contents of Borrowing Instruction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(c) Deficient Borrowing Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(d) Requirement to Borrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.7 Disbursement Trust; Payment Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(a) Disbursement Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(b) Payment Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(c) Certain Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.8 Duties of Bontang VI Trustee with Respect to Instructions . . . . . . . . . . . . . . . . . . . . . 35
3.9 Bontang VI Depositaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 4 ESTABLISHMENT OF BONTANG VI
PAYMENT ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.1 Bontang VI Payment Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.2 Funds to be Deposited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.3 Other Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 5 DISBURSEMENTS WITH RESPECT TO
PROCESSING CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.1 Submission and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.2 Payment Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 6 TRANSPORTATION EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.1 Submission and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.2 Payment Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 7 DISBURSEMENTS WITH RESPECT TO OTHER CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.1 Submission and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.2 Payment Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 8 DISBURSEMENTS WITH RESPECT TO
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SHARING PERCENTAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.1 Approved Level of Working Capital; Sharing Percentages . . . . . . . . . . . . . . . . . . . . . . . 39
8.2 Charging of Amounts Payable; Payment of Excess . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.3 Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.4 Arrangements for Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.5 Special Disbursement Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.6 Payment Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.7 Receipt of Special Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE 9 PROCEDURES RESPECTING ACCOUNTS UNDER
THIS AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.1 Accounting for Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.2 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.3 Producer Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE 10 INVESTMENT OF FUNDS HELD IN ACCOUNTS
UNDER THIS AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.1 Permitted Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.2 Prudence and Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.3 Interest Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 11 CONCERNING THE BONTANG VI TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.1 Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.3 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.4 Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.5 Application to Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.6 Successor Vested with Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.7 Payments After Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.8 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.9 Trustee in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 12 DEBT SERVICE ALLOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.1 Debt Service Allocation Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.2 Estimated Debt Service Percentages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
12.3 Aggregate Dollar Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.4 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.5 Income From the Disbursement Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 13 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
13.1 Counterparts; Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
13.2 DISPUTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
13.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
13.4 Incumbency Certificates; Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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13.5 No Amendment Except in Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
13.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
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BONTANG VI
TRUSTEE AND PAYING AGENT AGREEMENT
THIS AGREEMENT, made as of the 4th day of March, 1997 among
PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA ("Pertamina"); and TOTAL
INDONESIE ("Total"), VIRGINIA INDONESIA COMPANY ("VICO"), LASMO SANGA SANGA
LIMITED, UNION TEXAS EAST KALIMANTAN LIMITED, OPICOIL HOUSTON, INC., VIRGINIA
INTERNATIONAL COMPANY, UNIVERSE GAS & OIL COMPANY, INC., INDONESIA PETROLEUM,
LTD. ("Inpex"); and UNOCAL INDONESIA COMPANY ("Unocal"); and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Bontang VI Trustee"), as Trustee
and Paying Agent;
W I T N E S S E T H :
WHEREAS, Pertamina, in collaboration with the Contractors
(such expression and certain other capitalized expressions used in these
Recitals have the meanings set forth in Article 1 hereof), has executed the LNG
Sales Contracts;
WHEREAS, the LNG Sales Contracts provide that the Buyers shall
pay amounts due thereunder to a bank in the United States designated by
Pertamina;
WHEREAS, under the Supply Agreements:
(i) each of the Contractors has agreed to make available,
for sale and delivery by Pertamina under the LNG Sales Contracts, a portion of
the LNG sold thereunder;
(ii) Pertamina has assigned to each Contractor a
percentage of certain amounts paid or payable by the Buyers thereunder;
(iii) Pertamina and the Contractors have agreed that
certain payments made by the Buyers shall be remitted directly to a bank in the
United States selected by Pertamina and the Contractors which will serve as
Trustee and Paying Agent for the purposes of causing the due payment in an
orderly administrative manner of certain costs and expenses of Pertamina and of
each Contractor incurred in the processing and sale of the LNG of each such
party;
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WHEREAS, Pertamina and the Contractors wish to authorize the
Bontang VI Trustee to borrow funds from time to time to pay for certain costs
incurred and to be incurred in connection with Train H;
WHEREAS, Pertamina, the Contractors and BankAmerica
International (both as successor in interest to Continental Bank International
and in its own right) are parties to certain existing trustee and paying agent
agreements and Bank of America National Trust and Savings Association may in
the future enter into other such agreements; and
WHEREAS, Pertamina and the Contractors wish to set forth
arrangements whereby certain amounts paid with respect to the LNG Sales
Contracts and certain other agreements will be received, held, managed and
disbursed by the Bontang VI Trustee upon the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINED TERMS
The following defined terms shall have the meanings set forth
below, such meanings to be applicable to both the singular and the plural forms
of such expressions:
"Accountants" shall have the meaning set forth in Section 8.3.
"Additional Plant" shall have the meaning set forth in Section
1 of the Loan Agreement.
"Advance" shall have the meaning set forth in Section 1 of the
Loan Agreement.
"Affected Lender" shall mean any Lender with respect to which
the Bontang VI Trustee has received a Notice of Mandatory Prepayment. An
Affected Lender shall continue to be such for purposes of this Agreement until
the entire amount of the Mandatory Prepayment payable to it has been paid in
full.
"Agent" shall have the meaning set forth in Section 1 of the
Loan Agreement.
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"Amortization Period" shall have the meaning set forth in
Section 1 of the Loan Agreement.
"Anticipated Loan Amount Notice" shall have the meaning set
forth in Section 3.2(b)(iii).
"Anticipated Loan Amounts" shall have the meaning set forth in
Section 3.2(b)(iii).
"Approved Level of Working Capital" shall have the meaning set
forth in Section 8.1.
"Assumed Interest Rate" shall have the meaning set forth in
Section 1 of the Loan Agreement.
"Availability Period" shall have the meaning set forth in
Section 1 of the Loan Agreement.
"Bontang Excess Sales Trust Agreement" shall mean the Bontang
Excess Sales Trustee and Paying Agent Agreement, originally dated as of
November 1, 1986, as amended and restated as of February 9, 1988, as amended by
Amendment No. 1 thereto, dated as of July 1, 1995, as amended by Amendment No.
2 thereto, dated as of March 4, 1997, each among the Producers or their
predecessors in interest, and BankAmerica International (as successor in
interest to Continental Bank International), as further modified or amended
from time to time.
"Bontang Excess Sales Trustee" shall mean the trustee and
paying agent under the Bontang Excess Sales Trust Agreement.
"Bontang I Trust Agreement" shall mean the Badak Trustee and
Paying Agent Agreement, originally dated as of July 15, 1974, as amended and
restated as of February 9, 1988, and as amended by Amendment No. 1 thereto,
dated as of July 1, 1995, each among the Producers or their predecessors in
interest, and BankAmerica International (as successor in interest to
Continental Bank International), as further modified or amended from time to
time.
"Bontang I Trustee" shall mean the trustee and paying agent
under the Bontang I Trust Agreement.
"Bontang Plant" shall mean the natural gas liquefaction plant
at Bontang Bay on the east coast of Kalimantan, Indonesia, including all
related facilities, such as natural gas processing plants for the production of
LNG, condensate and liquefied petroleum gas consisting of propane and butane,
utilities, storage tanks, loading lines and arms, harbor, docks, berths,
tugboats, residential community, workshops, offices,
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fixed plant and equipment and communication systems, together with
replacements, improvements, additions and expansions of all such facilities
(including Train H), 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 II Trust Agreement" shall mean the Badak Expansion
Trustee and Paying Agent Agreement, originally dated as of July 15, 1981, as
amended and restated as of July 15, 1991, among the Producers or their
predecessors in interest, and BankAmerica International (as successor in
interest to Continental Bank International), as further modified or amended
from time to time.
"Bontang II Trustee" shall mean the trustee and paying agent
under the Bontang II Trust Agreement.
"Bontang III Trust Agreement" shall mean the Bontang III
Trustee and Paying Agent Agreement, dated as of February 9, 1988, among the
Producers or their predecessors in interest, and BankAmerica International (as
successor in interest to Continental Bank International), as modified or
amended from time to time.
"Bontang III Trustee" shall mean the trustee and paying agent
under the Bontang III Trust Agreement.
"Bontang IV Trust Agreement" shall mean the Bontang IV Trustee
and Paying Agent Agreement, dated as of August 26, 1991, among the Producers or
their predecessors in interest, and BankAmerica International (as successor in
interest to Continental Bank International), as modified or amended from time
to time.
"Bontang IV Trustee" shall mean the trustee and paying agent
under the Bontang IV Trust Agreement.
"Bontang V Trust Agreement" shall mean the Bontang V Trustee
and Paying Agent Agreement, dated as of July 1, 1995, among the Producers and
BankAmerica International, as modified or amended from time to time.
"Bontang V Trustee" shall mean the trustee and paying agent
under the Bontang V Trust Agreement.
"Bontang VI Depositary" shall mean the United States
headquarters or a United States branch of the following financial institutions
appointed pursuant to Section 3.9 as a depositary of funds, properties and
rights in the Debt Service Account and the Reserve Account for the purposes of
safekeeping, investment or disbursement thereof:
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(a) any branch or affiliate of Bank of America
National Trust and Savings Association with the power to act as a Bontang VI
Depositary, or
(b) any other bank, trust company or financial
institution (in each case with trust powers) which (i) has a net worth in
excess of $100,000,000.00 or (ii) has outstanding debt securities rated A or
better by Standard and Poor's Rating Group or its equivalent by Moody's
Investors Service or another nationally recognized rating agency in the United
States and, in either case, has been approved in writing by the Producers and
the Agent on behalf of the Lenders.
"Bontang VI General Account" shall have the meaning set forth
in Section 2.1.
"Bontang VI Payment Account" shall mean a trust account of the
Bontang VI Trustee established as a subaccount of the Bontang VI General
Account pursuant to Section 4.1.
"Bontang VI Trustee" shall mean Bank of America National Trust
and Savings Association, as trustee and paying agent under this Agreement, or a
successor thereto.
"Bontang VI Trust Funds" shall have the meaning set forth in
Section 2.2.
"Bontang VI Trust Funds Accounts" shall mean the accounts
referred to in Section 9.3.
"Borrowed Amounts" shall have the meaning set forth in Section
1 of the Loan Agreement.
"Borrowing" shall have the meaning set forth in Section 1 of
the Loan Agreement.
"Borrowing Date" shall have the meaning set forth in Section 1
of the Loan Agreement.
"Business Day" shall have the meaning set forth in Section 1
of the Loan Agreement.
"Buyer" shall mean each of (i) Korea Gas Corporation, as buyer
under the KGC Sales Contract and (ii) Chinese Petroleum Corporation, as buyer
under the CPC Sales Contract.
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"Capital Payment Dates" shall mean the dates determined
pursuant to Section 3.2(a).
"Commitment" shall have the meaning set forth in Section 1 of
the Loan Agreement.
"Contractor" shall mean each of Virginia Indonesia Company,
Lasmo Sanga Sanga Limited, Union Texas East Kalimantan Limited, OPICOIL
Houston, Inc., Virginia International Company, Universe Gas & Oil Company,
Inc., Total Indonesie, Unocal Indonesia Company and Indonesia Petroleum, Ltd.
and, in each case, its predecessors and successors in interest (collectively,
the "Contractors").
"Contractor Group" shall mean any of the VICO Group, the Total
Group and the Unocal Group, and, after it ceases to be a member of the Unocal
Group, Inpex.
"CPC Sales Contract" shall mean the LNG Sale and Purchase
Contract (Badak VI) between Pertamina and Chinese Petroleum Corporation, dated
as of October 25, 1995, as modified or amended from time to time.
"CPC Supply Agreements" shall mean:
(i) Package VI Supply Agreement for Natural Gas
in Support of 2000-2017 LNG Sales to Chinese Petroleum Corporation under Badak
VI, dated May 1, 1996, by and between Pertamina, on the one hand, and the
members of the VICO Group, on the other hand, as modified or amended from time
to time;
(ii) Package VI Supply Agreement for Natural Gas
in Support of 2000-2017 LNG Sales to Chinese Petroleum Corporation under Badak
VI, dated April 4, 1996, by and between Pertamina, on the one hand, and the
members of the Total Group, on the other hand, as modified or amended from time
to time;
(iii) Package VI Supply Agreement for Natural Gas
in Support of 2000-2017 LNG Sales to Chinese Petroleum Corporation under Badak
VI, dated April 16, 1996, by and between Pertamina, on the one hand, and
Unocal, on the other hand, as modified or amended from time to time; and
(iv) Package VI Supply Agreement for Natural Gas
in Support of 2000-2017 LNG Sales to Chinese Petroleum Corporation under Badak
VI, dated April 16, 1996, by and between Pertamina, on the one hand, and Unocal
and Inpex, on the other hand, as modified or amended from time to time.
"Debt Coverage Ratio" shall have the meaning set forth in
Section 1 of the Loan Agreement.
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"Debt Coverage Reserve Account" shall mean a trust account of
the Bontang VI Trustee established as a subaccount of the Reserve Account
pursuant to Section 3.2(c), and such term shall include all subaccounts
thereof.
"Debt Service" shall mean payments into the Debt Service
Account and the Reserve Account, together with payments made by one or more
Producers and identified to the Bontang VI Trustee as "Debt Service" under the
Debt Service Allocation Agreement.
"Debt Service Account" shall mean a trust account of the
Bontang VI Trustee established as a subaccount of the Bontang VI General
Account pursuant to Section 3.2(c), which may be established and maintained at
the offices of the Bontang VI Trustee, or any Bontang VI Depositary as
permitted in accordance with the terms hereof and such term shall include all
subaccounts thereof.
"Debt Service Allocation Agreement" shall mean the Amended and
Restated Debt Service Allocation Agreement, dated as of February 9, 1988, among
the Producers, as modified or amended from time to time.
"Deferred Principal" shall mean any amount of principal due to
the Lenders (other than any Affected Lenders) under the Loan Agreement and the
Notes, the payment of which is deferred pursuant to Section 2.9(b) of the Loan
Agreement.
"Disbursement Trust Agreement" shall mean a disbursement
trustee and paying agent agreement entered into in the manner specified in
Section 3.7 under which the Loan Proceeds (other than amounts referred to in
Sections 3.2(d), (e), (f) and (g) and 3.6(b)(iii)(y)) shall be maintained until
use thereof is required, as modified or amended from time to time.
"Disbursement Trustee" shall mean Bank of America National
Trust and Savings Association, acting as disbursement trustee and paying agent
under the Disbursement Trust Agreement, or a successor thereto.
"Effective Date" shall mean the date specified as such in the
Loan Agreement, as advised to the Bontang VI Trustee in writing by the Agent on
behalf of the Lenders.
"Encumbrance" shall mean any lien, security interest,
mortgage, deed of trust, pledge, charge or any other encumbrance of any kind,
including, without limitation, the rights of a vendor, lessor or similar party
under any conditional sale agreement or other title retention agreement or
lease substantially equivalent thereto, any production payment, and, with
respect to any property or assets, any other right of or arrangement with any
creditor to have its claim satisfied out of any such property or assets, or the
proceeds therefrom, prior to the general creditors of the owner thereof.
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"Excluded Amounts" shall have the meaning set forth in Section
2.1.
"Finance Company" shall mean Bontang LNG Train-H Investment
Co., Ltd.
"Financed Capital Project" shall have the meaning specified in
the Processing Agreement.
"Gross Invoice Amount" shall mean:
(i) with respect to the KGC Sales Contract, the
sum, without duplication, of (a) all amounts payable to the Borrower pursuant
thereto in respect of LNG purchased or required to be paid for if not taken
thereunder (including without limitation amounts purchased pursuant to Section
4.11 of the KGC Sales Contract), (b) amounts payable to the Borrower pursuant
to Section 6.3 of each KGC Supply Agreement (with respect to amounts payable to
Pertamina), (c) all amounts payable to the Borrower on account of interest due
by reason of late payment of invoices for LNG under the KGC Sales Contract and
(d) to the extent they may hereafter become applicable by virtue of an
amendment to the KGC Sales Contract, amounts payable to the Borrower relating
to transportation charges, including, without limitation, demurrage and
non-utilization charges; and
(ii) with respect to the CPC Sales Contract, the
sum, without duplication, of (a) all amounts payable to the Borrower pursuant
thereto in respect of LNG purchased or required to be paid for if not taken
thereunder, (b) amounts payable to the Borrower pursuant to Section 6.3 of each
CPC Supply Agreement (with respect to amounts payable to Pertamina), (c) all
amounts payable to the Borrower on account of interest due by reason of late
payment of invoices for LNG under the CPC Sales Contract and (d) amounts
payable to the Borrower relating to transportation charges, including, without
limitation, demurrage and non-utilization charges;
provided that the Gross Invoice Amount (other than any such amounts payable
solely with respect to the transportation of cargoes of LNG, including without
limitation demurrage payments and non-utilization costs) shall not be reduced
by any rebate, set-off, reduction or discount given or agreed to by one or more
parties to any LNG Sales Contract from such amount payable as so defined,
adjusted and calculated; and provided, further, 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 Gross
Invoice Amount, and if the Agent on behalf of the Lenders also executes and
delivers such agreement this definition of Gross Invoice Amount shall be deemed
amended for all purposes of this Agreement as set forth in such agreement.
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"Guarantee" by any Person shall mean any obligation,
contingent or otherwise, of such Person guaranteeing any Indebtedness or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or- pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Indebtedness" shall mean, with respect to any Person, (i) all
indebtedness or obligations of such Person for borrowed money, (ii) all
indebtedness or obligations of such Person evidenced by bonds, debentures,
notes, swap agreements or other similar instruments or agreements, and all
securities issued by such Person providing for mandatory payments of money,
whether or not contingent, (iii) all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of such Person
as lessee under capital leases, (v) all obligations of such Person to purchase
securities (or other property) which arise out of or in connection with the
sale of the same or substantially similar securities or property, (vi) all
non-contingent obligations of such Person to reimburse any Person in respect of
amounts paid under a letter of credit or similar instrument to the extent that
such reimbursement obligations remain outstanding five business days after they
become non-contingent, (vii) Indebtedness of others secured by an Encumbrance
on any 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.
"Inpex" is defined in the title paragraph hereof.
"Interest" shall mean all amounts of interest, including
interest on Scheduled Principal, Deferred Principal and overdue amounts,
payable to the Lenders (other than any Affected Lenders) under Sections 2.3 and
2.6(a) of the Loan Agreement and under the Notes.
"Interest Payment Date" shall have the meaning set forth in
Section 1 of the Loan Agreement.
"Interest Period" shall have the meaning set forth in Section
1 of the Loan Agreement.
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"KGC Sales Contract" shall mean the LNG Sales and Purchase
Contract (Badak V), dated August 12, 1995, by and between Pertamina and Korea
Gas Corporation, as modified or amended from time to time.
"KGC Supply Agreements" shall mean:
(i) Package VI Supply Agreement for
Natural Gas in Support of 2000-2017 LNG Sales to Korea Gas Corporation under
Badak V, dated May 1, 1996, by and between Pertamina, on the one hand, and the
members of the VICO Group, on the other hand, as modified or amended from time
to time;
(ii) Package VI Supply Agreement for
Natural Gas in Support of 2000-2017 LNG Sales to Korea Gas Corporation under
Badak V, dated April 4, 1996, by and between Pertamina, on the one hand, and
the members of the Total Group, on the other hand, as modified or amended from
time to time;
(iii) Package VI Supply Agreement for
Natural Gas in Support of 2000-2017 LNG Sales to Korea Gas Corporation under
Badak V, dated April 16, 1996, by and between Pertamina, on the one hand, and
Unocal, on the other hand, as modified or amended from time to time; and
(iv) Package VI Supply Agreement for
Natural Gas in Support of 2000-2017 LNG Sales to Korea Gas Corporation under
Badak V, dated April 16, 1996, by and between Pertamina, on the one hand, and
Unocal and Inpex, on the other hand, as modified or amended from time to time.
"Lender" shall have the meaning set forth in Section 1 of the
Loan Agreement.
"Lenders Fees and Expenses" shall mean any amounts payable to
the Agent or any of the Lenders (other than any Affected Lenders) under
Sections 2.7 and 10.6 of the Loan Agreement and under the Letter Agreement.
"Letter Agreement" shall have the meaning set forth in Section
1 of the Loan Agreement.
"LNG" shall have the meaning set forth in Article 1 of the
Processing Agreement.
"LNG Sales Contract" shall mean each of, and "LNG Sales
Contracts" means both of, the CPC Sales Contract and the KGC Sales Contract.
"Loan Account" shall mean a trust account of the Bontang VI
Trustee established as a subaccount of the Debt Service Account pursuant to
Section 3.2(c).
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"Loan Agreement" shall mean the Loan Agreement among the
Bontang VI Trustee, as borrower thereunder, the Lenders, the Agent, the
Co-Agents and the Arrangers parties thereto, to be entered into pursuant to
Section 3.1(a), as modified or amended from time to time.
"Loan Percentage" shall mean, for any Lenders at any time, the
percentage determined by dividing the principal amount of such Lenders' Notes
outstanding at such time by the aggregate principal amount outstanding at such
time under all Lenders' Notes.
"Loan Proceeds" shall mean any funds disbursed by the Lenders
pursuant to the Loan Agreement.
"LPG" shall have the meaning set forth in Article 1 of the
Processing Agreement.
"Majority Lenders" shall have the meaning set forth in Section
1 of the Loan Agreement.
"Mandatory Prepayment" shall mean any required prepayment of
the entire outstanding principal of a Lender's Note, together with all other
amounts due to such Lender thereunder and under the Loan Agreement and the
Letter Agreement, the payment of which is mandatorily accelerated under Section
3.4(a) of the Loan Agreement.
"Mandatory Prepayment Account" shall mean a trust account of
the Bontang VI Trustee established as a subaccount of the Debt Service Account
pursuant to Section 3.2(c).
"Maturity Date" shall have the meaning set forth in Section 1
of the Loan Agreement.
"Mutual Incentive Sharing Side Letter" shall have the meaning
set forth in Section 8.1.
"Non-Scheduled Payment Notice" shall have the meaning set
forth in Section 3.2(b)(ii).
"Note" shall have the meaning set forth in Section 1 of the
Loan Agreement.
"Notice of Acceleration" shall have the meaning set forth in
Section 3.3(d).
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"Notice of Borrowing" shall have the meaning set forth in
Section 1 of the Loan Agreement.
"Notice of Mandatory Prepayment" shall have the meaning set
forth in Section 3.3(c).
"Other Facilities" shall have the meaning set forth in Section
1 of the Loan Agreement.
"Other Trust Agreements" shall mean the Bontang I Trust
Agreement, the Bontang II Trust Agreement, the Bontang Excess Sales Trust
Agreement, the Bontang III Trust Agreement, the Bontang IV Trust Agreement, the
Bontang V Trust Agreement and any other relevant agreements of this type
entered into from time to time by Pertamina and the trustees parties thereto,
among others, as modified or amended from time to time.
"Pari Passu Swap Indebtedness" shall have the meaning set
forth in Section 3.1(c).
"Person" shall mean and include any individual, corporation,
juridical entity, association, statutory body, partnership, joint venture,
trust, estate, unincorporated organization or government, state or any
political subdivision, instrumentality, agency or authority thereof.
"Pertamina" is defined in the title paragraph hereof.
"Processing Agreement" shall mean the Amended and Restated
Bontang Processing Agreement, dated as of February 9, 1988, among the Producers
(or their predecessors in interest) on the one hand and P.T. Badak on the
other, as modified or amended from time to time.
"Producers" shall mean Pertamina (and its successors) and the
Contractors.
"Producers Agreement" shall have the meaning set forth in
Section 1 of the Loan Agreement.
"Production Sharing Contracts" shall mean, to the extent such
contracts relate to the supply of natural gas to the Bontang Plant, each of:
(i) as to Pertamina and the VICO Group, (i)
through August 7, 1998, the Amended and Restated Production Sharing Contract
dated April 23, 1990, as modified or amended from time to time, between
Pertamina, on the one hand, and the members of the VICO Group on the other, and
(ii) effective August
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8, 1998, the Production Sharing Contract dated April 23, 1990, as modified or
amended from time to time, between Pertamina, on the one hand, and the members
of the VICO Group, on the other;
(ii) as to Pertamina and the Total Group, (i)
through March 30, 1997, the Amended and Restated Production Sharing Contract
dated January 11, 1991, as modified or amended from time to time, between
Pertamina, on the one hand, and the members of the Total Group, on the other,
and (ii) effective March 31, 1997, the Production Sharing Contract dated
January 11, 1991, as modified or amended from time to time, between Pertamina,
on the one hand, and the members of the Total Group, on the other;
(iii) as to Pertamina and the Unocal Group, (i)
through October 24, 1998, the Amended and Restated Production Sharing Contract
dated January 11, 1991, as modified or amended from time to time, between
Pertamina, on the one hand, and Unocal on the other, and (ii) effective October
25, 1998, the Production Sharing Contract dated January 11, 1991, as modified
or amended from time to time, between Pertamina, on the one hand, and Unocal,
on the other; and
(iv) as to Pertamina and Inpex, effective March
31, 1997, the Production Sharing Contract dated March 28, 1991, as modified or
amended from time to time, between Pertamina, on the one hand, and Inpex, on
the other.
"P.T. Badak" shall mean P.T. Badak Natural Gas Liquefaction
Company, a corporation organized under the laws of the Republic of Indonesia.
"Quarterly Period" shall have the meaning set forth in Section
1 of the Loan Agreement.
"Regular Reserve Account" shall mean a trust account of the
Bontang VI Trustee established as a subaccount of the Reserve Account pursuant
to Section 3.2(c), and such term shall include all subaccounts thereof.
"Reserve Account" shall mean a trust account of the Bontang VI
Trustee established as a subaccount of the Bontang VI General Account pursuant
to Section 3.2(c), which may be established at the offices of the Bontang VI
Trustee, or any Bontang VI Depositary, as permitted in accordance with the
terms hereof, and such term shall include all subaccounts thereof.
"Reserve Account Borrowed Amount" shall have the meaning set
forth in Section 2.2(b) of the Loan Agreement.
"Scheduled Payment Notice" shall have the meaning set forth in
Section 3.2(b)(i).
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"Scheduled Principal" shall mean the amount of principal
regularly scheduled to be payable to the Lenders (other than any Affected
Lenders) under Section 2.9(a) of the Loan Agreement and under the Notes.
"Selected Qualified Bank" shall have the meaning set forth in
Section 1 of the Loan Agreement.
"Sharing Percentages" shall have the meaning set forth in
Section 8.1.
"Source of Debt Service" shall have the meaning set forth in
Section 1 of the Loan Agreement.
"Special Disbursement Amount" shall mean an amount paid by the
Bontang VI Trustee pursuant to a Special Disbursement Instruction or an amount
received by the Bontang VI Trustee from the trustee and paying agent under any
of the Other Trust Agreements which such trustee and paying agent has notified
the Bontang VI Trustee is a Special Disbursement Amount, as the case may be.
"Special Disbursement Instruction" shall have the meaning set
forth in Section 8.5.
"Special Payment Account" shall mean a trust account of the
Bontang VI Trustee established as a subaccount of the Debt Service Account
pursuant to Section 3.2(c).
"Special Payments" shall mean (i) any amounts of or with
respect to taxes, increased costs arising from regulatory changes, breakage and
other funding costs and losses, indemnities and any other amounts payable to
any of the Lenders (other than any Affected Lenders) under Sections 2.6(b), 3.3
and 3.4(b) of the Loan Agreement and (ii) any other amounts (other than Lenders
Fees and Expenses, Interest, Deferred Principal, Scheduled Principal and
Mandatory Prepayments) payable to any of the Lenders (other than any Affected
Lenders) under the Loan Agreement and the Notes. For avoidance of doubt, it is
expressly agreed that the term "Special Payments" does not include or refer to
prepayments of principal of the Advances pursuant to the Loan Agreement.
"Subordinated Indebtedness" shall have the meaning set forth
in Section 3.1(b).
"Successor" shall have the meaning set forth in Section 11.4.
"Supply Agreement" shall mean each of, and "Supply Agreements"
shall mean all of, the CPC Supply Agreements and the KGC Supply Agreements.
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"Total" is defined in the title paragraph hereof.
"Total Group" shall mean Total and Inpex, and their respective
successors in interest under the Production Sharing Contracts described in
clause (ii) of the definition thereof.
"Train H" shall have the meaning set forth in Section 1 of the
Loan Agreement.
"Transportation Agreement" shall mean the time charter with
respect to the transportation of LNG to be sold pursuant to the CPC Sales
Contract.
"Transporter" shall mean a Person that contracts with
Pertamina to provide transportation of LNG under an LNG Sales Contract.
"Trustee's Office" shall mean the office of the Bontang VI
Trustee, the address of which is set out in Section 13.3 or any other office of
the Bontang VI Trustee in the United States the address of which is notified to
the Producers by the Bontang VI Trustee pursuant to Section 13.3 or the office
specified in an instrument delivered by the Successor pursuant to Section 11.4.
"Unocal" is defined in the title paragraph hereof.
"Unocal Group" shall mean (a) Unocal and its successors in
interest under the Production Sharing Contracts described in clause (iii) of
the definition thereof and (b) prior to March 31, 1997, Inpex; provided,
however, that Inpex shall cease to be a member of the Unocal Group on March 31,
1997.
"VICO" is defined in the title paragraph hereof.
"VICO Group" shall mean VICO, Virginia International Company,
OPICOIL Houston, Inc., Lasmo Sanga Sanga Limited, Union Texas East Kalimantan
Limited, and Universe Gas & Oil Company, Inc. and their respective successors
in interest under the Production Sharing Contracts described in clause (i) of
the definition thereof.
ARTICLE 2
RECEIPT OF PAYMENTS WITH RESPECT TO LNG
2.1 Designation of Bontang VI Trustee and Bontang VI General
Account. Pursuant to the relevant provisions of the Supply Agreements and the
LNG Sales Contracts, Pertamina hereby designates, and each of the Contractors
hereby
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agrees to the designation of, the Bontang VI Trustee named herein, and directs
the Bontang VI Trustee to establish on the next Business Day following the date
hereof and maintain at the Trustee's Office an account, to be designated as the
"Bontang VI General Account." Pertamina hereby designates the Bontang VI
General Account, and each of the Contractors hereby agrees to such designation
of the Bontang VI General Account, as the account to which the following
amounts shall be paid:
(a) (i) all amounts payable under the KGC Sales
Contract for quantities of LNG purchased on or after January 1, 2000 or for
quantities of LNG required to be purchased on or after January 1, 2000 but
which are not taken by the Buyer thereunder and (ii) all other amounts that
become due and payable under the KGC Sales Contract with respect to the period
commencing on January 1, 2000, in each case as provided therein; and
(b) (i) all amounts payable under the CPC Sales
Contract for quantities of LNG purchased on or after January 1, 2000 or for
quantities of LNG required to be purchased on or after January 1, 2000 but
which are not taken by the Buyer thereunder and (ii) all other amounts that
become due and payable under the CPC Sales Contract with respect to the period
commencing on January 1, 2000, in each case as provided therein.
Without limiting the foregoing, and notwithstanding any other provision herein
to the contrary, the parties hereto acknowledge and agree that all amounts
payable by the relevant Buyer under the relevant LNG Sales Contract with
respect to quantities of LNG purchased on or before December 31, 1999, and any
other amounts that become due and payable thereunder with respect to the period
ending on December 31, 1999, in each case as provided therein, shall not
constitute Bontang VI Trust Funds, and if received by the Bontang VI Trustee
shall be paid over to the Bontang Excess Sales Trustee (all such amounts are
herein called "Excluded Amounts"). For purposes of this Section 2.1,
quantities of LNG shall be deemed to have been purchased when title thereto
passes to the relevant Buyer under the terms of the relevant LNG Sales
Contract, except that any quantities of LNG included in (i) the Fixed Quantity
Period (as defined in the KGC Sales Contract) ending on December 31, 1999
pursuant to Section 7.3(c) of the KGC Sales Contract or (ii) the Fixed Quantity
Period (as defined in the CPC Sales Contract) ending on December 31, 1999
pursuant to Section 7.3(c) of the CPC Sales Contract, that would otherwise be
deemed to have been purchased on or after January 1, 2000 shall instead be
deemed to have been purchased on December 31, 1999.
2.2 Bontang VI Trust Funds. All such amounts that shall have
been received in the Bontang VI General Account pursuant to Section 2.1 (other
than Excluded Amounts), and any other amounts the Bontang VI Trustee may
receive under the terms of this Agreement (together with any securities
acquired by the Bontang VI Trustee pursuant to Article 10 and all interest
thereon) are herein referred to as the
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"Bontang VI Trust Funds." The respective Sharing Percentages of each Producer
of all Bontang VI Trust Funds shall be credited to the respective Bontang VI
Trust Funds Accounts of such Producer, to be held in trust, however, for the
benefit of those having a right, to the extent provided in this Agreement, to
receive disbursements and distributions hereunder. Immediately upon the
Bontang VI Trustee's receipt of any funds unambiguously representing amounts
payable to the Bontang VI Trustee with respect to the LNG Sales Contracts
(other than Excluded Amounts), such funds shall be impressed with the trust
created hereby and become a part of the Bontang VI Trust Funds and shall be
deposited in the Bontang VI General Account.
2.3 Allocation of Amounts Received. All amounts received by
the Bontang VI Trustee pursuant to Section 2.1 and designated as representing
amounts payable for LNG delivered, or for LNG required to be purchased, but not
taken, under the LNG Sales Contracts, all amounts paid on account of interest
due by reason of the late payment of invoices, and all demurrage payments by
the Buyers, shall be deemed to be attributable to sales under the LNG Sales
Contracts. In the event the Bontang VI Trustee receives any amount from any
Buyer which amount is not designated for the Bontang VI General Account or for
any accounts established or to be established under the Other Trust Agreements,
it shall first contact the remitting party in order to determine the proper
designation for the amounts received, and shall solicit and, if possible,
obtain from the remitting party such documentation as the Bontang VI Trustee
deems appropriate as evidence of such designation. In the event the remitting
party is unable to provide appropriate evidence of such designation, the
Bontang VI Trustee shall notify the Producers of the amounts received, the date
of receipt and any other information relevant to such amount known to the
Bontang VI Trustee. The Bontang VI Trustee shall thereupon request
instructions as to the proper allocation of the amount received and shall
allocate such amounts between the Bontang VI General Account and any accounts
established under the Other Trust Agreements in accordance with instructions
given jointly by the Producers. Pertamina shall provide written notice to the
Bontang VI Trustee identifying and itemizing in reasonable detail the portions
of the amounts received in the Bontang VI General Account that do and do not
constitute Source of Debt Service. Until such notice has been delivered, all
amounts received in the Bontang VI General Account shall be retained therein.
2.4 Proceeds of Cargo Insurance. The Producers hereby agree
that all proceeds from cargo insurance policies covering LNG transported for
sale under the LNG Sales Contracts (other than Excluded Amounts) shall be paid
directly to the Bontang VI Trustee. All such amounts received by the Bontang
VI Trustee and designated by the insurer as representing proceeds from cargo
insurance policies covering LNG transported for sale under the LNG Sales
Contracts on an ex-ship basis shall become a part of the Bontang VI Trust Funds
and shall be deposited in the Bontang VI General Account. In the event the
Bontang VI Trustee receives any amounts from insurers that are not designated
as to origin, the procedures specified in Section 2.3 shall apply.
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2.5 Payment Under Transportation Agreement. Pertamina shall
provide instructions that all amounts coming due to Pertamina under the
Transportation Agreement or any other transportation arrangement relating to an
LNG Sales Contract (other than Excluded Amounts) shall be paid directly to the
Bontang VI Trustee. All such amounts received by the Bontang VI Trustee shall
become a part of the Bontang VI Trust Funds and shall be deposited in the
Bontang VI General Account. Upon receipt of any such amount that has not been
designated as to origin, the procedures specified in Section 2.3 shall apply.
ARTICLE 3
POWER TO BORROW AND ENTER INTO INTEREST RATE SWAPS
3.1 Enumeration of Powers.
(a) Power to Borrow from the Lenders. In
addition to its other powers hereunder, the Bontang VI Trustee shall have the
power to borrow money from time to time from the Lenders upon the terms and
conditions set forth below:
(i) Upon its receipt of notice from the
Producers that they have determined that a credit facility for borrowing by the
Bontang VI Trustee to pay for a portion of the capital costs incurred, or to be
incurred, in connection with the construction or financing of Train H is
desirable, the Bontang VI Trustee, at the direction of the Producers, shall
undertake to obtain such credit facility, which shall be evidenced by the Loan
Agreement, the Notes and the Letter Agreement.
(ii) The Bontang VI Trustee shall have
the power to enter into or modify the Loan Agreement, the Notes and the Letter
Agreement upon its receipt of notice from Pertamina and each of the Contractors
that they have approved the form and terms of such agreements or modifications
and that they authorize and request the Bontang VI Trustee to enter into such
agreements or modifications. The Bontang VI Trustee shall have the power, as
specified herein, to obtain and repay Indebtedness and to pay other amounts and
to perform other obligations under the Loan Agreement, the Notes and the Letter
Agreement. Notwithstanding the provisions of Section 13.3, no representatives
of the Contractor Groups, any Contractor or any other individual or entity
shall have authority to give any approval under this Section 3.1(a) for any
Contractor other than itself, unless such Contractor shall give notice to the
Bontang VI Trustee that it has appointed such representative or other
individual or entity to give such approval.
(iii) The Loan Agreement, the Notes and
the Letter Agreement shall contain provisions acceptable to the Bontang VI
Trustee to the effect
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that no recourse may be had nor any claim thereunder made against Bank of
America National Trust and Savings Association, in its individual capacity,
other than for breach of a representation or warranty made in its individual
capacity or for gross negligence or willful misconduct.
(b) Power to Incur Subordinated Indebtedness. In
addition to its other powers hereunder, the Bontang VI Trustee shall have the
power at any time to incur Indebtedness that is payable out of amounts of the
Source of Debt Service only after (i) the Bontang VI Trustee shall have
accumulated amounts in the Debt Service Account and the Reserve Account during
each Interest Period required to be accumulated therein pursuant to Section 3.2
or 3.3(d), as applicable, and (ii) any amounts required to be deposited in the
Debt Coverage Reserve Account and paid to the Lenders therefrom under Sections
3.2 and 3.3, as applicable, have been so deposited and paid (such Indebtedness,
"Subordinated Indebtedness"), as follows. Upon its receipt of notice from the
Producers that they have determined that Subordinated Indebtedness in the form
of a credit facility for borrowing by the Bontang VI Trustee to pay for a
portion of the capital costs incurred, or to be incurred, in connection with a
Financed Capital Project is desirable, the Bontang VI Trustee, at the direction
of the Producers, shall undertake to obtain and enter into one or more
appropriate agreements relating to such Subordinated Indebtedness; provided,
however, that the Bontang VI Trustee shall not enter into any such agreement or
amendment prior to (i) receiving written notice from the Agent that the
Majority Lenders have approved such agreement in form and substance in
accordance with Section 6.4 of the Loan Agreement, and (ii) entering into an
appropriate amendment to this Agreement to make provision for making payments
under the agreements relating to such Subordinated Indebtedness to the extent
provided in the first sentence of this Section 3.1(b), which amendment shall
have been approved in writing as to form and substance by the Majority Lenders.
(c) Power to Incur Pari Passu Swap Indebtedness.
In addition to its other powers hereunder, the Bontang VI Trustee shall have
the power to incur Indebtedness (other than Subordinated Indebtedness) in
respect of interest rate swap arrangements of the Bontang VI Trustee entered
into solely for the purpose of exchanging floating interest rate obligations of
the Bontang VI Trustee under the Loan Agreement into fixed interest rate
obligations if such Indebtedness is only payable out of Source of Debt Service
and is pari passu in right of payment and does not benefit from any Encumbrance
other than equally and ratably with, or subordinate to, the Indebtedness owed
to the Lenders under the Loan Agreement, the Notes and the Letter Agreement
("Pari Passu Swap Indebtedness"). Upon its receipt of notice from the
Producers that they have determined that such Pari Passu Swap Indebtedness is
desirable, the Bontang VI Trustee, at the direction of the Producers, shall
undertake to obtain and enter into one or more appropriate agreements relating
to such Pari Passu Swap Indebtedness; provided, however, that the Bontang VI
Trustee shall not enter into any such agreement prior to (i) receiving written
notice from the Agent that the
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Majority Lenders have approved such agreement in form and substance in
accordance with Section 6.4 of the Loan Agreement, and (ii) entering into an
amendment to this Agreement making provision for making payments under such
agreement on a pari passu basis out of the Source of Debt Service with the
payments to be made to the Lenders under the Loan Agreement, which amendment
shall have been approved in writing as to form and substance by the Majority
Lenders.
(d) Application of Certain Provisions. The
provisions contained in the last sentence of Section 3.1(a)(ii) and in Section
3.1(a)(iii) relating to the Loan Agreement shall apply equally to any
agreements relating to Subordinated Indebtedness or Pari Passu Swap
Indebtedness to be entered into by the Bontang VI Trustee pursuant to Section
3.1(b) or 3.1(c).
3.2 Accumulation of Debt Service.
(a) Capital Payment Dates. The Loan Agreement
shall provide that all payment dates for payment of principal and interest
thereunder shall be uniform dates within each calendar quarter (each such date
for payment of principal or interest, a "Capital Payment Date").
(b) Notices. (i) The Loan Agreement shall
provide for the Bontang VI Trustee to receive, at the time of the initial
borrowing and each subsequent borrowing thereunder in each case in respect of
the Quarterly Period in which such borrowing occurs and on or about the first
day of each Quarterly Period thereafter, a notice (a "Scheduled Payment
Notice") from the Agent of the amounts of Scheduled Principal, Deferred
Principal, regularly scheduled Interest and regularly scheduled Lenders Fees
and Expenses payable on the Capital Payment Date occurring at the end of such
Quarterly Period (specifying the portions thereof payable to the Finance
Company, on the one hand, and the other Lenders, on the other).
(ii) The Loan Agreement shall provide for
the Bontang VI Trustee to receive notice (a "Non-Scheduled Payment Notice")
from the Agent of other amounts payable under the Loan Agreement, the Notes and
the Letter Agreement as the same shall become due and payable, designating
whether such amounts constitute principal, Lenders Fees and Expenses, Interest,
Special Payments or Mandatory Prepayments (specifying the portions thereof
payable to the Finance Company, on the one hand, and the other Lenders, on the
other).
(iii) The Loan Agreement shall provide for
the Bontang VI Trustee to receive on or about December 31, 1999 and on or about
the first day of each Quarterly Period thereafter and on or following the date
of delivery of each Notice of Borrowing delivered thereafter, a notice (an
"Anticipated Loan Amount Notice") from the Agent of the sum (such sum, the
"Anticipated Loan Amounts") of Scheduled Principal and Deferred Principal to be
payable to the Lenders (other than
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Affected Lenders) on each of the two Capital Payment Dates next succeeding the
Capital Payment Date occurring at the end of such Quarterly Period plus all
Interest to accrue during the two Quarterly Periods next succeeding such
Quarterly Period plus all Lenders Fees and Expenses reasonably anticipated to
be payable during such next two Quarterly Periods; provided, however, that
during the period beginning January 1, 2000 and ending on the day immediately
preceding the first day of the Amortization Period, such sum shall be equal to
(and the phrase Anticipated Loan Amounts shall refer to) the Scheduled
Principal and Deferred Principal reasonably anticipated to become due to the
Lenders (other than Affected Lenders) with respect to the first two Maturity
Dates plus all Interest and Lenders Fees and Expenses reasonably anticipated to
be due on such Maturity Dates.
(iv) The Bontang VI Trustee, without any
action or approval being required of the Producers, shall be entitled to rely
conclusively on each such notice in the absence of manifest error.
(c) Establishment of Debt Service Account and
Reserve Account. On or before the Effective Date, the Bontang VI Trustee shall
open in its own name, as Bontang VI Trustee, at the Trustee's Office, two
subaccounts of the Bontang VI General Account, one designated as the "Debt
Service Account" (which term shall include all subaccounts thereof), and the
other designated as the "Reserve Account" (which term shall include all
subaccounts thereof). On or before the Effective Date, the Bontang VI Trustee
shall also open in its own name at the Trustee's Office (i) three separate
subaccounts of the Debt Service Account (such subaccounts to be designated as
the "Loan Account," the "Special Payment Account" and the "Mandatory Prepayment
Account") and (ii) two separate subaccounts of the Reserve Account (such
subaccounts to be designated as the "Regular Reserve Account" and the "Debt
Coverage Reserve Account," respectively), all such subaccounts to be used for
the receipt, administration and payment of principal, interest and other
amounts due or to become due under the Loan Agreement.
(d) Depositing of Borrowings for Lenders Fees and
Expenses. If the Bontang VI Trustee borrows amounts under the Loan Agreement
for the purpose of paying any Lenders Fees and Expenses due thereunder as
specified in all Scheduled Payment Notices and Non-Scheduled Payment Notices
received by the Bontang VI Trustee, without duplication, such amounts shall be
immediately deposited into the Loan Account.
(e) Depositing of Borrowings for Interest. If
the Bontang VI Trustee borrows amounts under the Loan Agreement for the purpose
of paying any Interest due thereunder as specified in all Scheduled Payment
Notices and Non-Scheduled Payment Notices received by the Bontang VI Trustee,
without duplication, such amounts shall be immediately deposited into the Loan
Account.
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(f) Depositing of Borrowings for Special
Payments. If the Bontang VI Trustee borrows amounts under the Loan Agreement
for the purpose of paying any Special Payments due thereunder as specified in
all Non- Scheduled Payment Notices received by the Bontang VI Trustee, without
duplication, such amounts shall be immediately deposited into the Special
Payment Account.
(g) Depositing of Borrowing for Regular Reserve
Account. If the Bontang VI Trustee borrows an amount under the Loan Agreement
for the purpose of funding the Regular Reserve Account, such amount shall be
immediately deposited into the Regular Reserve Account.
(h) Depositing of Borrowings for Selected
Qualified Bank. If the Bontang VI Trustee borrows amounts under the Loan
Agreement for the purpose of reimbursing the Producers for amounts paid by them
to a Selected Qualified Bank retained pursuant to Section 6.6 of the Loan
Agreement to specify the assumptions necessary for calculating the Debt
Coverage Ratio, such amounts shall be immediately deposited into the Bontang VI
Payment Account.
(i) Depositing of Source of Debt Service Before
Amortization Period. Subject to all payments (if any) required by Section
3.3(d) having first been made, during the period beginning on January 1, 2000
and ending on the day immediately preceding the first day of the Amortization
Period, the Bontang VI Trustee shall, upon receipt, promptly pay over to the
Reserve Account or the Mandatory Prepayment Account, as applicable, for deposit
in the appropriate subaccount (or, in the case of clause (iii) below, to the
Bontang VI Payment Account), or for payment, all amounts of the Source of Debt
Service received in the Bontang VI General Account in the following amounts and
in the following order of priority:
(i) First, to the Regular Reserve
Account until the aggregate amount accumulated therein shall be equal to the
Anticipated Loan Amounts at such time as specified in all Anticipated Loan
Amount Notices received by the Bontang VI Trustee, without duplication;
(ii) Second, to the Mandatory Prepayment
Account, until the aggregate of all amounts of Mandatory Prepayments due and
payable, if any, as specified in any applicable Notices of Mandatory Prepayment
and to the extent not previously paid pursuant to Section 3.3(c), have been
paid in full; and
(iii) Third, to the Bontang VI Payment
Account as provided in Section 4.2.
(j) Depositing of Source of Debt Service in Loan
Account and Special Payment Account During Amortization Period. Subject to all
payments (if any) required by Section 3.3(d) having first been made, commencing
on the first day of
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the Amortization Period and for each Quarterly Period thereafter and continuing
until the date of payment of all amounts due under the Loan Agreement, the
Bontang VI Trustee shall, upon receipt, promptly pay over to the Debt Service
Account with respect to each such Quarterly Period for deposit in the
appropriate subaccount all amounts of the Source of Debt Service received in
the Bontang VI General Account in the following amounts and in the following
order of priority:
(i) First, to the Loan Account, the
amounts, if any, of Lenders Fees and Expenses due and payable by the Bontang VI
Trustee on the Capital Payment Date occurring at the end of such Quarterly
Period (and on any prior Capital Payment Date to the extent not previously
paid), as specified in all Scheduled Payment Notices and Non-Scheduled Payment
Notices received by the Bontang VI Trustee, without duplication, until the
aggregate amount accumulated in the Loan Account shall be sufficient to pay the
aggregate of all such amounts of Lenders Fees and Expenses;
(ii) Second, to the Loan Account, the
amounts of Interest due and payable by the Bontang VI Trustee on the Capital
Payment Date occurring at the end of such Quarterly Period (and on any prior
Capital Payment Date to the extent not previously paid), as specified in all
Scheduled Payment Notices and Non-Scheduled Payment Notices received by the
Bontang VI Trustee, without duplication, until the aggregate amount accumulated
in the Loan Account (in excess of the amounts referred to in clause (i) above)
shall be sufficient to pay the aggregate of all such amounts of Interest;
(iii) Third, to the Special Payment
Account, the amounts of Special Payments, if any, due and payable by the
Bontang VI Trustee on the Capital Payment Date occurring at the end of such
Quarterly Period (and on any prior Capital Payment Date to the extent not
previously paid), as specified in all Non-Scheduled Payment Notices received by
the Bontang VI Trustee, without duplication, until the aggregate amount
accumulated in the Special Payment Account shall be sufficient to pay the
aggregate of all such amounts of Special Payments;
(iv) Fourth, to the Loan Account, the
amounts, if any, of Deferred Principal due and payable by the Bontang VI
Trustee on the Capital Payment Date occurring at the end of such Quarterly
Period (and on any prior Capital Payment Date to the extent not previously
paid), as specified in all Scheduled Payment Notices received by the Bontang VI
Trustee, without duplication, until the aggregate amount accumulated in the
Loan Account (in excess of the amounts referred to in clauses (i) and (ii)
above) shall be sufficient to pay the aggregate of all such amounts of Deferred
Principal; and
(v) Fifth, to the Loan Account, the
amounts of Scheduled Principal due and payable by the Bontang VI Trustee on the
Capital Payment Date occurring at the end of such Quarterly Period (and on any
prior Capital Payment
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Date to the extent not previously paid and not constituting Deferred
Principal), as specified in all Scheduled Payment Notices and Non-Scheduled
Payment Notices received by the Bontang VI Trustee, without duplication, until
the aggregate amount accumulated in the Loan Account (in excess of the amounts
referred to in clauses (i), (ii) and (iv) above) shall be sufficient to pay the
aggregate of all such amounts of Scheduled Principal.
(k) Depositing of Source of Debt Service in
Reserve Account, Mandatory Prepayment Account and Payment Account During
Amortization Period. Subject to all payments (if any) required by Section
3.3(d) having first been made, for each Quarterly Period referred to in Section
3.2(j), after all amounts of Source of Debt Service required to be paid into
the Debt Service Account pursuant to Section 3.2(j) with respect to such
Quarterly Period have been so paid, the Bontang VI Trustee shall, upon receipt,
promptly pay over to the Reserve Account or the Mandatory Prepayment Account,
as applicable, with respect to each such Quarterly Period for deposit in the
appropriate subaccount (or, in the case of clause (iv) below, to the Bontang VI
Payment Account), or for payment, all additional amounts of the Source of Debt
Service received in the Bontang VI General Account in the following amounts and
in the following order of priority:
(i) First, to the Regular Reserve
Account until the aggregate amount accumulated therein shall be equal to the
Anticipated Loan Amounts specified for such Quarterly Period in all Anticipated
Loan Amount Notices received by the Bontang VI Trustee, without duplication;
(ii) Second, if the certificate delivered
to the Agent pursuant to Section 6.1(b) of the Loan Agreement on or prior to
the first day of such Quarterly Period indicates that the Debt Coverage Ratio
is less than 130%, to the Debt Coverage Reserve Account;
(iii) Third, to the Mandatory Prepayment
Account, until the aggregate of all amounts of Mandatory Prepayments due and
payable, as specified in any applicable Notices of Mandatory Prepayment and to
the extent not previously paid pursuant to Section 3.3(c), have been paid in
full; and
(iv) Fourth, to the Bontang VI Payment
Account as provided in Section 4.2.
(l) Contested Special Payments. Subject to all
payments (if any) required by Sections 3.3(c) and (d) having first been made,
if the Producers have, prior to the Bontang VI Trustee having paid all or part
of any Special Payments, advised the Bontang VI Trustee, in writing, to contest
payment of any amounts of Special Payments, such contested amounts of the
Source of Debt Service accumulated in the Special Payment Account shall remain
on deposit therein until such time as
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Pertamina and the Contractors have approved the use thereof for payment of such
amounts or, if earlier, such time as the Bontang VI Trustee may be legally
compelled to pay such amounts to the Lenders through the exercise by such
Lenders of the legal or equitable remedies available to them.
3.3 Payment of Debt Service.
(a) Payments from Loan Account and Special
Payment Account. Subject to all payments (if any) required by Sections
3.3(b)(ii), 3.3(c) and 3.3(d) having first been made, on each Capital Payment
Date, the Bontang VI Trustee shall pay the following amounts in the following
order of priority:
(i) First, all amounts of Lenders Fees
and Expenses then due and payable, as specified in all Scheduled Payment
Notices and Non-Scheduled Payment Notices received by the Bontang VI Trustee,
without duplication, shall be paid to the Agent (for the account of the Lenders
other than the Finance Company) and the Finance Company, pro rata in accordance
with the amounts thereof specified by the Agent in all Scheduled Payment
Notices and Non-Scheduled Payment Notices as being payable to all Lenders other
than the Finance Company, on the one hand, and as being payable to the Finance
Company, on the other, to the extent of and out of amounts then held in the
Loan Account; provided, however, that all amounts of Lenders Fees and Expenses
due and payable under Section 10.6(a) of the Loan Agreement, as specified in
all Scheduled Payment Notices and Non-Scheduled Payment Notices, without
duplication, shall be paid (I) with respect to such amounts for which the Agent
shall have delivered an invoice to the Bontang VI Trustee on or before February
14, 1997, on the earliest to occur of (x) the date of such initial Borrowing
and (y) the 30th day following the Effective Date and (II) with respect to such
amounts for which the Agent shall have delivered an invoice to the Bontang VI
Trustee at any time after February 14, 1997, on or before the next date that is
the 21st day of a month and occurs at least 30 days following the date of
delivery of such invoice;
(ii) Second, all amounts of Interest then
due and payable, as specified in all Scheduled Payment Notices and
Non-Scheduled Payment Notices received by the Bontang VI Trustee, without
duplication, shall be paid to the Agent (for the account of the Lenders other
than the Finance Company) and the Finance Company, pro rata in accordance with
the portions thereof specified by the Agent in all Scheduled Payment Notices
and Non-Scheduled Payment Notices as being payable to all Lenders other than
the Finance Company, on the one hand, and as being payable to the Finance
Company, on the other, to the extent of and out of amounts then held in the
Loan Account;
(iii) Third, subject to Section 3.2(l),
all amounts of Special Payments then due and payable, as specified in all
Non-Scheduled Payment Notices received by the Bontang VI Trustee, without
duplication, shall be paid to the
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Agent (for the account of the Lenders other than the Finance Company) and the
Finance Company, pro rata in accordance with the amounts thereof specified by
the Agent in all Non-Scheduled Payment Notices as being payable to all Lenders
other than the Finance Company, on the one hand, and as being payable to the
Finance Company, on the other, for the account of the Lenders to the extent of
and out of amounts then held in the Special Payment Account;
(iv) Fourth, all amounts of Deferred
Principal then due and payable, as specified in all Scheduled Payment Notices
received by the Bontang VI Trustee, without duplication, shall be paid to the
Agent (for the account of the Lenders other than the Finance Company) and the
Finance Company, pro rata in accordance with the amounts thereof specified by
the Agent in all Scheduled Payment Notices as being payable to all Lenders
other than the Finance Company, on the one hand, and as being payable to the
Finance Company, on the other, to the extent of and out of amounts then held in
the Loan Account;
(v) Fifth, all amounts of Scheduled
Principal then due and payable, as specified in all Scheduled Payment Notices
received by the Bontang VI Trustee, without duplication, shall be paid to the
Agent (for the account of the Lenders other than the Finance Company), and the
Finance Company, pro rata in accordance with the amounts thereof specified by
the Agent in all Scheduled Payment Notices as being payable to all Lenders
other than the Finance Company, on the one hand, and as being payable to the
Finance Company, on the other, to the extent of and out of amounts then held in
the Loan Account;
(vi) Sixth, all amounts necessary to
ensure that the aggregate amount accumulated in the Regular Reserve Account
shall be equal to the Anticipated Loan Amounts specified for the Quarterly
Period commencing on such Capital Payment Date in Anticipated Loan Amount
Notices received by the Bontang VI Trustee shall be paid from the Debt Service
Account to the Regular Reserve Account;
(vii) Seventh, if the certificate
delivered to the Agent pursuant to Section 6.1(b) of the Loan Agreement on or
prior to the first day of such Quarterly Period indicates that the Debt
Coverage Ratio for the Quarterly Period is less than 130%, all amounts required
for application as provided in Section 3.3(b)(ii) shall be paid from the Debt
Service Account to the Debt Coverage Reserve Account; and
(viii) Eighth, any amount held in the Debt
Service Account after all payments required by Sections 3.3(a)(i) through
(vii), inclusive, have been made, shall be paid to the Bontang VI Payment
Account as provided in Section 4.2.
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(b) Payments from Reserve Account.
(i) Subject to all payments (if any)
required by Sections 3.3(c) and 3.3(d) having first been made, to the extent
that on any Capital Payment Date the amounts held in any subaccount of the Debt
Service Account are not sufficient to pay in full all amounts payable under the
Loan Agreement, the Notes and the Letter Agreement on such Capital Payment Date
that are to be paid out of amounts then held in such subaccount, any amounts
then held in the Regular Reserve Account shall be applied to make such payments
in the order of priority set forth in Section 3.3(a)(i) through (v), inclusive;
provided, however, that if on any Capital Payment Date occurring prior to the
first day of the Amortization Period there are any undrawn amounts of the
Commitments and such amounts are available to be borrowed under the Loan
Agreement, then the Bontang VI Trustee may apply amounts held in the Regular
Reserve Account to make payment to the Lenders of the Interest and Lenders Fees
and Expenses due and payable on such Capital Payment Date solely upon receipt
of notice to such effect from the Producers addressed to the Agent and the
Bontang VI Trustee; provided, further, that the Bontang VI Trustee may not
apply any portion of the Reserve Account Borrowed Amount to make a payment to
the Lenders of Interest due and payable on any Capital Payment Date at any time
on or prior to the first day of the Amortization Period.
(ii) Subject to all payments (if any)
required by Section 3.3(d) having first been made, if on any Capital Payment
Date there shall be amounts held in the Debt Coverage Reserve Account, all such
amounts shall be paid to the Agent (for the account of the Lenders other than
the Finance Company) and the Finance Company, pro rata based on the aggregate
Loan Percentages of the Lenders other than the Finance Company and the Loan
Percentage of the Finance Company, respectively, as a prepayment of principal
of the Notes in the manner prescribed in the Loan Agreement for the making of
prepayments from the Debt Coverage Reserve Account.
(iii) Subject to all payments (if any)
required by Sections 3.3(b)(i), 3.3(c) and 3.3(d) having first been made, if at
any time during the Availability Period after the start of the Amortization
Period the Bontang VI Trustee shall receive a notice from the Producers given
pursuant to Section 1.13(b) of the Producers Agreement, the Bontang VI Trustee
shall transfer to the Bontang VI Payment Account, from amounts then held in the
Regular Reserve Account, the amount specified in such notice.
(iv) Subject to all payments (if any)
required by Sections 3.3(b)(i), 3.3(b)(iii), 3.3(c) and 3.3(d) having first
been made, if, following the first day of the Amortization Period, the Bontang
VI Trustee shall receive a notice from Pertamina given pursuant to Section
1.13(c) of the Producers Agreement, then the
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Bontang VI Trustee shall transfer to the Bontang VI Payment Account, from
amounts then held in the Regular Reserve Account, the amount specified in such
notice.
(v) Subject to all payments (if any)
required by Sections 3.3(b)(i), 3.3(b)(ii), 3.3(b)(vi), 3.3(c) and 3.3(d)
having first been made, if immediately following the deposit of the Reserve
Account Borrowed Amount into the Reserve Account, the amounts then held in the
Regular Reserve Account exceed the Anticipated Loan Amounts required to be held
in the Regular Reserve Account pursuant to Section 3.2, the amount by which
such amounts exceed such Anticipated Loan Amounts shall be paid over to the
Bontang VI Payment Account as provided in Section 4.2.
(vi) Subject to all payments (if any)
required by Sections 3.3(b)(i), 3.3(c) and 3.3(d) having first been made, if,
on any Capital Payment Date, following payment in full of all amounts then due
and payable on such Capital Payment Date to the Lenders under the Loan
Agreement, the Notes and the Letter Agreement, there remains in the Regular
Reserve Account any amount in excess of the Anticipated Loan Amounts then
required to be held in the Regular Reserve Account pursuant to Section 3.2,
such excess amount shall (x) at any time the certificate delivered to the Agent
pursuant to Section 6.1(b) of the Loan Agreement indicates that the Debt
Coverage Ratio for the Quarterly Period is less than 130%, be paid to the Debt
Coverage Reserve Account for application as provided in Section 3.3(b)(ii) or
(y) if the circumstances set forth in clause (x) do not apply, be paid over to
the Bontang VI Payment Account as provided in Section 4.2.
(c) Mandatory Prepayments. (i) The Loan
Agreement provides for Mandatory Prepayments to be made with respect to the
Notes of one or more of the Lenders in circumstances involving illegality with
respect thereto. Notwithstanding Sections 3.3(a) and (b)(i), but subject to
all payments (if any) required by Sections 3.3(b)(ii) and 3.3(d) having first
been made, upon receipt by the Bontang VI Trustee of any Non-Scheduled Payment
Notice that any Mandatory Prepayments have become due and payable to one or
more Affected Lenders (a "Notice of Mandatory Prepayment"), the Bontang VI
Trustee, without any action or approval being required of Pertamina or the
Contractors, shall:
(1) Immediately pay to the Agent
(for the account of any Affected Lenders other than the Finance
Company) and the Finance Company (if it is an Affected Lender), to the
extent necessary to pay the entire amount of the Mandatory Prepayments
payable to such Affected Lenders in full as shown on such Notice of
Mandatory Prepayment, the Loan Percentage for such Affected Lenders of
all amounts then held in the Debt Service Account and the Regular
Reserve Account; and
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(2) Immediately upon deposit of any
amounts in the Mandatory Prepayment Account pursuant to Section
3.2(i)(ii) or 3.2(k)(iii) or otherwise, pay all such amounts to the
Agent (for the account of any Affected Lenders other than the Finance
Company) and the Finance Company (if it is an Affected Lender), to the
extent the amount of such Mandatory Prepayments shall not have been
previously paid.
(ii) All amounts paid to the Finance
Company and to the Agent for the account of the Affected Lenders or to the
Finance Company pursuant to Section 3.3(c)(i) shall be reflected in the records
of the Bontang VI Trustee as having been applied in the following order of
priority:
(1) First, to the payment of all
Lenders Fees and Expenses due and payable at the time of payment to
the Affected Lenders as specified in the applicable Notices of
Mandatory Prepayment;
(2) Second, to the payment of all
Interest due and payable at the time of payment to the Affected
Lenders as specified in the applicable Notices of Mandatory
Prepayment;
(3) Third, to the payment of all
principal then due and payable to the Affected Lenders as specified in
the applicable Notices of Mandatory Prepayment; and
(4) Fourth, to the payment of all
Special Payments due and payable at the time of payment to the
Affected Lenders as specified in the applicable Notices of Mandatory
Prepayment.
(d) Payments Upon Acceleration. The Loan
Agreement may provide for the acceleration of Advances outstanding and payable
thereunder. Notwithstanding Sections 3.3(a), (b) and (c), upon receipt by the
Bontang VI Trustee of any notice of acceleration (a "Notice of Acceleration")
from the Agent, the Bontang VI Trustee, without any action or approval being
required of the Producers, shall:
(i) Immediately apply all amounts then
held in all subaccounts of the Debt Service Account and the Reserve Account to
the payment of the following amounts in the following order of priority, to the
extent not previously paid:
(1) First, all amounts of Lenders
Fees and Expenses due and payable at the time of payment, as specified
in the Notice of Acceleration or in any Non-Scheduled Payment Notices
received by the Bontang VI Trustee, without duplication, shall be paid
to the Agent (for the account of the Lenders other than the Finance
Company) and the Finance
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Company, pro rata in accordance with the amounts thereof specified by
the Agent in such Notices as being payable to all Lenders other than
the Finance Company, on the one hand, and as being payable to the
Finance Company, on the other;
(2) Second, all amounts of Interest
due and payable at the time of payment, as specified in the Notice of
Acceleration or in any Non-Scheduled Payment Notices received by the
Bontang VI Trustee, without duplication, shall be paid to the Agent
(for the account of the Lenders other than the Finance Company) and
the Finance Company, pro rata in accordance with the amounts thereof
specified by the Agent in such Notices as being payable to all Lenders
other than the Finance Company, on the one hand, and as being payable
to the Finance Company, on the other;
(3) Third, all amounts of principal
then due and payable under the Loan Agreement and the Notes, as
specified in the Notice of Acceleration or in any Scheduled Payment
Notices or Non- Scheduled Payment Notices received by the Bontang VI
Trustee, without duplication, shall be paid to the Agent (for the
account of the Lenders other than the Finance Company) and the Finance
Company, pro rata in accordance with the amounts thereof specified by
the Agent in such Notices as being payable to all Lenders other than
the Finance Company, on the one hand, and as being payable to the
Finance Company, on the other; and
(4) Fourth, all amounts of Special
Payments due and payable at the time of payment, as specified in the
Notice of Acceleration or in any Non-Scheduled Payment Notices
received by the Bontang VI Trustee, without duplication, shall be paid
to the Agent (for the account of the Lenders other than the Finance
Company) and the Finance Company, pro rata in accordance with the
amounts thereof specified by the Agent in such Notices as being
payable to all Lenders other than the Finance Company, on the one
hand, and as being payable to the Finance Company, on the other;
(ii) Promptly upon receipt pay over to
the Debt Service Account all amounts of Source of Debt Service received in the
Bontang VI General Account following receipt of the Notice of Acceleration; and
(iii) Immediately upon deposit of any
amounts in the Debt Service Account pursuant to Section 3.3(d)(ii), make the
payments referred to in Section 3.3(d)(i), to the extent not previously paid.
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3.4 Choices; Delivery of Information and
Certificates.
(a) Choices. The Loan Agreement may provide for
the exercise of choices or taking or refraining from taking any action by the
Bontang VI Trustee as to certain matters, including, but not limited to,
acceptance of alternate interest rates and optional prepayment of loans. If
the exercise of such a choice or the taking of any other action with respect
thereto is required of or permitted by the Bontang VI Trustee pursuant to the
terms of such Loan Agreement which is not otherwise specifically provided for
in this Article 3, the Bontang VI Trustee shall take no action with respect
thereto except such action as it has been specifically authorized and directed
to take, in writing, by the Producers.
(b) Delivery of Information and Certificates to
Lenders. The Loan Agreement may provide for the delivery of information and
certificates to the Lenders. To the extent the information to be furnished is
produced by the Bontang VI Trustee in the performance of its duties under this
Agreement, the Bontang VI Trustee shall supply such information and
certificates to the Lenders as and when required, without any action being
required on the part of the Producers. Otherwise, the Bontang VI Trustee, as
between itself and the Producers, shall have no obligation to provide such
information and certificates unless and until such time as such information and
certificates have been provided to the Bontang VI Trustee by the Producers,
which, together with information produced by the Bontang VI Trustee in the
performance of its duties hereunder, will enable the Bontang VI Trustee to
provide to such Lenders the information and certificates required under the
Loan Agreement.
(c) Copies to Producers. In furtherance of the
foregoing provisions of Section 3.3 and this Section 3.4, the Bontang VI
Trustee shall provide to the Producers a copy of each notice and declaration
received by it from the Lenders under the Loan Agreement promptly after receipt
thereof by the Bontang VI Trustee.
(d) Method of Notices. All notices, approvals,
instructions, and other communications to be provided by the Producers to the
Bontang VI Trustee pursuant to Section 3.3 and this Section 3.4 shall be given
or made as provided in Section 13.3.
(e) Notices to Allocation Trustees. The Bontang
VI Trustee shall promptly give notice to the Allocation Trustees (as defined in
Section 12.1) of
(1) each payment into the Debt
Service Account or Reserve Account made by the Bontang VI Trustee;
(2) each payment of Debt Service
made by a Producer pursuant to the Producers Agreement and of which
the Bontang VI Trustee has been notified;
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(3) each transfer to the Bontang VI
Payment Account of funds in the Regular Reserve Account pursuant to
Section 4.2;
(4) each distribution of funds in
the Debt Service Account and Reserve Account pursuant to Section 3.5;
(5) each receipt of amounts from
the Disbursement Trustee to which the Producers are entitled pursuant
to Section 3.7(c); and
(6) the portion of each such
payment of Debt Service, whether made by the Bontang VI Trustee or a
Producer, borne by each Producer.
Solely for the purposes of this Section 3.4(e), the portion of
each such payment of Debt Service "borne by such Producer" shall be the portion
of each such payment under (1) above (other than payments made from Borrowed
Amounts) which is charged to such Producer's account pursuant to Section 8.2,
plus the sum of any payments under (2) above of which the Bontang VI Trustee
has received notice from such Producer less the portion of each transfer and
distribution of funds referred to in clauses (3) and (4) above, and each amount
received referred to in clause (5) above, which is credited to such Producer's
account pursuant to Section 8.2.
(f) Information to Accountants. The Bontang VI
Trustee shall furnish the Accountants with such information as they may from
time to time request (with a copy to the Producers), to the extent such
information is in the possession of the Bontang VI Trustee, as to Debt Service
and other matters stated by the Accountants to be necessary to enable them to
perform their functions under the Debt Service Allocation Agreement in a timely
manner.
3.5 Closing of Debt Service Account and Reserve Account.
After the date of payment of the final installment of principal of and accrued
interest on the loans made pursuant to the Loan Agreement and the payment of
all other amounts due thereunder and under the Notes and the Letter Agreement,
the Bontang VI Trustee shall forthwith convert to cash any investments then
held in the Debt Service Account and Reserve Account and promptly give notice
to the Accountants of the amount held in such account after the receipt of such
cash proceeds. Upon receipt of instructions from the Accountants, which shall
state that they are issued pursuant to provisions of the Debt Service
Allocation Agreement relating to final distribution of the Debt Service Account
and Reserve Account, the Bontang VI Trustee shall distribute the funds then
held in the Debt Service Account and Reserve Account, as specified in such
instructions, and thereafter close the relevant accounts.
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3.6 Borrowing Instructions.
(a) Notice of Authorized Signatory. Prior to any
borrowing under the Loan Agreement, Pertamina shall give the Bontang VI Trustee
written notice of each entity and individual authorized to give borrowing
instructions to the Bontang VI Trustee with respect to the Loan Agreement. No
other entity or individual shall be authorized to give such borrowing
instructions. Any such entity or individual may be changed by subsequent
written notice from Pertamina to the Bontang VI Trustee.
(b) Contents of Borrowing Instruction. Each
borrowing instruction shall specify (i) that the borrowing is to be made under
the Loan Agreement, (ii) the date and amount thereof and (iii) the persons to
whom the Loan Proceeds should be paid, which (x) in the case of amounts still
to be applied to the design, engineering, procurement and construction of or
otherwise relating to Train H shall be a disbursement trust fund of the type
referred to in Section 3.7, (y) in the case of reimbursement of costs
previously incurred for the design, engineering, procurement and construction
of or otherwise relating to Train H shall be to such persons as the borrowing
instruction shall specify, and (z) in the case of Borrowed Amounts, shall be as
provided in Sections 3.2(d), (e), (f), (g) and (h).
(c) Deficient Borrowing Instructions. In the
event any borrowing instruction does not include all of the information
required by subsection (b) above, the Bontang VI Trustee shall promptly so
notify the instructing entity by telex or telecopier (with a copy to the
Producers) and shall not comply with such incomplete instructions.
(d) Requirement to Borrow. The Bontang VI
Trustee shall take such action as is required to effect the specified borrowing
under the Loan Agreement.
3.7 Disbursement Trust; Payment Instructions.
(a) Disbursement Trust. Subject to Sections
3.2(d), (e), (f) and (g) and 3.6(b)(iii)(y), all Loan Proceeds and all amounts
transferred from the Regular Reserve Account to the Payment Account pursuant to
Section 3.3(b)(iii) ("Transferred Amounts") shall be disbursed directly into a
disbursement trust fund pursuant to a Disbursement Trust Agreement for Train H
having the following features:
(i) The disbursement trust fund will be
maintained by Bank of America National Trust and Savings Association, as
Disbursement Trustee.
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(ii) The parties to the Disbursement
Trust Agreement shall be the Disbursement Trustee and the Bontang VI Trustee.
(iii) The Bontang VI Trustee shall have
the power to enter into or modify the Disbursement Trust Agreement upon its
receipt of notice from the Producers that they have approved the form and terms
of such agreement or modification and that they authorize and request the
Bontang VI Trustee to enter into such agreement or modification.
Notwithstanding the provisions of Section 13.3, the representative of a
Contractor shall not have authority to give such approval for any Contractor
other than itself.
(b) Payment Instructions. (i) Pertamina shall,
at the time the Disbursement Trust Agreement is executed and delivered, give
the Bontang VI Trustee written notice of each entity and individual authorized
to give payment instructions to the Bontang VI Trustee with respect to the
Disbursement Trust Agreement. No other entity or individual shall be
authorized to give such payment instructions. Any such entity or individual
may be changed by subsequent written notice from Pertamina to the Bontang VI
Trustee.
(ii) Each payment instruction shall be
transmitted by telex or telecopier to the Bontang VI Trustee, with a copy by
hand delivery or by telex or telecopier to the Producers, and shall include the
following information:
(1) the full name and date of the
Disbursement Trust Agreement;
(2) the name of the payee and the
place and manner of payment;
(3) the amount of such payment and
the currency to be used; and
(4) a brief description of the
purpose of such payment, together with the relevant invoice number or
designation of other relevant payment documentation.
(iii) In the event any payment instruction
does not include all of the information required by subsection (ii) above, the
Bontang VI Trustee shall promptly so notify the instructing entity by telex or
telecopier (with a copy to the Producers) and shall not comply with such
incomplete instructions.
(iv) Except in the case of payments to be
made as provided in Section 3.6(b) for costs previously incurred or as provided
in
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Sections 3.2(d), (e), (f) and (g), the Bontang VI Trustee shall forward each
payment instruction to the Disbursement Trustee.
(c) Certain Notices. (i) With respect to the
Disbursement Trust Agreement and the investment income earned from amounts held
thereunder in each calendar year, the Producers shall, subject to Section
3.7(c)(ii)(1), on or after February 15 in each year, cause the Accountants to
notify the Bontang VI Trustee (with a copy to the Producers) of the amount of
such investment income earned during the previous calendar year (and not
disbursed pursuant to payment instructions) and the portions due each of the
Producers. Upon receipt of each such notice, the Bontang VI Trustee shall
promptly send the same to the Disbursement Trustee, which notices shall include
a payment instruction for the Disbursement Trustee to pay such amount to the
Bontang VI Trustee.
(ii) The Producers shall notify the
Bontang VI Trustee when any Financed Capital Project to be paid for under the
Disbursement Trust Agreement has been completed. Any such notice shall contain
the following information:
(1) Until such time as the Bontang
VI Trustee shall have received notice from the Agent that the Lenders
have been paid in full all amounts owed to them under the Loan
Agreement, the Notes and the Letter Agreement, instructions to hold
for the account of the Lenders and pay on the next following Capital
Payment Date to the Agent for the account of the Lenders to their
accounts provided in the Loan Agreement any Loan Proceeds and
Transferred Amounts still held under the Disbursement Trust Agreement
to the extent necessary to make payment to the Lenders of all such
amounts owing to them. The Bontang VI Trustee shall apply all such
Loan Proceeds and Transferred Amounts and the income accrued thereon
on the next following Capital Payment Date under Section 3.5(a) of the
Loan Agreement in the following order of priority:
(A) First, to the extent that such
amounts are not otherwise paid as provided in Section 3.3, to
the payment of all Lenders Fees and Expenses due and payable
on such Capital Payment Date;
(B) Second, to the extent that such
amount is not otherwise paid as provided in Section 3.3, to
the payment of all Interest due and payable on such Capital
Payment Date;
(C) Third, to the extent that such
amount is not otherwise paid as provided in Section 3.3, to
the payment of all principal then due and payable on such
Capital Payment Date;
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(D) Fourth, to the extent that such
amounts are not otherwise paid as provided in Section 3.3, to
the payment of all Special Payments due and payable on such
Capital Payment Date; and
(E) Fifth, applied to prepay the
Notes, which prepayment, if partial, shall be applied pro rata
to the principal amounts due thereunder in the order of
maturity.
(2) Upon satisfaction of the
requirements of clause (1) above, instructions with respect to Loan
Proceeds and Transferred Amounts still held under the Disbursement
Trust Agreement, identifying the portion thereof to be paid to the
Bontang VI Trustee for the account of the Producers and the portion
thereof to which each of the Producers is entitled.
(3) With respect to investment
income earned under the Disbursement Trust Agreement and not
previously distributed, the portion thereof to be paid to the Bontang
VI Trustee for the account of the Producers and the portion thereof to
which each of the Producers is entitled.
Upon receipt of such notice, the Bontang VI Trustee shall send
the same to the Disbursement Trustee together with an instruction to terminate
the disbursement trust under, and to make payment of all amounts then held
under, the Disbursement Trust Agreement in conformity with the notice referred
to above in this clause (ii) and the terms of the Disbursement Trust Agreement.
3.8 Duties of Bontang VI Trustee with Respect to
Instructions. In acting on any borrowing instruction or forwarding any payment
instruction hereunder or any Notice of Borrowing under the Loan Agreement, the
Bontang VI Trustee shall not have any responsibility for determining whether or
not the borrowing being incurred or the payment being made is being properly
incurred or made in accordance with the provisions of any agreement or any
understandings among the Producers or any other parties, it being understood
that the Bontang VI Trustee's sole responsibility in such circumstances shall
be to take such action with respect to such instruction as is specified in
Section 3.6 or Section 3.7(b), as the case may be.
3.9 Bontang VI Depositaries. The Bontang VI Trustee shall,
upon the authorization and request of the Producers, and in accordance with the
Loan Agreement, appoint or remove any Bontang VI Depositary as set forth below.
(a) The Bontang VI Trustee may entrust any
Bontang VI Depositary with the exclusive custody and possession of any funds,
properties and rights in the Debt Service Account or the Reserve Account or
both. The Bontang VI Trustee's responsibility with respect to the funds,
properties and rights held by a
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Bontang VI Depositary shall be only to maintain and administer the accounting
of the Debt Service Account or the Reserve Account or both. Each Bontang VI
Depositary shall have the exclusive custody and possession of the funds,
properties and rights held by it.
(b) It shall be a condition to the appointment of
any Bontang VI Depositary hereunder that the bank, trust company or financial
institution so appointed shall conform to the definition of "Bontang VI
Depositary" set forth herein and shall agree to hold the funds, properties and
rights held by it in trust on the same basis, and subject to the same rights
and obligations, as are set forth in this Agreement with respect to the Bontang
VI Trustee, and upon such agreement such rights and obligations shall be
enjoyed by and binding upon such Bontang VI Depositary. The terms of
appointment of any Bontang VI Depositary shall not be inconsistent with the
provisions of this Agreement.
(c) Without the written consent of the Producers
and, so long as the Loan Agreement shall be in effect, the Majority Lenders
pursuant to the Loan Agreement, no funds, properties or rights shall be
transferred from the custody and possession of the Bontang VI Trustee to the
custody and possession of a Bontang VI Depositary nor, except in the case such
transfer shall be required for effecting payments necessary hereunder, shall
any such funds, properties or rights be transferred from a Bontang VI
Depositary to the Bontang VI Trustee without such consent.
ARTICLE 4
ESTABLISHMENT OF BONTANG VI PAYMENT ACCOUNT
4.1 Bontang VI Payment Account. On or before the Effective
Date, a subaccount of the Bontang VI General Account designated as the "Bontang
VI Payment Account" shall be opened by the Bontang VI Trustee in its own name,
as Bontang VI Trustee, at the Trustee's Office. If requested by the Producers,
the Bontang VI Trustee shall open in its own name, as Bontang VI Trustee, at
the Trustee's Office, one or more subaccounts of the Bontang VI Payment Account
(each a "Payment Subaccount").
4.2 Funds to be Deposited. Commencing on the date of the
first receipts by the Bontang VI Trustee under Article 2 and continuing
throughout the term of this Agreement the Bontang VI Trustee shall deposit in
the Bontang VI Payment Account (i) promptly after receipt by the Bontang VI
Trustee of any amount hereunder (other than Loan Proceeds), all amounts in the
Bontang VI General Account other than Source of Debt Service, (ii) as and when
specified herein, all amounts required to be transferred from the Debt Service
Account or the Reserve Account to the Bontang VI Payment Account, (iii) any
Loan Proceeds to be deposited in the Bontang VI Payment
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Account pursuant to Section 3.2(h), and (iv) promptly after receipt, all
amounts of Source of Debt Service in the Bontang VI General Account not
required to be paid over into the Debt Service Account or the Reserve Account
pursuant to the provisions of Sections 3.2 and 3.3. If any Payment Subaccounts
have been opened by the Bontang VI Trustee pursuant to Section 4.1, amounts
deposited into the Bontang VI Payment Account shall be further credited to the
appropriate Payment Subaccount pursuant to the written instructions of the
Producers provided at the time such Payment Subaccount is opened or at any
subsequent date.
4.3 Other Prepayments. Any prepayments of the Notes pursuant
to Sections 2.5, 3.4(b) or 3.7 of the Loan Agreement (other than a prepayment
in full of all amounts due and payable under the Loan Agreement, the Notes and
the Letter Agreement) shall be made solely from the amounts held from time to
time in the Bontang VI Payment Account and otherwise in accordance with the
provisions of such Sections 2.5, 3.4(b) or 3.7.
ARTICLE 5
DISBURSEMENTS WITH RESPECT TO PROCESSING CHARGES
5.1 Submission and Payment. The Producers shall submit to
the Bontang VI Trustee debit notes received from P.T. Badak on account of LNG
processing charges. To the extent that funds are then held in the Bontang VI
Payment Account the Bontang VI Trustee shall, promptly upon receipt of notice
from the Producers that any such debit note has been approved for payment, pay
to P.T. Badak from the Bontang VI Payment Account the amount of such debit
note, pursuant to procedures to be agreed upon pursuant to Section 5.2.
5.2 Payment Procedures. The Producers shall agree with P.T.
Badak on appropriate procedures for the payment of funds payable to P.T. Badak
pursuant to Section 5.1 and shall advise the Bontang VI Trustee of such
procedures, which shall include a requirement that P.T. Badak furnish the
Bontang VI Trustee with an acknowledgment that each payment by the Bontang VI
Trustee hereunder fully satisfies the liabilities of the Producers with respect
to the debit note to which the payment relates.
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ARTICLE 6
TRANSPORTATION EXPENSES
6.1 Submission and Payment. Pertamina shall submit to the
Bontang VI Trustee (with a copy to the Contractors) each invoice relating to
shipment of LNG that it may receive from a Transporter pursuant to the
Transportation Agreement or such other transportation arrangement as may be
applicable to the sale of LNG under the LNG Sales Contracts. To the extent
that funds are then held in the Bontang VI Payment Account, the Bontang VI
Trustee shall, promptly upon receipt of notice from the Producers that any such
invoice has been approved for payment, pay to the Transporter shown on such
invoice from the Bontang VI Payment Account the amount of such invoice,
pursuant to such procedures, which shall specify the place and manner of
payment, as shall be established with the Bontang VI Trustee by the Producers.
6.2 Payment Procedure. Pertamina, in consultation with the
Contractors, shall agree with each Transporter as to appropriate procedures for
the payment of funds payable to such Transporter out of the Bontang VI Payment
Account under Section 6.1 and shall advise the Bontang VI Trustee of such
procedures, which shall include a requirement that such Transporter furnish the
Bontang VI Trustee with an acknowledgment that each payment by the Bontang VI
Trustee hereunder satisfies the liabilities of Pertamina to which the payment
relates.
ARTICLE 7
DISBURSEMENTS WITH RESPECT TO OTHER CHARGES
7.1 Submission and Payment. It is contemplated that other
charges with respect to the production, sale or delivery of LNG sold under the
LNG Sales Contracts will from time to time be payable from the Bontang VI
Payment Account. Any Producer may submit to the Bontang VI Trustee payment
orders or instructions, or invoices or other statements, received by it with
respect to such charges. To the extent that funds are then held in the Bontang
VI Payment Account, the Bontang VI Trustee shall, promptly upon receipt of
notice from the Producers that any such payment order, instruction, invoice or
statement has been approved for payment, pay to the person entitled thereto
from the Bontang VI Payment Account the amount thereof, pursuant to procedures
to be agreed upon pursuant to Section 7.2.
7.2 Payment Procedures. The Producers shall agree with the
person submitting any invoice or statement payable pursuant to Section 7.1 on
appropriate procedures for the payment thereof and shall advise the Bontang VI
Trustee of such procedures, which shall include a requirement that the person
receiving payment
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furnish the Bontang VI Trustee with an acknowledgment that each payment by the
Bontang VI Trustee hereunder fully satisfies the liabilities of the Producers
with respect to the invoice or statement to which the payment relates.
ARTICLE 8
DISBURSEMENTS WITH RESPECT TO SHARING PERCENTAGES
8.1 Approved Level of Working Capital; Sharing Percentages.
For the purposes of this Agreement the "Approved Level of Working Capital"
shall be that amount, if any, specified to the Bontang VI Trustee in a notice
from the Producers, and the respective "Sharing Percentages" of each Producer
with respect to an LNG Sales Contract shall be the percentages set forth in the
most recent certificates furnished to the Bontang VI Trustee pursuant to
Section 8.3. The Producers acknowledge that the Approved Level of Working
Capital may include amounts anticipated to be payable from time to time by
Pertamina pursuant to the letter agreement dated October 25, 1995 between
Pertamina and Chinese Petroleum Corporation regarding Mutual Incentive Sharing,
as amended or modified from time to time (the "Mutual Incentive Sharing Side
Letter").
8.2 Charging of Amounts Payable; Payment of Excess. The
respective Sharing Percentages of each Producer of all amounts required to be
paid into the Debt Service Account and the Reserve Account under Sections 3.2
and 3.3, and of all amounts required to be paid under Articles 5, 6 and 7 and
Sections 8.5 and 11.2, shall be charged to each such Producer's Bontang VI
Trust Fund Account. The (i) respective Sharing Percentages of each Producer of
any funds deposited in the Bontang VI Payment Account pursuant to Section 4.2,
(ii) amount of any excess funds distributed to each Producer from the Debt
Service Account and Reserve Account pursuant to Section 3.5, and (iii) portion
due each Producer from any amounts received by the Bontang VI Trustee from the
Disbursement Trustee pursuant to Section 3.7(c), shall be credited to each such
Producer's Bontang VI Trust Fund Account. Whenever and to the extent that the
amount held in the Bontang VI Payment Account at the end of any business day of
the Bontang VI Trustee in the City of New York is in excess of the Approved
Level of Working Capital, after having deducted all amounts of Source of Debt
Service then required to be paid into the Debt Service Account and the Reserve
Account under Sections 3.2 and 3.3, and all amounts then payable by the Bontang
VI Trustee under Articles 5 and 6 and Sections 8.5 and 11.2, then, except as
otherwise provided in Section 8.3 or Article 12, such excess shall be
immediately paid out to the Producers in accordance with their respective
Sharing Percentages applicable to such amount, as specified in the most recent
certificate for the current year furnished pursuant to Section 8.3.
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8.3 Accountants. The Producers shall mutually appoint a firm
of independent public accountants to act as the accountants hereunder (the
"Accountants") and shall promptly advise the Bontang VI Trustee of such
appointment.
The Accountants shall be directed to furnish to the Bontang VI
Trustee (with a copy to the Producers) a certificate on or before the 15th day
of December in each calendar year (initially for 1997 on or before December 15,
1997) setting forth the respective Sharing Percentages of each Producer for the
following calendar year (and for 1997 in the case of the first such
certificate) with respect to each LNG Sales Contract in effect during such
calendar year.
The Sharing Percentages with respect to an LNG Sales Contract
shall be calculated as provided in the respective Supply Agreements applicable
to such LNG Sales Contract and the respective Production Sharing Contracts,
based upon actual or estimated production and costs as required thereby.
The Accountants shall also be directed to furnish to the
Bontang VI Trustee (with a copy to the Producers) on or before the 15th day of
March, June and September in each calendar year, commencing March 15, 1998 a
revision of the certificate furnished for such year setting forth the
respective Sharing Percentages of each Producer based upon revised estimates of
production and costs for such year.
In addition, the Accountants shall be directed to furnish to
the Bontang VI Trustee (with a copy to the Producers) on or before the 15th day
of February in each calendar year, commencing February 15, 1998, a final
version of the certificate for the previous year setting forth the respective
Sharing Percentages of each Producer based upon actual production and costs for
the previous year.
Every revised and final certificate shall specify the amount,
if any, by which the aggregate amount paid by the Bontang VI Trustee to each
Producer pursuant to the initial certificate and any earlier revisions thereof
under this Article 8 was greater or less than the amount that would have been
paid to each on the basis of the Sharing Percentages which are certified
therein and shall specify the amount that will be required to be paid to any
underpaid Producer, in order to bring the total amount paid to it into
equitable relation to the amount paid to any overpaid Producers so that the
payments, as adjusted, would be in accordance with such Sharing Percentages.
In the event that any such certificate indicates that any of the Producers has
been underpaid, the Bontang VI Trustee, after receipt of the certificate, shall
pay to any such Producers pro rata in proportion to the amount by which each
such Producer was underpaid, all amounts otherwise payable under this Article 8
to the Producers which have been overpaid until each such underpaid Producer
shall have received the entire amount stated in the certificate as required to
be paid to such underpaid Producer. After each such Producer has received the
entire amount it is entitled to receive as aforesaid, the Bontang VI Trustee
shall make all future payments to the Producers out
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of the funds remitted in respect of the LNG Sales Contracts in accordance with
the Sharing Percentages specified in the most recent certificate relating
thereto furnished to the Bontang VI Trustee pursuant to this Section 8.3.
8.4 Arrangements for Payment. Each Producer shall make such
reasonable arrangements with the Bontang VI Trustee as it shall deem
appropriate for the payment to it of amounts payable to it under the terms of
this Article 8. Except as otherwise provided in Section 8.5, each Contractor
shall make its own arrangements with respect to such payments directly with the
Bontang VI Trustee and, notwithstanding the provisions of Section 13.3, the
representative of any Contractor Group shall have no authority to act for any
Contractor other than itself in making such arrangements.
8.5 Special Disbursement Instructions. The Producers
acknowledge that from time to time it may be necessary for amounts which would
otherwise be paid to Producers pursuant to Section 8.2 to be paid instead to
(a) persons who have submitted invoices or other statements for charges with
respect to the production, sale or delivery of LNG or LPG from the Bontang
Plant under sales contracts other than the LNG Sales Contracts, (b) the trustee
under any trust established to pay charges of the type described in (a) above,
(c) Chinese Petroleum Corporation to satisfy obligations of Pertamina under the
Mutual Incentive Sharing Side Letter or (d) the trustee under any of the Other
Trust Agreements, in order to satisfy certain obligations of the Producers
having interests in the Bontang VI Payment Account. Accordingly,
notwithstanding the payment arrangements made with the Bontang VI Trustee
pursuant to Section 8.4, each Contractor hereby authorizes the representative
of any of the Contractor Groups of which it is a member, as designated in or
pursuant to Section 13.3, to give to the Bontang VI Trustee from time to time
on its behalf such Special Disbursement Instructions as such representative may
deem necessary or appropriate to authorize such payments. Each representative
shall give copies of any such Special Disbursement Instruction to the members
of its Contractor Group contemporaneously with the transmission thereof to the
Bontang VI Trustee, by the same means of transmission. As used herein, a
"Special Disbursement Instruction" means an instruction so entitled which (i)
is given by the Producers as provided in Section 13.3, (ii) instructs the
Bontang VI Trustee to pay to persons described in clauses (a), (b), (c) or (d)
above any amount which would otherwise be paid to Producers pursuant to Section
8.2, and (iii) specifies the funds from which such payment is to be made. Any
Special Disbursement Instruction requiring payment to another trustee shall
also specify the account or accounts to which such funds are to be credited and
direct the Bontang VI Trustee to notify such trustee that such payment is a
Special Disbursement Amount for the account or accounts so specified. The
inclusion of this Section 8.5 shall have no effect on the authority of the
Bontang VI Trustee to act and rely upon any other special disbursement or
transfer instruction which does not comply with this Section 8.5 so long as
such instruction is given in an instrument executed by all of the Producers.
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8.6 Payment Procedures. The Producers shall agree with the
persons specified in Section 8.5(a) on appropriate procedures for the payment
of the relevant invoices or statements and shall advise the Bontang VI Trustee
of such procedures, which shall include a requirement that the person receiving
payment furnish the Bontang VI Trustee with an acknowledgment that each payment
by the Bontang VI Trustee hereunder fully satisfies the liabilities of the
person to which such invoice or statement is addressed with respect thereto.
8.7 Receipt of Special Disbursements. The Bontang VI Trustee
may from time to time receive Special Disbursement Amounts from the trustee
under any of the Other Trust Agreements. Immediately upon the Bontang VI
Trustee's receipt of any funds identified as a Special Disbursement Amount,
such funds shall be impressed with the trust created hereby and become a part
of the Bontang VI Trust Funds. Any such amounts received by the Bontang VI
Trustee shall be deposited in the account hereunder specified by the remitting
trustee.
ARTICLE 9
PROCEDURES RESPECTING ACCOUNTS UNDER THIS AGREEMENT
9.1 Accounting for Assets. All assets under the jurisdiction
and control of the Bontang VI Trustee and held from time to time in the Bontang
VI Trust Funds shall be accounted for within the Bontang VI General Account
specifying the subaccount and LNG Sales Contract to which such assets may be
allocated, the bank or banks at which cash deposits may be maintained and the
place or places at which investment securities may be held in custody for the
account of the Bontang VI Trustee. The Bontang VI Trustee shall maintain such
books of account and other records as may be necessary to ensure full and
proper segregation of the funds credited to such accounts as may be established
by the Bontang VI Trustee hereunder. It shall also segregate, and keep such
accounts separate, from any accounts which may be established by it as trustee
and paying agent under the Other Trust Agreements. Such books of account shall
be open to inspection by the duly authorized representatives of the Producers
at all reasonable times.
9.2 Reports. The Bontang VI Trustee shall furnish to each of
the Producers the following reports:
(a) As soon as practicable (but not later than 45
days) after the close of each calendar year, a statement prepared by the
Bontang VI Trustee, setting forth the amount and source (by category and the
relevant LNG Sales Contract) of funds received pursuant to this Agreement and
the disbursement of such funds as disclosed by the records and accounts kept by
the Bontang VI Trustee pursuant to Sec-
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tion 9.1 during such preceding calendar year, and a statement of the cash and
investments held in the accounts under this Agreement as of the end of such
period.
(b) Within 20 days after the close of each
calendar quarter a statement prepared by the Bontang VI Trustee setting forth
the amount and source (by category and the relevant LNG Sales Contract) of
funds received pursuant to this Agreement and the disbursements of such funds
as disclosed by the records and accounts kept by the Bontang VI Trustee
pursuant to Section 9.1 during such preceding calendar quarter and a statement
of the cash and investments held in the accounts under this Agreement as of the
end of such period.
(c) Promptly after its receipt or disbursement of
any funds pursuant to this Agreement, the Bontang VI Trustee shall notify the
Producers by telex or telecopier of such transactions specifying the amount and
the source (by category and the relevant LNG Sales Contract) of the funds
received and disbursed and the amounts credited or charged to the Bontang VI
General Account or any subaccount thereof.
Notwithstanding the provisions of Section 13.3 respecting the
representatives of the Contractors' Groups, each of the reports required by
clauses (a) and (b) of this Section 9.2 shall be furnished by the Bontang VI
Trustee directly to each Contractor at its address specified pursuant to
Section 13.3.
9.3 Producer Accounts. The Bontang VI Trustee shall maintain
separate accounts for each Producer which are sufficient to reflect each such
Producer's interest in the assets, liabilities, receipts and disbursements of
the Bontang VI Trust Funds and its right to distributions therefrom (the
"Bontang VI Trust Funds Accounts"). It is the intention of each Producer that
the trust created hereby be a security trust of the type described in Treas.
Reg. 1.61- 13(b) and I.T. 1942, III-1 C.B. 11 (1924). Accordingly, each
Producer agrees for U.S. income tax purposes to account for its share of the
receipts and disbursements made pursuant to this Agreement as if it had
received such amounts directly and made such disbursements directly, and the
Bontang VI Trustee agrees for United States income tax purposes, unless advised
by the U.S. Internal Revenue Service to the contrary, to treat such receipts
and disbursements in a manner consistent with its status as the agent for each
such party or, if so advised by Bontang VI Trustee's counsel, as the trustee of
a separate grantor trust for each such party within the meaning of Section 671
of the U.S. Internal Revenue Code of 1986, as amended, and the regulations
thereunder.
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ARTICLE 10
INVESTMENT OF FUNDS HELD IN ACCOUNTS UNDER THIS AGREEMENT
10.1 Permitted Investments. The Bontang VI Trustee shall
invest amounts held by it from time to time in the Bontang VI Payment Account,
the Debt Service Account and the Reserve Account solely in:
(i) Eurodollar bank time deposits or
Eurodollar certificates of deposit with banks whose deposits are rated "P-1" by
Moody's Bank Credit Report Service and "A-1+" by Standard and Poor's Rating
Group CD Ranking Service, which may include any affiliate of the Bontang VI
Trustee satisfying the foregoing criteria; or
(ii) such other types of short-term
interest-bearing bank time deposits and certificates of deposit (x) as to which
there is applicable a sovereign guarantee of repayment of principal, or other
evidence of sovereign support in respect of such repayment as approved by the
Producers and, with respect to amounts, if any, held in the Debt Service
Account or the Reserve Account or any subaccount thereof for the Lenders under
the Loan Agreement, approved by the Majority Lenders; and (y) issued by banks
having at least $100,000,000.00 (or its equivalent) of capital and earned
surplus (or equivalent accounts) as reflected in the then current financial
statements of the issuing banks, which may include any affiliate of the Bontang
VI Trustee satisfying the foregoing criteria; or
(iii) if, due to the relatively small
amount of funds to be invested, the unconventional period during which such
funds are to be invested or similar factors, investments of the type authorized
by clauses (i) and (ii) above are not generally available for such funds, the
Bontang VI Trustee may invest such funds in short-term Eurodollar time
deposits, Eurodollar certificates of deposit or Eurodollar repurchase
agreements, or any combination of the foregoing, in each case with any bank or
banks each having at least $100,000,000.00 (or its equivalent in any other
currency) of capital and earned surplus (or equivalent accounts) as reflected
in the then current financial statements of such bank or banks, which may
include any affiliate of the Bontang VI Trustee satisfying the foregoing
criteria; provided, however, that the aggregate principal amount of such funds
so invested shall not exceed $1,000,000.00 at any one time.
In no event shall the aggregate amount invested by the Bontang
VI Trustee pursuant to the foregoing provisions in time deposits or
certificates of deposit with, or issued by, respectively, any one bank exceed
10% of such bank's capital and earned surplus (or equivalent accounts) as
reflected in the bank's then current financial statements. For purposes of
investments pursuant to clause (ii) above, the Bontang VI Trustee shall request
the approval of the Producers in accordance with Section 13.3
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and, as applicable, the Majority Lenders by giving notice, which request shall
specify the type of investment proposed and the nature of any sovereign
guarantee or support applicable thereto. The Bontang VI Trustee shall use its
best efforts to assure that the final maturity of any such investment does not
extend beyond the time when the amounts used to acquire such investments would
be required for any other application hereunder.
For the purposes of investments made pursuant to the foregoing
clauses (i) and (iii), the Bontang VI Trustee may submit to the Producers and
to the Agent a list of bank issuers of securities satisfying the criteria of
such clauses and may request that the Producers and the Agent designate one or
more such issuers, on the list or otherwise, as acceptable to them for
investment purposes. Upon receipt of such list and request, the Producers and
the Agent shall designate from such list or propose one or more issuers
satisfactory to them for such investment purposes; if more than one such issuer
is designated, the designation shall indicate a priority among them; and no
such designation with respect to investments of amounts in the Bontang VI
Payment Account shall require any approval or other action on the part of the
Lenders or the Agent. The Bontang VI Trustee shall make no investments under
such clauses (i) and (iii) until it has received such a designation. The
Bontang VI Trustee shall not be liable for the results of any investments made
in the securities contemplated by clauses (i) and (iii) of issuers so approved.
10.2 Prudence and Yield. In making any investments pursuant
to Section 10.1 the Bontang VI Trustee shall be guided by the standards of a
prudent investor seeking the maximum yield available consistent with security
of principal at all times; provided that the Bontang VI Trustee shall have no
liability whatsoever for the results of any investment approved by the
Producers and the Agent.
10.3 Interest Allocation. Interest or any other income
arising out of investment of the Bontang VI Trust Funds shall be and become a
part of the Bontang VI Trust Funds, allocated to the account for which such
investment was made. Interest or any other income arising out of investment of
funds in a subaccount of the Debt Service Account or the Reserve Account shall
be allocated to the subaccount for which such investment was made.
ARTICLE 11
CONCERNING THE BONTANG VI TRUSTEE
11.1 Duties. In connection with its duties, rights and
powers under this Agreement (including in relation to transactions it may enter
into pursuant hereto), the Bontang VI Trustee shall be subject to the
following:
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(a) The Bontang VI Trustee shall be entitled to
act upon any notice, certificate, request, direction, waiver, receipt or other
document which it in good faith believes to be genuine; and it shall be
entitled to rely upon the due execution, validity and effectiveness, and the
truth and acceptability of any provisions contained therein.
(b) The Bontang VI Trustee shall not be liable
for any error of judgment or for any act done or omitted by it in good faith or
for any mistake of fact or law, or for anything which it may do or refrain from
doing, including, but not limited to, with respect to any provision herein
requiring the Bontang VI Trustee to use its best efforts, except for its own
gross negligence or willful misconduct, nor shall the Bontang VI Trustee be
liable for special, indirect or consequential loss or damage of any kind
including, without limitation, lost profits, except such losses or damages
resulting from its willful misconduct.
(c) The Bontang VI Trustee may consult with, and
obtain advice from, accounting and legal advisers and it shall incur no
liability or loss and shall be fully protected in acting in good faith in
accordance with the opinion and advice of such advisers.
(d) The Bontang VI Trustee shall have no duties
other than those specifically set forth or provided for in this Agreement. The
Bontang VI Trustee shall have no obligation to familiarize itself with and
shall have no responsibility with respect to any agreement to which it is not a
party relating to the transactions contemplated by this Agreement nor any
obligation to inquire whether any notice, instruction, statement or calculation
is in conformity with the terms of any such agreement, except for those
irregularities, errors or mistakes apparent on the face of such document or to
the knowledge of the Bontang VI Trustee. If, however, any remittance or
communication received by the Bontang VI Trustee appears erroneous or irregular
on its face, the Bontang VI Trustee shall be under a duty to make prompt
inquiry to the person or party originating such remittance or communication in
order to determine whether a clerical error or inadvertent mistake has
occurred.
11.2 Compensation. The Bontang VI Trustee shall be entitled
to reasonable compensation to be agreed upon from time to time among the
parties for the services to be performed by the Bontang VI Trustee hereunder or
under any other document entered into by the Bontang VI Trustee at the request
of, or with the approval of, the Producers, or contemplated hereby or thereby,
and to be reimbursed for all reasonable out-of-pocket expenses incurred by the
Bontang VI Trustee in connection therewith. The Bontang VI Trustee may charge
such agreed compensation and expenses to the Bontang VI Payment Account,
providing the Producers with such evidence as to the nature and amount of such
expenses as any of the Producers may reasonably require. If the balance in the
Bontang VI Payment Account is insufficient therefor, each Producer shall pay
such compensation and expenses to the Bontang VI
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Trustee, provided, however, that the obligation of each respective Contractor
with respect to this Section 11.2 shall be pro rata in accordance with its
respective Sharing Percentage.
11.3 Resignation. The Bontang VI Trustee may, at any time,
by notice to the Producers and the Agent, tender the Bontang VI Trustee's
resignation as Trustee and Paying Agent under this Agreement. The Producers
may, at any time by notice jointly given by them, terminate the Bontang VI
Trustee's appointment hereunder. Such resignation or termination shall be
effective as from the appointment of a successor as hereinafter provided.
11.4 Appointment of Successor. Within 60 days of receipt of
a notice of resignation or issuance of a notice of termination, the Producers
shall jointly appoint a successor, being a bank in the United States acceptable
to the Producers. The proposed successor bank (the "Successor") shall promptly
give notice of its appointment to the Bontang VI Trustee and shall execute and
deliver to each of the parties hereto an instrument in writing accepting the
successor's appointment hereunder which shall specify the office of the
Successor in the United States which is to be the Trustee's Office for the
purpose of this Agreement.
11.5 Application to Court. If in any case a Successor shall
not be appointed pursuant to the foregoing provisions of this Article 11 within
the 60 days aforesaid, the Bontang VI Trustee may apply to any court of
competent jurisdiction to appoint a Successor, notwithstanding the provisions
of Section 13.2. Such court may thereupon, in any case, after such notice, if
any, as such court may deem proper and prescribe, appoint a Successor.
11.6 Successor Vested with Rights. Upon and from the
execution and delivery of its acceptance in writing as aforesaid, the Successor
without any further act or deed shall become fully vested with all the rights,
powers and duties and subject to all the obligations of the Bontang VI Trustee
hereunder, but the Bontang VI Trustee, upon payment of all sums due it and on
the written request of the Producers shall execute and deliver an instrument
transferring to the Successor the Bontang VI Trust Funds, including all funds
held in the Bontang VI Payment Account, the Debt Service Account and the
Reserve Account and assigning to the Successor all its rights hereunder and
under any Disbursement Trust Agreement and all of the Bontang VI Trustee's
rights with respect to any Bontang VI Depositary.
11.7 Payments After Notice. Upon and from the date of
notification from any Successor, any person required to pay amounts to the
Bontang VI Trustee under this Agreement shall pay the Successor at its office
specified as aforesaid all amounts described herein as payable to the Bontang
VI Trustee.
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11.8 Indemnification. The Producers hereby agree to
indemnify the Bontang VI Trustee for, and to hold it harmless against, any
loss, liability, claim, judgment, settlement, compromise or reasonable expense
incurred or suffered without gross negligence or willful misconduct on the part
of the Bontang VI Trustee, arising out of or in connection with its entering
into this Agreement, the Loan Agreement or any other document entered into by
the Bontang VI Trustee at the request of, or with the approval of, the
Producers, or contemplated hereby or thereby, and carrying out its duties or
exercising its rights hereunder or thereunder, including, but not limited to,
the cost and expenses of defending itself against any claim of liability in the
premises.
11.9 Trustee in Individual Capacity. Each of the parties
hereto acknowledges and consents that the Bontang VI Trustee, in its individual
capacity, or any affiliate thereof, shall have the same rights, powers and
authority to enter into any deposit agreement, loan agreement or any other
banking or business relationship permitted by law with any of the Producers,
the Lenders or the Agent (without having to account therefor to any of the
Producers) as though the Bontang VI Trustee were not the Trustee and Paying
Agent under this Agreement.
ARTICLE 12
DEBT SERVICE ALLOCATION
12.1 Debt Service Allocation Definitions. In addition to and
in amendment of the terms defined elsewhere in this Agreement, the following
terms shall, solely for purposes of this Article 12, have the meanings set
forth below:
"Aggregate Dollar Share" shall have the meaning set forth in
Section 12.3.
"Allocation Trust Agreements" shall mean this Agreement, the
Bontang II Trust Agreement, the Bontang III Trust Agreement, the Bontang IV
Trust Agreement, the Bontang V Trust Agreement, the Bontang Excess Sales Trust
Agreement and the Bontang LPG Trust Agreement, provided that the foregoing may
be expanded or otherwise modified by written notice from the Producers to the
Bontang VI Trustee.
"Allocation Trustees" shall mean all of the trustees under the
Allocation Trust Agreements, collectively, and "Allocation Trustee" shall mean
one of such Allocation Trustees as the context may require.
"Bontang LPG Trust Agreement" shall mean the Bontang LPG
Trustee and Paying Agent Agreement, dated as of August 1, 1988, among the
Producers and
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BankAmerica International (as successor in interest to Continental Bank
International), as modified or amended from time to time.
"Bontang LPG Trustee" shall mean the trustee under the Bontang
LPG Trust Agreement.
"Borrowing Trustees" shall mean those Trustees which are a
party to any of the Financing Agreements and "Borrowing Trustee" shall mean one
of such Borrowing Trustees as the context may require.
"Contingent Support Trustees" shall mean all of the trustees
under the Bontang Excess Sales Trust Agreement and any Special Long Term Sales
Trust Agreements of which the Bontang VI Trustee has been notified by
Pertamina, collectively, and "Contingent Support Trustee" shall mean one of
such Contingent Support Trustees as the context may require.
"Debt Service" shall mean (i) amounts paid into any Debt
Service Account by a Borrowing Trustee (other than amounts so paid from the
proceeds of any borrowing under a Financing Agreement or by the Bontang III
Trustee from Contingent Support (as defined in Financing Agreement No. 3)),
(ii) amounts which any Borrowing Trustee has been notified as having been paid
by one or more Producers and identified to such Borrowing Trustee as "Debt
Service" under the Debt Service Allocation Agreement with respect to
indebtedness of such Borrowing Trustee, and (iii) Contingent Support paid by
any Contingent Support Trustee to the Bontang III Trustee.
"Debt Service Accounts" shall mean all accounts, including any
subaccounts thereof, which a Borrowing Trustee opens and into which it
transfers LNG revenues or other funds in anticipation of payments of, or as a
reserve for possible payment of, principal, interest and other fees and
expenses pursuant to any of the Financing Agreements, and "Debt Service
Account" shall mean one of such Debt Service Accounts as the context may
require.
"Estimated Debt Service Percentages" shall have the meaning
set forth in Section 12.2.
"Financing Agreement No. 3" shall mean the Bontang III Loan
Agreement, dated as of February 9, 1988, as modified or amended from time to
time, entered into by the Bontang III Trustee.
"Financing Agreement No. 4" shall mean the Bontang IV Loan
Agreement, dated as of August 26, 1991, as modified or amended from time to
time, entered into by the Bontang IV Trustee.
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"Financing Agreement No. 5" shall mean the Bontang V Loan
Agreement, dated as of July 1, 1995, as modified or amended from time to time,
entered into by the Bontang V Trustee.
"Financing Agreement No. 6" shall mean the Bontang VI Loan
Agreement, dated as of the date hereof, as modified or amended from time to
time, entered into by the Bontang VI Trustee.
"Financing Agreements" shall mean Financing Agreement No. 3,
Financing Agreement No. 4, Financing Agreement No. 5, Financing Agreement No. 6
and any other agreement designated as a "Financing Agreement" in a notice to
the Bontang VI Trustee from the Producers.
"Producers Agreement" shall mean any agreement so entitled
among the Producers, or any of them, and lenders under a Financing Agreement,
as modified or amended from time to time.
"Provisional Debt Service" shall mean, with respect to any
Debt Service, payments by any Allocation Trustee to reimburse Producers which
have borne more than their respective Estimated Debt Service Percentages of
such Debt Service, together with interest on the Reimbursement Amount from and
including the date of such Debt Service payment to, but not including, the date
of such reimbursement, at the rate equal to the weighted average of the
interest rates in effect under Financing Agreement No. 3 on the date of such
reimbursement or, upon payment in full of all amounts owing under Financing
Agreement No. 3, at the rate specified in the Debt Service Allocation
Agreement or otherwise at a rate per annum agreed by the Producers.
"Reimbursement Amount" shall mean the amount of any
Provisional Debt Service payment other than the portion thereof attributable to
interest on said reimbursement amount.
"Special Long Term Sales Trust Agreements" shall have the
meaning set forth in Article I of the Bontang III Trust Agreement.
"Trust Agreements" shall mean, collectively, this Agreement
and all Other Trust Agreements, and "Trust Agreement" shall mean one of such
Trust Agreements as the context may require.
"Trustees" shall mean the trustees under the Trust Agreements,
and "Trustee" shall mean one of such Trustees as the context may require.
12.2 Estimated Debt Service Percentages. The Debt Service
Allocation Agreement requires that the Accountants calculate, and deliver to
the Allocation
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Trustees from time to time certificates setting forth, the Estimated Debt
Service Percentages for each Producer of the estimated amounts of each type of
Debt Service to be paid by the Borrowing Trustees, and the Contingent Support
Trustees (the percentages last so certified as to each period for each Producer
being its "Estimated Debt Service Percentages"). Each Trust Agreement to which
a Borrowing Trustee is a party provides that such Borrowing Trustee shall
promptly give notice to the Allocation Trustees of (i) each payment into a Debt
Service Account made by such Borrowing Trustee, specifying any amounts so paid
from the proceeds of any borrowing under a Financing Agreement and, in the case
of the Bontang III Trustee, from Contingent Support, (ii) each transfer,
payment or distribution from a Debt Service Account, or any disbursement trust
pursuant to a Financing Agreement, of funds in excess of the amount required to
be held therein from time to time, (iii) each payment of Debt Service of which
such Borrowing Trustee has been notified made by a Producer pursuant to a
Producers Agreement, and (iv) the portion of each such payment of Debt Service,
whether made by such Borrowing Trustee or a Producer, borne by each Producer,
after taking into account such Producer's interest in any excess funds
transferred, paid or distributed from any Debt Service Account, or any
disbursement trust pursuant to a Financing Agreement, to or for the account of
any Producers. Each Trust Agreement to which a Contingent Support Trustee is a
party provides for similar notices.
In the event that such notices received by the Bontang VI
Trustee, together with the notices referred to in the last sentence of this
paragraph and all similar notices received from the other Allocation Trustees,
considered in the aggregate, show at any time that any Producers have borne
more than their Estimated Debt Service Percentages of Debt Service ("underpaid
Producers"), the Bontang VI Trustee shall thereafter make Provisional Debt
Service payments to the underpaid Producers, pro rata in proportion to the
excess amount borne by each such Producer, out of all amounts otherwise payable
under Article 8 to the Producers which have borne less than their Estimated
Debt Service Percentages of such Debt Service until the Reimbursement Amount of
the aggregate Provisional Debt Service payments received by each of the
underpaid Producers from the Allocation Trustees equals the excess amount of
Debt Service borne by such Producer. The Bontang VI Trustee shall promptly
advise each other Allocation Trustee of each such Provisional Debt Service
payment made by the Bontang VI Trustee.
12.3 Aggregate Dollar Share. The Debt Service Allocation
Agreement also requires that the Accountants calculate, and deliver to the
Allocation Trustees from time to time certificates setting forth, the portion
of Debt Service each Producer should have borne of the Debt Service paid by the
Borrowing Trustees and the Contingent Support Trustees (the amount last so
certified as to each period for each Producer being its "Aggregate Dollar
Share") and the portion thereof which has actually been borne by each Producer.
In the event that any such calculations indicate that any Producers have borne
more than their Aggregate Dollar Shares of Debt Service during the period in
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question ("underpaid Producers"), the Accountants are required to instruct the
Bontang VI Trustee to pay to the underpaid Producers, pro rata in proportion to
the excess amount borne by each such Producer, all amounts otherwise payable
under Article 8 to the Producers which have borne less than their Aggregate
Dollar Shares for the period in question until the aggregate amount received by
each of the underpaid Producers from the Allocation Trustees (as shown by the
notices referred to in the last sentence of this paragraph and all similar
notices received from the other Allocation Trustees) equals the amount stated
in such instructions to be the excess amount borne by such Producer. The
Bontang VI Trustee shall promptly advise each other Allocation Trustee of each
such payment pursuant to this Section 12.3.
Upon receipt of any such instructions the Bontang VI Trustee
shall give effect thereto commencing with the next payments to Producers
pursuant to Article 8.
12.4 Pro Rata Treatment. In the event that the funds
available for making the payments required by Sections 12.2 and 12.3 shall not
be sufficient to make the payments therein required in full, such funds shall
be paid to the Producers entitled to payments pursuant to such Sections pro
rata in proportion to the amounts payable to each such Producer thereunder.
12.5 Income From the Disbursement Trust. In order to
implement the provisions of Section 2.4 of the Debt Service Allocation
Agreement, upon receipt of instructions from the Accountants, which shall state
that they are issued pursuant to said Section, and receipt from the
Disbursement Trustee of the funds specified in such instructions, the Bontang
VI Trustee shall distribute the funds so received as specified in such
instructions.
ARTICLE 13
MISCELLANEOUS
13.1 Counterparts; Term. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts together shall constitute one and the same
instrument. Complete sets of counterparts shall be lodged with the Bontang VI
Trustee. This Agreement shall be effective as of the date hereof and shall
remain in effect until the Producers shall have notified the Bontang VI Trustee
that this Agreement shall terminate.
13.2 DISPUTES. ALL DISPUTES ARISING AMONG THE PARTIES
RELATING TO THIS AGREEMENT OR THE INTERPRETATION OR PERFORMANCE HEREOF, SHALL
BE FINALLY SETTLED BY
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ARBITRATION CONDUCTED IN THE ENGLISH LANGUAGE IN PARIS, FRANCE, BY THREE
ARBITRATORS UNDER THE RULES OF ARBITRATION OF THE INTERNATIONAL CHAMBER OF
COMMERCE. JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION, OR APPLICATION BE MADE TO SUCH COURT FOR A JUDICIAL ACCEPTANCE OF
THE AWARD AND AN ORDER OF ENFORCEMENT AS THE CASE MAY BE. ANY AWARD MADE UNDER
THIS SECTION 13.2 SHALL BE BINDING UPON ALL PARTIES CONCERNED.
13.3 Notices. All notices, approvals, instructions, and
other communications for purposes of this Agreement shall be in English and
shall be in writing, which shall include transmission by telex or telecopier.
All communications given by telex or telecopier shall be directed as set forth
below, provided that, in the event any communication is received by the Bontang
VI Trustee from a telex or telecopy number other than those set forth below,
its responses thereto may be directed to the number from which such
communication was received.
(a) To Pertamina at the following mail, telex
and telecopier addresses:
Perusahaan Pertambangan Minyak dan Gas Bumi Negara (Pertamina)
Jalan Medan Merdeka Timur 1A
Jakarta 10110
Indonesia
Telex No.: 45018
Answerback: PTMJKT 1A
Telecopier No.: 62-21-345-2958
Attention: Director of Finance
(b) To the Contractors comprising the VICO Group
at the following mail, telex and telecopier addresses:
Virginia Indonesia Company
One Houston Center
1221 McKinney - Suite 700
Houston, Texas 77010
U.S.A.
Telex No.: 713-166-100
Answerback: VICO HOU
Telecopier No.: 713-754-6697
Attention: Treasurer
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(c) To the Contractors comprising the Total Group
at the following mail, telex and telecopier addresses:
Total Indonesie
Plaza Kuningan Menara Utara
Lantai 9
Jl. H.R. Rasuna Said Kav. C11-14
Jakarta 12940
Indonesia
Telex No.: 60980
Answerback: TOTALJ IA
Telecopier No.: 62-21-252-0814
Attention: President and General Manager
(d) To the Contractors comprising the Unocal
Group at the following mail, telex and telecopier addresses:
Unocal Indonesia Company
Ratu Plaza Office Tower
Jalan Jenderal Sudirman
Jakarta 10270
Indonesia
Telex No. 47335
Answerback: UNOCAL IA
Telecopier No.: 62-21-720-4499
Attention: President and Managing Director
(e) To Inpex on or following March 31, 1997 at
the following mail, telex and telecopier address:
Indonesia Petroleum, Ltd.
17th Floor, Ebisu Neonato,
No. 1-18, Ebisu 4-Chome
Shibuya-ku, Tokyo 150, Japan
Telex No.: 2424210
Answerback: JAIPEX J
Telecopier No.: 81-3-5448-1244
Attention: General Manager of Gas Business Department
(f) To the Bontang VI Trustee or the trustee
under any Other Trust Agreement at the following mail, telex, and telecopier
addresses:
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Bank of America National Trust and Savings Association
One World Trade Center, 9th Floor
New York, New York 10048-1191
Telex No.: 62 944
Answerback: BOA UW
Telecopier No.: 212-390-3595
Attention: Vice President-Manager
Each of VICO, Total and Unocal is hereby designated the sole representative of
the Contractors comprising its respective Contractor Group for the giving and
receipt of notices, approvals, instructions and other communications to or from
the Contractors under this Agreement and, to the extent Contractors are
entitled to give or receive notices, approvals or instructions thereunder, the
Other Trust Agreements. For purposes of the foregoing, unless specifically
provided otherwise and, with respect to Inpex, solely until March 31, 1997,
each reference in this Agreement to the Producers or the Contractors, shall,
insofar as the Contractors are concerned, require notices, approvals and other
communications to and from such representatives. On and following March 31,
1997, each reference to the Producers or the Contractors shall, insofar as
Inpex is concerned, require notices, approvals and other communications to and
from Inpex. A new or successor representative may be designated by notice to
such effect signed by all the Contractors comprising a Contractor Group given
to the parties to this Agreement ten days in advance of any such change. Until
receipt of any such notice, the parties to this Agreement and the Other Trust
Agreements may rely on any notice, approval, instruction or other communication
from or to the representative of a Contractor Group as binding upon each of the
Contractors in such Contractor Group; provided, however, that, except as
provided in Section 8.5, nothing in this Agreement is intended to grant the
representative of a Contractor Group (or any successor representative
designated pursuant to this Section 13.3) any power or authority as among the
Contractors in such Contractor Group themselves.
The parties may designate additional addresses for particular
communications as required from time to time, and may change any address, by
notice given 10 days in advance of such additions or changes. Immediately upon
receiving communications by telex or telecopier a party may request a repeat
transmittal of the entire communication or confirmation of particular matters.
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 at or before 5:00 p.m. on the date of
delivery in the time zone of the recipient (otherwise on the day immediately
following the date of delivery), (ii) five days following posting if
transmitted by mail, (iii) the date of transmission if transmitted by telex
with confirmed answerback received at or before 5:00 p.m. on the date of
transmission in the time zone of the recipient (otherwise on the day
immediately following the date of transmission) or (iv) the date of receipt of
a legible copy thereof if
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sent by telecopier received at or before 5:00 p.m. on the date of transmission
in the time zone of the recipient (otherwise on the day immediately following
the date of receipt), whichever shall first occur.
Any notice to or from the Agent under the Loan Agreement shall
be given in accordance with this Section 13.3, addressed, if to the Agent, at
the address set forth in the Loan Agreement.
13.4 Incumbency Certificates; Notices.
(a) Pertamina and each representative of a
Contractor Group (or any successor representative of a Contractor designated
pursuant to Section 13.3) shall each furnish the Bontang VI Trustee, from time
to time, with duly executed incumbency certificates showing the names, titles,
and specimen signatures of the persons authorized on behalf of such party to
give the notifications and approvals required by this Agreement.
(b) The Producers shall arrange for the
Accountants to provide the Bontang VI Trustee from time to time with a
notification signed by two of the Accountants' partners, advising the Bontang
VI Trustee of the name and title, and furnishing a specimen signature, of the
person or persons authorized to execute the certificates and other documents
required by this Agreement.
(c) Each Producer shall, and the Producers shall
cause the Accountants to, agree with the Bontang VI Trustee upon "test-key"
arrangements for the purpose of authenticating communications between them
respectively which authorize, accomplish, direct or otherwise deal with the
transfer of money under this Agreement. If the Bontang VI Trustee or any
Producer receives such a communication which does not comply with such
arrangements, such recipient shall notify the sender of such failure to comply,
requesting correction thereof, and shall take no action in accordance with such
communication until such correction is effected.
(d) Each of the Contractors shall furnish the
Bontang VI Trustee, from time to time, with such certificates or other evidence
as the Bontang VI Trustee may reasonably require showing the names, titles, and
specimen signatures of the persons authorized on behalf of such party to make
the payment arrangements contemplated by Section 8.4. Each Contractor shall
also furnish the Bontang VI Trustee, from time to time, with such Contractor's
address to which the reports required by Section 9.2 shall be sent.
(e) The Bontang VI Trustee shall furnish the
Producers with notice of the officers of the Bontang VI Trustee who are
authorized to act on its behalf in the performance by the Bontang VI Trustee of
its duties under this Agreement.
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13.5 No Amendment Except in Writing. This Agreement may not
be revoked, amended, modified, varied or supplemented except by an instrument
in writing signed by all of the parties hereto.
13.6 GOVERNING LAW. THIS AGREEMENT 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 WITHIN SUCH
STATE.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized signatories as of
the date first above written.
PERUSAHAAN PERTAMBANGAN MINYAK
DAN GAS BUMI NEGARA (PERTAMINA)
By /s/ F. ABDA'OE
-------------------------------
Name: F. Abda'oe
Title: President Director and
Chief Executive Officer
(Signatures continue on following page)
64
59
TOTAL INDONESIE VIRGINIA INDONESIA COMPANY
By /s/ MICHAEL SEQUIN By /s/ CHARLES M. REIMER
--------------------------------- -------------------------------
Name: Michael Sequin Name: Charles M. Reimer
Title: Vice-Chairman and Chief Title: Chairman and Chief Executive
Executive Officer Officer
VIRGINIA INTERNATIONAL UNIVERSE GAS & OIL
COMPANY COMPANY, INC.
By /s/ RICHARD L. SMERNOFF By /s/ TOSHIO NORIMATSU
--------------------------------- ---------------------------------
Name: Richard L. Smernoff Name: Toshio Norimatsu
Title: Vice President, Virginia Title: General Manager of Business
International Company Dept.
LASMO SANGA SANGA LIMITED INDONESIA PETROLEUM, LTD.
By /s/ RICHARD L. SMERNOFF By /s/ YUSUKE SAWATARI
--------------------------------- ---------------------------------
Name: Richard L. Smernoff Name: Yusuke Sawatari
Title: Director and Chief Financial Title: Managing Director and General
Officer Manager of Accounting &
Finance Dept.
UNION TEXAS EAST KALIMANTAN UNOCAL INDONESIA COMPANY
LIMITED
By /s/ DEAN HENRY By /s/ TIMOTHY C. LAUER
--------------------------------- ---------------------------------
Name: Dean Henry Name: Timothy C. Lauer
Title: Assistant Treasurer Title: President and Managing Director
OPICOIL HOUSTON, INC. BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By /s/ ROY C. H. CHIU By /s/ HANAFI GAN BIN ABDULLAH
--------------------------------- ---------------------------------
Name: Roy C. H. Chiu Name: Hanafi Gan Bin Abdullah
Title: President Title: a/k/a Gan Kah Chai
Senior Vice President and
Country Manager
65
APPOINTMENT OF ACCOUNTANTS
UNDER
BONTANG VI TRUSTEE AND PAYING AGENT AGREEMENT
___________________________________
Reference is made to the Bontang VI Trustee and Paying Agent
Agreement dated as of March 4, 1997 (the "Bontang VI Trustee and Paying Agent
Agreement"), among the undersigned parties and Bank of America National Trust
and Savings Association. Terms defined in the Bontang VI Trustee and Paying
Agent Agreement shall have the same meanings herein as so defined.
Pursuant to Section 8.3 of the Bontang VI Trustee and Paying
Agent Agreement the independent public accounting firm of ___________________,
Member firm of ___________________, and its successors from time to time, is
hereby appointed to act as the Accountants thereunder. In preparation of the
certificates required pursuant to Section 8.3 of the Bontang VI Trustee and
Paying Agent Agreement such Accountants are authorized to rely upon
confirmations from the auditors of the Total Group and the Unocal Group with
respect to the percentages in which natural gas produced under their respective
Production Sharing Contracts is shared among such groups and Pertamina.
Dated _______________, 1997
PERUSAHAAN PERTAMBANGAN MINYAK
DAN GAS BUMI NEGARA (PERTAMINA)
By_____________________________
Name:
Title:
(Signatures continue on following page)
66
2
TOTAL INDONESIE VIRGINIA INDONESIA COMPANY
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
VIRGINIA INTERNATIONAL COMPANY UNIVERSE GAS & OIL COMPANY, INC.
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
LASMO SANGA SANGA LIMITED INDONESIA PETROLEUM, LTD.
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
UNION TEXAS EAST
KALIMANTAN LIMITED UNOCAL INDONESIA COMPANY
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
OPICOIL HOUSTON, INC.
By
------------------------------
Name:
Title: