Exhibit 4.5
CONDITIONAL SALE AND PURCHASE AGREEMENT
NO: K.TEL.76/HK810/SEK-32/2002
by and among
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA TBK.
as Purchaser
and
PT ARIA INFOTEK
MEDIAONE INTERNATIONAL I B.V.
THE ASIAN INFRASTRUCTURE FUND
as the Selling Shareholders
relating to the acquisition of
PT ARIA WEST INTERNATIONAL
dated as of May 8, 2002
CONDITIONAL SALE AND
PURCHASE AGREEMENT
NO: K.TEL.76/HK810/SEK-32/2002
DATED MAY 8, 2002
Conditional Sale and Purchase Agreement, dated as of May 8, 2002, by and among
PERUSAHAAN PERSEROAN (PERSERO) PT TELEKOMUNIKASI INDONESIA TBK., a limited
liability company organized under the laws of the Republic of Indonesia (the
"Purchaser"), PT ARIA INFOTEK, a limited liability company organized under the
laws of the Republic of Indonesia ("Aria Infotek"), MEDIAONE INTERNATIONAL I
B.V. ("MediaOne"), a private limited company incorporated under the laws of the
Netherlands and THE ASIAN INFRASTRUCTURE FUND, an exempted limited duration
company organized under the laws of the Cayman Islands, ("AIF" and together with
Aria Infotek and MediaOne, the "Selling Shareholders" and each a "Selling
Shareholder"). Capitalized terms not otherwise defined have the meanings
assigned to them in Article I.
WHEREAS, the Selling Shareholders wish to sell to Purchaser and Purchaser wishes
to purchase from the Selling Shareholders in aggregate 2,704,444 ordinary shares
of nominal value Rp. 114,000 per share of PT ARIA WEST INTERNATIONAL, a limited
liability company organized under the laws of the Republic of Indonesia (the
"Company"), representing all of the issued and paid-up ordinary shares of the
Company;
WHEREAS pursuant to the Interim Management Agreement dated of even date herewith
by and among Purchaser, the Company and the Selling Shareholders, the KSO Unit
will pay US$41,750,000 to Purchaser and Purchaser will pay, and as payment in
advance of the Purchase Price for the Sale Shares, an aggregate amount of
US$20,000,000 to the Selling Shareholders and the parties have agreed to certain
arrangements regarding the management and operation of the KSO Unit pending the
closing of the transactions contemplated herein;
WHEREAS, pursuant to the Settlement Agreement to be executed at of the date of
the closing of the transactions contemplated herein Purchaser and the Company
have agreed to permanently settle, resolve and put to rest all claims and causes
of action between and among them that were or could have been raised in the
Arbitration Proceeding or in any
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other Proceeding that are in any way based upon, relating to or arising out of
the KSO Project, agreements relating to the KSO Project or the management,
operation and finances of the KSO Unit and the KSO System; and
WHEREAS, a separate Indemnity and Guarantee Agreement ("Guarantee") has been
executed and delivered by AT&T Wireless Services Inc., ("AT&T Wireless") on the
date hereof, in the form of Exhibit A.
NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. For purposes of this Agreement, except as
otherwise expressly provided or unless the context clearly requires otherwise:
"Affiliate" shall mean, with respect to a Person, any entity directly or
indirectly controlling, controlled by, or under common control with a Person,
where "control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with") as applied to any Person, shall
mean the possession, directly or indirectly, of the power to direct the
management and policies of that Person, whether through ownership of voting
securities or by contract or otherwise.
"Agent" shall have the meaning assigned to such term in 3.4(c).
"AIF" shall have the meaning assigned to such term in the preamble.
"Aria Infotek" shall have the meaning assigned to such term in the preamble.
"Deed of Transfer" shall mean the Deed of Transfer in the form annexed hereto as
Exhibit B.
"Subsidiary" shall mean, with respect to any Person, any corporation or other
organization, whether incorporated or unincorporated, of which (a) at least a
majority of the securities, or other interests having by their terms ordinary
voting power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other organization, is
directly or indirectly owned or controlled by such Person or by any one or more
of its Subsidiaries, or by such Person and one or more of its Subsidiaries, (b)
such
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Person or any other Subsidiary of such Person is a general partner (excluding
any such partnership where such Person or any Subsidiary of such Person does not
have a majority of the voting interest in such partnership, or (c) such Person
and any of its Subsidiaries in aggregate have a majority of the economic
interests.
"Assets" shall have the meaning assigned to such term in Section 4.19(a).
"AT&T Wireless" shall have the meaning assigned to such term in the recitals.
"Governmental Entity" shall mean any court, administrative agency, ministry or
commission, or other governmental or regulatory authority or agency, of any
jurisdiction.
"Pro Rata Share" shall mean with respect to each Selling Shareholder, the ratio
of the number of Sale Shares owned by such Selling Shareholder to the total
number of Sale Shares.
"Materials of Environmental Concern" shall mean chemicals, pollutants,
contaminants, wastes, toxic or hazardous substances, materials and wastes,
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead and lead-based paints and materials, radon and
other materials determined by a Governmental Entity of the Republic of Indonesia
to be harmful or otherwise determined to have adverse effects to human health or
the environment.
"Payment Cap" shall have the meaning assigned to such term in Section 9.6(c).
"Liability Cap" shall have the meaning assigned to such term in Section 9.6(c).
"Cap Exceptions" shall have the meaning assigned to such terms in Section
9.6(c).
"Unpaid Interest" shall have the meaning assigned to such term in Section
3.5(c).
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"Material Adverse Effect" shall mean any circumstance, event, change or effect
that is or can be reasonably foreseen to be materially adverse to (i) with
respect to the Company and its Subsidiaries, the business, operations,
prospects, assets, condition (financial or otherwise), liabilities (absolute,
accrued, contingent or otherwise), or results of operations of the Company and
its Subsidiaries taken as a whole and (ii) with respect to the Company and its
Subsidiaries and each Selling Shareholder, the ability of the Company, its
Subsidiaries or such Selling Shareholder to consummate the Transactions.
"Transaction Documents" shall mean this Agreement, the AriaWest Loan
Restructuring Agreement, the Interim Management Agreement, (including the
promissory notes delivered by the Selling Shareholders to Purchaser pursuant
thereto), the Settlement Agreement, the Mutual Waivers, and any other contract,
agreement, certificate or other document entered into or delivered pursuant to
any of the foregoing or contemplated by any of the foregoing.
"U.S. Dollar" and "USS" shall mean the lawful currency of the United States of
America.
"GAAP" shall mean generally accepted accounting principles in the Republic of
Indonesia established by the Indonesian Accounting Association as in effect at
the relevant time.
"Intellectual Property" shall mean any intellectual property rights, including
any trademarks, patents, copyrights, trade, secrets, know-how, licenses, service
marks, trade names, trade secrets, and computer software programs.
"Purchase Price" shall mean US$164,500,000.
"Aggregate Purchase Price" shall mean One Hundred Forty Four Million and Five
Hundred Thousand U.S. Dollars (US$144,500,000).
"Business Day" shall mean any day other than a Saturday or Sunday or on which
banks in Jakarta, Singapore and New York are not required to be open or are
permitted to remain closed.
"Real Property" shall mean all real property that is owned or used by the
Company or any of its Subsidiaries or that is reflected as an asset of the
Company or any of is Subsidiaries in any of the Financial Statements, and shall
include the KSO Unit Installations.
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"Environmental Law" shall mean each federal, state, provincial or local law or
regulation of the Republic of Indonesia relating to pollution, protection or
preservation of human health or the environment including ambient air, surface
water, ground water, land surface or subsurface strata, and natural resources,
and including each such law or regulation relating to emissions, discharges,
releases or threatened releases of Materials of Environmental Concern, or
otherwise relating to the manufacturing, processing, distribution, use,
treatment, generation, storage, containment (whether above ground or
underground), disposal, transport or handling of Materials of Environmental
Concern, or the preservation of the environment or mitigation of adverse effects
thereon and each law and regulation with regard to record keeping, notification,
disclosure and reporting requirements respecting Materials of Environmental
Concern.
"Indebtedness" shall mean (i) all indebtedness for borrowed money or for the
deferred purchase price of property or services, (ii) any other indebtedness
that is evidenced by a note, bond, debenture or similar instrument, (iii) all
obligations under financing leases and all other repurchase or similar
obligations, (iv) all obligations in respect of acceptances issued or created,
(v) all liabilities secured by any lien on any property and (vi) all guarantee,
financial support, keep-well and other obligations of a similar nature.
"Voting Debt" shall mean with respect to any Person, Indebtedness having voting
rights or the right to nominate one or more directors or commissioners, and debt
convertible into securities having either of such rights.
"ICC" shall mean the International Chamber of Commerce.
"Consent" shall mean, with respect to any Governmental Entity or any other
Person, any approval (including shareholder and other corporate approvals),
consent, ratification, permit, license, waiver or other authorization of, filing
with, or notice to such Governmental Entity or other Person, as the case may be.
"License" shall have the meaning assigned to such term in the KSO Agreement.
"New Installations" shall have the meaning assigned
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to such term in the KSO Agreement.
"Additional New Installations" shall have the meaning assigned to such term in
the KSO Agreement.
"Existing Installation" shall have the meaning assigned to such term in the KSO
Agreement.
"KSO Unit Installations" shall mean the New Installations and any Additional New
Installations which are uncompleted or in respect of which Interconnection Tests
have not been successfully completed and any other telecommunications facilities
(and all related supporting facilities, buildings, furnishings, computer and
other equipment, systems, and other assets and resources, including replacements
and non maintenance related upgrades to the Existing Installation) provided or
constructed by the Company which are uncompleted or in respect of which
Interconnection Tests have not been successfully completed.
"Remaining Withheld Amount" shall have the meaning assigned to such term in
Section 3.5(c).
"Balance Amount" shall mean One Hundred Twenty Million U.S. Dollars
(US$120,000,000), payable by Purchaser to the Selling Shareholders by the
issuance of Notes in accordance with Section 3.4(b) and subject to the other
provisions of this Agreement.
"Withheld Amount" shall have the meaning assigned to such term in Section
3.5(b).
"Eligible Amounts" shall have the meaning assigned to such term in Section
3.5(a).
"Shareholder Balance Amount" shall mean, with respect to each Selling
Shareholder, such Selling Shareholder's Pro Rata Share of US$120,000,000 as set
forth opposite such Selling Shareholder's name in Exhibit I.
"Denied Amount" shall have the meaning assigned to such term in Section 9.2(c).
"Additional KSO Employee" shall have the meaning assigned to such term in the
KSO Agreement, provided however that the term General Manager as used in such
definition shall only be a reference to an individual who held the title of
general manager
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of the KSO Unit at any time during the period beginning on September 11, 2000
and ending on the Closing Date.
"Excess Amount" shall have the meaning assigned to such term in Section 3.5(c).
"Excess Claim Amount" shall have the meaning ascribed to such term in Section
3.5(d).
"Excess Security Amount" shall have the meaning ascribed to such term in Section
3.5(d).
"Damages" shall mean in the case of any Person, collectively, any loss,
liability, claim, damage, judgment, settlement and expense (including interest
and penalties recovered by any third-party with respect thereto and reasonable
attorney's fees and expenses, reasonable accountant's fees and expenses and
other reasonable fees and expenses incurred in the investigation or defense of
any of the same or in asserting, preserving or enforcing any of the rights of
Purchaser arising under Article IX or the other provisions of this Agreement) or
diminution of value, whether or not involving a third-party claim, suffered or
incurred by such Person but shall not include any punitive, indirect losses or
future lost profits.
"Tax Loss Carryforwards" shall mean tax losses of the Company which are
available to be carried forward and offset against taxable income of the Company
for the purposes of calculation of Indonesian income Tax of the Company.
"Contracts" shall have the meaning assigned to such term in Section 4.22(a).
"Closing Disclosure Schedule" shall mean the Closing Disclosure Schedule dated
as of the date hereof prepared and signed by each Selling Shareholder and
annexed hereto.
"Purchaser Disclosure Schedule" shall mean the Purchaser Disclosure Schedule
dated as of the date hereof prepared and signed by Purchaser and delivered to
the Selling Shareholders simultaneously with the execution hereof.
"Signing Disclosure Schedule" shall mean the Signing Disclosure Schedule dated
as of the date
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hereof prepared and signed by each Selling Shareholder and annexed hereto.
"Tax Return" shall mean any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any such document
prepared on a consolidated, combined or unitary basis, and also including any
schedule or attachment thereto, and any amendment thereof.
"Unaudited Financial Statements" shall mean an unaudited consolidated balance
sheet of the Company and its Subsidiaries as at March 31, 2002 and unaudited
consolidated statements of income, shareholders' equity and cash flows for the
quarterly period then ended and the notes thereto.
"Audited Financial Statements" shall mean the consolidated balance sheet of the
Company and its Subsidiaries as at December 31, 2001 together with consolidated
statements of income, shareholders' equity and cash flows for the year then
ended, and the notes thereto, the audit report and opinion (if any) therein and
any letter issued in connection therewith, in each case certified or prepared
by, as applicable, by Ernst & Young, independent certified public accountants.
"Letter Agreement" shall mean the letter agreement relating to the MOU dated
April 11, 2002 among the Selling Shareholders, the Company and Purchaser.
"Restriction Period" shall mean the period on and from the Closing Date up to
and including the later of (A) the date 2 years following the Closing Date and
(B) if Purchaser shall have notified Aria Infotek of one or more claims under
the Transaction Documents on or before the date referred to in subsection (A),
such notice setting forth with reasonable specificity the nature of such claims,
the last date on which all such claims in respect of which the Purchaser has
commenced Arbitration Proceedings within 3 years following the Closing Date (the
"Arbitrated Claims") are finally resolved or settled between the parties hereto
or a final arbitral award has been issued by an arbitral tribunal for each
Arbitrated Claim and to the extent any such resolution, settlement or final
arbitral award requires payment by Aria Infotek to Purchaser, such resolution,
settlement or final arbitral award (as applicable) has been paid in full with
respect to all Arbitrated Claims.
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"MediaOne" shall have the meaning assigned to such term in the preamble.
"MOU" shall have the meaning assigned to such term in Section 10.5.
"Tax" or "Taxes" shall mean all taxes, charges, fees, duties, levies, penalties
or other assessments imposed by any Governmental Entity or other federal, state,
local or foreign governmental authority, including income, capital gains,
receipts, fringe benefits, employee, excise, property, sales, gain, use,
license, custom duty, stamp duty, unemployment, capital stock, transfer,
franchise, payroll, withholding, social security, minimum estimated, profit,
gift, severance, value added, disability, premium, recapture, credit,
occupation, service, leasing, employment, stamp and other taxes, and shall
include interest, fines, charges, penalties or additions attributable thereto or
attributable to any failure to comply with any requirement regarding Taxes or
Tax Returns.
"Initial Payment" shall mean the amount payable by Purchaser to the Selling
Shareholders in accordance with the provisions of Section 3.4(a), being in the
aggregate Twenty Four Million Five Hundred Thousand U.S. Dollars
(US$24,500,000).
"Shareholder Initial Payment" shall mean, with respect to each Selling
Shareholder, the amount of the Shareholder Initial Payment set forth opposite
such Selling Shareholder's name on Exhibit J under the column, "Shareholder
Initial Payment."
"Encumbrances" shall mean any and all encumbrances, liens, charges, fiduciary
transfers, security interests, options, claims, mortgages, hak tanggungan, xxx
xxxxx, jaminan xxxxxxx, xxx reklame, hak retensi, pledges, or agreements,
obligations, understandings or arrangements or other restrictions or limitations
on title, transfer, sale or other disposition of any nature whatsoever and with
respect to the Sale Shares, shall include, in addition to the foregoing, any
proxies, voting trusts or agreements, obligations, understandings or other
restrictions or limitations on voting of any nature whatsoever.
"Mutual Waivers" shall mean the Mutual Waiver between the Selling Shareholders
and Purchaser and the Mutual Waiver between the Selling Shareholders and the
Company annexed hereto as Exhibits D and E respectively.
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"Purchaser" shall have the meaning assigned to such term in the preamble.
"Selling Shareholder" shall have the meaning assigned to such term in the
preamble.
"Minimum Telkom Revenue" shall have the meaning assigned to such term in the KSO
Agreement.
"Selling Shareholder Opinions" shall have the meaning assigned to such term in
Section 3.2(l).
"ICC Court" shall have the meaning assigned to such term in Section 10.8(b)(i).
"Knowledge of the Selling Shareholders" concerning a particular subject, area or
aspect of the business or affairs of the Company, any of its Subsidiaries or the
KSO Unit shall mean in respect of each Selling Shareholder the knowledge of (i)
each of the officers, directors and commissioners of such Selling Shareholder,
(ii) each of the officers, directors and commissioners of the Company or any of
its Subsidiaries, (iii) each individual who held the title of general manager of
the KSO Unit at any time during the period beginning on September 11, 2000 and
ending on the Closing Date and (iv) all knowledge which was or could have been
obtained upon reasonable inquiry by any such person referred to in clause (i),
(ii) or (iii).
"Guarantee" shall have the meaning assigned to such term in the preamble.
"Closing" shall mean the closing referred to in Section 3.1.
"ICC Rules" shall have the meaning assigned to such term in Section 10.8(b).
"Agreement" or "this Agreement" shall mean this Conditional Sale and Purchase
Agreement, together with the Schedules and Exhibits hereto and the Disclosure
Schedule.
"Agency Agreement" shall have the meaning assigned to such term in Section
3.4(c).
"KSO Agreement" shall mean the KSO Agreement
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dated October 20, 1995, No. PKS. 222/HK.810/UTA-00/95, by and between Purchaser
and the Company, as amended.
"Interim Management Agreement" shall mean that agreement in respect of interim
management of the KSO Unit annexed hereto as Exhibit C.
"Settlement Agreement" shall mean the settlement and release agreement annexed
hereto as Exhibit H.
"AriaWest Loan Restructuring Agreement" shall mean the agreement, in form and
substance acceptable to Purchaser in its sole and absolute discretion, among
AriaWest International Finance B.V., the other parties to the AriaWest Loan and
Purchaser (in its capacity as guarantor) to restructure the AriaWest Loan.
"Proceeding" shall mean in respect of any Person any action, arbitration, audit,
claim, hearing, litigation, mediation, suit, inquiry, proceeding or
investigation (whether civil, criminal, administrative, investigative or
informal) commenced, brought, conducted or heard by or before, or otherwise
involving any Governmental Entity or arbitral tribunal.
"Arbitration Proceeding" shall mean the arbitration proceeding pending between
Purchaser and the Company before the ICC Court of Arbitration (reference number
11 565/BWD/SPB/JNK).
"Request" shall have the meaning assigned to such term in Section l0.8(b)(iv).
"Company" shall have the meaning assigned to such term in the preamble.
"Required Company Consents" shall have the meaning assigned to such term in
Section 4.9.
"Person" shall mean a natural person, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity or organization.
"Related Person" shall have the meaning assigned to such tarn in Section 4.25.
"Indemnifying Party" shall have the meaning assigned to such term in Section
9.4(a).
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"Indemnified Party" shall have the meaning assigned to such term in Section
9.4(a).
"AriaWest Loan" shall mean the loan provided to AriaWest International Finance
B.V. and guaranteed by the Company under the Amendment and Restatement dated as
of May 12, 1999 of the Common Agreement dated as of April 30, 1996 among
AriaWest International Finance B.V., the Company, each of the lenders named
therein and a party thereto, CIBC Asia Ltd., as facility agent and intercreditor
agent, Credit Lyonnais S.A., as technical agent, and the Chase Manhattan Bank,
as collateral agent, the Amendment and Restatement dated as of May 12, 1999 of
the Credit Facility Agreement dated as of April 30, 1996 among AriaWest
International Finance B.V., the Company, each of the banks named therein and a
party thereto, each of the vendors named therein and a party thereto, CIBC Asia
Ltd., as facility agent and intercreditor agent, Credit Lyonnais S.A., as
technical agent, and the Chase Manhattan Bank, as collateral agent, and all
liens, grants of security interest, pledges, commitments, instruments and other
agreements and amendments relating thereto.
"Plan" shall mean, in respect of any Person, each deferred compensation,
incentive compensation, stock purchase, stock option and other equity
compensation plan, program, agreement or arrangement, each severance or
termination pay medical, surgical, hospitalization, life insurance and other
plan, and each profit-sharing, bonus or pension or retirement or annuity plan,
fund or program; in each case, that is or was sponsored, maintained or
contributed to or required to be contributed to by such Person or any of its
Subsidiaries or to which such Person or any of its Subsidiaries is party,
whether written or oral, for the benefit of any past or present director,
officer, commissioner or employee of such Person or any of its Subsidiaries.
"Rupiah" and "Rp." shall mean the lawful currency of the Republic of Indonesia.
"Shares" shall mean all of the ordinary shares of the Company.
"Sale Shares" shall mean 2,704,444 Shares (subject to adjustment to reflect
share splits, reverse share splits, share dividends or other changes to the
capital stock of the Company), representing 100% of the issued and paid-up
Shares on a fully-diluted basis.
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"Shareholder Sale Shares" shall mean, with respect to each Selling Shareholder,
the number or Sale Shares set forth opposite such Selling Shareholder's name on
Exhibit K. under the column, "Shareholder Sale Shares."
"Dispute" shall have the meaning assigned to such term in Section 10.8(a).
"Lease" shall mean each lease or agreement or commitment to lease pursuant to
which the Company or any of its Subsidiaries leases or agrees or commits to
lease any real or personal property.
"KSO System" shall have the meaning assigned to such term in the KSO Agreement.
Tax Clearance Letter" shall mean the one or more tax clearance letters (surat
ketetapan xxxxx) in substance satisfactory to Purchaser in its sole and
absolute discretion evidencing that the Company has available to it Tax Loss
Carryforwards as of December 31, 2001 of no less than Rp.1,710,000,000,000.
"Notes" shall mean the Promissory Notes and the Restricted Notes.
"Promissory Notes" shall mean the promissory notes issued by Telkom to the
Selling Shareholders in the form annexed hereto as Exhibit F.
"Restricted Notes", shall mean the Restricted Notes issued by Purchaser to Aria
Infotek in the form annexed hereto as Exhibit G.
"Fifth Maturity Date" shall have the meaning assigned to such term in Exhibit R.
"Sixth Maturity Date" shall have the meaning assigned to such term in Exhibit R.
"Seventh Maturity Date" shall have the meaning assigned to such term in Exhibit
R.
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"Closing Date" shall mean the date on which the Closing actually occurs.
"Transactions" shall mean the purchase by Purchaser and sale by each of the
Selling Shareholders of the Sale Shares, the performance by each of the parties
hereto of their other respective obligations under this Agreement, the AriaWest
Loan Restructuring Agreement, the Interim Management Agreement (including the
promissory notes delivered by the Selling Shareholders to Purchaser pursuant
thereto), the Settlement Agreement, the Mutual Waivers, and any other contract,
agreement, certificate or other document entered into or delivered pursuant to
any of the foregoing or contemplated by any of the foregoing.
"Interconnection Tests" shall have the meaning assigned to such term in the KSO
Agreement.
"Second Anniversary" shall have the meaning assigned to such term in Section
3.5(d).
"KSO Unit" shall have the meaning assigned to such term in the KSO Agreement.
"Relevant Time" shall have the meaning assigned to such term in Section 9.6(c).
Section 1.2 Interpretation.
(a) When a reference is made in this Agreement to a Section, Article,
Schedule or Exhibit, such reference shall be to a Section or Article of
this Agreement or to a Schedule (including the Signing Disclosure
Schedule and the Closing Disclosure Schedule) or an Exhibit to this
Agreement unless otherwise clearly indicated to the contrary.
(b) Whenever the words "include", "includes" or "including" are used in
this Agreement they shall be deemed to be followed by the words
"without limitation."
(c) The words "hereof", "herein" and "herewith" and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement.
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(d) The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term, and
words denoting any gender shall include all genders, Where a word or
phrase is defined herein, each of its other grammatical forms shall
have a corresponding meaning.
(e) A reference to any party to this Agreement or any other agreement or
document shall include such party's successors and permitted assigns.
(f) A reference to any legislation or to any provision of any legislation
shall include any amendment to, and any modification or re-enactment
thereof, any legislative provision substituted therefore and all
regulations and statutory instruments issued thereunder or pursuant
thereto.
(g) As used in this Agreement, any reference to a document in agreed form
means a document in a form annexed hereto.
(h) The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties, and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of
any provision of this Agreement.
(i) The section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(j) Except as expressly provided to the contrary herein, the body of this
Agreement, the Schedules (including the Signing Disclosure Schedule and
the Closing Disclosure Schedule) and the Exhibits shall be read in the
following order of priority: (i) the body
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of this Agreement, (ii) the Exhibits and (iii) the Signing Disclosure
Schedule and the Closing Disclosure Schedule.
(k) Whenever the word "several" or "severally" is used herein with respect
to a Selling Shareholder, it shall mean several in proportion to the
Pro Rata Share applicable to such Selling Shareholder.
(l) Whenever, in this Agreement (including the Schedules and Exhibits
hereto), (i) the term "final arbitral award" is used, such term shall
mean, as applicable, a final and binding arbitral award or final
non-appealable judgment or opinion of a court or other tribunal; and
(ii) the phrase "finally determined" is used, such term shall mean, as
applicable, as finally determined in a final and binding arbitral award
or final non-appealable judgment or opinion of a court or other
tribunal, in each case as the context may require.
ARTICLE II
PURCHASE AND SALE OF
THE SALE SHARES
Section 2.1 Sale and Transfer of Sale Shares. Subject to the terms
and on the conditions set forth in this Agreement, at the Closing each Selling
Shareholder shall contemporaneously sell, convey, assign, transfer and deliver
to Purchaser the Shareholder Sale Shares of such Selling Shareholder, with full
legal title, free and clear of all Encumbrances whatsoever and with all voting,
distribution and other rights attaching thereto as of and from the Closing Date.
Section 2.2 The Aggregate Purchase Price. Subject to the terms and on
the conditions set forth in this Agreement, in consideration of the aforesaid
sale, conveyance, assignment, transfer and delivery to Purchaser of the Sale
Shares, Purchaser shall pay to each Selling Shareholder such Selling
Shareholder's Pro Rata Share of the Aggregate Purchase Price in accordance with
the provisions of Section 3.4.
ARTICLE III
THE CLOSING; PAYMENT OF
PURCHASE PRICE
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Section 3.1 The Closing. The Closing of the sale and transfer of the
Sale Shares by Selling Shareholders to Purchaser shall take place at the offices
of Adnan Kelana Haryanto & Hermanto at Chase Plaza, 18th Floor, JI, Jend
Xxxxxxxx Xxx. 00, Xxxxxxx 00000 at 10:00 a.m., local time three Business Days
after the Conditions to Closing (other than those Conditions to Closing which
are to be satisfied contemporaneously with Closing) have been satisfied, or at
such other place and time as may be agreed by the parties.
Section 3.2 Deliveries by the Selling Shareholders. At the Closing,
each Selling Shareholder shall deliver to Purchaser:
(a) certificates representing Shareholder Sale Shares of such Selling
Shareholder, together with (i) all documents necessary to effect the
transfer of good, valid and marketable title to such Shareholder Sale
Shares to Purchaser or Purchaser's designee and (ii) the Company's
register of shareholders naming Purchaser as the holder and owner of
record of all Sale Shares as of the Closing Date;
(b) a copy of the resolutions of such Selling Shareholder's (i) Board of
Commissioners and shareholders (in the case of Aria Infotek), (ii)
investment committee (in the case of AIF) or (iii) management board (in
the case of MediaOne) and (iii) evidence of such other corporate
approvals as such Selling Shareholder is required to obtain under its
organizational documents, if any, authorizing such Selling
Shareholder's execution and delivery of this Agreement and the
consummation of the Transactions and such other documents evidencing
such authority as Purchaser may reasonably request;
(c) a copy of each of the Consents with respect to such Selling Shareholder
referred to in Sections 7.1(e) (including, without limitation, those
set forth in Schedule 4.4 of the Signing Disclosure Schedule);
17
(d) a copy of each of the Required Company Consents;
(e) a certificate dated as of the Closing Date and executed by such number
of duly authorized officers of such Selling Shareholder as is required
for such certificate to be duly authorized under such Selling
Shareholder's organizational documents or attorney-in-fact of such
Selling Shareholder for and on behalf of such Selling Shareholder to
the effect that (i) each of such Selling Shareholder's representations
and warranties in this Agreement that is qualified as to materiality
and each of such Selling Shareholder's representations and warranties
in Sections 4.1, 4.3, 4.6, 4.7, 4.8, 4.11, 4.14, 4.16, 4.26 and 4.28
are true and complete in all respects (subject, in respect to each of
such representation and warranty, to only the specific schedule of the
Closing Disclosure Schedule corresponding to the Section number in
which such representation and warranty is made), (ii) other than the
representations and warranties in Sections 4.1, 4.3, 4.6, 4.7, 4.8,
4.11, 4.14, 4.16, 4.26 and 4.28, each of such Selling Shareholder's
representations and warranties in this Agreement that is not so
qualified (considered individually) is, and all such representations
and warranties that are not so qualified (considered collectively) are,
true and complete in all material respects, in each case as of the date
hereof and as of the Closing Date (subject, in respect to each of such
representation and warranty, to only the specific schedule of the
Closing Disclosure Schedule corresponding to the Section number in
which such representation and warranty is made) (iii) there has not
occurred since the date of execution of this Agreement any Material
Adverse Effect (subject to Schedule 4.17 of the Closing Disclosure
Schedule) and (iv) such Selling Shareholder has performed in all
material respects all obligations required to be performed by it under
this Agreement on or prior to the Closing Date;
(f) a certificate setting forth the names of all of the officers, directors
and commissioners of each of the Company and its Subsidiaries
18
with attached letters from each such officer, director and commissioner
evidencing the resignation and removal of such officer, director and
commissioner which certificate shall have annexed to it a release
substantially in the form of the release annexed hereto as Exhibit J
duly executed and delivered by each such removed officer, director and
commissioner;
(g) all of the books and records of the Company, any of its Subsidiaries
and, to the extent within the possession of the Company, the KSO Unit,
including such books and records which are in the possession of the
Selling Shareholders, provided however that the books and records of
the Company shall be delivered at the offices of the Company;
(h) copies of all records, including all signature or authorization cards,
pertaining to the safe deposit boxes, savings, time deposit or checking
accounts or other accounts of any nature listed in Schedule 4.29 of the
Closing Disclosure Schedule;
(i) in the case of the Selling Shareholders, the opinion of Indonesian
Counsel to the Selling Shareholders dated the Closing Date and
addressed to Purchaser, in form and substance reasonably satisfactory
to Purchaser as to the matters set forth in Exhibit K hereto;
(j) in the case of MediaOne, the opinion of Loyens & Loeff, Netherlands
Counsel to MediaOne dated the Closing Date and addressed to Purchaser,
in form and substance reasonably satisfactory to Purchaser as to the
matters set forth in Exhibit L hereto;
(k) in the case of MediaOne, the opinion of Delaware counsel to AT&T
Wireless dated the Closing Date and addressed to Purchaser, in form and
substance reasonably satisfactory to Purchaser as to the matters set
forth in Exhibit M and the opinion of the Assistant General Counsel of
AT&T Wireless dated the Closing Date and addressed to Purchaser, in
form and substance reasonably satisfactory to Purchaser as to the
matters set forth in
19
Exhibit N;
(l) in the case of AIF, the opinion of Walkers, Cayman Islands Counsel to
AIF dated the Closing Date and addressed to Purchaser, in form and
substance reasonably satisfactory to Purchaser as to the matters set
forth in Exhibit O hereto (each of the opinions of counsel pursuant to
Sections 3.2(i), (j), (k) and (l) are collectively referred to as
"Selling Shareholder Opinions");
(m) the Settlement Agreement, duly executed and delivered by such Selling
Shareholder;
(n) the Mutual Waivers, duly executed and delivered by the Company and such
Selling Shareholder;
(o) the Deed of Transfer, duly executed by such Selling Shareholder;
(p) a written receipt acknowledging receipt of the Shareholder Initial
Payment paid at Closing to such Selling Shareholder;
(q) the promissory note having a principal amount of US$1,750,000 to be
executed by each of the Selling Shareholders and delivered to Purchaser
pursuant to the Interim Management Agreement;
(r) the Agency Agreement, duly executed by the Selling Shareholders; and
(s) all other previously undelivered documents required to be delivered by
such Selling Shareholder to Purchaser at or prior to the Closing under
the Transaction Documents.
Any statement contained in any certificate delivered by or on behalf of such
Selling Shareholder at the Closing shall constitute a representation and
warranty by such Selling Shareholder under this
20
Agreement.
Section 3.3 Deliveries by Purchaser. At the Closing, Purchaser shall
deliver to the Selling Shareholders:
(a) a copy of the resolutions of Purchaser's Board of Commissioners and the
minutes of the General Meeting of Shareholders of Purchaser authorizing
Purchaser's execution and delivery of this Agreement and the
consummation of the Transactions;
(b) the opinion of Indonesian counsel to Purchaser, dated as of the Closing
Date addressed to each of the Selling Shareholders in form and
substance reasonably satisfactory to the Selling Shareholders, as to
the matters set forth in Exhibit P;
(c) the opinion of New York counsel to Purchaser, dated as of the Closing
Date addressed to each of the Selling Shareholders in form and
substance reasonably satisfactory to the Selling Shareholders as to the
matters set forth in Exhibit Q.
(d) a copy of each of the Consents referred to in Section 7.1(c)
(including, without limitation, those set forth in Schedule 5.4 of the
Purchaser Disclosure Schedule);
(e) the Settlement Agreement, duly executed by Purchaser; and
(f) the Mutual Waivers, duly executed by Purchaser;
(g) the Deed of Transfer, duly executed by Purchaser;
(h) one or more Promissory Notes, each duly executed by Purchaser; and
(i) the Agency Agreement, duly executed by Purchaser.
Section 3.4 Payment of the Aggregate Purchase Price. Subject to the
other provisions of this Agreement, Purchaser shall pay the Aggregate Purchase
Price in U.S. Dollars to the Selling
21
Shareholders in accordance with the following provisions:
(a) At the Closing, Purchaser shall pay to each Selling Shareholder such
Selling Shareholder's Initial Payment, by wire transfer in immediately
available funds to such Selling Shareholder's bank account (as
designated by such Selling Shareholder to Purchaser in writing no later
than three Business Days prior to the scheduled date of the Closing).
Upon receipt of its Shareholder Initial Payment, each Selling
Shareholder shall at the Closing deliver to Purchaser a written
acknowledgment and receipt thereof.
(b) At the Closing, Purchaser shall issue (i) to MediaOne Promissory Notes
in an aggregate amount equal to MediaOne's Shareholder Balance Amount,
(ii) to AIF Promissory Notes in an aggregate amount equal to AIF's
Shareholder Balance Amount and (iii) to Aria Infotek (A) Promissory
Notes in an aggregate amount equal to Aria Infotek's Shareholder
Balance Amount less US$10,000,000 and (B) the Restricted Notes in an
aggregate amount equal to US$10,000,000. The form of Promissory Note
is annexed hereto as Exhibit F and the form of the Restricted Note is
annexed hereto as Exhibit G. The aggregate amount of all Notes issued
pursuant to this Agreement shall equal US$120,000,000. The Notes
shall have the respective maturity dates and aggregate repayment
amounts on such maturity dates set forth in Exhibit R and each Selling
Shareholder shall, in respect of each maturity date, be issued one or
more Notes having an aggregate principal amount equal to such Selling
Shareholder's Pro Rata Share of the aggregate principal amount of Notes
having such maturity date.
(c) The Notes (including payments thereunder) shall be administered by an
agent (the "Agent") under an agency agreement dated as of the Closing
Date (the "Agency Agreement") at the sole cost and expense of the
Selling Shareholders (other than all legal fees of Purchaser, which
shall be borne by
22
Purchaser). Purchaser and the Selling Shareholder shall enter into an
Agency Agreement (which shall include customary representations and
warranties of Purchaser) on terms and conditions satisfactory to
Purchaser and the Selling Shareholders.
(d) In the event Purchaser is required to deduct or withhold any Indonesian
Taxes in respect of any payment of any portion of the Purchase Price,
the Selling Shareholders shall only be entitled to receive from
Purchaser the amount of such payment less the amount of such deduction
or withholding, provided however that to the extent a Selling
Shareholder provides Purchaser with evidence of residency and other
evidence as may be reasonably required by Purchaser to eliminate
Purchaser's obligation to deduct or withhold any such Taxes, Purchaser
shall not deduct or withhold such Taxes. In the event Purchaser makes
any such deduction or withholding, Purchaser shall provide Selling
Shareholder with written evidence of payment of such deducted or
withheld amounts to the relevant Governmental Entity of the Republic of
Indonesia as soon as reasonably practicable following such payment.
Section 3.5 Restricted Notes.
(a) Notwithstanding the other provisions of this Agreement, the Notes
issued to Aria Infotek in an aggregate principal amount of
US$10,000,000 shall constitute restricted notes (the "Restricted
Notes"). The Restricted Notes shall comprise US$3,454,545.45 of the
Notes issued to Aria Infotek having a stated maturity date of the Fifth
Repayment Date, US$3,454,545.45 of the Notes issued to Aria Infotek
having a stated maturity date of the Sixth Repayment Date and
US$3,090,909.10 of the Notes issued to Aria Infotek having a stated
maturity date of the Seventh Repayment Date. Until the expiration of
the Restriction Period, (i) Aria Infotek shall not sell, transfer,
pledge, charge, hypothecate, Encumber or otherwise dispose of any
Restricted Notes and (ii) Purchaser shall be entitled to set-off and
deduct from any and all principal or other amounts owing or due under
the Restricted Notes all or any amount
23
owing, due or otherwise payable by Aria Infotek to Purchaser under any
Transaction Document or otherwise, as evidenced by (A) a written
instrument executed by and between Purchaser end Aria Infotek; (B) in
the event Aria Infotek participates in or assumes the defense of a
third-party claim pursuant to Section 9.4 of this Agreement, the full
amount for which the Company, any of its Subsidiaries or the
Indemnified Party is or becomes liable as finally determined in any
Proceeding or any compromise or settlement relating to such third-party
claim or (C) a final arbitral award (such amounts which Purchaser shall
be so entitled to set-off or deduct, are individually and collectively
referred to herein as "Eligible Amounts"). The Restricted Notes shall
be deemed satisfied, paid and forever discharged to the extent
Purchaser sets-off or deducts any Eligible Amounts against such
Restricted Notes. Neither the exercise nor the failure to exercise a
right of set-off or deduction shall constitute an election of remedies
or limit Purchaser in any manner in the enforcement of other remedies
that may be available to it, whether at law or in equity. If exercised,
such right of set-off shall be applied to the payment next due under
the Restricted Notes after such right of set-off is asserted, and, to
the extent necessary to satisfy such right of set-off, to subsequent
Restricted Notes, in the chronological order in which such Restricted
Notes mature and become due.
(b) During the Restriction Period no payment shall he required to be made
by Purchaser under the Restricted Notes and Purchaser may withhold and
shall not be required to pay any and all principal and other amounts
which (but for Purchaser's rights under this Agreement) would otherwise
have been payable under the Restricted Notes ("Withheld Amounts").
24
(c) On or before the date 10 Business Days following expiration of the
Restriction Period (such 10th Business Day, the "Remaining Withheld
Amount Payment Date"), to the extent that there exists any Withheld
Amounts under a Restricted Note against which Purchaser has not set-off
or deducted any Eligible Amounts hereunder (a "Remaining Withheld
Amount), Purchaser shall pay to Aria Infotek, interest on such
Remaining Withheld Amount from the stated maturity date of such
Restricted Note through the earlier of (x) the date of payment of such
interest; and (y) the Remaining Withheld Amount Payment Date, at the
rate of 5.0% per annum, compounded annually. To the extent any such
interest has not been paid on or before the Remaining Withheld Amount
Payment Date (the "Unpaid Interest"), Purchaser shall pay to Aria
Infotek interest on the Unpaid Interest from the Remaining Withheld
Amount Payment Date through the date of payment of the Unpaid Interest
at the rate of 10.5% per annum, compounded annually.
(d) In the event a notice of claim to Aria Infotek results in the extension
of the Restriction Period beyond the date which is two years after the
Closing Date (the "Second Anniversary"), (i) Aria Infotek shall, within
60 days following the Second Anniversary, be entitled to irrevocably
and unconditionally surrender for cancellation and destruction
Restricted Notes outstanding on the date of such surrender, (together
with all rights and entitlements thereunder or relating thereto), in an
aggregate principal amount no greater than the amount (if any) by which
the aggregate amount of Restricted Notes outstanding at such time,
exceeds two-hundred percent (200%) of the aggregate of all amounts then
being claimed by Purchaser against Aria Infotek under any and all
Transaction Documents (such excess, the "Excess Claim Amount"), being
Restricted Notes
25
having the latest stated maturities of all Restricted Notes; and (ii)
Purchaser shall contemporaneously with such surrender issue one or more
Promissory Notes having an aggregate principal amount equal to the
Excess Claim Amount, with each such Promissory Note, having a principle
amount equal to, and a stated maturity the same as, a Restricted Note
(or part thereof) so surrendered.
(e) If, on the date the Restriction Period expires, the aggregate principal
amount of all of the Restricted Notes outstanding on such date exceeds
the sum of all Eligible Amounts then owing or due or otherwise payable
to Purchaser (such excess, the "Excess Security Amount"), (i) Aria
Infotek shall, within 60 days of the expiration of the Restriction
Period, be entitled to irrevocably and unconditionally surrender for
cancellation and destruction Restricted Notes outstanding on such date,
(together with all rights and entitlements thereunder or relating
thereto), in an aggregate principal amount no greater than the Excess
Security Amount, being Restricted Notes having the latest stated
maturities of all Restricted Notes; and (ii) Purchaser shall
contemporaneously with such surrender issue one or more Promissory
Notes having an aggregate principal amount equal to the Excess Security
Amount, with each such Promissory Note, having a principal amount equal
to, and a stated maturity the same as, a Restricted Note (or part
thereof) so surrendered.
(f) To the extent Purchaser gives Aria Infotek notice of any set-off or
deduction of any Eligible Amount under this Agreement, Aria Infotek
shall within 5 Business Days thereof irrevocably and unconditionally
surrender for cancellation and destruction to Purchaser, any and all
Restricted Notes against which such set-off or deduction has been made,
provided however to the extent any such set-off or deduction is made
26
against less than the full principal amount of a Restricted Note,
Purchaser shall issue a replacement Restricted Note for the portion of
such principal amount not so set-off with the same maturity as such
Restricted Note.
(g) All reasonable costs and expenses relating to any exchange of
Restricted Notes for Promissory Notes as provided in this Section 3.5
shall be paid exclusively by Aria Infotek.
Section 3.6 Acknowledgement of Payment. Each Selling Shareholder shall,
upon receipt of such Selling Shareholder's Pro Rata Share of US$20,000,000 paid
to such Selling Shareholder by Purchaser as an advance payment of the Purchase
Price under and subject to the terms of the Interim Management Agreement shall
deliver to Purchaser an acknowledgment and receipt thereof.
Section 3.7 Registration of the Sale Shares. At the closing, each Selling
Shareholder shall cause the entry into the Company's register of shareholders
the name of Purchaser as the holder of the Shareholder Sale Shares purchased by
Purchaser from such Selling Shareholder, the number of such Shareholder Sale
Shares so purchased by Purchaser and the date of such purchase.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE SELLING SHAREHOLDERS
Except as specifically set forth in the Signing Disclosure Schedule (but not the
Closing Disclosure Schedule), each Selling Shareholder represents and warrants
to Purchaser that all of the statements contained in Sections 4.1, 4.3, 4.4,
4.6, 4.7, and 4.30 of this Article IV (other than statements which are expressly
made only as of the Closing Date) are true and complete as of the date of this
Agreement or, if made as of a specified date (other than expressly only as of
the Closing Date), are true and complete as of such date.
27
Except as specifically set forth in the Closing Disclosure Schedule (but not the
Signing Disclosure Schedule), each Selling Shareholder represents and warrants
to Purchaser that all of the statements contained in Sections 4.1, 4.3,
4.4, 4.6, 4.7 and 4.30 of this Article IV (and not to those statements expressly
made only as of a date other than the Closing Date) will be true and complete as
of the Closing date as though made on the Closing Date.
Except as specifically set forth in the Signing Disclosure Schedule (but not the
Closing Disclosure Schedule), each Selling Shareholder, severally and not
jointly, represents and warrants to Purchaser that all of the statements
contained in Section 4.2, 4.5, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15,
4.16, 4.17, 4.18, 4.19, 4.20, 4,21, 4.22, 4.23, 4.24, 4.25, 4.26, 4.27, 4.28,
4.29 and 4.31 of this Article IV (other than statements which are expressly made
only as of the Closing Date) are true and complete as of the date of this
Agreement or, if made as of a specified date (other than expressly only as of
the Closing Date), are true and complete as of such date.
Except as specifically set forth in the Closing Disclosure Schedule (but not the
Signing Disclosure Schedule), each Selling Shareholder, severally and not
jointly, represents and warrants to Purchaser that all of the statements
contained in Section 4.2, 4.5, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15,
4.16, 4.17, 4.18, 4.19, 4.20, 4.21, 4.22, 4.23, 4.24, 4.25, 4.26, 4.27, 4.28,
4.29 and 4.31 of this Article IV (and not to those statements expressly made
only as of a date other than the Closing Date) will be true and complete as of
the Closing date as though made on the Closing Date.
The Selling Shareholders and Purchaser agree that notwithstanding anything to
the contrary contained in this Agreement:
(A) the exceptions to the representations and warranties set forth in the
Signing Disclosure Schedule apply only to the representations and
warranties made as of the date of this Agreement or, if made as of a
specified date (other than expressly only as of the Closing Date), as
of such date; and
(B) the exceptions to the representations and
28
warranties set forth in the Closing Disclosure Schedule apply only to
the representations and warranties made as of the Closing Date as
though made on the Closing Date (and not to those statements expressly
made only as of a date other than the Closing Date).
Each exception set forth in the Signing Disclosure Schedule or the Closing
Disclosure Schedule and each other response to this Agreement set forth in the
Signing Disclosure Schedule or Closing Disclosure Schedule is identified by
reference to, or has been grouped under a heading referring to, a specific
individual Section of this Agreement and, except as otherwise specifically
stated with respect to such exception, relates only to such Section. In the
event of any inconsistency between statements in the body of this Agreement and
statements in the Signing Disclosure Schedule or the Closing Disclosure Schedule
(excluding exceptions expressly set forth in the Signing Disclosure Schedule or
the Closing Disclosure Schedule with respect to a specifically identified
Section), the statements in the body of this Agreement shall control.
Section 4.1 Legal Power; Organization; Authorization. Such Selling
Shareholder is a legal entity of the type set forth opposite such Selling
Shareholder's name on Schedule 4.1 of the Signing Disclosure Schedule and
Schedule 4.1 of the Closing Disclosure Schedule, duly organized and validly
existing under the laws of its jurisdiction of organization as set forth in
Schedule 4.1 of the Signing Disclosure Schedule and Schedule 4.1 of the Closing
Disclosure Schedule and has all requisite power and authority to execute and
deliver each of the Transaction Documents, to perform its obligations under each
of the Transaction Documents and to consummate the Transactions. Such Selling
Shareholder has taken all necessary corporate or other action to authorize the
execution and delivery of each of the Transaction Documents, the performance of
its obligations under each of the Transaction Documents and the consummation of
the Transactions.
Section 4.2 Subsidiaries and Affiliates. The Company does not (i) have any
Subsidiaries, (ii) own, directly or indirectly, any capital stock or other
securities, or any Voting Debt, of any Person or (iii) have any other direct or
indirect equity or other ownership interest in any Person other than
29
AriaWest International Finance B.V., a private limited liability company duly
incorporated and validly existing under the laws of the Netherlands. The
authorized share capital of Aria West International Finance B.V. consists only
of 2,000 shares, of which 400 shares are issued and paid-up as of the date
hereof, and is qualified to do business in the Netherlands. As of the date of
execution of this Agreement (except as set forth in Schedule 4.2 of the
Signing Disclosure Schedule), and as of the Closing Date, all the outstanding
shares of AriaWest International Finance B.V. are owned by the Company free and
clear of all Encumbrances, and are validly issued, fully paid-up and
non-assessable. AriaWest International Finance B.V. has full corporate power and
authority to carry on its business as it is now being conducted and to own or
use the properties and assets it now purports to own and use and is duly
qualified or licensed to conduct business or own property as a corporation in
every jurisdiction in which such qualification is required. True and complete
copies of the deed of incorporation and articles of association of AriaWest
International Finance B.V. as presently in effect have been delivered to
Purchaser by the Selling Shareholders.
Section 4.3 Binding Agreement. Each of the Transaction Documents to which
such Selling Shareholder is a party which are signed by such Selling Shareholder
as of the date of this Agreement has been duly executed and delivered by such
Selling Shareholder and, assuming due and valid authorization, execution and
delivery of such Transaction Document by Purchaser and each other Selling
Shareholder where required, such Transaction Document constitutes a legal,
valid and binding obligation of such Selling Shareholder, enforceable against it
in accordance with its terms and as of the Closing Date, such Selling
Shareholder represents and warrants that each of the Transaction Documents to
which such Selling Shareholder is a party which are signed by such Selling
Shareholder as of the Closing Date has been duly executed and delivered, by each
Selling Shareholder and, in each case, assuming due and valid authorization,
execution and delivery of such Transaction Document by Purchaser and each
Selling Shareholder where required, such Transaction Document constitutes a
legal, valid and binding obligation of such Selling Shareholder, enforceable
against it in accordance with its terms, except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of Purchaser's rights generally and (ii) general
equitable principles.
30
Section 4.4 Selling Shareholders' Consents and Approvals: No Conflicts,
Violations or Defaults. Neither the execution and delivery of any Transaction
Document by such Selling Shareholder, nor the consummation by any Selling
Shareholder of the Transactions, will (i) conflict with or result in any
violation or breach of any provision of the organizational documents of such
Selling Shareholder, (ii) as of the date of execution of this Agreement (except
as set forth in Schedule 4.4 of the Signing Disclosure Schedule), and as of the
Closing Date, require that such Selling Shareholder obtain any Consent of any
Governmental Entity or other Person, (iii) as of the date of execution of this
Agreement (except as set forth in Schedule 4.4 of the Signing Disclosure
Schedule), and as of the Closing Date, require any Consent under, or result in
a violation or breach of, or constitute (with or without due notice or the
passage of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any agreement, loan, lease, license, contract, commitment,
obligation, understanding, undertaking,arrangement or instrument to which such
Selling Shareholder is a party or by which such Selling Shareholder or any of
the properties or assets of such Selling Shareholder is bound or (iv) violate
any binding order, writ, injunction, decree, statute, rule or regulation
applicable to such Selling Shareholder or any of the properties or assets of
such Selling Shareholder. As of the Closing Date (except as set forth in
Schedule 4.4 of the Closing Disclosure Schedule), each Consent of any
Governmental Entity and any other Person required in order for such Selling
Shareholder to consummate the Transactions (including the Consents with respect
to such Selling Shareholder set forth in Schedule 4.4 of the Signing Disclosure
Schedule) has been obtained and remains in full force and effect.
Section 4.5 Legal Proceedings. As of the date of execution of this
Agreement (except as set forth in Schedule 4.5 of the Signing Disclosure
Schedule), and as of the Closing Date (except as set forth in
31
Schedule 4.5 of the Closing Disclosure Schedule), other than the Arbitration
Proceeding, (i) there is no Proceeding pending or, to the Knowledge of the
Selling Shareholders threatened against, involving or affecting the Company or
any of its Subsidiaries, (ii) to the Knowledge of the Selling Shareholders,
there is no Proceeding pending or threatened against, involving or affecting the
KSO Unit and (iii) to the Knowledge of the Selling Shareholders, no event has
occurred and no circumstances exist which may give rise to or serve as the basis
for the commencement of any such Proceeding. Without limiting the generality of
the foregoing, except for the Arbitration Proceeding, there is no Proceeding
pending or, to the Knowledge of the Selling Shareholders, threatened against,
involving or affecting the Company, any of its Subsidiaries, the KSO Unit or
such Selling Shareholder which questions or challenges the validity of any
Transaction Document or any action taken or to be taken by the Company, any of
its Subsidiaries, the KSO Unit or such Selling Shareholder pursuant to any
Transaction Document or in connection with the Transactions, or which may result
in the issuance of a judgment, order or decree prohibiting or making illegal the
consummation of the Transactions by the Company, any of its Subsidiaries or such
Selling Shareholder, and to the Knowledge of the Selling Shareholders, there is
no valid basis for any such Proceeding. Neither the Company, any of its
Subsidiaries nor such Selling Shareholder is subject to any judgment, order or
decree prohibiting or making illegal or otherwise adversely affecting the
consummation of the Transactions.
Section 4.6 Share Ownership.
(a) (i) As of the date of this Agreement, such Selling Shareholder (in
the case of AIF and Aria Infotek only) is the legal owner of, and has legal
title to, the Shareholder Sale Shares of such Selling Shareholder and is
registered for all purposes (legal, corporate and otherwise) as the owner of the
Shareholder Sale Shares of such Selling Shareholder, in each case free and clear
of all Encumbrances whatsoever (other than the lien securing the AriaWest Loan),
(ii) the Shareholder Sale Shares of such Selling Shareholder are now, and will
be at all times between the date hereof and the Closing, owned by such Selling
Shareholder and held by such Selling Shareholder, free and clear of all
Encumbrances whatsoever (other than the lien
32
securing the AriaWest Loan) and (iii) neither such Selling Shareholder nor any
of its Subsidiaries owns any securities issued by, or other obligations of, the
Company or any of its Subsidiaries other than the Shareholder Sale Shares of
such Selling Shareholder.
(b) As of the Closing Date, each Selling Shareholder represents and
warrants that (i) such Selling Shareholder is the legal owner of, and has legal
title to the Shareholder Sale Shares of such Selling Shareholder and is
registered for all purposes (legal, corporate and otherwise) as the owner of the
Shareholder Sale Shares of such Selling Shareholder, in each case free and clear
of all Encumbrances whatsoever; and (ii) neither such Selling Shareholder nor
any of its Subsidiaries owns any securities issued by, or other obligations of,
the Company or any of its Subsidiaries other than the Shareholder Sale Shares of
such Selling Shareholder.
Section 4.7 Legal Title Conveyed. As of the Closing Date, the share
certificates, stock powers, endorsements, assignments and other instruments and
documents delivered by such Selling Shareholder to Purchaser at the Closing will
effectively vest in Purchaser good, valid and marketable title to all of the
Shareholder Sale Shares of such Selling Shareholder free and clear of all
Encumbrances whatsoever. As of the Closing Date, such Selling Shareholder has
conveyed to Purchaser good, valid and marketable title to the Shareholder Sale
Shares of such Selling Shareholder, free and clear of all Encumbrances
whatsoever. No Person has made, or threatened to make any claim, asserting that
such Selling Shareholder is not the legal owner of the Shareholder Sale Shares
of such Selling Shareholder or that such Shareholder Sale Shares are not
authorized, validly issued or fully paid-up.
Section 4.8 Organization; Qualification of Company. The Company is a
limited liability company duly organized, validly existing and in good standing
under the laws of the Republic of
33
Indonesia, with full corporate power and authority to carry on its business as
it is now being conducted and to own or use the properties and assets it now
purports to own and use and is duly qualified or licensed to conduct business or
own property in every jurisdiction in which such qualification is required. True
and complete copies of the deed of establishment as approved by the Ministry of
Justice and Human Rights of the Republic of Indonesia and other organizational
documents and by-laws of the Company as presently in effect have been delivered
to Purchaser by such Selling Shareholder.
Section 4.9 Company's Consents and Approvals; No Conflicts, Violations or
Defaults. As of the date of execution of this Agreement (except as set forth in
Schedule 4.9 of the Signing Disclosure Schedule), and as of the Closing Date,
none of the execution, delivery or performance of any Transaction Document by
such Selling Shareholder, nor the consummation by such Selling Shareholder of
the Transactions, will (i) conflict with or result in any violation or breach of
any provision of any of the organizational documents of the Company or any of
its Subsidiaries or cause any Indebtedness to accelerate or become due or result
in a right on the part of the holder of any Indebtedness (with or without due
notice or lapse of time) to require prepayment, redemption or repurchase
thereof, (ii) require that the Company or any of its Subsidiaries obtain any
Consent of any Governmental Entity or other Person, (iii) require any Consent
under, or result in a violation or breach of, or constitute (with or without due
notice or the passage of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any Contract (x) to which the Company or any of its
Subsidiaries is a party, or by which the Company or any of its Subsidiaries or
any of the properties or assets of the Company or any of its Subsidiaries is
bound or (y) made or entered into by or on behalf, at the direction, with the
consent or under the authority of (A) any past or present Additional KSO
Employee, (B) the Company, any of its Subsidiaries or any of the Selling
Shareholders or (C) any past or present officer, director, commissioner or
employee of the Company, any of its Subsidiaries or any of the Selling
Shareholders or (iv) violate any binding order, writ, injunction, decree,
statute, rule or regulation applicable to (A) the Company or any of its
Subsidiaries or (B) any of the properties or assets of the Company or any of its
Subsidiaries (any Consents of the types referred to in the clauses (ii), (iii)
and (iv) being referred to herein as the "Required Company Consents"). As of the
Closing
34
Date, all Required Company Consents (including the Consents set forth in
Schedule 4.9 of the Signing Disclosure Schedule) have been obtained and remain
in full force and effect.
Section 4.10. Single Purpose Entity. As of the date of execution of this
Agreement (except as set forth in Schedule 4.10 of the Signing Disclosure
Schedule), and as of the Closing Date (except as set forth in Schedule 4.10 of
the Closing Disclosure Schedule),
(a) Since the date of its formation, the Company has not been engaged in
any business other than as contemplated by the KSO Agreement.
(b) Since the date of its formation, AriaWest International Finance B.V.,
has not been engaged in any business other than the financing of the
AriaWest Loan.
Section 4.11 Capitalization. The authorized capital stock of the Company
consists only of 2,704,444 Shares of which 2,704,444 Shares are issued and
paid-up as of the date hereof. The Sale Shares of each Selling Shareholder are
duly authorized, validly issued, fully paid-up and non-assessable, and were not
issued in violation of any pre-emptive rights, and (i) there is no Voting Debt
of the Company or any of its Subsidiaries issued and outstanding, (ii) as of the
date of execution of this Agreement (except as set forth in Schedule 4.11 of the
Signing Disclosure Schedule), and as of the Closing Date (except as set forth in
Schedule 4.11 of the Closing Disclosure Schedule), except as identified in the
immediately preceding sentence, there is no share capital of the Company or any
of its Subsidiaries authorized, issued, paid-up or reserved, (iii) as of the
date of execution of this Agreement (except as set forth in Schedule 4.11 of the
Signing Disclosure Schedule), and as of the Closing Date, other than this
Agreement there are no existing options, warrants, calls, pre-emptive rights,
subscriptions or other rights, agreements, contracts.
35
undertakings, understandings, obligations, arrangements or commitments of any
character, relating to the issued or unissued share capital of the Company or
any of its Subsidiaries, obligating the Company, any of its Subsidiaries or such
Selling Shareholder to issue, transfer or sell, or cause to be issued,
transferred or sold any share capital or Voting Debt of, or other equity or debt
interest in, the Company or any of its Subsidiaries or securities convertible
into or exchangeable for such shares, equity interests, options, warrants,
calls, subscriptions or other rights or Voting Debt, or obligating the Company,
any of its Subsidiaries or such Selling Shareholder to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement,
contract, undertaking, understanding, obligation, arrangement or commitment and
(iv) as of the date of execution of the Agreement (except as set forth in
Schedule 4.11 of the Signing Disclosure Schedule), and as of the Closing Date,
there are no outstanding contractual obligations of the Company, any of its
Subsidiaries or such Selling Shareholder to repurchase, redeem or otherwise
acquire any Shares or, other capital stock or Voting Debt of the Company or any
share capital or Voting Debt of any of its Subsidiaries or for the Company or
any of its Subsidiaries to provide funds to make any investment (in the form of
a loan, capital contribution or otherwise) in any Person. There are no voting
trust agreements or understandings to which the Company, any of its Subsidiaries
or such Selling Shareholder is a party with respect to the voting of the share
capital of the Company or any of its Subsidiaries.
Section 4.12 Financial Statements. As of the date of the delivery of the
Audited Financial Statements to Purchaser, and as of the Closing Date, true and
complete copies of the Audited Financial Statements, will have been delivered to
Purchaser. As of the date of the delivery of the Audited Financial Statements to
Purchaser (except as set forth in Schedule 4.12 of the Signing Disclosure
Schedule), and as of the Closing Date (except as set
36
forth in Schedule 4.12 of the Closing Disclosure Schedule), the Audited
Financial Statements will have been prepared from, will be in accordance with,
and accurately reflect, the books and records of the Company and its
Subsidiaries, comply with applicable accounting requirements in all material
respects, will have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved, will fairly present in all
material respects the consolidated financial position and the consolidated
results of operations and cash flows (and changes in financial position, if any)
of the Company and its Subsidiaries as at the times and for the periods referred
to therein. As of the date of the delivery of the Unaudited Financial Statements
to Purchaser, and as of the Closing Date, the Unaudited Financial Statements
will have been delivered to Purchaser. As of the date of delivery of the
Unaudited Financial Statements to Purchaser (except as set forth in Schedule
4.12 of the Signing Disclosure Schedule), and as of the Closing Date (except as
set forth in Schedule 4.12 of the Closing Disclosure Schedule), the Unaudited
Financial Statements will have been prepared from, will be in accordance with
and accurately reflect the books and records of the Company and its
Subsidiaries, comply in all material respects with applicable accounting
requirements except for normal year end adjustments, will have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved,
will fairly present in all material respects the consolidated financial
position and the consolidated results of operations and cash flows (and changes
in financial position, if any) of the Company and its Subsidiaries as at the
times and for the periods referred to therein, subject to normal year-end
adjustments.
Section 4.13 Books and Records. As of the date of execution of this
Agreement (except as disclosed in Schedule 4.13 of the Signing Disclosure
Schedule), and as of the Closing Date, the books of account, minute books,
register of shareholders and other records of the Company and its Subsidiaries
are true and complete in all material respects and have been maintained in
accordance with all applicable legal requirements. As of the Closing Date, true
and complete copies of all minute books and each register of shareholders of the
Company and its Subsidiaries has been delivered to Purchaser by the Selling
Shareholders, provided that, in the case of the minutes of meetings of the
shareholders, Board of Directors or the Board of Commissioners of the Company
dated on or after January 1, 2001,
37
information therein which would prejudice AriaWest's claims and defenses in the
Arbitration Proceeding (as reasonably determined by the Selling Shareholder) and
which would not be material to a purchaser of the Sale Shares but for the
Arbitration Proceeding, may be redacted by the Company prior to such delivery.
Section 4.14 No Liabilities.
(a) As of the Closing Date except for (i) the liabilities and obligations
owed to the KSO Unit or as set forth in Schedule 4.14 of the Closing
Disclosure Schedule and (ii) the AriaWest Loan as restructured pursuant
to the AriaWest Loan Restructuring Agreement, neither the Company nor
any of its Subsidiaries has any liability or obligation of any
nature, whether or not absolute, accrued, contingent or otherwise.
(b) As of the date of execution of this Agreement (except as set forth in
Schedule 4.14 of the Signing Disclosure Schedule), and as of the
Closing Date (except as set forth in Schedule 4.14 of the Closing
Disclosure Schedule), and except for (i) Indebtedness owed to Purchaser
and (ii) liabilities and obligations incurred at the direction or under
the authority of any person other than (A) any past or present
Additional KSO Employee, (B) the Company, any of its Subsidiaries, any
of the Selling Shareholders or the Affiliates of the Selling
Shareholders, or (C) any past or present officer, director,
commissioner or employee of the Company, any of its Subsidiaries, any
of the Selling Shareholders or the Affiliates of the Selling
Shareholders, the KSO Unit has no liability or obligation of any
nature, whether or not absolute, accrued, contingent or otherwise.
(c) As of the Closing Date, except for Indebtedness owed to Purchaser,
there are no liabilities or obligations of any nature, whether or not
absolute, accrued, contingent or otherwise) owed or alleged to be owed
by the Company, any of its Subsidiaries or the KSO Unit which (A) any
past or present
38
Additional KSO Employee, (B) the Company, any of its Subsidiaries, any
of the Selling Shareholders or Affiliates of the Selling Shareholders,
or (C) any past or present officer, director, commissioner or employee
of the Company, any of its Subsidiaries, any of the Selling
Shareholders or Affiliates of the Selling Shareholders has disputed or
determined to dispute or refused to pay.
Section 4.15 Accounts Receivable.
(a) As of the date of execution of this Agreement (except as set forth in
Schedule 4.15(a) of the Signing Discloser Schedule), and as of the
Closing Date (except as set forth in Schedule 4.15(a) of the Closing
Disclosure Schedule), other than the accounts receivable from the KSO
Unit, the Company and its Subsidiaries have no accounts receivable.
(b) As of the Closing Date (except as set forth in Schedule 4.15(b) of the
Closing Disclosure Schedule), neither the Selling Shareholders, the
Company nor any of its Subsidiaries has assigned, delegated or
otherwise transferred to any Person all or any interest in, or claim in
respect of, any receivables or other amounts owing to the Company or
any of its Subsidiaries from Purchaser or the KSO Unit which are
outstanding as of the date hereof or any other right of the Company,
any of its Subsidiaries or any Selling Shareholder relating thereto. As
of the Closing Date, all assignments, delegations or other transfers,
including those listed in Schedule 4.15(b) of the Closing Disclosure
Schedule, shall have been made without recourse and without any
obligation to the Company whatsoever and the Company Shall have no
liabilities or obligations in respect of such assignment, delegation or
other transfer that have not been fully performed or discharged on or
before the Closing Date.
Section 4.16 AriaWest Loan. As of the Closing Date that any and all
breaches and defaults
39
(including claims in respect thereof) under the AriaWest Loan have been
irrevocably waived and forever released by all of the parties thereto.
Section 4.17 Absence of Certain Changes. Since December 31, 2001, each of
the Company and its Subsidiaries has as of the date of execution of this
Agreement (except as set forth in Schedule 4.17 of the Signing Disclosure
Schedule), and as of the Closing Date (except as set forth in Schedule 4.17 of
the Closing Disclosure Schedule), conducted its business only in the ordinary
and usual course and consistent with past practice, and neither the Company nor
any of its Subsidiaries has:
(a) as of the date of execution of this Agreement (except as set forth in
Schedule 4.17 of the Signing Disclosure Schedule), and as of the
Closing Date (except as set forth in Schedule 4.17 of the Closing
Disclosure Schedule), suffered any Material Adverse Effect;
(b) as of the date of execution of this Agreement (except as set forth in
Schedule 4.17(b) of the Signing Disclosure Schedule), and as of the
Closing Date (except as set forth in Schedule 4.17(b) of the Closing
Disclosure Schedule), incurred any liability or obligation (absolute,
accrued, contingent or otherwise);
(c) permitted or allowed any of its property or assets (real, personal or
mixed, or tangible or intangible) to become subject to any Encumbrance
whatsoever;
(d) as of the date of execution of this Agreement (except as set forth in
Schedule 4.17(d) of the Signing Disclosure Schedule), and as of the
Closing Date (except as set forth in Schedule 4.17(d) of the Closing
Disclosure Schedule), cancelled or written off as uncollectible any
receivables or waived any claims or rights of substantial value other
than pursuant to the Transaction Documents;
(e) as of the date of execution of this Agreement (except as set forth in
Schedule 4.17(e) of the Signing Disclosure Schedule), and as of the
Closing Date (except as set forth in Schedule 4.17(e) of the Closing
Disclosure Schedule), sold, transferred, or otherwise
40
disposed of (i) any of the KSO Unit Installations or (ii) other than in
the ordinary course of business and consistent with past practice, any
of its other properties or assets (real, personal or mixed, or tangible
or intangible), in each case, except to Purchaser or the KSO Unit;
(f) as of the date of execution of this Agreement (except as set forth in
Schedule 4.17(f) of the Signing Disclosure Schedule), and as of the
Closing Date (except as set forth in Schedule 4.17(f) of the Closing
Disclosure Schedule), disposed of or permitted to lapse any rights to
the use of any Intellectual Property, or disposed of or disclosed to
any Person other than representatives of Purchaser any trade secret,
formula, process, know-how or other Intellectual Property not
heretofore a matter of public knowledge;
(g) as of the date of execution of this Agreement (except as set forth in
Schedule 4.17(g) of the Signing Disclosure Schedule), and as of the
Closing Date (except as set forth in Schedule 4.17(g) of the Closing
Disclosure Schedule), granted any increase in the compensation of
officers, directors, commissioners or employees (including any such
increase pursuant to any bonus, pension, profit sharing or other plan
or commitment) or any increase in the compensation payable or to become
payable to any officer, director, commissioner or employee, and no such
increase is customary on a periodic basis or required by agreement or
understanding for an amount in excess of US$50,000 (or equivalent in
any other currency);
(h) as of the date of execution of this Agreement (except as set forth in
Schedule 4.17(h) of the Signing Disclosure Schedule), and as of the
Closing Date, made any capital expenditure or commitment for additions
to property, plant, equipment or intangible capital assets;
(i) declared, paid or set aside for payment any dividend or other
distribution in respect of its share capital or redeemed, purchased or
41
otherwise acquired, directly or indirectly, any share capital or other
securities of the Company or any of its Subsidiaries;
(j) except as set forth in the Audited Financial Statements, made any
change in any method of accounting or accounting practice;
(k) as of the date of execution of this Agreement (except as set forth in
Schedule 4.17(k) of the Signing Disclosure Schedule), and as of the
Closing Date (except as set forth in Schedule 4.17(k) of the Closing
Disclosure Schedule), paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets (real, personal or
mixed, or tangible or intangible) to, or entered into any agreement or
arrangement with, any of its commissioners, directors or officers or
any Person controlled (as such term is defined in the definition of
"Affiliate") by any of its commissioners, directors or officers except
for commissioners' fees and compensation to directors and officers at
rates not exceeding the rates set forth in Schedule 4.17(l) of the
Closing Disclosure Schedule; or
(l) agreed or committed, whether in writing or otherwise, to take any
action described in this Section 4.17.
Section 4.18 Insurance. As of the date of execution of this Agreement,
Schedule 4.18 of the Signing Disclosure Schedule, and as of the Closing Date,
Schedule 4.18 of the Closing Disclosure Schedule, sets forth a true and complete
list of all insurance policies, other insurance arrangements and other contracts
or arrangements for the transfer or sharing of insurance risks by the Company or
any of its Subsidiaries in force on the date hereof with respect to the business
or assets of the Company or its Subsidiaries, together with a statement of the
aggregate amount of claims paid out within the last three years, and claims
pending, under each such insurance policy or other arrangement through the date
hereof. As of the date of execution of this Agreement (except as set forth in
Schedule 4.18 of the Signing Disclosure Schedule), and as of the Closing Date
(except as set forth in Schedule 4.18 of the Closing Disclosure Schedule), (a)
all such policies are in full force and effect, all premiums due
42
thereon have been paid by the Company or its Subsidiaries, and the Company and
its Subsidiaries are otherwise in full compliance with the terms and provisions
of such policies, (b) neither the Company nor any of its Subsidiaries has
received any notice of cancellation or non-renewal of any such policy or
arrangement and to the Knowledge of the Selling Shareholders the termination of
any such policies or arrangements is not threatened, (c) there is no claim
pending under any of such policies or arrangements as to which coverage has been
denied or disputed by the underwriters of such policies or arrangements and (d)
neither the Company nor any of its Subsidiaries has received any notice from any
of its insurance carriers that any insurance premiums will be increased in the
future or that any insurance coverage presently provided for will not be
available to the Company or any of its Subsidiaries in the future on
substantially the same terms as now in effect.
Section 4.19 Properties and Assets.
(a) Neither the Company nor any of its Subsidiaries has transferred, sold
or otherwise disposed of or destroyed any KSO Unit Installations. Each
of the Company and its Subsidiaries has good, valid and marketable
title to all of (i) the KSO Unit Installations in the possession of or
under the control of the KSO Unit and (ii) as of the date of execution
of this Agreement (except as set forth in Schedule 4.19 of the Signing
Disclosure Schedule), and as of the Closing Date, the properties and
assets in the possession of the Company and its Subsidiaries, in each
case free and clear of all Encumbrances whatsoever (collectively, the
"Assets"), provided however that between the date hereof and the
Closing Date, the Company intends to sell or transfer to one or more
third parties the assets listed in Schedule 4.17(e) of the Signing
Disclosure Schedule. Neither the Company nor any of its Subsidiaries
owns any land or buildings.
43
(b) Except for the Arbitration Proceeding, there is no Proceeding pending,
or to the Knowledge of the Selling Shareholders, threatened against,
involving or affecting any of the Assets. Neither the Company nor any
of its Subsidiaries is a party to any lease, assignment or similar
arrangement under which the Company or any of its Subsidiaries is a
lessor or assignor of, or otherwise makes available for use by any
third-party, any of the Assets.
(c) Each of the Company and its Subsidiaries has obtained all appropriate
certificates, licenses, easements and rights of way required to use and
operate the Assets in the manner in which the Assets are currently
being used and operated. True and complete copies of all such
certificates, permits and licenses in respect of any Real Property have
been furnished to Purchaser by the Selling Shareholders. Each of the
Company and its Subsidiaries has all approvals, permits and licenses
necessary to own or operate the Assets as currently owned and operated,
and no such approvals, permits or licenses will be required, as a
result of the Transactions, to be issued after the date hereof in order
to permit each of the Company and its Subsidiaries, following the
Closing, to continue to own or operate the Assets in the same manner as
heretofore.
Section 4.20 Leases. As of the date of execution of this Agreement, Schedule
4.20 of the Signing Disclosure Schedule, and as of the Closing Date, Schedule
4.20 of the Closing Disclosure Schedule, contains an accurate and complete list
of all of the Leases in effect. A true and complete copy of each Lease set
forth in Schedule 4.20 of the Signing Disclosure Schedule and Schedule 4.20 of
the Closing Disclosure Schedule has been delivered to Purchaser by the Selling
Shareholders. Each Lease is valid, binding and enforceable in accordance with
its terms and is in full force and effect. The leasehold estate created by each
Lease is free and clear of all Encumbrances whatsoever and has been registered
with the appropriate Governmental Entity of the Republic of Indonesia.
44
There are no existing defaults under any of the Leases by any of the parties
thereto. No event has occurred that (whether with or without notice, lapse of
time, or the happening or occurrence of any other event) would constitute a
default under any Lease. Such Selling Shareholder has not received written
notice, nor has any other reason to believe, that any lessor under any Lease
will not consent (where such consent is necessary) to the consummation of the
Transactions without requiring any modification of the rights or obligations of
the lessee thereunder.
Section 4.21 Environmental Matters. To the Knowledge of the Selling
Shareholders, each of the Company and its Subsidiaries is in full compliance
with all Environmental Laws. The Company has not received any written
communication, whether from a Governmental Entity of the Republic of Indonesia,
citizens group, employee or otherwise, that alleges that the Company or any of
its Subsidiaries is not in full compliance with any Environmental Laws.
Section 4.22 Contracts and Commitments.
(a) As of the date of execution of this Agreement, Schedule 4.22(a) of the
Signing Disclosure Schedule, and as of the Closing Date, Schedule
4.22(a) of the Closing Disclosure Schedule, contains a complete and
accurate list of all agreements, contracts, licenses, instruments,
obligations and commitments of any kind, whether written or oral,
including all indentures, loans, mortgages leases, notes, installment
obligations (including finance leases), consulting agreements, services
agreements and agreements for the sale of goods or provision of
services, any agreement to acquire any debt obligations of others,
power of attorney or any obligations or liabilities (whether absolute,
accrued, contingent or otherwise), as guarantor, surety, co-signer,
endorser, co-maker, indemnitor or otherwise in respect of the
obligation of any other Person, corporation, partnership, joint
venture, association, organization or other entity (collectively, the
"Contracts") for which any of the following apply: (i) to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or any of their properties or assets may be
bound or (ii) entered into by or on behalf, at the
45
direction, with the consent or under the authority of (A) any past or
present Additional KSO Employee, (B) the Company, any of its
Subsidiaries or any of the Selling Shareholders, (C) any past or
present officer, director, commissioner or employee of the Company, any
of its Subsidiaries or any of the Selling Shareholders or (D) any past
or present officer, director, commissioner or employee of any Affiliate
of any Selling Shareholder to which the KSO Unit is a party or by which
the KSO Unit or any of its properties or assets may be bound.
(b) Except for the KSO Agreement, each of the Contracts is a legal, valid,
binding and enforceable obligation of the parties thereto, except as
the enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of Purchaser's rights generally and (ii) general equitable
principles. Except for the KSO Agreement, neither the Company nor any
of its Subsidiaries is in default under or in violation of, nor has any
event occurred that with the giving of notice or lapse of time or both
would constitute a default or event of default under, nor is there any
valid basis for any claim of default under or violation of, any
Contract. To the Knowledge of the Selling Shareholders, the KSO Unit is
not in default under or in violation of any Contract and no event has
occurred that with the giving of notice or lapse of time or both would
constitute a default or event of default under, and there is no basis
for any claim of default under or violation of, any Contract. To the
Knowledge of the Selling Shareholders, there has been no default,
violation or event that with the giving of notice or lapse of time or
both would constitute a default or event of default on the part of any
other party to a Contract except for the KSO Agreement. As of the
Closing Date, each Contract then in effect was entered into in the
ordinary course of business consistent with past practice.
46
Section 4.23 Labor; Employee Benefit Plans.
(a) Each of the Company and its Subsidiaries is and has at all times been,
in compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment, wages, hours
of work and occupational safety and health, and neither the Company nor
any of its Subsidiaries is engaged in any unfair labor practices, as
defined in any applicable laws. As of the date of execution of this
Agreement Schedule 4.23(a) of the Signing Disclosure Schedule, and as
of the Closing Date, Schedule 4.23(a) of the Closing Disclosure
Schedule, lists each employee of the Company.
(b) There is no Proceeding pending or threatened against the Company or any
of its Subsidiaries by or on behalf of any past or present Additional
KSO Employee or any past or present officer, director, commissioner or
employee of the Company, any of its Subsidiaries or, to the Knowledge
of the Selling Shareholders, the KSO Unit in respect of the employment
practices of the Company or any of its Subsidiaries.
(c) As of the date of execution of this Agreement (except as set forth in
Schedule 4.23 of the Signing Disclosure Schedule), and as of the
Closing Date, neither the Company nor any of its Subsidiaries has or
has had any Plans.
Section 4.24 Compliance with Laws. As of the date of execution of this Agreement
(except as set forth in Schedule 4.24 of the Signing Disclosure Schedule), and
as of the Closing Date, each of the Company and its Subsidiaries has complied
with all laws, rules and regulations, judgments, decrees and orders of all
Governmental Entities that affect the business, properties, assets or interests
of the Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries has received any notice, charge, claim, action or assertion
alleging any violation of any laws, rules and regulations, judgments, decrees or
orders of any
47
Governmental Entity that affect the business, properties, assets or interests of
the Company or any of its Subsidiaries and no such notice, charge, claim, action
or assertion has been filed, commenced or to the Knowledge of the Selling
Shareholders threatened against the Company or any of its Subsidiaries. To the
Knowledge of the Selling Shareholders, the KSO Unit has not received any notice,
charge, claim, action or assertion alleging any violation of any laws, rules and
regulations, judgments, decrees or orders of any Governmental Entity that affect
the business, properties, assets or interests of the KSO Unit and to the
Knowledge of the Selling Shareholders no such notice, charge, claim, action or
assertion has been filed, commenced or threatened against the KSO Unit.
Section 4.25 Insider Interests, Debt and Guarantees. As of the date of execution
of this Agreement (except as set forth in Schedule 4.25 of the Signing
Disclosure Schedule), and as of the Closing Date (except as set forth in
Schedule 4.25 of the Closing Disclosure Schedule), none of the past or present
directors, commissioners, officers, employees, statutory auditors or
shareholders of the Company, any of its Subsidiaries, any of the Selling
Shareholders, or any of the Affiliates of the Company, any of its Subsidiaries
or any of the Selling Shareholders, or any entity in which any such person or
entity has a significant economic or financial interest (other than the Company
and its Subsidiaries), any past or present Additional KSO Employee, (each a
"Related Person") is a party to or has any interest in any contracts or
agreement, arrangement or understanding (whether oral or otherwise) or property
(real or personal, or tangible or intangible), including any Intellectual
Property, used in or pertaining to the business or assets of the Company, any of
its Subsidiaries or the KSO Unit. Neither the Company, any of its Subsidiaries
nor the KSO Unit has any outstanding liabilities, obligations or Indebtedness to
any Related Person, and no Related Person has outstanding any liabilities,
obligations or Indebtedness to the Company, any of its Subsidiaries or the KSO
Unit. Except for the AriaWest Loan, neither the Company, any of its Subsidiaries
nor the KSO Unit has entered into any guarantees, keep-xxxxx or financial
support arrangements or other accommodations to any third-party with respect to
Indebtedness of any Related
48
Person or with respect to Indebtedness of any of their Affiliates.
Section 4.26 Tax Matters.
(a) As of the date of this Agreement (except as set forth in Schedule
4.26(a) of the Signing Disclosure Schedule) and as of the Closing Date
(except as set forth in Schedule 4.26(a) of the Closing Disclosure
Schedule), each of the Company and its Subsidiaries has duly filed all
Tax Returns that are required to be filed and has duly paid or caused
to be duly paid in full all Taxes for all periods or portions thereof
ending through the date hereof (whether or not shown on any Tax
Return). All such Tax Returns are correct and complete and accurately
reflect all liability for Taxes for the periods covered thereby.
(b) There are no liens for Taxes upon any property or assets of the Company
or any of its Subsidiaries.
(c) As of the date of this Agreement (except as set forth in Schedule
4.26(c) of the Signing Disclosure Schedule), and as of the Closing Date
(except as set forth in Schedule 4.26(c) of the Closing Disclosure
Schedule), each of the Company and its Subsidiaries has complied in all
respects with all applicable laws, rules and regulations relating to
the payment and withholding of Taxes and have, within the manner
prescribed by law, withheld and paid over to the proper taxing
authorities all amounts required to be so withheld and paid over under
applicable laws.
(d) All Tax deficiencies that have been claimed, proposed or asserted
against the Company or any of its Subsidiaries have been fully paid or
finally settled, and no issue has been raised in any examination by any
taxing authority that, by application of similar
49
principles, could reasonably be expected to result in the proposal or
assertion of a Tax deficiency for another taxable period not so
examined.
(e) As of the date of execution of this Agreement (except as set forth in
Schedule 4.26 of the Signing Disclosure Schedule), and as of the
Closing Date, no power of attorney has been granted by or with respect
to the Company or any of its Subsidiaries with respect to any matter
relating to Taxes.
(f) As of the date of execution of this Agreement (except as set forth in
Schedule 4.26 of the Signing Disclosure Schedule), and as of the
Closing Date, neither the Company nor any of its Subsidiaries is a
party to, is bound by or has any obligation under any Tax sharing
agreement, Tax indemnification agreement or similar contract or
arrangement, and neither the Company nor any of its Subsidiaries has
any potential liability or obligation to any Person as a result of, or
pursuant to, any such agreement, contract or arrangement.
(g) There is no Proceeding pending or threatened concerning any Tax
liability of the Company.
(h) Within 20 days of the date of execution of this Agreement, true and
complete copies of all Tax Returns of each of the Company and its
Subsidiaries have been delivered to Purchaser by the Selling
Shareholders (other than Tax Returns that shall not have been required
to be filed as of such date).
(i) As of the date of execution of this Agreement (except as set forth in
Schedule 4.26 of the Signing Disclosure Schedule), and as of the
Closing Date (except as set forth in Schedule 4.26 of the Closing
Disclosure Schedule), since December 31, 2001, the Company has not
set-off any taxable income against the Tax Loss Carryforwards.
50
(j) Within 20 days of the date of execution of this Agreement, true and
complete copies of each of (i) all audit reports, letter rulings,
technical advice memoranda and similar documents issued by a
Governmental Entity relating to Taxes due from or with respect to the
Company or any of its Subsidiaries and (ii) all closing agreements
entered into by the Company or any of its Subsidiaries with any taxing
authority have been delivered to Purchaser by the Selling Shareholders,
and as of the Closing Date, no such agreements have been entered into
by the Company or any of its Subsidiaries between the date of execution
of this Agreement and the Closing Date.
(k) As of the date of execution of this Agreement (except as set forth in
Schedule 4.26 of the Signing Disclosure Schedule), and as of the
Closing Date, neither the Company nor any of its Subsidiaries has any
liability with respect to income, franchise or similar Taxes relating
to the operation of the Company or any of its Subsidiaries prior to
December 31, 2001 in excess of the amounts that are accrued with
respect thereto and are reflected in the Financial Statements, and
since the date of the Financial Statements, none of the Company nor any
of its Subsidiaries has incurred any liability for Taxes, except with
respect to operations in the ordinary course of business consistent
with past practice after December 31, 2001. All Taxes owed and due by
each of the Company and its Subsidiaries relating to operations of the
Company and its Subsidiaries for all periods or portions thereof ending
through the date hereof (whether or not shown on any Tax Return) have
been duly paid in full.
(l) Neither the Company nor any of its Subsidiaries has received written
notice of any claim made by an authority in a jurisdiction where
neither the Company nor any of its Subsidiaries files Tax Returns, that
the Company is or may be subject to taxation
51
by that jurisdiction.
Section 4.27 Intellectual Property.
(a) Each of the Company and its Subsidiaries owns or otherwise possesses
valid and enforceable licenses for all Intellectual Property currently
used in or necessary for the conduct of the business of the Company and
its Subsidiaries, and the consummation of the Transactions will not
alter or impair any such ownership, possession, right or licenses in
any respect. The Company is in full compliance with the terms and
conditions of all licenses for all Intellectual Property.
(b) There is no opposition, cancellation, invalidity, interference or
re-examination proceeding or other Proceeding presently pending or
threatened with respect to any Intellectual Property used in the
business of the Company or any of its Subsidiaries. The conduct of the
business of the Company and its Subsidiaries and the use by the Company
and its Subsidiaries of such Intellectual Property does not infringe
any Intellectual Property right or any other proprietary right of any
Person.
(c) To the Knowledge of the Selling Shareholders, there is no opposition,
cancellation, invalidity, interference or re-examination proceeding or
other Proceeding presently pending or threatened with respect to any
Intellectual Property used in the business of the KSO Unit. To the
Knowledge of the Selling Shareholders, the conduct of the business of
the KSO Unit and the use by the KSO Unit of such Intellectual Property
does not infringe any Intellectual Property right or any other
proprietary right of any Person.
(d) Neither (A) any past or present Additional KSO Employee, (B) the
Company, any of its Subsidiaries or any of the Selling Shareholders nor
(C) any past or present officer, director, commissioner or employee of
the Company, any of its Subsidiaries or any of the Selling Shareholders
has received any written notice from any other Person
52
pertaining to or challenging the right of the Company, any of its
Subsidiaries or the KSO Unit to use any of the Intellectual Property
currently used in the businesses of the Company, any of its
Subsidiaries or the KSO Unit. Neither the Company nor any of its
Subsidiaries has made, or has grounds for making, any claim of a
violation or infringement by any other Person of its rights to or in
connection with the Intellectual Property used in the business of the
Company or any of its Subsidiaries.
Section 4.28 License. As of the date of execution of this Agreement (except as
set forth in Schedule 4.28 of the Signing Disclosure Schedule), and as of the
Closing Date (except as set forth in Schedule 4.28 of the Closing Disclosure
Schedule), the License is owned by the Company, is valid and enforceable and has
not been cancelled, terminated, suspended or otherwise altered or impaired in
any way. Prior to July 9, 2001, the Company was not in breach of, and was in
full compliance with, all of the terms and conditions of the License. For the
period on and following July 9, 2001, to the Knowledge of the Selling
Shareholders, the Company has not breached and is in full compliance with, all
of the terms and conditions of the License. For the purposes of the second and
third sentences of this Section 4.28, (but for no other purpose), to the extent
any actual or alleged breach or default by the Company of the KSO Agreement
which is the subject of the Arbitration Proceeding would constitute a breach or
default by the Company of the License, such breach or default shall be deemed to
be properly disclosed to Purchaser in the Signing Disclosure Schedule and the
Closing Disclosure Schedule. The consummation of the Transactions will not alter
or impair the License, any rights of the Company with respect to the License or
the Company's ownership of the License in any respect. There is no opposition,
cancellation, invalidity, interference or re-examination proceeding or other
Proceeding presently pending or threatened relating to or in connection with the
License. Neither (A) any past or present Additional KSO Employee, (B) the
Company, any of its Subsidiaries, or any of the Selling Shareholders or their
respective Affiliates nor (C) any past or present officer, director,
commissioner or employee of the Company, any of its Subsidiaries or any of the
Selling Shareholders has received any written notice from any other Person
pertaining to or challenging the right of the Company, any of its Subsidiaries
or the KSO Unit to use the License.
53
Section 4.29 Bank Accounts. As of the date of execution of this Agreement,
Schedule 4.29 of the Signing Disclosure Schedule, and as of the Closing Date,
Schedule 4.29 of the Closing Disclosure Schedule, sets forth the names and
locations of all banks, and other financial institutions at which the Company,
and its Subsidiaries maintain, or any of the past or present Additional KSO
Employees has signature authority over or rights relating to, safe deposit
boxes, savings, time deposit or checking accounts or other accounts of any
nature and the names of all Persons authorized to draw thereon, make withdrawals
therefrom or have access thereto.
Section 4.30 Brokers or Finders. None of the Company, any of its Subsidiaries or
such Selling Shareholder has entered into any agreement or arrangement entitling
any agent, broker, investment banker, financial advisor or other firm or Person
to any broker's or finder's fee or any other commission or similar fee in
connection with any of the Transactions except Canadian Imperial Bank of
Commerce, Singapore office and Prince Consulting, whose fees and expenses will
be paid or otherwise satisfied in full by the Company prior to Closing in
accordance with the Company's and/or Selling Shareholders, agreements with such
firms.
Section 4.31 Full Disclosure. No representation or warranty by such Selling
Shareholder contained in the Transaction Documents, Signing Disclosure Schedule,
Closing Disclosure Schedule, Audited Financial Statements, Unaudited Financial
Statements, certificates and other documents delivered pursuant to the
Transaction Documents, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary, in light
of the circumstances under which it was or will be made, to make the statements
herein or therein not misleading.
54
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
PURCHASER
Purchaser represents and warrants to each Selling Shareholder that:
Section 5.1 Organization. Purchaser is a limited liability company duly
organized and validly existing under the laws of the Republic of Indonesia and
has all requisite power and authority to execute and deliver each of the
Transaction Documents, to perform its obligations under each of the Transaction
Documents and to consummate the Transactions.
Section 5.2 Authorization: Validity of Agreement. Purchaser has taken all
corporate or other action necessary to execute and deliver each of the
Transaction Documents and to perform its obligations under each of the
Transaction Documents. The consummation by Purchaser of the Transactions has
been duly authorized by Purchaser's Board of Commissioners and, except for the
approval of the General Meeting of Shareholders of Purchaser, no other corporate
action on the part of Purchaser is necessary to authorize the consummation by
Purchaser of the Transactions. As of the Closing Date, the approval of a General
Meeting of Shareholders of Purchaser of the consummation by Purchaser of the
Transactions has been obtained and remains in full force and effect.
Section 5.3 Binding Agreement. Each of the Transaction Documents which are
signed as of the date of this Agreement has been duly executed and delivered by
Purchaser and, assuming due and valid authorization, execution and delivery of
such Transaction Document by the Selling Shareholders where required, such
Transaction Document constitutes a legal, valid and binding obligation of
Purchaser, enforceable against it in accordance with its terms and as of the
Closing Date, each of the Transaction Documents which are signed as of the
Closing Date has been duly executed and delivered by Purchaser and, in each
case, assuming due and valid authorization, execution and delivery of such
Transaction Document by the Selling Shareholders where required, such
Transaction Document constitutes a legal, valid and binding obligation of
Purchaser, enforceable against it in accordance with its terms, except (i) as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of the Selling
Shareholders' rights generally and (ii) general equitable principles.
55
Section 5.4 Consents and Approvals: No Conflicts, Violations or Defaults. Except
for such Consents as are set forth in Schedule 5.4 of the Purchaser Disclosure
Schedule, neither the execution or delivery of any Transaction Document by
Purchaser nor the consummation by Purchaser of the Transactions will (i)
conflict with or result in any breach of any provision of Purchaser's
organizational documents, (ii) require that Purchaser obtain any Consent of any
Governmental Entity or any other Person, (iii) require any Consent under, or
result in a violation or breach of, or constitute (with or without due notice or
the passage of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any agreement, loan, lease, license, contract,
commitment, obligation, understanding, undertaking, arrangement or instrument to
which Purchaser is a party or by which Purchaser or any of its properties or
assets is bound or (iv) violate any binding order, writ, injunction, decree,
statute, rule or regulation applicable to Purchaser or any of its properties or
assets. As of the Closing, each Consent of any Governmental Entity and any other
Person required in order for Purchaser to consummate the Transactions
(including, without limitation, the Consents set forth in Schedule 5.4 of the
Purchaser Disclosure Schedule) shall have been obtained and remains in full
force and effect.
Section 5.5 Legal Proceedings. Except for the Arbitration Proceeding, there are
no Proceedings pending against, involving or affecting Purchaser which question
or challenge the validity of any Transaction Document or any action taken or to
be taken by Purchaser pursuant to any Transaction Document or in connection with
the Transactions, or which may result in the issuance of a judgment, order or
decree prohibiting or making illegal the consummation of the Transactions by
Purchase, and to the knowledge of Purchaser, there is no valid basis for any
such Proceeding. Purchaser is not subject to any judgment, order or decree
prohibiting or making illegal or otherwise adversely affecting the consummation
by Purchaser of the Transactions.
Section 5.6 Brokers or Finders. Purchaser has not entered into any agreement or
arrangement entitling any agent, broker, investment banker, financial advisor
or other firm or Person to any
56
broker's or finder's fee or any other commission or similar fee in connection
with any of the Transactions, except Xxxxxxx Xxxxx Barney, whose fees and
expenses will be paid by Purchaser in accordance with Purchaser's agreement with
such firm.
ARTICLE VI
COVENANTS
Section 6.1 Interim Operations of the Company. The Selling Shareholders shall
severally and not jointly cause each of the Company and its Subsidiaries, from
the date hereof to the Closing Date, except (i) as expressly provided in the
Transaction Documents or (ii) as may be agreed in writing by Purchaser:
(a) (i) to conduct its business diligently and in accordance with all
applicable laws and regulations, (ii) not to hire any permanent
employees, (iii) not to take any action or fail to act resulting in the
cancellation, termination, suspension or other alteration or impairment
in any way of the License and (iv) not to take any action which would
impair any existing relations with customers or suppliers of goods or
services, provided however that none of the Company, its Subsidiaries
nor the Selling Shareholders shall be prohibited from taking any action
(even if such action impairs such existing relations) related to the
settlement of liabilities of the Company as contemplated by this
Agreement;
(b) not to (i) amend its organizational documents, (ii) issue, sell,
transfer, pledge, dispose of or encumber any shares of any class or
series of its share capital, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of
any kind to acquire, any shares of any class or series of its capital
stock or any Voting Debt, (iii) declare, set aside or pay any dividend
or other distribution payable in cash, stock or property with respect
to any shares of any class or series of its capita] stock, (iv) split,
combine or reclassify any shares of any class or series of its capital
stock or (v) redeem, purchase or otherwise acquire, directly or
indirectly, any shares of any class or series of its capital stock, or
any instrument or security which consists of or
57
includes a right to acquire such shares;
(c) not to organize any new Subsidiary or acquire any capital stock or
other equity securities, or equity or ownership interest in the
business, of any other Person;
(d) not to modify, amend or terminate any Contract set forth in Schedule
4.22 of the Closing Disclosure Schedule or waive, release or assign any
rights or claims thereunder;
(e) not to (i) incur or assume any Indebtedness (except for Indebtedness to
shareholders of the Company), (ii) assume, guarantee, endorse or
otherwise take any action to become liable or responsible (whether
directly, contingently or otherwise) for the liabilities or obligations
of any other Person, (iii) except as set forth in Schedule 4.15(b) of
the Closing Disclosure Schedule, assign, delegate or otherwise transfer
to any Selling Shareholder or any third-party all or any interest in,
or claim in respect of, any receivables or other amounts that are owing
to the Company or any of its Subsidiaries from Purchaser or the KSO
Unit or any other rights of the Company or any of its Subsidiaries or
any Selling Shareholder whether in respect of the KSO Unit or
otherwise, provided however in each case that any such assignment,
delegation or other transfer shall have been made without recourse and
without any obligation to the Company whatsoever and the Company shall
have no liabilities or obligations in respect of such assignment,
delegation or other transfer that have not been fully performed or
discharged on or prior to the Closing Date, (iv) dispose of or permit
to lapse any rights to any Intellectual Property or (v) change any of
the banking or safe deposit arrangements described or referred to in
any part of the Signing Disclosure Schedule or the Closing Disclosure
Schedule or open any new safe deposit boxes, savings, time deposit or
checking accounts or other accounts of any nature, in each except to
transfer to the Person designated by Purchaser (to the sole and
absolute satisfaction of Purchaser) all
58
authority, right or interest in such banking or safe deposit
arrangements;
(f) except is set forth in Schedule 4.17(e) of the Closing Disclosure
Schedule, not to sell, lease, license, hypothecate, mortgage, pledge,
transfer or otherwise encumber or dispose or destroy any assets or
property except to the KSO Unit;
(g) except as set forth in Schedule 4.17(g) of the Closing Disclosure
Schedule or as may otherwise be directly related to payments of
severance, bonus or success fees (provided however that such the
aggregate amount of such payments shall not exceed US$6,000,000), not
to increase the compensation payable or to become payable to any of its
officers, directors, commissioners, employees, agents or consultants
(other than Prince Consulting, Canadian Imperial Bank of Commerce,
Singapore office, Ernst & Young and PriceWaterhouseCoopers) or to
Persons providing management services including by entering into or
amending any employment, severance, consulting, termination or other
agreement with, or employee benefit plan for, by making any loan or
advance to, any of its officers, directors, commissioners, employees,
agents or consultants (other than Prince Consulting Canadian Imperial
Bank of Commerce, Singapore office, Ernst & Young and
PriceWaterhouseCoopers) or by making any change in its existing
borrowing or lending arrangements for or on behalf of any of such
Persons pursuant to an employee benefit plan or otherwise, provided
however that on and from the closing Date the Company shall have no
liabilities or obligations in respect of any payments or other actions
by the Company in respect of any of the matters as contemplated by this
Section 6.1(g);
(h) neither the Company nor any of its Subsidiaries shall permit any
insurance policy in effect as of the date hereof and
59
naming it as a beneficiary or a loss payable payee to be canceled or
terminated;
(i) not to adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries;
(j) not to (i) change any of the accounting methods used by it unless
required by GAAP or (ii) except as set forth in Schedule 4.26(j) of the
Signing Disclosure Schedule, make any election relating to Taxes,
change any election relating to Taxes already made, adopt any
accounting method relating to Taxes, change any accounting method
relating to Taxes unless required by GAAP, enter into any closing
agreement relating to Taxes, settle or consent to any claim or
assessment relating to Taxes (except with respect to Taxes listed in
Schedule 4.26(a) and Schedule 4.26(c) of the Signing Disclosure
Disclosure) or waive the statute of limitations for any such claim or
assessment; and
(k) not to enter into any agreement, contract, commitment or arrangement to
do any of the foregoing.
Section 6.2 Access; Confidentiality.
(a) From the date hereof until the Closing Date, each Selling Shareholder,
severally and not jointly, shall cause the Company to (i) afford
Purchaser and its authorized representatives reasonable access to all
books, records, offices and other facilities of the Company, its
Subsidiaries and (to the extent within the control of any of the
Company, its Subsidiaries, or such Selling Shareholder or any of its
Affiliates) the KSO Unit, to the Assets and to personnel and suppliers
of each of the Company and its Subsidiaries (ii) permit Purchaser to
make such inspections (including making such reasonable investigations
and assessments, as Purchaser deems necessary or appropriate in its
sole and absolute discretion) of the condition of
60
such properties or the business conducted there and to make copies of
such books and records as it may reasonably require and (iii) furnish
Purchaser with such financial and operating data and other information
as Purchaser may from time to time reasonably request. Purchaser and
its authorized representatives shall use reasonable efforts to conduct
all such inspections in a manner that will minimize disruptions to the
business and operations of the Company, its Subsidiaries and the KSO
Unit. Notwithstanding the foregoing, the Company shall not be required
to disclose to Purchaser any information (i) the disclosure of which
would prejudice AriaWest's claims and defenses in the Arbitration
Proceeding (as reasonably determined by the Selling Shareholders) and
(ii) which would not be material to a purchaser of the Sale Shares but
for the Arbitration Proceeding.
(b) From the date hereof and at all times thereafter, except as otherwise
provided herein, each of the Selling Shareholders and Purchaser shall,
and shall (in the case of the Selling Shareholder severally and not
jointly) use its reasonable efforts to cause the consultants, advisors
and representatives of the Company and its Subsidiaries to, treat the
terms of the Transaction Documents and all nonpublic, confidential or
proprietary information concerning the Company, its Subsidiaries and
the KSO Unit as strictly confidential (except to the extent such
information is requested to be disclosed by judicial or administrative
process or, in the reasonable opinion of the disclosing party, by other
requirements of law), provided that (i) prior to the Closing, Purchaser
may use and disclose such information in connection with Purchaser's
evaluation of the Transactions, including evaluation of the acquisition
of the Sale Shares, negotiation of the Transaction Documents,
preparation and circulation of any disclosure, notice or other
materials in connection with Purchaser's meeting of shareholders and
obtaining any other required Consents and (ii) as and from the Closing
Date Purchaser shall not be subject to any such limitation. Each of the
Selling Shareholders shall (as and from the
61
Closing Date), and shall (severally and not jointly) use its reasonable
efforts to cause such Selling Shareholder's consultants, advisors and
representatives to, refrain from using or disclosing such information,
except (A) to the extent requested to be disclosed by judicial or
administrative process or by other requirements of law, (B) as required
for internal reporting or archival purposes or (C) for use in any
Proceeding.
Section 6.3 Efforts and Actions to Cause Closing to Occur.
(a) Prior to the Closing, upon the terms and subject to the conditions of
this Agreement, each Selling Shareholder and Purchaser shall use, and
each Selling Shareholder shall (severally and not jointly) cause the
Company and its Subsidiaries to use, its respective reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be
done and to cooperate with each other in order to do, all things
necessary, proper or advisable (subject to any applicable laws) to
consummate the Closing and the Transactions as promptly as practicable
but in any event prior to August 30, 2002 (including the preparation
and filing of all forms, registrations and notices required to be filed
to consummate the Closing and the Transactions and the taking of such
actions as are necessary to obtain any requisite Consents of any
Governmental Entity or any other Person). In addition, no party hereto
shall take any action after the date hereof that could reasonably be
expected to materially delay the obtaining of, or result in not
obtaining, any permission, approval or consent from any Governmental
Entity or other Person required to be obtained prior to Closing,
provided that this restriction shall not apply to the date chosen by a
party hereto for its general meeting of shareholders of that party.
Nothing in this Agreement shall require a party to hold its general
meeting of shareholders on or by any
62
particular date.
(b) Prior to the Closing, each party hereto shall promptly consult with the
other parties hereto with respect to, provide any necessary information
with respect to, and provide, upon request, the other parties (or their
respective counsel) with copies of, all filings made by such party with
any Governmental Entity or any other information supplied by such party
to a Governmental Entity in connection with this Agreement and the
Transactions. If any party hereto receives a request for additional
information or documentary material from any such Governmental Entity
with respect to any of the Transactions, then such party shall endeavor
in good faith to make, or cause to be made, as soon as reasonably
practicable and after consultation with the other parties, an
appropriate response in compliance with such request.
(c) Nothing in this Section 6.3 shall require Purchaser (i) to waive, or
otherwise exercise in a particular manner any discretion it may have
under, any condition to Closing, (ii) to divest or hold separately any
assets or agree to limit its future activities, method or place of
doing business, (iii) to commence any litigation against any entity in
order to facilitate the consummation of any of the Transactions or (iv)
to defend against any litigation brought by any Governmental Entity or
other Person seeking to prevent the consummation of, or impose
limitations on, any of the Transactions.
(d) Each of the Selling Shareholders shall vote in favor of all
resolutions of the Company and any other Person which are necessary to
consummate the Transactions.
63
Section 6.4 Notification of Certain Matters.
(a) Each Selling Shareholder shall give notice to Purchaser promptly after
becoming aware of (i) the occurrence or non-occurrence of any event
whose occurrence or non-occurrence would be likely to cause either (A)
(x) any representation or warranty of such Selling Shareholder
contained in this Agreement or in any certificate of such Selling
Shareholder delivered in connection herewith that is qualified as to
materiality or any representation or warranty of such Selling
Shareholder in Sections 4.1, 4.3, 4.6, 4.7, 4.8, 4.11, 4.14, 4.16, 4.26
and 4.28 to be untrue or incorrect in any respect and (y) other than
the representations and warranties in Sections 4.1, 4.3, 4.6, 4.7, 4.8,
4.11, 4.14, 4.16, 4.26 and 4.28, any representation or warranty of such
Selling Shareholder contained in this Agreement or in any certificate
of such Selling Shareholder delivered in connection herewith that is
not so qualified (considered individually), and all such
representations and warranties that are not so qualified (considered
collectively); to be untrue or incorrect in any material respect at any
time from the date hereof to the Closing Date or (B) any condition set
forth in Article VII to be unsatisfied in any respect at any time from
the date hereof to the Closing Date and (ii) any material failure of
such Selling Shareholder, the Company, any of its Subsidiaries or any
director, commissioner, employee or agent of such Selling Shareholder,
the Company or any of its Subsidiaries, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder at any time from the date hereof to the Closing, provided
however, that the delivery of any notice pursuant to this Section 6.4
shall not limit or otherwise affect the remedies available hereunder to
Purchaser nor shall any delivery of any notice be deemed, to affect
amend or supplement any representation and warranty or the Signing
Disclosure Schedule or the Closing Disclosure Schedule hereunder.
64
(b) Purchaser shall give notice to the Selling Shareholders promptly after
becoming aware of (i) the occurrence or non-accurrence of any event
whose occurrence or non-occurrence would be likely to cause either (A)
(x) any representation or warranty of Purchaser contained in this
Agreement (considered individually), and all such representations and
warranties (considered collectively), to be untrue or incorrect in any
material respect at any time from the date hereof to the Closing Date
or (B) my condition set forth in Sections 7.1, 7.2(a), 7.2(b), 7.2(c),
7.2(f), 7.2(g), 7.2(b), or 7.2(j) to be unsatisfied in any respect at
any time from the date hereof to the Closing Date and (ii) any material
failure of Purchaser or any director, commissioner, employee or agent
of any Purchaser, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder, provided
however, that the delivery of any notice pursuant to this Section
6.4(b) shall not limit or otherwise affect the remedies available
hereunder to the Selling Shareholders.
Section 6.5 Termination of Employees. On or prior to the Closing Date, each
Selling Shareholder shall (severally and not jointly) cause each of the Company
and its Subsidiaries to (i) terminate the employment of each and every one of
the employees of each of the Company and its Subsidiaries, (ii) obtain from each
such terminated employee a release substantially in the form annexed hereto as
Exhibit J and (iii) pay all costs expenses and liabilities of every kind and
description associated with or related to such employees (including their
termination).
Section 6.6 Further Assurances. If at any time after the Closing Purchaser
considers or is advised that any deeds, bills of sale, instruments of
conveyance, assignments, assurances or any other actions or things are necessary
or desirable (i) to vest, perfect or, confirm ownership (of record or
65
otherwise) in Purchaser, its right, title or interest in, to or under any or all
of the Sale Shares, (ii) to vest, perfect or confirm ownership (of record or
otherwise) in the Company or any of its Subsidiaries, any of their rights,
properties or assets or (iii) otherwise to carry out this Agreement or the other
Transaction Documents or consummate the Transactions, each of the Selling
Shareholders agrees that it shall, upon written request of Purchaser and at the
sole cost and expense of Purchaser, execute and deliver all deeds, bills of
sale, instruments of conveyance, powers of attorney, assignments and assurances
and take and do all such other reasonable actions and things as may be
reasonably requested by Purchaser in order to vest, perfect or confirm any and
all right, title and interest in, to and under such rights, properties or assets
in Purchaser or the Company or any of its Subsidiaries or otherwise to carry out
this Agreement or the other Transaction Documents, or consummate the
Transactions.
Section 6.7 Public Notice. The initial press release with respect to the
execution of this Agreement shall be a joint press release acceptable to
Purchaser and the Selling Shareholders. On or prior to June 30, 2002 (unless
otherwise agreed to by the parties hereto), each Selling Shareholders shall
(severally and not jointly) cause the Company to publish a notice substantially
in the form annexed hereto as Exhibit S. The parties agree mat the notice shall
be published in one or more newspapers and other publications, and be of such
size, form, style and specification as determined by Purchaser in its sole and
absolute discretion.
Section 6.8 Mail Received After Closing. Following the Closing, (i) Purchaser
may receive and open all mail addressed to the Company, any of its Subsidiaries
or the KSO Unit and deal with the contents thereof in its discretion to the
extent that such mail and the contents thereof relate to the Company, any of its
Subsidiaries or the KSO Unit, and to the extent that such mail and the contents
thereof do not relate to the Company, any of its Subsidiaries or the KSO Unit,
Purchaser shall forward such mail to the applicable Selling
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Shareholder and (ii) each Selling Shareholder shall forward mail received by it
relating to the Company, say of its Subsidiaries or the KSO Unit to Purchaser.
Section 6.9 Financial Statements. Each Selling Shareholder shall (severally and
not jointly) use its reasonable efforts to cause the Company to provide
Purchaser with true and complete copies of the Audited Financial Statements and
the Unaudited Financial Statements on or prior to May 30, 2002, provided however
that no Selling Shareholder shall be responsible or have any liability for any
delays in finalizing the Audited Financial Statements or Unaudited Financial
Statements as a result of Purchaser, the Company and the KSO Unit failing to
reach mutually acceptable agreement regarding the proper characterization,
recognition, tax and/or accounting treatment of various disputed amounts between
and among such parties.
Section 6.10 Advertisement. On, or within 5 Business Days following, the Closing
Date, Aria Infotek shall unconditionally satisfy in full the requirements of
Indonesia Law. No. 1 1995 (Company Law) to advertise the sale of its Shareholder
Sale Shares in a newspaper circulated in Jakarta, Indonesia.
Section 6.11 Covenants of Purchaser.
(a) Purchaser agrees from the date hereof until the Closing Date, except
(i) as expressly provided in the Transaction Documents or (ii) as may
be agreed in writing by the Selling Shareholders; not to take, or agree
to or commit to take, any action that would or is reasonably likely to
result in any of the conditions to the Closing set forth in Sections
7.1, 7.2(a), 7.2(b), 7.2(c), 7.2(f), 7.2(g), 7.2(h), or 7.2(j) not
being satisfied or that would or is reasonably likely to impair the
ability of the Company, Purchaser or the Selling Shareholders to
consummate the Closing in accordance with the terms hereof or delay
such consummation.
(b) If (i) the AriaWest Loan shall have been restructured in form and
substance
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acceptable to Purchaser in its sole and absolute discretion pursuant to
the AriaWest Loan Restructuring Agreement and (ii) any and all breaches
and defaults (including claims in respect thereof) under the AriaWest
Loan shall have been irrevocably waived and forever released by all of
the parties to the AriaWest Loan, Purchaser shall guarantee the
Company's obligations under the restructured AriaWest Loan pursuant to
the AriaWest Restructuring Loan Agreement.
(c) From and after the Closing Date, to the extent the Company after the
Closing Date receives cash proceeds from any of the receivables listed
in Schedule 4.15(b) which were assigned to the Selling Shareholders
prior to the Closing Date, Purchaser shall cause the Company as soon as
reasonably practicable to remit such proceeds (without interest) to the
Selling Shareholders, provided that (i) at the Closing the Selling
Shareholders, acting unanimously as a group, shall have submitted in
writing to the Company and Purchaser instructions setting forth with
reasonable specificity the name of the payor of such proceeds, the
aggregate amount of such proceeds, the pro rata share of such proceeds
to which each Selling Shareholder is entitled and the details of the
bank accounts to which such proceeds should be remitted, (ii) the
Company shall be entitled to deduct, withhold and set-off against such
payment any and all amounts required to be withheld and deducted on
account of Taxes and any reasonable costs and expenses incurred by
Purchaser in remitting such proceeds to the Selling Shareholders, and
(iii) notwithstanding anything to the contrary contained in this
Agreement, the Company shall have no liability or obligations under
this provision unless and only to the extent that the Company was
grossly negligent in effecting the payment of such proceeds to the
Selling Shareholders (but in no event shall such liability exceed the
aggregate amount of all such proceeds not received by any of Selling
Shareholders).
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Section 6.12 Covenants of Selling Shareholders.
(a) Each of the Selling Shareholders agrees from the date hereof until the
Closing Date, except (i) as expressly provided in the Transaction
Documents or (ii) as may be agreed in writing by the Selling
Shareholders, not to take, or agree to or commit to take, any action
that would or is reasonably likely to result in any of the conditions
to the Closing set forth in Article VII not being satisfied or that
would or is reasonably likely to impair the ability of the Company,
Purchaser or the Selling Shareholders to consummate the Closing in
accordance with the terms hereof or delay such consummation.
(b) As soon as practicable following the date of this Agreement and in any
event, prior to the Closing. MediaOne covenants and agrees with
Purchaser to cause, effect and procure (i) the consummation of the
transfer to MediaOne of legal ownership of, and legal title to, all of
the Sale Shares which MediaOne has agreed to sell to Purchaser under
this Agreement (the "Relevant Shares") and (ii) the registration for
all purposes (legal, corporate and otherwise) of MediaOne as the owner
of the Relevant Shares, in each case free of all Encumbrances
whatsoever (other than the lien securing the AriaWest Loan).
Section 6.13 Agreements Among the Selling Shareholders. As and from the date of
execution of this Agreement until the date of termination of this Agreement, (i)
each of the Selling Shareholders irrevocably waives and releases any and all of
such Selling Shareholder's rights, including any options, warrants, calls, puts,
subscription rights, rights of first refusal and pre-emptive rights, to acquire,
transfer, or sell any or all of the Sale Shares under or pursuant to (A) the
Joint Venture Agreement dated September 27, 1995 among the Selling Shareholders,
as amended and (B) the Articles of Association of the Company, (ii) AIF
irrevocably and unconditionally covenants and agrees not to
69
exercise any or all of its rights to sell, transfer or otherwise dispose any or
all of the Sale Shares under or pursuant to the put option dated November 16,
1995 between Aris Infotek and AIF, the letter agreement dated March 10, 1999
between Aria Infotek and AIF or the letter agreement dated December 10, 2001
between Aria Infotek and AIF, and (iii) each Selling Shareholder accepts and
consents and agrees to such waivers and releases of all such rights and
covenants and other agreements by each of the other Selling Shareholders.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party's Obligation to Effect the Closing. The
respective obligation of each party to effect the Closing shall be subject to
the satisfaction at or prior to the Closing Date of each of the following
conditions:
(a) Statutes; Court Orders. No statute, rule, regulation or decree shall
have been enacted or promulgated by any Governmental Entity which
prohibits the consummation of the Closing or the Transactions; and
there shall be no order, writ or injunction of a court of competent
jurisdiction in effect precluding consummation of the Closing or the
Transactions.
(b) Termination. The Transactions shall not have been terminated or
abandoned in accordance with the terms of this Agreement.
(c) Purchaser's Consents. Each of the Consents necessary for the
consummation of the Transactions by Purchaser (including as set forth
in Schedule 5.4 of the Purchaser Disclosure Schedule) shall have been
obtained and shall be in full force and effect.
(d) Company's Consents. Each of the Required Company Consents (including as
set forth in Schedule 4.9 of the Signing Disclosure Schedule) shall
have been obtained and shall be in full force and effect.
(e) Selling Shareholders' Consents. Each of the
70
Consents necessary for the consummation of the Transactions by each of
the Selling Shareholders (including as set forth in Schedule 4.4 of the
Signing Disclosure Schedule) shall have been obtained and shall be in
full force and effect.
(f) No Legal Proceedings. Since the date of this Agreement, there shall not
have been commenced or threatened against Purchaser, any Subsidiary of
Purchaser, the Company, any of its Subsidiaries, the KSO Unit or any
Selling Shareholder, any Proceeding (i) involving any challenge to, or
seeking damages or other relief in connection with, the Transactions or
(ii) that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with the Transactions.
(g) The foregoing conditions are for the benefit of all of the Selling
Shareholders and Purchaser and may be waived only by all of them. The
failure by any party at any time to exercise any of the foregoing
rights shall not be deemed to be a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at
any time and from time to time.
Section 7.2 Conditions to Obligations of Purchaser to Effect the Closing. The
obligations of Purchaser to consummate the Closing shall be subject to the
satisfaction on or prior to the Closing Date of each of the following
conditions:
(a) Accuracy of Representations and Warranties of each Selling Shareholder.
(i) All of the representations and warranties of each of the Selling
Shareholders in this Agreement or in any certificate delivered in
connection herewith that are qualified as to materiality and the
representation and warranties of each Selling Shareholders in Sections
4.1, 4.3, 4.6, 4.7, 4.8, 4.11, 4.14, 4.16, 4.26 and 4.28 shall have
been true and complete in all respects and (ii) other than the
representations and warranties in Sections 4.1, 4.3, 4.6, 4.7, 4.8,
4.11, 4.14, 4.16, 4.26 and 4.28, each of the representations and
warranties of each of the Selling Shareholders in this Agreement or in
any certificate delivered in connection herewith that is not so
qualified (considered individually), and all such representations and
warranties that are not so qualified
71
(considered collectively), shall have been true and complete in all
material respects, in each case as of the date of this Agreement (or,
if made as of a specified date, as of such date) and will be true and
complete as of the Closing Date as though made on the Closing Date.
(b) Performance by each Selling Shareholders.
(i) All of the covenants and obligations that each Selling
Shareholder is required to perform or to comply with pursuant
to this Agreement and the other Transaction Documents at or
prior to the Closing (considered collectively), and each of
these covenants and obligations (considered individually),
shall have been duly performed and complied with in all
material respects.
(ii) Each document required to be executed and/or delivered
pursuant to Section 3.2 shall have been executed or delivered.
(c) Material Adverse Effect. There shall not have occurred any Material
Adverse Effect;
(d) AriaWest Loan. (i) The AriaWest Loan shall have been restructured in
form and substance acceptable to Purchaser in its sole and absolute
discretion pursuant to the AriaWest Loan Restructuring Agreement and
(ii) any and all breaches and defaults (including claims in respect
thereof) under the AriaWest Loan shall have been irrevocably waived and
forever released by all of the parties to the AriaWest Loan in form and
substance satisfactory to Purchaser in its sole and absolute
discretion.
(e) Tax Loss Carryforward. (i) The Company shall have available to it Tax
Loss Carryforwards of not less than Rp.
72
1,710,000,000,000 as of December 31, 2001, (ii) the Director General of
Taxation of the Government of the Republic of Indonesia shall have
provided the Tax Clearance Letters (surat ketetapan xxxxx) and (iii) no
Governmental Entity (including the Taxation authorities of the Republic
of Indonesia) or any other Person shall have instituted or threatened
any Proceeding that challenges the validity of any terms of any such
letter, notification or amount of such Tax Loss Carryforwards.
(f) License. The License shall be valid and enforceable and shall not have
been cancelled, terminated, suspended, or otherwise altered or impaired
in any way. No opposition, cancellation, invalidity, interference or
re-examination proceeding or other Proceeding shall have been commenced
or threatened relating to or in connection with the License and there
shall not have occurred at any time any breach of any of the terms and
conditions of the License which could reasonably be foreseen to
adversely affect the validity or enforceability of the License.
(g) Performance by the Company. All of the covenants and obligations that
the Company is required to perform or comply with pursuant to the
Transaction Documents at or prior to the Closing (considered
collectively), and each of the these covenants and obligations
(considered individually), shall have been duly performed and complied
with in all material respects.
73
(h) Officers, Directors, Commissioners and Employees. Each and every one of
the officers, directors, commissioners and employees of the Company and
its Subsidiaries shall have resigned or been terminated by -the Company
and its Subsidiaries, (ii) each of the releases referred to in Sections
3.2(f) and 6.5 shall have been delivered to Purchaser and (iii) the
Company and its Subsidiaries shall have paid all costs expenses and
liabilities of every kind and description associated with or related to
such resignations or termination of such officers, directors,
commissioners and employees.
(i) Investigations; Etc. Neither any investigations of the Company or any
of its Subsidiaries by Purchaser nor any certificate of any Selling
Shareholder or other document delivered to Purchaser as contemplated by
this Agreement shall have revealed any circumstance, event, change or
effect which, in the sole and absolute judgment of Purchaser, reflect
in a material adverse way to the business, operations, prospects,
assets, condition (financial or otherwise), liabilities (absolute,
accrued, contingent or otherwise), or results of operations of the
Company and its Subsidiaries taken as a whole.
(j) Simultaneous Closings. The sale and purchase of the Sale Shares of not
less than all of the Selling Shareholders' Shareholder Sale Shares
shall be consummated at the Closing.
(k) Forensic Audit Fee. On or before June 30, 2002, any and all liabilities
of the Company, the KSO Unit and Purchaser and their Affiliates to
PriceWaterhouseCoopers shall have been fully paid and discharged and
an irrevocable and unconditional release of the Company, the KSO Unit,
Purchaser and their Affiliates in form and substance satisfactory to
Purchaser in its sole and absolute discretion shall have been received
from PriceWaterhouseCoopers for, any and all claims and demands under
or in connection with the engagement letter dated September 18, 2000
and any other agreements related to the forensic audit of the KSO Unit
by PriceWaterhouseCoopers pursuant to the Good Faith Interim Solutions
Agreement
74
dated September 11, 2000.
(l) Audited Financial Statements and Unaudited Financial Statements. The
Audited Financial Statements and the Unaudited Financial Statements
shall have been delivered to Purchaser and such Audited Financial
Statements and Unaudited Financial Statements shall in substance be
satisfactory to Purchaser in its sole and absolute discretion, provided
that for the purpose of this Section 7.2(l) only, the disputed items
set forth in Annex 4.12 to Schedule 4.12 of the Closing Disclosure
Schedule will be deemed to be satisfactory to Purchaser.
(m) Bank Accounts. For any bank accounts over which any past or present
Additional KSO Employee or any past or present officer, director,
commissioner or employee of the Company or any of its Subsidiaries has
signature authority or other rights or interests, such authority, right
or interest shall have been validly and irrevocably transferred to such
Person designated by Purchaser to the sole and absolute satisfaction of
Purchaser.
(n) Waivers, Releases and Agreements. The Selling Shareholders shall have
delivered to Purchaser all waivers, releases, agreements, receipts,
consents, approvals and other documents evidencing the final,
irrevocable and unconditional settlement and resolution with no
liability or obligation to the Company of each of the matters listed in
Schedule 7.2(n) of the Closing Disclosure Schedule in form and
substance satisfactory to Purchaser in its sole and absolute
discretion, including final and binding judgments or rulings of each
relevant judicial authority evidencing the final and unconditional
dismissal with prejudice of any Proceeding.
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(o) Amendment of KSO Agreement. The Company and Purchaser shall have
amended the KSO Agreement in form and substance satisfactory to
Purchaser in its sole and absolute discretion.
(p) Import Duty and Value Added Taxes. The Company shall have received from
each of (i) the Director General of Customs and Excise and (ii) the
Director General of Taxation, in each case of the Government of the
Republic of Indonesia, one or more rulings satisfactory to Purchaser in
its sole and absolute discretion establishing that the Company shall
have no liability or obligation whatsoever to pay import duty or value
added taxes in respect of the matters disclosed in Schedule 4.14(a) of
the Closing Disclosure Schedule and no Governmental Entity (including
the Taxation or Customs and Excise authorities of the Republic of
Indonesia) or any other Person shall have instituted or threatened any
Proceeding that challenges the validity of any such ruling.
(q) Transfer of Title. Each of (i) the transfer to MediaOne of legal
ownership of, and legal title to, the Relevant Shares and (ii) the
registration for all purposes (legal, corporate or otherwise) of
MediaOne as the owner of such Sale Shares, in each case free of all
Encumbrances whatsoever, shall have been unconditionally and
irrevocably effected to the satisfaction of Purchaser in its sole and
absolute discretion, and Purchaser shall have received documentary
evidence that MediaOne has legal ownership of and legal title to, and
is registered as the owner of the Relevant Shares, to the satisfaction
of Purchaser in its sole and absolute discretion.
(r) Approval of Central Committee for the Settlement of Labor Disputes. On
or prior to the Closing Date, the Company shall have obtained written
approval from the Central Committee for the Settlement of Labor
Disputes (Panitia Penyelesaian Perselisihan Perburuhan Pusat) of the
Company's plan to conduct a mass termination (PHK Massal) of its
employees, in form and substance satisfactory to Purchaser in its sole
and absolute discretion.
The foregoing conditions are for the sole benefit of Purchaser, may be waived by
Purchaser, in whole or
76
in part, at any time and from time to time in the sole discretion of Purchaser.
The failure by Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
Section 7.3 Conditions to Obligations of the Selling Shareholders to Effect the
Closing. The obligations of each Selling Shareholder to consummate the Closing
shall be subject to the satisfaction on or prior to the Closing Date of each of
the following conditions:
(a) Accuracy of Representations and Warranties of Purchaser. All of the
representations and warranties of Purchaser set forth in this Agreement
or in any certificate delivered in connection herewith that are
qualified as to materiality shall have been true and complete in all
respects and each such representation and warranty that is not so
qualified (considered individually), and all such representations and
warranties that are not so qualified (considered collectively), shall
have been true and complete in all material respects as of the Closing
Date.
(b) Performance by Purchaser.
(i) All of the covenants and obligations that Purchaser is
required to perform or to comply with pursuant to the
Transaction Documents at or prior to the Closing (considered
collectively), and each of the covenants and obligations
(considered individually), shall have been duly performed and
complied with in all material respects.
(ii) Each of the documents required to be delivered by Purchaser
pursuant to Section 3.3 shall have been delivered.
(iii) Each of the Shareholder Initial Payments shall have been paid
by Purchaser to each of the Selling
77
Shareholders in accordance with Section 3.4(a).
(c) Release of Pledge. The AsiaWest Loan Restructuring Agreement shall not
restrict the transfer of the Sale Shares by the Selling Shareholders to
Purchaser.
(d) Waiver of Defaults. Any and all breaches and defaults (including claims
in respect thereof) under the AsiaWest Loan shall have been irrevocably
waived and forever released by all of the parties to the AsiaWest Loan
in form and substance satisfactory to each of the Selling Shareholders
in such Selling Shareholder's sole and absolute discretion.
(e) Settlement Agreement Payment. Purchaser shall have, contemporaneous
with Closing, paid to the Company the US$20,000,000 Settlement Amount
under and in accordance with the terms of the Settlement Agreement.
The foregoing conditions are for the sole benefit of such Selling Shareholder,
may be waived by such Selling Shareholder, in whole or in part, at any time and
from time to time in the sole discretion of such Selling Shareholder. The
failure by such Selling Shareholder at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated:
(a) At any time prior to the Closing Date, by the mutual written consent of
Purchaser, on the one hand, and each of the Selling Shareholders,
unanimously acting as a group, on the other hand;
(b) At any time prior to the Closing Date, by Purchaser or the Selling
Shareholders, unanimously acting as a group, if any Governmental Entity
shall have issued an order, decree or ruling or taken any other
78
action (which order, decree, ruling or other action the parties hereto
shall have used their reasonable efforts to lift), which prohibits the
acquisition of the Sale Shares by Purchaser and such order, decree,
ruling or other action shall have become final and non-appealable;
(c) By the Selling Shareholders, unanimously acting as a group:
(i) at any time prior to the Closing Date, if Purchaser shall have
breached in any material respect any of its representations,
warranties, covenants or other agreements contained in this
Agreement which would give rise to the failure of a condition
set forth in Article VII and such breach has not been cured
(if capable of being cured) within 10 days of the date the
Selling Shareholders notified Purchaser of such breach or
waived by each of the Selling Shareholders; or
(ii) on or after August 30, 2002, if the Closing shall not have
theretofore occurred and if the failure of the Closing to
occur is not the result of a breach of a covenant by any
Selling Shareholder;
(iii) at any time prior to the Closing Date, if the Selling
Shareholders have not received US$20,000,000 (less any
applicable Taxes permitted to be withheld or deducted by
Purchaser) in accordance with, Section 1(a)(ii) of the Interim
Management Agreement; or
(iv) at any time prior to the Closing Date, if Purchaser has
breached its
79
obligations to lend US$1,750,000 (less any applicable Taxes
permitted to be withheld or deducted by Purchaser) to the
Selling Shareholders pursuant to, and in accordance with,
Section 2(a)(ii) of the Interim Management Agreement.
(d) By Purchaser:
(i) at any time prior to the Closing Date, if any Selling
Shareholder shall have breached any representation, warranty,
covenant or other agreement contained in this Agreement which
would give rise to the failure of a condition set forth in
Article VII and such breach has not been cured (if capable of
being cured) within 10 days of the date Purchaser notified
such Selling Shareholder of such breach or waived by
Purchaser; or
(ii) on or after August 30, 2002, if the Closing shall not have
theretofore occurred and if the failure of the Closing to
occur is not the result of a breach of a covenant by
Purchaser.
(e) Prior to May 17, 2002, by AIF if prior to that date AIF shall not have
received adequate documentation and/or assurances satisfactory to it in
its sole and absolute discretion as to the transfer, immediately
following Closing, by Aria Infotek of $15,000,000 of Promissory Notes
to AIF in full and final satisfaction of Aria Infotek's obligations to
AIF under the put option agreement dated November 16, 1995 between Aria
Infotek and AIF.
Section 8.2 Effect of Termination.
(a) In the event of the termination of this Agreement by Purchaser, the
Selling Shareholders, (unanimously, acting as a group) or AIF, pursuant
to the terms of this Agreement, written notice thereof shall forthwith
be given to the other parties hereto,
80
specifying the provision hereof pursuant to which such termination is
made, following termination of this Agreement, there shall be no
liability or obligation thereafter on the part of Purchaser or any of
the Selling Shareholders under this Agreement except for (i) fraud or
breach of covenant or agreement (but not breach of a representation or
warranty) under this Agreement arising prior to such termination and
(ii) under Section 6.2, Article IX (other than Sections 9.2(a)(i), (b)
and (c) and 9.3(a), each of which shall survive and continue in force)
and Article X.
(b) In the event of the termination of this Agreement by Purchaser, the
Selling Shareholders (unanimously, acting as a group) or AIF, pursuant
to the terms of this Agreement, the terms of this Agreement and the
other Transaction Documents shall be without prejudice to the claims
and defenses of the parties in the Arbitration Proceeding and shall not
be used in any way whatsoever as or otherwise disclosed in the
Arbitration Proceeding or any other proceeding (other than in any
proceeding under any Transaction Document). Without limiting the
foregoing, in such event, the terms of the Transaction Documents shall
not be deemed, used or construed as evidence of any guilt or an
admission on the part of any party of any liability or wrongdoing
whatsoever, or of the truth of any allegations, claims or counterclaims
asserted in the Arbitration Proceeding.
(c) To the extent any party has a claim for breach of a representation or
warranty or for indemnification under any of Sections 9.2(a)(i), (b)
and (c) or 9.3(a), which claim arises prior to the Closing Date, such
party agrees not to commence an arbitration proceeding in respect of
such claim until on or after the Closing Date.
Section 8.3 Waiver of Court Pronouncement. Purchaser and the Selling
Shareholders hereby waive the provisions of Article 1266 of the Indonesian Civil
Code to the extent it requires a court pronouncement in respect of termination
of this Agreement.
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ARTICLE IX
INDEMNIFICATION
Section 9.1 Survival of Covenants, Representations and Warranties; Effect of
Investigation. Each of the covenants, agreements, representations, warranties
and obligations of the parties in this Agreement, the Schedules and Exhibits
hereto, the Signing Disclosure Schedule, the Closing Disclosure Schedule, any
certificate or other document delivered pursuant to this Agreement or in any
amendment of or supplement to the foregoing shall survive the Closing Date and
shall continue in force (i) indefinitely with respect to each covenant contained
in Sections 6.2(b) and 6.6 and the representations and warranties set forth in
Sections 4.1, 4.2, 4.3, 4.4, 4.6, 4.7, 4.8, 4.9, 4.11, 5.1, 5.2, 5.3 and 5.4,
(ii) until the date which is 60 calendar days after the expiration of all
applicable statutes of limitations (including all extensions, permissive or
automatic) with respect to Section 4.26 and (iii) until the earlier of (x) the
second anniversary of the Closing Date and (y) the date which is forty-five days
following the date the Company receives from the Company's auditors their signed
audit report, together with the Company's audited financial statements for the
fiscal year ending December 31, 2003 with respect to each covenant, agreement,
representation and warranty contained herein other than those described in
clauses (i) or (ii) above, after which it shall be of no force or effect;
provided that the foregoing limitations shall not apply in the event of
fraudulent misrepresentation or fraudulent conduct; and, provided further if
Purchaser shall have notified the Selling Shareholders of one or more claims for
indemnification under this Article IX, such notice setting forth with reasonable
specificity the nature of the claim, the foregoing limitations shall not apply
to such claims until such claims are finally resolved or settled between the
parties hereto or a final arbitral award (or other judgment, if applicable) has
been issued by an arbitral tribunal (or other tribunal with competent
jurisdiction) with respect to such claims. The right to indemnification, payment
of Damages, set-off (as set forth in Sections 3.5 and 10.10 only) or other
remedy based on any representation, warranty, covenant or obligation of a party
hereto contained in or made pursuant to this Agreement shall not be affected by
(A) any investigation conducted with respect to, or (B) any knowledge acquired
(or capable of being acquired) at any time with respect to, or (C) any
notification delivered pursuant to Section 6.4 with respect to, the accuracy or
inaccuracy of or compliance with, any such representation, warranty, covenant or
obligation. The waiver of any condition to consummation of the Transactions,
where such condition is based on the accuracy of any representation or warranty,
or on the performance of or compliance with any covenant or obligation, shall
not affect the right to
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indemnification, payment of Damages, set-off (as set forth in Section 3.5 and
10.10 only) or other remedy based on such representation, warranty, covenant or
obligation.
Section 9.2 Indemnification and Payment of Damages by the Selling Shareholders.
Each Selling Shareholder shall, severally and not jointly, indemnify and bold
harmless Purchaser for and against:
(a) any and all Damages, arising from or in connection with:
(i) any breach of any representation or warranty made by such
Selling Shareholder in any Transaction Document or in any
certificate or document delivered by such Selling Shareholder
in connection with any Transaction Document; or
(ii) any breach by such Selling Shareholder of any covenant or
obligation of such Selling Shareholder under any Transaction
Document;
(b) any and all Taxes imposed upon the Company on or prior to the Closing
Date; and
(c) the amount in Rupiah of any Tax Loss Carryforward as of December 31,
2001 which as a result of fraud cannot be offset against Indonesian
taxable income of the Company (the "Denied Amount") but only to the
extent that (i) (A) (x) the amount of Tax Loss Carryforwards available
to the Company as of December 31, 2001 as set forth in the Tax
Clearance Letters minus (y) the Denied Amount, is less than (B)
Rp.1,710,000,000,000, multiplied by (ii) fifteen percent, provided
however that the
83
Selling Shareholders' maximum liability to Purchaser under this Section
9.2(c) shall be Rp.51,000,000,000 (excluding reasonable attorney's fees
and expenses, reasonable, accountant's fees and expenses and other
reasonable fees and expenses incurred in the investigation or defense
of any of the same or in asserting, preserving or enforcing any of the
rights of Purchaser under this Section 9.2).
Except as expressly set forth in the Transaction Documents, such
Selling Shareholder is not making any representation, warranty,
covenant or agreement with respect to the matters contained in the
Transaction Documents.
Section 9.3 Indemnification and Payment of Damages by Purchaser. Purchaser shall
indemnify and hold harmless each Selling Shareholder for and against any and all
Damages, arising from or in connection with:
(a) any breach of any representation or warranty made by Purchaser in any
Transaction Document or in any certificate delivered by Purchaser in
connection with any Transaction Document; or
(b) any breach by Purchaser of any covenant or obligation of Purchaser
under any Transaction Document.
Except as expressly set forth in the Transaction Documents, Purchaser
is not making any representation, warranty, covenant or agreement with
respect to the matters contained in the Transaction Documents.
Section 9.4 Procedure for Indemnification - Third-Party Claims.
(a) The indemnified party under Sections 9.2 or 9.3 (an "Indemnified
Party") shall give the indemnifying party under such Section (an
"Indemnifying Party") prompt notice of any third-party claim that may
give rise to any indemnification obligation under this Article IX. Such
notice shall describe with reasonable specificity the nature of such
claim. Failure to give such notice shall not affect the Indemnifying
Party's obligations hereunder in the absence of actual and
84
material prejudice. A claim for indemnification for any matter not
involving a third-party claim may be asserted by notice to the party
from whom indemnification is sought.
(b) The Indemnified Party shall give each Indemnifying Party prompt notice
of any third-party claim that may give rise to any indemnification
obligation under this Article IX and the Indemnifying Party shall have
the right to participate in or assume the defense (at the Indemnifying
Party's expense) of any such claim through counsel of the Indemnifying
Party's own choosing by so notifying the Indemnified Party within 30
days of the first receipt by any Indemnifying Party of such notice from
the Indemnified Party, provided however that any such counsel shall be
reasonably satisfactory to the Indemnified Party. If the Indemnifying
Party participates in or assumes the defense of a third-party claim,
(i) it will be conclusively established for the purposes of this
Agreement and the other Transaction Documents that all of the claims
and issues presented in such third-party claim are within the scope of
and subject to indemnification by the Indemnifying Party, (ii) the
Indemnifying Party will be bound by any final determination made in
such Proceeding or any compromise or settlement effected by the
Indemnifying Party of such third-party claim, and (iii) no compromise
or settlement of any such claim may be effected by the Indemnifying
Party without the Indemnified Party's prior written consent unless (A)
there is no finding or admission of any violation of law or regulation
or any violation of the rights of any Person and no effect on any other
claims that may be made against the Indemnified Party, the Company or
any of its Subsidiaries and (B) the sole relief provided is monetary
damages that are paid in full by the Indemnifying Party. If notice of a
third-party claim is given to an Indemnifying Party and the
Indemnifying Party does not, within 30 days after the Indemnified
Party's written notice is given, give notice to the Indemnified Party
of its election to assume the defense of such claim, the Indemnifying
Party shall (i) reasonably cooperate with the Indemnified Party's
preparation and actual defense of such claim, including by providing
information, cooperating in
85
preparation of pleadings and other submissions and procuring the
appearance of witnesses (to the extent within its reasonable control),
all as reasonably requested by Indemnified Party, and (ii) be bound by
any final determination made in such Proceeding or any compromise or
settlement effected by the Indemnified Party. The Indemnifying Party
shall (severally and not jointly if the Selling Shareholders are the
Indemnifying Parties) be liable for the reasonable fees and expenses of
counsel employed by the Indemnified Party for any period during which
the Indemnifying Party has not assumed the defense of any such
third-party claim (other than during any period in which the
Indemnified Party will have failed to give notice of the third-party
claim as provided above). If the Indemnifying Party participates in or
assumes such defense, the Indemnified Party shall (severally and not
jointly if the Selling Shareholders are the Indemnifying Parties)
reasonably cooperate at the Indemnifying Party's sole cost with the
Indemnifying Party's preparation and actual defense of such claim,
including by providing information, cooperating in preparation of
pleadings and other submissions and procuring the appearance of
witnesses (to the extent within its reasonable control), all as
reasonably requested by Indemnifying Party and have the right to
participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the Indemnifying Party,
it being understood that the Indemnifying Party shall control such
defense, provided however that if the Indemnified Party determines in
good faith that a conflict exists between it and the Indemnifying Party
with respect to any significant issue in respect of such third-party
claim, the Indemnifying Party shall pay the reasonable fees and
expenses of such additional counsel as may be required to be retained
by the Indemnified Party in order to avoid or prevent such conflict.
86
Section 9.5 Survival of Indemnification Claims. The indemnification obligations
set forth in this Article IX shall survive the Closing and termination
hereunder.
Section 9.6 Limitations on Liability of the Selling Shareholders.
(a) Subject to Section 9.6(b), a Selling Shareholder shall not be liable
under this Agreement in respect of any claim unless the aggregate
amount of all claims for which such Selling Shareholder would otherwise
be liable hereunder exceeds such Selling Shareholder's Pro Rata Share
of US$705,000 (or equivalent in any other currency) but if the
aggregate liability of all such claims exceeds such Selling
Shareholder's Pro Rata Share of US$705,000 (or equivalent in any other
currency), then such Selling Shareholder shall be liable for all such
claims, including such Selling Shareholder's Pro Rata Share of the
initial US$ 705,000 (or equivalent in any other currency) of claims.
(b) Section 9.6(a) shall not apply to, and each Selling Shareholder shall
be immediately liable for, all claims (i) under Sections 9.2(b) and
9.2(c) and (ii) with respect to any breach of representation and
warranty under Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9,
4.10, 4.11, 4.14, 4.16, 4.26 and 4.28.
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(c) Each Selling Shareholder's maximum aggregate liability to Purchaser
under this Agreement for breaches of representations and warranties,
covenants or agreements shall be such Selling Shareholder's Pro Rata
Share of US$184,500,000 (the "Liability Cap") (exclusive of reasonable
attorney's fees and expenses, reasonable accountant's fees and expenses
and other reasonable fees and expenses incurred in the investigation or
defense of any of the same or in asserting, preserving or enforcing any
of the obligations of such Selling Shareholder under this Agreement),
provided however that the foregoing limitation shall not apply to (x)
fraudulent misrepresentation or fraudulent conduct by such Selling
Shareholder and (y) any interest payable by a Selling Shareholder as
a result of such Selling Shareholder's breach under Section 1(c) of the
Interim Management Agreement (together (x) and (y), the "Cap
Exceptions"). Except where the Cap Exceptions apply, and without
limiting the Liability Cap but for the purposes of determining the
timing of payments only, each such Selling Shareholder and Purchaser
agree that if at any time (the "Relevant Time") Purchaser is entitled
to recover any amount from such Selling Shareholder under this
Agreement, the maximum aggregate amount that such Selling Shareholder
shall be required to pay at the Relevant Time (for each such Relevant
Time, the "Payment Cap") shall not exceed the sum of (without
duplication between clauses (ii) and (iii) below): (i) such Selling
Shareholder's Pro Rata Share of US$64,500,000, (ii) the aggregate
principal amount of (x) all Promissory Notes originally issued to such
Selling Shareholder on the Closing Date which have been paid by or on
behalf of Purchaser up to and including the Relevant Time; and (y) all
Restricted Notes originally issued to such Selling Shareholder on the
Closing Date, and (iii) the aggregate principal amount of Promissory
Notes originally issued to such Selling Shareholder on the Closing Date
which have not been paid by Purchaser up to and including the Relevant
Time but which (except to the extent set forth in Section 9.6(d) below)
have been sold, transferred or otherwise disposed of (including by way
of pledge or hypothecation in the nature of a sale, transfer or
disposition) by such Selling Shareholder up to and including the
Relevant Time, less all amounts previously paid by such Selling
Shareholder to Purchaser under this Agreement prior to the Relevant
Time.
88
provided however that to the extent an amount for which such Selling
Shareholder is liable to Purchaser under this Agreement is not payable
at a Relevant Time due to the foregoing provisions of this Section
9.6(c), such Selling Shareholder shall not be released from its
liability to pay such amount but shall remain liable for such amount
and shall be required to pay to Purchaser such amount at one or more
later Relevant Times (as necessary) to the extent the applicable
Payment Cap is not exceeded at each of such later Relevant Times,
provided further however that in the event such Selling Shareholder or
a wholly-owned Subsidiary of such Selling Shareholder which holds
Promissory Notes commences a voluntary case or other Proceeding seeking
liquidation, reorganization, winding-up or other relief with respect to
itself or its debts under any bankruptcy, insolvency, reorganization
or other similar law now or hereinafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or take
possession by such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the
benefit of creditors, or shall take any corporate action to authorize
any of the foregoing or an involuntary case or other Proceeding shall
be commenced against such Selling Shareholder or a wholly-owned
Subsidiary of such Selling Shareholder which holds Promissory Notes
seeking liquidation, reorganization or other relief with respect to it
or its debts under any bankruptcy, insolvency, reorganization or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of
it or any substantial part of its property, the Payment Cap applicable
to such Selling Shareholder shall from and after such time equal such
Selling Shareholder's Pro Rata Share of US$184,500,000.
89
(d) For the purposes of clause (iii) of Section 9.6(c), a sale, transfer
or other disposition by a Selling Shareholder (other than Aria Infotek)
to a wholly-owned Subsidiary of such Selling Shareholder, which
Subsidiary has, prior to my such sale, transfer or other disposition,
unconditionally guaranteed to Purchaser the full performance and
satisfaction by such Selling Shareholder of all of its obligations
under the Transaction Documents pursuant to a duly executed and
delivered guarantee in substantially the same form and substance as the
Guarantee, shall not constitute a sale, transfer or other disposition
of Promissory Notes for the purpose of determining the Payment Cap,
until (x) any such Promissory Notes are transferred by such
wholly-owned Subsidiary to a Person other than such Selling
Shareholder or another wholly-owned Subsidiary of such Selling
Shareholder that has also provided a guarantee in accordance with the
foregoing requirements hereunder, (y) any such wholly-owned Subsidiary
has ceased to be a wholly-owned Subsidiary of such Selling Shareholder
or (z) such Selling Shareholder fails to provide notice to Purchaser at
least 7 days prior to any such sale, transfer or other disposition, at
which time, in each case, any such sale, transfer or other disposition
shall be deemed to constitute a sale, transfer or other disposition of
Promissory Notes for the purpose of determining the Payment Cap under
clause (iii) of Section 9.6(c). Each of AIF and MediaOne covenants and
agrees to provide, and to cause its wholly-owned subsidiaries to
provide, Purchaser with advance written notice of each proposed sale,
transfer or other disposition of Promissory Notes
90
originally issued to it at least 7 days prior to such sale, transfer or
other disposition.
(e) Subject to Section 10.11, to the extent a Person fully and
unconditionally performs an obligation of a Selling Shareholder which
otherwise would have been required to have been performed by such
Selling Shareholder, such Selling Shareholder shall be discharged from
performing such obligation to the same extent as such obligation was so
performed by such Person.
Section 9.7 Limitations on Liability of Purchaser.
(a) Subject to Section 9.7(b), Purchaser shall not be liable under this
Agreement in respect of any claim unless the aggregate amount of all
claims for which Purchaser would otherwise be liable hereunder exceeds
US$705,000 (or equivalent in any other currency) but if the aggregate
liability of all such claims exceeds US$705.000 (or equivalent in any
other currency), then Purchaser shall be liable for all claims
hereunder, including such initial US$ 705,000 (or equivalent in any
other currency) of claims.
(b) Section 9.7(a) shall not apply to, and Purchaser shall be immediately
liable for, all claims with respect to any breach of representation and
warranty under Sections 5.1, 5.2, 5.3, 5.4 and 5.5.
(c) Purchaser's maximum aggregate liability to the Selling Shareholders
under this Agreement for breaches of representations and warranties,
covenants or agreements
91
shall be US$10,000,000 (exclusive of reasonable attorney's fees and
expenses, reasonable accountant's fees and expenses and other
reasonable fees and expenses incurred in the investigation or defense
of any of the same or in asserting, preserving or enforcing any of the
obligations of Purchaser under this Agreement), provided however that
(i) the foregoing limitation, shall not apply to fraudulent
misrepresentation or fraudulent conduct by Purchaser, and (ii)
Purchaser's maximum aggregate liability to KSO Unit for breach of
Sections 1(a) and (c) and Section 2(a) of the Interim Management
Agreement shall be equal to (x) the amount received by Purchaser under
Section 1(a) and 1(b) of the Interim Management Agreement minus (y) the
amount paid by Purchaser to the Selling Shareholders under Sections
1(a) and 2(a) of the Interim Management Agreement plus (z) any
interest payable by Purchaser as a result of Purchaser's breach under
Section 1(c) of the Interim Management Agreement.
Section 9.8 Interest. In the event of any third-party claim that gives rise to a
right to indemnification under this Article IX or in the event of any other
claim for indemnification hereunder, the parties agree that the Indemnifying
Party shall be required to pay the Indemnified Party interest on the amount of
any compromise, settlement or other amount finally determined as payable by the
Indemnifying Party hereunder (i) in the case of a third-party claim that gives
rise to a right to indemnification under this Article IX, from the date any such
third-party claim is finally determined or any compromise or settlement is
effected through the date payment by the Indemnifying Party is actually received
by the Indemnified Party (or in the case of a set-off or deduction under Section
3.5 hereof, through the date such payment obligation is satisfied and paid by
set-off or deduction against the Restricted Notes) and (ii) in the case of a
claim for indemnification between the Indemnifying Party and the Indeminified
Party, from the date such claim is compromised, settled or finally determined
through the date payment is actually received by the Indemnified Party (or in
the case of set-off or deduction under Section 3.5 hereof, through the date such
payment obligation is satisfied by set-off and paid or deduction against the
Restricted Notes).
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ARTICLE X
MISCELLANEOUS
Section 10.1 Fees and Expenses; Transfer Taxes. All costs and expenses incurred
in connection with this Agreement and the consummation of the Transactions shall
be paid by the party incurring such expenses, including the fees and expenses of
its legal and financial advisors. The Selling Shareholders (shall be solely
liable for all applicable stamp duties, transfer taxes, fees and expenses
(including any notarial fees and expenses) relating to the transfer of the Sale
Shares from the Selling Shareholders to Purchaser.
Section 10.2 Amendment and Modification. This Agreement may be amended, modified
and supplemented in any and all respects, but only by a written instrument
signed by all of the parties hereto expressly stating that such instrument is
intended to amend, modify or supplement this Agreement.
Section 10.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given when mailed, sent by facsimile (which is
confirmed) or sent by overnight courier service to the parties at the following
addresses (or at such other address for a party as shall be specified by such
party by like notice):
If to Purchaser, to:
Perusahaan Perseroan (Persero) PT Telekomunikasi
Indonesia Tbk.
JI. Xxxxxx Xx. 0
Xxxxxxx 00000
Xxxxxxxxx
Attention: President Director
Telephone: (00 00) 000-0000
Facsimile: (00 00) 000-0000
If to Aria Infotek, to:
PT Aria Infotek:
JI. Xxxxx Xxxxxx Xx. 00
Xxxxxxx Xxxxx 00000
Xxxxxxxxx
Attention: Xxxxx Soeryadjaya
Facsimile: (00 00) 000-0000
Telephone: (00 00) 000-0000
93
If to MediaOne, to:
c/o AT&T Wireless Services, Inc.
0000 000xx Xxx. XX, X0XX
Xxxxxxx, XX 00000-0000
X.X.X.
Attention: Chief Counsel, International
Facsimile: 0000 000-0000
Telephone: 0000 000-0000
If to AIF, to:
The Asian Infrastructure Fund Limited
c/o AIF Funds Management Limited
0000-00 Xxxx Xxxxx'x Xxxx Xxxxxxx
Xxxx Xxxx
Attention: Xxxxxxx Xxxxx, Head of Administration
Facsimile: (000) 0000-0000
Telephone: (000) 0000-0000
with a copy to:
The Asian Infrastructure Fund
c/o Caledonian Bank & Trust Ltd.
Xxxxxxxxxx Xxxxx
00 Xxxxxxx Xxxxxx
P.O. Box 1043 GT
Grand Cayman, Cayman Islands
British West Indies
Section 10.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to all the other parties.
Section 10.5 Entire Agreement; No Third-Party Beneficiaries. This Agreement and
the other Transaction Documents (a) supersede the Letter Agreement and the
Memorandum of Understanding, dated April 11, 2002, by and among Purchaser, the
Selling Shareholders and the Company (the "MOU"), (b) constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof and
thereof and (c) are not intended to confer any rights or remedies upon any
Person other than parties hereto and thereto.
Section 10.6 Severability. Any term or provision of this Agreement that is held
by a court of competent jurisdiction or other authority to be invalid, void or
94
unenforceable in any situation in any jurisdiction shall not affect due validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction. If the final judgment of a court of competent
jurisdiction or other authority declares that any term or provision hereof is
invalid, void or unenforceable, the parties agree that the court making such
determination shall have the power to reduce the scope, duration, area or
applicability of the term or provision, to delete specific words or phrases, or
to replace any invalid, void or unenforceable term or provision with a term or
provision that is valid and enforceable and the comes closest to expressing the
intention of the invalid or unenforceable term or provision.
Section 10.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Republic of Indonesia.
Section 10.8 Dispute Resolution.
(a) Amicable Settlement. Purchaser and the Selling Shareholders agree that
if any difference, dispute, claim or controversy, arises out of or in
connection with this Agreement, or any exhibits or schedules hereto, or
its performance, including without limitation any dispute regarding its
breach, existence, validity, or termination (a "Dispute"), Purchaser
and the Selling Shareholders will attempt, for a period of thirty (30)
days after the receipt by one party of a written notice from the other
party of the existence of the Dispute, to settle the Dispute by
settlement discussions between the parties.
(b) Referral to Arbitration. If the Dispute is not settled for any reason
within the 30-day period set forth in Section 10.8(a), then at the
request of any party, the Dispute shall be finally sealed by
arbitration under the Rules of Arbitration (the "ICC Rules") of the
International Chamber of Commerce ("ICC") then in effect. The
arbitration will be conducted and the award will be rendered in the
English language in London, England. Notwithstanding the provisions of
Section
95
10.3, any request for arbitration, response or other communication
given to or by a party to the arbitration must be given and deemed
received as provided in the ICC Rules. In any arbitration brought
pursuant to this Agreement, the Selling Shareholders who are parties to
the arbitration shall act and be considered as one party.
(i) Arbitral Tribunal. There shall be three arbitrators. One
arbitrator will be nominated by Purchaser and one arbitrator
will be nominated jointly by the Selling Shareholders who are
parties to the arbitration. The third arbitrator, who shall be
the chair of the arbitral tribunal, will be nominated by the
arbitrators appointed by Purchaser and the Selling
Shareholders within thirty (30) days of the confirmation of
the appointment of the second arbitrator, in each case in
accordance with the ICC Rules. Subject to any extension that
may be granted by the ICC Court of Arbitration ("ICC Court"),
if any arbitrator is not timely nominated, such arbitrator
shall be appointed by the ICC Court in accordance with the ICC
Rules.
(ii) Provisional Relief. Notwithstanding the parties agreement to
arbitrate as set forth herein, the parties agree that any
party may apply to any competent judicial authority for
interim or conservatory measures in support of the arbitration
in accordance with Article 23 of the ICC Rules. Without
prejudice to such provisional remedies in aid of arbitration
as may be available from any competent judicial authority, the
arbitral tribunal shall have full authority to grant
provisional remedies in accordance with Article 23 of the ICC
Rules.
96
(iii) Arbitral Award. The parties expressly agree that leave to
appeal under Section 45 or Section 69 of the English
Arbitration Xxx 0000 may not be sought with respect to any
question of law arising in the course of the arbitration or
with respect to any award made. In order to further ensure the
final and binding nature of the arbitral award, the parties
expressly agree to waive any time limits contained in the Law
of the Republic of Indonesia No. 30 of 1999. The award shall
be final and binding upon the parties as from the date
rendered. Judgment upon any award may be entered in any court
having jurisdiction thereof.
(iv) Consolidation. If any party hereto submits a request for
arbitration ("Request") in connection with a Dispute, and an
arbitration proceeding under the Transaction Documents is
already pending under the ICC Rules, the ICC Court or, if
constituted, the arbitral tribunal in the pending arbitration,
shall include the claims contained in the Request in the
pending proceeding (regardless of whether the Terms of
Reference have been signed), if the ICC Court or the arbitral
tribunal finds that (i) there are issues of fact or law common
to the proceedings so that a consolidated proceeding would be
more efficient than separate proceedings, and (ii) no party
would be unduly prejudiced as a result of such consolidation
through undue delay or otherwise.
97
(v) Agreement in Effect. Save as otherwise provided for herein,
this Agreement and the rights and obligations of the parties
shall remain in full force and effect pending the award in any
arbitration proceeding hereunder.
(vi) Binding on Successors. This arbitration agreement set forth in
this Section 10.8 shall be binding upon the parties, their
successors and assigns.
Section 10.9 Extension; Waiver. At any time prior to the Closing Date, Purchaser
or the Selling Shareholders (unanimously, acting as a group) hereto may, in a
written instrument signed in writing on behalf of such party, (a) extend the
time for the performance of any of the obligations or other acts of any other
party, (b) waive any inaccuracies in the representations and warranties of any
other party contained in this Agreement or in any document delivered pursuant to
this Agreement or (c) waive compliance by any other party with any of the
agreements or conditions contained in this Agreement. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of those rights.
Section 10.10 Set off; Election of Remedies. In the event Purchaser is required
to deduct or withhold any Indonesian Taxes in respect of any payment to be made
under any Transaction Document such payment shall be made after deducting
therefrom the amount of any such deduction or withholding, provided however that
to the extent the payee of any such payment provides Purchaser with evidence of
residency and other evidence as may be required by Purchaser in its reasonable
discretion to eliminate Purchaser's obligation to deduct or withhold any such
Taxes, Purchaser shall not deduct or withhold such Taxes. In the event Purchaser
makes any such deduction or withholding. Purchaser shall provide such payee with
written evidence of payment of such deducted or withheld amounts to the relevant
Governmental Entity of the Republic of Indonesia as soon as reasonably
practicable following such payment. Neither the exercise of nor the failure to
exercise a right of set-off or to give notice of a claim under this Agreement
will constitute an election of remedies or limit Purchaser in any manner in the
enforcement of any other rights or remedies that may be available to it,
whether at law or in equity.
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Section 10.11 Assignment. Neither this Agreement nor any of the rights,interests
or obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
parties, except that Purchaser may assign, in its sole discretion, any or all of
its rights and interests hereunder to any direct or indirect wholly-owned
Subsidiary of Purchaser provided that Purchaser shall remain liable for all of
its obligations hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and permitted assigns.
Section 10.12 Language. This Agreement is concluded in both bahasa Indonesia and
English. In the event of any inconsistency or contradiction between the bahasa
Indonesia and English texts, the bahasa Indonesia text shall prevail.
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Section 10.13 Immunity. Purchaser hereby expressly waives any and all claims to
sovereign immunity for itself or any of its assets from suit, execution,
attachment or other legal process in any dispute under this Agreement.
Signatures on the following page
100
IN WITNESS WHEREOF, the duly authorized representatives of the parties have
executed this Agreement as of the dated first written above.
PERUSAHAAN PERSEROAN (PERSERO)
PT TELEKOMUNIKASI INDONESIA TBK.
By: /s/ Xxxxxxxx Xxxxx
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Name: Xxxxxxxx Xxxxx
Title: President Director
PT ARIA INFOTEK
By: /s/ Xxxxx Soeryakjaya
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Name: Xxxxx Soeryakjaya
Title: President
MEDIAONE INTERNATIONAL I.B.V.
By: /s/ Xxxx Xxxx Xxx
-------------------------
Name: Xxxx Xxxx Xxx
Title: Representative
THE ASIAN INFRASTRUCTURE FUND
By /s/ Xxxxxxx Xxxxx
--------------------------
Name: Xxxxxxx Xxxxx
Title: Attorney
