Exhibit 10.10
OPTION, MANNDATORY PURCHASE AND
RIGHT OF FIRST REFUSAL AGREEMENT
dated as of December 19, 1997
among
P.T. FREEPORT INDONESIA COMPANY
P.T. PUNCAKJAYA POWER
DUKE IRIAN JAYA, INC.
WESTCOAST POWER, INC.
and
P.T. PRASARANA NUSANTARA JAYA
This OPTION, MANDATORY PURCHASE AND RIGHT OF FIRST REFUSAL
AGREEMENT (as hereafter amended, modified or supplemented in
accordance with the terms hereof, this "Option Agreement") is
made as of December 19, 1997 among P.T. Freeport Indonesia
Company, an Indonesian limited liability company also
domesticated in Delaware ("PTFI"), acting in its individual
capacity; P.T. Puncakjaya Power, an Indonesian limited liability
company ("PJP"); Duke Irian Jaya, Inc., a Delaware corporation
("DIJ"); Westcoast Power, Inc., a Canadian corporation ("WPI");
and P.T. Prasarana Nusantara Jaya, an Indonesian limited
liability company ("PNJ")
WITNESSETH
WHEREAS, DIJ, WPI and PNJ constitute all of the Persons
owning any of the issued and outstanding shares of PJP ("Shares")
as of the effective date of this Option Agreement;
WHEREAS, PTFI operates a mining enterprise in Irian Jaya,
Indonesia pursuant to a Contract of Work dated December 30, 1991,
between PTFI and the Government of the Republic of Indonesia (as
the same may hereafter be amended, modified or supplemented, the
"COW");
WHEREAS, the Use Rights relating to the Untitled Land, the
Land, the Improvements, the Improvement-Related Property, and, if
any, the Future Assets (collectively, the "Property") are located
in the mining area covered by the COW;
WHEREAS, PTFI has requested from the Shareholders and (i)
the Shareholders have collectively agreed to grant to PTFI in
certain instances an exclusive right and option to purchase all
of the Shares owned by such Shareholders; and (ii) each of the
Shareholders has individually agreed to grant to PTFI a right of
first refusal to purchase any Shares which such Shareholder
intends to sell, convey, transfer or assign to the extent that
such Shares are not acquired by the Shareholders or Affiliates
thereof, with such right being exercisable in accordance with and
subject to the terms of this Option Agreement;
WHEREAS, PTFI has requested from PJP and PJP has agreed to
grant to PTFI (i) an exclusive right and option in certain
instances to purchase the Property; (ii) a right of first refusal
to purchase all or such part of the Property as PJP may in the
future decide to sell, convey, transfer or assign; and (iii) a
right of first refusal to purchase any Shares which PJP intends
to issue, sell, convey, transfer or assign which are not
subscribed for or acquired by the Shareholders or Affiliates
thereof, with each of such rights being exercisable in accordance
with and subject to the terms of this Option Agreement; and
WHEREAS, PJP and the Shareholders have requested from PTFI
and PTFI has agreed to provide to PJP and the Shareholders, the
exclusive right in certain instances to require PTFI to offer to
purchase the Shares or the Property at the option of PJP, with
such right being exercisable in accordance with and subject to
the terms of this Option Agreement.
NOW, THEREFORE, in consideration of the promises and mutual
covenants set forth herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND USAGE
Section 1.01 Definitions. Unless the express terms of
this Agreement shall otherwise provide, capitalized terms shall
have the meanings ascribed to them in Appendix A hereto.
Section 1.02 Usage. This Agreement shall be governed by
the following rules of usage:
(a) References to Persons. A reference herein to
a Person includes, unless the context otherwise requires,
its permitted assignees.
(b) References to Laws. A reference herein to an
Applicable Law includes any Governmental Authority's
amendment to, or modification or published written
interpretation of, such Applicable Law.
(c) References to Divisions. A reference herein
to an article, section, exhibit, schedule or appendix is to
the article, section, exhibit, or appendix of this Agreement
unless otherwise indicate
(d) References to Documents. References to any
document, instrument or agreement (a) shall be deemed to
include all appendices, exhibits, schedules and other
attachments thereto, and (b) shall mean such document,
instrument or agreement, as amended, modified and
supplemented from time to time in accordance with the terms
thereof and as the same is in effect as any given time.
(e) Use of "herein". Unless otherwise specified,
the words "hereby", "herein", "hereof" and "hereunder" and
word of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular
provision hereof.
(f) Use of "including". The words "include" and
"including" do not limit the generality of any description
following such term, and, for such purposes, the rule of
ejusdem generis shall not be applicable to limit a general
statement, which is followed by or referable to an
enumeration of specific matters, to matters similar to the
matters specifically mentioned.
ARTICLE 2
THE OPTION BY PTFI TO PURCHASE THE PROPERTY
Section 2.01 Granting of the Property Purchase Option.
PJP hereby grants to PTFI an exclusive right and option,
exercisable by PTFI (ii) at any time from the effective date of
this Option Agreement and continuing through the last day that
the COW or any successor agreement to the COW is in effect (in
the case of an exercise of such option pursuant to Section
2.05(a), 2.05(b), 2.05(d) or 2.05(e)) or (ii) on the fifth,
tenth, fifteenth and twentieth anniversary of the Closing Date
(if otherwise exercised) (the "Option Period"), to purchase the
Property in accordance with the terms of this Option Agreement
(the "Property Purchase Option"), it being understood and agreed
that PTFI's exercise of the Property Purchase Option shall be
subject to the provisions of Section 2.06 hereof and that PTFI
has no obligation to exercise the Property Purchase Option. PJP
hereby grants to PTFI an exclusive right and option, exercisable
by PTFI during the Option Period, to exercise the Property
Purchase Option during the fourteen-Day period following receipt
by PTFI of written notice from the administrative agent under the
PJP Credit Agreement to the effect that the lenders thereunder
have determined to accelerate the maturity of the loans
thereunder based solely on the occurrence of one or more events
of default, with respect to PJP, under the following sections of
the PJP Credit Agreement: 9(a) through (g), 9(k) through (p),
9(q), 9(s) and 9(t); provided that PTFI shall not have such right
if the specified event of default was the result of the Breach or
Fault of PTFI.
Section 2.02 Fee for the Property Purchase Option. As
full and complete consideration for the granting of the Property
Purchase Option by PJP, PTFI shall pay to PJP the fixed sum of
US$10 (Ten United States Dollars) upon the signing of this Option
Agreement, the receipt and sufficiency of which is hereby
acknowledged by PJP by its signing of this Option Agreement.
Section 2.03 Option Irrevocable and Binding. The Property
Purchase Option is irrevocable and effective for the Option
Period and shall be binding upon the parties hereto and their
respective permitted successors, transferees and assigns, and is
for the benefit of PTFI and its Affiliates, nominees, successors
in title and assigns.
Section 2.04 Procedures for Exercise of Option. If PTFI
elects to exercise the Property Purchase Option, PTFI shall do so
by giving written notice of such election to PJP during the
Option Period (the "Property Purchase Exercise Notice"; the date
of the Property Purchase Exercise Notice being the "Property
Purchase Exercise Notice Date"), which Property Purchase Exercise
Notice shall specify (a) the date on which PTFI desires for the
closing of the sale and transfer of the Property by PJP to PTFI
to be consummated, which date shall not be later than one hundred
eighty (180) Days from the Property Purchase Exercise Notice Date
and (b) PTFI's calculation of the Purchase Option Purchase Price
as defined and further described in Section 2.05.
Section 2.05 Property Purchase Option Price. The amount
to be paid by PTFI to PJP for the sale and transfer of the
Property (the "Property Purchase Option Price") shall vary and be
determined as set forth below.
(a) If PTFI is purchasing the Property concurrently
with its election to terminate the Restated Power Sales Agreement
following an Event of Default by PJP under any paragraph (other
than paragraph (d)) of Section 16.01 of the Restated Power Sales
Agreement, or pursuant to the last sentence of Section 2.
hereof then the Property Purchase Option Price shall be (i) the
Outstanding Investment, plus, if applicable, (ii) the lesser of
(A) the Net Book Value of any Third Party Assets and (B) the fair
market value of such Third Party Assets minus, if applicable,
(iii) the unpaid principal amount of any PSA Subordinated Debt
plus interest accrued and unpaid thereon and (iv) the liquidated
damages due under Section 16.03(d) of the Restated Power Sales
Agreement; in each case determined as of the date on which the
sale and transfer of the Property by PJP to PTFI is consummated
(the "Property Purchase Option Closing Date"). As used herein,
the "Net Book Value" of Third Party Assets shall mean the net
book value thereof as reflected in the most recent balance sheet
of PJP.
(b) If PTFI is purchasing the Property concurrently
with its election to terminate the Restated Power Sales Agreement
following an Event of Default by PJP under Section 16.01(d)
thereof, then the Property Purchase Option Price shall be (i) the
Outstanding Investment, plus, if applicable, (ii) the lesser of
(A) the Net Book Value of any Third Party Assets and (B) the fair
market value of such Third Party Assets, minus, if applicable,
(iii) the unpaid principal amount of any PSA Subordinated Debt
plus accrued and unpaid interest thereon; in each case determined
as of the Property Purchase Option Closing Date.
(c) If the Property Purchase Option Notice is given
for any reason other than those described in Section 2.05(a) or
(b) above or 2.05(d) or (e) below, then the Property Purchase
Option Price shall be the greater of (i) the Fair Market Value of
the Property (excluding, for such purpose, any Third Party
Assets), and (ii) the Option Price, plus, if applicable, (iii)
the Third Party Asset Price, minus, if applicable, (iv) the
unpaid principal amount of any PSA Subordinated Debt plus accrued
and unpaid interest thereon (except, in the case that the
Property Purchase Option Price is the Fair Market Value of the
Property, to the extent that such amount was taken into account
in determining such Fair Market Value); in each case determined
as of the Property Purchase Option Closing Date.
(d) If the Property Purchase Option Notice is given
for the reason set forth in Section 10.04 of the Restated Power
Sales Agreement (shortfall in insurance proceeds to repair
property damage), then the Property Purchase Option Price shall
be (i) the Outstanding Investment minus $250,000 (but not less
than zero), plus, if applicable, (ii) the Net Book Value of any
Third Party Assets, minus, if applicable, (iii) the unpaid
principal amount of any PSA Subbordinated Debt plus accrued and
unpaid interest thereon, in each case determined as of the
Propertyy Purchase Option Clossing Date.
(e) If the Property Purchase Option Notice is given
for the reason set forth in Section 13.05 of the Restated Power
Sales Agreement (Extended Force Majeure), then the Property
Purchase Option Price shall be (i) the Outstanding Investment,
plus, if applicable, (ii) the Net Book Value of any Third Party
Assets, minus, if applicable, (iii) the unpaid principal amount
of any PSA Subordinated Debt plus accrued and unpaid interest
thereon, in each case determined as of the Property Purchase
Option Closing Date.
Section 2.06 Consent Required. Unless the Property
Purchase Option is being exercised pursuant to the last sentence
of Section 2.01 or for the reasons described in Section 2.05(a),
the exercise of the Property Purchase Option (as opposed to the
Share Purchase Option) shall be subject to the consent of PJP.
Section 2.07 Fairness of Tax Gross-Up. If the Property
Purchase Option Price is determined pursuant to Section 2.05(c),
(d) or (e), then the Tax Gross-Up payable by PTFI to PJP will be
adjusted, if necessary, as follows:
(a) If the inaccuracy of any of the assumptions set
forth in Schedule VI to the Restated Power Sales Agreement with
respect to Indonesian Taxes or tax attributes shall result in an
increase or decrease in Indonesian taxes payable by PJP (other
than to the extent such increases or decreases are allocable to
sales of electricity or electric capacity to third parties) or
United States taxes payable by the Shareholders (as assumed in
the Closing Model), then the Closing Model shall be amended to
correct any inaccuracies set forth therein and the Tax Gross-Up
shall be equitably adjusted to maintain the Closing Model's
original project internal rate of return (i.e. 16.65%), with
differences in prior period payments being subject to interest at
the Default Interest Rate.
(b) If the highest marginal U.S. corporate income tax
rate at the Property Purchase Option Date is other than 35%, then
the Closing Model shall be amended to correct this difference
the Tax Gross-Up adjusted accordingly.
(c) If any change in Indonesian Taxes shall result in
an increase or decrease in the Tax Gross-Up payable by PJP
pursuant to the calculation of the Tax Gross-Up in the Closing
Model, then the Closing Model shall be adjusted to reflect such
increase or decrease and the Tax Gross-Up adjusted accordingly.
ARTICLE 3
THE RIGHT OF FIRST REFUSAL OF PTFI
TO PURCHASE THE PROPERTY
Section 3.01 Granting of the Right of First Refusal as to
Property. PJP does hereby grant to PTFI an exclusive right of
first refusal, exercisable by PTFI at any time within the Option
Period, to acquire any of the Property which PJP desires to sell,
convey, transfer or assign (each a "Property Transfer") to any
Person (the "Right of First Refusal as to Property"). PJP hereby
covenants and agrees that it will not engage in any Property
transfer except in compliance with this Article 3.
Section 3.02 Permitted Transfers. PJP may make the
following Property Transfers and no others: (a) inoperable,
broken, old or worn Property in the ordinary course of business
if such Property is replaced as necessary; (b) any of the
Property which is no longer used or useful in order for PJP to
perform its obligations under the Restated Power Sales Agreement;
(c) Property Transfers of Property as security in connection with
a financing which is approved by PTFI; (d) Property Transfers of
Third Party Assets; and (e) Property Transfers in accordance with
Sections 3.03 or 3.04 below.
Section 3.03 Transfer to a Pre-Approved Party. (a) PJP
may, at its option, seek a waiver by PTFI of the Right of First
Refusal as to Property as hereinafter provided.
(b) PJP may make a Property Transfer to the extent
that PJP (i) gives PTFI written notice of its intention to make a
Property Transfer of all or a portion of the Property (the
"Property Transfer Intent Notice"), (ii) PTFI does not notify
PJP, within thirty (30) Days after having received the Property
Transfer Intent Notice, of PTFI's intent to exercise its rights
pursuant to this Article, and (iii) otherwise complies with the
provisions of this Option Agreement. The Property Transfer
Intent Notice shall contain a description of the Property
proposed to be the subject of the Property Transfer (the
"Available Property Interest"), the names and addresses of not
more than ten proposed third party purchasers and a full,
accurate and complete description of the terms upon which the
sale, conveyance, transfer or assignment is proposed to be made.
Upon receipt of a Property Transfer Intent Notice, PTFI shall
have the option, but not the obligation, (x) to purchase the
Available Property Interest upon the terms proposed by PJP minus,
if applicable, the unpaid principal amount of any PSA
Subordinated Debt plus accrued and unpaid interest thereon
(except to the extent that such amount was taken into account in
determining the terms of such proposed Property Transfer) and
provided, that if such proposed terms include non-cash
compensation which would be difficult or impossible for PTFI to
provide, PTFI's purchase price shall include the fair market
value of such non-cash compensation, as determined by agreement
of PJP and PTFI, or by an appraiser selected jointly by PJP and
PTFI, if the parties are unable to agree, (y) to waive the Right
of First Refusal as to Property with regard to a Property
Transfer of the Available Property Interest to any or all of the
proposed third party purchasers (each such third party as to
which PTFI waives the Right of First Refusal as to Property, a
"Pre-Approved Party"), or (z) to effuse to waive the Right of
First Refusal as to Property as to any or all of the proposed
third party purchasers.
Section 3.04 Right of First Refusal. Notwithstanding any
failure by PJP to obtain a pre-approval of a Property Transfer
pursuant to Section 3.03(b), PJP may make a Property Transfer to
the extent that PJP (i) receives a written offer from a Person
to purchase all or a portion of the Property, which offer PJP
intends to accept if PTFI does not exercise its rights pursuant
to this Article, (ii) gives PTFI prior written notice of the
offer and PJP's intent to accept such offer (the "Property Sale
Notice") and PTFI does not notify PJP, within ninety (90) Days
after having received the Property Sale Notice, of PTFI's intent
to exercise its rights pursuant to this Article, and (iii)
otherwise complies with the provisions of this Option Agreement.
The Property Sale Notice shall contain a description of the
Available Property Interest, the name and address of the proposed
third party purchaser and a full, accurate and complete
description of the terms upon which the Property Transfer is
proposed to be made. The Property Sale Notice shall also contain
a copy of the written offer. Upon receipt of a Property Sale
Notice, PTFI shall have the option, but not the obligation, to
purchase the Available Property Interest upon the same terms and
conditions, minus, if applicable, the unpaid principal amount of
any PSA Subordinated Debt plus accrued and unpaid interest
thereon (except to the extent that such amount was taken into
account in determining such terms and conditions), that the
proposed Property Transfer to the third party is to be made, or
as otherwise agreed upon by PTFI and PJP; provided that if such
terms include non-cash compensation which would be commercially
difficult or impossible for PTFI to provide, PTFI's purchase
price shall include the fair market value of such non-cash
compensation, as determined by agreement of PJP and PTFI, or by
an appraiser selected jointly by PJP and PTFI, if the parties are
unable to agree.
Section 3.05 Duration of the Right of First Refusal as to
Property. The Right of First Refusal as to Property granted
herein is irrevocable for the Option Period, shall be binding
upon the parties hereto and their respective permitted
successors, transferees and assigns, and is for the benefit of
PTFI and its Affiliates, nominees, successors in title and
assigns.
Section 3.06 Right of First Refusal as to Property Closing
Matters. In the event that PTFI exercises its right to purchase
the Available Property Interest set forth in this Article, the
closing with respect to any Property to be so acquired by PTFI
shall occur within one hundred eighty (180) Days of the notice by
PTFI to PJP that it intends to exercise its rights and acquire
the Available Property Interest.
Section 3.07 PJP's Rights upon PTFI's Waiver. In the
event that PTFI does not exercise its (i) right to purchase any
Available Property Interest and waives the Right of First Refusal
as to Property as to such Available Property Interest with
respect to one or more of the proposed third party purchasers
specified in a Property Transfer Intent Notice, then PJP may make
a Property Transfer of that Available Property Interest to a Pre-
Approved Party on terms no more favorable to such Pre-Approved
Party than the terms proposed in the Property Transfer Intent
Notice, or (ii) Right of First Refusal as to Property as to such
Available Property Interest, then PJP may make a Property
Transfer of that Available Property Interest on the terms
specified in, and to the third party identified in, the Property
Sale Notice; provided, however, that in either case unless such
Property Transfer is consummated within one hundred eighty (180)
Days of PTFI's waiver or the expiration of the time period for
PTFI to exercise its right to purchase the Available Property
Interest set forth in this Article, PJP may not thereafter make
any Property Transfer without again complying with the provisions
of this Article.
ARTICLE 4
THE RIGHT OF PJP TO REQUIRE PTFI TO OFFER
TO PURCHASE THE PROPERTY OR THE SHARES
Section 4.01 Granting of the Right to Require the Offer to
Purchase Property or Shares. PTFI hereby grants to PJP a right
to require that PTFI offer to acquire all of the Property or
Shares, directly or indirectly, upon the occurrence of an Event
of Default by PTFI under the Restated Power Sales Agreement. If
PJP accepts such offer, PTFI shall be required to purchase the
Property or the Shares (and unless PJP shall otherwise agree,
such purchase shall be a purchase of Shares), as applicable (the
"Mandatory Purchase Right"), in accordance with Section 16.03(b)
or (e), as applicable, of the Restated Power Sales Agreement by,
at the election of PJP, either (i) purchasing such Property or
Shares, as applicable, from PJP or (ii) purchasing all of the
Shares and the Subordinated Loans, if any, from the Shareholders
and satisfy the requirements of Section 8.08 hereof. The offer
may only be required to be made within the Option Period and may
only be made under the conditions set forth in the Restated Power
Sales Agreement. By signing this Option Agreement, each of the
Shareholders acknowledges PJP's right to require PTFI to offer to
acquire the Shares and the Subordinated Loans, if any, owned by
it as provided above and agrees to sell its Shares and
Subordinated Loans, if any, to PTFI should PJP so elect and
accept PTFI's offer.
Section 4.02 Fee for the Mandatory Purchase Right. As
full and complete consideration for the granting of the Mandatory
Purchase Right by PTFI, PJP shall pay to PTFI the fixed sum of
US$10 (Ten United States Dollars) upon the signing of this Option
Agreement, the receipt and sufficiency of which is hereby
acknowledged by PTFI by its signing of this Option Agreement.
Section 4.03 Mandatory Purchase Right Irrevocable and
Binding. The Mandatory Purchase Right is irrevocable and
effective for the Option Period and shall be binding upon the
parties hereto and their respective permitted successors,
transferees and assigns.
Section 4.04 Procedures for Exercise of Mandatory Purchase
Right. If PJP elects to accept the offer referred to in the
first sentence of Section 4.01, PJP shall do so by giving written
notice of such election to PTFI and the Shareholders during the
Option Period (the "Mandatory Purchase Right Exercise Notice",
the date of the Mandatory Purchase Right Exercise Notice being
the "Mandatory Purchase Right Exercise Notice Date"), which
Mandatory Purchase Right Exercise Notice shall specify (a) the
date on which PJP desires for the closing of the sale and
transfer of the Property or Shares to PTFI to be consummated,
which date shall not be earlier than sixty (60) Days or later
than one hundred eighty (180) Days from the Mandatory Purchase
Right Exercise Notice Date; provided, however, that such sale
shall be consummated (1) within thirty (30) Days of the Mandatory
Purchase Right Exercise Notice Date, if such sale consists of
Shares and is made subsequent to a PTFI Event of Default under
Section 16.01(f) of the Restated Power Sales Agreement or
subsequent to the event described in clause (y) of Section 4.01
hereof or (2) immediately, if such sale is made subsequent to an
Event of Default under Section 16.01(c) of the Restated Power
Sales Agreement and (b) PJP's calculation of the Mandatory
Purchase Right Purchase Price as defined and further described in
Section 4.05. In the event that PJP accepts PTFI's offer to
acquire the Shares and Subordinated Loans, if any, following the
exercise by PJP of the Mandatory Purchase Right, each of the
Shareholders hereby agrees to sell, transfer, assign and convey
to PTFI all of its Shares and Subordinated Loans, if any, for its
allocable share of the Mandatory Purchase Right Purchase Price
and otherwise on the terms set forth in this Article 4.
Section 4.05 Mandatory Purchase Right Purchase Price. The
Mandatory Purchase Right Purchase Price for the purchase of all
of the Property or all of the Shares and Subordinated Loans, if
any, pursuant to PJP's acceptance of the offer referred to in the
first sentence of Section 4.01 shall be the greatest of (i) the
Fair Market Value of the Property or the Shares, (ii) the Option
Price and (iii) 125% of the Outstanding Investment, plus, if
applicable, (iv) the Third Party Asset Price, minus, if
applicable, (v) the unpaid principal amount of any PSA
Subordinated Debt plus accrued and unpaid interest thereon
(except, in the case in which the Mandatory Purchase Price is the
Fair Market Value of the Property or the Shares, to the extent
such amount was taken into account in determining the Option
Price); in each case determined as of the date on which the sale
and transfer of the Property or the Shares and Subordinated
Loans, if any, by PJP or the Shareholders to PTFI is consummated.
ARTICLE 5
THE RIGHT OF FIRST REFUSAL BY PTFI
TO PURCHASE SHARES FROM PJP
Section 5.01 Granting of the PJP Right of First Refusal as
to Portfolio Shares. PJP does hereby grant to PTFI an exclusive
right of first refusal, exercisable by PTFI at any time within
the Option Period, to acquire any Shares of PJP, whether or not
previously issued, which PJP desires to issue, sell, convey,
transfer or assign (each a "PJP Share Issuance") to any Person,
other than a Shareholder or an Affiliate thereof, (the "Right of
First Refusal as to Portfolio Shares"), such Right of First
Refusal as to Portfolio Shares to be maintained and honored by
PJP according to the terms of this Option Agreement. PJP hereby
covenants and agrees that it will not engage in any PJP Share
Issuance except in compliance with this Article 5.
Section 5.02 Permitted Transfers. PJP may make the
following PJP Share Issuances and no others: (a) PJP Share
Issuances to the Shareholders or Affiliates thereof in accordance
with the terms of the Restated Shareholders Agreement, and (b)
PJP Share Issuances in accordance with Sections 5.03 or 5.04
below.
Section 5.03 Issuance to a Pre-Approved Party. (a) PJP
may, at its option, seek a waiver by PTFI of the Right of First
Refusal as to Portfolio Shares as hereinafter provided.
(b) PJP may make a PJP Share Issuance to the extent
that PJP (i) gives PTFI written notice of its intention to make a
PJP Share Issuance of any Shares (the "PJP Share Issuance Intent
Notice"), (ii) PTFI does not notify PJP, within thirty (30) Days
after having received the PJP Share Issuance Intent Notice, of
PTFI's intent to exercise its rights pursuant to this Article,
and (iii) otherwise complies with the provisions of this Option
Agreement. The PJP Share Issuance Intent Notice shall contain a
description of the Shares proposed to be the subject of the PJP
Share Issuance (the "Available PJP Shares"), the names and
addresses of not more than ten proposed third party purchasers
and a full, accurate and complete description of the terms upon
which the PJP Share Issuance is proposed to be made. Upon
receipt of a PJP Share Issuance Intent Notice, PTFI shall have
the option, but not the obligation, to (x) purchase the Available
PJP Shares upon the terms proposed by PJP provided that if such
terms include non-cash compensation which would be commercially
difficult or impossible for PTFI to provide, PTFI's purchase
price shall include the fair market value of such non-cash
compensation, as determined by agreement of PJP and PTFI, or by
an appraiser selected jointly by PJP and PTFI, if the parties are
unable to agree, (y) to waive the Right of First Refusal as to
Portfolio Shares with regard to a PJP Share Issuance of the
Available PJP Shares to any or all of the proposed third party
purchasers (each such third party as to which PTFI waives the
Right of First Refusal as to Portfolio Shares, a "Pre-Approved
Party"), or (z) to refuse to waive the Right of First Refusal as
to Portfolio Shares as to any or all of the proposed third party
purchasers.
Section 5.04 PJP Share Right of First Refusal.
Notwithstanding any failure by PJP to obtain a pre-approval of a
PJP Share Issuance pursuant to Section 5.03(b), PJP may make a
PJP Share Issuance to the extent that PJP (i) receives a written
offer from a Person (other than a Shareholder or an Affiliate
thereof) to purchase Shares, which offer PJP intends to accept if
the Shareholders do not exercise their rights under the Restated
Shareholders Agreement and PTFI does not exercise its rights
pursuant to this Article, (ii) gives PTFI prior written notice of
the offer and PJP's intent to accept such offer (the "PJP Share
Sale Notice") and PTFI does not notify PJP, within ninety (90)
Days after having received the PJP Share Sale Notice, of PTFI's
intent to exercise its rights pursuant to this Article, and (iii)
otherwise complies with the provisions of this Option Agreement.
The PJP Share Sale Notice shall contain a description of the
Available PJP Shares, the name and address of the proposed third
party purchaser and a full, accurate and complete description of
the terms upon which the PJP Share Issuance is proposed to be
made. The PJP Share Sale Notice shall also contain a copy of the
written offer. Upon receipt of a PJP Share Sale Notice, PTFI
shall have the option, but not the obligation, to purchase the
Available PJP Shares upon the same terms and conditions provided
that if such terms include non-cash compensation which would be
commercially difficult or impossible for PTFI to provide, PTFI's
purchase price shall include the fair market value of such non-
cash compensation, as determined by agreement of PJP and PTFI, or
by an appraiser selected jointly by PJP and PTFI, if the parties
are unable to agree.
Section 5.05 Duration of the PJP Right of First Refusal as
to Portfolio Shares. The Right of First Refusal as to Portfolio
Shares granted herein is irrevocable for the Option Period, shall
be binding upon the parties hereto and their respective permitted
successors, transferees and assigns, and is for the benefit of
PTFI and its Affiliates, nominees, successors in title and
assigns.
Section 5.06 Right of First Refusal as to Portfolio Shares
Closing Matters. In the event that PTFI exercises its right to
purchase the Available PJP Shares set forth in this Article (and
none of the Shareholders exercise their rights under the Restated
Shareholders Agreement), the closing with respect to any Shares
to be so acquired by PTFI shall occur within one hundred eighty
(180) Days of the notice by PTFI to PJP that it intends to
exercise its rights and acquire the Available PJP Shares.
Section 5.07 PJP's Rights upon PTFI's Waiver. In the
event that PTFI does not exercise its (i) right to purchase the
Available PJP Shares and waives the Right of First Refusal as to
Portfolio Shares as to such Available PJP Shares with respect to
one or more of the proposed third party purchasers specified in a
PJP Share Issuance Intent Notice, then PJP may make a PJP Share
Issuance of those Available PJP Shares to an Pre-Approved Party
on terms no more favorable to such Pre-Approved Party than the
terms proposed in the PJP Share Issuance Intent Notice, or (ii)
Right of First Refusal as to Portfolio Shares as to such
Available PJP Shares (and none of the Shareholders exercise their
rights under the Restated Shareholders Agreement), then PJP may
make a PJP Share Issuance of such Available PJP Shares on the
terms specified in, and to the third party identified in, the PJP
Share Sale Notice; provided, however, in either case unless such
PJP Share Issuance is consummated within one hundred eighty (180)
Days of PTFI's waiver or the expiration of the time period for
PTFI to exercise its rights to purchase the Available PJP Shares
set forth in this Article, PJP may not thereafter make any PJP
Share Issuance without again complying with the provisions of
this Article.
ARTICLE 6
THE OPTION BY PTFI
TO PURCHASE SHARES FROM THE SHAREHOLDERS
Section 6.01 Granting of the Shareholder Share Purchase
Option. Each of the Shareholders hereby grants to PTFI an
exclusive right and option, subject to the terms of the Financing
Documents, exercisable by PTFI at any time during the Option
Period in the case that PTFI is exercising its option pursuant to
Section 6.05(a) or (b), or on the fifth, tenth, fifteenth, or
twentieth anniversary of the Closing Date (if otherwise
exercised), to purchase the Shares and the Subordinated Loans, if
any, owned by such Shareholder in accordance with the terms of
this Option Agreement (the "Shareholder Share Purchase Option").
PTFI shall also have the right to exercise the Shareholder Share
Purchase Option in the circumstances described in the last
sentence of Section 2.01. It is understood and agreed that PTFI
has no obligation to exercise its rights under the Shareholder
Share Purchase Option and provided, however, that PTFI shall only
be entitled to exercise the Shareholder Share Purchase Option to
purchase all Shares and all Subordinated Loans held by all
Shareholders in a single transaction.
Section 6.02 Fee for the Shareholder Share Purchase
Option. As full and complete consideration for the granting of
the Shareholder Share Purchase Option by each of the
Shareholders, PTFI shall pay to each of the Shareholders the
fixed sum of US$10 (Ten United States Dollars) upon the signing
of this Option Agreement, the receipt and sufficiency of which is
hereby acknowledged by each of the Shareholders by its signing of
this Option Agreement.
Section 6.03 Option Irrevocable and Binding. The
Shareholder Share Purchase Option is irrevocable and effective
for the Option Period and shall be binding upon the parties
hereto and their respective permitted successors, transferees and
assigns, and is for the benefit of PTFI and its Affiliates,
nominees, successors in title and assigns.
Section 6.04 Procedures for Exercise of Option. If PTFI
elects to exercise the Shareholder Share Purchase Option, PTFI
shall do so by giving written notice of such election to each
Shareholder during the Option Period (the "Shareholder Share
Purchase Exercise Notice"; the date of the Shareholder Share
Purchase Exercise Notice being the "Shareholder Share Purchase
Exercise Notice Date"), which Shareholder Share Purchase Exercise
Notice shall specify (a) the date on which PTFI desires for the
closing of the sale and transfer of the Shares and Subordinated
Loans, if any, by the Shareholder to PTFI to be consummated,
which date shall not be later than one hundred eighty (180) Days
from the Shareholder Share Purchase Exercise Notice Date and (b)
PTFI's calculation of the Shareholder Share Purchase Option Price
as defined and further described in Section 6.05.
Section 6.05 Shareholder Share Purchase Option Price. The
amount to be paid by PTFI to each Shareholder for the sale and
transfer of such Shareholder's Shares and Subordinated Loans, if
any (the "Shareholder Share Purchase Option Price"), shall vary
and be determined as set forth below and shall, in each case, be
the Proportionate Amount of each amount set forth below.
(a) If PTFI is purchasing the Shares and Subordinated
Loans, if any, concurrently with its election to terminate the
Restated Power Sales Agreement following an Event of Default by
PJP under any paragraph (other than paragraph (d)) of Section
16.01 of the Restated Power Sales Agreement, or in accordance
with the second to last sentence of Section 6.01, then the
Shareholder Share Purchase Option Price shall be (i) the
Outstanding Investment applicable to such Shares and (ii) any
cash and cash equivalents remaining in PJP due to a legal or
contractual prohibition against distributing such funds to
shareholders, plus, if applicable (iii) the lesser of the Net
Book Value and the fair market value of any Third Party Assets,
minus, if applicable, (iv) the unpaid principal amount of any PSA
Subordinated Debt plus accrued and unpaid interest thereon; in
each case determined as of the date on which the sale and
transfer of the Shares by such Shareholder to PTFI is consummated
(the "Shareholder Share Purchase Option Closing Date") and (v)
the liquidated damages due under Section 16.03(d) of the Restated
Power Sales Agreement.
(b) If PTFI is purchasing the Shares and Subordinated
Loans, if any, concurrently with its termination of the Restated
Power Sales Agreement following an Event of Default by PJP under
Section 16.01(d) thereof or as a result of a Change in Control,
then the Shareholder Share Purchase Option Price shall be the (i)
the Outstanding Investment applicable to such Shares and (ii) any
cash and cash equivalents remaining in PJP due to a legal or
contractual prohibition against distributing such funds to
shareholders, plus, if applicable, (iii) the lesser of (A) the
Net Book Value (as shown on the most recent balance sheet of PJP)
of any Third Party Assets and (B) the fair market value of such
Third Party Assets, minus, if applicable, (iv) the unpaid
principal amount of any PSA Subordinated Debt plus accrued and
unpaid interest thereon; in each case determined as of the
Shareholder Share Purchase Option Closing Date.
(c) If the Shareholder Share Purchase Option Notice is
given for any reason other than those described in Section
6.05(a) or (b) above, or 6.05(d) or (e) below, then the
Shareholder Share Purchase Option Price shall be (i) the greater
of (A) the Fair Market Value of the Property and (B) the Option
Price applicable to such Shares and (ii) any cash and cash
equivalents remaining in PJP due to a legal or contractual
prohibition against distributing such funds to shareholders,
plus, if applicable, (iii) the Third Party Asset Price (except,
in the case that the Shareholder Share Purchase Option Price is
the Fair Market Value of the Shares, to the extent that such
amount was taken into account in determining such Fair Market
Value, minus, if applicable, (iv) the unpaid principal amount of
any PSA Subordinated Debt plus accrued and unpaid interest
thereon (except, in the case that the Shareholder Share Purchase
Option Price is the Fair Market Value of the Shares, to the
extent that such amount was taken into account in determining
such Fair Market Value); in each case determined as of the
Shareholder Share Purchase Option Closing Date.
(d) If the Shareholder Share Purchase Option Notice is
given for the reason set forth in Section 10.04 of the Restated
Power Sales Agreement (shortfall in insurance proceeds to repair
property damage), then the Shareholder Share Purchase Option
Price shall be (i) the Outstanding Investment applicable to such
Shares minus $250,000 (but not less than zero), and (ii) any cash
and cash equivalents remaining in PJP due to a legal or
contractual prohibition against distributing such funds to
shareholders, plus, if applicable, (iii) the Net Book Value of
any Third Party Assets, minus, if applicable, (iv) the unpaid
principal amount of any PSA Subordinated Debt plus accrued and
unpaid interest thereon, in each case determined as of the
Shareholder Share Purchase Option Closing Date.
(e) If the Shareholder Share Purchase Option Notice is
given for the reason set forth in Section 13.05 of the Restated
Power Sales Agreement (Extended Force Majeure), then the
Shareholder Share Purchase Option Price shall be (i) the
Outstanding Investment and (ii) any cash and cash equivalents
remaining in PJP due to a legal or contractual prohibition
against distributing such funds to shareholders, plus, if
applicable, (iii) the Net Book Value of any Third Party Assets,
minus, if applicable, (iv) the unpaid principal amount of any PSA
Subordinated Debt plus accrued and unpaid interest thereon, in
each case determined as of the Shareholder Share Purchase Option
Closing Date.
Section 6.06 Fairness of Tax Gross-Up. If the Shareholder
Share Purchase Option Price is determined pursuant to Section
6.05(c), (d) or (e), then the Tax Gross-Up payable by PTFI to PJP
will be adjusted, if necessary, as follows:
(a) If the inaccuracy of any of the assumptions set
forth in Schedule VI to the Restated Power Sales Agreement with
respect to Indonesian Taxes or tax attributes shall result in an
increase or decrease in Indonesian taxes payable by PJP (other
than to the extent such increases or decreases are allocable to
sales of electricity or electric capacity to third parties) or
United States taxes payable by the Shareholders (as assumed in
the Closing Model), then the Closing Model shall be amended to
correct any inaccuracies set forth therein and the Tax Gross-Up
shall be equitably adjusted to maintain the Closing Model's
original project internal rate of return (i.e. 16.65%), with
differences in prior period payments being subject to interest at
the Default Interest Rate.
(b) If the highest marginal U.S. corporate income tax
rate at the Shareholder Share Purchase Option Date is other than
35%, then the Closing Model shall be amended to correct this
difference and the Tax Gross-Up adjusted accordingly.
(c) If any change in Indonesian Taxes shall result in
an increase or decrease in the Tax Gross-Up payable by PJP
pursuant to the calculation of the Tax Gross-Up in the Closing
Model, then the Closing Model shall be adjusted to reflect such
increase or decrease and the Tax Gross-Up adjusted accordingly.
ARTICLE 7
THE RIGHT OF FIRST REFUSAL BY PTFI
TO PURCHASE SHARES FROM THE SHAREHOLDERS
Section 7.01 Granting of the Shareholder Share Right of
First Refusal. Each of the Shareholders does hereby grant to
PTFI an exclusive right of first refusal, exercisable by PTFI at
any time within the Option Period, to acquire any Shares and
Subordinated Loans, if any, owned by such Shareholder which such
Shareholder desires to sell, convey, transfer or assign (each a
"Shareholder Share Transfer") to any Person other than a
Shareholder or an Affiliate thereof (the "Shareholder Share Right
of First Refusal"), such Shareholder Share Right of First Refusal
to be maintained and honored by each Shareholder, respectively,
according to the terms of this Option Agreement. Each
Shareholder hereby covenants and agrees that it will not engage
in any Shareholder Share Transfer except in compliance with this
Article 7.
Section 7.02 Permitted Transfers. Any Shareholder may
make the following Shareholder Share Transfers and no others:
(a) Shareholder Share Transfers to the Shareholders or Affiliates
thereof in accordance with the terms of the Restated Shareholders
Agreement; (b) Shareholder Share Transfers as security in
connection with a financing which is approved by PTFI; and (c)
Shareholder Share Transfers in accordance with Sections 7.03 or
7.04 below.
Section 7.03 Transfer to a Pre-Approved Party. (a) Each
of the Shareholders may, at its option, seek a waiver by PTFI of
the Shareholder Share Right of First Refusal as hereinafter
provided.
(b) Each Shareholder may make a Shareholder Share
Transfer to the extent that such Shareholder (i) gives PTFI
written notice of its intention to make a Shareholder Share
Transfer of any Shares and Subordinated Loans, if any (the
"Shareholder Share Transfer Intent Notice"), (ii) PTFI does not
notify such Shareholder, within thirty (30) Days after having
received the Shareholder Share Transfer Intent Notice, of PTFI's
intent to exercise its rights pursuant to this Article, and (iii)
otherwise complies with the provisions of this Option Agreement.
The Shareholder Share Transfer Intent Notice shall contain a
description of the Shares and Subordinated Loans, if any,
proposed to be the subject of the Shareholder Share Transfer (the
"Available Shareholder Shares"), the names and addresses of not
more than ten proposed third party purchasers and a full,
accurate and complete description of the terms upon which the
Shareholder Share Transfer is proposed to be made. Upon receipt
of a Shareholder Share Transfer Intent Notice, PTFI shall have
the option, but not the obligation, (x) to purchase the Available
Shareholder Shares upon the terms proposed by such Shareholder
provided that if such proposed terms include non-cash
compensation which would be commercially difficult or impossible
for PTFI to provide, PTFI's purchase price shall include the fair
market value of such non-cash compensation as determined by
agreement of PTFI and such Shareholder, or by an appraiser
jointly-selected by PTFI and such shareholder of the parties are
unable to agree, (y) to waive the Shareholder Share Right of
First Refusal with regard to a Shareholder Share Transfer of the
Available Shareholder Shares to any or all of the proposed third
party purchasers (each such third party as to which PTFI waives
the Shareholder Share Right of First Refusal, a "Pre-Approved
Party"), or (z) to refuse to waive the Shareholder Share Right of
First Refusal as to any or all of the proposed third party
purchasers.
Section 7.04 Shareholder Share Right of First Refusal.
Notwithstanding the failure by any Shareholder to obtain a pre-
approval of a Shareholder Share Transfer pursuant to Section
7.03(b), any Shareholder may make a Shareholder Share Transfer to
the extent that such Shareholder (i) receives a written offer
from a Person to purchase all or a portion of its Shares and
Subordinated Loans, if any, which offer such Shareholder intends
to accept if the other Shareholders do not exercise their rights
under the Restated Shareholders Agreement and PTFI does not
exercise its rights pursuant to this Article, (ii) gives PTFI
prior written notice of the offer and such Shareholder's intent
to accept such offer (the "Shareholder Share Sale Notice") and
PTFI does not notify such Shareholder, within ninety (90) Days
after having received the Shareholder Share Sale Notice, of
PTFI's intent to exercise its rights pursuant to this Article,
and (iii) otherwise complies with the provisions of this Option
Agreement. The Shareholder Share Sale Notice shall contain a
description of the Available Shareholder Shares, the name and
address of the proposed third party purchaser and a full,
accurate and complete description of the terms upon which the
Shareholder Share Transfer is proposed to be made. The
Shareholder Share Sale Notice shall also contain a copy of the
written offer. Upon receipt of a Shareholder Share Sale Notice,
PTFI shall have the option, but not the obligation, to purchase
the Available Shareholder Shares upon the same terms and
conditions, that the proposed Shareholder Share Transfer to the
third party is to be made, or as otherwise agreed upon by PTFI
and the selling Shareholder.
Section 7.05 Duration of the Shareholder Share Right of
First Refusal. The Shareholder Share Right of First Refusal
granted herein is irrevocable for the Option Period, shall be
binding upon the parties hereto and their respective permitted
successors, transferees and assigns, and is for the benefit of
PTFI and its Affiliates, nominees, successors in title and
assigns.
Section 7.06 Shareholder Share Right of First Refusal
Closing Matters. In the event that PTFI exercises its right to
purchase the Available Shareholder Shares set forth in this
Article (and none of the Shareholders exercise their rights
under the Restated Shareholders Agreement), the closing with
respect to any Shares and Subordinated Loans, if any, to be so
acquired by PTFI shall occur within one hundred eighty (180) Days
of the notice by PTFI to PJP that it intends to exercise its
rights and acquire the Available Shareholder Shares.
Section 7.07 Shareholder's Rights upon PTFI's Waiver. In
the event that PTFI does not exercise its (i) right to purchase
the Available Shareholder Shares and waives the Shareholder Share
Right of First Refusal as to such Available Shareholder Shares
with respect to one or more of the proposed third party
purchasers specified in a Shareholder Share Transfer Intent
Notice, then such Shareholder may make a Shareholder Share
Transfer of those Available Shareholder Shares to a Pre-Approved
Party on terms no more favorable to such Pre-Approved Party than
the terms proposed in the Shareholder Share Transfer Intent
Notice, or (ii) Shareholder Share Right of First Refusal as to
such Available Shareholder Shares (and none of the Shareholders
exercise their rights under the Restated Shareholders Agreement),
then the selling Shareholder may make a Shareholder Share
Transfer of such Available Shareholder Shares on the terms
specified in, and to the third party identified in, the
Shareholder Share Sale Notice; provided, however, in either case
unless such Shareholder Share Transfer shall be consummated
within one hundred eighty (180) Days of PTFI's waiver or the
expiration of the time period for PTFI to exercise its rights to
purchase the Available Shareholder Shares set forth in this
Article, such Shareholder may not thereafter make any Shareholder
Share Transfer without again complying with the provisions of
this Article.
Section 7.08 PJP Acknowledgment. PJP hereby acknowledges
the Shareholder Share Right of First Refusal and agrees that it
will not register or permit the registration of any Shareholder
Share Transfer that is not made in compliance with the provisions
of this Article 7.
ARTICLE 8
PROVISIONS APPLICABLE TO THE CLOSING
Section 8.01 Pre-Closing Obligations. Within a reasonable
period of time following the giving of the notice that initiates
any of the transactions set forth in this Option Agreement (each
a "Notice") and a reasonable period of time prior to the closing
of any of the transactions whereby PTFI acquires all of the
Shares or all or substantially all of the Property as
contemplated by this Option Agreement (each a "Transaction"), PJP
shall deliver to PTFI: (a) a list of all Property owned by PJP;
(b) a list of all employees of PJP or any Affiliate of PJP who
devote all or a substantial amount of their time to the
operations of PJP (the "Key Employees"); (c) copies of all
contracts, licenses and permits held by PJP; (d) all other
information delivered by PTFI to PJP in connection with the
transfer of the New Facilities from PTFI to PJP pursuant to the
New Asset Sale Agreement, including all information reflected in
the schedules attached thereto; and (e) all other information and
documentation that is reasonably requested by PTFI with respect
to the transferor, the assets being transferred, liabilities
being assumed or the operations of PJP.
Section 8.02 Closing. The closing of any Transaction
(each a "Closing") shall occur on such date and in such location
as the parties may agree; provided that, if the parties cannot
agree, the closing shall occur in the offices of PTFI in either
New Orleans, Louisiana or Jakarta, Indonesia, at PTFI's option,
on the Business Day immediately following the occurrence or
waiver by PTFI of the last of the conditions to closing set forth
in Article 9, except that, absent such agreement in the case of a
Transaction under Article 4, the Closing shall occur at such
place in New York, New York as PJP shall specify (i) immediately
(in the case of an Event of Default under Section 16.01(c) of the
Restated Power Sales Agreement), (ii) within one hundred and
eighty (180) Days of the Mandatory Purchase Right Exercise Notice
Date (in the case of an Event of Default under Section 16.01(a)
or (b) of the Restated Power Sales Agreement), or (iii) within
thirty (30) Days of the Mandatory Purchase Right Exercise Notice
Date (in the case of an Event of Default under Section 16.01(f)
of the Restated Power Sales Agreement), or if any such day is not
a Business Day, on the next succeeding Business Day. At the
Closing, each of the parties shall execute and deliver to the
other party any and all documents and agreements that are
reasonably requested by the other party to effectuate the
Transaction and PTFI shall deliver the appropriate purchase price
to the transferor by wire transfer or cashier's check.
Section 8.03 Representations and Warranties at Closing.
Except in the case of a Transaction under Article 4, the
definitive documents to be executed by the parties in connection
with the Closing (the "Definitive Documents") shall contain
representations, warranties and covenants by the transferor of
Shares or Property, as the case may be (the "Transferor"), that
are substantially similar to (i) the representations and
warranties set forth in Sections 3.01, 3.02, 3.03, 3.07, 3.10 and
3.13 of the New Asset Sale Agreement and a representation and
warranty that PJP has no material liabilities not disclosed on
its most recent audited balance sheet or otherwise disclosed to
PTFI in writing, and (ii) the covenants set forth in Sections
5.01, 5.02 5.04 and Article 7 of the New Asset Sale Agreement
with regard to PTFI, to the extent applicable. In connection
with any Transaction set forth in Articles 5, 6 or 7, the
Definitive Documents shall also include representations and
warranties by the transferor: (a) that the Shares being acquired
by PTFI are fully paid, non-assessable, (b) that legal and
beneficial title to such Shares is held by the Transferor free
and clear of any and all Liens (except Liens in favor of the
Senior Secured Lenders), and (c) that the transfer documents are
sufficient to transfer to PTFI all of the Transferor's right,
title and interest in and to the Shares being transferred.
Section 8.04 Indemnity. Except in the case of a
Transaction under Article 4, the Definitive Documents shall
contain an indemnity by the Transferor that is substantially
similar to the indemnification provisions that are set forth in
Section 10.01 of the New Asset Sale Agreement with regard to
PTFI.
Section 8.05 No Contravention. Except in the case of a
Transaction under Article 4, the Definitive Documents in
connection with any Transaction set forth in Articles 2, 3 or 4
shall contain a provision substantially similar to Section 2.
of the New Asset Sale Agreement.
Section 8.06 Closing Costs. Each party to any Transaction
shall bear all of the costs of its personnel, attorneys and
advisors in connection with the preparation and negotiation of
the Definitive Documents, other documents to be furnished by it
and, except as provided below in this Section 8.06, otherwise in
connection with any Transaction; provided, that if any
Transaction hereunder occurs subsequent to a PTFI Event of
Default, PTFI shall bear all attorneys' costs incurred in
connection with such Transaction. All transfer and other taxes,
all notarial and filing costs and fees, and all similar third
party costs which are incurred as a result of any Transaction
(the "Closing Costs") shall be paid by PTFI; provided, however,
if the Transaction results from PTFI's exercise of its rights
under Sections 2.05(a), 2.05(b), 6.05(a) or 6.05(b), then PJP or
the Shareholders, as applicable, shall pay such Closing Costs.
Section 8.07 Employees. In connection with any
Transaction involving all of the Shares or all or substantially
all of the Property set forth in Articles 2, 3, 4 or 6, PTFI
shall be permitted to hire from PJP or its Affiliates any or all
of the Key Employees that PTFI identifies to PJP in writing, and
PJP agrees that it will terminate at, but not prior to, the
Closing any Key Employees that PTFI so indicates that it would
like to hire. Except in the case of a transaction under Article
4, each of PJP and the Shareholders agrees that neither PJP, any
Shareholder nor any Affiliate of any of them will give any new
offer of employment (or any offer which is similar to employment,
such as a consulting arrangement) to any such Key Employee for an
eighteen (18) month period beginning on the date of any Notice
under this Option Agreement. PJP agrees not to interfere with
the hiring by PTFI of any Key Employees, and PJP hereby waives
any claims or rights that PJP may have with respect to any such
hiring.
Section 8.08 Assumption or Payment of Obligations by PTFI.
In connection with and as a condition to any purchase of all or
substantially all of the Property pursuant to Articles 2, 3 or 4,
PTFI shall assume, indemnify and hold PJP harmless from, unless
there has occurred and is continuing an Event of Default under
the Restated Power Sales Agreement relating to PTFI, in which
case PTFI shall pay and discharge in full (i) all outstanding
principal, interest and other amounts payable by PJP, or an
Affiliate of PJP, to the Senior Secured Lenders under the
Financing Documents and, to the extent approved by PTFI, other
Debt of PJP, (ii) all of the other obligations and liabilities of
PJP as to which PTFI has an obligation to reimburse PJP pursuant
to the Restated Power Sales Agreement or would have been required
to reimburse PJP pursuant to the Restated Power Sales Agreement
if PJP had continued to operate the Property or portioon of the
Property so purchased by PTFI, (iii) all obligations and
liabilities of PJP under contracts for the sale of electricity to
third parties to which PTFI has previously consented pursuant to
the Restated Power Sales Agreement and (iv) for the period after
the closing date of such purchase, all obligations and
liabilities of PJP under all contracts between PJP and one or
more third parties that are assumed by PTFI. It is expressly
understood by the parties that the obligations of PTFI under
clause (i) of this Section 8.08 are absolute and unconditional
and shall be performed by PTFI (A) on the date on which the
Restated Power Sales Agreement is terminated due to an Event of
Default by either PTFI or PJP and (B) regardless of whether or
not PJP complies with any Section of this Article 8 and
regardless of whether any of the conditions set forth in Article
9 is satisfied.
Section 8.09 No Liens. In connection with each of the
Transactions set forth in Articles 2, 3 or 4, all of the Property
shall be transferred to PTFI free and clear of any and all Liens
other than Permitted Liens or Liens created by the acts or
omissions of PTFI.
Section 8.10 Post-Closing Transition Obligations. For a
reasonable period of time following the Closing, each of PJP and
the Shareholders shall provide to PTFI any and all reasonable
assistance requested by PTFI in connection with the transition of
the ownership, operation and maintenance of the Facilities. PTFI
shall reimburse PJP and the Shareholders within a reasonable
period of time following receipt of an invoice for any direct,
reasonable, out-of-pocket expenses in connection with any such
transitional assistance.
Section 8.11 Risk of Loss. Pending any Closing, the risk
of loss or damage to the Property or Shares being transferred by
fire or other casualty or its taking or damage by condemnation
shall be on the Transferor.
ARTICLE 9
CONDITIONS TO CLOSING
Section 9.01 Conditions to the Obligations of Each Party
at the Closing. The obligations of each party to consummate the
Closing are subject to the satisfaction of the following
conditions (except that, in the case of a transaction under
Article 4, any condition which cannot be satisfied as a result of
any act or omission on the part of PTFI shall be waived):
(a) No provision of any applicable law or
regulation and no judgment, injunction, order or decree
shall (i) prohibit the consummation of the Closing or (ii)
restrain, prohibit or otherwise materially interfere with
the effective operation of all or any portion of the
Property.
(b) All actions by or in respect of or filings
with any governmental body, agency, official or authority
required to permit the consummation of the Closing,
including, without limitation, all approvals set forth in
any Schedule produced by the Transferor pursuant to Section
8.01 or 8.03 hereto, any approval of the BKPM, PLN, MOME,
BPN, the Bank of Indonesia and any other department,
Ministry or agency of the Indonesian Government necessary
for the transfer scheduled to be consummated at the Closing,
for the parties to execute the Definitive Documents and for
the continued operation of the Property.
(c) There shall have been no Material Adverse
Effect with respect to the Property since the date of the
Notice.
(d) PTFI shall have obtained all approvals and
consents required under its contractual arrangements in
connection with the execution of the Definitive Documents.
(e) As of the date of the Closing, PJP shall not
be in violation of any law or regulation relating to the
Property, except for violations which could not reasonably
be expected to have a Material Adverse Effect, and there
shall be no action, suit, investigation or proceeding
pending, or to PJP's knowledge threatened, against or
affecting the Property before any court or arbitrator or any
governmental body, agency or official which is reasonably
likely to be determined or resolved in a manner which could
reasonably be expected to have a Material Adverse Effect or
which in any manner challenges or seeks to prevent, enjoin
or materially alter or delay the transactions contemplated
hereby or by the Definitive Documents.
(f) Each of the Definitive Documents shall have
been executed and delivered in form and substance
satisfactory to the parties thereto and shall be in full
force and effect, and no default by any party thereto in the
performance of its obligations thereunder shall have
occurred and be continuing.
Section 9.02 Conditions to Obligation of the Transferor at
the Closing. The obligation of the Transferor to consummate the
Closing is also subject to the satisfaction of the following
further conditions:
(a) PTFI shall have performed in all material
respects all of its obligations hereunder required to be
performed by it on or prior to the Closing, the
representations and warranties of PTFI set forth in the
Definitive Documents shall be true in all material respects
at and as of the Closing, as if made at and as of such date
and the Transferor shall have received a certificate signed
by an authorized officer of PTFI to the foregoing effect.
(b) With respect to the Closing, (i) the
Transferor shall have received all consents, authorizations
or approvals from governmental agencies which are required
to effectuate the Transfer, in each case in form and
substance reasonably satisfactory to the Transferor and no
such consent, authorization or approval shall have been
revoked and no proceeding or formal investigation shall have
been commenced to revoke such consent, authorization or
approval and (ii) the Transferor shall have received such
legal opinions as it shall reasonably request.
Section 9.03 Conditions to the Obligations of PTFI at the
Closing. The obligations of PTFI to consummate the Closing is
also subject to the satisfaction of the following further
conditions (except that, in the case of a transaction under
Article 4, any conditionn which cannot be satisfied as a result of
any act or omission on the part of PTFI shall be waived):
(a) the Transferor shall have performed in all
material respects all of its obligations hereunder required
to be performed by it at or prior to the Closing, the
representations and warranties of the Transferor set forth
in the Definitive Documents shall be true in all material
respects at and as of the Closing, as if made at and as of
such date and PTFI shall have received a certificate signed
by an authorized representative of the Transferor to the
foregoing effect.
(b) PTFI shall have received all consents,
permits, authorizations or approvals from any governmental
agencies required to effectuate the Transfer to be
consummated at the Closing, and each shall be in form and
substance reasonably satisfactory to PTFI, and no such
consent, permit, authorization or approval shall have been
revoked and no proceeding or formal investigation shall have
been commenced to revoke such consent, authorization or
approval.
ARTICLE 10
COVENANTS
Section 10.01 Single Purpose Entity. Each of the
Shareholders hereby covenants and agrees that during the Option
Period it shall vote its Shares, and shall instruct any of PJP's
commissioners and directors nominated by it, to retain PJP's
status as a single purpose entity whose only business is the
ownership and operation of electric generation, transmission and
distribution facilities in the area in which PTFI conducts its
operations pursuant to the COW.
Section 10.02 Transferee to be Bound. PJP hereby covenants
and agrees to cause any Person to whom any Property (other than
non-essential Property as contemplated by Section 3.01) is sold,
conveyed, transferred or assigned to execute such document or
documents, in form and substance reasonably satisfactory to each
other party, as will expressly bind such transferee to the terms
of this Option Agreement. PJP and each of the Shareholders
hereby covenants and agrees to cause any Person to whom it
issues, sells, conveys, transfers or assigns any Shares to
execute such document or documents, in form and substance
reasonably satisfactory to each other party, as will expressly
bind such transferee to the terms of this Option Agreement.
Section 10.03 Notification of Changes. PJP and each of the
Shareholders hereby covenants and agrees that during the Option
Period it shall promptly inform PTFI of any (i) proposed change
to the Articles, the Restated Shareholders Agreement and any
other document or agreement governing the relationship between
the Shareholders or between the Shareholders and PJP, (ii)
proposed transfer of non-essential Property to a Shareholder or
an Affiliate thereof as contemplated by Section 3.01, (iii)
proposed issuance, sale, conveyance, transfer or assignment of
Shares by PJP to any Shareholder or Affiliate thereof, (iv)
proposed sale, conveyance, transfer or assignment of Shares to
any Shareholder to any other Shareholder or an Affiliate thereof,
(v) any proposed Change in Control and (vi) incurrence of any
material liability by PJP.
Section 10.04 Cooperation. Each party hereto hereby
covenants and agrees to use all reasonable efforts to cooperate
with each other Party to this Agreement in fulfilling its
obligations hereunder including, but not limited to, executing
consents and other documents, attending meetings and doing such
other things as are reasonably necessary in order that the
Conditions to Closing set forth in Article 9 are fulfilled prior
to the Closing Date of any Transaction, even though not a party
to such Transaction.
ARTICLE 11
MISCELLANEOUS
Section 11.01 Notices. All notices, requests and other
communications to either party hereunder (i) shall be in writing
(including facsimile transmissions), (ii) shall be given
if to PTFI, to:
P.T. Freeport Indonesia Company
Plaza 89, 5th Floor
▇▇. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇-▇, ▇▇. ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Attention: President Director
Telecopy: 011-62-21-850-4535
with a copy to:
P.T. Freeport Indonesia Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Attention: General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
if to PJP, to:
P.T. Puncakjaya ▇▇▇▇▇
▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇-▇ ▇▇. ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Attention: President Director
Telecopy: 011-62-21-850-8178
with a copy to:
P.T. Puncakjaya Power
c/o Duke Energy International LLC
Suite 1800
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Attention: Puncakjaya Power Project Administrator
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
if to DIJ, to:
Duke Irian Jaya, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Attention: President
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
if to WPI, to:
Westcoast Power, Inc.
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attention: Vice President, Indonesia
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
and if to PNJ, to:
P.T. Prasarana ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇-▇, ▇▇. ▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Attn: Managing Director
Telecopy: 011-62-21-850-6743
and (iii) shall be sent either (A) internationally recognized
express courier service (postage prepaid) that guarantees
delivery to the intended destination within a specified number of
days or (B) by telecopier with a hard copy sent in accordance
with (A) above. All such notices, requests and other
communications shall be deemed received two days after they are
sent if sent in accordance with (B) above and if sent by in
accordance with (A) above, in accordance with (A) above, in the
number of days following the
delivery to the carrier which is equal to the number of days
within which the carrier guarantees delivery to the intended
destination.
Section 11.02 Amendments and Waivers.(a) Any provision of
this Option Agreement may be amended or waived if and only if
such amendment or waiver is in writing and is signed, in the case
of an amendment, by each party to this Option Agreement, or in
the case of a waiver, by the party against whom the waiver is to
be effective.
(b) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided by law, subject to the limitations herein set
forth.
Section 11.03 Expenses. Except as otherwise provided
herein, all costs and expenses incurred in connection with this
Option Agreement shall be paid by the party incurring such cost
or expense.
Section 11.04 Successors and Assigns. The provisions of
this Option Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns; provided, that no party may assign, delegate or
otherwise transfer any of its rights or obligations under this
Option Agreement without the prior written consent of the other
party hereto.
Section 11.05 Assignment. PTFI shall not be permitted to
assign its rights or obligations under this Option Agreement
without the prior written consent of the other parties.
Section 11.06 Governing Law. This Option Agreement shall
be governed by and construed in accordance with the law of the
State of New York without regard to principles of conflicts of
laws.
Section 11.07 Counterparts; Effectiveness. This Option
Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This
Option Agreement shall become effective when signed by all
parties hereto.
Section 11.08 Entire Agreement; Third Party Beneficiaries.
This Option Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter
of this Option Agreement. Nothing in this Option Agreement is
intended to confer upon any Person other than the Parties hereto
and their successors and assigns any rights or remedies
hereunder. This Option Agreement shall remain in full force and
effect and shall not be terminated by either of the Parties
during the Option Period.
Section 11.09 Confidentiality. Each party hereto will
hold, and will use its reasonable efforts to cause its respective
officers, directors, employees, accountants, counsel,
consultants, advisers and agents to hold, in confidence for a
period of five (5) years commencing with the date of receipt
thereof, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all
documents and information furnished to such party, as applicable,
or any of its respective Affiliates in connection with the
transactions contemplated by this Option Agreement to the extent
that the documents or the context of their disclosure indicate
that they are intended to be confidential, except to the extent
that such information can be shown to have been (i) previously
known on a nonconfidential basis by it, (ii) in the public domain
through no fault of it, or (iii) later lawfully acquired by it
from sources other than such party, as applicable; provided, that
PJP may disclose such information to its officers, directors,
employees, accountants, counsel, consultants, advisors and agents
in connection with the transactions contemplated by the Restated
Power Sales Agreement and to prospective lenders or purchasers of
PJP debt instruments in connection with obtaining the financing
for the transactions contemplated by the New Asset Sale Agreement
and the refinancing of the Existing Assets, so long as such
Persons are informed by PJP of the confidential nature of such
information and are directed by PJP to treat such information
confidentially and, in the case of prospective lenders or
purchasers of PJP debt instruments, agree in writing to be bound
by the terms of this confidentiality provision or other
confidentiality provisions acceptable to PJP. The obligation of
each party and its respective Affiliates to hold any such
information in confidence shall be satisfied if they exercise the
same care with respect to such information as they would take to
preserve the confidentiality of their own similar information.
If this Option Agreement is terminated, each party and its
respective Affiliates will, and will use their reasonable efforts
to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to,
destroy or deliver to each other party, as applicable, upon
request, all documents and other materials, and all copies
thereof, obtained by each such party or its Affiliates or on its
behalf from each other party, as applicable, in connection with
this Option Agreement that are subject to such confidence.
Section 11.10 Captions. The captions herein are included
for convenience of reference only and shall not be used in the
construction of interpretation hereof.
Section 11.11 Survival. Except as expressly provided in
this Option Agreement, the covenants, agreements, representations
and warranties of the parties hereto set forth in this Option
Agreement or in any certificate or other writing pursuant hereto
or in connection herewith shall not survive the Closing at which
they were made.
IN WITNESS WHEREOF, the parties hereto have caused this
Option Agreement to be duly executed by their respective
authorized officers as of the day and year first written above.
P.T. FREEPORT INDONESIA COMPANY
By: Signed
Name:
Title:
P.T. PUNCAKJAYA POWER
By: Signed
Name:
Title:
DUKE IRIAN JAYA, INC.
By: Signed
Name:
Title:
WESTCOAST POWER, INC.
By: Signed
Name:
Title:
P.T. PRASARANA NUSANTARA JAYA
By: Signed
Name:
Title:
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND USAGE................................2
SECTION 1.01 DEFINITIONS......................................2
SECTION 1.02 USAGE............................................2
ARTICLE 2 THE OPTION BY PTFI TO PURCHASE THE PROPERTY..........2
SECTION 2.01 GRANTING OF THE PROPERTY PURCHASE OPTION.........2
SECTION 2.02 FEE FOR THE PROPERTY PURCHASE OPTION.............3
SECTION 2.03 OPTION IRREVOCABLE AND BINDING...................3
SECTION 2.04 PROCEDURES FOR EXERCISE OF OPTION................3
SECTION 2.05 PROPERTY PURCHASE OPTION PRICE...................3
SECTION 2.06 CONSENT REQUIRED.................................4
SECTION 2.07 FAIRNESS OF TAX GROSS-UP.........................5
ARTICLE 3 THE RIGHT OF FIRST REFUSAL OF PTFI TO PURCHASE THE
PROPERTY.......................................................5
SECTION 3.01 GRANTING OF THE RIGHT OF FIRST REFUSAL AS TO
PROPERTY.........................................5
SECTION 3.02 PERMITTED TRANSFERS..............................5
SECTION 3.03 TRANSFER TO A PRE-APPROVED PARTY.................6
SECTION 3.04 RIGHT OF FIRST REFUSAL...........................6
SECTION 3.05 DURATION OF THE RIGHT OF FIRST REFUSAL AS TO
PROPERTY.........................................7
SECTION 3.06 RIGHT OF FIRST REFUSAL AS TO PROPERTY CLOSING
MATTERS..........................................7
SECTION 3.07 PJP'S RIGHTS UPON PTFI'S WAIVER..................7
ARTICLE 4 THE RIGHT OF PJP TO REQUIRE PTFI TO OFFER TO PURCHASE
THE PROPERTY OR THE SHARES.....................................7
SECTION 4.01 GRANTING OF THE RIGHT TO REQUIRE THE OFFER TO
PURCHASE PROPERTY OR SHARES ..................................7
SECTION 4.02 FEE FOR THE MANDATORY PURCHASE RIGHT.............8
SECTION 4.03 MANDATORY PURCHASE RIGHT IRREVOCABLE AND BINDING.8
SECTION 4.04 PROCEDURES FOR EXERCISE OF MANDATORY PURCHASE
RIGHT............................................8
SECTION 4.05 MANDATORY PURCHASE RIGHT PURCHASE PRICE..........9
ARTICLE 5 THE RIGHT OF FIRST REFUSAL BY PTFI TO PURCHASE SHARES
FROM PJP.......................................................9
SECTION 5.01 GRANTING OF THE PJP RIGHT OF FIRST REFUSAL AS TO
PORTFOLIO SHARES .............................................9
SECTION 5.02 PERMITTED TRANSFERS..............................9
SECTION 5.03 ISSUANCE TO A PRE-APPROVED PARTY.................9
SECTION 5.04 PJP SHARE RIGHT OF FIRST REFUSAL................10
SECTION 5.05 DURATION OF THE PJP RIGHT OF FIRST REFUSAL AS TO
PORTFOLIO SHARES ............................................10
SECTION 5.06 RIGHT OF FIRST REFUSAL AS TO PORTFOLIO SHARES
CLOSING MATTERS .............................................10
SECTION 5.07 PJP'S RIGHTS UPON PTFI'S WAIVER.................11
ARTICLE 6 THE OPTION BY PTFI TO PURCHASE SHARES FROM THE
SHAREHOLDERS..................................................11
SECTION 6.01 GRANTING OF THE SHAREHOLDER SHARE PURCHASE OPTION.11
SECTION 6.02 FEE FOR THE SHAREHOLDER SHARE PURCHASE OPTION...11
SECTION 6.03 OPTION IRREVOCABLE AND BINDING..................11
SECTION 6.04 PROCEDURES FOR EXERCISE OF OPTION...............12
SECTION 6.05 SHAREHOLDER SHARE PURCHASE OPTION PRICE.........12
SECTION 6.06 FAIRNESS OF TAX GROSS-UP........................13
ARTICLE 7 THE RIGHT OF FIRST REFUSAL BY PTFI TO PURCHASE SHARES
FROM THE SHAREHOLDERS.........................................14
SECTION 7.01 GRANTING OF THE SHAREHOLDER SHARE RIGHT OF FIRST
REFUSAL......................................................14
SECTION 7.02 PERMITTED TRANSFERS.............................14
SECTION 7.03 TRANSFER TO A PRE-APPROVED PARTY................14
SECTION 7.04 SHAREHOLDER SHARE RIGHT OF FIRST REFUSAL........15
SECTION 7.05 DURATION OF THE SHAREHOLDER SHARE RIGHT OF FIRST
REFUSAL......................................................15
SECTION 7.06 SHAREHOLDER S HARE RIGHT OF FIRST REFUSAL CLOSING
MATTERS......................................................16
SECTION 7.07 SHAREHOLDER'S RIGHTS UPON PTFI'S WAIVER.........16
SECTION 7.08 PJP ACKNOWLEDGMENT..............................16
ARTICLE 8 PROVISIONS APPLICABLE TO THE CLOSING................15
SECTION 8.01 PRE-CLOSING OBLIGATIONS.........................16
SECTION 8.02 CLOSING.........................................17
SECTION 8.03 REPRESENTATIONS AND WARRANTIES AT CLOSING......17
SECTION 8.04 INDEMNITY.......................................17
SECTION 8.05 NO CONTRAVENTION................................17
SECTION 8.06 CLOSING COSTS...................................18
SECTION 8.07 EMPLOYEES.......................................18
SECTION 8.08 ASSUMPTION OR PAYMENT OF OBLIGATIONS BY PTFI....18
SECTION 8.09 NO LIENS........................................19
SECTION 8.10 POST-CLOSING TRANSITION OBLIGATIONS.............19
SECTION 8.11 RISK OF LOSS....................................19
ARTICLE 9 CONDITIONS TO CLOSING...............................19
SECTION 9.01 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY AT THE
CLOSING......................................................19
SECTION 9.02 CONDITIONS TO OBLIGATION OF THE TRANSFEROR AT THE
CLOSING......................................................20
SECTION 9.03 CONDITIONS TO THE OBLIGATIONS OF PTFI AT THE
CLOSING......................................................20
ARTICLE 10 COVENANTS..........................................21
SECTION 10.01 SINGLE PURPOSE ENTITY..........................21
SECTION 10.02 TRANSFEREE TO BE BOUND.........................21
SECTION 10.03 NOTIFICATION OF CHANGES........................21
SECTION 10.04 COOPERATION....................................22
ARTICLE 11 MISCELLANEOUS......................................22
SECTION 11.01 NOTICES........................................22
SECTION 11.02 AMENDMENTS AND WAIVERS.........................24
SECTION 11.03 EXPENSES.......................................24
SECTION 11.04 SUCCESSORS AND ASSIGNS.........................24
SECTION 11.05 ASSIGNMENT.....................................25
SECTION 11.06 GOVERNING LAW..................................25
SECTION 11.07 COUNTERPARTS; EFFECTIVENESS....................25
SECTION 11.08 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES....25
SECTION 11.09 CONFIDENTIALITY................................25
SECTION 11.10 CAPTIONS.......................................26
SECTION 11.11 SURVIVAL.......................................26