EXHIBIT 10.4
______________________________________________________________
JOINT VENTURE AND SHAREHOLDERS' AGREEMENT
between
MITSUBISHI MATERIALS CORPORATION
and
P.T. FREEPORT INDONESIA COMPANY
and
FLUOR ▇▇▇▇▇▇ ▇▇▇▇, INC.
entered into as of October 25, 1995
______________________________________________________________
JOINT VENTURE AND SHAREHOLDERS' AGREEMENT
THIS JOINT VENTURE AND SHAREHOLDERS' AGREEMENT is made as
of this 25th day of October 1995 between MITSUBISHI MATERIALS
CORPORATION ("MMC"), a company organized and existing under
the laws of Japan; P.T. FREEPORT INDONESIA COMPANY ("FI"), a
company established under the laws of the Republic of
Indonesia which is also domesticated in the State of Delaware,
U.S.A.; and FLUOR ▇▇▇▇▇▇ ▇▇▇▇, INC. ("FLUOR"), a company
organized and existing under the laws of the State of
California, U.S.A. (sometimes referred to individually as
" Party" and together as the "Parties").
WHEREAS, as described in " Gresik Smelter Project -
Equity Partner's Philosophy," the Parties have agreed in
principle to work together in a spirit of good faith and
cooperation to develop, construct, own and operate a 200,000
metric ton per annum copper smelter and refinery to be located
at Gresik, East Java, Indonesia (the "Project");
WHEREAS, the Parties have entered into that certain
Project Planning Agreement dated May 12, 1995 (the "Project
Planning Agreement") concerning the preparation of a
feasibility study for the Project;
WHEREAS, consistent with and in furtherance of the terms
of the Project Planning Agreement, the Parties desire to form
a foreign investment company under the provisions of Law No. 1
of 1967, as amended, and other applicable laws of the Republic
of Indonesia (the "Project Company") to implement the
Project;
NOW, THEREFORE, in consideration of the mutual promises
and covenants hereinafter set forth, the Parties hereby agree
as follows:
ARTICLE 1. DEFINITIONS AND INTERPRETATION.
1.1 Definitions. The following capitalized terms shall have
the meanings in this Agreement as set forth below:
"AIP" shall mean that certain Agreement in Principle dated
January 6, 1995 between MMC, Freeport-McMoran Copper & Gold
Inc., a corporation organized under the laws of the State of
Delaware, U.S.A. ("FCX") and Fluor ▇▇▇▇▇▇ ▇▇▇▇▇▇ Ltd., a
company organized and existing under the laws of the Province
of British Columbia, Commonwealth of Canada.
"Auditor" means any independent firm of certified public
accountants of good international repute, appointed by Project
Company and approved by a General Meeting of Shareholders.
"Basic Proportions" means the proportions in which the
Parties own shares in the Project Company as set forth in
Section 3.2 and any subsequent modifications, supplements or
amendments thereto.
"Concentrate Purchase and Sale Agreement" means the agreement
in form and substance approved in writing by all of the
Parties to be entered into between Project Company and FI
pursuant to which FI will sell to Project Company, and Project
Company will purchase from FI, 100% of the copper concentrates
required for the operation of the Facilities, and any
subsequent modifications, supplements or amendments thereto.
"EPC Agreement" means the agreement in form and substance
approved in writing by all of the Parties to be entered into
between Project Company and FLUOR or one of more of its
Affiliates as the main contractor for the engineering,
procurement and construction of the Facilities for the
Project, and any subsequent modifications, supplements or
amendments thereto.
"Feasibility Study Expenses" shall have the meaning as
defined in the Project Planning Agreement.
"Lease Agreement" means the agreement in form and substance
approved in writing by all of the Parties to be entered into
between the Project Company and PG pursuant to which PG will
lease land to the Project Company required for the Facilities,
and any subsequent modifications, supplements or amendments
thereto.
"Major Contracts" means (i) the MMC Offshore Marketing
Services Agreement, (ii) the PG Sulfuric Acid Agreement, (iii)
the Lease Agreement, (iv) the MMC Offshore Operation and
Technical Assistance Agreement, (v) the MMC License Agreement,
(vi) the Concentrate Purchase and Sale Agreement,(vii) the
Project Financing Agreements, (viii) the EPC Agreement(s)
(including major subcontracts), and (ix) the PG Facilities
Agreement.
"MMC License Agreement" means the agreement in form and
substance approved in writing by all of the Parties to be
entered into between Project Company and MMC and/or one or
more of its Affiliate(s) pursuant to which MMC and/or one or
more of its Affiliates(s) will grant to Project Company a
license of the Mitsubishi Process, and any subsequent
modifications, supplements or amendments thereto.
"MMC Offshore Marketing Services Agreement" means the
agreement in form and substance approved in writing by all of
the Parties to be entered into between Project Company and MMC
pursuant to which MMC will market products produced by the
Project Company, and any subsequent modifications, supplements
or amendments thereto.
"MMC Offshore Operation and Technical Assistance Agreement"
means the agreement in form and substance approved in writing
by all of the Parties to be entered into between Project
Company and MMC and/or one or more of its Affiliates pursuant
to which MMC and/or its Affiliates will provide management
services to the Project Company, and any subsequent
modifications, supplements or amendments thereto.
"MSK" means Mitsubishi Corporation, a company organized and
existing under the laws of Japan.
"NMM" means Nippon Mining and Metals, Co., Ltd., a company
organized and existing under the laws of Japan.
"Penalty Interest Rate" means with respect to amounts to be
paid by a Party in U.S. Dollars, the published prime
commercial lending rate of at The Chase Manhattan Bank,
National Association, from the due date of the payment as
changed from time to time, plus 2% (such rate to be adjusted
simultaneously with each change in such prime commercial
lending rate) and calculated on the basis of a 365 days year
and actual days elapsed.
"PG" means P.T. Petrokimia Gresik (Persero), a State owned
Indonesian limited liability company.
"PG Facilities Agreement" means the agreement in form and
substance approved in writing by all of the Parties to be
entered into between Project Company and PG pursuant to which
PG will provide the use of certain facilities to the Project
Company, and any subsequent modifications, supplements or
amendments thereto.
"PG Sulfuric Acid Agreement" means the agreement in form and
substance approved in writing by all of the Parties to be
entered into between Project Company and PG pursuant to which
PG will purchase from the Project Company, and Project Company
will sell to PG the Project Company's sulfuric acid output
and any subsequent modifications, supplements or amendments
thereto.
"PMA Account" means the Indonesian bank account established
by the Project Company and into which shall be deposited all
amounts contributed by each Party to the Project Company for
Shares issued by the Project Company to such Party, or for
Subordinated Loans made by such Party to the Project Company.
"Production Date" means the date on which the Project begins
commercial operation (as commercial operation is defined in
the Project Loans).
"Project Loans" mean the loan agreements in form and
substance approved in writing by all of the Parties to be
entered into between Project Company and its lenders in
regards to financing of the Project.
"ROI" means the Republic of Indonesia.
"Shareholder" means a person who owns shares in the Project
Company.
"Share" or "Shares" means a share of common stock in the
Project Company.
"Subordinated Loans" means a loan made by any Shareholder to
the Company which by its terms is expressly made subordinate
to the Project Loans.
"Subsidiary" means any entity in which a Party to this
Agreement holds, directly or indirectly, through one or more
intermediaries, beneficial ownership of fifty percent (50%) or
more of the voting shares or equity interests.
"Transfer" means any pledge, mortgage, hypothecation,
encumbrance, assignment, sale, conveyance or disposition,
whether voluntarily, by operation of law, at judicial sale or
otherwise.
1.2 Construction
a) In this Agreement, unless the context otherwise
requires, the singular shall include the plural and
vice versa and reference to a gender shall include
any other gender.
b) Any reference herein to a Section or Sections is a
reference to the referenced Section or Sections of
this Agreement unless otherwise specifically
provided.
ARTICLE 2. ESTABLISHMENT OF PROJECT COMPANY
2.1 Organization and Registration. The Parties shall use
their best efforts to have the Project Company organized and
registered promptly under the laws of the ROI. The cost of the
Notary who will review the Articles of Association prior to
their submission to the ROI Ministry of Justice shall be
treated as a preincorporation expense.
2.2 Articles of Association. At the time of organization and
registration of Project Company, the Parties shall cause
Project Company to register the Articles of Association in the
form attached hereto as Attachment "A," unless otherwise
required by the ROI Ministry of Justice and approved in
writing by all the Parties. The Parties acknowledge that the
provisions of this Agreement are more detailed in certain
respects than the Articles of Association and the Parties
agree that in such cases the more detailed provisions of this
Agreement, as among the Parties, shall be applicable. In the
event of any conflict between the provisions of this Agreement
and the Articles of Association, this Agreement shall control
and the Parties shall to the extent permitted by applicable
law amend the Articles of Association to the extent of any
such conflict, so as to be consistent with the provisions of
this Agreement.
2.3 Ratification by Project Company. The Parties shall cause
the Project Company to ratify and agree to be bound by this
Agreement as if it were a party hereto and to carry out the
management and administration and its businesses in accordance
with the terms and conditions of this Agreement, and to
perform all obligations intended under this Agreement to be
undertaken or performed by the Project Company.
ARTICLE 3. CAPITAL, SHARES, AND SUBORDINATED LOANS
3.1 Initial Authorized Capital/Shares/Par Value. The Project
Company shall be incorporated with an initial authorized
capital (the "Initial Authorized Capital") of Rp
191,275,000,000 (One Hundred Ninety-One Billion, Two Hundred
Seventy-Five Million Rupiah) [US$ 87,500,000 (Eighty-Seven
Million, Five Hundred Thousand United States Dollars)], to be
divided into Shares of par value Rp218,600 (Two Hundred
Eighteen Thousand, Six Hundred Rupiah) [US$100 (One Hundred
United States Dollars)] each.
3.2 Subscription for Initial Issued Capital. The initial
issuance of authorized capital (the "Initial Issued Capital")
shall be Rp 191,275,000,000 (One Hundred Ninety-One Billion,
Two Hundred Seventy-Five Million Rupiah [US$87,500,000
(Eighty-Seven Million, Five Hundred Thousand United States
Dollars)], represented by Eight Hundred Seventy-Five Thousand
(875,000) Shares. The Parties agree to subscribe for and
accept the Shares of the Initial Issued Capital in the
following ratio:
Party Number of Shares Subscription Basic
Amount Proportion
-------- ----------------- ------------- ----------
MMC 612,500 US$61,250,000 70%
FI 175,000 US$17,500,000 20%
FLUOR 87,500 US $8,750,000 10%
3.3 Initial Payment for Initial Issued Capital. Provided that
all conditions precedent to such payment as set forth in
Section 3.8 have been satisfied, each Party shall pay ten
percent (10%) of the subscription amount for the Initial
Issued Capital specified in Section 3.2 within fourteen (14)
days after approval of the Articles of Association by the ROI
Ministry of Justice. Payment shall be made in cash in U.S.
Dollars, in a lump sum into the PMA Account or Accounts
without any right of set-off.
3.4 Payment of the Initial Issued Capital Subscription
Balance. In accordance with the Financial Plan and the
provisions of this Agreement, the Board of Directors may,
subject to approval by the General Meeting of Shareholders,
call further payments by the Parties for the Initial Issued
Capital until the Shares subscribed to in Section 3.2 are
fully paid-up. The Board of Directors may call such payments,
subject to approval by the General Meeting of Shareholders,
in U.S. Dollars at such times and in such amounts as may be
necessary to meet the expenditures of the Project Company in
accordance with the Financial Plan. On each call for further
payment, each Party shall pay in cash in the amount due
without any right of set-off within thirty (30) days from the
date of the notice into the PMA Account or Accounts of
Project Company opened for that purpose without any right of
setoff. All Shares subscribed for in Section 3.2 must be fully
paid up on or before the Production Date in accordance with
the Financial Plan.
3.5 Increase of Authorized Capital Amount Prior to Production
Date. Notwithstanding the Articles of Association, prior to
the Production Date the Board of Directors may resolve, in
accordance with the Financial Plan and the provisions of this
Agreement and subject to approval by the General Meeting of
Shareholders, that the Project Company shall increase its
authorized capital amount and/or the amount of Subordinated
Loans at such times and in such amounts as may be necessary to
meet the expenditures of the Project Company in accordance
with the Financial Plan. Upon approval by the General Meeting
of Shareholders, the shares representing the increased
authorized capital amount and/or the additional Subordinated
Loans shall be offered to and subscribed to and/or lent by
each of the Parties in its Basic Proportion. Each Party shall
pay in cash in U.S. Dollars, without any right of set-off, the
amount due into the PMA Account or Accounts of Project Company
opened for that purpose within fourteen (14) days after
approval of the amendment of the Articles of Association by
the ROI Ministry of Justice.
3.6 Making of Subordinated Loans. In addition to the capital
subscriptions set forth in Sections 3.2 and 3.5, as such time
or times as set by the Board of Directors and approved by the
General Meeting of Shareholders in accordance with the
Financial Plan and the Project Loans, each Shareholder agrees
to make Subordinated Loans to the Project Company in U.S.
Dollars in the following aggregate principal amounts:
Party Principal Amount Basic
Proportion
------- ---------------- ----------
MMC US$96,250,000 70%
FI US$27,500,000 20%
FLUOR US$13,750,000 10%
The terms of the Subordinated Loans, including the Loan
period(s), the interest rate(s), repayment terms,
subordination, priority, etc. shall be determined by the Board
of Directors in accordance with the Financial Plan and the
Project Loans, and approved by a General Meeting of
Shareholders.
3.7 Default in Payment of Subscription or Making of
Subordinated Loans.
a) If any Party (in this Section, hereinafter called
the "Defaulting Party") fails to fulfill any of its
obligations (i) to make subscription payments for the Initial
Authorized Capital, (ii) to make subscription payments for
additional Shares issued as a result of an increase in
authorized capital prior to the Production Date, or (iii) to
make a Subordinated Loan when due, the Project Company or any
non-defaulting Party may immediately serve notice on the
Defaulting Party, with copies to all other Parties, declaring
the Defaulting Party to be in default and requiring it to
remedy such default in full within ten (10) days of the date
of the notice. Interest on overdue amounts shall be payable
by the Defaulting Party to Project Company at the Penalty
Interest Rate from the date payment was due until paid. All
the rights, but not the obligations, of the Defaulting Party
as a Shareholder, lender of Subordinated Loans, and Party to
this Agreement shall be suspended for as long as such default
is unremedied or until the Party ceases to be a Shareholder
and/or lender of Subordinated Loans.
b) Upon the expiration of the ten (10) day period
described in Section 3.7(a) without remedy of the default,
each non-defaulting Party shall have the right to acquire all
or any portion of the Shares held by the Defaulting Party and
assume all or any portion of the Subordinated Loans held by
the Defaulting Party by giving notice thereof within thirty
(30) days. If the total number of Shares or total amount of
Subordinated Loans for which such notice has been given
exceeds the total number of Shares or Subordinated Loans held
by the Defaulting Party then each Party giving notice (in this
Section, hereinafter called "Accepting Party") may acquire at
least the number of Shares and may assume at least the amount
of Subordinated Loans that bears the same ratio to the total
number of Shares or Subordinated Loans (as the case may be) of
the Defaulting Party that such Accepting Party's Basic
Proportion bears to the aggregate Basic Proportions of all the
Accepting Parties. The Defaulting Party shall transfer the
appropriate number of its Shares and assign the appropriate
amount of its Subordinated Loans to each of the Accepting
Parties within ten (10) days of receipt of such notice from
the Accepting Party. The purchase price for the Shares to be
paid by the Accepting Party shall be fifty percent (50%) of
the aggregate amount paid up on such Shares by the Defaulting
Party, or the book value of such Shares as determined by the
Auditor, whichever is less. The Accepting Party shall also pay
to the Project Company the unpaid balance of any Shares that
are not fully paid. The purchase price for the Subordinated
Loans shall be fifty percent (50%) of the aggregate
outstanding principal and interest then due on the
Subordinated Loans to the Defaulting Party. In either case the
purchase price shall be paid on the date the Accepting Party
receives the Shares or the assignment of the Subordinated
Loans from the Defaulting Party, or, in the case of the
Shares, as soon thereafter as the book value may be determined
by the Auditor.
c) If the total number of Shares or the total amount of
the Subordinated Loans accepted or assumed by the Accepting
Parties is less than the total number of Shares owned or total
amount of outstanding Subordinated Loans held by the
Defaulting Party, the Defaulting Party shall be required to
sell any remaining Shares and assign any remaining
Subordinated Loans to a third party, designated by the Board
of Directors and approved by a General Meeting of
Shareholders, for the same price and payment terms as provided
in Section 3.7 (b) in the case of Transfer to an Accepting
Party. The third party shall also pay to the Project Company
the unpaid balance of any Shares that are not fully paid. For
the execution of such sale of Shares and assignment of
Subordinated Loans to a third party, the Board of Directors
shall be empowered for and on behalf of the Defaulting Party
to apply to, appear before, submit information, obtain
approval from the competent authorities and to take any other
action to accomplish the above Transfer of Shares and
Subordinated Loans.
3.8 Conditions to Payment of Subscriptions and Making of
Subordinated Loans.
The Parties' obligation to make subscription payments and
Subordinated Loans in accordance with Sections 3.3, 3.4, 3.5,
and 3.6 shall be subject to the satisfaction of the conditions
listed in Section 3.1 of the Project Planning Agreement.
ARTICLE 4. PREEMPTIVE RIGHTS
4.1 Increase in Authorized Capital After the Production Date.
If, after the Production Date, the Board of Directors shall
determine that the Project Company should increase its
authorized capital, the Board of Directors shall give notice
to the Shareholders and set a General Meeting of Shareholders
for approval of the authorized capital increase. If approved
by the General Meeting of Shareholders, the increase in the
authorized capital of the Project Company shall take effect
when the Articles of Association are duly amended and, when
necessary, any Government approvals have been obtained.
4.2 Preemptive Rights of Parties. Each Party shall be
entitled to subscribe for its proportionate share of any
additional Shares issued by the Project Company as a result of
an increase in the authorized capital as specified in Section
4.1. Upon receipt of notice from the Board of Directors of
Project Company's intention to issue additional Shares, each
Party shall notify the Project Company within thirty (30) days
whether it intends to purchase its proportionate Share of the
additional Shares to be issued. If the total number of Shares
for which the Parties have exercised such pre-emptive right
exceeds the total number of Shares to be issued, then each
Party exercising such pre-emptive right may acquire at least
the number of Shares that bears the same ratio to the total
number of Shares to be issued that such Party's Basic
Proportion bears to the aggregate Basic Proportion of all
Parties giving such notice.
4.3 Consequences of Failure to Subscribe for Full
Proportionate Share. Should any Party elect not to subscribe
for its full proportionate share of the Shares then being
offered (a "Non-Subscribing Party"), then such Non-
Subscribing Party shall thereafter have no greater rights than
any person or entity not a Party to this Agreement to
subscribe for Shares later offered by the Project Company. In
the event any Party fails to notify the Board of Directors in
writing within such thirty (30) day period that it will
subscribe to all of its proportionate share of the new Shares
to be issued, or notifies the Board of Directors in writing
that it will not subscribe to such new Shares or will
subscribe to fewer new Shares than those to which it is
entitled, then the Board of Directors shall first offer such
Shares (the "Non-Subscribing Party Shares") to the other
Parties. Each Party receiving such notice shall have thirty
(30) days to notify the Project Company whether it desires to
purchase its proportionate share of the Non-Subscribing Party
Shares. If the total number of Non-Subscribing Party Shares
desired by the other Parties exceeds the total number of Non-
Subscribing Party Shares to be issued, then each Party
desiring Non-Subscribing Party Shares may acquire at least the
number of Non-Subscribing Party Shares that bears the same
ratio to the total number of Non-Subscribing Party Shares to
be issued that such Party's Basic Proportion bears to the
aggregate Basic Proportion of all Parties giving such notice;
provided that should any Party
accept in writing less than the number of Shares to which he
would be entitled under the foregoing, such Party shall be
entitled only to the number of Shares it has so accepted, and
the remaining Shares shall be divided proportionately as above
among those Parties who have accepted more than the number of
Shares to which they would be entitled in accordance with the
foregoing. If the other Parties do not subscribe for Non-
Subscribing Party Shares within the time limits established
above, then the Board of Directors may offer such Shares to
third parties, with the prior approval of a General Meeting of
Shareholders.
ARTICLE 5. TRANSFER OF SHARES OR SUBORDINATED LOANS
5.1 Approval Required for Transfer. Except as otherwise
provided herein, or except as may be approved in writing by
all of the Parties, none of the Parties nor any person acting
by authority of or for any of the Parties shall Transfer any
or all of its right, title or interest in its respective
Shares or its Subordinated Loans, all such right, title and
interest of each of the Parties being personal and
non-transferable and non-assignable except as otherwise
specified in this Agreement.
5.2 Prohibition on Certain Transfers. Except as specifically
provided herein, no Shareholder shall Transfer any interest in
its Shares or its Subordinated Loans prior to the Production
Date. Nor shall any Party, without the written consent of the
other Parties or except in the case of a Transfer pursuant to
Section 5.4 or 5.8, make any Transfer as a result of which
either the transferring Party or its transferee shall own less
than five percent (5%) of all Shares of the Project Company
then issued.
5.3 Right of First Offer.
a) No Party (a "Transferring Party") shall Transfer any
of its Shares or Subordinated Loans to any third
party, unless it shall have first offered to sell
such Shares and assign such Subordinated Loans by
written notice to all the other Parties and the Board
of Directors. The written notice shall contain a
description of the number of Shares offered for sale
and the amount and terms of the Subordinated Loans
offered for assignment, the price sought by the
Transferring Party, and any other material
information necessary for the other Parties to make
an informed decision whether to purchase the Shares
and/or assume the Subordinated Loans.
b) Within (30) thirty days following receipt of the
notice from the Transferring Party, each Party shall
give written notice to all other Parties and the
Board of Directors of its decision whether to
purchase all or any portion of such Shares and/or
assume all or any portion of such Subordinated Loans.
If the total number of Shares for which Parties have
exercised such right exceeds the total number of
Shares offered, or the total amount of Subordinated
Loans for which Parties have exercised such right
exceeds the total amount of Subordinated Loans
offered, then each Party exercising such right may
acquire at least the number of Shares and assume at
least the amount of Subordinated Loans that bears the
same ratio to the total number of Shares or
Subordinated Loans offered that such Party's Shares
or Subordinated Loans bear to the total number of
Shares or Subordinated Loans of all Parties
exercising such right; provided that should any Party
accept in writing less than the number of Shares or
amount of Subordinated Loans to which he would be
entitled under the foregoing, such Party shall be
entitled only to the number of Shares or amount of
Subordinated Loans it has so accepted, and the
remaining Shares and Subordinated Loans offered for
Transfer shall be divided proportionately as above
among those Parties who have accepted more than the
number of Shares or amount of Subordinated Loans to
which they would be entitled in accordance with the
foregoing.
c) Notwithstanding the right of first offer stated in
Section 5.3 a) and b), in the event that the total
number of Shares or Subordinated Loans accepted in
writing as provided in Section 5.3 b) is less than
all of the Shares or Subordinated Loans offered for
Transfer, the Transferring Party may:
i) withdraw in whole or in part its offer to
Transfer the number of Shares and amount of
Subordinated Loans offered; or
ii) Transfer (A) all of the Shares and/or
Subordinated Loans offered (including those
accepted), or (B) if the Transferring Party so
determines, only Transfer those Shares or
Subordinated Loans that were not accepted by
the other Parties. In either case, the
Transfer shall be made only to a third party
who is financially responsible and of generally
recognized good business repute at terms no
more favorable than offered to the Parties,
after the Transferring Party has notified the
other Parties of the identity of the proposed
purchaser and the terms of the proposed
Transfer, and after the Transferring Party has
received the consent of the General Meeting of
Shareholders, and any Government approvals
required for the proposed Transfer.
5.4 Consent to Certain Transfers by MMC and FLUOR.
a) Notwithstanding the provisions of Sections 5.1, 5.2
and 5.3 or the Articles of Association, MMC shall
have the absolute right to Transfer up to nineteen
and nine-tenths percent (19.9%) in total of the
issued Shares of the Project Company and an
equivalent amount of the Subordinated Loans to MSK
and/or NMM, and/or, subject to the transferee being
of financial standing acceptable to the other
Parties, in their reasonable determination, any other
Japanese company(ies) engaging in the copper smelting
business or trading business, provided that the
transferee company(ies) agree to be bound to all of
the terms and conditions hereof and the Articles of
Association. N o guarantees or other support from MMC
shall be required to effectuate such Transfer of
Shares and Subordinated Loans by MMC. Each Party
agrees to vote in favor of such Transfer at a General
Meeting of Shareholders at the request of MMC.
b) Notwithstanding the provisions of Sections 5.1, 5.2
and 5.3 or the Articles of Association, at any time
within three (3) years and three and one-half (3-
1/2) years after the Production Date, FLUOR shall
have the absolute right to Transfer its issued Shares
of the Project Company and its Subordinated Loans to
FI. N o guarantees or other support from FLUOR shall
be required to effectuate such Transfer of Shares and
Subordinated Loans by FLUOR. Each Party agrees to
vote in favor of such Transfer at a General Meeting
of Shareholders at the request of FLUOR.
5.5 Consent to Certain Transfers to Subsidiaries.
Notwithstanding the provisions of Section 5.1, 5.2 and 5.3 or
the Articles of Association, any Party shall have the right to
Transfer its Shares and Subordinated Loans to a Subsidiary,
provided that either of the following conditions are met:
a) such Subsidiary shall be of financial standing acceptable
to the other Parties (which acceptance shall not be
unreasonably withheld); or
b) the transferring Party shall remain jointly and severally
liable for its obligations assumed under this Agreement.
Notwithstanding the above:
c) without the written consent of the other Parties or
except in the case of a Transfer pursuant to Section 5.4
or 5.8, no Party shall make any Transfer as a result of
which either the transferring Party or its Subsidiary
shall own less than five percent (5%) of all Shares of
the Project Company then issued; and
d) no such Subsidiary shall cease to be a fifty percent
(50%) or more owned Subsidiary of a Party without first
transferring all of the said Shares and Subordinated
Loans to the Party or to another fifty percent (50%) or
more owned Subsidiary of the Party.
5.6 Consent to Share Pledges in Connection With the Project
Loans. Notwithstanding the provisions of Section 5.1, 5.2 and
5.3 or the Articles of Association, the Parties hereby consent
to a hypothecation or pledge of Shares if such hypothecation
or pledge is required in connection with the execution or
performance of the Project Loans.
5.7 Party's Right to Assign Shareholder Rights and
Subordinated Loans. Should applicable laws, regulations or
decrees of the ROI at any time limit the ability of any Party
to fully exercise the rights granted to it pursuant to this
Agreement and the Articles of Association, then such Party
shall have the right to assign all of the rights and
privileges conferred upon it under this Agreement and the
Articles of Association to any other person or entity
qualified to hold its Shares and Subordinated Loans (the
"Qualified Transferee") and such Qualified Transferee shall
be entitled to all of the privileges and to exercise all of
the rights of such Party; provided, however, that such
Qualified Transferee shall agree to be bound to all of the
terms and conditions hereof.
5.8 Mandatory Participation by a Third Party in the Share
Capital of the Project Company.
a) If, in the sole discretion of the Board of Directors,
it becomes necessary in connection with the
acquisition of the land for the Project, in
connection with obtaining financing for the Project,
or in order to comply with Indonesian laws,
regulations and decrees, for a third party to acquire
an interest in the share capital of the Project
Company (the "Third Party Shareholder"), the Parties
agree that Shares and Subordinated Loans shall be
tendered to the Third Party Shareholder in accordance
with the procedure set forth in this Section 5.8.
b) Before the Project Company issues new Shares to a
Third Party Shareholder, if so requested by the Board
of Directors FLUOR shall first make an irrevocable
tender in writing to Transfer to the Third Party
Shareholder the number and type of Shares and amount
and type of Subordinated Loans specified by the Board
of Directors at the amount actually paid for the
Shares by FLUOR, plus the outstanding principal
amount and accrued interest of the Subordinated
Loans. FLUOR shall send a copy of the tender to the
other Parties and the Board of Directors. The tender
shall be open for ninety (90) days from receipt by
the Third Party Shareholder and the Board of
Directors. If accepted by the Third Party
Shareholder, FLUOR shall promptly Transfer the Shares
and assign the Subordinated Loans to the Third Party
Shareholder upon receipt of payment therefor.
c) If (i) the mandatory participation by the Third Party
Shareholder is required within three (3) years after
the Production Date, and (ii) FLUOR no longer owns
any issued Shares nor holds any Subordinated Loans,
then, before the Project Company shall issue new
Shares to a Third Party Shareholder, if so requested
by the Board of Directors, FI shall make an
irrevocable tender in writing to Transfer to the
Third Party Shareholder the number and type of Shares
and the amount and type of Subordinated Loans
specified by the Board of Directors at the amount
actually paid for the Shares by FI plus the
outstanding principal amount and accrued interest of
the corresponding portion of the Subordinated Loans.
FI shall send a copy of the tender to the other
Parties and the Board of Directors. The tender shall
be open for ninety (90) days from receipt by the
Third Party Shareholder and the Board of Directors.
If accepted by the Third Party Shareholder, FI shall
promptly Transfer the Shares and Subordinated Loans
to the Third Party Shareholder upon receipt of
payment therefor. In the event that FI is required to
Transfer Shares to a Third Party Shareholder in
accordance with this subsection c) and if, as a
result, FI retains ten percent (10%) or more of the
issued Shares of the Company , the other Parties agree
to revise the Articles of Association and any
affected provisions of this Agreement as necessary
such that FI shall retain, despite such forced
Transfer of Shares, the shareholder veto rights it
had prior to the Transfer pursuant to the Articles of
Association. Furthermore, in the case of a forced
transfer of Shares from FI to a Third Party
Shareholder in accordance with this subsection c)
where FI retains ten percent (10%) or more of the
issued Shares of the Company , pending formal
amendment of the Articles of Association and this
Agreement, the Parties agree that FI shall continue
to have the same veto rights specified in the
Articles of Association as though it were an owner of
twenty percent (20%) of the issued Shares of the
Project Company.
d) In the event of a forced Transfer in accordance with
Subsections 5.8 b) or c), the transferring Party
shall transfer to the Third Party Shareholder good
and marketable title to the Shares and Subordinated
Loans, and shall, prior to the Transfer, be
responsible to satisfy in full any liens, pledges, or
other encumbrances on the Shares and Subordinated
Loans other than liens, pledges or encumbrances
arising in connection with the Project Loans.
5.9 New Shareholder to Become Bound by this Agreement.
Any transferor of Shares and Subordinated Loans shall,
before the transfer is effected, cause the transferee (other
than the Parties) to submit to all the other Parties a written
confirmation and agreement in a form reasonably satisfactory
to all such Parties to the effect that the transferee
acknowledges all the provisions of this Agreement and agrees
to be bound by and to comply with all the provisions
applicable to the transferor as if the transferee were
originally a party to this Agreement.
5.10 Obligations Continuing. In the event any of the Parties
ceases to own Shares and hold Subordinated Loans, such Party
shall cease to be a Party to this Agreement and shall
thereafter not be entitled to any rights or benefits under
this Agreement. However, such Party shall not be released
from any outstanding obligations hereunder (including the
Party's duty of Confidentiality as stated in Article 18), in
the Major Contracts or under any guarantee unless the
guarantee obligation is duly assumed by the transferee and the
transferor is released with the written consent of the other
Parties.
ARTICLE 6. BOARD OF DIRECTORS; PRESIDENT DIRECTOR.
The Project Company shall be managed by a Board of
Directors to be elected at the General Meeting of
Shareholders. The Board of Directors shall consist of not
less than three (3) and not more than fourteen (14) Directors.
The initial number of Directors shall be three (3), but shall
be increased shortly after establishment of the Project
Company to eleven (11). Each Shareholder who holds nine
percent (9%) or more of the issued Shares shall have the right
to nominate one or more Directors. The number of Directors
that each such Shareholder shall have the right to nominate
shall be calculated by first dividing the Shareholder's
percentage ownership of all issued and outstanding Shares of
the Project Company by the number nine (9), then rounding any
resulting fraction up or down to the nearest whole integer(a
resulting fraction of one-half shall be rounded up). Each
Party covenants and agrees to vote as a Shareholder so as to
elect as Directors the individuals nominated by each
Shareholder who is entitled to do so. Each nominating Party
shall cause its nominated individual(s) to abide by the terms
and conditions of this Agreement. MMC shall have the right to
designate one of the Directors it nominates to be the
President Director.
ARTICLE 7. BOARD OF COMMISSIONERS; PRESIDENT COMMISSIONER.
The Project Company shall have a Board of Commissioners
to be elected at the General Meeting of Shareholders. The
Board of Commissioners shall consist of not less than three
(3) and not more than five (5) Commissioners. The initial
number of Commissioners shall be four (4). Each Shareholder
who holds twenty percent (20%) or more of the issued Shares
shall have the right to nominate one or more Commissioners.
The number of Commissioners that each such Shareholder shall
have the right to nominate shall be calculated by first
dividing the Shareholder's percentage ownership of all issued
Shares of the Project Company by the number twenty (20), then
rounding any resulting fraction up or down to the nearest
whole integer (a resulting fraction of one-half shall be
rounded up). Each Party covenants and agrees to vote as a
Shareholder so as to elect as Commissioners the individuals
nominated by each Shareholder who is entitled to do so. Each
nominating Party shall cause its nominated individual(s) to
abide by the terms and conditions of this Agreement. MMC shall
have the right to designate one of the Commissioners it
nominates to be the President Commissioner.
ARTICLE 8. GENERAL PROVISIONS RELATING TO DIRECTORS AND
COMMISSIONERS
8.1 Dismissal. Each nominating Party may at any time by
advising the other Shareholders request the dismissal of such
Directors or Commissioners as have been so nominated by it and
request the replacement of such dismissal Directors or
Commissioners by other nominated individual(s). Each Party
hereby covenants and agrees to vote as a Shareholder so as to
appoint the selected replacements and dismiss the selected
Directors or Commissioners as the case may be.
8.2 Vacancy. In the event that the office of a Director or
Commissioner becomes vacant by reason of death, resignation,
removal or otherwise, the Parties agree to cause the election
of a successor from nominees of that Party which originally
nominated the Director or Commissioner concerned.
ARTICLE 9. DIVIDEND POLICY
The Project Company shall declare and distribute by way
of dividends all profits legally available for that purpose
after setting aside such reserves as may be required by law or
by the General Meeting of Shareholders as provided in the
Articles of Association.
ARTICLE 10. EXECUTION OF AGREEMENTS; PREINCORPORATION
EXPENSES
10.1 Execution of Agreements. Immediately upon the
incorporation and registration of the Project Company, or at
such later date as the Board of Directors may decide, the
Parties shall cause the Project Company to execute and deliver
each of the Major Contracts to which it is a party and
concurrently each Party shall execute and deliver each of the
Major Contracts to which it is a party; provided that in each
case each such Party's obligation to enter into such Major
Contracts shall be subject to such documentation being in form
and substance satisfactory to it after negotiation in good
faith in accordance with the principles set forth in this
Agreement.
10.2 Reimbursement of Incorporation Expenses. All pre-
incorporation costs and expenses of the Project Company
approved by the Board of Directors and reasonably incurred in
connection with the incorporation of the Project Company,
including but not limited to legal and notarial fees, shall be
borne by the Project Company. All other expenses incurred by
any Party in connection herewith or otherwise relating to the
Project shall be borne by the Party so incurring such expenses
or shall be reimbursed by the Project Company in accordance
with the Project Planning Agreement.
10.3 Reimbursement of Feasibility Study Expenses. Promptly
after its formation and subject to the availability of funds,
the Project Company shall reimburse any Party which has
subscribed and fully paid in cash for its proportionate number
of Shares in the capital of the Project Company for all
Feasibility Study Expenses actually paid by such Party
pursuant to the terms of the Project Planning Agreement.
ARTICLE 11. FINANCING
11.1 Financial Plan. As soon as feasible after the execution
of this Agreement, the Parties shall cause the Project Company
to adopt a Financial Plan (the "Financial Plan"), which shall
have been approved in writing by all of the Parties and which
shall contain a detailed plan of the financial requirements of
the Project and the funding thereof for a period of three (3)
years. In addition, not later than November 1st of each year,
the Board of Directors shall prepare and provide to the
Shareholders for their approval an annual operating and
capital budget. For reference purposes only in relation to the
annual budgets, the Board of Directors shall also prepare a
rolling three (3) year business plan. The rolling three (3)
year plan shall not require the approval of a General Meeting
of Shareholders.
11.2 Financing and Guarantees. The Parties confirm that the
Project Company shall use its best efforts to procure on the
basis of its own resources the funds and financial facilities
it requires in accordance with the approved Financial Plan, by
using its assets as security. In the event, however, that the
Project Company lenders require Shareholder guarantees,
Shareholder loans, Subordinated Loans or other forms of
Shareholder support ("Shareholder Support"), such Shareholder
Support shall be provided by the Parties severally, and not
jointly, shall be proportionate to their respective Basic
Proportions at the time of provision of any such Shareholder
Support and upon such terms and conditions as all of the
Parties shall mutually agree, and, in no event shall exceed a
total of US$300,000,000 for all Parties in the aggregate. If
any Party fails to fulfill any of its obligations to provide
Shareholder Support pursuant to this Article after all Parties
have agreed to the form and substance of such Shareholder
Support to be provided, such Party shall be deemed to be a
Defaulting Party within the meaning of Section 3.7 hereof and
the provisions of such Section shall apply mutatis mutandis
with respect to such failure and such Defaulting Party.
11.3 Share and Subordinated Loan Transfers. In the event that
any Party Transfers its Shares and/or Subordinated Loans in
the Project Company, the transferor shall arrange that its
guarantee or loan obligations shall be duly assumed by the
transferee consistent with the percentage of the Shares and
amount of Subordinated Loans Transferred, unless such
transferee is prohibited or precluded from providing any
guarantee or making such loan(s) under the laws, regulations
and policies of the ROI, in which case the transferring Party
shall continue to assume its guarantee or loan obligations.
Article 12. COVENANTS
12.1 General. Each of the Parties agrees and covenants that
it will work diligently on all major aspects of the Project
including, but not limited to, facility design, securing of
financing, start-up and operation of the Project.
12.2 Governmental Approvals. Each of the Parties agrees and
covenant that it shall during the term of this Agreement exert
its best efforts to procure all of the required government
approvals and licenses for the establishment and continuance
of the Project Company and the attainment of the Project
Company's objectives, including but not limited to all
authorizations required under the Foreign Capital Investment
Law and regulations.
12.3 Execution Of Other Agreements. Each of the Parties
covenants and agrees to enter into and execute such other
documents as are necessary to give full effect to the
provisions of this Agreement.
12.4 Competition With The Project Company. Each Party may,
from time to time, be engaged in businesses which are directly
or indirectly in competition with the business of the Project
Company. While the Parties intend that each Party shall be
free to compete with each other Party and with the Project
Company, the Parties agree that none of the Project
Information or other information which has been obtained
concerning the Project or the Project Company shall be used by
any Party to the detriment of the other Parties or the Project
Company.
12.5 MMC Guaranteed Return. FI and FLUOR each agree that to
the extent the Project does not provide an average annual
simple return (after Indonesian taxes) of thirteen percent
(13%) on MMC's total capital contribution (which shall include
its Subordinated Loans) to the Project Company (the "Target
Return") during the first twenty (20) years after the
Production Date (the "Return Adjustment Period"), then (a) FI
will assign to MMC up to one hundred percent (100%) of any
returns it may be entitled to receive from the Project and (b)
FLUOR will assign to MMC up to fifty percent (50%) of any
returns it may be entitled to receive from the Project, with
such assignments to be prorated based on a 20:5 ratio as
between FI and FLUOR, until such time as MMC has achieved an
average annual simple return equal to the Target Return;
provided, however, that if MMC's average annual simple return
shall at any time exceed the Target Return during the Return
Adjustment Period, then MMC shall assign such excess returns
based on a 20:5 ratio to FI and FLUOR until such time as FI
and FLUOR have been reimbursed for all amounts which FI and
FLUOR previously assigned to MMC.
ARTICLE 13. TERM OF THIS AGREEMENT
This Agreement shall remain in force and effect as long
as Project Company continues to exist, unless earlier
terminated as provided for in this Agreement.
ARTICLE 14. DEFAULT
14.1 Default. Any of the following will constitute a Default:
(a) If any of the Parties shall be declared insolvent or
bankrupt, or make an assignment or other arrangement
for the benefit of creditors;
(b) If any of the Parties shall be dissolved or
liquidated; or
(c) If any of the Parties shall at any time be in
default in any material respect in the performance
of any of its obligations under this Agreement or
otherwise commit any material breach of this
Agreement, and such default or breach shall continue
for a period of sixty (60) days after a written
notice demanding rectification of such default or
breach has been given by Project Company or any
other Party to the Defaulting Party, and, provided
further, such Default has been acknowledged by the
Defaulting Party or confirmed by an arbitrator's
judgment as provided in Article 16.
14.2 Effect of Default. Upon the occurrence of a Default,
without prejudice to any other rights and remedies of the Non-
defaulting Parties or Party, the rights of the Defaulting
Party under this Agreement shall be suspended pending sale of
the Defaulting Party's Shares as provided in Section 14.3 or
for so long as the Default is unrectified.
14.3 Share Purchase Right. In the event of a Default after
the establishment of Project Company, each of the Non-
defaulting Parties shall have the right to purchase all or any
part of the Shares and assume all or any part of the
Subordinated Loans held by the Defaulting Party, at the price
determined in accordance with Section 14.4, by giving notice
("an Exercise Notice") thereof to all the Parties within
sixty (60) days after the Default occurs. If the total number
of Shares and amount of Subordinated Loans for which Parties
have exercised such right exceeds the total number of Shares
and Subordinated Loans offered, then each Shareholder
exercising such right may acquire at least the number of
Shares and amount of Subordinated Loans that bears the same
ratio to the total number of Shares and Subordinated Loans
held by the Defaulting Party that such Party's Basic
Proportion bears to
the aggregate Basic Proportions of all Parties exercising such
right; provided that should any Party accept in writing less
than the number of Shares and/or Subordinated Loans to which
it would be entitled under the foregoing, such Party shall be
entitled only to the number of Shares and/or Subordinated
Loans it has so accepted, and the remaining Shares and
Subordinated Loans offered for sale or assignment shall be
divided proportionately as above among those Parties who have
accepted more than the number of Shares and/or Subordinated
Loans to which they would be entitled in accordance with the
foregoing. If the total number of Shares or Subordinated Loans
for which Parties have exercised such right is less than the
total number of Shares or Subordinated Loans offered, then the
Board of Directors may offer such Shares or Subordinated Loans
to third parties, with the prior approval of a General Meeting
of Shareholders.
14.4 Share Price. For the purpose of the Transfer of the
Shares and Subordinated Loans as stated in Section 14.3 above,
the sale and purchase price of the Shares and Subordinated
Loans shall be at (i) the then book value of such Shares and
the outstanding principal and accrued interest of the
Subordinated Loans as determined by the Auditor in the case of
Subsections 14.1 (a) through (b) above, or (ii) seventy-five
percent (75%) of the par value of such Shares or seventy-five
percent (75%) of the then book value of such Shares as
determined by the Auditor, whichever is less, and seventy-five
percent (75%) of the outstanding principal and accrued
interest of the Subordinated Loans in the case of Subsection
14.1(c) above.
14.5 Share and Subordinated Loan Transfer. Within thirty (30)
days after the Share and Subordinated Loans purchase price is
determined in accordance with Section 14.4:
(a) the Defaulting Party shall:
(i) execute and deliver to the purchaser the
relevant documents required to transfer the
Shares and assign the Subordinated Loans;
(ii) deliver to the purchaser the share
certificate(s) (if any) relating to the Shares
and loan and security documents relating to
the Subordinated Loans;
(iii) deliver to the purchaser a letter of
resignation from each of the Director(s) and
Commissioner(s) appointed or elected on its
nomination with a waiver of all claims for
compensation for loss of office;
(iv) deliver to the purchaser a bank check for one
half of the amount of any stamp or other
transfer tax or duty payable in respect of the
Transfer of the Shares and Subordinated Loans,
failing which the purchaser may deduct such
sum from the purchase price of the Shares and
Subordinated Loans;
(v) deliver to the purchaser all books and records
of the Project Company in its possession or in
the possession of Director(s) or
Commissioner(s) thereof elected or appointed
on its nomination;
(vi) co-operate with the purchaser in the orderly
transfer of the Shares and Subordinated Loans
and, where appropriate, control and management
of the business and affairs of the Project
Company to the purchaser.
(b) the purchasing Party shall deliver to the Defaulting
Party a bank check for the purchase price of the
Shares and Subordinated Loans less any deduction in
respect of stamp or other tax or duty in accordance
with subparagraph (a)(iv) of this Section 14.5.
ARTICLE 15. EFFECT OF TERMINATION AND DISSOLUTION
Termination of this Agreement for any cause shall not
release the Parties from any liability which at the time of
termination has already accrued or which thereafter may accrue
in respect of any act or omission prior to such termination.
Further, any such termination hereof shall in no way affect
the survival of rights and obligations of the Parties which
are expressly stated elsewhere in this Agreement to survive
termination hereof. To the extent necessary to give effect to
the termination provisions of this Agreement, the Parties
hereby waive the provisions of Article 1266 of the Indonesian
Civil Code to the extent they require judicial approval of the
termination of contracts.
ARTICLE 16. DISPUTE RESOLUTION
16.1 Amicable Settlement. Any dispute arising out of or in
connection with this Agreement or its performance, including
the validity, scope, meaning, construction, interpretation,
application, breach or termination hereof, shall to the extent
possible be settled amicably by negotiation and discussion
between the Parties. Any Party wishing to invoke the right to
conduct such settlement negotiations shall give written notice
to the other Parties of the substance of the dispute and
propose a schedule of conferences to resolve the matter.
16.2 Arbitration Rules. Any such dispute not settled by
amicable agreement within sixty (60) days of receipt of the
written notice described in Section 16.1 (or such other period
as may be agreed by all Parties in writing in any specific
case) it shall be finally settled by arbitration in Singapore
as an international arbitration under the auspices of the
Singapore International Arbitration Centre and applying the
UNCITRAL Arbitration Rules. In the event of a conflict between
the UNCITRAL Arbitration Rules and the terms of this
Agreement, the terms of this Agreement shall govern.
Documents may be submitted in either English or Japanese
without the need for translation.
16.3 Arbitrators. Any arbitration hereunder shall be
conducted in both the English and Japanese languages before a
panel of three arbitrators. Each arbitrator shall preferably
be fluent in both English and Japanese, but if fluent in only
one of such language, an interpreter shall be retained and
paid for by the Parties equally. The arbitrators shall be
appointed in accordance with the following provisions:
(a) where only two Parties are involved in the dispute,
each Party shall appoint one arbitrator and the two
arbitrators so appointed shall select the third
arbitrator (who shall not be a resident or national
of the same country as either of the Parties
involved in the dispute). The third arbitrator shall
act as the presiding arbitrator;
(b) if within a period of 30 days from the date of the
notice of arbitration, a Party has failed to appoint
an arbitrator, or, the two appointed arbitrators
have failed to select the third arbitrator within 30
days after both arbitrators have been appointed, the
Chairman of the Singapore International Arbitration
Centre shall appoint such arbitrator or arbitrators
as have not been appointed; and
(c) where more than two Parties are involved in the
dispute, the Chairman of the Singapore International
Arbitration Centre shall appoint each of the three
arbitrators, and select one as the presiding
arbitrator.
16.4 Arbitration Award. The award rendered in any
arbitration commenced hereunder shall apportion the costs of
the arbitration. In accordance with Section 631 of the
Indonesian Code of Civil Procedure the arbitrators shall not
be bound by strict rules of law where they consider the
application thereof to particular matters to be inconsistent
with the spirit of this Agreement and the underlying intent of
the Parties, and as to such matters their conclusions shall
reflect their judgment of the correct interpretation of all
relevant terms hereof and the correct and just enforcement of
this Agreement in accordance with such terms.
16.5 Award to be Final and Conclusive. The award
rendered in any arbitration commenced hereunder shall be final
and conclusive, and judgment thereon may be entered in any
court having jurisdiction for its enforcement. The Parties
expressly agree to waive Article 641 of the Indonesian Code of
Civil Procedure and Articles 15 and 108 of Law No. 1 of 1950
(Supreme Court Rules), and accordingly there shall be no
appeal to any court from the decision of the panel of
arbitrators. No Party shall be entitled to commence or
maintain any action in a court of law upon any matter in
dispute until such matter shall have been submitted and
decided as herein provided and then only for the enforcement
of the board of arbitration's award.
16.6 Performance of Obligations Pending Decision.
Pending submission to the board of arbitration and thereafter
until the board of arbitration gives its award, the Parties
hereto agree that they will continue to perform all their
respective obligations under this Agreement without prejudice
to the final judgment in accordance with the said award.
16.7 Waiver of Right to Terminate Board of Arbitration.
The Parties hereto expressly agree to waive the applicability
of Article 650.2 of the Indonesian Commercial Code, so that
the appointment of the board of arbitration shall not
terminate as of the sixth month from the date of its
appointment. The mandate of the board of arbitration
reconstituted in accordance with the terms hereof shall remain
in effect until a final arbitral award has been issued by the
board of arbitration.
Article 17. REPRESENTATIONS AND WARRANTIES
17.1 Corporate Power. Each Party warrants that it has full
corporate power to enter into this Agreement and to perform
its obligations hereunder according to the terms of this
Agreement, and that it has taken all necessary corporate or
other actions to authorize its entry into and performance of
this Agreement.
17.2 Statements True. Each Party warrants that the
statements made relating to it in this Agreement are true and
accurate and that nothing further needs to be stated to
prevent such statements from being misleading.
Article 18. CONFIDENTIALITY
18.1 Confidential Treatment/Permitted Disclosures. Each of the
Parties covenants and agrees not to (a) use any of the Project
proprietary or confidential information (as herein defined),
including but not limited to proprietary and confidential
technical information such as drawings, documents,
specifications and non-public data and procedures, furnished
by any Party or its Affiliates or developed pursuant to the
AIP, the Project Planning Agreement, or this Agreement
(collectively, the ``Project Information'') for any commercial
purpose other than in connection with the Project, and (b)
divulge any Project Information to third parties without the
consent of the other Parties; except that (i) any Party may
disclose Project Information to such of its directors,
officers, employees, consultants and advisors (including
financial and legal advisors) as have a reasonable need to
know such Project Information in connection with arranging the
Project Financing Agreements and its equity participation in
the Project (in each case pursuant to a written agreement
whereby the recipient agrees to keep such Project Information
confidential); (ii) FI shall have the right to disclose such
Project Information to the Government in furtherance of its
obligations under the COW; and (iii) each other Party may
disclose Project Information as required in accordance with
applicable laws and for the due enforcement of its rights
hereunder and under the Major Contracts.
Notwithstanding the above, no Party shall be under any
obligation of confidentiality and restricted use as to any
Project Information and knowledge based thereon, which, as
evidenced by documents,
c) was in the lawful possession of the receiving party
prior to the disclosure thereof by the disclosing
party and which was not obtained by the receiving
party either directly or indirectly from the
disclosing party or another Party, or
d) is, after disclosure by the disclosing Party,
lawfully disclosed to the receiving party by a third
party having no obligation of secrecy to the
disclosing party as to the said information, or
e) is or at any time becomes available to the public
through no act, failure to act or other legal fault
of receiving party.
Specific information disclosed to a receiving party shall not
be deemed to be within the foregoing exceptions merely because
such information is embraced by more general information in
the public domain or is in the possession of receiving party.
In addition, any combination of features shall not be deemed
to be within the foregoing exceptions merely because
individual features are in the public domain or in the
possession of receiving party, but only if the combination
itself and its principles of operation are in the public
domain or in the possession of receiving party.
18.2 Implementation. Each Party further agrees to make all
reasonable efforts, and to take all reasonable precaution, to
prevent any of its employees or personnel, or any other
persons, from obtaining or making any unauthorized use of, or
effecting any disclosure of any Project Information. The
Parties shall implement this policy of confidentiality in part
by appropriate contract provisions, including but not limited
to appropriate terms in contracts of employment.
18.3 Treatment of Project Information by the Project Company.
Each Party further agrees that the Project Company shall treat
all Project Information as confidential and shall not disclose
all or any part of it to any third party or otherwise seek to
exploit all or any part of it without the prior written
consent of the Party(ies) from which it was derived.
18.4 Obligations to Survive. The obligations contained in
this Article 18 shall bind the Parties during the term of this
Agreement and shall continue to bind the Parties after this
Agreement is terminated (for whatever cause) or expires for a
period of five (5) years thereafter.
Article 19. ASSIGNMENT
Except as provided herein concerning the authorized
Transfer of Shares or Subordinated Loans, no Party may assign
any of its rights or obligations under this Agreement without
the prior written consent of the other Parties. In the event
an assignment is consented to by the other Parties, this
Agreement shall inure to the benefit of and be binding upon
such assignee and its successors or assigns, and such assignee
shall execute an appropriate document or documents as
necessary to become a Party to this Agreement.
Article 20. LAW AND INTERPRETATION
20.1 Governing Law. The provisions of this Agreement shall be
governed in all respects by and construed in accordance with
the laws of Japan.
20.2 Governing Language of this Agreement. This Agreement is
executed in the English language which shall be the governing
language despite translation into any other language(s).
20.3 Headings. The headings of the Articles and Sections in
this Agreement and table of contents shall not form part of
this Agreement and shall be disregarded in interpreting and
construing this Agreement.
Article 21. SEVERABILITY
If one or more of the provisions herein shall be void,
invalid, illegal or unenforceable in any respect under any
applicable law or decision, the validity, legality and
enforceability of the remaining provisions contained shall not
be affected or impaired in any way. Each Party hereto shall,
in any such event, execute such additional documents as the
other Party(ies) may reasonably request in order to give
valid, legal and enforceable effect to any provision hereof
which is determined to be invalid, illegal or unenforceable as
written in this Agreement.
Article 22. NOTICES
22.1 Manner of Delivery/Addresses. Except as expressly set out
in this Agreement to the contrary, all notices and other
communications to be given to a Party under this Agreement
shall be in writing in the English language and communicated
by personal delivery, mail or facsimile from one Party to the
other Party(ies) at their respective addresses as follows:
FI: P.T. Freeport Indonesia Company
Plaza 89, 5th Floor
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Attention: President
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with a copy to:
P.T. Freeport Indonesia Company
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Attention: Legal Department
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MMC: Mitsubishi Materials Corporation
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Attention: General Manager, Metals Division
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FLUOR: Fluor ▇▇▇▇▇▇ ▇▇▇▇, Inc.
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Attention: President
Fax Number:
Subject to any express provisions contained in this Agreement
to the contrary, the notices and other communications shall be
deemed delivered when sent in the case of facsimile
transmissions or personal delivery, and ten (10) days after
sending in the case of mail.
22.2 Change of Address. Any Party hereto may at any time
change its address by written notice to the other Parties of
such change.
Article 23. FORCE MAJEURE
No Party shall be liable for any delay or failure in the
performance of any of its obligations under this Agreement to
the extent that such delay or failure is caused by Force
Majeure, provided that the Party whose performance is
prevented or delayed by such Force Majeure shall make every
good faith effort to overcome or dispel the event of Force
Majeure, and further provided that Force Majeure shall not
excuse a failure to pay money when due. For the purposes of
this Agreement, "Force Majeure" shall mean events or
circumstances beyond the reasonable control of a Party such as
lightning, fire, explosion, storm, wind, flood, tidal wave,
earthquake, tempest or other natural disasters of overwhelming
proportions or acts of God; civil commotion, rebellion, war,
sabotage, riot, strike, lock out or industrial unrest; or the
enactment of any law or regulation not existing or not
applicable on the date of this Agreement by the Government
which renders the Project economically impracticable, or the
nationalization, expropriation or compulsory acquisition of
the Project or any part thereof by the Government.
Article 24. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between
the Parties with respect to the subject matter hereof and,
with the exception of the Project Planning Agreement,
supersedes all prior agreements, understandings and
negotiations, both written and oral, between the Parties with
respect to the subject matter of this Agreement, including
without limitation the AIP. Insofar as possible this
Agreement shall be interpreted to be consistent with the
Project Planning Agreement, provided, however, that in the
event of a direct inconsistency, this Agreement shall take
precedence. No representation, inducement, promise,
understanding, condition or warranty not set forth herein has
been made or relied upon by any Party hereto.
Article 25. AMENDMENTS
This Agreement may not be modified or amended except in
writing and with the unanimous agreement of the Parties
hereto.
Article 26. NO THIRD PARTY BENEFICIARIES
Neither this Agreement nor any provision hereof is
intended to confer upon any person, firm, corporation or other
entity other than the Parties hereto any rights or remedies
hereunder.
IN WITNESS WHEREOF, the Parties have cause this Agreement to
be executed by their duly authorized representatives on the
date and year and place first written above.
Witness:
MITSUBISHI MATERIALS CORPORATION
By:
Title:
P.T. FREEPORT INDONESIA COMPANY
By:
Title:
FLUOR ▇▇▇▇▇▇ ▇▇▇▇, INC.
By:
Title: