PLEDGE AGREEMENT. among WORLD INVESTMENTS LTD. and ADVENTURE CORP. for itself and. as agent for and on behalf of the KX SUPPLIERS. Dated as of, 200--

Transcription

1 PLEDGE AGREEMENT among WORLD INVESTMENTS LTD and ADVENTURE CORP. for itself and as agent for and on behalf of the KX SUPPLIERS Dated as of,

2 TABLE OF CONTENTS PAGE Article 1. Definitions and Principles of Construction 3 Article 2. Grant of Security 7 Article 3. Security for Obligations 8 Article 4. Delivery of the Collateral Shares 8 Article 5. Representations and Warranties of the Pledgor 8 Article 6. Covenants of the Pledgor 10 Article 7. Further Assurances 12 Article 8. Subsequent Changes Affecting the Collateral Shares 12 Article 9. Voting Rights 13 Article 10. Dividends, Etc 13 Article 11. Pledgee Appointed Attorney-In-Fact 14 Article 12. Pledgee May Perform; Pledgee's Duties 15 Article 13. Remedies 15 Article 14. Mandatory Put 17 Article 15. Indemnity and Expenses 17 Article 16. Security Interest Absolute 18 Article 17. Amendments; Waivers; Etc. 18 Article 18. Addresses for Notices 19 Article 19. Continuing Security Interest 19 Article 20. Release of Collateral Shares 20 Article 21. Termination; Return of the Collateral Shares 20 Article 22. Non-Impairment 20 Article 23. Separability Clause 21 Article 24. Reinstatement 21 Article 25. Rights Upon Liquidation 21 Article 26. Taxes 22 Article 27. Currency Indemnity 22 Article 28. Governing Law and Dispute Resolution 22 Article 29. Counterparts 23 Article 30. Assignment 23 Exhibit A Schedule of Pledge 25 Exhibit B Notice of Assignment 27 Exhibit C Acknowledgement of Receipt Notice 30 Exhibit D Mandatory Put Notice 32 2

3 PLEDGE AGREEMENT This PLEDGE AGREEMENT, dated, 2000, is made by World Investments Ltd (the Pledgor ), a corporation organized with limited liability under the laws of in favor of Venture Corp. (the Pledgee ), a corporation organised with limited liability under the laws of the Republic of Korea. for itself and as agent for and on behalf of the MC Suppliers PRELIMINARY STATEMENTS WHEREAS, the Pledgee and the KX Suppliers have made available the Facility to the APP Buyers (the APP ) pursuant to the Master Supply Agreement; WHEREAS, in order to induce the Pledgee and the KX Suppliers to make available the Facility, the Pledgor is granting the security interest herein, making the assignments and pledges contemplated hereby, and is agreeing to, making representations and warranties as to and covenanting as to, certain other matters for the benefit of the Pledgee, all as more fully set forth herein; WHEREAS, the Pledgor is a wholly owned subsidiary of APP; WHEREAS, a condition precedent to the obligations of the KX Suppliers under the Master Supply Agreement is that the Pledgor shall have executed and delivered this Pledge greement; and WHEREAS, in satisfaction of such condition, and because of the direct and indirect benefits to APP wherein the Pledgor is a wholly owned subsidiary, from the transactions contemplated by the Master Supply Agreement the Pledgor agrees to provide this Pledge Agreement as set forth herein. NOW, THEREFORE, in consideration of the premises and in order to induce the Pledgee to extend the Facility, the Pledgor hereby agrees with the Pledgee, as follows: ARTICLE 1 DEFINITIONS AND PRINCIPLES OF CONSTRUCTION Section Definitions. (a) In this Pledge Agreement, unless the context otherwise requires, the following capitalized terms shall have the following meanings: 3

4 Adjustment Date shall mean the monthly anniversary dates of X Date. Adjustment Notice shall have the meaning set forth in Article 6. APP Buyers shall have the meaning set forth in the Master Supply Agreement. APP shall mean Asia Pulp & Paper Company Ltd, a corporation organised and existing under the laws of Singapore. "Business Day" shall have the meaning set forth in the Master Supply Agreement. Closing Price for any Trading Day shall mean the reported last sale price regular way of the IKPP Shares on such day or, in case no such reported sales takes place on such day, the average of the reported closing bid and asked prices regular way on such day, in either case, on the JSE or, if the IKPP Shares are not then listed or admitted for trading on the JSE, such other principal national securities exchange on which the IKPP Shares are listed or admitted to trading or, if the IKPP Shares are not listed or admitted for trading on any national securities exchange, the average of the closing bid and asked prices for such day in the over-the-counter market as furnished by any JSE member firm selected from time to time by Indah Kiat for such purpose. Collateral Shares shall have the meaning set forth in Article 2. Credit Limit Amount shall have the meaning set forth in the Master Supply Agreement. Credit Payment Portion shall have the meaning set forth in the Master Supply Agreement. Event of Default shall have the meaning set forth in the Master Supply Agreement. Exercise Date shall mean the date the Mandatory Put Notice is delivered by the Pledgee in accordance with Article 14 of this Pledge Agreement. Facility shall mean the secured line of credit of up to [ ] US$. IKPP Shares shall mean the shares of Indah Kiat traded or eligible to be traded on the JSE or any other principal national securities exchange. Indah Kiat shall mean PT Indah Kiat Pulp & Paper Tbk, a corporation organised and existing under the laws of Indonesia. Indonesia Rupiah shall mean the lawful currency of Indonesia. 4

5 Insolvency Event shall have the meaning set forth in the Master Supply Agreement. JSE shall mean the Jakarta Stock Exchange. "Lien" means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such property or asset, including, without limitation, the right of a vendor, lessor, or similar party under any conditional sales agreement, capital lease or other title retention agreement relating to such property or asset, and any other right of or arrangement with any creditor to have its claims satisfied out of any property or assets, or the proceeds therefrom, prior to any general creditor of the owner thereof. Liquidation Notice shall have the meaning set forth in Article 13. Mandatory Put shall mean the obligation (but not the right) of the Pledgee to put all of the IKPP Shares held as security by the Pledgee it intends to sell or dispose of under Article 3 on the Exercise Date at a price equal to the Put Price, all in accordance with the terms of this Pledge Agreement. Mandatory Put Notice shall mean a notice of exercise of the Mandatory Put in the form of Exhibit C annexed hereto, to be delivered by the Pledgee in accordance with Article 14 of this Pledge Agreement. Market Value shall mean the fair market value of the Collateral Shares at any relevant time, expressed in US$, derived by multiplying the average of the Closing Price of one IKPP Share on the JSE during the immediately preceding 10 Trading Days with the total number of IKPP Shares. The Indonesia Rupiah/US$ exchange rate shall be the average rate quoted by Bank Indonesia at the closing of each day of the same 10 Trading Days period. Master Supply Agreement shall mean the master supply agreement entered into among the APP Buyers and KX Suppliers dated July 19, Material Adverse Change shall mean an event or circumstance which (when taken alone or together with any previous event or circumstance) constitutes an adverse change in the assets, financial or trading position or legal status of the Pledgor such that, the Pledgor is materially likely to be unable, fully and punctually to perform all of its material obligations under this Pledge Agreement. Material Adverse Effect shall mean an event or circumstance which (when taken alone or together with any previous event or circumstance) causes or results in a Material Adverse Change. KX Suppliers shall have the meaning set forth in the Master Supply Agreement. 5

6 Person shall have the meaning set forth in the APP Guarantee. Pledged Cash Account shall have the meaning set forth in Article 10. Purchase Date shall have the meaning set forth in the Master Supply Agreement. Put Price shall mean with respect to each of the IKPP Shares to be purchased, expressed in Japanese Yen, pursuant to the Mandatory Put, the average of the Closing Price for one IKPP Share on the JSE during the immediately preceding 10 Trading Days. The Indonesia Rupiah/Japanese Yen exchange rate shall be the average rate quoted by Bank Indonesia at the closing of each day of the same 10 Trading Days period. Release Certification shall have the meaning set forth in Article 20. "Secured Obligations" shall have the meaning set forth in Article 3. Share Collateral Agent shall mean Fuji Bank International Indonesia, a corporation organised and existing under the laws of Indonesia. Trading Day shall mean with respect to IKPP Shares, a day on which the JSE or, if the IKPP Shares are not then listed or admitted for trading on the JSE, such other principal national securities exchange on which the IKPP Shares are listed or admitted to trading is open for the transaction of business. Trigger Event shall have the meaning set forth in Article 13. US$ or U.S. Dollar shall mean the lawful currency of United States of America. X Date shall have the meaning set forth in the schedule of pledge set out in Exhibit A attached hereto. (b) Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Master Supply Agreement. Section Principles of Construction. (a) (b) The meanings set forth for defined terms in Section 1.01 shall be equally applicable to both the singular and plural forms of the terms defined. All references in this Pledge Agreement to Sections, Schedules and Exhibits are to sections, schedules and exhibits in or to this Pledge Agreement unless otherwise specified therein. The words hereof, herein and hereunder and words of similar import when used in this Pledge Agreement shall refer to this Pledge Agreement as a whole and not to any particular provision of this Pledge Agreement. The words include, including and among other things shall be 6

7 deemed to be followed by without limitation or but not limited to whether or not they are followed by such phrases or words of like import. (c) References in this Pledge Agreement to any statute, decree, regulation or other applicable law shall be construed as a reference to such statute, law, decree, regulation or other applicable law as re-enacted, re-designated, amended or extended from time to time, except as otherwise provided in this Pledge Agreement. (d) References in this Pledge Agreement to any document or agreement shall be deemed to include references to such document or agreement as amended, varied, supplemented or replaced from time to time and to include any side letters executed in connection therewith, except as otherwise provided in this Pledge Agreement. (e) References to any condition or any representation by any person being to the best of such person's knowledge shall be deemed to be to the best of such person's actual knowledge after reasonable inquiry. (f) (g) References to any person or persons shall be construed as a reference to any successors or permitted assigns of such person or persons. The headings of the several sections and subsections of this Pledge Agreement are intended for convenience only and shall not in any way affect the meaning or construction of any provision therein. ARTICLE 2 GRANT OF SECURITY The Pledgor hereby assigns and pledges to the Pledgee, and hereby grants to the Pledgee a continuing security interest in and to the Pledgor s right, title and interest in (i) a number of IKPP Shares and (ii) such additional IKPP Shares as may be pledged by the Pledgor from time to time (the Collateral Shares ), whether now owned or existing or hereafter acquired or arising and regardless of where located from the signing date of the Master Supply Agreement, in accordance with the schedule described in Exhibit A annexed hereto, that, will have a Market Value, as of the date immediately preceding the date the IKPP Shares are pledged to the Pledgor, of at least 100% of the Credit Limit Amount, in accordance with the schedule described in Exhibit A, save when the Market Value of the IKPP Shares pledged shall be [ ] US$ or more, the Credit Limit Amount shall be increased up to [ ]US$, as described in Exhibit A. Nothing herein shall prevent the Pledgor from pledging the IKPP Shares in the amount of [ ] US$ to the Pledgee on a date earlier than X Date + 2 months, in accordance with Exhibit A wherein the Pledgor shall increase the Credit Limit Amount up to [ ]US$. For the avoidance of doubt, notwithstanding Article 2 herein and 7

8 the schedule of pledge described in Exhibit A annexed hereto, nothing herein shall obligate the Pledgor to pledge the IKPP Shares to the Pledgee, and if the Pledgor elects to pledge the IKPP Shares to the Pledgee, the Pledgor shall not be obligated to pledge in accordance with the schedule of pledge described in Exhibit A annexed hereto which shall only act as a guideline, and in any event, notwithstanding Article 2 herein, the Pledgee shall not be obligated to make available any Credit Limit Amount to the APP Buyers until the IKPP Shares have been pledged and only to the extent of the Market Value of the IKPP Shares pledged. ARTICLE 3 SECURITY FOR OBLIGATIONS This Pledge Agreement and the Collateral Shares secure the payment (whether at stated maturity, by acceleration or otherwise) of all amounts due and payable by the APP Buyers now or hereafter existing under the Master Supply Agreement from time to time, including any award and/or judgement for damages against any APP Buyers (the Secured Obligations ). Without limiting the generality of the foregoing, this Pledge Agreement and the Collateral Shares secure the payment of all amounts that constitute part of the Secured Obligations which would be owed by the APP Buyers under the Master Supply Agreement but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any of the APP Buyers. ARTICLE 4 DELIVERY OF THE COLLATERAL SHARES Subject to Article14 herein, all certificates or instruments representing or evidencing the Collateral Shares shall be delivered to and held by the Share Collateral Agent on behalf of the Pledgee pursuant hereto, and shall be in suitable form for transfer by delivery (where applicable) together with share transfer form covering the Collateral Shares duly executed by the Pledgor in blank, all in form and substance reasonably satisfactory to the Pledgee, together with powers of attorney granted by the Pledgor in respect of the Collateral Shares, in each case granting the Pledgee the right to transfer into the name of the Pledgee or sell or otherwise dispose of such Collateral Shares. In addition, on or prior to the date hereof the Pledgor, and on or prior to the date or dates on which additional Collateral Shares are required to be pledged pursuant to Article 2, the Pledgor, shall have delivered to Indah Kiat a notice of assignment substantially in the form of Exhibit B attached hereto attaching a copy of this Pledge Agreement and shall in each case have delivered to the Pledgee Indah Kiat s acknowledgement of receipt thereof substantially in the form of Exhibit C attached hereto. Subject to Article 14 herein, the Pledgee, upon the occurrence of a Payment Default or Trigger Event, may transfer the Collateral Shares to, or register any or all of the Collateral Shares in the name of, the Pledgee or any other Person as the Pledgee shall direct. In addition, the Pledgee shall have the right at any time to exchange certificates or 8

9 instruments representing or evidencing the Collateral Shares for certificates or instruments of smaller or larger denominations. ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR The Pledgor represents and warrants on the X Date as follows: (a) The execution, delivery and performance by the Pledgor of this Pledge Agreement are within the Pledgor s corporate powers, have been duly authorized by all necessary corporate action, and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the articles or memorandum of association of the Pledgor or of any agreement, judgement, injunction, order, decree or other instrument binding upon the Pledgor, or result in the creation or imposition of any Lien on any assets of the Pledgor, except for the Lien granted under this Pledge Agreement. (b) The Pledgor is, and at the time of delivery of any of the Collateral Shares to the Share Collateral Agent will be, the legal and beneficial owner of such Collateral Shares free and clear of any Lien, except for the Lien created by this Pledge Agreement duly registered with Indah Kiat s Share Administration Bureau (Biro Administrasi Efek), PT Sinartama Gunita. (c) The Collateral Shares, at the time they are pledged hereunder and at all times thereafter, have been duly authorized and validly issued and are fully paid and non-assessable. (d) This Pledge Agreement creates a valid perfected first priority Lien on the Collateral Shares; (e) No consent of any other Person and no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other third party is required either: (i) for the grant by the Pledgor of the assignment and Lien granted hereby, pursuant hereto or for the execution, delivery or performance of this Pledge Agreement by the Pledgor; (ii) for the perfection (meaning to make enforceable against third parties) or maintenance of the Lien created hereby (including the first priority nature of such Lien), other than the registration of the Collateral Shares in the name of the Pledgee; or (iii) for the exercise by the Pledgee of its rights provided for in this Pledge Agreement. (f) This Pledge Agreement has been duly executed and delivered by the Pledgor and, assuming the due execution and delivery thereof by the Pledgee, constitutes a legal, valid and binding obligation of the Pledgor, enforceable against the Pledgor in accordance with its terms, except as such enforceability may be limited by the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or 9

10 other laws affecting creditors rights generally, or general principles of equity. (g) No material litigation, investigation or proceeding of or before any arbitrator or governmental authority is pending or, to the best knowledge of the Pledgor, threatened by or against the Pledgor with respect to this Pledge Agreement or the transactions contemplated hereby or having a Material Adverse Effect on the Pledgor s ability to observe its obligations hereunder. (h) Except pursuant to this Pledge Agreement, the Collateral Shares are not subject to any stockholder agreement, voting trust agreement or other agreement that prevents the Pledgor from validly entering into this Pledge Agreement or limits the Pledgee s exercise of remedies hereunder or under the Master Supply Agreement. (i) The requirements of Minister of Finance Decree No of 1989 (and any laws, regulations and decrees amending or replacing that Decree from time to time) regarding the permitted level of foreign ownership of shares in Indah Kiat are being and at all time will be duly observed and satisfied. On each Purchase Date, the Pledgor shall be deemed to have reaffirmed that its representations and warranties contained in this Article hereof are true and correct at and as of such date as if repeated then by reference to the then existing circumstances. ARTICLE 6 COVENANTS OF THE PLEDGOR (a) The Pledgor covenants and agrees with the Pledgee for the ratable benefit of the KX Suppliers from and after the date of this Pledge Agreement for so long as any Credit Payment Portion shall remain outstanding that on the Adjustment Dates, whether or not there was any further pledge of IKPP Shares in accordance with the schedule as described, and prior to pledging further IKPP Shares of aggregate Market Value up to [ ] US$, if the Market Value of the Collateral Shares, as reasonably determined by the Pledgee, falls below 80% of the aggregate Credit Payment Portion outstanding under the Master Supply Agreement the Pledgee shall be entitled to deliver a notice thereof (an Adjustment Notice ) to the Pledgor and the Pledgor shall, not later than 7 Trading Days following receipt of such Adjustment Notice, pledge such additional Collateral Shares, so that after such pledge, the Market Value of the Collateral Shares shall be equal to not less than 100% of the aggregate Credit Payment Portion outstanding. If the Market Value of the Collateral Shares, as reasonably determined by the Pledgee on such Adjustment Dates, rises above 120% of the aggregate Credit Limit Amount under the Master Supply Agreement, the Pledgee shall accordingly increase the Credit Limit Amount, so that after such increase of the Credit Limit Amount, the Market Value of the Collateral Shares shall be equal to not less than 100% of the 10

11 aggregate Credit Limit Amount provided that the Pledgee shall not be obligated to increase any Credit Limit Amount beyond US$ [ ]. (b) The Pledgor covenants and agrees with the Pledgee for the ratable benefit of the KX Suppliers from and after the date of this Pledge Agreement for so long as any Credit Payment Portion shall remain outstanding, upon the occurence where the Pledgor has pledged the IKPP Shares up to a Market Value of US$ [ ], wherein the Credit Limit Amount shall be increased up to US$ [ ], on such and each subsequent Adjustment Date, if the Market Value of the Collateral Shares, as reasonably determined by the Pledgee, falls below US$ [ ] and is below 80% of the aggregate Credit Payment Portion outstanding under the Master Supply Agreement, the Pledgee shall be entitled to deliver the Adjustment Notice to the Pledgor and the Pledgor shall, not later than 7 Trading Days following receipt of such Adjustment Notice, pledge additional Collateral Shares, so that after such pledge, the Market Value of the Collateral Shares shall be equal to not less than US$ [ ]. (c) The Pledgor covenants and agrees with the Pledgee for the ratable benefit of the KX Suppliers from and after the date of this Pledge Agreement for so long as any Credit Payment Portion shall remain outstanding that if on any Adjustment Date after the full utilisation of the Credit Limit Amount, and upon the commencement of a winding down of the Facility, if the Market Value of the Collateral Shares, as reasonably determined by the Pledgee, falls below 80% of the aggregate Credit Payment Portion outstanding under the Master Supply Agreement, the Pledgee shall be entitled to deliver the Adjustment Notice to the Pledgor and the Pledgor shall, not later than 7 Trading Days following receipt of such Adjustment Notice, pledge such additional Collateral Shares, so that after such pledge the Market Value of the Collateral Shares shall be equal to not less than 100% of the aggregate Credit Payment Portion outstanding. If the Market Value of the Collateral Shares, as reasonably determined by the Pledgee on such Adjustment Dates, rises above 120% of the aggregate Credit Limit Amount under the Master Supply Agreement, the Pledgee may, at its sole determination, increase the Credit Limit Amount, so that after such increase of the Credit Limit Amount, the Market Value of the Collateral Shares shall be equal to not less than 100% of the aggregate Credit Limit Amount provided that the Pledgee shall not be obligated to increase any Credit Limit Amount beyond US$ [ ]. (d) The Pledgor covenants and agrees with the Pledgee that from and after the date of this Pledge Agreement for so long as any Credit Payment Portion shall remain outstanding: (i) The Pledgor shall not (A) sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the Collateral Shares or (B) create or suffer to exist any Lien on or with respect to the Collateral Shares, except for any Lien in favor of the Pledgee created by this Pledge Agreement. 11

12 (ii) The Pledgor will not enter into any agreement or understanding that purports to or may restrict or inhibit the Pledgee s rights or remedies hereunder, including, without limitation, the Pledgee s right to sell or otherwise dispose of the Collateral Shares or otherwise take any action that interferes with the purpose of this Pledge Agreement or which limits or restricts any rights or privileges the Pledgee may have hereunder. (iii) (A) The Pledgor shall keep the office where it keeps its records concerning the Collateral Shares at its address set forth in this Pledge Agreement or, upon 30 days prior written notice to the Pledgee, at such other location in a jurisdiction where all actions hereunder with respect to the Collateral Shares, shall be or have been taken with respect to the Collateral Shares and (B) the Pledgor will hold and preserve such records and will permit authorized representatives of the Pledgee at any time during normal business hours to inspect and make copies or abstracts from such records. (iv) Subject to the rights granted under this Pledge Agreement, the Pledgor will at all times be the sole beneficial owner of the Collateral Shares. (e) The Pledgor shall deliver to the Pledgee notices, reports, accounts, circulars and other documents relating to the Collateral Shares not later than 10 days after the date of receipt of such documents by the Pledgor from Indah Kiat or other party. ARTICLE 7 FURTHER ASSURANCES (a) The Pledgor agrees that from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and deliver all further instruments and documents, and take or cause to be taken all further action, that may be necessary, or that the Pledgee may reasonably request, in order to perfect (meaning to make enforceable against third parties) and protect and maintain the first priority status of any charge, pledge, or other Lien granted or purported to be granted hereby or to enable the Pledgee to exercise and enforce its rights and remedies hereunder with respect to the Collateral Shares. (b) Any notice or certification by the Pledgor required to be delivered pursuant to this Pledge Agreement shall be validly given if delivered by any director of the Pledgor. ARTICLE 8 12

13 SUBSEQUENT CHANGES AFFECTING THE COLLATERAL SHARES The Pledgor represents to the Pledgee that the Pledgor has made its own arrangements for keeping informed of changes or potential changes affecting the Collateral Shares (including, without limitation, rights to convert, rights to subscribe, payment of dividends, reorganization or other exchanges, tender offers and voting rights), and the Pledgor agrees that the Pledgee shall have no responsibility or liability for informing the Pledgor of any such changes or potential changes or for taking any action or omitting to take any action with respect thereto. The Pledgor covenants that it will not, without the prior written consent of the Pledgee, vote to enable, or take any other action to permit, any Person to sell or otherwise dispose of, or grant any option with respect to the Collateral Shares, nor create nor permit to exist any Lien upon or with respect to the Collateral Shares (except for the Lien created in favor of the Pledgee by this Pledge Agreement). The Pledgor will defend the right, title and interest of the Pledgee in and to the Collateral Shares, against the claims and demands of all Persons. ARTICLE 9 VOTING RIGHTS (a) So long as no Trigger Event shall have occurred and be continuing: (i) The Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral Shares or any part thereof for any purpose. (ii) The Pledgee shall execute and deliver (or cause to be executed and delivered) to the Pledgor all such proxies and other instruments as the Pledgor may reasonably request at the expense of the Pledgor, for the purpose of enabling the Pledgor to exercise the voting and other rights that it is entitled to exercise pursuant to this paragraph (a). (b) Upon notification from the Pledgee to the Pledgor of the occurrence of, and during the continuance of, a Trigger Event: (i) All rights of the Pledgor to exercise or refrain from exercising the voting and other consensual rights that it would otherwise be entitled to exercise pursuant to Article 9(a) shall, upon notice to the Pledgor by the Pledgee, cease, and all such rights shall thereupon become vested in the Pledgee, which shall thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights. Nothing herein shall require the Pledgee to exercise such voting rights if to do so would involve it in unusual risk or liability, or if such risk or liability cannot be determined, or if the Pledgee has not received indemnity deemed by it to be satisfactory. 13

14 (ii) In order to permit the Pledgee to exercise the voting and other consensual rights which it may be entitled to exercise pursuant to Article 9(b)(i) above, the Pledgor shall, if necessary, upon written notice from the Pledgee, from time to time execute and deliver (or cause to be executed and delivered) to the Pledgee appropriate proxies and other instruments as the Pledgee may reasonably request for the purposes of enabling the Pledgee to exercise the voting and other rights that it is entitled to exercise pursuant to this paragraph. ARTICLE 10 DIVIDENDS, ETC (a) (b) So long as no Event of Default has occurred and is continuing, the Pledgee shall, to the extent received by it, pay to the Pledgor, upon delivery by the Pledgor to the Pledgee of an officers certificate to the effect that the Pledgee is required to do so, all dividends, subscription rights, options, warrants or other transferable rights, evidences of indebtedness, securities, assets or other property distributed by Indah Kiat or otherwise paid on or distributed in respect of the Collateral Shares held by the Pledgee. On the occurrence of an Event of Default under the Master Supply Agreement and during the continuance thereof, the Pledgor shall not be entitled to receive and retain any dividend or other distribution in respect of any of the Collateral Shares, whether in cash or otherwise. Any such dividend or any distribution, and any other dividend or distribution which under the provisions of this Article 10 are not permitted to be received and retained by the Pledgor shall be forthwith delivered to the Pledgee in the same form so received (together with any necessary endorsement) and deposited by the Pledgee upon receipt thereof in a separate bank account with the Share Collateral Agent (the Pledged Cash Account ) (any such amount shall constitute part of the collateral under the Collateral Shares hereunder). All dividends or distributions that are received with respect to the Collateral Shares by the Pledgor contrary to the provisions of this Article 10 shall be held in trust for the benefit of the Pledgee and the ratable benefit of the KX Suppliers, shall be segregated from other property or funds of the Pledgor and shall be forthwith delivered to the Pledgee in the same form as so received (with any necessary endorsement). (c) In order to permit the Pledgee to receive all dividends or other distributions to which it may be entitled under paragraph (a) or (b) above, the Pledgor shall, upon written notice from the Pledgee, from time to time execute and deliver (or cause to be executed and delivered) to the Pledgee appropriate dividend payment orders and other instruments as the Pledgee may reasonably request. 14

15 ARTICLE 11 PLEDGEE APPOINTED ATTORNEY-IN-FACT The Pledgor hereby irrevocably appoints the Pledgee the Pledgor s attorney-in-fact, with full authority in the place and stead of the Pledgor, and in the name of the Pledgor, or otherwise, from time to time in the Pledgee s discretion, upon the occurrence and continuance of a Payment Default or Trigger Event (as defined in Article 13 below), to take any action and to execute any instrument that the Pledgee may deem necessary or advisable to accomplish the purposes of this Pledge Agreement, including, without limitation: (a) to ask for, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in respect of the Collateral Shares; (b) to receive, indorse and collect any drafts or other instruments and documents, in connection with clause (a) above; (c) to file any claims or take any action or institute any proceedings that the Pledgee may deem necessary or desirable for the collection of the Collateral Shares or otherwise to enforce the rights of the Pledgee with respect to the Collateral Shares; and (d) to execute all other documents and instruments (and the due stamping thereof) as are necessary to effect any transfers of the Collateral Shares by the Pledgee in exercise of the Pledgee s remedies hereunder. provided, however, that nothing herein requires the Pledgee to act if it has not received indemnity deemed satisfactory by it, or if to do so would involve it in unusual risk, expense or liability, or the risk, expense or liability cannot be determined. ARTICLE 12 PLEDGEE MAY PERFORM PLEDGEE S DUTIES (a) If the Pledgor fails to perform any agreement contained herein, the Pledgee may, but shall not be required to, to the extent it may legally do so, itself perform, or cause performance of, such agreement, and the expenses of the Pledgee incurred in connection therewith shall be payable by the Pledgor under Article 15 hereof on a full indemnity basis. (b) The powers conferred on the Pledgee hereunder are solely to protect its interest in 15

16 the Collateral Shares and shall not impose any duty upon it to exercise any such powers. The Pledgee shall be deemed to have exercised reasonable care in the custody and preservation of any of the Collateral Shares in its possession if such Collateral Shares is accorded treatment substantially equal to that which a trustee would accord property under similar circumstances. The Pledgee shall not be responsible for the acts or omissions of others, and has no duty to monitor compliance by other parties with respect to Indonesian securities laws. (c) Notwithstanding any other provision of this Pledge Agreement, the Pledgee shall not be liable for any action taken or omitted to be taken by it in accordance with this Pledge Agreement except for its own gross negligence or willful misconduct. (d) Nothing in this agreement shall require the Pledgee to expend its own funds or to incur any personal liability. ARTICLE 13 REMEDIES If any Payment Default or Trigger Event shall have occurred and be continuing, subject to Article 14: (a) The Pledgee may exercise in respect of the Collateral Shares, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party upon default under English law and may also sell the Collateral Shares or any part thereof in one or more parcels at public or private sale, at any of the Pledgee s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Pledgee may deem commercially reasonable. The Pledgee agrees that at least 5 days notice to the Pledgor, of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification (the Liquidation Notice ). The Pledgee shall not be obligated to make any sale of the Collateral Shares regardless of the Liquidation Notice having been given. The Pledgee may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. (b) All cash proceeds received by the Pledgee in respect of any sale of, collection from, or other realization upon all or any part of the Collateral Shares shall be immediately applied (after payment of any amounts payable to the Pledgee pursuant to Article 15) in whole by the Pledgee in the following manner and order: (i) first, in or towards payment of any fees and any costs, charges and expenses incurred by the Pledgee as a result of or in connection with the creation or administration of and/or enforcement of any rights, powers and authorities 16

17 under this Pledge Agreement; (ii) secondly, in or towards payment to the Pledgee of the Secured Obligations; and (iii) thirdly, in payment of any surplus to the Pledgor or other person entitled thereto. (c) For the purposes of this Agreement, a Trigger Event shall mean the occurrence and continuance of an Event of Default. (d) Upon the occurrence of any sale, transfer or appropriation (as determined and approved by a court of competent jurisdiction) of the Collateral Shares, the Pledgor will automatically cease to have any interest or rights whatsoever in or to the Collateral Shares to the extent so sold, transferred or appropriated and the Pledgor hereby irrevocably and unconditionally waives the contents of Articles 1266 and 1267 of the Indonesian Civil Code for the purposes of this Pledge Agreement. (e) In the event of any private sale of or the transfer of the Collateral Shares or appropriation of the Collateral Shares to itself by the Pledgee (as determined and approved by a court of competent jurisdiction), the Pledgor hereby waives to the fullest extent permitted by law any rights whatsoever it may otherwise have to require the Collateral Shares to be sold pursuant to a public auction. ARTICLE 14 MANDATORY PUT (a) The Pledgee hereby grants to the Pledgor the Mandatory Put. (b) The Mandatory Put is exercisable by the Pledgee at any time from the date hereof, and it may be exercised more than once, and shall be exercisable upon issuance of the Liquidation Notice. (c) The Pledgee may exercise the Mandatory Put by delivery of the Mandatory Put Notice to the Pledgor (the Exercise Date ). Consummation of the Mandatory Put will be pursuant to the procedures set forth herein. (d) Within 2 Business Days after the Exercise Date, there shall be a closing for the Mandatory Put. (e) At the closing, the Pledgor shall pay to the Pledgee the Put Price for each of the IKKP Shares to be redeemed by the Pledgor in US$ to such bank account and in such name as the Pledgee shall advise the Pledgor. For the avoidance of doubt, 17

18 the aggregate redemption price to be paid for the IKPP Shares shall equal to the Put Price multiplied by the number of IKPP Shares for redemption. (f) At the closing, if not already made available to the Pledgor pursuant to the Pledge Agreement, the Pledgee shall deliver or cause to be delivered to the Pledgor the share certificates representing the IKPP Shares to be redeemed by the Pledgor, free from all liens, encumbrances and other restrictions of any kind (other than restrictions arising under this Pledge Agreement). (g) If the Pledgor does not redeem the IKPP Shares pursuant to any Mandatory Put Notice served hereunder, then the Pledgee shall be permitted to sell any number of IKPP Shares under such Mandatory Put Notice or any other number of IKPP Shares, in aggregate, sufficient towards payment to the Pledgee of the outstanding Secured Obligations without having to deliver any further Mandatory Put Notices to the Pledgor hereunder. ARTICLE 15 INDEMNITY AND EXPENSES (a) The Pledgor will, upon demand, pay to the Pledgee the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, that the Pledgee may incur in connection with (i) the sale of, collections from or other realization upon, the Collateral Shares; (ii) the exercise or enforcement of any of the rights of the Pledgee hereunder; or (iii) the failure by the Pledgor, to perform or observe any of the provisions hereof. (b) This indemnity shall survive the termination of this Agreement. ARTICLE 16 SECURITY INTEREST ABSOLUTE All rights of the Pledgee and the Lien created hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional, irrespective of: (a) any lack of validity or enforceability of the Master Supply Agreement or any other agreement or instrument relating thereto; (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations or any other amendment or waiver of or any consent or any departure from the Master Supply Agreement; (c) any taking, exchange, release or non-perfection of any Liens or the Collateral 18

19 Shares, or any taking, release or amendment or waiver of or consent to departure from any guarantee, for all or any of the Secured Obligations; (d) any manner of application of the Collateral Shares, or proceeds thereof, to all or any of the Secured Obligations, or any manner of sale or other disposition of the Collateral Shares for all or any of the Secured Obligations. (e) any change, restructuring or termination of the corporate structure or existence of the Pledgor; or (f) any other circumstances that might otherwise constitute a defense available to, or a discharge of, the Pledgor or a third party grantor of a Lien. ARTICLE 17 AMENDMENTS; WAIVERS; ETC No amendment or waiver of any provision of this Pledge Agreement, and no consent to any departure by the Pledgor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Pledgee, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of the Pledgee to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law. ARTICLE 18 ADDRESSES FOR NOTICES All notices and other communications provided for hereunder shall be in the form and manner, and delivered to (a) the Pledgor hereto at the address, set forth herein or (b) the Pledgee hereto at the address, set forth herein, or, as to any such party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Article. All such notices and other communications shall, when mailed, telecopied or delivered, respectively, be effective when deposited in the mails, telecopied or delivered to the addressee, addressed as set forth herein: To the Pledgor: c/o Asia Company Ltd charles Road 19

20 Singapore Attention: David Wang, Corporate & Legal Affairs Facsimile: To the Pledgee: Adventure Corp. Jakarta Stock Exchange Building Tower Attention: K. D. Hong, Senior Manager Facsimile: ARTICLE 19 CONTINUING SECURITY INTEREST This Pledge Agreement shall create a continuing Lien on the Collateral Shares and shall (i) remain in full force and effect for so long as any Credit Payment Portion remains outstanding, (ii) be binding upon the Pledgor their respective successors and permitted assigns and (iii) inure, together with the rights and remedies of the Pledgee hereunder, to the benefit of the Pledgee and its respective successors and permitted assigns. ARTICLE 20 RELEASE OF COLLATERAL SHARES Upon the occurrence where the Pledgor has pledged the IKPP Shares up to a Market Value of US$ [ ], wherein the Credit Limit Amount shall be increased up to US$ [ ], on such and each subsequent Adjustment Date, if the Market Value of the Collateral Shares, as reasonably determined by the Pledgee, is in excess of 120% of the aggregate Credit Payment Portion outstanding, the Pledgee shall so notify the Pledgor. Upon receipt by the Pledgee of a certification (a Release Certification ) of the Pledgor that no Payment Default or Event of Default has occurred and is continuing, the Pledgee will promptly release from the Lien of the Pledge Agreement such part of the Collateral Shares (as specified by the Pledgor) whose Market Value is not more than the amount by which the Collateral Shares exceeds 100% of the aggregate Credit Payment Portion outstanding (and the Pledgee, promptly after receipt of such Release Certification, shall, at the Pledgor s expense, execute and deliver to the Pledgor such documents as the Pledgor may reasonably request to evidence such release). ARTICLE 21 20

21 TERMINATION; RETURN OF THE COLLATERAL SHARES Without prejudice to the generality of Article 20, the Liens granted hereby shall terminate upon the payment in full of all of the Secured Obligations and any amounts owed to the Pledgee. Upon any such termination the Pledgee shall promptly, upon the written request of the Pledgor and at the sole expense of the Pledgor, assign, transfer and deliver, against receipt without recourse to the Pledgee but free of any Liens granted by or arising through the Pledgee, with respect to the Pledgor and the Collateral Shares, in each case as shall not have been sold or otherwise applied pursuant to the terms hereof to or on the order of the Pledgor, respectively. ARTICLE 22 NON-IMPAIRMENT None of the Secured Obligations of the Pledgor under this Pledge Agreement shall be impaired by the Pledgee: (a) determining, enlarging or varying the Credit Limit Amount under the Master Supply Agreement to the APP Buyers; (b) releasing or granting any time or any indukxence whatsoever to the Pledgor or the APP Buyers, or entering into any transaction or arrangements whatsoever with or in relation to the Pledgor; or (c) taking, accepting, varying, dealing with, enforcing, abstaining from enforcing, surrendering or releasing any security for the Credit Payment Portion in such manner as it may think fit, or claiming, proving for, accepting or transferring any payment in respect of the Credit Payment Portion in any composition by, or liquidation of the Pledgor or abstaining from so claiming, proving for, accepting or transferring. ARTICLE 23 SEPARABILITY CLAUSE In case any provision of this Pledge Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. ARTICLE 24 REINSTATEMENT 21

22 This Pledge Agreement shall continue to be effective or be reinstated if at any time any amount received by the Pledgee in respect of the Secured Obligations is rescinded or must otherwise be restored or returned by the Pledgee upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Pledgor or upon the appointment of any judicial manager, receiver, receiver and manager, intervener, conservator, trustee or similar official for the Pledgor or any substantial part of its respective assets, or otherwise, all as though such payments had not been made. ARTICLE 25 RIGHTS UPON LIQUIDATION (a) As further security for the due performance of the Secured Obligations, the Pledgor hereby assigns and transfers in favor of the Pledgee, which accepts that assignment, all of the rights of the Pledgor in respect of the Collateral Shares, to receive any and all payments which may accrue to the Pledgor as a consequence of and in the event of a dissolution or liquidation of Indah Kiat. (b) The Pledgor hereby irrevocably confers on the Pledgee, power of attorney and therefore the Pledgee is fully authorized: (i) (ii) to represent and act for and on behalf of the Pledgor from the commencement of the dissolution or liquidation of Indah Kiat to exercise all the Pledgor s rights attaching to or in respect of the Collateral Shares under Indah Kiat s articles of association and the laws and regulations of the Republic of Indonesia, including but not limited to, preparing, signing and submitting applications for approvals, providing and requesting information, appearing before competent government agencies and notaries, drawing up and signing deeds, documents and other instruments, to represent the Pledgor at any meeting of shareholders of Indah Kiat, to cast votes at such meetings, to receive any distributions from Indah Kiat to the Pledgor as shareholder of Indah Kiat; and upon the dissolution or liquidation of Indah Kiat, to act in the Pledgor s name in the course of enforcing any of the Pledgor s rights attaching to or in respect of the Collateral Shares under Indah Kiat s articles of association and prevailing regulations having the force of law. (c) The Pledgor by signing this Pledge Agreement ratifies all acts performance by virtue of the powers conferred by this Article after the commencement of the dissolution and liquidation of Indah Kiat and on such dissolution and liquidation of Indah Kiat. 22

23 ARTICLE 26 TAXES The Pledgor hereby represents and warrants that all taxes, charges, fees, duties and assessments with respect or relating to the Collateral Shares have been fully paid, and agrees to pay promptly any and all taxes, charges, fees, duties and assessments which may be levied or become due with respect thereto in the future. ARTICLE 27 CURRENCY INDEMNITY (a) U.S. Dollar is the sole currency of account and payment for all sums payable by the APP Buyers under or in connection with the Master Supply Agreement, except where required otherwise by the Pledgee. (b) Any amount received in a currency other than U.S. Dollar by the Pledgee shall only constitute a discharge to the Pledgor to the extent of the amount in U.S. Dollar which the recipient is able to purchase with the amount so received or recovered in such other currency on the date of that receipt or recovery. ARTICLE 28 GOVERNING LAW AND DISPUTE RESOLUTION This Pledge Agreement shall be governed by and interpreted in accordance with the laws of Indonesia. For the implementation of this Pledge Agreement and all its consequences, the Pledgor hereby elects general and permanent domicile at the Registrar s Office at the District Court of Central Jakarta (Kantor Panitera Pengadilan Negeri Jakarta Pusat). Without limiting the foregoing, the Pledgor further agrees that the Pledgee may at is opinion submit any dispute which may arise uder or in connection with this Pledge Agreement to any District Court in Jakarta or to any court in Indonesia having jurisdiction over the Pledgor s property. ARTICLE 29 COUNTERPARTS This Pledge Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. 23