Exhibit 4.08
ATTACHMENT TO FIRST PRIORITY
LAND MORTGAGE AGREEMENT
THIS ATTACHMENT to the Land Mortgage Agreement is made on 12 March 1998,
between:
(1) NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED, a public limited company
duly organized and validly existing under the laws of the Kingdom of
Thailand having its registered office at No. 9, UM Tower, 16th Floor,
Kwaeng Suanluang, Khet Suanluang, Bangkok, Thailand (the "Mortgagor");
(2) The financial institutions whose names are listed in Exhibit 1 (the "Thai
Lenders") represented by THE INDUSTRIAL FINANCE CORPORATION OF THAILAND, a
corporation duly organized and validly existing under the laws of the
Kingdom of Thailand having its registered office at No. 1770 New Petchburi
Road, Bangkok 10320, as Facility Agent for the Thai Lenders (the "Thai
Facility Agent");
(3) THE CHASE MANHATTAN BANK, a company duly organized and validly existing
under the laws of the State of New York, having its registered office at
450 West 33rd Street, New York, New York, U.S.A., having its branch office
in Bangkok, Thailand, located at 20 North Sathorn Road, Silom, Bangrak,
Bangkok 10500, acting as the Book-Entry Depositary for the Notes referred
to below (the "Depositary");
AND
(4) THE CHASE MANHATTAN BANK as collateral agent (the "Collateral Agent").
(the Thai Lenders and the Depositary are hereinafter collectively referred to as
the "Mortgagees").
WHEREAS:
A. The Mortgagor and the Thai Lenders entered into a credit facility
agreement dated 27 September 1995, (the "CFA") whereunder credit
facilities of Baht 3,300,000,000 and US$ 308,000,000 have been granted;
B. The Mortgagor intends to procure financing from abroad by having NSM Steel
Company, Ltd. ("NSM Cayman"), a company incorporated under the laws of the
Cayman Islands and in which the Mortgagor holds 100 percent of its shares,
and NSM Steel (Delaware) Inc., a company incorporated under the laws of
the State of Delaware, the United States, a wholly owned subsidiary of NSM
Cayman (hereinafter collectively referred to as the "Note Issuers"),
acting as agent of NSM Cayman pursuant to an agency agreement, issue
US$452,500,000 of indebtedness comprised of (a) US$249,000,000 (aggregate
principal amount at maturity) of 12% Senior Mortgage Notes Due 2006 (the
"Senior Notes") which will be issued pursuant to an indenture dated as of
1 March 1998 (the "Senior Note Indenture"), among the Note Issuers, the
Mortgagor and The Chase Manhattan Bank ("Chase"), as trustee (the "Senior
Notes Trustee"), (b) the US$203,500,000 (aggregate
principal amount at maturity) 12 1/4 Senior Subordinated Mortgage Notes
Due 2008 (the "Senior Subordinated Notes" and together with the Senior
Notes, the "Notes"), which will be issued pursuant to an indenture dated
as of 1 March 1998 (the "Senior Subordinated Note Indenture", and together
with the Senior Note Indenture, the "Indentures") among the Note Issuers
and Chase, as trustee (the "Senior Subordinated Notes Trustee" and
together with the Senior Notes Trustee, the "Trustees"), with warrants to
purchase 74,476,809 ordinary shares of the Mortgagor, and (c) a private
placement consisting of US$53,133,016 (aggregate principal amount at
maturity) of 12 3/4% Subordinated Second Mortgage Debentures Due 2009 (t
"Debentures") which will be issued pursuant to an indenture dated as of 1
March 1998 (the "Debenture Indenture"), among the Note Issuers, the
Mortgagor and Chase, as trustee (the "Debenture Trustee") and 64,417,180
ordinary shares of the Mortgagor;
C. The Mortgagor has entered into an amendment to the CFA (the "CFA
Amendment") with the Thai Lenders dated 12 March 1998 for the amendment of
certain terms and provisions to facilitate the Mortgagor's additional
financing (the CFA and the CFA Amendment, collectively, the "Bank Credit
Facility"), including but not limited to, an agreement the Mortgagor
entered into with the Thai Lenders, the Trustees and the Debenture Trustee
dated 12 March 1998 to set forth arrangements for the Thai Lenders and
holders of the Notes and the Debentures to share certain collateral (the
"Security Sharing Agreement").
D. Pursuant to the terms of the Security Sharing Agreement, the Mortgagor,
the Thai Lenders, the Thai Facility Agent, the Depositary and the
Collateral Agent agree to enter into this Attachment as security for the
Obligations (as defined hereunder).
IT IS AGREED as follows:
1. DEFINITIONS
1.1 Capitalized terms used in this Attachment have the respective meanings
assigned below unless the context otherwise requires:
1.2 In this Attachment:
"Attachment" means this Attachment to Land Mortgage Agreement between the
Mortgagor and the Mortgagees dated 12 March 1998, including all schedules,
exhibits and other supplements and as modified or amended from time to
time;
"Land" means the plots of land as described in Exhibit 2 together with all
buildings and structures located now or at anytime hereafter therein;
"Land Mortgage Agreement" means the official land mortgage agreement to
which this Attachment is attached;
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"Land Title Deeds" means such deeds of title to land as have been issued
by the Land Department of Thailand for the registration of the Land and
the other particulars related thereto;
"Mortgage" means the Land Mortgage Agreement, this Attachment to the Land
Mortgage Agreement and any schedules, exhibits or other supplements
hereto, and the encumbrances thereby constituted; and
"Mortgaged Amount" means the principal amount of the Mortgage expressed in
Thai Baht which equals Baht 59,033,000,000. At the Closing Date, the
Mortgaged Amount will be set at an amount equal to the sum of the
outstanding Senior Note and Senior Subordinated Note Obligations and the
outstanding Bank Credit Facility Obligations expressed in US$ converted to
Baht at a rate of Baht 75 to $1.00.
"Mortgage Amount Adjustment" means the obligation of the Mortgagor to
cause the Mortgaged Amount to be increased from time to time at its own
expense in order to maintain at all applicable times a Mortgaged Amount
based on an exchange rate of Baht to US$ that is no less than Baht 15 per
US$ 1.00 higher than the actual exchange rate quoted at the close of
business on any business day by the Bank of Thailand (by way of example,
if the actual exchange rate quoted by the Bank of Thailand is Baht 65 per
US$ 1.00, the Mortgagor would be obliged, subject to the provision set
forth in Clause 3, to cause the Mortgaged Amounts to be increased to an
amount equal to the sum of the then outstanding Senior Note and Senior
Subordinated Note Obligations and the then outstanding Bank Credit
Facility Obligations expressed in US$ converted to Baht at rate of Baht 80
to US$ 1.00).
"Obligations" means all present and future obligations and liabilities of
Mortgagor under the Bank Credit Facility, the Notes, the Indentures and
the Security Sharing Agreement.
1.3 Any reference in this Attachment to:
(i) any agreement or document shall be read and construed as a reference
to such agreement or document as the same may have been, or may from
time to time be, amended, varied, novated or supplemented; and
(ii) any party shall be construed so as to include its respective
successors, permitted assigns and transferees in accordance with its
respective interests;
1.4 Words denominating the singular include the plural and vice versa.
1.5 Section headings are for reference only.
2. MORTGAGE AND GRANT OF SECURITY INTEREST
2.1 As security for the Obligations, the Mortgagor hereby grants to the
Mortgagees a first priority mortgage and continuing security interest in:
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(a) the Land; and
(b) all of the property, rights, title and interest in respect of any
and all of the Land (the "Mortgaged Property").
The Mortgagees hereby accept such Mortgage.
2.2 The Mortgagor agrees that if a novation or assignment of any of the
Obligations occurs, the Mortgage shall continue to be held as security for
such novated or assigned obligations and for any such new creditor.
2.3 The Mortgage shall be in addition to, independent of and without prejudice
to, and shall not be in substitution for, any other rights, security,
guarantee or indemnity now held or which may hereafter be held by the
Mortgagees.
2.4 The Mortgage shall be a continuing security and shall remain in force,
notwithstanding the bankruptcy or other incapacity of the Mortgagor or any
intermediate satisfaction of the whole or any part of the Obligations
until such time as the Obligations shall have been fully and finally paid
and discharged.
2.5 Upon the payment, discharge and performance in full of the Obligations,
the Collateral Agent will, at the request and at the cost and expense of
the Mortgagor, discharge the Mortgage and return to the Mortgagor the Land
Title Deeds.
3. ADJUSTMENT TO MORTGAGED AMOUNT
The Mortgagor hereby agrees to undertake the Mortgage Amount Adjustment
within two business days of any date on which the exchange rate of Baht to
US$ upon which the Mortgaged Amount is then based does not exceed the
actual exchange rate quoted by the Bank of Thailand by at least Baht 10
per US$ 1.00.
4. INTEREST
The Mortgagor agrees to pay interest to the Mortgagees as may accrue on
any debts incurred to the Mortgagees at the following interest rate:
(a) each of the Thai Lenders are entitled to charge interest at rates
specified in the CFA Amendment;
(b) the interest on the Senior Notes shall be charged at 12% per annum;
and
(c) the interest on the Senior Subordinated Notes shall be charged at 12
1/4% per annum.
5. OBLIGATIONS
The Mortgage constitutes a continuing security for all of the following
whether now existing or hereafter incurred:
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(1) the prompt payment by the Mortgagor when due and payable of the
Obligations; and
(2) the prompt payment by the Mortgagor when due and payable, of all
interest, compensation, indemnities, penalties, and all other
accessory debts from time to time owing by it in respect of the
Obligations.
6. DELIVERY OF CERTIFICATES
The Land Title Deeds shall be delivered to and retained by the Collateral
Agent upon execution of the Mortgage. All other certificates and
instruments relating to the Mortgage coming into existence from time to
time shall be delivered to the Collateral Agent promptly upon the receipt
thereof by the Mortgagor.
7. ENFORCEMENT OF MORTGAGE
7.1 The enforcement of the Mortgage and the distribution of proceeds realized
thereon shall be in accordance with the procedures set forth in the
Security Sharing Agreement.
7.2 As per the Security Sharing Agreement, the Mortgagees will act to enforce
the Mortgage upon receipt of (i) a Notice of Actionable Default (as
defined in the Security Sharing Agreement) and (ii) written instruction
from the Required Holders (as defined in the Security Sharing Agreement).
Upon receipt of the above, the Mortgagees may proceed to seek a court
order declaring the Mortgagor in default of its Obligations and that the
Mortgaged Property shall be sold at public auction or take any other
action permitted by law or as mutually agreed by the parties.
7.3 The Mortgagees may select to sell any or all of the Land to be enforced as
they deems appropriate.
7.4 As per the Security Sharing Agreement, the net proceeds derived from a
sale of any or all of the Mortgaged Property shall be applied towards
settlement of the Obligations. If such proceeds or the value of the Land
in case of foreclosure are insufficient to pay or set off all amounts to
which the Mortgagees are entitled, the Mortgagor shall remain liable for
the deficiency. All such proceeds shall be distributed in accordance with
the Security Sharing Agreement.
7.5 If the Mortgage is enforced, the Mortgage Amount stated herein shall not
prejudice the right of the Mortgagees to apply all of the net proceeds
derived from a sale of any or all of the Mortgaged Property, whether or
not such proceeds or value exceeds the Maximum Amount, towards settlement
of the Obligations.
7.6 If the Mortgagees enforce the mortgage or forecloses the Mortgaged
Property and tax liabilities of any kind (including but not limited to
customs duty, value added tax and transfer fees) related to the Mortgaged
Property arise for which the Mortgagees are liable, the Mortgagor shall
immediately pay such tax liabilities and all related penalties and
expenses and/or reimburse the Mortgagees for said amounts if paid by the
Mortgagees.
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8. COVENANTS
The Mortgagor hereby further covenants and agrees with the Mortgagees as
follows:
(1) To comply with all applicable laws, announcements, decrees, and
regulations of the Government of Thailand and all the subdivisions
thereof for the time being in force except where such failure to
comply would not have a material effect on the business or general
condition of the Mortgagor and with all further laws, announcements,
decrees or regulations subsequently issued from time to time which
may affect the Mortgaged Property except where such failure to
comply would not have a material effect on the business or general
condition of the Mortgagor.
(2) Not to do or permit or consent to be done or omit anything with the
knowledge that the consequence thereof may in any material way cause
the Mortgaged Property to deteriorate or lessen in value in any
material respect or cause any policy of insurance effected in
pursuance of the provisions of the mortgage or the Land Mortgage
Agreement to be cancelled or the amount of any premium payable for
any such policy of insurance to be materially increased.
(3) Not to grant any rights to any person, such as to let, give
habitation or allow a third party to construct or do any act on the
Mortgaged Property, except as otherwise agreed with the Mortgagees
or except as to any such right as would not in the good faith
judgment of the Mortgagee have a material adverse affect on the
value of the Mortgaged Property.
(4) Not to make or permit to be made without the written consent of the
Mortgagees any material structural alteration or addition to the
buildings and improvements for the time being forming part of the
Mortgaged Property, the consent for which shall not be unreasonably
withheld, except for the Phase II Construction and the Phase III
Construction (as defined in the Offering Memorandum) or such other
structural alteration or addition as would not, in the good faith
judgment of the Mortgagor, have a material adverse affect on the
value of the Mortgaged Property.
(5) To notify the Mortgagees in writing immediately on receipt of any
written notice, order or similar matter materially and adversely
affecting or likely so to affect the Mortgaged Property, sent to the
Mortgagor by a competent governmental authority and send the same or
a copy thereof to the Mortgagees, and on demand by the Mortgagees to
supply to the Mortgagee all material information within the
possession of the Mortgagor relating to the matters mentioned or
dealt with in such notice, order or other similar matter and upon
the grant or issue of any material permission, consent, license or
other document affecting the Mortgaged Property granted by any
competent governmental authority, to hand such document to the
Mortgagees to be kept with the deeds and documents of title relating
to the Mortgaged Property.
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(6) To use the Mortgaged Property only for the purposes of the
Mortgagor's business.
(7) To keep the Mortgaged Property in good repair and permit the
Mortgagees or their representatives upon 24 hours notice and during
normal working hours to enter the Mortgaged Property to examine the
condition thereof.
9. MORTGAGEES' RIGHTS
9.1 Any act performed by the Mortgagor in violation of this Attachment shall
not bind the Mortgagees and the Mortgagees shall have the right to deny
such act of the Mortgagor and the Mortgagees shall also have the right to
immediately enforce the Mortgaged Property in case the Mortgagor has
defaulted under this Attachment.
9.2 No delay in exercising or omission to exercise any right, power or remedy
available to the Mortgagees, upon any failure by the Mortgagor to observe
or perform any of its obligations under the Land Mortgage Agreement and
this Attachment shall impair such right, power or remedy or be construed
as a waiver thereof or as acquiescence in respect of any such failure nor
shall any acquiescence in any such failure affect or impair any right,
power or remedy of the Mortgagees in respect of any other or later failure
by the Mortgagor to observe or perform any of the Mortgagor's obligations
hereunder and under the Land Mortgage Agreement.
9.3 All rights herein shall be in addition to and without prejudice to all and
any rights granted by law.
10. EXPENSES
All fees, costs and all reasonable expenses related to the Mortgage, the
registration of the Mortgage and the removal thereof and the enforcement
of the Mortgage shall be borne by the Mortgagor.
11. LAW
This Attachment shall be governed by and construed in accordance with the
laws of the Kingdom of Thailand.
12. AMENDMENTS
The terms of this Attachment may be waived, altered or amended only by an
instrument in writing duly executed by the Mortgagor and the Collateral
Agent in accordance with Section 17 of the Security Sharing Agreement.
IN WITNESS WHEREOF, the parties have executed this Attachment in 16 copies by
their duly authorized representatives in the presence of witnesses on the date
first above written with 14 copies to be kept by the Land Department, one copy
for the Mortgagor and one copy for each of the Mortgagees.
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Mortgagor:
NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED
By: /s/ Sawasdi Horrungruang
--------------------------
Under power of attorney
dated _______________
Mortgagees:
as Thai Facility Agent for the Thai Lenders
THE INDUSTRIAL FINANCE CORPORATION OF THAILAND
By: /s/ [ILLEGIBLE]
----------------------------
Under power of attorney
dated _______________
THE CHASE MANHATTAN BANK
as Depositary
By: /s/ [ILLEGIBLE]
----------------------------
Under power of attorney
dated _______________
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THE CHASE MANHATTAN BANK
as Collateral Agent
By: /s/ [ILLEGIBLE]
----------------------------
Under power of attorney
dated _______________
Witnesses
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Witnesses
- ----------------------------
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EXHIBIT 2
Description of Land and Buildings
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No. Title Deed No. Land No. Survey Page No. Area
-----------------------
Rai Ngan Wah
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1. 68083 129 1682 82 1 69
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2. 72240 18 1826 52 1 13
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3. 72242 15 1825 36 1 31
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4. 72243 16 1830 11 2 87
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5. 72246 14 1824 26 3 57
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6. 77402 123 1676 18 1 55
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7. 77403 125 1677 37 -- 16
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8. 77404 124 1678 19 1 48
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9. 77405 126 1679 32 -- 74
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10. 77406 127 1680 51 1 93
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11. 77407 128 1681 9 2 15
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12. 78239 122 1675 22 -- 49
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13. 78240 13 1683 16 2 13
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14. 78241 12 1684 16 2 17
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No. Nor.Sor. 3 Kor Land No. Survey Page No. Area
-----------------------
No. Rai Ngan Wah
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1. 255 97 5 46 3 76
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2. 125 (737) 40 (37) 25 11 -- 90
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All plots of Land and Buildings above are located at Tambol Bowin, Amphur
Sriracha Chonburi Province.
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