Exhibit 4.12
PLEDGE OF ACCOUNTS
THIS 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 "Pledgor");
(2) The financial institutions whose names are listed in Exhibit I (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 Trustees and the Debenture Trustee (as
defined below).
AND
(4) THE CHASE MANHATTAN BANK as collateral agent (the "Pledgee").
WHEREAS:
A. The Pledgor 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 Pledgor 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 Pledgor 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
Pledgor 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 (Seventy Four Million Four Hundred Seventy Six
Thousand Eight Hundred and Nine) ordinary shares of the Pledgor, 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
(the "Debentures") which will be issued pursuant to an indenture dated as
of 1 March 1998 (the "Debenture Indenture"), among the Note Issuers, the
Pledgor and Chase, as trustee (the "Debenture Trustee") and 64,417,180
ordinary shares of the Pledgor;
C. The Pledgor 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 Pledgor's additional financing (the
CFA and the CFA Amendment, collectively, the "Bank Credit Facility"),
including but not limited to, an agreement the Pledgor entered into with
the Thai Lenders, the Trustees and the Debenture Trustee dated 12 March
1998 to set forth arrangements for the Thai Lenders, the holders of the
Notes and the holders of the Debentures to share certain collateral (the
"Security Sharing Agreement"); and
D. Pursuant to the terms of the Security Sharing Agreement, the Pledgor, the
Thai Lenders, the Thai Facility Agent, the Trustees, the Debenture Trustee
and the Pledgee agree to enter into this Agreement as security for the
Obligations (as defined hereunder).
IT IS AGREED as follows:
1. DEFINITIONS
1.1 Except as otherwise provided herein, words and expressions in this
Agreement shall have the same respective meanings as described in the Bank
Credit Facility, the Indentures, the Debenture Indenture and the Security
Sharing Agreement:
"Accounts" means those accounts set forth in Exhibit 4 and all rights
relating thereto, together with any substitute account or accounts opened
from time to time;
"Account Bank" means each of the commercial banks as financial
institutions set out in Exhibit 4, or such other bank at which the
Accounts or any of them are maintained and any assignor or successor
thereof,
"Collateral" means (i) the Accounts, (ii) all the Evidence, (iii) all the
Deposits, and (iv) all other rights, entitlements, benefits and proceeds
in, to and of the Accounts that may now or hereafter be, or required to
be, pledged in favor of the Pledgee pursuant to this Agreement;
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"Deposits" means, in respect of each Account, all monies now or at anytime
hereafter standing to the credit thereof and all entitlement to interest
(without prejudice to the provisions of Section 761 of the Civil and
Commercial Code) and all other rights and benefits accruing to or arising
from such monies and "Deposit" shall be construed accordingly;
"Enforcement Notice" means a notice of an Event of Default under the Bank
Credit Facility, the Indentures or, as the case may be, the Debenture
Indentures in the form attached as Exhibit 3;
"Evidence" means the passbook or other documents of title in relation to
any Deposit or evidencing rights to any Deposit;
"Pledge" means, in respect of each Account, the pledge of that Account
created by or pursuant to this Agreement; and
"Obligations" means all present and future obligations and liabilities of
the Pledgor under the Bank Credit Facility Agreement, the Notes, the
Indentures, the Debentures, the Debenture Indenture, and the Security
Sharing Agreement.
1.2 Any reference in this Agreement 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;
1.3 Words denominating the singular include the plural and vice versa.
1.4 Section headings are for reference only.
2. PLEDGE
2.1 To secure the due and punctual payment and performance by the Pledgor of
the Obligations, the Pledgor hereby:
(a) pledges the Accounts to the Pledgee as a first security interest for
the benefit of the Thai Lenders and the holders of the Notes and as
a second security interest for the benefit of the holders of the
Debentures, on the terms and conditions set out in this Agreement
and the Pledgee agrees to accept the pledge of such Accounts on the
terms and conditions set out in this Agreement.
(b) undertakes at each time when any Evidence is issued to immediately:
(i) deliver such Evidence to the Pledgee;
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(ii) endorse on such Evidence the following: "This Account is
pledged pursuant to the Pledge of Accounts dated 12 March 1998
between the Pledgor, the Thai Facility Agent, the Trustees,
the Debenture Trustee and the Pledgee named therein and the
terms and conditions thereof shall apply to this Account"; and
execute such endorsement;
(iii) give notice to the Account Banks in the form set out in Part A
of Exhibit 2 hereto and procure that as soon as practicable
the Account Banks acknowledges such notice in the form set out
in Part B of Exhibit 2, or in such other form as may be
reasonably acceptable to the Pledgee; and
(iv) complete all other actions and deliver any other document
which the Pledgee may reasonably require to perfect the
pledging by the Pledgor under this Agreement and each Pledge;
and
(c) in the event that the Pledgor opens any Account the details of which
are not listed in Exhibit 4 , the Pledgor agrees, if requested by
the Thai Lenders, the Trustees or the Debenture Trustee to promptly
execute and deliver to the Pledgee an agreement substantially in the
form of this Agreement pledging such Account to the Pledgee for the
benefit of the Thai Lenders, the holders of the Notes and the
holders of the Debentures (as a second priority lien).
3. ENFORCEMENT OF PLEDGE
3.1 The enforcement of the Pledge shall be in accordance with the Security
Sharing Agreement.
3.2 In accordance with the Security Sharing Agreement, following the receipt
of a Notice of Actionable Default (as defined therein) and in compliance
with Section 4 of the Security Sharing Agreement, the serving on the
Pledgor of an Enforcement Notice shall cause each Pledge constituted by or
pursuant to this Agreement to become immediately enforceable by any means
in accordance with applicable laws.
3.3 In the enforcement of the Pledge created pursuant to the provisions of
this Agreement, the Pledgee may select any or all of the Collateral as it
deems appropriate, subject only to limitations imposed by applicable law.
3.4 The proceeds derived from the enforcement of any Pledge shall be applied
towards settlement of the Obligations in accordance with the first
security interests of the Thai Lenders and holders of the Notes under the
Bank Credit Facility, the Indentures and the Security Sharing Agreement
and the second security interests of the holders of Debentures under the
Debenture Indenture and the Security Sharing Agreement. In the event that
such proceeds are insufficient to pay or set off all amounts to which the
Thai Lenders, The Thai Facility Agent, the Trustees and the Debenture
Trustee and the Pledgee are entitled, the Pledgor shall be liable for the
deficiency.
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4. CONTINUING SECURITY
4.1 This Agreement and each Pledge created by or pursuant hereto shall be in
addition to, independent of, without prejudice to, and shall not be in
substitution for or merge with any other rights, security, guarantee,
indemnity or suretyship now held or which may hereafter be held by the
Thai Lenders, the Trustees or, as the case may be, the Debenture Trustee
(as a second priority lien) for the due payment and performance by the
Pledgor of the Obligations.
4.2 This Agreement and each Pledge created by or pursuant hereto shall be a
continuing security and shall remain in full force and effect
notwithstanding the liquidation, bankruptcy or other incapacity of the
Pledgor or any amalgamation or reconstruction of the Pledgor or any change
in the constitution thereof or any settlement of account, intervening
payment or the extinction of any or all indebtedness by whatever reason
(other than by full performance and discharge of the Obligations) or other
matter or thing whatsoever.
4.3 If after the date of this Agreement:
(a) any settlement or discharge of any or all of the Obligations of the
Pledgor is nullified for any reason whatsoever, and/or
(b) an order or judgement is made against the Thai Lenders, the
Trustees, the Debenture Trustee, the holders of the Notes or the
holders of the Debentures under Section 237 of the Civil and
Commercial Code of Thailand (or any modification or re-enactment
thereof) or under any of Section 113, 114 and 115 of the Bankruptcy
Act of Thailand (or any modification or re-enactment thereof)
directing the Thai Lenders, the Trustees, the Debenture Trustee, the
holders of the Notes or the holders of the Debentures to pay any sum
received or held by it from the Pledgor or any other person to
settle all or part of the debt of the Pledgor to an official
receiver, a liquidator or a creditor of the Pledgor;
then the returned moneys, losses, damages, costs and expenses of the Thai
Lenders, the Trustees, the Debenture Trustee, the holders of the Notes or
the holders of the Debentures arising as a result of such nullified
settlement or discharge, and/or (as the case may be) the sum paid by it
pursuant to such order or judgement shall be recoverable from the Pledgor
on demand.
5. FURTHER ASSURANCES
5.1 The Pledgor shall, at anytime at the reasonably request of the Pledgee and
at the cost and expense of the Pledgor, promptly sign, seal, execute and
deliver such deeds, instruments, notices and documents, (including further
legal or other transfers or assignments) and do such acts and things as
may reasonably be required by the Pledgee for the purpose of maintaining,
perfecting, protecting, defending, enforcing or securing the obligations
of the Pledgor under this Agreement and the encumbrances arising under or
constituted by or
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pursuant to this Agreement (or purported to be created by or constituted
by or pursuant to this Agreement) or in respect of each Account (whether
in existence at the date hereof or acquired after the date hereof) or for
facilitating the exercise or, as the case may be, realization thereof and
the exercise of all other powers, authorities and discretion vested in the
Pledgee.
5.2 The Pledgee shall, without prejudice to other rights, powers and
privileges under this Agreement, be entitled (but shall be under no
obligation), at any time and as often as it may reasonably consider to be
necessary, to take any such action and/or demand additional documents and
instruments from the other party (in which case the Pledgor undertakes to
use its best endeavors to procure such documents or instruments from such
person) for the purpose of protecting the rights constituted by this
Agreement.
5.3 The Pledgor hereby agrees to indemnify the Pledgee on demand against any
and all costs, losses, expenses or liabilities incurred by or imposed on
the Thai Facility Agent, the Thai Lenders, the Trustees, the Debenture
Trustee or the Pledgee in connection with actions taken concerning the
perfection and/or protection of the rights and/or security interest
referred to in this Clause 5.3.
6. INVESTMENT DECISIONS
Unless otherwise provided in the Indentures or the Debenture Indenture and
as described more fully in the Pledge of Permitted Investments, the
Pledgor is authorized to continue to control investment decisions with
respect to the funds in the Accounts until a Notice of Actionable Default
(as defined in the Security Sharing Agreement) has been issued by the
Trustees under the Indentures, the Thai Facility Agent under the Bank
Credit Facility, or, as the case may be, the Debenture Trustee under the
Debenture Indenture (as a second priority lien). At such time, the Pledgee
shall control investment decisions with respect to funds in Accounts and
realize upon its security interest.
7. FILINGS, RECORDS, INSPECTION
Except as otherwise permitted hereunder, the Pledgor shall not file or
suffer to be on file, or authorise or permit to be filed or to be on file,
in any jurisdiction, any other encumbrance with respect to the Accounts in
which the Pledgee is not named as the sole first secured party for the
benefit of the Thai Lenders and the Trustees or as the sole second secured
party for the benefit of the Debenture Trustee. The Pledgor shall permit
representatives of the Pledgee upon reasonable notice, at any time during
normal business hours to inspect and make abstracts from its books and
records pertaining to the Accounts.
8. REMEDIES AND WAIVERS
8.1 Any receipt, release or discharge of the pledge provided by, or of any
liability arising under this Agreement may be given by the Pledgee alone
and shall not release or discharge the Pledgor from any liability for the
same or any other moneys which may exist
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independently of this Agreement. Where such receipt, release or discharge
relates only to part of the Accounts, such receipt, release or discharge
shall not prejudice or affect the pledge hereby created in relation to the
remainder of the Accounts.
8.2 The Pledgee may in its or their discretion grant time or other indulgence,
or make any other arrangement variation or release, with the Pledgor or
any other person (whether or not party hereto and whether or not jointly
liable with the Pledgor) in respect of all the obligations or of any other
security therefor or guarantee in respect thereof without prejudice either
to the pledge constituted by or pursuant to this Agreement or to the
liability of the Pledgor for the Obligations.
8.3 The rights, powers and remedies provided in this Agreement are cumulative
and are not, nor are they to be construed as, exclusive of any rights,
powers and remedies provided by law.
8.4 No failure on the part of the Pledgee to exercise, or delay on its or
their part in exercising any of the rights, powers and rei-nedies provided
for by this Agreement or by law shall operate as a waiver thereof, nor
shall any single or partial waiver of any such rights, powers or remedies
preclude any further or other exercise of such rights, power or remedies
or the exercise of any other of such rights, powers or remedies.
9. SUCCESSORS AND ASSIGNS
This Agreement shall be binding on and inure to the benefit of the parties
hereto and their respective successors, assignees and transferees provided
that the Pledgor may not assign any of its rights or obligations under
this Agreement.
10. RELEASE AND DISCHARGE
The Pledgee shall, at the request and cost of the Pledgor, at any time
after the Pledgor's Obligations have been repaid in full, promptly release
and discharge the Pledgor from its obligations under this Agreement and
any Pledge and shall deliver any Accounts in its possession at such time
to the possession of the Pledgor.
11. SEVERABILITY
If at any time any one or more of the provisions of this Agreement or any
Pledge becomes invalid, illegal or unenforceable in any respect under any
law, the validity, legality and enforceability of the remaining provisions
of this Agreement and such Pledge shall not in any way be affected or
impaired thereby.
12. NOTICES
Any notice or communication under or in connection with Section 12 of the
Security Sharing Agreement and the provisions of such agreement shall
apply hereto mutatis mutandis.
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13. LAW
This Agreement and each Pledge shall be governed by and construed in
accordance with the laws of Thailand.
14. AMENDMENTS
The terms of this Agreement may be waived, altered or amended only by an
instrument in writing duly executed by the Pledgor and the Pledgee in
accordance with Section 17 of the Security Sharing Agreement.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed.
NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED
as Pledgor
By: /s/ Sawasdi Horrungruang
-----------------------------------------
Title:
THE INDUSTRIAL FINANCE CORPORATION OF THAILAND
as Facility Agent for the Thai Lenders
By: /s/ [ILLEGIBLE]
-----------------------------------------
Title:
THE CHASE MANHATTAN BANK
as Trustees and Debenture Trustee
By: /s/ [ILLEGIBLE]
-----------------------------------------
Title:
THE CHASE MANHATTAN BANK
as Pledgee
By: /s/ [ILLEGIBLE]
-----------------------------------------
Title:
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EXHIBIT 1
The Thai Lenders
1. The Industrial Finance Corporation of Thailand
2. Thai Farmers Bank Public Company Limited
3. Siam City Bank Public Company Limited
4. The Government Bank
5. First Bangkok City Bank Public Company Limited
6. Nakornthon Bank Public Company Limited
7. SCF Finance and Securities Public Company Limited
8. Siam City Credit Finance and Securities Public Company Limited
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EXHIBIT 2
Part A
Notice of Pledge
12 March 1998
To: The Chase Manhattan Bank
20 North Sathorn Road
Bangkok 10500
Dear Sirs,
We refer to the passbooks (the "Instrument(s)") representing the accounts as
listed in the attachment hereto (the "Accounts").
We hereby give you notice that pursuant to the Pledge of Accounts Agreement
dated 12 March 1998, (the "Pledge of Accounts") between Nakornthai Strip Mill
Public Company Limited (the "Pledgor"), the Thai Lenders, the Trustees and the
Pledgee named therein, the Pledgor has pledged to the Pledgee the Instruments
and all rights of the Pledgor arising from the Instruments, including its right
to withdraw monies.
Terms and expressions defined in the Pledge of Accounts shall have the same
meaning when used herein.
Please acknowledge receipt of this notice by signing and retuming a copy to the
Collateral Agent and another copy to the Pledgor.
NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED
as Pledgor
By:
----------------------------------
Name:
Title:
Attachment: Acknowledgment of notice of pledge
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Part B
Acknowledgment of Pledge of Accounts
To: THE CHASE MANHATTAN BANK
as Collateral Agent
NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED
No. 9, UM Tower, 16th Floor
Kwaeng Suanluang, Khet Suanluang
Bangkok
We hereby acknowledge receipt of a notice of pledge of which this is a copy.
Yours sincerely,
THE CHASE MANHATTAN BANK
By:
---------------------------
Name:
Title:
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EXHIBIT 3
Form of Enforcement Notice
To: NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED
No. 9, UM Tower, 16"' Floor
Kwaeng Suanluang, Khet Suanluang
Bangkok
[date]
Dear Sirs,
We refer to:
(a) the following accounts as listed in the attached (the "Accounts"):
(b) the Pledge of Accounts dated 12 March 1998 (the "Pledge of
Accounts") between Nakornthai Strip Mill Public Company Limited (the
"Pledgor"), the Thai Lenders, the Trustees, the Debenture Trustee
and the Collateral Agent (as therein defined); and
(c) the notice of pledge dated [ ] given to the Account Banks by the
Pledgor and confirmed by the Account Banks in respect of the Pledge
of Accounts.
Words and expressions defined in the Pledge of Accounts (whether expressly
therein or by cross-reference to another document) and used herein shall, unless
the context otherwise requires, have the same meanings when used herein.
We hereby notify you that we have received a Notice of an Actionable Default and
that we have been directed to deliver this Enforcement Notice in accordance with
the provisions of Section 4 of the Sharing Agreement.
We hereby confirm that this Enforcement Notice is delivered pursuant to and for
the purposes of Clause 3.2 of the Pledge of Accounts and in accordance with the
terms thereof, each pledge constituted by or pursuant to the Pledge of Accounts
is immediately enforceable by any means in accordance with applicable law.
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This Enforcement Notice and the rights and obligations of the parties hereunder
shall be governed by and construed in accordance with the laws of Thailand.
Your faithfully,
THE CHASE MANHATTAN BANK
As Collateral Agent, for and on behalf of the Thai Lenders, the Trustees and the
Debenture Trustees [o]
By:
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EXHIBIT 4
Details of Accounts
The Chase Manhattan Bank - Bangkok Branch
1) Type: corporate savings A/C - Baht, non-interest bearing
A/C Name: Nakornthai Strip Mill Public Co., Ltd. - Onshore Baht Revenue
Account
A/C No. 6580116868
2) Type: corporate savings A/C - US$, non-interest bearing
A/C Name: Nakornthai Strip Mill Public Co., Ltd. - Onshore USD Revenue
Account
A/C No. 6581115463
3) Type: corporate savings A/C - Baht, non-interest bearing (with check
book)
A/C Name: Nakornthai Strip Mill Public Co., Ltd. - Baht Operating Account
A/C No. 6580116876
4) Type: corporate savings A/C - US$, interest bearing
A/C Name: Strip Mill Public Co., Ltd. - USD Operating Account
A/C No. 6581115471