Exhibit 4.16
PLEDGE OF THAI PERMITTED INVESTMENTS
THIS AGRIEEMENT 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 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 33d Street, New York, New York, U.S.A., having its branch office
in Bangkok, Thailand, located at 20 North Sathom Road, Silom, Bangrak,
Bangkok 10500, acting as the Trustee and the Debenture Trustee (as defined
below);
AND
THE CHASE MANHATTAN BANK as collateral agent (the "Pledgee")
WHEREAS:
(4) 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;
A. 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) 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 Indenture 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"); and
D. Pursuant to the terms of the Security Sharing Agreement, the Pledgor, the
Thai Lenders, the Thai Facility Agent, the Trustee, 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:
"Collateral" means the Instruments and all rights, entitlements, benefits
and proceeds that may now or hereafter be, or required to be, pledged in
favor of the Pledgee for the benefit of the Thai Lenders, the Trustees and
the Debenture Trustee pursuant to this Agreement;
" Enforcement Notice" means notice of an Event of Default as defined under
the Bank Credit Facility, the Indentures and Debenture Indenture in the
form attached as Exhibit 3;
"Instrument" means any instrument representing, or document of title to, a
Permitted Investment;
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"Obligations" means all present and future obligations and liabilities of
the Pledgor under the Bank Credit Facility, the Notes, the Indentures, the
Debentures, the Debenture Indenture and the Security Sharing Agreement.
"Pledge" means, in respect of each Instrument, the pledge of that
Instrument created by or pursuant to this Agreement; and
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 to the Pledgee as a first security interest for the benefit
of the Thai Lenders and the holders of the Notes and a second
security interest for the benefit of the holders of the Debentures
(i) all Instruments, (ii) all rights, entitlements and benefits of
the Pledgor in respect of such Instruments, (iii) all rights of the
Pledgor to withdraw monies from the Permitted Investments and (iv)
all proceeds of such Instruments and Permitted Investments; and
(b) undertakes at each time when any Instruments and permitted
Investments are issued to immediately:
(i) deliver the Instrument to the Collateral Agent;
(ii) endorse on such Instrument the following: "This Instrument is
pledged pursuant to the Pledge of Thai Permitted Investments
dated 12 March 1998 between the Pledgor, the Thai Facility
Agent, the Trustee, the Debenture Trustee and the Pledgee
named therein and the terms and conditions thereof shall apply
to this Instrument", and execute such endorsement;
(iii) give notice to the issuer of such Instrument in the form set
out in Part A of Exhibit 2 hereto and use reasonable efforts
to procure that as soon as practicable the issuer of such
Instrument acknowledge such notice in the
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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 invests in any instrument which does
not qualify as a Permitted Investment (as defined in the Indentures
and the Debenture Indenture), the Pledgor agrees, if requested by
the Thai Lenders, the Trustees, the Debenture Trustees or the
Pledgee, as the case may be, to promptly execute and deliver to the
Pledgee an agreement substantially in the form of this Agreement
pledging such instrument to the Pledgee.
3. ENFORCEMENT OF PLEDGE
3.1. The enforcement of Pledges 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 issuance 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 law.
3.3. The proceeds derived from the enforcement of any Pledge shall be applied
towards settlement of the Obligations in accordance with the Security
Sharing Agreement, the Bank Credit Facility, the Indentures and the
Debenture Indenture. In the event that such proceeds are insufficient to
pay or set off all amounts to which the Thai Lenders, the Trustees, or the
Debenture Trustees are entitled, the Pledgor shall be liable for the
deficiency.
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.
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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 judgment 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 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 judgment shall be recoverable from the Pledgor on demand.
5. INVESTMENT DECISIONS
As provided in the Indentures and the Debenture Indenture, as the case may
be, the Pledgor is authorized to continue to control investment decisions
with respect to Permitted Investments until an Enforcement Notice has been
issued. At such time, the Pledgee shall control investment decisions with
respect to Permitted Investments and realize upon its security interest.
6. FURTHER ASSURANCES
6.1. The Pledgor shall, at any time at the reasonable 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 pursuant to this Agreement (or
purported to be created by or constituted by or pursuant to this
Agreement) or in respect of each Instrument (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.
6.2. 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 to demand additional documents and instruments
from a third party (in which case,
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the Pledgor undertakes to use its best endeavors to procure such documents
or instruments from such third party) for the purpose of protecting the
rights constituted by this Agreement.
6.3. 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 6.3.
7. FILINGS, RECORDS, INSPECTION
Except as otherwise permitted hereunder, the Pledgor shall not file or
suffer to be on file, or authorize or permit to be filed or to be on file,
in any jurisdiction, any other encumbrance with respect to the Permitted
Investment 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 Permitted Investments.
8. REMEDIES AND WAIVERS
8.1. Any receipt, release or discharge of the assignment provided by, or of any
liability arising under, Permitted Investments 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 independently of this
Agreement. Where such receipt, release or discharge relates only to part
of the Permitted Investment, such receipt, release or discharge shall not
prejudice or affect the pledge hereby created in relation to the remainder
of the Permitted Investment.
8.2. The Pledgee may in its 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
assignment 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 remedies 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
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9. 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 promptly release and
discharge the Pledgor from its obligations under this Agreement and any
Pledge and shall deliver any Instrument in its possession at such time to
the possession of the Pledgor.
10. SUCCESSORS AND ASSIGNS
T958249741his Agreement shall be binding on and shall inure to the benefit
of the parties hereto and their respective successors, assignees and
transferees, provided that the Pledgor may not assign or transfer all or
any part of its rights or obligations under this Agreement.
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 this Agreement
shall be given in accordance with Clause 12 of the Security Sharing
Agreement and the provisions of such agreement shall apply hereto mutatis
mutandis.
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 Attachment 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.
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NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED
as Pledgor
By /s/ Sawasdi Horrungruang
-----------------------------------
Title: Chairman
THE INDUSTRIAL FINANCE CORPORATION OF THAILAND
as Thai Facility Agent for the Thai Lenders
By /s/ [ILLEGIBLE]
-----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
as the Trustees and Debenture Trustee
By /s/ [ILLEGIBLE]
-----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
as Pledgee
By /s/ [ILLEGIBLE]
-----------------------------------
Name:
Title:
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EXHIBIT I
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 Savings 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
To: [Issuer of the Instruments]
Dear Sirs,
We refer to the instruments as listed in the attached (the "Instrument(s)").
We hereby give you notice that pursuant to the Pledge of permitted Investments
dated 12 March 1998 (the "Pledge of Permitted Investments") between Nakomthai
Strip Mill Public Company Limited (the "Pledgor"), the Thai Lenders, the
Trustees, the Debenture Trustee and the Collateral Agent, as Pledgee, the
Pledgor has pledged to the Pledgee for the benefit of the Thai Lenders, the
Trustees and the Debenture Trustee, the Instruments and all rights, entitlements
and benefits of the Pledgor in respect of such Instrument, including its right
to withdraw monies.
Terms and expressions defined in the Pledge of Permitted Investments shall have
the same meaning when used herein.
Please acknowledge receipt of this notice in the form-n of acknowledgment
attached hereto (the "Acknowledgment") by signing and returning a copy of the
Acknowledgment to the Collateral Agent at The Chase Manhattan Bank, Bubhajit
Building, 20 North Sathom Road, Silom, Bangrak, Bangkok 10500 and another copy
to the Pledgor.
NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED
By: _______________________________________________
Name:
Title:
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We confirm our agreement with the foregoing.
THE CHASE MANHATTAN BANK
As Collateral Agent, and for on behalf of the
Thai Lenders, the Trustees and the Debenture Trustee
By: _____________________________________
Name-
Title:
Attachment: Acknowledgment of notice of pledge
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Part B
Acknowledgment of Pledge of Permitted Investments
To: THE CHASE MANHATTAN BANK 20 North Sathom Road
Silom, Bangrak
Bangkok 10500
NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED
No. 9, UM Tower, 16 th Floor
Kwaeng Suanluang, Khet Suanluang
Bangkok
We hereby acknowledge receipt of a notice of pledge of which this is a copy.
Yours sincerely,
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EXHIBIT 3
Form of Enforcement Notice
To: NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED
No. 9, UM Tower, 16th Floor
Kwaeng Suanluang, Khet Suanluang
Bangkok
[date]
Dear Sirs,
We refer to:
(a) the instruments as listed in the attached (the "Instruments");
(b) the Pledge of Pennitted Investments Agreement dated 12 March 1998
(the "Pledge of Permitted Investments") between Nakomthai Strip Mill
Public Company Limited (the " Pledgor"), the Thai Lenders, Trustees,
the Debenture Trustee and the Collateral Agent (as therein defined);
(c) the notice of pledge dated [*] given to the issuers of the
Instruments by the Pledgor and confirmed by the Collateral Agent in
respect of the Pledge of Permitted Investors.
Words and expressions defined in the Pledge of Permitted Investments (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 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 Permitted Investments and in
accordance with the terms thereof, each pledge constituted by or pursuant to the
Pledge of Permitted Investments is immediately enforceable 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
By: ________________________________
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