Exhibit 4.19
EXECUTION COPY
SECURITY AGREEMENT dated as of March 12, 1998, among Nakomthai Strip Mill
Public Company Limited ("NSM" or the "Company"), a public limited company duly
organized and validly existing under laws of the Kingdom of Thailand, NSM Steel
(Delaware) Inc. ("NSM (Del)"), a Delaware corporation, NSM Steel Company, Ltd.,
a Cayman Islands company ("NSM Cayman" and, together with the Company and NSM
(Del), the "Grantors"), The Chase Manhattan Bank, a New York banking corporation
("Chase"), as trustee (in such capacities, the "Trustee") under each of the
Indentures (as defined below), Chase, as collateral agent (in such capacity, the
"Collateral Agent") hereunder, and Chase, as deposit bank (in such capacity, the
"Deposit Bank").
NSM (Del) and NSM Cayman (collectively, the "Note Issuers"), propose to
issue and sell to NatWest Capital Markets Limited ("NatWest"), McDonald &
Company Securities, Inc. ("McDonald"), Paine Webber Incorporated ("Paine
Webber") and ECT Securities Corp ("ECT" and, together with NatWest, McDonald and
ECT, the "Initial Purchasers"), upon the terms set forth in a purchase agreement
dated March 2, 1998 (the "Purchase Agreement"), among the Note Issuers, NSM and
the Initial Purchasers, $249,000,000 principal amount at maturity of 12% Senior
Mortgage Notes Due 2006 (the "Senior Notes") and $175,010,000 (Gross Proceeds)
Representing 203,500 Units (the "Units" and, together with the Senior Notes, the
"Offered Securities"), each unit consisting of one 12 1/4% Senior Subordinated
Mortgage Note Due 2008 with a principal amount at maturity of $ 1,000
(collectively, the "Senior Subordinated Notes" and, together with the Senior
Notes, the "Notes") and 633.09266 warrants, each to purchase one ordinary share,
par value 10 Baht per share (the "Ordinary Shares"), of NSM. In connection with,
and concurrently with the consummation of, the issuance and sale of the Offered
Securities, the Grantors propose to consummate a private placement consisting of
$53,133,016 aggregate principal amount at maturity of 12 3/4% Subordinated
Second Mortgage Debentures Due 2009 (the "Debentures").
The Senior Notes will be irrevocably and unconditionally guaranteed
as to principal, premium, interest and Additional Amounts, if any, by NSM. The
Senior Subordinated Notes will be irrevocably and unconditionally guaranteed as
to principal, premium, interest and Additional Amounts, if any, by NSM. The
Debentures will be irrevocably and unconditionally guaranteed as to principal,
premium, interest and Additional Amounts, if any, by NSM. The Senior Notes will
be issued under an indenture dated as of March 1, 1998 (the "Senior Note
Indenture"), among the Note Issuers, NSM and the Trustee. The Senior
Subordinated Notes will be issued pursuant to an indenture dated as of March 1,
1998 (the "Senior Subordinated Note Indenture"), among the Note Issuers, NSM,
and the Trustee. The Debentures will be issued pursuant to an Indenture dated as
of March 1, 1998 (the "Debenture Indenture" and, together with the Senior Note
Indenture and the Senior Subordinated Note Indenture, the "Indentures"), among
the Note Issuers, NSM and the Trustee.
Pursuant to the terms of the Indentures, the Grantors have agreed to
execute and deliver an agreement in the form hereof to secure all obligations of
the Note Issuers and the Company under the Notes and the Indentures goveming the
Notes (the "Note Obligations") and all obligations of the Note Issuers and the
Company under the Debentures and the Debenture Indenture (the "Debenture
Obligations" and, together with the Note Obligations, the "Obligations").
Accordingly, the Grantors and the Collateral Agent on behalf of each
of the holders of the Notes and the Debentures, including any Depository (as
defined in the Security Sharing Agreement) therefor (the "Secured Parties"),
hereby agree as follows:
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ARTICLE I
Definitions
SECTION 1.01. Definition of Terms Used Herein. Unless the context
otherwise requires, all capitalized terms used but not defined herein shall have
the meanings set forth in the Indentures and all references to the Uniform
Commercial Code shall mean the Uniform Commercial Code in effect in the State of
New York as of the date hereof.
SECTION 1.02. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
"Accounts" shall mean the Notes DSR Account and the Offshore Reserve
Account.
"Collateral" shall mean (a) the Notes DSR Account, (b) the Offshore
Reserve Account, (c) any Investment Property or Financial Assets held or owned
in or through either of (a) or (b) and (d) any and all Proceeds of the
foregoing.
"Entitlement Holder" shall mean a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement against the
Securities Intermediary. If a person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the Uniform Commercial Code, such person is the
Entitlement Holder.
"Entitlement Order" shall mean a notification communicated to a Securities
Intermediary (including without limitation the Deposit Bank) directing transfer
or redemption of a Financial Asset to which the Entitlement Holder (including
but not limited to the Grantor) has a Security Entitlement.
"Financial Asset" shall mean (a) a Security, (b) an obligation of a person
or a share, participation or other interest in a person or in property or an
enterprise of a person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another person in a Securities Account if the
Securities Intermediary has expressly agreed with the other person that the
property is to be treated as a Financial Asset under Article 8 of the Uniform
Commercial Code. As the context requires, the term Financial Asset shall mean
either the interest itself or the means by which a person's claim to it is
evidenced, including a certificate or uncertificated Security, a certificate
representing a Security or a Security Entitlement.
"Investment Property' shall mean all Securities (whether certificated or
uncertificated), Security Entitlements and Securities Accounts of any Grantor
held by the Collateral Agent, under its exclusive dominion and control, in or
through the Accounts whether now owned or hereafter acquired by the Collateral
Agent.
"Notes DSR Account " shall have the meaning assigned to such term in the
Security Sharing Agreement.
'Offshore Reserve Account' shall have the meaning assigned to such term in
the Security Sharing Agreement.
"Person" shall mean any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
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"Proceeds " shall mean any consideration received from the sale, exchange,
license, lease or other disposition of Collateral, any value received as a
consequence of the possession of any Collateral and any payment received from
any insurer or other person or entity as a result of the destruction, loss,
theft, damage or other involuntary conversion of whatever nature of any asset or
property which constitutes Collateral, and shall include (a) all cash and
negotiable instruments received by or held on behalf of the Collateral Agent and
(b) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
"Secured Parties" shall have the meaning assigned to such term in the
introduction to this Agreement.
"Securities " shall mean any obligations of an issuer or any shares,
participation's or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participation's, interests or obligations and (c)(i) are, or are of a type,
dealt with or trade on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the Uniform Commercial Code.
"Securities Account' shall mean an account to which a Financial Asset is
or may be credited in accordance with an agreement under which the person
maintaining the account undertakes to treat the person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Security Entitlements" shall mean the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"Security Interest" shall have the meaning assigned to such term in
Section 2.01.
"Securities Intermediary" shall mean (a) a clearing corporation or (b) a
person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
ARTICLE II
Security Interest
SECTION 2.01 Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest in, all of such Grantor's right, title and interest
in, to and under the Collateral (the "Security Interest"). Without limiting the
foregone, the Collateral Agent is hereby authorized to file one or more
financing statements, continuation statements or other documents for the purpose
of perfecting, confirming, continuing, enforcing or protecting the Security
Interest granted by each Grantor, without the signature of any Grantor, and
naming any Grantor or the Grantors as debtors and the Collateral Agent as
secured party.
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SECTION 2.02 No Assumption Liability. The Security Interest is granted as
security only and shall not subject the Collateral Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Collateral.
ARTICLE III
Representations and Warranties of the Grantors
The Grantors jointly and severally represent and warrant to the Collateral
Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and valid rights
in the Collateral with respect to which it has purported to grant a Security
Interest hereunder and has full power and authority to grant to the Collateral
Agent the Security Interest in such Collateral pursuant hereto and to execute,
deliver and perform its obligations in accordance with the terms of this
Agreement, without the consent or approval of any other person other than any
consent or approval which has been obtained.
SECTION 3.02. Filings. Fully executed Uniform Commercial Code financing
statements or other appropriate filings, recordings or registrations containing
a description of the Collateral with evidence of filing thereon will, as soon as
practicable after the date hereof, be delivered to the Collateral Agent which
are all the filings, recordings and registrations that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Collateral Agent (for the ratable
benefit of the Secured Parties) in respect of all Collateral in which the
Security Interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing-, refiling, recording,
recording, registration or registration is necessary in any such jurisdiction,
except as provided under applicable law with respect to the filing of
continuation statements.
SECTION 3.03 Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations and (b) subject to the
filings described in Section 3.02 above, a perfected security interest in all
Collateral in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the Uniform Commercial Code or other applicable law in such jurisdictions.
The Security Interest is and shall be prior to any other Lien on any of the
Collateral.
SECTION 3.04 Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien. The Grantor has not filed or consented to
the filing of (a) any financing statement or analogous document under the
Uniform Commercial Code or any other applicable laws covering any Collateral,
(b) any assignment in which any Grantor assigns any Collateral or any security
agreement or similar instrument covering, any Collateral with any foreign
governmental, municipal or other office, which financing statement or analogous
document, assignment, security agreement or similar instrument is still in
effect or (c) entered into any agreement that purports to give any Person other
than the Collateral Agent any rights in or control over any Collateral.
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ARTICLE IV
Covenants
SECTION 4.01 Change of Name, Location of Collateral, Records; Place of
Business. Each Grantor agrees promptly to notify the Collateral Agent in writing
of any change (a) in its corporate name or in any trade name used to identify it
in the conduct of its business or in the ownership of its properties, (b) in the
location of its chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned by it
or any office or facility at which Collateral owned by it is located (including
the establishment of any such new office or facility), (c) in its identity or
corporate structure or (d) in its Federal Taxpayer Identification Number. Each
Grantor agrees not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the Uniform Commercial Code or
otherwise that are required in order for the Collateral Agent to continue at all
times following such change to have a valid, legal and perfected first priority
security interest in all the Collateral.
SECTION 4.02 Control Agreement. Each Grantor agrees not to enter into any
agreements that purport to give any Person other than the Collateral Agent any
rights in or any control over the Accounts.
SECTION 4.03 Further Assurances. Each Grantor agrees, at its own expense,
to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Collateral Agent may
from time to time request to better assure, preserve, protect and perfect the
Security Interest and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and
delivery of this Agreement, the granting of the Security Interest and the filing
of any financing statements or other documents in connection herewith or
therewith.
ARTICLE V
The Accounts
SECTION 5.01 Sole Dominion and Control The Grantors acknowledge that the
Collateral shall be under the sole dominion and control of the Collateral Agent,
and that all of the right, title and interest of any Grantor in and to each and
every item of the Collateral shall be subject to the security interest and
control of the Collateral Agent. This Agreement shall constitute a control
agreement within the meaning set forth in Article 8 of the Union Commercial Code
and Chase, as Deposit Bank, shall follow only those directions and Entitlement
Orders in respect of the Collateral as are delivered by the Collateral Agent.
SECTION 5.02 Withdrawals and Investments. The Grantors acknowledge that
(a) the Collateral Agent is the sole signatory for the Accounts, (b) any payment
or withdrawal from or investment of funds deposited in either of the Accounts
shall be made solely at the direction of the Collateral Agent and (c) any
indispensable instruments that govern or evidence either of the Accounts have
been delivered to the Collateral Agent and not to the Grantors. The Grantors
agree that if any indispensable instruments that govern or evidence either of
the Accounts are delivered to any Grantor, such Grantor will immediately deliver
such instrument to the Collateral Agent.
SECTION 5.03. "Financial Assets" Election. The Collateral Agent and the
Deposit Bank hereby agree that each item of property (whether Investment
Property, Financial Assets, Securities, instruments or cash) credited to the
Collateral shall be treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the Uniform Commercial Code.
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ARTICLE VI
Priority of rights
SECTION 6.01 Second Priority Creditors. Each holder of any Debenture
agrees that (i) the interests of the holders of Senior Notes and the holders of
Senior Subordinated Notes, including their interests in any payments to be made
from the proceeds of any sale or other perfection or creation of any security
interests or Liens in the Collateral on behalf of any Secured Party shall be
prior to the interests of the holders of the Debentures in the Collateral,
including their interests in any such payments, to the extent and in the manner
provided in Section 6.03 (and from time to time shall execute and deliver any
instruments or agreements as may be reasonably necessary or desirable to confirm
the same), and (ii) at all times that a Default under the Senior Notes or Senior
Note Indenture and Senior Subordinated Notes or Senior Subordinated Note
Indenture has occurred and is continuing, absent the consent of the holders of a
majority of the aggregate principal amount of each of the Senior Notes
outstanding and the Senior Subordinated Notes outstanding, the holders of the
Debentures shall refrain from taking any action to foreclose upon, acquire title
to (by bidding in at foreclosure or otherwise), take possession of, liquidate or
otherwise proceed against any of the Collateral.
SECTION 6.02 Senior Subordinated Noteholders. Each holder of any
Senior Subordinated Note agrees that at all times that a Default has occurred
and is continuing under the Senior Notes or Senior Note Indenture, the holders
of the Senior Subordinated Notes shall (a) absent the consent of the holders of
a majority of the aggregate principal amount of Senior Notes outstanding,
refrain from taking any action toward collection of or enforcement or otherwise
exercise any rights of such holders of Senior Subordinated Notes with respect to
the Collateral, whether pursuant to applicable law, contract or otherwise,
including any and all rights concerning foreclosure upon the Collateral and (b)
shall (i) with respect to any bankruptcy, insolvency, or similar proceeding, not
be entitled to vote with respect to the Collateral or their rights with respect
thereto, whether pursuant to applicable law (including applicable bankruptcy or
insolvency law), contract (including the Senior Subordinated Indenture), or
otherwise, and (ii) in connection with any vote in respect of the Collateral
(including in any bankruptcy, insolvency or similar proceeding or otherwise), be
deemed to have voted in the same manner and to the same effect as the holders of
a majority of the aggregate principal amount of Senior Notes then outstanding,
and the holders of the Senior Subordinated Notes hereby assign such rights to
vote to the holders of the Senior Notes for the duration of any such Default for
the purposes of effecting any such vote; provided, that the foregoing provisions
(A) shall only apply to the holders of the Senior Subordinated Notes so long as
the amount owed by the Note Issuers or the Company to the holders of the Senior
Notes in respect of the Senior Notes and the Senior Note Indenture exceeds
U.S.$50 million and (B) shall not create any contractual obligation on holders
of the Senior Notes to take or refrain from taking any action with respect to
the Collateral.
SECTION 6.03 Distribution. The proceeds of any enforcement,
collection or other realization of all or any part of the Collateral pursuant
hereto shall be paid to the Collateral Agent. The Collateral Agent shall deposit
these proceeds into accounts it will establish and maintain at its principal
corporate trust office in New York, New York for the benefit of the Secured
Parties (the "Collateral Accounts"). The Collateral Agent may appropriate and
apply sums received by it in connection with the enforcement of all outstanding
Obligations to the credit of any of the accounts which have been established in
the name of the Collateral Agent, or over which the Collateral Agent holds a
security interest on behalf of the Secured Parties or other sums the disposition
of which it has
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the power to control, in relation to this Agreement or the Indentures. Such sums
shall be applied to the following order of priority:
(a) first, in payment of all costs, charges, fees, expenses and
liabilities incurred and payments made by and indemnities owed to
(collectively, "costs") the Collateral Agent and any receiver,
attorney, agent, delegate, subdelegate or other person (each a
"receiver") appointed by the Collateral Agent in accordance with the
terms of this Agreement or the Indentures in connection with the
performance of its obligations hereunder or thereunder or the
execution or purported execution of any powers, authorities or
discretions vested in it or him pursuant hereto or thereto including
(without limitation to the foregoing) the remuneration of the
Collateral Agent;
(b) second, pro rata to: the Notes Depositary and the Notes Trustees, in
payment for all Notes Obligations that consist of costs incurred in
connection with the administration of the Note Depositary Agreement
and the applicable Indentures;
(c) third, to the payment in full of the Note Obligations (the amounts
so applied to be distributed among the Secured Parties ratably to
the respective entitlements of the applicable Secured Parties (as
the case may be) in accordance with the amounts of the Note
Obligations owed to them on the date of any such distribution);
(d) fourth, to the Debenture Depositary and the Debenture Trustee, in
payment for all Debentures Obligations consisting of costs incurred
in connection with the administration of the Debenture Depositary
Agreement and the Debenture Indenture;
(e) fifth, to the payment in full of the Debenture Obligations; and
(f) sixth, to the extent that any funds remain, to the Grantors, their
successors or assigns, or as a court of competent jurisdiction may
otherwise direct.
ARTICLE VII
Deposit Bank
SECTION 7.01 Appointment of deposit Bank. The Collateral Agent
hereby appoints the Deposit Bank as its sub-agent under this Security Agreement
and authorizes the Deposit Bank, on the terms and subject to the conditions set
forth herein, to receive payments in respect of the Collateral. The Deposit Bank
shall be the Collateral Agent's agent for the purpose of holding and investing
the Collateral.
SECTION 7.02 Instructions. The Grantors and the Deposit Bank
acknowledge that the Collateral Agent is the only Person who may give
instructions to the Deposit Bank in respect of the Collateral. Neither the
Grantors nor any person or entity claiming by, through or under the Grantors
shall have any right, title or interest in, or control over the use of, or any
right to withdraw any amount from, the Collateral, except that the Collateral
Agent shall have the right to withdraw amounts from the Accounts. The Deposit
Bank shall be entitled to rely on, and shall act in accordance with, all
instructions given to it by the Collateral Agent with respect to the Collateral.
SECTION 7.03 Consent of Grantors. The Grantors consent to the
appointment of the Deposit Bank and agree that the Deposit Bank shall incur no
liability to any Grantor as a result of any action taken pursuant to an
instrument given by the Collateral Agent in accordance with the
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provisions of this Agreement. The Grantors agree to indemnify and defend the
Deposit Bank against any loss, liability, claim or expense (including reasonable
attorneys" fees) arising from the Deposit Bank's entry into this Agreement and
actions taken hereunder, except to the extent resulting from Deposit Bank's
gross negligence or willful misconduct.; provided, however, that the Grantors
will not indemnify the Deposit Bank against any consequential damages or loss of
profits or loss of business.
SECTION 7.04 Transfer of rights. The Deposit Bank will not assign or
transfer any of its rights or obligations hereunder (other than to the
Collateral Agent) without the prior written consent of the other parties hereto,
and any such attempted assignment or transfer shall be void.
SECTION 7.05 Right of Setoff. The Deposit Bank hereby irrevocably
waives any right to set off against, or otherwise deduct from, any funds held in
the Accounts and all Investment Property or Financial Assets (and Proceeds
thereof) that come into its possession in connection with the Accounts any
indebtedness or other claim owed by any Grantor or any affiliate thereof to the
Deposit Bank.
SECTION 7.06 Subordination of the Deposit Bank. The Deposit Bank
hereby irrevocably subordinates to the Security Interest any security interest
in or lien on any of the Collateral that the Deposit Bank may have from time to
time by operation of law or by agreement.
SECTION 7.07 Representation, Warranties and Covenants of the Deposit
Bank. The Deposit Bank represents, warrants and covenants to the Grantors, the
Collateral Agent and the Secured Creditors that:
(a) the Deposit Bank is a Securities Intermediary and is acting in that
capacity;
(b) each Account is a Security Account;
(c) the Deposit Bank will treat each item of property (including without
limitation each Security Entitlement) credited to any Account, other than cash,
as a Financial Asset;
(d) each Account is maintained in the name of the respective Grantor, and
the security interest of the Collateral Agent in each Account is indicated on
the books of the Deposit Bank;
(e) the Deposit Bank has not and will not enter into any agreement under
which the Deposit Bank agrees to comply with any directions or Entitlement
Orders regarding any of the Collateral originated by any person other than the
Collateral Agent; and
(f) the Deposit Bank will promptly notify the Grantors and the Collateral
Agent upon the Deposit Bank's obtaining any notice of an adverse claim in
respect of any of the Collateral.
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ARTICLE VIII
Appointment of Collateral Agent
Each of the Secured Parties hereby irrevocably appoints and
authorizes the Collateral Agent to act as the Collateral Agent for and on its
behalf in respect of the Collateral on the same terms and conditions as provided
under Articles 3 and 4 of the Security Sharing Agreement; provided, however,
that for purposes of this Agreement references in such Article 3 and 4: (i) to
the "Secured Creditors" shall be deemed to be references to the Secured Parties,
(ii) to the "Revenue Account, the Operating Account and the Notes Sinking Fund
Account" shall be deemed to be references to the Notes DSR Account and the
Offshore Reserve Account, (iii) to the "Security Documents" shall be deemed to
be references to this Agreement (iv) to "this Agreement", when used alone and
not in conjunction with the term "Security Documents," shall be deemed to be
references to this Agreement (v) to "this Agreement", when used in conjunction
with the term "Security Documents," shall be deemed to have been deleted, (vi)
to the "Secured Creditors' Representative" shall be deemed to be references to
the Trustee, (vii) to the "Shared Collateral" shall be deemed references to the
Collateral, (viii) to the "Collateral" shall be deemed to be references to the
Collateral (ix) to the "Credit Documents" shall be deemed to be references to
the Indentures, the Notes, the Debentures and this Agreement (x) to "Secured
Indebtedness" and "Total Secured Indebtedness" shall be deemed to be references
to the Obligations; and (xi) to the "Issuers and the Company" shall be deemed to
be references to the Grantors; and all references in such Article 3 and 4 to the
"Thai Lenders", the "Thai Facility Agent" and the "Bank Credit Facility" shall
be deemed to have been deleted.
ARTICLE IX
Miscellaneous
SECTION 9.01 Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 12 of the Security Sharing Agreement.
SECTION 9.02 Binding Effect; Several Agreement; Assignments. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Grantors that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns. This Agreement shall become effective as to any Grantor
when a counterpart hereof executed on behalf of such Grantor shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent and thereafter shall be binding upon
such Grantor and the Collateral Agent and their respective successors and
assigns, and shall inure to the benefit of such Grantor, the Collateral Agent,
the Trustee and the other Secured Parties, and their respective successors and
assigns, except that such Grantor shall not have the right to assign its rights
hereunder or any interest herein or in the Collateral (and any such attempted
assignment shall be void), except as expressly contemplated by this Agreement or
the Indentures.
SECTION 9.03 Survival of agreement; Severabilty . (a) All covenants,
agreements, representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Collateral Agent, the Trustee and the other Secured Parties and shall survive
the issuance of the Notes by the Note Issuers and the sale of the Debentures by
the Issuers, regardless of any investigation made by the Secured Parties or on
their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on or any other fee or amount payable under
this Agreement is outstanding and unpaid.
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(b) In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
(c) This Agreement shall remain in full force and effect as to all
Obligations remaining unpaid, notwithstanding the discharge and payment in full
of any and all Obligations owed under any one or more of the Indentures. Upon
any such discharge of any one or more of the Indentures, the Grantors hereby
agree to enter into such conforming changes hereto as shall be reasonably
satisfactory to the Trustee confirming the rights provided hereunder in respect
of the remaining Obligations outstanding.
SECTION 9.04 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THE
JURISDICTION OF THE DEPOSIT BANK, WITHIN THE MEANING OF SECTION 8-1 10(e) OF THE
UNIFORM COMMERCIAL CODE, IS THE STATE OF NEW YORK.
SECTION 9.05 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute a single contract, and shall become effective
as provided in Section 9.02. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 9.06 Rules of Interpretation. The rules of interpretation
specified in Section 1.04 of the Indentures shall be applicable to this
Agreement. Section headings used herein are for convenience of reference only,
are not part of this Agreement and are not to affect the construction of, or to
be taken into consideration in interpreting this Agreement.
SECTION 9.07 Jurisdiction; Consent to Service of Process. (a) Each Grantor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that, to the extent
permitted by applicable law, all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent, the Trustee or any other Secured Party may otherwise have to
bring any action or proceeding relating to this Agreement against any Grantor or
its properties in the courts of any jurisdiction.
(a) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
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(b) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.08 Waiver Of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.09 Amendments. No modifications, waiver or amendment of any
provision of this Security Agreement shall in any event be effective unless the
same shall be in writing and signed by the Grantors, the Trustee, the Collateral
Agent and the Deposit Bank; provided, however, that (i) no such modification,
waiver or amendment shall adversely effect any of the Collateral Agent's rights,
immunities or rights to indemnification under this Agreement or expand its
duties or obligations under this Agreement without the prior written consent of
the Collateral Agent and (ii) no such modification, waiver or amendment shall
(A) create any lien on the Collateral or any part thereof or terminate any part
of the security interest of the Collateral Agent in all or substantially all of
the Collateral or (B) deprive the holders of the Notes or Debentures of any part
of the security afforded hereunder, in each case without the consent of (x) the
Trustee on behalf of the Senior Notes and Senior Subordinated Notes, acting at
the direction of a majority of the holders of outstanding Note Obligations
(unless the holders of the Senior Notes and Senior Subordinated Notes shall have
released the Company of its obligations hereunder) and (y) the Trustee on behalf
of the holders of the Debentures, acing at the direction of a majority of the
holders of outstanding Debenture Obligations.
SECTION 9.10. No. Waiver. No failure or delay on the part of any of the
parties hereto in exercising any right, power or privilege under this Agreement
shall impair such right, power or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of
any such right, power or privilege preclude other or further exercise thereof or
any other right, power or privilege.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
NAKORNTHAI STRIP MILL PUBLIC COMPANY
LIMITED,
by
/s/ John W. Schultes
----------------------------
Title: President/CEO
NSM STEEL (DELAWARE) INC.,
by
/s/ John W. Schultes
----------------------------
Title: President/CEO
NSM STEEL COMPANY LTD.,
by
/s/ John W. Schultes
----------------------------
Title: President/CEO
THE CHASE MANHATTAN BANK, as Trustee under
each of the Indentures,
by
/s/ Valerie Dunbar
----------------------------
Title: Vice President
THE CHASE MANHATTAN BANK, as Collateral Agent,
by
/s/ Valerie Dunbar
----------------------------
Title: Vice President
THE CHASE MANHATTAN BANK, as Deposit Bank
by
/s/ Valerie Dunbar
----------------------------
Title: Vice President