Exhibit 4.21
White & Case
08/01/98
(Translation)
CREDIT FACILITIES AGREEMENT DATED SEPTEMBER 27, 1995
(AMENDMENT NO. I)
between
Nakornthai Strip Mill Public Company Limited The Borrower
and
The Industrial Finance Corporation of Thailand The Lender/
The Facility Agent
Thai Farmers Bank Public Company Limited The Lender
Siam City Bank Public Company Limited The Lender
The Government Savings Bank The Lender
First Bangkok City Bank Public Company Limited The Lender
Nakornthon Bank Public Company Limited The Lender
SCF Finance and Securities Public Company Limited The Lender
First City Investment Finance and Securities Public The Lender
Company Limited
IFCT Finance and Securities Public Company Limited The Lender
Dated March 12, 1998
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Appendix
(Attached to the Agreement)
Exhibit I Copy of Letter of the Industrial Finance Corporation of
Thailand, as the Facility Agent, dated October 30, 1997 re:
the Approval and Consent from the Lenders to Procure the
Additional Financing
Exhibit II Copy of Letter of the Industrial Finance Corporation of
Thailand dated December 12, 1997 re: the Extension of the
Period for the Approval and Consent to Procure the Additional
Financing
Exhibit III Security Sharing Agreement
Exhibit IV Copy of the Agreement to Transfer Credit between SCF Finance
and Securities Public Company Limited and Siam City Credit
Finance and Securities Public Company Limited dated July 2,
1997
Exhibit V Copy of the Agreement to Transfer Credit among IFCT Finance
and Securities Public Company Limited, First City Investment
Finance and Securities Public Company Limited and the
Industrial Finance Corporation of Thailand dated December 29,
1997
Exhibit VI The Sample of Calculation of Principal Amount according to the
Notes terms (Accreted Value)
Exhibit VI Copy of Letter of Siam City Bank Public Company Limited dated
January 7, 1998 re: the Conversion of the US Dollars
Obligations to Baht Obligations
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Schedule
Schedule A The schedule of credit drawn by the Borrower
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CREDIT FACILITIES AGREEMENT DATED SEPTEMBER 27, 1995
(FIRST AMENDMENT)
THIS AGREEMENT (the "CFA Amendment") is made on this 12th day of March 1998
BETWEEN
(1) NAKORNTHAI STRIP MILL PUBLIC COMPANY LIMITED, a public limited company
duly organized and existing under the laws of Thailand, having its
registered office located at No. 9, UM Tower, 16th Floor, Ramkhamhaeng
Road, Kwaeng Suanluang, Khet Suanluang, Bangkok, Thailand (hereinafter
referred to as the "Borrower"), and
(2) THE INDUSTRIAL FINANCE CORPORATION OF THAILAND of No. 1770 New Petchburi
Road, Kwaeng Bangkapi, Khet Huaykwang, Bangkok Metropolis, (hereinafter
referred to as "IFCT");
THAI FARMERS BANK PUBLIC COMPANY LIMITED of No. 1 Soi Kasikornthai,
Ratburana Road, Bangkok Metropolis, (hereinafter referred as "Thai
Farmers");
SIAM CITY BANK PUBLIC COMPANY LIMITED of No. 1101 New Petchburi Road,
Kwaeng Makkasan, Khet Rajthevi, Bangkok Metropolis, (hereinafter referred
to as "SCIB");
THE GOVERNMENT SAVINGS BANK of No. 470 Phaholyothin Road, Kwaeng
Samsennai, Khet Phayathai, Bangkok Metropolis, (hereinafter referred to as
"the Government Savings Bank");
FIRST BANGKOK CITY BANK PUBLIC COMPANY LIMITED of No. 20 Yukon 2 Road,
Kwaeng Debhsirin, Khet Pomprap Sattruphai, Bangkok Metropolis,
(hereinafter referred to as "First Bangkok City Bank");
NAKORNTHON BANK PUBLIC COMPANY LIMITED of No. 90 North Sathorn Road,
Kwaeng Silom, Khet Bangrak, Bangkok Metropolis, (hereinafter referred to
as "Nakornthon");
SCF FINANCE AND SECURITIES PUBLIC COMPANY LIMITED of No. 2922/209 Charn
Issara Building 2, 16th Floor, New Petchburi Road, Kwaeng Bangkapi, Khet
Huaykwang, Bangkok Metropolis, (hereinafter referred to as "SCF");
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SIAM CITY CREDIT FINANCE AND SECURITY PUBLIC COMPANY LIMITED of No. 2
Ploenchit Center Building, 8th - 16th Floor, Sukhumvit Soi 2, Sukhumvit
Road, Kwaeng Klongtoey, Khet Klongtoey, Bangkok Metropolis, (hereinafter
referred to as "SCF");
FIRST CITY INVESTMENT FINANCE AND SECURITIES PUBLIC COMPANY LIMITED of No.
2884 New Petchburi Road, Kwaeng Bangkapi, Khet Huaykwang, Bangkok
Metropolis, (hereinafter referred to as "First City");
IFCT FINANCE AND SECURITIES PUBLIC COMPANY LIMITED of No. 1770 Building 2,
Industrial Finance Corporation of Thailand, 10th - 13th Floor, New
Petchburi Road, Kwaeng Bangkapi, Khet Huaykwang, Bangkok Metropolis,
(hereinafter referred to as "IFCTF"),
(hereinafter, if not specifically called, collectively referred to as the
"Lenders"; when specifically called "any Lender"; and when referred to as
Thai Farmers, SCIB, First Bangkok City Bank and Nakornthon, they shall
also include their International Banking Facilities under the
notifications of the Ministry of Finance); and
(3) THE INDUSTRIAL FINANCE CORPORATION OF THAILAND, in the capacity as the
lead manager (hereinafter referred to as the "Facility Agent").
WITNESSETH:
A. The Borrower has received credit facilities from the Lenders, pursuant to
Credit Facilities Agreement dated September 27, 1995 (hereinafter referred
to as the "CFA") for the credit, in Baht and foreign currency (equivalent
to Thai Baht), for an amount of approximately 11,000,000,000 Baht (Eleven
Billion Baht), for the purposes of the construction, equipment and
machinery expenses and operation of the hot-rolled coil project (the "Hot
Mill"). As of December 31, 1997, the Borrower has drawn the facilities
from the Lenders which includes the facilities in the forms of Letter of
Credit and Bank Guarantee for Letter of Credit opening for an amount of
306,813,904.95 (Three Hundred and Six Million Eight Hundred and Thirteen
Thousand Nine Hundred and Four point Ninety Five) US Dollars. The credit
facilities of 1,186,095.05 (One Million One Hundred and Eighty Six
Thousand and Ninety Five point Zero Five) US Dollars is provided by the
Lenders for the case that the value of the Deutch Mark is relatively high
when compared to US Dollars and Baht for the amount of 3,300,000,000
(Three Billion and Three Hundred Million) Baht as shown in Schedule A of
this Agreement;
B. The Borrower has studied and is confident that the production of the
direct reduced iron and co-generation power (the "DRI Facility") and the
downstream processing facilities for the production of high-quality
pickled and oiled, cold-rolled, galvanized, and other value-added steel
products (the "Finishing Mill") (collectively together with the Hot Mill,
the "Mill") in addition to the production of __________________________
will maximize the
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benefit to the Borrower. The Borrower therefore would like to procure
financing from abroad to be used in the construction and the operation of
the Mill, by (i) having NSM Steel Co., Ltd., a company incorporated under
the laws of the Cayman Islands and in which the Borrower holds 100 percent
of shares and NSM Steel (Delaware) Inc., a limited liability company
incorporated under the laws of the State of Delaware, the United States of
America, a wholly-owned subsidiary of NSM Steel Co., Ltd., acting as an
agent of NSM Steel Co., Ltd., under the Agency Agreement (hereinafter
referred to as "Note Issuer") issue secured notes and secured private
placement notes (hereinafter collectively referred to as the "Notes"),
(ii) issuing warrants to purchase ordinary shares concurrently with partly
issuing the Notes and issuing warrants for a foreign company in
consideration of technology know-how provided to the Borrower by them,
(iii) issuing newly issued ordinary shares of the Borrower, and (iv)
obtaining financing in the form of a revolving working capital facility
(collectively, the "Additional Financing"). The proceeds from the
Additional Financing will be used for the business of the Borrower.
C. The Lenders agree to continue their financial support under the CFA.
D. The Borrower received approval and consent from the Lenders to procure the
Additional Financing under the letters of the Facility Agent dated October
30, and December 12, 1997 which are shown as Exhibit I and Exhibit II,
respectively. In addition, as required by the CFA, certain terms and
conditions under the CFA must be amended in order to comply with the
Additional Financing.
NOW THEREFORE, the Parties heretofore agree to enter into this Agreement in
accordance with the terms and conditions as follows:
1. Definitions
1.1 Unless it is specified otherwise in this Agreement, any term shall
have the meaning ascribed to it pursuant to the CFA and the Security
Sharing Agreement, which are shown as Exhibit III, which shall be
deemed a part hereof.
1.2 "Closing Date" means the date of which (a) the Note Issuer has
received the proceeds from the offering of the Notes and maintained
such proceeds so received in the Borrower's account(s) with bank(s)
outside Thailand and (b) the holders of the Notes have accepted the
mortgage of collateral jointly with the Lenders and (c) the Borrower
has received the proceeds from the offering of newly issued ordinary
shares and (d) the Lenders have been prepaid for the principal
amount and interests remaining unpaid for an amount of 58,000,000
(Fifty Eight Million) US Dollars at the date of closing together
with the mortgage registration pursuant to (b) mentioned above.
1.3 The provision in Section 1.1(l) of the CFA shall be repealed and
replaced by the following:
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"(l) 'Majority Vote of the Lenders': A resolution of at least 4
(four) lenders, granting the facilities in aggregate of not less
than sixty (60) percent of the total credit facilities under this
Agreement."
1.4 Headings are for convenience only and shall be ignored in construing
this Agreement.
2. Consent to Additional Financing
2.1 Offering of the Notes, Warrant to Purchase Ordinary Shares and Newly
Issued Ordinary Shares for the investors in the Notes
The Lenders hereby allow the Note Issuer to issue the Notes to
wholly sell to the investors abroad. The Notes shall be
unconditionally and irrevocably guaranteed in the whole amount of
obligations and provided with the collateral for the Noteholders by
the Borrower. The gross proceeds received by the Note Issuer on the
Closing Date prior to the deduction of expenses used in the
Additional Financing is approximately 444,204,000 (Four Hundred
Forty Four Million Two Hundred and Four Thousand) US Dollars and the
principal amount of the Notes (including discount amount) is
approximately 506,500,000 (Five Hundred and Six Million and Five
Hundred Thousand US Dollars) as follows:
2.1.1 Senior Mortgage Notes ("Portion A Notes"), having the
principal amount of 249,000,000 (Two Hundred and Forty Nine
Million) US Dollars and the gross proceeds the Note Issuer
will receive on the Closing Day of 225,594,000 (Two Hundred
Twenty Five Million Five Hundred and Ninety Four Thousand) US
Dollars at the interest rate of 12 (twelve) percent per annum
to be due on February 1, 2006. The Noteholders will share the
collateral in first priority jointly with the Lenders in
proportion to their debts and under the conditions of the
security sharing under Article 6 of this Agreement.
2.1.2 Senior Subordinated Mortgage Notes (Senior Mortgage Notes
together with the Lenders and the holders of Portion A Notes,
entitled to be repaid following the holders of Portion A Notes
in the case of the collateral being enforced) ("Portion B
Notes") having the principal amount of 203,500,000 (Two
Hundred and Three Million and Five Hundred Thousand) US
Dollars and the gross proceeds the Note Issuer will receive on
the Closing Date of approximately 175,010,000 (One Hundred and
Seventy Five Million and Ten Thousand) US Dollars at the
interest rate of 12.25 (Twelve Point Twenty Five) percent per
annum to be due on February 1, 2008. The Noteholder will
receive the warrants to purchase ordinary shares of not less
than 128,834,361 (One Hundred and Twenty Eight Million Eight
Hundred and Thirty Four Thousand and Three Hundred and Sixty
One) units for the holders of Portion B Notes.
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2.1.3 Private Placement Notes ("Portion C Notes") having the
principal amount of approximately 54,000,000 (Fifty Four
Million ) US Dollars and the gross proceeds the Note Issuer
will receive on the Closing Date of approximately 43,600,000
(Forty Three Million and Six Hundred Thousand) US Dollars at
the interest rate of 12.75 (Twelve Point Seventy Five) percent
per annum to be due on February 1, 2009. The holders of
Portion C Notes will receive the collateral ranked after the
Lenders and the holders of Portion A Notes and the holders of
Portion B Notes. In addition, the newly issued ordinary shares
of the Borrower of 64,417,180 (Sixty Four Million Four Hundred
and Seventeen Thousand and One Hundred and Eighty) shares in
aggregate at the par value of 10 (ten) Baht each shall be
allocated to the holders of Portion C Notes.
2.2 Increase of Share Capital of the Borrower and the Issuance of the
Warrants to Purchase the Ordinary Shares
The Lenders hereby allow the Borrower and consent to issue
additional ordinary shares of 300,000,000 (Three Hundred Million)
shares, representing 34.8 (Twenty Four Point Eight) percent of fully
diluted issued shares of the Borrower (the amount of existing and
newly issued shares) as well as to amend the Memorandum of
Association and/or the Articles of Association of the Borrower
related thereto as follows:
2.2.1 Private Placement of Newly Issued Ordinary Shares
Newly issued ordinary shares of 158,639,864 (One Hundred and
Fifty Eight Million Six Hundred and Thirty Nine Thousand and
Eight Hundred and Sixty Four) shares of 10 (Ten) Baht per
share for the value of 1,586,398,640 (One Billion Five Hundred
and Eighty Six Million Three Hundred and Ninety Eight Thousand
and Six Hundred and Forty) Baht shall be offered to specific
foreign investors. A portion of the newly issued shares,
totaling to 74,468,090 (Seventy Four Million Four Hundred and
Sixty Eight Thousand and Ninety) shares for the value of
744,680,900 (Seven Hundred and Forty Four Million Six Hundred
and Eighty Thousand and Nine Hundred) Baht will be allocated
by the Borrower as if they were fully paid to Steel Dynamics
Inc. ("SDI") that will grant the Borrower the right to use
technology and know-how in the production and operation of the
Mill, the secret information related to the production and the
administration of the Mill.
The remaining 84,171,774 (Eighty Four Million One Hundred and
Seventy One Thousand and Seven Hundred and Seventy Four)
shares shall be paid in cash in US Dollars currency equivalent
to the amount of 841,717,740 (Eight Hundred and Forty One
Million Seven Hundred and Seventeen Thousand and Seven Hundred
and Forty) Baht.
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2.2.2 Private Placement of the Warrants
The warrants to purchase ordinary shares of not exceeding
128,834,361 (One Hundred and Twenty Eight Million Eight
Hundred and Thirty Four Thousand and Three Hundred and Sixty
One) units for the investors in Portion B Notes with the
exercised price of 10 (Ten) Baht per share. The exercise of
right shall be made after the period of not less than 1 (One)
year from the date of warrant issuance but not later than 10
(Ten) years from the date of warrant issuance. Additionally,
to approve the reservation of ordinary shares, totaling to
128,834,361 (One Hundred and Twenty Eight Million Eight
Hundred and Thirty Four Thousand and Three Hundred and Sixty
One) shares so reserved for the aforesaid exercise.
The warrants to purchase the newly issued ordinary shares of
the Borrower in the amount of 11,421,480 (Eleven Million Four
Hundred and Twenty One Thousand and Four Hundred and Forty)
units to SDI for the consideration of the technology of _____
and cold-rolled production. In this regard, SDI shall be
entitled to exercise its right to purchase the newly issued
ordinary shares at the price of 10 (Ten) Baht after a period
of not less than 1 (One) year from the date of warrant
issuance but not later than 10 (Ten) years from the date of
warrant issuance, provided that SDI shall be entitled to
exercise its right exclusively in the proportion of the
exercise of right of the holders of Portion B Notes.
2.3 Obtaining Revolving Working Capital Facilities
The Lenders hereby allow the Borrower to obtain the revolving
working capital facility from The Banque National De Paris ("BNP")
for the sum of approximately 125,000,000 (One Hundred and 'Twenty
Five Million) US Dollars of which the Borrower granted the right
from BNP for the credit facilities of not exceeding 150,000,000 (One
Hundred and Fifty Million) US Dollars, to be used as working capital
of the Borrower. In the business operation of the Borrower, BNP
shall not be entitled to share any collateral with the Lenders and
the holders of the Notes (the "Noteholders"), with the exception of
receivables under the offtake agreements between the Borrower and
Preusseg Handel GmbH dated November 19, 1997, and between the
Borrower and Klockner Stahl-und Metall Handel GmbH entered into as
of the same date and/or any obligations under the mentioned
agreements.
The proceeds the Borrower derived from the Additional Financing
shall be used for the construction and operation of the Mill, the
repayment of a portion of the Borrower's obligations to the Lenders
hereunder, and the use in the business of the Borrower. The Borrower
must submit reports and/or documents relating to the issuances of
Notes and newly issued ordinary shares, such as minutes of the board
of directors and/or of shareholders, trust indenture, offering
memorandum, agreements or other documents relating to the Additional
Financing to the Facility
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Agent to satisfy the Lenders that such Additional Financing is in
compliance with the terms and conditions hereunder.
3. The Lenders' Support
The Lenders hereby confirm to continue their financial support of the
Borrower pursuant to the CFA under the terms and conditions of the CFA and
this Agreement.
4. Prepayment of Principal and Outstanding Interests to the Lenders
In consideration for the Lenders' consent for the Additional Financing,
the Borrower agrees to use the proceeds derived from the offering of the
Notes under Article 2.1 and/or from the offering of the newly issued
ordinary shares under Article 2.2 above, concurrently with the release of
the first priority collateral of the joint collateral by the Lenders on
the Closing Date and arrange for the Noteholders entitled to jointly share
collateral with the Lenders, the Borrower shall prepay the amount of
50,000,000 (Fifty Million) US Dollars and the interests outstanding due on
December 1, 1997 of 8,000,000 (Eight Million) US Dollars to the Lenders.
In addition, within 5 (Five) business days from the Closing Date, the
Borrower will pay to the Lenders the interest outstanding to be due on
March 5, 1998 of 8,650,229.30 (Eight Million Six Hundred and Fifty
Thousand Two Hundred and Twenty Nine Point Three Zero) US Dollars together
with the late fee of 337,581.88 (Three Hundred and Thirty Seven Thousand
Five Hundred and Eighty One Point Eighty Eight) US Dollars (excluding any
other outstanding debts remaining unpaid to the Lenders, such as fees,
advances and expenses incurred by the Borrower from seeking other sources
of funds to be paid to the Lenders). The said prepayment shall be made by
the Borrower to the Lenders pro rata it obliged to any Lender in
accordance with the ratio of the commitment of any Lender of which any
Lender is obliged to under the CFA. Failure to completely pay such
proceeds within the time fixed shall be considered a default of the
Borrower. The calculation of the amount of interest outstanding to be
payable under this paragraph, the Lenders used the approximate exchange
rate equal to 43 (Forty Three) Baht against 1 (One) US Dollar. Therefore,
the payment of such interest may be adjusted according to the exchange
rate of the date of actual payment. Prepayment of the outstanding amount
after deducting the principal amount shall be made in 12 (twelve)
installments of which the amount payable in each installment shall be
decreased pro rata. The principal previously required to be paid in the
thirteenth installment (after pro rata deducting the prepaid principal)
pursuant to Article 7 attached to the CFA shall be pro rata averaged with
the first twelve installments. The Borrower agrees to repay the principal
of the twelfth installment at the same date as the eleventh installment.
The calculation of such ratio of the commitment of any Lender obligated
shall convert the debts from US Dollars into Thai Baht based upon the
average selling rates of US Dollars of IFCT and Thai Farmers Bank at 11:00
a.m. 2 (two) business days before the prepayment date. Provided that, the
prepayment made to Thai Farmers Bank, Siam City Bank, First Bangkok City
Bank and Nakornthon Bank shall be, applied toward the Baht
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Facility first. If there is still a remaining sum, then it can be applied
toward the US Dollars Facility for such four lenders.
In prepaying the principal amount and interest outstanding to the Lenders
as mentioned in the first paragraph, the Borrower shall arrange for the
proceeds derived from the offering of the Notes of the Note Issuer and/or
from the offering of newly issued ordinary shares of the Borrower to pay
the Lenders through the account of Thai Farmers Bank, New York Branch, USA
maintained with The Chase Manhattan Bank and Thai Farmers Bank, New York
Branch, USA will further transfer to any Lenders according to the schedule
specified by such Lenders.
5. Covenants of the Borrower
Due to the fact that to provide for the Additional Financing caused the
changes of certain covenants of the Borrower, the Lenders have agreed to
waive and amend the following covenants in the CFA as follows:
5.1 Affirmative covenants under Article 11.1 (a) paragraph two and (d)
of the CFA shall be repealed and the conditions provided that the
Borrower has to maintain the debt and equity ratio of which the
Lenders specifying for approving the bridge financing from First
Bangkok City Bank under Article 9 hereunder.
The non-specification of debt and equity ratio under the first
paragraph shall be limited to only the debt establishment in this
Additional Financing.
5.2 The following provision shall be added as paragraph two of Article
11.2 of the CFA.
"The provisions of (d) through to (h) above shall not apply to any
acts of the Borrower in relation to the Additional Financing under
the principles set forth in this CFA Amendment, the Security Sharing
Agreement".
5.3 The Lenders hereby allow the Borrower to unconditionally and
irrevocably guarantee the whole indebtedness of the Notes for the
payment and/or repayment of the principal amount, interests,
advances, fees and other expenses which currently have or shall have
in respect of the Notes.
6. Security and Security Sharing
6.1 The provisions of Articles 12, 13, 18.3 and any provisions of the
CFA in relation to security and security sharing shall be repealed
and replaced with the Security Sharing Agreement among the Borrower,
the Lenders, the Trustee and the Collateral Agent, and the Security
Documents, in the form of Exhibit III.
6.2 The Lenders allow the Noteholders to share with Lenders all
collateral which the Lenders currently have or shall have pursuant
to the CFA and for the Security
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Sharing Agreement (as defined below), including but not limited to
the following agreements:
(1) pledge of accounts;
(2) pledge of permitted investments;
(3) pledge of machinery;
(4) assignment of performance bonds;
(5) assignment of insurance (and/or the conditions providing for
the Lenders and the Noteholders to be co-beneficiaries under
the Insurance Agreement);
(6) conditional assignment of accounts;
(7) conditional assignment of project agreements;
(8) mortgage of land and buildings;
(9) mortgage of machinery; and
(10) security interest over Offshore Accounts (except the account
of the proceeds derived from the offering of Notes).
(hereinafter referred to as the "Joint Collateral"). The Lenders and the
holders of Portion A Notes and Portion B Notes ("Senior Secured
Creditors") will share equally and ratably the Joint Collateral to the
obligated amount of which the Borrower is required to pay to the Lenders
and the holders of Portion A and Portion B Notes under the CFA and terms
of the Notes, respectively (hereinafter the debts of the Lenders and the
debts of the Portion A and Portion B Notes collectively referred to as "
Senior Secured Obligations"). The Lenders allow the holders of Portion C
Notes to the security following from the Senior Secured Creditors in the
Joint Collateral ("Second Secured Creditors"), at any time there is a
default causing the enforcement of the collateral. However, the
obligations of which the Noteholders entitled to jointly share with the
Lenders shall be in accordance with the calculation of accreted value of
obligations, past due interest of the Notes and tax liability related to
such portion of Notes (if any) after deducting by the proceeds maintained
in the offshore account(s) of the Borrower solely derived from the
offering of Notes of the Note Issuer ("Collateral of Notes") at any time
there is the enforcement of Joint Collateral.
The Lenders and/or the Facility Agent acting as the agent of the Lenders
and the Borrower, agrees to enter into a security sharing agreement (the
"Security Sharing Agreement") with The Chase Manhattan Bank acting as the
Noteholders' representative (the "Trustee") which was registered in the
global note certificate and also acting as the collateral agent
("Collateral Agent") having the obligations and responsibilities under the
Security Sharing Agreement as shown in Exhibit III as well as any relevant
agreements or documents.
6.3 On the Closing Date, the Lenders shall arrange for the Senior
Secured Creditors to be secured creditors in the Joint Collateral by
being jointly the first Co-Mortgages of land and buildings of the
Borrower, being co-pledgees and co-assignee of relevant rights and
benefits under any agreements of which the Borrower may be
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entitled to for being the security of the Borrower's obligations
under the CFA and the Notes, respectively and in order that the
Lenders and the Noteholders receive equally and ratably security
sharing of Senior Secured Obligations. The Lender must be pre-paid
with the principal amount and interests outstanding under Article 4
at the same time of such process. The holders of Portion C Notes
shall be arranged for being the Second Secured Creditors in the
Joint Collateral.
6.3.1 The Borrower shall provide the secured property to be pledged,
mortgaged with the Lenders and the Trustee in accordance with
the forms and conditions jointly specified by the Facility
Agent and the Collateral Agent under the Security Sharing
Agreement as follows:
(a) The Borrower shall register the mortgage of immovable
property to secure the obligations including interests
and fees under the CFA and under three portions of
Notes;
(b) The Borrower shall pledge all of its machinery including
the machinery in DRI Project and Finishing Mill to
secure the obligations to the Lenders and the
Noteholders.
If the aforesaid pledged machinery may be registered, the
Borrower must arrange for the ownership registration according
to the laws with the machinery Registrar as soon as possible.
After such registration, the Borrower shall immediately
arrange for the mortgage registration to the Lenders and
Noteholders in place of pledge. For machinery promoted under
the Investment Promotion Act, the Borrower shall arrange for
the prior approval to mortgage such machinery from the Board
of Investment.
In the event there is a request from the Collateral Agent, the
Borrower shall assign the Collateral Agent to arrange for the
registrations of machinery ownership and/or machinery
mortgage. In this regard, the Borrower shall deliver and sign
any documents in order that the Collateral Agent will be able
to arrange for the aforesaid registrations on behalf of the
Borrower for the benefit of the Lenders and the Noteholders.
Other than the immovable property and machinery so mortgaged
or pledged by the Borrower to the Lenders and the Noteholders
to secure the Secured Obligations, the machinery of which any
Lender holds ownership during the trust receipt transaction
shall be deemed as the holding of ownership for the benefits
of the Lenders and the Noteholders.
6.3.2 The Borrower shall provide risk insurance for the construction
buildings and machinery of the project during the construction
and the installation of machinery according to the progress of
the project with the insurance company approved by the
Collateral Agent for an insured amount as the Collateral Agent
deems appropriate. It must be specified in the insurance
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policy that the Lenders and the Collateral Agent are the
beneficiaries. Such policy shall be delivered to the
Collateral Agent for safe keeping. The policy shall be in
effect until the Lenders are totally repaid the obligations
under the Agreement. In this regard, the Borrower shall be
responsible for the premiums and other expenses.
6.3.3 The Borrower shall assign any rights and benefits it entitled
to receive under the terms of the sale of machinery and/or
construction agreements, including but not limited to the
assignment of refund bond, down payment guarantee/bond or the
assignment of performance guarantee/bond, and/or assign any
other rights and benefits the Borrower entitled to receive
under all other agreements with any persons to the Collateral
Agent.
6.3.4 The Borrower shall arrange for the pledge of onshore accounts
of which the Borrower has to open a savings account and/or any
other account with The Chase Manhattan Bank, Bangkok Branch,
and/or the pledge of promissory notes or other instruments
issued by the aforesaid bank or other bank to be further
agreed among the Borrower, the Lenders and the Collateral
Agent for the investment of the Borrower for being the
additional security. Furthermore, the Borrower shall make the
conditional assignment of such accounts to the Collateral
Agent.
6.3.5 If there is the loss, deterioration or depreciation of the
secured property under Article 6.3.1, the Facility Agent
and/or the Collateral Agent is entitled to request the
Borrower to provide additional property be mortgaged, pledged
or additionally secured with a value of not less than the
security lost, deteriorated or depreciated within the time
fixed by the Facility Agent and/or the Collateral Agent.
6.3.6 The Borrower agrees to pay fees, stamp duties, taxes, expenses
and other costs used in arranging for the security hereof
including all fees, stamp duties, taxes, expenses and other
costs necessary for the enforcement of pledge and mortgage and
the enforcement of obligations or any other security
respectively. The Borrower shall indemnify any Lenders,
Trustee and/or the Collateral Agent for all taxes under the
law of Investment Promotion incurred by them in the
enforcement of the mortgage of machinery so promoted.
6.3.7 The Borrower and the Lenders agree that, for the benefit of
the Lenders and the Noteholders, the Collateral Agent shall be
a receiver and keep evidence of ownership or other rights over
the secured property, including but not limited to the
original of land title deeds, the registration showing the
construction, the ownership registration of machinery, the
mortgage, the pledge as well as the guarantees, policies, any
assignment of rights agreements and all other agreements and
documents relevant to the security under this Agreement. The
Borrower shall arrange for the
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Borrower and/or the Collateral Agent to inform, deliver,
notify or arrange for any actions to the Collateral Agent in
order that it will receive information and copies of
correspondence and/or other documents relevant to the
security.
6.4 Notwithstanding any provisions of this Article 6, the Joint
Collateral shall exclude the co-generation facility (the "Co-Gen
Facility") to be constructed on the Borrower's land (of which such
land is still the Joint Collateral under Article 6.3.1 above) and
co-generation facility (hereinafter referred to as "Co-Gen
Facility"). The Co-Gen Facility shall be funded by Enron Corporation
for the amount of 20,000,000 (Twenty Million) US Dollars and the
Borrower shall allocate a sum of 15,500,000 (Fifteen Million and
Five Hundred Thousand) US Dollars of the proceeds derived from the
Note Offering to lend to Enron Corporation at the interest rate to
be further agreed between the parties for using in the construction
and the operation of the Co-Gen Facility. The Borrower is in the
process of consideration and negotiation with Enron Corporation
regarding details and conditions of the agreement and shall further
inform the Lenders and shall receive approval from the Lenders.
"Enron Corporations" shall include the group companies and/or
related companies of Enron Corporation.
6.5 Any payment and/or any withdrawal of funds from the Offshore
Accounts of the Borrower, whether the account is for proceeds
derived from Additional Financing, Notes Debt Reserve Service
Account, Offshore Reserve Account and Offshore Sub-account, subject
to the laws and regulations relevant to the control of currency
exchange of Thailand may be made only for the following purposes:
(a) to prepay a principal amount and the interests outstanding to
the Lenders under Article 4 of this Agreement;
(b) to pay for expenses relating to the Additional Financing,
including but not limited to, financial advisory fees, fees
payable to underwriters, legal and other professional fees,
traveling expenses and others;
(c) to pay for supplies, materials, equipment and machinery and/or
fees to suppliers and/or contractors outside Thailand and/or
those payable in foreign currencies;
(d) to pay interests on the Notes to Noteholders under the terms
of the Notes when they become due including the additional
amount for taxes (if any) to the government agencies;
(e) to pay the management fee under the Management Agreement;
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(f) for loan for the construction of the Co-Gen Facility under
Article 6.4 above;
(g) to repay principal amounts and/or past due interests to
Noteholders pursuant to the terms of the Notes;
(h) to deposit the amount equal to the outstanding under the
bridge facility to the First Bangkok City Bank under Article 9
of this Agreement;
(i) to deposit as a security and/or to purchase promissory notes
and pledge them with IFCT and/or any Lenders jointly grants
the facilities with IFCT equal to the outstanding amount under
the letters of credit pursuant to packing credit under Article
10 of this Agreement; and
(j) to transfer funds to onshore accounts to be used as working
capital for the Mill on an as-needed basis including bringing
proceeds to repay a principal amounts and/or interests to the
Lenders under the CFA and this Agreement.
7. Priority of Payments
In making payment of the obligations under the CFA, this Agreement and the
conditions of the Notes which become due. the Company shall allocate the
proceeds to be repaid at each installment to the Lenders and Noteholders
according to the following:
First Payment of interests which become due and outstanding in such
respective installment under the CFA to the Lenders;
Second Payment of Fifty (50) percent of the principal amount due under the
CFA to the Lenders;
Third Payment of interest which becomes due on the Notes to Noteholders;
Fourth If there is still a sum remaining, such sum will be used for the
payment of principal amount due under the CFA (the balance from the second
payment) to the Lenders.
Such priority of payments shall not change the events of default of the
Borrower as specified under the CFA, except for the case that the Borrower
is unable to pay the fourth priority due to the lack of sufficient funds,
it shall not constitute a default under the CFA. Any principal amount in
this fourth priority of any installments that has not been paid will be
averaged over the remaining repayment installments pro rata to the
outstanding principal in each installment. Nevertheless, the Borrower must
repay the entire principal amount within the twelfth repayment
installment, otherwise, it shall constitute a default. Any events other
than the above mentioned shall be considered an event of default pursuant
to the provisions of the CFA in all respects.
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However, this Article 7 shall not apply to the case of an enforcement of
obligations and of the collateral which shall be in compliance with
Article 6 above and Security Sharing Agreement.
8. Use of Cash Flow Sweep for Prepayment
The Borrower shall provide for the use of Cash Flow Sweep as prepayment
under the CFA to any Lenders pro rata to the outstanding principal in each
installment for the remaining installments on the date of such payment.
The term "Cash Flow Sweep" shall mean a sum equal to Fifty (50) percent of
the EBITDA which derives from each related financial year of the Borrower
after deduction of interest expenses, plus debt mandatory amortization,
taxation and maintenance capital expenditures in such financial year,
beginning after December 31, 1999.
In addition "EBITDA" means net profits of the Borrower before deducting of
interest expenses, taxation, depreciation and amortization of such
financial year.
The Lenders agree to waive prepayment fees under Article 7.5 of the CFA in
the case that the prepayment is made from (a) proceeds derived from the
offering of the Notes and/or increase of the Borrower's share capital
under Article 2, or (b) Cash Flow Sweep under this Article 8 of this
Agreement.
9. Bridge Finance Granted by First Bangkok City Bank
The Lenders hereby consent and ratify the Borrower's receipt of a bridge
financing from First Bangkok City Bank in the form of letters of credit,
trust receipts, the letter of guarantee and an aval of notes in Baht and
foreign currencies calculated based on the exchange rate as of October 11,
1997 for the amount of 400,000,000 Baht (Four Hundred Million Baht). On
the Closing Date, First Bangkok City Bank shall release a second mortgage
of land and buildings, machinery and equipment of which the Borrower has
registered a second mortgage provided that the proceeds derived from the
offering of Notes shall be repaid for such obligations by allocating an
amount equal to the outstanding amount of the unpaid obligations of a
bridge financing to be maintained and pledged with First Bangkok City Bank
to secure any obligations under this bridge financing, In this regard,
First Bangkok City shall release the personal guarantees of Mr. Sawasdi
Horrungruang and Mr. Chamni Janchai in relation to this credit and release
the pledge of inventories and raw materials.
10. Packing Credit Facility Granted by IFCT
The Lenders hereby consent to the Borrower's receipt of credit facility
from IFCT, the facility which export and Import Bank of Thailand ("Thai
Exim Bank") derived from Commerce Bank, Germany in the form of packing
credit for the amount of 10,000,000 US Dollars (Ten Million US Dollars).
The credit has been granted to finance the import and export activities.
The financing period shall not exceed 180 days for each letter of credit.
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IFCT will prescribe the interest rate and shall later inform the Borrower.
Upon the subsidiary of the Borrower or the agent of such subsidiary's
receipt of the proceeds from the Offering of the Notes, under Article 2.1.
On the Closing Date, IFCT agrees to release a second mortgage of land and
buildings for the Borrower concurrently with the proceeds the Borrower
derived from the Offering of Notes by the Note Issuer is repaid for such
obligation to IFCT and/or the Borrower has allocated an amount equal to
the outstanding of the letter of credit used and charge fee in the case
there is a default with IFCT and/or Thai Exim Bank at the rate of 5.5
(Five Point Five) percent per annum of such amount by depositing and/or
purchasing promissory notes and pledging them with IFCT to guarantee the
repayment of obligations under the packing credit and release the pledge
of inventories and raw materials, provided that the Borrower shall comply
with the conditions specified by Thai Exim Bank and/or Commerce Bank.
On the Closing Date and upon the allocation of amount to guarantee the
obligations to IFCT, IFCT shall release the personal guarantees by Mr.
Sawasdi Horrungruang and Mr. Chamni Janchai and/or any other person who is
the guarantor of such credit.
In addition, the Parties of this Agreement acknowledge and agree that IFCT
may allocate the packing credit to the other Lenders and/or request such
lender to guarantee the obligations hereof. In this case, such lender
shall have the rights and obligations as IFCT in all respects.
11. Transfer of Rights and Obligations of SCF and Siam City Credit to Siam
City Bank
SCF and Siam City Credit transferred all their rights and obligations
under the CFA to Siam City Bank in respect of the commitment to extend
credit of 137,151,480 (One Hundred Thirty Seven Million One Hundred Fifty
One Thousand Four Hundred and Eighty) Baht each to the Borrower and such
respective amount has already been drawn by the Borrower as of the date of
this Agreement. The two lenders., Siam City Bank and the Borrower entered
into an agreement dated as of July 2, 1997, as per Exhibit IV to this
Agreement, to effect such transfer of rights and obligations, including
the right over the relevant Onshore Collateral, under the CFA and the
Borrower had acknowledged and agreed with such transfer of rights and
obligations.
12. Transfer of Rights and Obligation of FCI and IFCTF to IFCT
FCI and IFCTF transferred all of their rights and obligations under the
CFA pursuant to the Agreement to Transfer Credit dated December 29, 1997
as per Exhibit V to this Agreement. The transferred rights and obligations
include, but are not limited to, the right to the repayment of all
obligations of the Borrower under the CFA and the right over the Onshore
Collateral under the terms of the CFA and CFA Amendment. FCI and IFCTF are
thus no longer creditors of the Borrower. Except the obligations relevant
and necessary to provide the security for IFCT for such transferees'
obligations. When this Agreement becomes effective, the terms "the
Lenders" or "Each of Lenders" or "Group of Lenders" under the CFA, this
Agreement and Security Sharing Agreement shall not include FCC and IFCTF.
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13. Changes in the Conditions of the Undrawn Portion of Siam City Bank
The Lenders hereby provide consent for Siam City Bank to change certain
terms in respect of the undrawn facility of 10,334,976.57 (Ten Million
Three Hundred Thirty Four Thousand Nine Hundred Seventy Six Point Fifty
Seven) US Dollars, as follows:
13.1 The amount of 2,629,050.00 US Dollars (Two Million Six Hundred
Twenty Nine Thousand and Fifty US Dollars) shall be drawn in Thai
Baht for the amount equivalent to 105,963,847.55 Baht (One Hundred
Five Million Nine Hundred Sixty Three Thousand Eight Hundred Forty
Seven Point Fifty Five Baht) under the following basis of
calculation:
(1) For obligations under letters of credit, the exchange rate of
Thai Farmers Bank on the date Thai Farmers Bank converts the
obligations thereunder which become due from the foreign
currency into Baht.
(2) In case the obligations are not under the letters of credit,
the average exchange rate of Siam City Bank of 2 business days
before the date the Borrower requests in writing for the
drawdown.
13.2 The undrawn amount of 7,705,926.57 (Seven Million Seven Hundred Five
Thousand Nine Hundred Twenty Six Point Fifty Seven) US Dollars, SCIB
may make available to the Borrower the amount in US Dollars and/or
Bhat. In case Siam City Bank provides the loan in Baht, the basis
for calculating the equivalent amount in Baht shall be as follows:
(1) In case the amount is granted according to the Drawdown
Schedule, Siam City Bank shall use its average exchange rate
of 2 business days before the date of drawdown.
(2) In case the amount is granted after the Drawdown Schedule, the
exchange rate shall be in accordance with Article 13.1 above.
(3) The Lenders grant a consent and the Borrower agrees to let the
Thai Farmers Bank, First Bangkok City Bank and IFCT allow the
Borrower to drawdown in US Dollars and/or Baht.
14. Schedule of Principal Repayment
The schedule of principal repayment under the CFA shall be repealed. The
Facility Agent shall prepare, from time to time, the new schedule of
principal repayment if there are changes caused by (1) the principal
repayment before the due date as specified under Article 4, (2) the fourth
sharing of principal under Article 7, (3) the principal repayment before
the due date under Article 8, (4) the transfer of credit facility under
Article 11 and (5) the transfer of all rights and obligations between some
of the Lenders under Article 12. The schedule newly prepared deems a part
hereof.
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15. Defaults
Before the Effective Date of this CFA Amendment and the Security Sharing
Agreement under Article 16, the Lenders covenant that:
(1) the Lenders will waive any and all defaults under Article 14.1
and/or Article 18.3 of the CFA that occurred before the effective
date of the CFA Amendment, including but not limited to notify an
event of default, to certain litigation against the Borrower who is
in default under Article 14 of the CFA, including but not limited to
(a) the Borrower's use of Facilities drawn under the CFA, in the DRI
Facility and the Finishing Mill and (b) certain litigation against
Mr. Sawasdi Horrungruang, in his personal capacity as guarantor;
The provision in the first paragraph shall not apply if this
Agreement and Security Sharing Agreement are null and void and even
though this Agreement and the Security Sharing Agreement are in
effect but a default is constituted under the CFA and/or this
Agreement, the Lenders reserve the right to undertake with the
Borrower under the CFA or this Agreement.
(2) the increased value added tax rate imposed by Thai governmental
authorities is not considered a material change under the CFA;
(3) any events occurring prior to the effective date of the CFA
Amendment and the Security Sharing Agreement shall not be used to
preclude the drawdown of the loan;
(4) the Lenders shall give consent for the amendment to the Memorandum
and Articles of Association to the extent required to effect or
facilitate the Additional Financing of the Borrower and give consent
to the Borrower for (a) providing collateral to Noteholders pursuant
to the terms and conditions of the Security Sharing Agreement as
specified under Article 2 of this Agreement, (b) providing a
guarantee for the Offering of the Notes and (c) changing of the
executive officers of the Borrower to be in compliance with the
agreement of the Additional Financing.
16. Effective Date of this Agreement
The Parties agree to execute the CFA Amendment, Security Sharing Agreement
and the Security Documents prior to the Closing Date. As a condition
precedent, these two Agreements shall come into effect only upon:
(i) the Subsidiary of the Borrower receiving the proceeds from the
Offering of the Notes and the Borrower receiving the proceeds from
the increase of share capital; and
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(ii) the Borrower's arrangement for the Noteholders to share the Onshore
Collateral with the Lenders under the laws and/or regulations of the
governmental agencies concurrently with the prepayment of the
principal before the Repayment Schedule and the interests remaining
unpaid under the CFA, Article 4.
17. Resolution of the Lenders
Article 14.2(a)(3) of the CFA shall be repealed and be replaced by the
following:
"Article 14.2
(a)
(3) In taking any legal action and/or enforcing the pledge and/or
enforcing the mortgage and/or other rights under the CFA, the
Security Sharing Agreement and the Security Documents and/or
enforcing the other property of the Borrower and/or institution of
claims or a court case against the Borrower, the majority vote of
the Lenders pursuant to the CFA is required. The enforcement of
collateral shall be in accordance with the agreement under the
Security Sharing Agreement as per Exhibit III"
18. Others
18.1 This Agreement shall be deemed a part of the CFA. Should there be
any conflicts or differences of the terms between the two
agreements, the terms of this Agreement shall prevail. The
provisions other than those so amended shall be in accordance with
the CFA.
This Agreement is made in 10 (Ten) copies with the same contents. All parties
have read the contents of this Agreement thoroughly and found them complete and
correct according to their intention and therefore affixed their signatures as
evidence. Each party retains one copy of the Agreement.
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Nakornthai Strip Mill Public Company Limited Borrower
Chairman of the Board
Sign /s/ Sawasdi Horrungruang
-----------------------------------------
(Mr. Sawasdi Horrungruang)
Sign /s/ Chamni Janchai Managing Director
-----------------------------------------
(Mr. Chamni Janchai)
The Industrial Finance Corporation of Thailand Lender
Sign /s/ Anothai Taechamontri
-----------------------------------------
(Mr. Anothai Taechamontri)
Thai Farmers Bank Public Company Limited Lender
Sign /s/ Siripong Kalayaruj Position: Director
-----------------------------------------
(Mr. Siripong Kalayaruj)
Siam City Bank Public Company Limited Lender
Sign /s/ [ILLEGIBLE] Position:
-----------------------------------------
( )
The Government Savings Bank Lender
Sign /s/ [ILLEGIBLE]
-----------------------------------------
( )
First Bangkok City Bank Public Company Limited Lender
Sign /s/ [ILLEGIBLE]
-----------------------------------------
( )
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Nakornthon Bank Public Company Limited Lender
Sign /s/ [ILLEGIBLE]
-----------------------------------------
( )
SCF Finance and Securities Public Company Limited Lender
Sign /s/ [ILLEGIBLE]
-----------------------------------------
( )
Siam City Credit Finance and Lender
Security Public Company Limited
Sign /s/ [ILLEGIBLE]
-----------------------------------------
( )
First City Investment Finance Public Company Limited Lender
Sign /s/ [ILLEGIBLE]
-----------------------------------------
( )
IFCT Finance and Securities Public Company Limited Lender
Sign /s/ [ILLEGIBLE]
-----------------------------------------
( )
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