Exhibit 4.7
SECURITY OVER SHARES AGREEMENT
THIS AGREEMENT is made on 28 June 2002
BETWEEN
(1) THE BANK OF NEW YORK of 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx,
00000 X.X.X. and fax number x0 000 000 0000, as trustee for the Holders on
the terms and conditions set out in the Indenture and the Notes (the
"Trustee", which expression shall include any person for the time being
appointed as trustee, or as an additional trustee, for the purposes of the
Indenture and the Notes); and
(2) KRONOS INTERNATIONAL, INC. (the "Chargor") having its registered office
at 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, X.X.X.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement:
"Additional Notes" has the meaning given to it in the Indenture.
"Articles" means the articles of association of the Company delivered to
the Trustee or to solicitors acting for the Trustee on or about the date
of execution of this Agreement.
"Business Day" means a day (other than a Saturday or a Sunday) on which
banks are open for general business in London and New York.
"Charged Portfolio" means the Shares and the Related Assets.
"Collateral Agent Agreement" has the meaning given to it in the Indenture.
"Collateral Rights" means all rights, powers and remedies of the Trustee
provided by this Agreement or, in connection with this Agreement, by law.
"Company" means Kronos Limited, a company incorporated in England and
Wales (registered no. 02442679) whose registered office is at Xxxxxx
Xxxxx, Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx XX0 0XX.
"Current Shares" means the shares in the share capital of the Company held
by the Chargor as identified in Schedule 1 to this Agreement.
"Event of Default" has the meaning given to it in the Indenture.
"High Yield Documents" means the Purchase Agreement, the Indenture and the
Notes, together with all other documents issued or entered into in
connection therewith including, without limitation, the Security
Documents, the Collateral Agent Agreement and the Registration Rights
Agreement.
"Holders" has the meaning given to it in the Indenture.
"Indenture" means an indenture dated 28 June 2002 between the Trustee and
the Chargor.
"Initial Purchasers" means Deutsche Bank AG London, Dresdner Bank AG,
London Branch and Commerzbank Aktiengesellschaft, London Branch as initial
purchasers of the Notes under the terms of the Purchase Agreement.
"New Shares" means any shares in the share capital of the Company which
are held by, or held to the order or on behalf of the Chargor excluding
any Current Shares and any shares which are Related Assets.
"Notes" means the 87/8% Senior Secured Notes due 2009 issued by the
Chargor under the Indenture, any global or other notes issued in exchange
for the Notes under the terms of the Registration Rights Agreement and the
Additional Notes (if any).
"Purchase Agreement" means an agreement dated 19 June 2002 between the
Chargor and the Initial Purchasers.
"Registration Rights Agreement" has the meaning given to it in the
Indenture.
"Related Assets" means all dividends, interest and other monies payable in
respect of the Shares and all other rights, benefits and proceeds in
respect of or derived from the Shares (whether by way of redemption,
bonus, preference, option, substitution, conversion or otherwise).
"Secured Obligations" means all obligations owing by the Chargor under the
High Yield Documents to the Holders or to the Trustee (whether for its own
account or as trustee for the Holders), whether principal, premium,
interest or otherwise, present or future (and including any obligation in
respect of any further advances made thereunder), actual or contingent
(and whether incurred by the Chargor alone or jointly, and whether as
principal or surety or in some other capacity).
"Security Documents" has the meaning given to it in the Indenture.
"Shares" means the Current Shares and any New Shares in respect of which
the Chargor has delivered the share certificates relating thereto and
blank stock transfer forms pursuant to Clause 3.3.
1.2 In this Agreement:
(a) Unless a contrary indication appears, a term defined in the
Indenture has the same meaning when used in this Agreement.
(b) The rules of construction contained in the Indenture apply to the
construction of this Agreement.
(c) Unless otherwise stated, a "Clause" is a reference to a Clause of
this Agreement.
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(d) A reference to any agreement or instrument is a reference to that
agreement or instrument as amended, supplemented or varied.
(e) Any reference to a "person" includes any person, firm, company,
corporation, government, state or agency of a state or any
association, trust or partnership (whether or not having separate
legal personality) or two or more of the foregoing.
(f) Any reference to a provision of law is a reference to that provision
as amended or re-enacted.
1.3 A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Xxx 0000 to enforce any term of this
Agreement.
2. COVENANT AND CHARGE
2.1 Pursuant to the terms of the Indenture, the Chargor shall on demand of the
Trustee discharge and pay to the Trustee (when due and payable) each of
the Secured Obligations.
2.2 The Chargor charges the Charged Portfolio, with full title guarantee and
by way of first fixed charge, in favour of the Trustee for the payment and
discharge of all of the Secured Obligations.
3. DEPOSIT OF CERTIFICATES and notices
3.1 The Chargor shall on the date of this Agreement deposit (or procure there
to be deposited) with the Trustee or solicitors acting for the Trustee all
certificates and other documents of title to the Current Shares, and stock
transfer forms (executed in blank by or on behalf of the Chargor) in
respect of the Current Shares.
3.2 The Chargor shall, promptly upon the accrual, offer or issue of any
Related Assets (in the form of stocks, shares, warrants or other
securities) in which the Chargor has a beneficial interest, procure the
delivery to the Trustee or solicitors acting for the Trustee of (a) all
certificates and other documents of title representing those Related
Assets and (b) such stock transfer forms or other instruments of transfer
(executed in blank by or on behalf of the Chargor) in respect of those
Related Assets as the Trustee may request.
3.3 To the extent necessary to comply with its obligations under Clause 5.3,
the Chargor shall procure that all certificates and other documents of
title relating to any New Shares and such stock transfer forms or other
instruments of transfer (executed in blank by or on behalf of the Chargor)
as the Trustee may request in respect of such New Shares are delivered to
the Trustee or solicitors acting for the Trustee.
3.4 The Chargor shall procure that:
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(a) (save with the Trustee's prior written consent) any increase in the
issued share capital of the Company after the date of this Agreement
is issued to the Chargor; and
(b) promptly upon any such issue, to the extent necessary to comply with
its obligations under Clause 5.3, such Related Assets or New Shares
(as the case may be) are charged in favour of the Trustee in
accordance with Clause 3.2 or Clause 3.3, respectively.
3.5 The Chargor shall procure that:
(a) a notice substantially in the form set out in Schedule 2 is
delivered to the Company (a) on the date of execution of this
Agreement in respect of the Current Shares and (b) on the date of
every occasion when New Shares are charged in favour of the Trustee
pursuant to Clause 3.3 in respect of such New Shares; and
(b) the Company delivers acknowledgement of receipt of such notice to
the Trustee on the date hereof (in the case of the notice relating
to the Current Shares) and within 5 Business Days of receiving such
notice in relation to any New Shares.
4. VOTING RIGHTS AND DIVIDENDS
4.1 At any time whilst there is no Event of Default outstanding unremedied or
unwaived, the Chargor shall be entitled to:
(a) receive all dividends, interest and other monies arising from the
Charged Portfolio; and
(b) exercise all voting rights in relation to the Charged Portfolio
provided that the Chargor shall not exercise such voting rights in
any manner, or otherwise permit or agree to any (i) variation of the
rights attaching to or conferred by all or any part of the Charged
Portfolio, or (ii) increase in the issued share capital of the
Company, which in the opinion of the Trustee (acting reasonably)
would prejudice the value of, or the ability of the Trustee to
realise, the security created by this Agreement.
4.2 At any time whilst there is an Event of Default outstanding unremedied or
unwaived, the Trustee may, at its discretion, (in the name of the Chargor
or otherwise and without any further consent or authority from the
Chargor):
(a) exercise (or refrain from exercising) any voting rights in respect
of the Charged Portfolio;
(b) apply all dividends, interest and other monies arising from the
Charged Portfolio as though they were the proceeds of sale under
this Agreement;
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(c) transfer the Charged Portfolio into the name of such nominee(s) of
the Trustee as it shall require; and
(d) exercise (or refrain from exercising) the powers and rights
conferred on or exercisable by the legal or beneficial owner of the
Charged Portfolio, including the right, in relation to the Company,
to concur or participate in:
(i) the reconstruction, amalgamation, sale or other disposal of
the Company or any of its assets or undertaking (including the
exchange, conversion or reissue of any shares or securities as
a consequence thereof);
(ii) the release, modification or variation of any rights or
liabilities attaching to such shares or securities; and
(iii) the exercise, renunciation or assignment of any right to
subscribe for any shares or securities,
in each case in the manner and on the terms the Trustee thinks fit,
and the proceeds of any such action shall form part of the Charged
Portfolio.
5. CHARGOR'S REPRESENTATIONS AND UNDERTAKINGS
5.1 Except with the Trustee's prior written consent, the Chargor shall not
(save as permitted under the High Yield Documents):
(a) assign or dispose of all or any part of the Charged Portfolio;
(b) create, grant or permit to exist (a) any security interest over or
(b) any restriction on the ability to transfer or realise, all or
any part of the Charged Portfolio, save for: (i) the Company's lien
on unpaid shares conferred by Regulation 8 of Table A of the
Companies (Tables A to F) Regulations 1985 (as in force at the date
of this Agreement); and (ii) the ability of the directors of the
Company to decline to register a transfer of shares as set out in
article 7.1 of the Articles, provided that article 7.2 of the
Articles continues to apply; or
(c) do or (to the extent within its control) permit to be done any other
act which, in the opinion of the Trustee, would adversely affect the
Collateral Rights.
5.2 The Chargor represents and warrants to the Trustee and undertakes for the
duration of this Agreement that (save as specified or permitted under the
High Yield Documents):
(a) it is, and will be, the sole legal and beneficial owner of the
Charged Portfolio free from any security interest except as created
by this Agreement;
(b) it has not sold or disposed of, and will not sell or dispose of, the
benefit of all or any of its rights, title and interest in the
Charged Portfolio;
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(c) it has and will have the necessary power to enable it to enter into
and perform its obligations under this Agreement;
(d) this Agreement constitutes its legal, valid and binding obligation;
(e) all necessary authorisations to enable it to enter into this
Agreement have been obtained and are, and will remain, in full force
and effect; and
(f) the authorised share capital of the Company as at the date hereof is
(pound)51,000 and the issued share capital of the Company as at the
date hereof consists of 50,032 ordinary shares of (pound)1.00 each
and all such shares are fully paid.
5.3 The Chargor represents and warrants to the Trustee and undertakes for the
duration of this Agreement to ensure that, at all times during the
duration of the Agreement, the Charged Portfolio represents 65% (to the
nearest share) but at no time more than 65% of the issued and voting share
capital of the Company.
5.4 The Chargor represents to the Trustee that the Shares are fully paid and
undertakes to pay all calls or other payments due in respect of any part
of the Charged Portfolio. If the Chargor fails to make any such payment
the Trustee may make that payment on behalf of the Chargor and any sums so
paid by the Trustee shall be reimbursed by the Chargor on demand, together
with interest on those sums. Such interest shall be calculated from the
due date up to the actual date of payment (after, as well as before,
judgement) at a rate equal to 1% per annum in excess of the interest rate
applicable to the Notes at such time (or if no interest rate is applicable
at such time, the most recent interest rate applicable to the Notes).
6. FURTHER ASSURANCE
6.1 The Chargor shall promptly execute all documents (including transfers) and
do all things (including the delivery, transfer, assignment or payment of
all or part of the Charged Portfolio to the Trustee or its nominee(s))
that the Trustee may reasonably specify for the purpose of (a) exercising
the Collateral Rights or (b) securing and perfecting its security over or
title to all or any part of the Charged Portfolio.
6.2 At any time after the occurrence of an Event of Default, which is
continuing unremedied or unwaived, the Chargor shall upon demand from the
Trustee (a) procure the transfer of the Charged Portfolio into the name of
the Trustee or its nominee(s), agents or such purchasers as it shall
direct and (b) execute all documents and do all other things that the
Trustee may require to facilitate the realisation of the Charged
Portfolio.
6.3 The Trustee shall only be entitled to transfer or request the transfer of
the Charged Portfolio whilst an Event of Default is continuing unremedied
or unwaived.
7. POWER OF ATTORNEY
7.1 The Chargor, by way of security, irrevocably appoints the Trustee to be
its attorney and in its name, on its behalf and as its act and deed to
execute, deliver and perfect all documents (including any stock transfer
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forms and other instruments of transfer) and do all things that the
Trustee may consider to be necessary for (a) carrying out any obligation
imposed on the Chargor under this Agreement; (b) exercising any of the
rights conferred on the Trustee by this Agreement or by law, (including,
after the security constituted by this Agreement has become enforceable,
the exercise of any right of a legal or a beneficial owner of the Charged
Portfolio); or (c) preserving the rights conferred on the Trustee by this
Agreement or by law. The Chargor shall ratify and confirm all things done
and all documents executed by the Trustee in the exercise of that power of
attorney.
8. POWER OF SALE
8.1 After the occurrence of an Event of Default and whilst the same is
continuing unremedied or unwaived, the Trustee shall be entitled, without
prior notice to the Chargor or prior authorisation from any court, to sell
or otherwise dispose of all or any part of the Charged Portfolio (at the
times, in the manner and on the terms it thinks fit). Subject to Clause
11, the Trustee shall apply the proceeds of that sale or other disposal in
paying the costs of that sale or disposal and in or towards the discharge
of the Secured Obligations in accordance with the terms of the Indenture.
8.2 The power of sale or other disposal in Clause 8.1 shall operate as a
variation and extension of the statutory power of sale under Section 101
of the Law of Property Xxx 0000. The restrictions contained in Sections 93
and 103 of the Law of Property Act 1925 shall not apply to this Agreement
or to any exercise by the Trustee of its right to consolidate mortgages or
its power of sale.
8.3 A certificate in writing by an officer or agent of the Trustee that any
power of sale or other disposal has arisen and is exercisable shall be
conclusive evidence of that fact, in favour of a purchaser of all or any
part of the Charged Portfolio.
9. RECEIVER
9.1 The Trustee may by writing (acting through an authorised officer of the
Trustee) without notice to the Chargor appoint one or more persons to be
receiver of the whole or any part of the Charged Portfolio (each such
person being (a) entitled to act individually as well as jointly and (b)
for all purposes deemed to be the agent of the Chargor) if:
(a) an Event of Default is continuing unremedied or unwaived;
(b) a petition or application is presented for the making of an
administration order in relation to the Chargor;
(c) the Chargor gives written notice of its intention to appoint an
administrator to the Chargor; or any person (other than the Chargor)
gives written notice of its intention to appoint an administrator to
the Chargor and, in the reasonable opinion of the Trustee, such
other person is not acting frivolously or vexatiously in so doing;
or
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(d) the Chargor requests the appointment of a receiver.
9.2 In addition to the powers of the Trustee conferred by Clause 8 (Power of
Sale), each person appointed pursuant to Clause 9.1 shall have, in
relation to the part of the Charged Portfolio in respect of which he was
appointed, all the powers (a) conferred by the Law of Property Xxx 0000 on
a receiver appointed under that Act, (b) of an administrative receiver set
out in Schedule 1 to the Insolvency Xxx 0000 (whether or not such person
is an administrative receiver) and (c) (if such person is an
administrative receiver) all the other powers exercisable by an
administrative receiver in relation to the Chargor by virtue of the
Insolvency Xxx 0000.
10. EFFECTIVENESS OF COLLATERAL
10.1 The collateral constituted by this Agreement and the Collateral Rights
shall be cumulative, in addition to and independent of every other
security which the Trustee may at any time hold for the Secured
Obligations or any rights, powers and remedies provided by law. No prior
security held by the Trustee over the whole or any part of the Charged
Portfolio shall merge into the collateral constituted by this Agreement.
10.2 This Agreement shall remain in full force and effect as a continuing
arrangement unless and until the Trustee discharges it.
10.3 No failure to exercise, nor any delay in exercising, on the part of the
Trustee, any Collateral Right shall operate as a waiver, nor shall any
single or partial exercise of a Collateral Right prevent any further or
other exercise of that or any other Collateral Right.
10.4 If, at any time, any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
neither the legality, validity or enforceability of the remaining
provisions of this Agreement nor the legality, validity or enforceability
of such provision under the law of any other jurisdiction will in any way
be affected or impaired.
10.5 The Trustee shall, at the request and cost of the Chargor, cancel the
security granted by this Agreement, and execute a release, in each case in
respect of:
(a) any portion of the Charged Portfolio upon the disposal of such
portion of the Charged Portfolio, provided that such disposal is
permitted under the terms of the Indenture;
(b) the whole of the Charged Portfolio upon the Secured Obligations
being discharged in full; and
(c) the whole of the Charged Portfolio in the event of the Secured
Obligations being defeased in full in accordance with section 8 of
the Indenture,
any such release to be without recourse to, and without any
representations or warranties by, the Trustee.
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10.6 None of the Trustee, its nominee(s) or any receiver appointed pursuant to
this Agreement shall be liable by reason of (a) taking any action
permitted by this Agreement or (b) any neglect or default in connection
with the Charged Portfolio or (c) the taking possession or realisation of
all or any part of the Charged Portfolio, except in the case of gross
negligence or wilful default upon its part.
11. SUBSEQUENT INTERESTS AND ACCOUNTS
11.1 If the Trustee at any time receives notice of any subsequent mortgage,
assignment, charge or other interest affecting all or any part of the
Charged Portfolio, all payments made by the Chargor to the Trustee or any
of the Holders after that time shall be treated as having been credited to
a new account of the Chargor and not as having been applied in reduction
of the Secured Obligations as at the time when the Trustee received
notice.
11.2 All monies received, recovered or realised by the Trustee under this
Agreement (including the proceeds of any conversion of currency) may in
its discretion be credited to and held in any suspense or impersonal
account (bearing a commercially reasonable rate of interest) pending their
application from time to time in or towards the discharge of any of the
Secured Obligations in accordance with the terms of the Indenture.
12. COSTS AND EXPENSES
The Chargor shall, within 3 Business Days of demand by the Trustee,
reimburse the Trustee on a full indemnity basis for all losses and
reasonable costs and expenses (including legal fees, stamp duties and any
value added tax) incurred in connection with (a) the execution of this
Agreement or otherwise in relation to it, (b) the perfection or
enforcement of the collateral constituted by this Agreement or (c) the
exercise of any Collateral Right, together with interest from the date the
Trustee notified the Chargor of the costs and expenses to the date of
payment at a rate equal to 1% per annum in excess of the interest rate
applicable to the Notes at such time (or if no interest rate is applicable
at such time, the most recent interest rate applicable to the Notes).
13. CURRENCY CONVERSION
For the purpose of or pending the discharge of any of the Secured
Obligations the Trustee may convert any money received, recovered or
realised or subject to application by it under this Agreement to the
currency in which the Secured Obligations are due to be discharged: and
any such conversion shall be effected at the Trustee's spot rate of
exchange for the time being for obtaining such other currency with the
first currency.
14. NOTICES
Any communication to be made by one person to another under or in
connection with this Agreement shall be made in writing in accordance with
those terms of the Notices provision in section 13.2 of the Indenture
applicable to notices and communications to persons other than Holders and
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shall be deemed to have been duly given in accordance with the provisions
of such section 13.2 within the times prescribed in such section 13.2.
15. SUCCESSORS
This Agreement shall remain in effect despite any amalgamation or merger
(however effected) relating to the Trustee; and references to the Trustee
shall include any assignee or successor in title of the Trustee and any
person who, under the laws of its jurisdiction of incorporation or
domicile, has assumed the rights and obligations of the Trustee under this
Agreement or to which, under such laws, those rights and obligations have
been transferred.
16. GOVERNING LAW AND JURISDICTION
16.1 Governing Law
This Agreement is governed by English law.
16.2 Jurisdiction
(a) The courts of England have exclusive jurisdiction to settle any
dispute arising out of or in connection with this Agreement
(including a dispute regarding the existence, validity or
termination of this Agreement).
(b) This Clause 16.2 is for the benefit of the Trustee only.
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IN WITNESS WHEREOF this Agreement has been signed on behalf of the Trustee and
executed as a deed by the Chargor and is intended to be and is hereby delivered
by it as a deed on the date specified above.
The Trustee
THE BANK OF NEW YORK
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
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Title: Assistant Vice President
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The Chargor
EXECUTED as a DEED
by KRONOS INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Vice President and Chief Financial Officer
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