SIERRA RUTILE LIMITED
SHARE PLEDGE AGREEMENT
THIS SIERRA RUTILE LIMITED SHARE PLEDGE AGREEMENT (the "Agreement") dated
as of May 15, 1998, made by SIERRA RUTILE HOLDINGS LIMITED, a corporation
organized and existing under the laws of the British Virgin Islands (the
"Shareholder"), to COMMONWEALTH DEVELOPMENT CORPORATION ("CDC"), DEG-DEUTSCHE
INVESTITIONS-UND ENTWICKLUNGSGESELLSCHAFT mbH ("DEG"), EXPORT-IMPORT BANK OF THE
UNITED STATES ("ExIm Bank"), INTERNATIONAL FINANCE CORPORATION ("IFC") and
OVERSEAS PRIVATE INVESTMENT CORPORATION ("OPIC" and, together with CDC, DEG ExIm
Bank, and IFC, the "Banks" and individually each a "Bank").
WHEREAS, Sierra Rutile Limited (the "Company") and each of the Banks have
entered into separate amendment agreements providing the modification of certain
of the terms and provisions governing certain outstanding indebtedness of the
Company owing to the respective Banks (collectively, the "Amendments");
WHEREAS, it is a condition to the effectiveness of the Amendments that the
Shareholder execute and deliver an equitable mortgage agreement in substantially
the form hereof delivering by way of an equitable mortgage as collateral
security for the Company's payment and performance obligations (collectively,
the "Obligations") with respect to the principal, interest, expenses, costs and
all other amounts payable by the Company to the Banks in connection with the
agreements amended by the Amendments (such agreements, as so amended being
referred to as the "Loan Agreements"), 38,685,017 shares of the Company held by
the Shareholder, constituting all of the outstanding shares of the Company;
WHEREAS, the Shareholder wishes to grant an equitable mortgage and security
interests in favor of the Banks for the benefit of the Banks as provided herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Shareholder hereby agrees as
follows:
1. GRANT OF SECURITY INTEREST. (a) As collateral security for the
Obligations, the Shareholder hereby delivers by way of equitable mortgage to the
Banks, for the benefit of the Banks, its shares in the Company described in
SCHEDULE 1 hereto, together with all income therefrom, increases therein and
proceeds thereof, now or hereafter owned or acquired by the Shareholder
(collectively, the "Mortgaged Shares") and grants to the Banks, a lien on and
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security interest in the Mortgaged Shares. All certificates representing or
evidencing the Mortgaged Shares shall be delivered to and held by the Banks or a
collateral agent designated by them, and shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in a form reasonably
satisfactory to the Banks. The Shareholder shall promptly create and make a
notation of the particulars of this Agreement on a Register of Mortgages and
Charges and Other Encumbrances of the Shareholder, maintain such Register at its
Registered Office and cause a copy thereof to be filed with the Register of
Companies in the British Virgin Islands.
(b) If the Shareholder shall become entitled to receive, in connection
with or in substitution or exchange for any of the Mortgaged Shares, any:
(i) other shares or certificates, including, without limitation,
any certificate representing a stock bonus or stock dividend or in connection
with any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock split, spin-off or
split-off;
(ii) option, warrant or right, whether as an addition to or in
substitution or in exchange for any of the Mortgaged Shares, or otherwise;
(iii) dividend or distribution payable in property, including
securities issued by an issuer other than the issuer of the Mortgaged Shares; or
(iv) cash dividends or other distributions of any sort;
then, except as otherwise provided in Clause 2, such property shall be delivered
directly to the Banks and, to the extent any such property is delivered,
inadvertently or otherwise, to the Shareholder, the Shareholder shall accept the
same as the agent for the Banks and shall hold the same in trust for the Banks
and shall (except as provided below) deliver them forthwith to the Banks in the
exact form received with, as applicable, the Shareholder's endorsement when
necessary, or appropriate stock powers duly executed in blank, to be held by the
Banks subject to the terms hereof, as part of the Mortgaged Shares and subject
to the pledge, lien and security interest granted herein with respect thereto.
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2. CASH DIVIDENDS; VOTING RIGHTS. Unless an Event of Default as defined
in any of the Loan Agreements (as so defined, an "Event of Default") shall have
occurred and be continuing, the Shareholder shall be entitled to receive all
cash dividends paid in respect of the Mortgaged Shares, to vote the Mortgaged
Shares and to give consents, waivers and ratifications in respect of the
Mortgaged Shares; PROVIDED, HOWEVER, that no vote shall be cast or consent,
waiver or ratification given or action taken that would materially impair any of
the Mortgaged Shares or be inconsistent with or violate any provision of this
Agreement or would otherwise impair the security for the Obligations or
adversely affect the position of Banks under this Agreement or any of the
Obligations.
3. REMEDIES; RIGHTS UPON AN EVENT OF DEFAULT. (a) Upon and after the
occurrence of an Event of Default, the Banks may, without demand or notice of
any kind (except the notice specified below of time and place of private sale)
to or upon the Shareholder or any other person (all of which are, to the extent
permitted by law, hereby expressly waived), forthwith realize upon the Mortgaged
Shares or any part thereof, and may forthwith, or may agree to, sell or
otherwise dispose of and deliver the Mortgaged Shares or any part thereof or
interest therein, in one or more portions at a private sale or sales, at such
prices and on such terms as it may deem best, for cash or on credit, or for
future delivery with or without assumption of any credit risk, with the right to
the Banks or any other purchaser to purchase upon any such sale the whole or any
part of the Mortgaged Shares free of any right or equity of redemption in the
Shareholder, which right or equity is hereby expressly waived and released.
(b) The proceeds of any such disposition or other action by the Banks
shall be applied as follows:
(i) first, to the costs and expenses incurred in connection
therewith or incidental thereto or to the care or safekeeping of any of the
Mortgaged Shares or in any way relating to the rights of the Banks hereunder,
including reasonable attorneys' fees and legal expenses;
(ii) second, to the satisfaction in full of the Obligations;
(iii) third, to the payment of any other amounts required by
applicable law; and
(iv) fourth, to the Shareholder to the extent of any surplus
proceeds.
(c) the Banks shall give the Shareholder at least ten (10) days notice of
the time and place of any private sale, which notice the Shareholder hereby
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deems reasonable notice under applicable law. The Banks may enforce its rights
hereunder without any other notice and without compliance with any other
condition precedent now or hereafter imposed by statute, rule of law or
otherwise (all of which are hereby expressly waived by the Shareholder, to the
fullest extent permitted by law).
(d) The Banks shall not be obligated to make any sale of the Mortgaged
Shares if it shall determine not to do so, regardless of the fact that notice of
sale of the Mortgaged Shares shall have been given. The Banks may, without
notice or publication, adjourn any private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at the time and place to which the same was
adjourned. The Shareholder acknowledges that any private sale shall be deemed
to have been made in a commercially reasonable manner.
4. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The Shareholder
represents and warrants that:
(a) the Shareholder has the full power, legal right and capacity to enter
into this Agreement, to pledge its interest in the Mortgaged Shares for the
purposes described in the recitals to this Agreement and to carry out the
transactions contemplated by this Agreement; and
(b) the Shareholder is the legal and beneficial owner of all the Mortgaged
Shares with good and valid title thereto.
5. COVENANTS OF THE SHAREHOLDER. The Shareholder hereby covenants that,
until all of the Banks deliver to the Shareholder a written release of its
obligations hereunder, (a) it will not sell, convey or otherwise dispose of any
of the Mortgaged Shares or any interest therein or create, incur or permit to
exist any pledge, mortgage, lien, charge, encumbrance or any security interest
whatsoever in or with respect to any of the Mortgaged Shares or the income
therefrom, increases thereof or proceeds thereof, other than that created hereby
and (b) it will not change its Registered Office located at Xxxxxxxxx Xxxxxxxx,
X.X. Xxx 00, Xxxx Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx without prior written
notice to the Banks.
6. TERMINATION. Upon satisfaction in full of all of the Obligations,
this Agreement shall terminate and the Banks shall deliver to the Shareholder
upon request, a written release of the Shareholder's obligations hereunder
together with the certificates representing or evidencing such of the Mortgaged
Shares as shall not have been sold or otherwise applied pursuant to this
Agreement.
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7. MISCELLANEOUS. (a) NO WAIVER. No course of dealing between the
Shareholder or the Banks, nor any failure to exercise, nor any delay in
exercising, any right, power or privilege of the Banks hereunder, shall operate
as a waiver thereof; nor shall any single or partial exercise by the Banks of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
(b) REMEDIES CUMULATIVE. The rights and remedies provided herein are
cumulative and are in addition to and not exclusive of any rights or remedies
provided by law.
(c) SEVERABILITY. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction then such invalidity or unenforceability shall affect
only such clause or provision or part thereof in such jurisdiction and shall not
in any manner affect such clause or provision in any other jurisdiction or any
other clause or provision in this Agreement in any jurisdiction.
(d) NOTICES. Each report, notice and other communication to be given
under this Agreement shall be in writing in the English language, be delivered
by hand, overnight or expedited delivery service, telecopier (with confirmation
by overnight or expedited delivery service) or telegram and be deemed to have
been duly given when received by the addressee as follows:
FOR THE SHAREHOLDER:
Sierra Rutile Holdings Limited
x/x XXXXXX XXXXXX XXXXXXX
x/x XXX (XXX) Mineral Sands
0000 Xxxxxx Xxxx
Xxxxx Xxxx Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xx. Xxxxxxx X. XxXxxxxx
Acting Chief Executive
Fax: 000-000-0000
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FOR CDC:
COMMONWEALTH DEVELOPMENT CORPORATION
Xxx Xxxxxxxxxxx Xxxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attention: Regional Director, WACLA
Fax: 000-00 000 000 0000
FOR DEG:
DEG-DEUTSCHE INVESTITIONS- UND
ENTWICKLUNGSGESELLSCHAFT
Xxxxxxxxxxxxxxx 00
D-50933 Koln 00 (Xxxxxxxxxxx)
Xxxxxxx Xxxxxxxx of Germany
Attention: Xx. Xxxxx Xxxxxxx
Fax: 000-00-000 0000-000/6
FOR EXIM BANK
EXPORT-IMPORT BANK OF THE UNITED STATES
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Xxxxxx Xxxxxx of America
Attention: Xx. Xxxxxxx X. Xxxxxx
Fax: 000-000-0000
FOR IFC:
INTERNATIONAL FINANCE CORPORATION
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Xxxxxx Xxxxxx of America
Attention: Director, Oil Gas and Mining Department
Fax: 000-000-0000
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FOR OPIC:
OVERSEAS PRIVATE INVESTMENT CORPORATION
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Attention: Vice President, Finance
Re: Sierra Rutile
Fax: 000-000-0000
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and shall be binding upon the heirs, executors, administrators and personal
representatives, or the representatives, successors and assigns, as the case may
be, of the parties hereto.
(f) GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of Sierra Leone.
(g) HEADINGS. The descriptive section headings have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
IN WITNESS WHEREOF, the Shareholder has duly executed this Agreement as of
the date and year first above written.
SHAREHOLDER:
SIERRA RUTILE HOLDINGS LIMITED
By: /s/ [ILLEGIBLE]
--------------------------
Title: Acting Chief Executive
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Accepted:
COMMONWEALTH DEVELOPMENT CORPORATION
By: /s/ [ILLEGIBLE]
-------------------------------
Title: Investment Manager
DEG-DEUTSCHE INVESTIGATIONS-UND
ENTWICKLUNGSGESELLSCHAFT MBH
By: /s/ [ILLEGIBLE]
-------------------------------
Title: [ILLEGIBLE]
EXPORT-IMPORT BANK OF THE UNITED STATES
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Title: Xxxxxxx X. Xxxxxx, Acting
Vice President, Asset
Management Division
INTERNATIONAL FINANCE CORPORATION
By: /s/ [ILLEGIBLE]
-------------------------------
Title:
OVERSEAS PRIVATE INVESTMENT CORPORATION
By: /s/ Xxxx X. Aldonar
-------------------------------
Title: Senior Investment Officer
SCHEDULE 1
MORTGAGED SHARES
38,685,017 shares of Sierra Rutile Limited
