THIS
TRUST DEED is made this………………… day of………………… 20
,
Between
………………… incorporated under the
__________________________ with its registered office at………………… (hereinafter
called "the Company") of the
One Part, and Mr………………… and Mr…………………
(hereinafter called
"the
Trustees") of the Other Part.
WHEREAS by Sub-Clause………………… of
Clause………………… of its
Memorandum of Association, the company is
authorised to borrow or raise and secure the payment of money by the issue of
debentures charged upon any of the company's property.
AND
WHEREAS the Directors of the company being duly empowered in that behalf by
Article No. ………………… of the Articles of Association of the company have decided
by a resolution passed in pursuance to ____________________by the Board of
directors in the meeting of the Board
held on………………… to raise a sum of Rs.…………………
by issue of………………… First Mortgage Debentures of Rs.………………… each, bearing
interest at………………… per cent per annum framed in accordance with the forms set
for in the First Schedule hereto and to secure the same by mortgaging with the
trustees the properties described in the Second Schedule hereto.
AND WHEREAS the trustees above mentioned
have consented to act as trustees for the debenture holders.
NOW THIS DEED WITNESSETH AND IT IS HEREBY
MUTUALLY AGREED TO AND DECLARED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:
1. That in these presents unless there be
something in the subject or context consistent therewith the expression
following shall have the meaning hereafter mentioned, that is to say:
(a) "Company" means………………… Ltd.
(b) "Trustees" means Mr………………… or any
other trustees hereof for the time being.
(c) "Debentures" means the debenture
of the company in the form set out in the First Schedule hereto for the time
being outstanding and entitled to the benefit of these presents.
(d) "Debenture holders" means the
holder for the time being of the debenture issued and entered in the register
of debenture holders, mentioned on the conditions endorsed on the debentures on
the holder of the debentures.
(e) "Mortgaged premises" means the
property belonging to the company described in the Second Schedule hereto and
comprised in the security of the debenture holder.
Words denoting the singular include the
plural and vice versa unless the contrary appears from the context.
(f) Act means the _______________________ and
any modification or reenactments thereof.
2.
The
debentures entitled to the benefit of these presents shall consist of a series
of number of debentures of Rs.………………… each, aggregating to
$………………… in all to rank pari passu without
any preference or priority by reason of the date of issue or otherwise and
secured by the mortgage hereby created on the mortgaged premises.
3. The company hereby covenants with the
trustees that the company will on the………………… day of………………… or such earlier day
as the principal moneys shall become payable under clause 7 hereof pay the
debenture holders the amounts secured by their debentures respectively, and in
the meantime will pay interest to the debenture holders on the day of…………………
20… in each year, the first payment of interest to be made on the day of…………………
20...
4. All payments due by the company in respect
of the Debentures issued hereunder whether of interest, principal or premium
shall be made by cheque or warrant drawn by the company on its bankers and the
company shall make at its own expenses all arrangements, with its Bankers as
shall be necessary to ensure that such cheques or warrants shall be encashable
for the amount for which they are expressed without any deduction whatsoever at
the office of its bankers in Delhi or
such other places in the Union of India as the Trustees may require.
5.
In
consideration of the debentures hereby authorised aggregating to
$………………… the company, as the beneficial
owner, hereby mortgages unto the trustees all the fixed plant and machinery and
fixture at present existing at the company's factory and described in part A of
the Second Schedule hereto and which may be acquired by the company hereafter
or fixed or erected hereafter at its factory for the benefit of the
debentureholders and the property described in Part B of the Second Schedule as
security for the due payment of principal moneys amounting to Rs………………… in
aggregate with interest and all other charges, expenses and other dues, the
payment of which has been secured by a charge on the mortgaged premises under
these presents. The charge hereby created on the property mentioned in Part A
of the Second Schedule shall be the specified charge, while that on the
property included in Part B of the Second Schedule shall rank as floating
charges.
The
trustees may, at any time, by notice in writing to the company, convert the
said floating charge into a specific charge as regards any assets included in
the Second Schedule and specified in the notice in case it is, in the opinion
of the trustees in danger of being seized or sold under any sort of distress or
execution levied or threatened or in any other case.
6. The company shall hold and enjoy all the
mortgaged premises and carry on therein and therewith the business or any of
the business mentioned in the Memorandum of Association of the company until
the security hereby constituted shall become enforceable under the terms of
these presents, in which case the trustees may, in their discretion, without
any such request as next hereinafter mentioned and shall upon the request in
writing of the holder or holders of………………… at least of the debentures, enter upon
or take possession of the mortgaged premises, or any of them and may in the
like discretion and shall upon the like request sell, call in, collect and
convert into money the same or any part thereof with full power to sell any of
the same premises either together or in parcels, and either by public auction
or private contract, and either for a lumpsum or for a sum payable by
instalments or for a sum on account and a mortgage or charge for the balance
and with full power upon every such sale to make any special or other
stipulations as to title or evidence, or commencement of the title or otherwise
which the trustees shall deem proper and with full power to modify or rescind
or vary any contract for sale of the said premises or any part thereof and to
re-sell the same without being responsible for any loss which may be occasioned
thereby and with full power to compromise and effect compositions and for the
purposes aforesaid or any of them to execute and do all such assurance and
things as they shall think fit.
7. The principal moneys due to the
debenture-holders under this Indenture shall become immediately payable and the
security hereby constituted shall become enforceable within the meaning of
these presents in each and any of the following events: (a) If the company makes default in the
payment of any interest which ought to be paid in accordance with these
presents.
(b)
If
the company without the consent of debenture holders ceases to carry on
its usiness or gives notice of its
intention to do so.
(c)
If
an order has been made by the Court of competent jurisdiction or a special
resolution has been passed by the members of the company for winding up the
company.
(d)
If
the company acts in contravention of clause………………… of its Articles of
Association.
(e)
If
it is certified by a Chartered Accountants capable of being appointed as
auditor under the
Act,
that the liabilities of the company exceed its assets.
(f)
If
the company creates or attempts to create any charge on the mortgaged premises
or any part thereof without the prior approval of the trustees/debenture
holders.
(g)
If
in the opinion of the trustees the security of debenture holders is in
jeopardy.
Provided that on the happening of the events
specified in sub-clause (a), the permission given by clause 6 to hold and enjoy
the mortgaged premises shall not be determined unless and until the trustees
shall have first served on the…………………
company a preliminary notice requiring the
company to pay the interest in arrears and the company shall have
neglected for the period of 30 days to comply with such notice.
8.
As
soon as the principal money shall become payable and the security enforceable
under the last preceding clause 7 (and unless the time for payment and the
security to be enforced has been expressly extended by the debenture holders),
the trustees shall enter upon and take possession of the mortgaged premises and
shall forthwith take steps to consult the debenture holders for the purpose of
determining whether the business of the company may be allowed to be carried on
or whether the mortgaged premises shall be realised by sale or otherwise.
9.
Until
the happening of some one of the events mentioned in clause no. 7 of this
Indenture, the trustees shall not be in any manner bound to interfere with the
management of affairs of the said business except to the extent they may
consider necessary for the preservation of the mortgaged premises or any part
thereof.
10.
If
the debenture-holders resolve not to allow the business of the company to be
carried on as mentioned in clause 9 above but to realise the security, the
trustees shall after giving a notice of 30 days in writing to the company,
proceed to realise the mortgaged premises by sale or otherwise and, in doing
so, shall conform to discretion, if any, given by debenture-holders.
11.
The
trustees shall apply the proceeds of such sale or other mode of realisation in
the following manner, that is to say, that the trustees shall pay:
(a) In the first place all costs, charges and
expenses incurred in or about such sale or the performance or execution of
trust or otherwise in relation to these presents or otherwise in respect of the
security, including the remuneration of the trustees.
(b)
Secondly,
the interest for the time being due and owing on the debentures.
(c)
Thirdly,
the principal money then due and owing to debenture-holders.
(d)
And
lastly, the surplus, if any, to the company or its assignee.
Provided that if the said money shall be insufficient
to pay all such interest or principal money in full, then the said moneys shall
be paid rateably and without preference or priority among all debenture-holders
of this series according to the amount of the face value of the debentures held
by them, but all interest shall be paid before any principal money.
12. When all the principal moneys and secured by
these presents shall have been paid and satisfied, the trustees shall
forthwith, upon the request and at the cost of the company and on being paid
all the costs, charges and expenses properly incurred by the trustees in
relation to the security, reconvey, reassign, release and surrender the
mortgaged premises or so much or the same as shall not have been sold or
disposed of, unto the company or its assigns.
13. If the company shall, at any time during the
continuance of the security, be desirous of selling, demising or otherwise
disposing of or dealing with any part of the mortgaged premises otherwise than
in respect of the floating charge the ordinary course of the company's
business, the trustees may, if satisfied that the debenture-holders' security
shall not be thereby prejudiced, assent to or concur in such sale, demise,
disposal or other dealing, and may, if necessary, release the property in
question from the trust under this deed on such terms as the trustees may
determine.
14.
The
company hereby covenants with the trustees:
(i)
That
the moneys secured by this deed shall be the first mortgage and charge on the
mortgaged premises and shall take precedence over all other moneys which may
hereinafter be borrowed by the company against the security of the premises.
(ii)
that
the company shall maintain the mortgaged premises and any and every part
thereof in a fit and efficient condition of repair and shall keep the said
property duly insured against risk of fire, riot, civil and war risks with such
insurers and in such manner as the trustees may determine from time to time
and, in default, the trustees shall carry out repair and keep insured the
mortgaged premises in the interest of the debenture-holders, and shall be
entitled to the immediate payment of such expenditure in full.
15.
(a) The company shall in each and every year during the continuance of this
security pay to the Trustees for the
time being of these presents as and by way of remuneration for their services
as Trustees the sum of Rs………………… (………………… only) per annum in addition to all
legal, travelling and other costs, charges and expenses incurred by the
Trustees on their officers, employees or agents in connection with the
execution of the trust hereof (including all the costs, charges and expenses of
and incidental to the approval and execution of these presents) and all other
documents effecting the security herein and the first of such payments to be
made proportionately for the period and the said remuneration shall continue to
be payable until the trust hereof shall be finally discharged. The trustees
acknowledge having received from the company a sum of Rs………………… (………………… only)
as their fee for agreeing and accepting the trusteeship of these presents.
(b)
The company shall pay to the trustees all legal travelling and other costs,
charges and expenses incurred by them or their agents in connection with
execution of trusts of these presents including costs, charges and expenses of
and incidental to the approval and execution of these presents and all other
documents affecting the security herein and will indemnify them against all
actions, proceedings, costs, charges, expenses, claims and demands whatsoever
which may arise or be brought or made against or incurred by them in respect of
any matter or thing done or permitted to be done without their wilful default
in respect of or in relation to the mortgaged premises.
16.
The
trustees hereof being a corporate body may, in the execution and exercise of
all or any of the trusts powers, authorities and discretions vested in them by
these presents act by responsible officers or a responsible officer for the
time being of the trustees and the trustees may also whenever they think it
expedient in the interests of the debenture-holders delegate by power of
attorney or otherwise to any such officer or officers all or any of the trusts
power, authorities, and discretions vested in them by these presents and any such
delegations may be made upon such terms and conditions and subject to such
regulations including power to sub-delegate as the trustees may, in the
interest of the debentureholders, think fit and the trustees shall not be bound
to supervise the proceedings of or be in any way responsible for any loss
incurred by reason of any misconduct or default or any mistake, oversight,
error of judgement, forgetfulness or want of prudence on the part of any such
delegate. The trustees, however, shall be liable for breach of trust, knowingly
and intentionally committed by such trustees or their delegate subject to the
permission of Section 119 of the Act.
Note: This clause is suitable where the
trustees is a bank. In case of individual this be modified suitably.
17.
The
debenture holders may, by an ordinary resolution, remove the trustee or
trustees, or the trustee or trustees may, with the consent of the directors of
the company and of the majority of the debenture holders in writing resign or
retire from trusteeship.
18.
In
the event of death, bankruptcy, disability or resignation of any trustee or
trustees, another trustee or trustees shall be appointed who shall thereafter
have and exercise all powers of the trustee or trustees under these presents.
The power of appointing a new trustee or trustees shall be vested in the
directors, but no such trustees shall be appointed by the company until his
appointment has been approved by an ordinary resolution of the debenture
holders.
19.
The
trustees may by agreement with the directors of the company modify the terms of
the deed in any manner that may be necessary to meet any requirement or
contingency, provided that the trustees are satisfied that such modifications
are in the interests of the debenture holders.
20.
If
any debenture is proved to the satisfaction of the company to have been lost,
the company shall issue a fresh debenture on payment of a fee of Rs………………… for
each such debenture and on such indemnity as the directors may think fit.
21.
The
company hereby covenants with trustees that company will at all times during
the continuance of the security (except as may be otherwise previously agreed
in writing by the trustees).
(a)
carry
on and conduct its business in proper and efficient manner with due deligence
and efficiency with sound financial standing and pay all rents, cesses on
mortgage premises, and insured these properties against fire and natural
calamities;
(b)
to
keep proper books of account as required under the Act and let them be open to
inspection of trustees during business hours;
(c)
to
give trustees such information as he or they may require relating to business,
mortgage property and the affairs of the company;
(d)
not
to affect any scheme of amalgamation, merger or reconstructions during the
period of debenture or any part thereof remain outstanding;
(e)
not
to utilise any portion of the debentures for purposes other than those for
which the same are issued;
(f)
not
to make any material changes in the existing management set up. Not to declare
any dividend to the equity (or preference shareholders, if any) in any year
until the company has paid or made satisfactory provision for payment of the
instalments of principal (if it has become due) and interest due on the
debentures;
(g)
allow
the debenture holders a right to appoint a nominee director on the Board of the
company. The said director so appointed shall not be liable for rotation nor
required to hold any qualification. Thus, if need be, the company shall take
immediate steps to amend its Articles of Association accordingly.
22.
The company hereby further covenants with the Trustees that the company shall
duly perform and observe the obligations hereby imposed upon it by this deed.
IN
WITNESS WHEREOF THE COMPANY has caused its Common Seal to be affixed to these
presents and the trustees have hereto set their hands the day and year above
written.
Common
Seal of the…………………
Witnesses:
affixed in the presence of
(DIRECTOR)
(TRUSTEES)
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