THIS
DEED OF HYPOTHECATION executed at Mumbai this
..............day of …………..Two thousand and one by ABC POWER GENERATION COMPANY
LIMITED, a Company registered under the
Companies Act, 1956 and having its
Registered Office at …………Mumbai, In the
State of Maharashtra (hereinafter referred to as the 'Borrower which expression
shall, unless It be repugnant to the subject or context thereof, include its
successors and assigns).
IN FAVOUR OF
THE XYZ FINANCE COMPANY
LTD., a Company registered under the Companies Act, 1956. having its Registered
Office at Mumbai whose name and address is set out in Schedule I hereto
(hereinafter referred to as the "XYZF/"Lender which expression shall
include its successors and assigns as the subject or context may require or
admit).
WHEREAS
(1)
By a Foreign Currency Loan
Agreement dated the .............. day of
1998 entered into between the Borrower and XYZF,(hereinafter referred to
as the Foreign Currency Loan Agreement").XYZF has agreed. to sanction
Foreign Currency Loan to the Borrower to the extent of Rs. 47.00 crore on the
terms and conditions contained in the Foreign Currency Loan Agreement as set out against its name in Schedule I
hereto, (hereinafter referred to as "the Loan' or "the Loans' as the
subject or context admits).
(2)
One of the conditions of the
Foreign Currency Loan Agreement is that the Loans together with interest at the
agreed rates, liquidated damages, premia on prepayment or on redemption, costs,
expenses and other monyes including any increase as a, result of
devaluation/revaluation/fluctuation in the foreign currencies involved payable
whatsoever, as stipulated in the Foreign Currency. Loan Agreement shall be
secured, Inter afia, by a first charge by, way of hypothecation of all the
Borrower's movable including movable machinery, machinery spares, tools and
accessories, (excluding Borrower's stocks of raw materials, semi-finished,
finished goods, consumable stores and book debts) and such other movables
present and future on pad passu basis with the other participating Financial
Institutions and Banks (referred to as Lenders) under the Foreign Currency Loan
Agreement.
(3)
XYZF has called upon the
Borrower to execute these presents, which the Borrower has agreed to do in the
manner hereinafter expressed.
NOW THEREFORE THESE PRESENTS
WITNESSETH THAT
1. In
pursuance of the Foreign Currency Loan Agreement and in consideration of XYZF
having lent and advanced and/or agreed to lend and advance the Loans to the
Borrower, for the purposes and subject to the terms and conditions set out in
the Foreign Currency Loan Agreement and in consideration of the premises, the
Borrower do hereby covenant with XYZF that it shall repay the Loans to XYZF and
shall pay all interest at the agreed rates, liquidated damages, premia on
prepayment or on redemption, costs, charges and expenses and all other monies
as stipulated and In the manner set out in the Foreign Currency Loan Agreement
and shall duly observe and perform all the terms and conditions of the Foreign
Currency Loan Agreement.
2. In
pursuance of the Foreign Currency Loan Agreement and for the consideration
aforesaid, the whole of the movable properties of the Borrower including its
movable plant and machinery, machinery spares, tools and accessories,
(excluding Borrowees stocks of raw materials,
semifinished, finished goods, consumable stores and book debts) and such
other movables both present and future whether installed or not and whether now
lying loose or In cases or which are now lying or stored in or about or shall hereafter from
time to time during the continuance of
these presents be brought into or upon or be stored or be in or about all the
Borrower's factories, premises and godowns or wherever else the same may be or
be held by any party to the order or disposition of the Borrower or in the
course of transit or on high seas or on order or delivery (hereinafter
collectively referred to as the said Goods") short particulars whereof are
given in Schedule II hereto, are hereby hypothecated as and by way of first
charge to XYZF as security for and be charged with the repayment/redemption of
the Loans and repayment or payment of other monies including all interest,
liquidated damages, premia on prepayment or on redemption, costs, charges,
expenses and all other monies including any increase as a result of
devaluation/revaluation/fluctuation In the foreign currencies involved payable
due to XYZF under the Foreign Currency Loan Agreement.
3. In
further pursuance of the Foreign Currency Loan Agreement
and for the consideration
aforesaid, the' Borrower do hereby further agree, declare and covenant with
XYZF as follows:
(i) The Borrower shall at
its expense keep the said Goods in marketable and good condition and insure the
same in the joint names of the Borrower and XYZC as provided in the Foreign
Currency Loan Agreement, against any loss or damage by theft, fire, lightning,
earthquake, explosion, Hot, strike, civil commotion, storm tempest, flood,
marine risk, erection risk, war risk and such other risks as XYZF shall from
time to time require, with an insurance
company or companies. The Borrower shall
deliver to XYZF the relevant policies of insurance duly assigned to XYZF and
maintain such insurance through out the continuance of the security of these
presents and deliver to XYZF the renewal receipts therefor and shall duly and
punctually pay all premia and shall not do or suffer to be done or omit to do
or be done any act which may invalidate or avoid such insurance. In default
XYZF may (but shall not be bound to) keep in good condition and render
marketable the said Goods and take out
renew such insurance. Any premium paid by XYZF and any costs, charges and
expenses incurred by XYZF shall forthwith on receipt of notice of demand be
reimbursed to XYZF together with interest thereon at the appilcable rates for the assistance on the
date of the Foreign Currency Loan Agreement, from the date of payment and until
such reimbursement by the Borrower, the same shall be debited to the Borrowees
Loan Account and be a charge on, the said Goods.
(ii)The nominees 6 f XYZF
shall, without any notice and at the risk and expense of the Borrower, be
entitled at all times to enter any place where the said Goods may be and
inspect, value, insure, superintend the disposal of and take particulars of all
or any part of the said Goods and check
any statement, accounts, reports and information.
(iii) In the event of any
breach or default by the Borrower in the performance of its obligations,
hereunder or any of the terms, covenants, obligations and conditions stipulated
in the Foreign Currency Loan Agreement or the related security documents or the
deeds executed or that may, hereafter be executed by the Borrower in favour of
XYZF, or in the event of, the Borrower failing to pay either the interest or
any instalments of the principal of the Loans, or in the , event of the charge,
or the, security created in favour of XYZF having become enforceable . for any
reason whatsoever, XYZF or their nominees shall, in. case such breach or
default is not remedied by the Borrower, to the satisfaction of XYZF within a
period of fifteen days from the date of Intimation by XYZF of such breach or
default or such extended time as may be granted by XYZF In Writing, without any
notice and without assigning any reason and at the risk and expense of the
Borrower and if necessary as Attorney for and in the name of the Borrower
be entitled to take charge and/or
possession of, seize, recover, remove and-remove them and/or sell by public
auction or by private contract, dispatch or consign for realisation or
otherwise dispose off or deal with all or any part of the said Goods and to
enforce, realise, settle, compromise and deal
with any rights or claims relating thereto, without being bound to
exercise any of these powers or be, liable for, any losses in the exercise or
non-exercise thereof and without prejudice to XYZFs rights and remedies of suit
or otherwise. Notwithstanding any
pending suit or other proceeding, Borrower undertakes to give immediate
possession to the nominees XYZF, on demand of the Said Goods and to transfer,
and to deliver to XYZF all relative bills contracts securities and documents
and the Borrower hereby agrees to accept XYZF's account of sales and
realisations as sufficient proof of amounts realised and relative expenses And
to pay on demand by XYZF any shortfall or , deficiency thereby shown
Provided, however, that XYZF shall not
be in any way liable or responsible for any -loss, damage' or depreciation that
the said Goods may suffer ,or sustain, on any Account, whatsoever, whilst the
same are in possession of XYZF or by
reason of exercise or nonexercise of rights- and remedies ava,ilabI61o XYZF as
aforesaid and that all such loss, damage or depreciation shall be wholly
debited to the account of the Borrower howsoever the same may have been caused.
(iv)XYZF at any time after
the security hereby constituted has become enforceable and whether or not XYZF
shall then have entered into or taken possession of and in addition to the
powers herein before conferred upon XYZF, after such entry into or taking
possession of, may have a receiver or receivers appointed of the said Goods or
any part, thereof. The following provisions shall also apply to such Receiver:
(a)
Unless otherwise directed by
XYZF, such Receiver shall have and exercise all
powers and authorities vested in XYZF;
(b)
Such Receiver shall, in the
exercise of his powers, authorities and discretions, conform to the regulation and direction from time to time
made and given by
XYZF;
(c)
XYZF may from, time to time
fix the remuneration of such Receiver and shall
direct payment thereof out, of the said Goods, but the Borrower alone
shall be liable for the payment of such
remuneration;
(d)
XYZF may from time to time
and at any time require such Receiver to give
security for the due performance of Ms duties, as such Receiver and may
fix the nature and amount of the
security to be given to XYZF, but VZF shall not be bound to require such security In any case;
(e)
XYZF may pay over such
Receiver any monies constituting part of the securities, to the intent that, the same may be applied
for the purpose hereof by such Receiver
and XYZF may from time to time determine, what funds the Receiver shall be at liberty to keep in hand, With a
view to the performance of his duties as
such Receiver;
(f)
Every such Receiver shall be
the agent of the Borrower for all purposes and the Borrower alone shall be responsible for his
acts and defaults loss or misconduct and
liable on any ,contract or engagement made or entered into by him and for
his remuneration and XYZF shall not
incur any liability or responsibility therefor by reason of their making or consenting to his
appointment as such Receiver. ;
4.All the said Goods and all
sale realisations and insurance proceeds thereof and all documents under this
security shall always be kept distinguishable and held as the exclusive
property of XYZF specifically appropriated to this security and be. dealt with only
under the directions of XYZF and the Borrower shall not create any charge,
mortgage, lien, or other encumbrance upon or over the same, or any part thereof
except in favour of the Lenders nor suffer any such charge, mortgage, lien or
other encumbrance or any attachment or distress to affect the same or any part
thereof nor do or allow any thing that may prejudice this security and XYZF
shall be, at liberty to incur all costs and expenses as may be necessary to
preserve this security and to maintain the same undiminished and claim
reimbursement thereof as mentioned in sub-clause (1) hereof PROVIDED, that the
Borrower may create a second charge over the said goods, as permitted by XYZF
in favour of the Commitment Charge Lenders (as defined in the Foreign Currency
Loan Agreement). Except to the extent specifically permitted by XYZF, the
Borrower shall not sell all or any of the said Goods. The Borrower shall on any
and every such sale pay to XYZF, if so required by them, the net proceeds of
the sale or disposal in satisfaction, so far as the same shall extend, of the
monies, due and payable by the Borrower to XYZF PROVIDED, that the Borrower may
without payment to XYZF, if XYZF so agrees, replace the outmoded equipment by
equipment of equivalent or greater value.
5.
The Borrower shall, whenever
required by XYZF, give full particulars to XYZF of all the assets of the
Borrower and of the said Goods and shall furnish and verify all statements,
reports, returns, certificates and information from time to time and as
required by XYZF and make furnish and execute all necessary documents to give
effect to this security
6.
This security shall be a
continuing security for repayment of the Loan together with all interest,
liquidated damages, premia on prepayment or on redemption and repayment or
payment of all other monies including any increase as a result of devaluation/
revaluation/fluctuation in the foreign currencies involved payable due to XYZF
under the Foreign Currency Loan Agreement and these presents, and shall not
affect, impair or discharge the liability of the Borrower by winding up
(voluntary or otherwise) or by any merger or amalgamation, reconstruction or
otherwise of the Borrower with any other Borrower or take-over of the
management or nationalisation of the undertaking of the Borrower.
7.
The Borrower hereby declares
that the said Goods are and will at all times be the absolute property of the
Borrower at the sole disposal of the Borrower and subject to the charges
created and/or to be created with the specific permission of XYZF be free from
any prior charge, ''trust,, pledge, lien, claim or. encumbrance and as to
future goods the same shall likewise be the unencumbered, absolute and
disposable property of the Borrower with full power of disposition over the
same provided that the Borrower may create a second charge over the said goods
as permitted by XYZF, in favour of the Commitment Charge. Lenders. Provided
further, that the Borrower shall be entitled at all times to sell or dispose
off the said goods
8.
The Borrower hereby appoints
XYZF as its attorney and authorises XYZF to act for and in the name of the
Borrower to do whatever the Borrower may be required to do under these presents
and generally to use the nameof the Borrower-in the exercise of all or any of
the powers by these presents conferred on XYZF, and the Borrower shall bear the
expenses that may be incurred in this regard.
9.
Nothing herein shall
prejudice the rights or remedies of XYZF in respect of any present or future
security, guarantee, obligation or decree for any indebtedness or liability of
the Borrower to XYZF.
10.
The provisions contained
herein, shall be read in conjunction with the provisions of. the Foreign
Currency Loan Agreement as amended from time to time and to the extent of any
inconsistency or repugnancy the latter shall prevail to all intents and
purposes
SCHEDULEI
PARTICULARS OF
LENDER AND LOANS
__________________________________________________________________________
Name Amount
of Foreign Currency Loan
__________________________________________________________________________
The XYZ Finance
Company Ltd US$
8.767
……………………………….. Million(Rs.47.00 crore)
………………………………..
Mumbai 400023
___________________________________________________________________________
SCHEDULEII
(SHORT
PARTICULARS OF MOVABLEPROPERTIFES)
The whole of the movable
properties. of the Borrower including its movable plant and machinery,
machinery spares, tools and accessories, (save and except Borrower's stocks of
raw materials, semi-finished, finished goods, consumable stores and book debts)
and such other movables, both, present and future whether installed or not and.
whether now, lying loose or in cases or which,, are now lying or stored in or
about or shall hereafter from time to time during the continuance of the
security of these presents be brought in to or upon or be stored or be in or
about all the Borrowers factories, promises and godowns at ………….. IDA,
…………..District, in the State of Maharashtra wherever else the same may be or be
held by any party to the order or disposition of the Borrower or in the course
of transitor on high seas or on order,
or delivery, howsoever and wheresoever in the possession of the Borrower and
either by way of substitution or addition.
IN
WITNESS WHEREOF the Borrower has caused its Common Seal
to be affixed hereto on the day, month and year first above written.
The Common Seal of ABC POWER
GENERATION LIMITED, has pursuant to the Resolution of its Board of Directors
passed in that behalf on the day of …………..2000 been hereunto affixed in the
presence of Mr. A Director, of the
Borrower and Mr.C Company Secretary, who have signed these presents in token
thereof.
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