|COMPANY 1as the Company
as Corporate Lenders
as Security Agent
|LETTER OF LIEN AND SET OFF|
This LETTER OF LIEN AND SET OFF is entered into and made on ______________, 2004.
(1) COMPANY 1, a company organised and existing under the laws of the People’s Republic of Bangladesh having its registered office at _______________________________________________, Bangladesh (the “Company“);
IN FAVOUR OF
(2) Company 2 HEREUNDER, THE CORPORATE LENDERS;
(3) BANK 1, as security agent for and on behalf of the Corporate Lenders pursuant to the terms of the Agency Agreement (the “Security Agent“).
(A) The Corporate Lenders have made available certain credit facilities to the Company on and subject to the terms of the Taka Group Credit Agreement and the other Taka Group Finance Documents.
(B) In consideration of the Corporate Lenders making available the facilities under the Taka Group Credit Agreement and the other Taka Group Finance Documents and pursuant to the conditions of the Taka Group Credit Agreement and the other Taka Group Finance Documents, the Company has agreed, inter alia, to enter into this Letter of Lien and Set Off in favour of the Corporate Lenders.
In this Letter, unless the context otherwise requires or unless such terms have been otherwise defined herein, terms defined in the Taka Group Credit Agreement shall have the same meanings herein:
“Accounts” means all accounts maintained by the Company with any bank in Bangladesh or elsewhere and listed in Schedule II and any other bank account maintained by the Company with any bank in Bangladesh or elsewhere from time to time;
“Agency Agreement” means the Agency Agreement dated as of the date hereof among [ ];
“Event of Default” means an “Event of Default” as defined under each of the Taka Group Credit Documents;
“Intercreditor Agent” means Bank 1. New York, having its offices at ______________ ;
“Intercreditor Agreement” means the Intercreditor Agreement dated as of the date hereof among [ ];
“Secured Obligations” means all present and future obligations and liabilities (whether actual or contingent or whether owed jointly or severally or in any other capacity whatsoever) of the Company to the Corporate Lenders under the Taka Group Credit Agreement and the other Taka Group Finance Documents; and
“Security Period” means the period beginning on the date of this Deed and ending on the date upon which all of the Secured Obligations have been unconditionally and irrevocably paid and discharged in full.
“Security Sharing Agreement” means the Security Sharing Agreement dated as of the date hereof among [ ];
“Taka Group Credit Agreement” means the credit agreement among the Borrower, the Refinancing Lenders, the Corporate Lenders, the L/C Lenders, and the Intercreditor Agent dated as of the date hereof;
“Taka Group Finance Documents” means this Agreement, the Notes, the Intercreditor Agreement, the Agency Agreement, the Fee Letters, and the Security Documents;
The principles of interpretation set out in the Taka Group Credit Agreement apply to this Letter as if set out in full in this Letter, except that references therein to “this Agreement” shall be deemed to be references to this Letter.
NOW, THEREFORE, THE COMPANY HEREBY declares and acknowledges as follows:
1. In exercising its rights, powers and discretion under this Letter, each of the Corporate Lenders and the Security Agent shall act in accordance with the provisions of the Intercreditor Agreement and the Security Sharing Agreement. The Security Agent is a party to this Letter in its capacity as agent for the Corporate Lenders, on the terms set out in the Agency Agreement. The Security Agent is not and shall not be deemed to be a fiduciary or trustee for any party.
2. All amounts available in the Accounts maintained by the Company shall be kept under lien as security for the payment and discharge of the Secured Obligations. The Company undertakes that in event of opening of any new accounts, the details will be provided to the Security Agent and the Corporate Lenders.
3. The lien on the Accounts created pursuant to this Letter in favour of the Security Agent on behalf of the Corporate Lenders and each of the Corporate Lenders shall be irrevocable and shall continue until the Secured Obligations have been fully and irrevocably discharged.
4. The Company hereby admits, acknowledges and declares that on the occurrence of any Event of Default, the Security Agent on behalf of the Corporate Lenders (upon receiving instructions in accordance with the Intercreditor Agreement) shall be entitled without any notice to the Company to withdraw the amounts available in the Accounts and apply the same (including any accrued interest thereon) towards discharging the Secured Obligations in accordance to the terms of the Intercreditor Agreement and the Security Sharing Agreement.
5. The Company admits and acknowledges that until all the Secured Obligations have been discharged in full, any amount available in the Accounts of the Company will remain subject to the security created by this Letter.
6. The Company hereby agrees that the Security Agent, on receiving instructions from the Intercreditor Agent in accordance with the Intercredtior Agreement, shall at any time or times hereinafter, following the occurrence of an Event of Default, without notice to the Company set off, transfer or apply all or any of the monies from time to time standing to the credit of the Accounts in or towards the discharge and satisfaction of the Secured Obligations.
7. The Company further agrees that the Security Agent may set off any amount standing to the credit of any of the Accounts against any amount owed by the Company to the Corporate Lenders under the Taka Group Finance Documents but unpaid and such right of set off shall be irrevocable and binding until the Secured Obligations have been irrevocably and fully discharged.
8. The Company agrees that it shall forthwith upon execution of this Letter, execute and deliver to each bank with which an Account is held a notice of this Letter of Lien and Set Off in the form set out in Part 1 of Schedule II and procure that each such bank acknowledges such notice in the form of acknowledgement set out in Part 2 of Schedule II, and shall deliver a copy of the acknowledgement from each bank, bearing original signatures of the parties signing the same, to the Security Agent.
9. The Company agrees that upon opening any new Account, it shall carry out the procedure described in Paragraph 8 above with respect to the bank with which such new Account is held.
10. In case any such new Account is a fixed deposit account and the Company has been furnished a fixed deposit receipt, such receipt shall be duly discharged and immediately delivered to the Security Agent.
11. The Company hereby declares that this Letter shall be binding on each of the Company’s successors-in-interest and assigns.
12. Upon the expiry of the Security Period, the Security Agent and each Corporate Lender shall, at the cost of and upon a request from the Company, take such action as is necessary to release the lien on Accounts created under this Letter.
13. The Company declares that all necessary corporate formalities including board approval, statutory and government approvals have been adopted and/or complied with in connection with the execution of this instrument.
14. The Company hereby agrees that in the event of any conflict between the terms of this Letter and any procedures regarding the operation of any of the Accounts agreed between the Company and the bank with whom such account is held, this Letter shall prevail.
15. Any provision of this Letter which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability but that shall not invalidate the remaining provisions of this Letter or affect such provision in any other jurisdiction.
16. This Letter shall be governed by and construed and interpreted in accordance with the laws of the People’s Republic of Bangladesh.
Description of the Accounts
|No.||Name of the Bank||Account No.||Type of Account||Name of Account||Remarks|
Form of Notice of Letter of Lien
(On letterhead of Company)
To: [Account Bank]
Date: [ ]
1. We hereby give you notice of a Letter of Lien and Set Off dated _______________________ from ourselves in favour of [ ] (the “Security Agent“), ______________, ________________, ___________________, ___________________ and _____________________ (the “Letter of Lien“) creating a lien over our right, title and interest in and to account number [ ], account name [ ] (including any renewal or redesignation of such account ) and all monies standing to the credit of that account from time to time (the “Account“).
2. Please note that we have agreed with the Security Agent as agent for the Corporate Lenders and each Corporate Lender under the Letter of Lien that, amongst other things, upon notification to you from the Security Agent that an Event of Default has occurred:
a. our authority to make any transfer from the Account (save as instructed by the Security Agent) ceases;
b. we shall have no further right to withdraw or require that any moneys be released or transferred from the Account or otherwise to give any instructions in relation thereto; and
c. at all times thereafter you are hereby authorised and instructed by us to act solely on the written instructions of the Security Agent (including, but not limited to, in relation to the making of any transfer from the Account).
3. Please accept this notice by signing the enclosed acknowledgement and returning it to the Security Agent at [ ] marked for the attention of [ ].
for and on behalf of
Form of Acknowledgement of Letter of Lien
To: [Security Agent]
At the request of [ ] (the “Company“) in a notice of a letter of lien and set-off (the “Notice“) to us dated[ ], we agree to accept the terms of the Notice and deliver to you in accordance with the Notice this acknowledgement and we confirm and agree that:
(i) we have received the Notice together with a copy of the Letter of Lien referred to therein and acknowledge its form and content;
(ii) we will act in accordance with the terms of the Notice;
(iii) we have noted in the Notice the restrictions imposed upon the Company and the authority of the Security Agent in respect of the Account and will not act in such a way as to breach those restrictions or to ignore the authority of the Security Agent;
(iv) we have not previously received any other notice of assignment or letter of lien relating to the Account; and
(v) we waive all rights which we may have at any time to set-off any amounts owed to us at any time by the Company against any amounts standing to the credit of the Account for so long as the Letter of Lien remains in force.
Terms defined in the Notice have the same meanings when used herein, unless otherwise stated.
for and on behalf of
as Account Bank
IN WITNESS WHEREOF the Company signs and executes this Letter of Lien and Set Off on the day first written above.
The common seal of
was affixed hereto in the presence of
acting in accordance with the laws of
the People’s Republic of Bangladesh
under the authority of COMPANY 1
Limited pursuant to its board resolution
For: “The Lawyers & Jurists”
M.L.Hotel Tower Ltd,208,Shahid Syed Nazrul Islam Sarani,
Bijoy Nagar, Dhaka-1000.