Legal Opinion regarding documentation (Loan Agreement).

Dated: March 18, 2007

The Asstt. General Manager

Bank 1

Local Office

129 – 130, Motijheel C/A

Dhaka – 1000

Dear Sir,

Re:      Legal Opinion regarding documentation (Loan Agreement).

We refer to your letter No. __________________ dated 14.03.2007 on the above subject.

We have perused the sanction letter dated 05.03.2007 and the Draft Loan Agreement (“the Agreement”) to be executed between Bank 1 (“the Lender”) and Lanka Bangla Finance Limited (“the Borrower”).

Our comments on the Agreement are as follows:

Clause/Paragraph Comments
Recital In 3rd line of the recital, the date of the Sanction Letter is wrongly specified. Please delete “March 03, 2007” and replace it with “March 05, 2007”.
Clause 11 Please delete Clause 11 and replace it with the following:

“11. Securities

Prior to the disbursement of the Facility, the Borrower shall, as Collateral security of the payment when due of all principal, interest fees and other amounts now or hereafter payable by the Borrower under this Agreement and under the documents contemplated hereby, deliver to the Bank duly executed originals of the following documents, in the form and substance satisfactory to the Bank:

a)      Letter of Hypothecation by Way of Fixed Charge: A Letter of Hypothecation/Modification of Letter of Hypothecation over all lease assets and lease rentals, financed by the Lenders in favour of the Borrower, the list of which is attached herewith in the Schedule A, by way of a first priority fixed charge executed/to be executed by the Borrower in favour of the Lender and ____________, _____________, ___________ (“the Other Lenders”) on pari-pasu basis and registered with Registrar of Joint Stock Companies and Firms (RJSC) along with an irrevocable general power of attorney to sell the hypothecated assets .

b)      Letter of Hypothecation by Way of Floating Charge: A Letter of Hypothecation/Modification of Letter of Hypothecation by way of Floating Charge over all the fixed and floating assets of the Borrower (including but not limited to book debts, receivables, plant, machinery, equipment, work-in-progress, finished goods, stocks, stores etc. both present and future, belonging to and/or accrued from the Borrower) executed/to be executed by the Borrower in favour of the Lender and the Other Lenders on pari-pasu basis and registered with Registrar of Joint Stock Companies and Firms (RJSC) along with an irrevocable general power of attorney to sell the hypothecated assets .

c)      Security Sharing Agreement: A Pari-Passu Security Sharing Agreement/ Modification of an existing Pari-Passu Security Sharing Agreement to be executed among the Borrower, the Lender and the Other Lenders.

d)      Insurance: Insurance over the imported machinery/equipment covering the risk of fire, RSD, flood, cyclone, theft and burglary.

e)      Registration: The Borrower shall maintain in full force and effect all governmental filings, registrations, consents and approvals necessary or advisable in connection with this Agreement, the Security Documents and the other documents contemplated hereby, and shall make or obtain any additional governmental filings, registrations, consents and approvals that become necessary or advisable hereafter.”
Addition of Schedule A At the end of the Agreement please add a Schedule A, in which all the lease assets and lease rentals, financed by the Lenders in favour of the Borrower, should be listed.

Except the above, the Agreement appears to be in order.

If you have any further query, please do not hesitate to contact us.

Thanking you.

Yours faithfully,

_________________

Barrister-at-Law

The Lawyers & Jurists

M.L.Hotel Tower Ltd, 208, Shahid Syed Nazrul Islam Sarani,

Bijoy Nagar, Dhaka-1000.

www.lawyersnjurists.com


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