PLEDGE FORMS
Ch. 61] PLEDGE?FORMS 929
where a document purporting to mortgage the tools and equipments of a
company, as specified in the instrument, to secure repayment of the amount
of loan advanced by the creditor, with the stipulation that the said tools and
equipments shall be deemed to be under the constructive possession of
the creditor and that the same shall not be removed from the work-site of
the company, the document was held, chargeable as a ?pledge? made Art.
6(2) and not as a ?mortgage? ?Board of Revenue, Kerala v Hindusthan
Construction Co., AIR 1985 Ker 286; 1985 KLT 382: AIR 1986 Ker 142.
Where goods are pledged to the bank under cash-credit system but the
goods are allowed to be left in the possession of the pledgor, the goods
will be deemed to be under the constructive possession of the bank, the
borrower being considered as an agent of the bank and holding the goods,
in actual possession on or behalf of the principal?State Bank of India v
Quality Bread Factory, Batala, AIR 1983 P&H 244.
A document of pledge is chargeable with duty under Art.6(2), Sch.1 of
the Stamp Act.?Shri Harish Chandra v Punjab National Bank Ltd. AIR
1958 AB 864.
However, where there is regular mortgage or moveable property
accompanied with delivery of possession, duty is leviable as prescribed by
Art. 40 Sch. 1 of the Stamp Act?Ko Shway Aung v Strong Steel & Co., 21
Cal 241;Shivaram v Dhau, 4 Bom LR 577; Queen Empress v Debendra
Krishna Mitter, 27 Cal 587; 4 CWN 524.
FORMS
1
Agreement for pledge with authority to sell if pledge is not
redeemed within agreed period
MEMORANDUM that I (pledgor) of (address, etc.) authorise (Pledgee) of
(address, etc.) the Pledge?……… months after this date if not sooner
redeemed to sell by public auction or private contract the following articles
as fully described in the Schedule hereto, which I have this day deposited
with him to be held by him as security for the sum of Rs???..which he
has this day lent to me together with interest thereon from this date at the
rate of,?..per cent per annum until repayment.
If the said articles be sold as authorised the said Pledgee is out of the
proceeds of sale to pay all expenses and to retain the principal and interest
as aforesaid and to pay the surplus (If any) to me.
The said (Pledgee) is compowered by me to deliver the said articles to
any person producing to him the counterpart of this Memorandum of Pledge
now handed to me upon such person paying to him the said (Pledgee) the
principal interest and all expenses then due hereunder.
G : CDD (Vol. 7) ? 59930 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
THE SCHEDULE ABOVE REFERRED TO:
(Full description of the articles pledged)
[Signature of Pledgor]
RECEIPT
The ariticles described in the Schedule above referred to have been this
day deposited with me (pledgee) by (Pledgor) of (address, etc.) as security
for a loan of Rs??..upon the terms agreed to by him as testified by his
signature to these presents this day.
Dated, the……………. day of……….. 20……
[Signature of Pledgee]
2
Agreement for pledge of articles to secure the repayment
of loan with power of sale in default of payment
and other usual covenants for liability for
loss etc. of pledged goods
MEMORANDUM OF AN AGREEMENT made the???day of???BETWEEN
(PAWNER) of (Address, etc.) (hereinafter called ?the PLEDGOR?) of the ONE
PART AND (PAWNEE) of (Address, etc.) Pledgee (hereinafter called ?the
PLEDGEE?) of the OTHER PART.
WHEREBY IT IS AGREED as follows:
1. The pledgee has on??..lent the sum of Rs???(loan) to the
Pledgor (as the Pledgor hereby admits and acknowledges) and the Pledgor
has delivered to the Pledgee the following articles as fully described in the
Schedule written hereunder by way of pledge for securing the payment on
or before the??..day of???next of??
(1) the said principal amount of loan of Rs???
(2) interest thereon from the date of this memorandum at the rate
of??.per cent per annum;
(3) the expenses which may be incurred by the insuring the said
articles against loss or damage by fire;
(4) the sum of Rs???.per week for storing the said articles:
(5) all expenses which may be incurred by the Pledgor in relation to
the said articles or in maintaining his special property in the same.
2. In consideration of the said loan the Pledgor promises to pay the said
several items specified in sub-clauses (1) to (5) inclusive of clause 1 hereof
on the said???..day of??..
3. In the event of the said loan with interest as aforesaid not being repaid
by the said??..day of?..at aforesaid the pledgee may without givingCh. 61] PLEDGE?FORMS 931
notice to the Pledgor sell the said articles or any of them either by public
auction or private contract and in one lot or separately or in such manner
as he may think fit.
4. Out of the proceeds of sale of the said articles the Pledgee may retain
all expenses incurred by him in selling or attempting to sell the same and
also a sum sufficient to satisfy the items specified in sub-clauses (1) to (5)
inclusive of clause 1 hereof and also a sum sufficient to satisfy any other
loans which have been made by the pledgee to the pledgor and which are
then due and owing and any interest accrued due thereon and unpaid
whether such loans have been made upon the security of the said articles
or not and subject thereto the Pledgee shall pay the balance of the said
proceeds of sale to the pledgor.
5. In the event of the said articles being sold by auction as aforesaid the
pledgee shall be at liberty to bid for and become the purchaser of the same
and shall in such event be liable to account to the pledgor only for the sum
at which he purchased.
6. In the event of the said articles being lost destroyed or injured during
the continuance of this security or if the pledgee be liable to the Pledgor
in law or otherwise in respect of the said articles the value of the said articles
shall be entimated at a sum not greater than the amount of the said loan
together with??.per cent thereof and in no case shall the pledgee be liable
to the pledgor for any amount greater than the sum so estimated as
aforesaid.
(Or, The aggregate value of the said articles shall as between the
Pledgor and the Pledgee be deemed to be Rs??..and in case the Pledgor
shall become liable to the Pledgee by reason of the loss destruction or injury
of the said articles or any of them during the continuance of this security
his total liability shall not exceed the said sum of Rs??..
(Or The respective values of the said articles shall as between the
Pledgor and the Pledgee be deemed to be the following (description of
articles and agreed values) and in case the Pledgee shall become liable
to the Pledgor by reason of the loss destruction or injury of any one or more
of the said articles during the continuance of this security his liability shall
not exceed the agreed value of each of such articles respectively above
set forth)
7. The pledgee is hereby empowered to deliver the said articles to any
person producing the duplicate hereof upon the payment by such person
to the pledgee of the sums specified in sub-cluases (1) to (5) inclusive of
clause 1 hereof.
THE SCHEDULE ABOVE RETERRED TO:
(Full description of the articles pledged)
IN WITNESS etc.
[Signatures of Pledgor and Pledgee]932 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
3
Agreement to pledge movable properties to secure advance
THIS AGREEMENT made this ???..day of??.. 20?. BETWEEN (here-
inafter called ?the Borrowers? (which term shall include their heirs, execu-
tors, administrators and assigns) of the ONE PART and??.. Bank, a body
corporate constituted under the Act and having its Head Office at??.and
a Branch Office inter alia at??.(hereinafter called ?the Bank?) (which
expression shall unless excluded by or repugnant to the context be deemed
to include its successors and assigns) of the OTHER PART:
WHEREAS the Bank having at the request of the Borrowers opined or
agreed to open in the books of the Bank at???..branch in??..a Cash
Credit Account to the extent of Rs???(Rupees?????..) only in the
name of the Borrowers to remain in full force until closed by the Bank to
be secured by goods to be pledged with the Bank and upon the terms and
conditions hereinafter appearing.
IT IS HEREBY AGREED BY AND BETWEEN and the Bank and the Borrowers
as follows:
1 That the Borrowers will pledge and hypothecate the goods and employ
as fully described in the Schedule hereto from time to time belonging to or
coming into the possession or under the control of the Borrowers (here-
inafter referred to as ? the said Goods? whether delivered to the Bank as
aforesaid for the purpose of additional security for any sum already drawn
or for additional security for any sum or sums to be drawn against the cash
credit account.
2. The said goods which may from time to time have been delivered or
may be delivered to the Bank under this agreement or otherwise shall form
security for the payment by the Borrowers against the said each credit
account and for the payment of all debts and liabilities agreed hereunder,
which sum shall include the principal money, the interest thereon and the
amount of all other costs, charges and expenses which may be incurred,
sustained or paid by the bank or by its agents in connection with safe-
guarding the security created or to be created by the pledge of the said
goods against fire, burglary, riot and civil commotion risk paid on borne by
the Bank.
3. That the said goods as coming into the possession of the Borrowers
from time to time shall be delivered to the Bank or to its agents by way of
pledge and shall be stored or kept in godown or godown belonging to or
rented by the Bank or the Borrowers as may be approved by the Bank from
time to time and the Borrowers shall pay necessary rents for storage and
all other expenses incidental thereto.
4. The said goods stored in the godown or godowns shall continue toCh. 61] PLEDGE?FORMS 933
remain pledged with the Bank and the borrowers will keep the same and
its contents free from attachment. In case the godown or godowns where
the said goods are stored or kept shall have no direct or independent
access from any public road or if access thereto can be had only through
any other building or passage in the possession or control of the Borrowers
or of a third part, the Bank shall not be responsible for any loss or damage
whatsoever to the said goods stores in the godown or godowns or any
portion thereof due to or arising from any cause or causes or reason
whatsoever including theft, larceny, house-breaking, misappropriation,
negligence, conspiracy by any person or persons whomsoever including
the Bank?s employees and any such loss or damage shall be borne entirely
by the Borrowers.
5.That the amount due to the Bank for the time being shall immediately
become payable on demand against release of such godown or godowns
and there will be no obligation on the part of the Bank to deliver the said
goods lying in such godown or godowns to the Borrowers.
6. That the Borrowers shall not during the continuance of this agreement
pledge or otherwise charge or encumber, dispose of or deal with any of the
said goods for the time being offered as security nor shall do or permit any
act whereby such security shall be in any way prejudicially affected.
7. That the said goods stored in the said godown or godowns shall be
deemed to be in the posession of the Bank who have all the rights conferred
by law as a Pawnee with the absolute and exclusive power of possession
custody and control over the said goods including (inter alia) the following
powers;
(a) to affix to all premises in which the said goods shall be stored a
notice or notices for public knowledge showing bank interest in the
said goods:
(b) to appoint guards or watchmen at the cost of the Borrowers for
security of the said goods stored therein;
(c) to maintain custody and control of the said goods by putting its own
lock or padlocks to the godown doors by the Bank retaining the
key or keys under its custody;
(d) to issue delivery orders authorising removal of the said goods or
any part thereof from the said premises by the Borrowers for the
purpose of manufacture, sale, or supply thereof in the due course
of the business of the Borrowers subject to the conditions and
stipulations governing such removal.
8. That the Borrowers agree to bear the necessary costs and expenses
that may be incurred by the Bank to maintain godown-keepers and/or
chowkidars for the said godown/godowns and taking out appropriate
Insurance policy covering risks of burglary, fire and any other risks that are
necessary for the safety, security and preservation of the said goods.934 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
9. That the Bank shall have unfettered discretion though not bound to
do so, to appoint godown-keeper or chowkidars for the godown or godowns
charged or pledged or to take out fire insurance on the goods stored in such
godown or godowns and to debit all such expenses including premium of
such insurance in the account of the Borrowers. PROVIDED HOWEVER, that
where special type of insurance is considered necessary by the Bank to
cover any risk, loss or damage, fire, burglary, riot, civil commotion, and war
risks, such policy of insurance shall be taken out in the joint name of the
Bank and the Borowers covering the full extent of the value of the said goods
and from time to time the premium therefor shall be paid by the Borrowers.
In case it shall at any time be required to vary the amount of insurance
effected, unless it is fully covered by the Borrowers in respect of the limit
or margin against the cash credit account, the bank shall take out that
additional insurance and the benefit of such insurance/insurances and/or
right/power/privilege therein shall belong to the bank without prejudice to
any other rights, powers and privileges which the bank is entitled to by virtue
of this agreement and the bank shall not be accountable to the Borrowers
for any money which it may receive under such policy or policies.
10. That all sums received under such insurance policy as aforesaid shall
be applied in or towards the liquidation of the balance due to the bank for
the time being and in the event of there being a surplus as provided
hereinafter in clause No.9 the same shall be credited to Cash Credit A/c
or any other A/c of the Borrowers maintained by the Bank.
11. That the Borrowers shall make and furnish to the bank such
statements and returns of the cost and market value of the said goods and
a full description thereof and produce such evidence in support thereof as
the Bank may from time to time require and shall maintain with the Bank
a margin or??? per cent or such margin as may from time to time be fixed,
on the invoice/market value of the said goods whichever be lower or in
relation to any ceiling for the value of the said goods that may be fixed
by the Bank from time to time in its discretion. The stipulated margin shall
be maintained by the Borrowers either by the delivery of further security
to be approved by the Bank or by cash payment by the Borrowers
immediately on market value for the time being of the securities becoming
less than the aggregate of the balance due to the Bank, plus the amount
of the margin as calculated above.
12. That the Borrowers shall be responsible for the correctness of the
statements and returns furnished by them to the bank from time to time as
required in the foregoing clause and the Borrowers do hereby assure and
undertake that all the information regarding the quantity, quality etc and
other description of the goods pledged with the Bank as given in the said
statements/retuns are or would be correct and the bank has advanced and
agreed to advance money under the above account on such representation.Ch. 61] PLEDGE?FORMS 935
13. In case any of such statements, returns or representations are found
to contain any mistake ( of which fact the Bank shall be the sole judge) the
Bank shall be entitled to revoke this agreement and dispose of the said
goods, without any notice to the Borrowers.
14. The Bank shall be entitled to inspect the Borrower?s books or
documents for the purpose of verification of the quantity, quality and
valuation of or dealing with the securities, pledged by the Borrowers with
the Bank and the Borrowers do hereby declare and agree that for the
purpose of such verification of the statements, returns or representations,
furnished by the Borrowers the Bank shall be at liberty at any time in its
discretion to get the goods weighed, counted and/or appraised by any
authorised officer of the Bank or any other person duly appointed for the
purpose, at the expenses of the Borrowers and the Borrowers agreed to
accept as conclusive proof of the result of such verification as certified by
the said officer or agents of the Bank.
15. If upon such verification the goods pledged are found to be inferior
in quality or value that are given or shown by the Borrowers in their
statements or returns, the Borrower undertake to make such deficiency and
reimburse the Bank any of loss, damage or expense incurred by the Bank
on that account.
16. That if the Borrowers fail or become unable to repay to the Bank on
demand the balance then due to the Bank or in the event of the Borrowers
become or being adjudicated bankrupt or insolvent or executing any Deed
of Arrangement or Compromise with creditor or in the event of any execution
being left or enforced upon or against any of the properties of the Borrowers
where the said property shall or shall not be subject to the security or in
the event of any person, firm or company taking steps towards applying for
or obtaining an order for the appointment of a Receiver of the Borrowers?
property or any part thereof or if any person, firm or company shall apply
for or obtain an order for the winding up of the Borrowers or if any such order
is made or any steps to be taken by any person, firm or company, it shall
be lawful for the bank forthwith or at any time thereafter and/or without any
notice to the Borrowers (without prejudice to the Bank?s rights of suit against
the Borrowers) either by public auction or private contract absolutely to sell
or otherwise dispose of all or any of the said goods either together with or
in lots or separately and to apply the net proceeds of such sale in or towards
the liquidation of balance then due to the Bank.
17. That the Borrowers shall at all times indemnify and keep indemnified
the bank against all suits, proceedings, costs, charges, claims and
demands whatsoever that may at any time arise or be brought or made
by any person against the bank in respect of any thing and any matter
lawfully done or cause by the Bank in connection with the said goods and
in pursuance of the rights and powers of the Bank under these presents.936 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
18. That during the continuance of the agreement the Borrowers shall
be responsible for all losses, damages, depreciations or deteroriations
resulting from the said goods or any part thereof having been acquired or
requisitioned by the Government under any act or statute and/or as a result
of the civil disturbances, uprisings, insurrection and occupation by the
military or by a foreign Government. The Bank shall in no way be responsible
for loss or damage to the said goods or any part thereof in the circum-
stances mentioned above nor shall it be its responsibility to make any
application or to take any legal proceedings or to do anything else to get
reimbursement from the authorities concerned for the value of the goods
so acquired or requisitioned or for compensation for any loss or damage
to the said goods, for which the entire responsibility shall vest in the
Borrowers.
19. That the Bank shall be entitled without prior reference to and approval
of the Borrowers to adjust, settle, compromise or refer to arbitration any
dispute with the Insurance Company or Companies arising under or in
connection with failure or failures of insurance and such adjustment,
settlement, compromise or award made on such reference shall be binding
on the Borrowers and the Borrowers shall neither raise any objection nor
be entitled to dispute the liability incurred or the sums expected or received
by the Bank upon such settlement, promise or award or that remaining due
after proper crediting of its adjustment in the said sums so received upon
adjustment, settlement, compromise or award.
20. That if the next sum realised by such adjustment, settlement, promise
or award or by sale of the said goods on happening of any of the incidents
as enumerated in paragraph 18 hereinabove, be insufficient to cover the
balance then due to the Bank, the Bank shall be at liberty to apply any other
monies in the hands of the Bank standing to the credit of or belonging to
the Borrowers towards payment of the balance for the time being to the Bank
and in the event there not being any such monies or moneys as aforesaid
in the hands of the Bank and in the event of such money being still
insufficient for the discharge in full of such balance, then and in such event
the Borrowers promise and agree forthwith on production to them of an
account to be prepared and signed by the officer of the Bank or any other
person duly authorised for the purpose, to pay any further balance which
may appear to be due from the Borrowers thereon.
21. That in the event of there being surplus available of the net proceeds
of such sale after payment in full of the balance due to the Bank in the cash
credit account it shall be lawful for the bank to retain and apply the said
surplus money together with any other money or moneys belonging to the
Borrowers for the time being in the hands of the Bank in or under whatever
account as far as the same shall extend against in or towards payment or
liquidation of any or all other money which shall be or may become due from
the Borrowers to the bank by way of Loans, Discounted Bills, Letters ofCh. 61] PLEDGE?FORMS 937
Credit, Guarantees, Charges or of any other debt or liability including Bills,
Notes, Credits and other obligations current though not then due or payable
or other demands legal or equitable which the Bank may have against the
Borrowers or which the law would in any case admit and whether the
Borrowers shall become or be adjudicated bankrupt or insolvent or be in
liquidation or otherwise and interest thereon from the date on which any
or all advance or advances in respect thereof shall have been made at the
rate or respective rates at which the same shall have been so advanced.
22. The interest at the rate of???.. over RBI rate with a minimum
of??% per annum with quarterly rests shall be calculated and charged
on the daily balance in the Bank?s favour due upon the said Cash Credit
Loan Account until the same is fully liquidated and shall be paid by the
Borrowers as and when demanded by the Bank.
PROVIDED that the liability to pay interest on the balance of the Cash
Credit Account shall not cease notwithstanding?
(a) that the said goods have been destroyed or damaged by fire,
burglary, riot or civil commotion and that in consequence of such
destruction or damage either the Borrowers or the Bank have
become entitled to receive payment from any insurance company
or companies in respect of such loss or damage, or
(b) that the said good or any part thereof has or have been acquired
or requisitioned by the Government under any order or statute.
23. That the Bank shall always have the rights to stop making any further
advances in the account at any time without any previous notice and without
assigning any reason thereof even though the account is not drawn to the
full extent of the limit provided for by this agreement, AND on demand by
the Bank the Borrowers shall pay to the Bank the balance then due to the
Bank on the said Cash Credit Account together with all interests, charges
and expenses as being accrued or become due and payable by the
Borrowers to the Bank.
24. That in the event of the accommodation granted shall not be availed
of to the minimum extent of Rs????.(Rupees??..) interest shall be
charged to and become payable by the said Borrowers at the rate and in
the manner aforesaid on the minimum sum of Rs??during the continu-
ance of the said Cash Credit Account whether the same is in debit or not.
25. That the Borrowers hereby agree and undertake to comply with all
the provisions of the various control, licensing and procurement orders
already promulgated or that may be promulgated hereinafter by the
Government and shall see that the Bank?s interests are not in any way
affected or prejudiced by violating or infringing the provisions thereof.
26. That the Borrowers agree to accept as conclusive proof of the
correctness of any sum claimed to be due from them to the Bank under this
agreement a statement of account made out from the books of the bank938 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
and signed by the manager or other duly authorised officer of the bank
without the production of any voucher, document or paper whatsoever.
27. That the Borrowers hereby declare that all the goods which may be
pledged with the bank from time to time shall be absolute property of the
Borrowers and at their sole disposal free from any prior charge or
encumbrance and that the borrowers shall not have knowingly suffered or
being party or privy to anything whereby they are in any way prevented from
dealing with the goods in manner aforesaid.
28. That this agreement is to operate as security for the balance from
time to time due to the Bank and also for the ultimate balance to become
due on the said Cash Credit Account and the said account is not to be
considered to be closed for the purpose of this security and the security
is not to be considered exhausted by reason of the said Cash Credit Account
being brought to credit at any time or from time to time or of its being drawn
upon to the full extent of the said sum of Rs??.
29. That the Borrowers shall be entitled to and make half-yearly charges
on any account to cover incidental expenses in connection therewith and
the amount of such charge shall be determined by the manager of the bank
in his absolute discretion and the same shall depend upon the operation
and turnover of the account.
30. That this agreement is not to prejudice the right of remedies of the
bank against the Borrowers irrespective and independent of the agreement
in respect of any other advance made or to be made by the Bank to the
Borrowers.
31.That the security hereby given shall not be prejudiced by any
collateral or other security including any personal guarantee for any money
hereby secured or by any release, exchange or variation of any such
security.
32. That any demand hereunder may effectually be made by notice to
the Borrowers by an officer of the Bank either served personally on the
Borrower or left or sent by post to the Borrowers at the Borrower?s usual
or last known address.
SCHEDULE OF SECURITIES ABOVE REFERRED TO:
IN WITNESS WHEREOF, etc.
4
Pledge of goods against Bills of Lading to secure
advances receive from Bank
To
?????Bank
In consideration of your advancing to us the sum of Rs???..orCh. 61] PLEDGE?FORMS 939
otherwise making or continuing advances or giving us credit or banking
facilities we have this day of ???pledged to you the goods represented
by the documents today delivered to you and mentioned in the Schedule
hereto the validity of which documents we guarantee. It is understood and
agreed that the terms upon which the said advance(s) credit and facilities
have been or will be made or given are as follows:
1. The goods and the proceeds of all insurances thereon and all sales
thereof and all our rights as unpaid sellers thereof shall be a continuing
security for the repayment to you on demand of all monies and liabilities
now or hereinafter due from us to you upon any account or in any manner
whatever.
2. The goods are readily saleable and worth at today?s spot prices the
amount stated in the schedule. They are free from any lien in your hands
except for any unpaid freight lading charges and warehouse rent deducted
in the schedule.
3. The goods are insured as stated in the schedule and shall be kept
insured against such risks and in such amounts as you may from time to
time require.
4. If the current market value of the goods shall at any time be less
than??per cent in excess of the said advance or the amount thereof for
the time being outstanding we will without notice from you forthwith provide
you with sufficient cash or additional security to your satisfaction to restore
that margin of value and in the event of our failing to pay or provide for the
payment of any money or liabilities due to you from us we hereby authorise
and empower you to sell the goods or any part thereof or any additional
security without notice to us.
5. All the terms hereof shall apply to any such additional security as
though it had been originally included herein.
6. Bills of lading may be accepted in full sets or as presented and your
right to repayment shall not be prejudiced or affected by any invalidity
insufficiency irregularity or misdescription of or in the documents or gods
or any insurance thereon.
SCHEDULE
[Signatures of Pledgors]
5
Pledge Agreement for extension of Credit Facilities
THIS PLEDGE AGREEMENT, dated as of?…… 20?.., is by and between940 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
Badenoff Industries Ltd. a limited liability company (the ?Pledgor?), and
Frostbite Falls Bank & Trust (the ?Secured Party?).
RECITALS
1. Pledgor has requested extensions of credit from the Secured Party
pursuant to the terms of that certain Loan Agreement dated as of even date
herewith (the Loan Agreement as it may be amended, modified, supple-
mented, increased or restated from time to time being referred to herein
as the ?Loan Agreement?) between Pledgor and the Secured Party.
2. As a condition to extensions of credit to the Pledgor, the Secured Party
requires that Pledgor enter into this Agreement.
3. Pledgor has determined that the execution, delivery and performance
of this Agreement is in Pledgor?s best business and pecuniary interest.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto,
it is agreed as follows :
1. Definitions.?If used herein, the following terms shall have the
meanings set forth in this Section:
?Collateral? shall mean all property in which a security interest is
granted hereunder.
?Loan Agreement? shall have the meaning provided in the recitals
hereto.
?Obligations? shall mean all loans (including the Loan(s)), ad-
vances, debts, liabilities, obligations, covenants and duties owing
by the Pledgor to the Secured Party of any kind or nature, present
or future, whether or not evidenced by any note, guaranty or other
instrument, whether arising under the Loan Agreement, the other
Loan Documents or under any other agreement or by operation
of law, whether or not for the payment of money, whether arising
by reason of an extension of credit, opening, guaranteeing or
confirming of a letter of credit, guarantee, indemnification or in any
other manner, whether joint, several or joint and several, direct or
indirect (including those acquired by assignment or purchases),
absolute or contingent, due or to become due, and however
acquired. The term includes, but is not limited to, all principal,
interest, fees, charges, expenses, reasonable attorneys? fees, and
any other sum chargeable to the Pledgor under the Loan Agree-
ment or any other Loan Document.
?Pledged Notes? shall have the meaning provided in Clause 2.
?Pledged Shares? shall have the meaning provided in Clause 2.
?Pledgor? shall have the meaning set forth in the preamble hereto.Ch. 61] PLEDGE?FORMS 941
?Proceeds? shall mean whatever is received upon the sale,
exchange, collection or other disposition of Collateral or Proceeds.
?Secured Party? shall have the meaning set forth in the preamble
hereto.
Other terms defined herein shall have the meanings ascribed to them
herein. All capitalised terms used herein and not specifically defined herein
shall have the meanings ascribed to them in the Loan Agreement.
2. Pledge.?To secure payment of the Obligations, Pledgor hereby
pledges to the Secured Party and grants to the Secured Party a security
interest in the following described property:
The promissory notes, bonds, debentures, and other instruments
listed in Exhibit ?A? hereto (herein collectively called the ?Pledged
Notes?) and all cash, securities, interest, principal and other
property at any time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Pledged Notes
together with all security therefor and guaranties thereof;
All other property hereafter delivered to the Secured Party in
substitution for or in addition to any of the foregoing, all certificates
and instruments representing or evidencing such other property
and all cash, securities, interest, dividends, rights and other
property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all
thereof, and all Proceeds of each of the foregoing.
3. Representations and Warranties.?Pledgor represents and war-
rants that:
(1) The Pledged Shares have been duly authorised and validly issued
and are fully paid and non-assessable. The outstanding principal
balance of each Pledged Note is accurately stated on Exhibit ?A?
attached hereto. All documentary, stamp or other taxes or fees
owing in connection with the issuance, transfer and/or pledge of
the Collateral have been paid and will hereafter be paid by Pledgor
as such become due and payable;
(2) Pledgor is, or at the time of any future delivery, pledge, assignment
or transfer will be, the legal and beneficial owner of all of the
Collateral with full right to deliver, pledge, assign and transfer the
Collateral to the Secured Party as Collateral hereunder free of any
pledge, mortgage, hypothecation, lien, charge, encumbrance or
security interest in such shares or the proceeds thereof except for
that granted hereunder;
(3) Upon delivery of the Collateral to the Secured Party or upon other
perfection of the Secured Party?s security interest in the Collateral
pursuant to applicable law, this Agreement shall create a valid first942 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
lien upon and a perfected security interest in the Collateral and the
proceeds thereof, subject to no prior security interest, lien, charge
or encumbrance or agreement purporting to grant a security
interest in the Collateral or any part thereof.
4. Covenants.?Pledgor hereby agrees as follows:
(1) Except as otherwise provided in this Agreement, Pledgor shall accept
the following as the Secured Party?s agent, in trust for the Secured Party,
and shall deliver such forthwith (but in no event later than 21 days after
Pledgor acquires any stock or trust certificates or other instrument repre-
senting or evidencing any of the Collateral) to the Secured Party in the exact
form received with, as applicable, such party?s endorsement when neces-
sary, or appropriate stock powers duly executed in blank, to be held by the
Secured Party, subject to the terms hereof, as part of the Collateral:
(a) Stock and trust certificates representing the Collateral or notes,
bonds, debentures, or other instruments constituting Collateral;
(b) Options, warrants, or rights, whether as an addition to or in
substitution or in exchange for any of the Collateral, or otherwise;
(c) Principal and interest payments, dividends or distributions relating
to the Collateral payable or paid in property, including securities
issued by a person other than the issuer of any of the Collateral;
and
(d) Principal and interest payments, dividends or distributions relating
to the Collateral payable or paid in cash, except as provided in sub-
sections 4(b) or (k) below.
Pending such delivery, all of the Collateral not delivered to the Secured
Party on the date hereof shall be held in trust for the Secured Party, separate
and distinct from any other property of Pledgor and free of all liens and
claims whatsoever other than the security interest of the Secured Party
created hereunder.
(2) The Secured Party or its nominee, regardless of whether the Pledged
Shares shall have been registered in the name of the Secured Party or its
nominee or whether a Default or Event of Default has occurred and is
continuing, shall have the right to exercise all rights pertaining to the
Pledged Shares as if the Secured Party was the absolute owner thereof,
including, without limitation, the right to receive all cash dividends payable
with respect to the Pledge Shares and the right to exercise all conversion,
exchange, subscription or other rights, privileges or options, pertaining to
any of the Pledged Shares, and, in connection therewith, to deliver any of
the Pledged Shares to any committee, depository, transfer agent, registrar
or other designated agency upon such terms and conditions as it may
determine, all without liability except to account for property actually
received by it; but the Secured Party shall not have any duty to exerciseCh. 61] PLEDGE?FORMS 943
any of the aforesaid rights, privileges or options and shall not be responsible
for any failure to do so or delay in so doing.
(3) Upon the occurrence of an Event of Default, the Secured Party may,
after giving the prior written notice, if any, required by Clause 4(a) hereof,
but without any other demand of performance or other demand or
advertisement to or upon Pledgor or any other person (all of which are, to
the extent permitted by law, hereby expressly waived), forthwith realize
upon the Collateral or any part thereof, or interest therein, in one or more
parcels at public or private sale or sales, at any exchange, broker?s board
or at any of the Secured Party?s offices or elsewhere, at such prices and
on such terms as the Secured Party may deem best, for cash or on credit,
or for future delivery without assumption of any credit risk, with the right
to the Secured Party or any purchaser to purchase upon any such sale the
whole or any part of the Collateral free of any right or equity of redemption
in Pledgor, which right or equity is hereby expressly waived and released.
Any disposition made in accordance with the provisions of this paragraph
shall be deemed to have been commercially reasonable. Pledgor agrees
that if any Collateral is sold at any public or private sale, the Secured Party
may elect to sell only to a buyer who will give further assurances,
satisfactory in form and substance to the Secured Party, and a sale subject
to such condition shall be deemed commercially reasonable.
If at any time when the Secured Party shall determine to exercise its right
to sell all or any part of the Collateral pursuant to this Clause 4(3), the
Secured Party is hereby authorized to comply with any limitation or
restriction in connection with such sale as they may be advised by counsel
is necessary in order to avoid any violation of applicable law (including,
without limitation, compliance with such procedures as may restrict the
number of prospective bidders and purchasers and/or further restrict such
prospective bidders or purchasers to persons who will represent and agree
that they are purchasing for their own account for investment and not with
a view to the distribution or resale of such Collateral), or in order to obtain
any required approval of the sale or of the purchaser by any governmental
regulatory authority or official, and Pledgor further agrees that such
compliance shall not result in such sale being considered or deemed not
to have been made in a commercially reasonable manner, nor shall the
Secured Party be liable or accountable to Pledgor for any discount allowed
by reason of the fact that such Collateral is sold in compliance with any such
limitation or restriction.
(4) In addition to the foregoing, whenever an Event of Default shall exist
hereunder, the Secured Party may, at its option, after giving Pledgor the
prior written notice, if any, required by Section 4(a), hereof, but without any
other demand, exercise any of the rights and remedies of a secured party
as may be available under any law for the time being in force.944 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
(5) Pledgor hereby covenants that, until all of the Obligations have been
satisfied in full, Pledger will not, without the prior written consent of the
Secured Party:
(i) Sell, convey, or otherwise dispose of any of Pledgor?s interest in
the Collateral 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
Collateral or the proceeds thereof, other than that created hereby;
(ii) Consent to or approve the issuance of any additional shares of any
class of capital stock of any corporations that have issued any of
the Collateral or of any of such corporations? securities convertible
voluntarily by the holder thereof or automatically upon the occur-
rence or non-occurrence of any event or condition into, or ex-
changeable for, any such shares; or any warrants, options, rights,
or other commitments entitling any person to purchase or other-
wise acquire any such shares; or
(iii) Settle, compromise, release, discharge or discount any obligation
evidenced by any Pledged Note or any other rights or interests
(including, without limitation, guarantees or security interests) that
Pledgor may have by law or agreement with respect to such
Pledged Note or exercise any conversion or exchange privilege
permitted by the terms of any such Pledged Note.
(6) Pledgor warrants and will, at Pledgor?s own expense, defend the
Secured Party?s right, title, special property and security interest in and to
the Collateral against the claims of any person, firm, corporation or other
entity.
(7) Beyond the exercise of reasonable care to assure the safe custody
of the Collateral while held hereunder, the Secured Party shall not have any
duty or liability to preserve rights pertaining thereto and shall be relieved
of all responsibility for the Collateral upon surrendering it or tendering
surrender of it to Pledgor.
(8) Pledgor, by entering into this Agreement and negotiating the terms
hereof, hereby waives any rights Pledgor may have to demand any notices
other than those provided for herein and any right to a hearing as a condition
precedent to the Secured Party?s exercise of its rights hereunder.
(9) If any notification of intended disposition of any of the Collateral or
of the Secured Party?s exercise of any other right or remedy is required by
law, such notification shall be deemed reasonably and properly given if
given in accordance with Section 9 hereof at least ten (10) days before such
disposition or exercise.
(10) No delay or failure by the Secured Party or any other Secured Party
in the exercise of any right or remedy shall constitute a waiver thereof, andCh. 61] PLEDGE?FORMS 945
no single or partial exercise by the Secured Party of any right or remedy
shall preclude other or further exercise thereof or the exercise of any other
right or remedy.
(11) Except as otherwise provided in this sub-section, Pledgor shall
continue to collect, at its own expense, all amounts due or to become due
to Pledgor under the Pledged Notes. In connection with such collections,
Pledgor may take (and, at the Secured Party?s direction, shall take) such
action as Pledgor or the Secured Party may deem necessary or advisable
to enforce collection of the Pledged Notes; provided, however, that the
Secured Party shall have the right, at any time to notify the obligor on any
Pledged Note of the assignment of such Pledged Note to the Secured Party
and to direct such obligor to make payment of all amounts due or to become
due to Pledgor thereunder directly to the Secured Party and, upon such
notification and at the expense of Pledgor, to enforce collection of any such
Pledged Note or other Collateral, and to adjust, settle or compromise the
amount or payment thereof in the same manner and to the same extent as
Pledgor might have done, but unless and until the Secured Party does so
or
gjves Pledgor other instructions, Pledgor shall make aII collections for
the Secured Party. Pledgor shall immediately deliver to the Secured Party
all full and partial payments on any Pledged Note received by Pledgor in
their original form, except for endorsements where necessary, to be held
as cash collateral or applied to the payment of the Obligations in accor-
dance with Clause 5. Until such payments are so delivered to the Secured
Party, such payments shall be held in trust by Pledgor for and as the
Secured Party?s property, and shall not be commingled with any funds of
Pledgor.
(11) Pledgor agrees to take any action which the Secured Party may
reasonably request in order to obtain and enjoy the full rights and benefits
granted to the Secured Party by this Agreement.
5. Application of proceeds.?At the Secured Party?s election, the
Secured Party may hold all Proceeds of Collateral received by the Secured
Party as cash collateral or may apply such Proceeds to the payment of the
Obligations in such order as the Secured Party may elect.
6. Termination.?Upon payment or prepayment of all Obligations after
the termination of any Commitment under the Loan Agreement, this
Agreement shall be terminated. Upon such termination, the Secured Party
shall deliver to Pledgor the original of all stock certificates, forms of stock
certificate assignments, notes and any other Collateral received by it
pursuant to the terms hereof.
7. Power-of-Attorney.?Pledgor hereby irrevocably appoints the Se-
cured Party, or any other person whom the Secured Party may from time
to time designate as Pledgor?s attorney-in-fact, with full authority in the
place and stead of Pledgor and in the name of Pledgor or otherwise, from
G : CDD (Vol. 7) ? 60946 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
and after the occurrence and continuance of an Event of Default, to take
any action and to execute any instrument that the Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement,
including without limitation, to assign, pledge, convey or otherwise transfer
title in or dispose of any of the Collateral to any third person after the
occurrence of an Event of Default and obtain any regulatory approvals in
connection therewith. Pledgor ratifies and approves all acts of the attorney
taken within the scope of the authority granted. Neither the Secured Party
nor the attorney will be liable for any acts of commission or omission or for
any error in judgment or mistake of fact or law, except that nothing in this
sentence shall relieve or discharge any such person from liability for its
gross negligence or wilful misconduct. This power, being coupled with an
interest, is irrevocable so long as any Obligation remains unpaid.
8. Costs and expenses.?Pledgor hereby agrees to reimburse the
Secured Party, on demand, for all reasonable and necessary costs and
expenses incurred by the Secured Party in connection with the enforcement
of this Agreement (including costs and expenses incurred by any sub-agent
employed by the Secured Party) and agrees to indemnify and hold harmless
the Secured Party and/or any such sub-agent from and against any and
all liability incurred by the Secured Party (or such sub-agent) hereunder or
in connection herewith, unless such liability shall be due to wilful miscon-
duct or gross negligence on the part of such person.
9. Notices.?All communications and notices hereunder shall be given
in accordance with the notice provisions of the Loan Agreement.
10. Binding Agreement; Assignment.?This Agreement, and the
terms, covenants and conditions hereof, shall be binding upon and inure
to the benefit of the parties hereto, and their respective successors and
assigns, except Pledgor shall not be permitted to assign this Agreement
or any interest herein or in the Collateral, or any part thereof, or otherwise
grant any option with respect to the Collateral, or any part thereof.
11. Miscellaneous provisions.?Neither this Agreement nor any
provision hereof may be amended, modified, waived, discharged or
terminated nor may any of the Collateral be released or the pledge or the
security interest created hereby extended, except by an instrument in
writing duly signed by or on behalf of the Secured Party. The section
headings used herein are for convenience of reference only and shall not
define or limit the provisions of this Agreement. The recitals hereto are
incorporated herein by reference.
12. Governing Law.?The laws of India shall govern this Agreement,
without giving effect to any choice or conflict of law provision or rule that
would cause the application of laws of any jurisdiction other than India.
Wherever possible each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if anyCh. 61] PLEDGE?FORMS 947
provision of this Agreement shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement
on the day and the year first abovewritten.
SIGNED SEALED AND DELIVERED by
the parties at????. In the pres-
ence of:
WITNESSES :
1.
2.
6
Pledge Agreement offering securities and other properties of
the Borrower to secure repayment of the Loan
against Promissory Note
THIS PLEDGE AGREEMENT is entered into this??.. day of???, 20?..
By and Between AVANTGO CORPORATION, a Company incorporated under
the Companies Act, 1956 and having its Registered Office at??????
(the ?Company?) and DAVID B COOPER, JR., resident of???????. (the
?Borrower?).
Section 1
In order to secure payment of the promissory note dated?????.,
20?? (the ?Note?) payable to the Company, at its principal offices in the
principal amount of Rupees Two Lakhs Forty-Nine Thousand Two Hundred
(Rs.2,49,200.00), which Note the Borrower delivered in connection with a
loan extended to the Borrower by the Company, the Borrower hereby grants
the Company a security interest in, and assigns, transfers and pledges to
the Company, the following securities and other property:
(a) The stock certificate evidencing Two Lakhs Eight Thousand (Rs.
2,08,000) shares of the Company?s Common Stock (the ?Common
Stock?) delivered to and deposited with the Company as collateral
for the Note; and
(b) Any and all new, additional or different securities or other property
subsequently distributed with respect to the shares identified in
sub-section (a) above that are to be delivered to and deposited with
the Company pursuant to the requirements of Section 4 of this
Agreement; and948 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
(c) Any and all other property and money that is delivered to or comes
into the possession of the Company pursuant to the terms and
provisions of this Agreement; and
(d) The proceeds of any sale, exchange or disposition of the property
and securities described in sub-section (a), (b) or (c) above.
All securities, property and money to be assigned to, transferred to and
pledged with the Company shall be herein referred to as the ?Collateral?
and, in the case of the securities, shall be accompanied by one or more
stock power assignments properly endorsed by the Borrower. The Com-
pany shall hold the Collateral in accordance with the terms and provisions
of this Agreement.
Section 2?Warranties
The Borrower hereby warrants that the Borrower is the owner of the
Collateral and has the right to pledge the Collateral and that the Collateral
is free from all liens, advance claims and other security interests (other than
those created hereby).
Section 3?Rights and Powers
The Company may, without obligation to do so, exercise one or more
of the following rights and powers with respect to the Collateral:
(a) Accept in its discretion, but subject to the applicable limitations of
Section 9, other property of the Borrower in exchange for all or part
of the Collateral and release Collateral to the Borrower to the extent
necessary to effect such exchange, and in such event the money,
property or securities received in the exchange shall be held by
the Company as substitute security for the Note and all other
indebtedness secured hereunder;
(b) Perform such acts as are necessary to preserve and protect the
Collateral and the rights, powers and remedies granted with
respect to such Collateral by this Agreement; and
(c) Transfer record ownership of the Collateral to the Company or its
nominee add receive, endorse and give receipt for, or collect by
legal proceedings or otherwise, dividends or other distributions
made or paid with respect to the Collateral, but only if there exists
at the time an outstanding Event of Default under Section 10 of
this Agreement.
(d) Any action by the Company pursuant to the provisions of this
Section 3 may be taken without notice to the Borrower. Expenses
reasonably incurred in connection with such action shall be
payable by the Borrower and form part of the indebtedness
secured hereunder, as provided in Section 12.
(e) So long as there exists no Event of Default under Section 10 ofCh. 61] PLEDGE?FORMS 949
this Agreement, the Borrower may exercise all shareholder-voting
rights and be entitled to receive any and all regular cash dividends
paid on the Collateral. Accordingly, until such time as an Event of
Default occurs under this Agreement, all proxy statements and
other shareholder materials pertaining to the Collateral shall be
delivered to the Borrower at the address indicated below.
(f) Any cash sums that the Company may receive in the exercise of
its rights and powers under this Section 3 shall be applied to the
payment of the Note and any other indebtedness secured here-
under, in such order of application as the Company deems
appropriate. Any remaining cash shall be paid over to the Borrower.
Section 4?Duty to Deliver
Any new, additional or different securities that may now or hereafter
become distributable with respect to the Collateral by reason of (i) any stock
dividend, stock split or reclassification of the capital stock of the Company
or (ii) any merger, consolidation or other reorganization affecting the capital
structure of the Company shall, upon receipt by the Borrower, be promptly
delivered to and deposited with the Company as part of the Collateral
hereunder. Such securities shall be accompanied by one or more property
endorsed stock power assignments.
Section 5?Care of Collateral
(1) The Company shall exercise reasonable care in the custody and
preservation of the Collateral but shall have no obligation to initiate any
action with respect to, or otherwise inform the Borrower of, any conversion,
call, exchange right, preemptive right, subscription right, purchase offer or
other right or privilege relating to or affecting the Collateral; provided,
however, that the Company will notify the Borrower of any such rights of
the Borrower to protect against adverse claims or to protect the Collateral
against the possibility of a decline in market value. The Company shall not
be obligated to take any action with respect to the Collateral requested by
the Borrower unless the request is made in writing and the Company
determines that the requested action will not unreasonably jeopardize the
value of the Collateral as security for the Note and other indebtedness
secured hereunder.
(2) The Company may at any time release and deliver all or part of the
Collateral to the Borrower, and the receipt thereof by the Borrower shall
constitute a complete and full acquittance for the Collateral so released and
delivered. The Company shall accordingly be discharged from any further
liability or responsibility for the Collateral, and the released Collateral shall
no longer be subject to the provisions of this Agreement. However, any and
all releases of the Collateral shall be effected in compliance with the
applicable limitations of Section 9(a) and (c).950 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
Section 6?Payment of Taxes and Other Charges
The Borrower shall pay, prior to the delinquency date, all taxes, liens,
assessments and other charges against the Collateral, and in the event of
the Borrower?s failure to do so, the Company may at its election pay any
or all of such taxes and charges without contesting the validity or legality
thereof. The payments so made shall become part of the indebtedness
secured hereunder and, until paid, shall bear interest at the minimum per
annum rate, compounded annually, required to avoid the imputation of
interest income to the Company and compensation income to the Borrower.
Section 7?Covenants of Borrower
Borrower will not (a) sell, assign, convey, lease or otherwise transfer or
permit the transfer of the Collateral, or any interest therein; or (b) create,
permit or suffer to exist any mortgage, pledge, hypothecation, assignment,
security interest, lien charge or encumbrance or preference, priority or other
security agreement or arrangement of any kind or nature whatsoever, in
the Collateral, or any interest thereto.
Section 8?Transfer of Collateral
In connection with the transfer or assignment of the Note (whether by
negotiation, discount or otherwise), the Company may transfer all or any
part of the Collateral, and the transferee shall thereupon succeed to all the
rights, powers and remedies granted by the Company hereunder with
respect to the Collateral so transferred. Upon such transfer, the Company
shall be fully discharged from all liability and responsibility for the trans-
ferred Collateral.
Section 9?Release of Collateral
Provided (i) all indebtedness secured hereunder (other than payments
not yet due and payable under the Note) shall at the time have been paid
in full or cancelled and (ii) there does not otherwise exist any Event of
Default under Section 10, the pledged shares of Common Stock, together
with any additional Collateral that may hereafter be pledged and deposited
hereunder, shall be released from pledge and returned to the Borrower in
accordance with the following provisions:
(a) Upon payment or prepayment of principal under the Note, together
with payment of all accrued interest to date, one or more shares
of Common Stock held as Collateral hereunder shall (subject to
the limitation of sub-section (d) below) be released to the Borrower
within three days after such payment or prepayment. The number
of shares to be so released shall be equal to the number obtained
by multiplying (i) the total number of shares of Common Stock held
under this Agreement at the time of the payment or prepayment
by (ii) a fraction, the numerator of which shall be the amount of the
principal paid or prepaid and the denominator of which shall beCh. 61] PLEDGE?FORMS 951
the unpaid principal balance of the Note immediately prior to such
payment or prepayment. In no event, however, shall any fractional
shares be released.
(b) One or more shares of Common Stock held as Collateral hereun-
der shall (subject to the limitation of sub-section (d) below) be
released to a stockbroker designated in writing by the Borrower
and acceptable to the Company for the sole purpose of effecting
an immediate sale of the released shares, provided that such
stockbroker agrees to forward any proceeds (up to the balance of
principal and interest due under the Note) directly to the Company
to be used to satisfy the Note.
(c) Any additional Collateral that may hereafter be pledged and
deposited with the Company (pursuant to the requirements of
Section 4) with respect to the shares of Common Stock pledged
hereunder shall be released at the same time the particular shares
of Common Stock to which the additional Collateral relates are to
be released in accordance with the applicable provisions of sub-
section (a) or (b) above. Under no circumstances, however, shall
any shares of Common Stock or any other Collateral be released
if previously applied to the payment of any indebtedness secured
hereunder.
(d) In no event shall any shares of Common Stock be released
pursuant to the provisions of sub-sections (a), (b) and (c) above
if, and to the extent, the fair market value of the Common Stock
and all other Collateral that would otherwise remain in pledge
hereunder after such release is effected would be less than the
unpaid balance of the Note (principal and accrued interest).
Section 10?Events of Default
The occurrence of one or more of the following events shall constitute
an Event of Default under this agreement:
(a) The failure of the Borrower to pay the principal and accrued interest
when due under the Note;
(b) The failure of the Borrower to perform a material obligation
imposed upon the Borrower by reason of this Agreement; or
(c) The breach of any covenant, representation or warranty of the
Borrower contained in this Agreement.
(d) Upon the occurrence of any such Event of Default, the Company
may, at its election, declare the Note and all other indebtedness
secured hereunder to be immediately due and payable and may
exercise any or all of the rights and remedies granted to a secured
party under the provisions of any other law for the time being in952 CONVEYANCING, DRAFTING & DEEDS [Ch. 61
force (as now or hereafter in effect), including (without limitation)
the power to dispose of the Collateral by public or private sale or
to accept the Collateral in full payment of the Note and all other
indebtedness secured hereunder.
(e) Any proceeds realised from the disposition of the Collateral
pursuant to the foregoing power of sale shall be applied first to the
payment of reasonable expenses incurred by the Company in
connection with the disposition, then to the payment of the Note
and finally to any other indebtedness secured hereunder. Any
surplus proceeds shall be paid over to the Borrower. However, in
the event of such proceeds prove insufficient to satisfy all obliga-
tions of the Borrower under the Note, then the Borrower shall
remain personally liable for the resulting deficiency.
Section 11?Other Remedies
The rights, powers and remedies granted to the Company and the
Borrower pursuant to the provisions of this Agreement shall be in addition
to all rights, powers and remedies granted to the Company and the
Borrower under any statute or rule of law. Any forbearance, failure or delay
by the Company or the Borrower in exercising any right, power or remedy
under this Agreement shall not be deemed to be a waiver of such right,
power or remedy. Any single or partial exercise of any right, power or remedy
under this Agreement shall not preclude the further exercise thereof, and
every right, power and remedy of the Company and the Borrower under
this Agreement shall continue in full force and effect, unless such right,
power or remedy is specifically waived by an instrument executed by the
Company or the Borrower, as the case may be.
Section 12?Costs and Expenses
All reasonable costs and expenses (including reasonable attorneys?
fees) incurred by the Company in the exercise or enforcement of any right,
power or remedy granted it under this Agreement shall become part of the
indebtedness secured hereunder and shall constitute a personal liability
of the Borrower payable immediately upon demand and bearing interest
until paid at the Company?s bank interest rate then being earned by the
Company on its deposits.
Section 13?Applicable Law
This Agreement shall be governed by and construed in accordance with
the laws of India and shall be binding upon the executors, administrators,
heirs and assigns of the Borrower.
Section 14?Arbitration
Any controversy between the parties hereto involving the construction
or application of any terms, covenants or conditions of this Agreement orCh. 61] PLEDGE?FORMS 953
the Note, or any claims arising out of or relating to this Ag