Vetting of Security Documents on account of Company

Dated: December 18, 2006

Mr. A

Executive Vice President

Bank 1

Motijheel Branch

Islam Chamber

125/A, Motijheel Commercial Area

Dhaka-1000

Dear Sir,

Re:      Vetting of Security Documents on account of Company 1.

We refer to your letter No. CREDIT/LOAN/7022/2006/26573 dated December 02, 2006 requesting us to vet the draft Agreements/documents. In this regard we have been referred the following documents (all photocopies):

  • Draft of Consortium Facility Agreement;
  • Pari Passu Security Sharing Agreement;
  • Irrevocable General Power of Attorney;
  • Deed of Floating Charge;
  • Equitable Mortgage of the properties Ranking Pari Passu Charge;
  • Deed of Hypothecation;
  • Loan Agreement;
  • Letter of Guarantee and Mortgaged Deeds;

We have perused the above documents and our comments on Documents are as follows:

1.     Consortium Loan Agreement

Reference of the Agreement Suggestion
Page2, Contents Please amend the page numbers in the content for each item as per actual page numbers.
Interpretation Please change the Definition of the following terms as follows:(a)    “AVAILABILITY PERIOD” means, subject to the completion and satisfaction of Conditions Precedent, the earlier of the period of 15 (fifteen) months from the Closing Date or 12 month from the first LC opening date.(b)   “BORROWER” means Company 1, a public company limited by shares incorporated under the relevant Companies Act of Bangladesh having its registered office at Sena Kalyan Bhaban, Suit No. 1003, 195, Motijheel C/A, Dhaka-1000.

(c)    ‘INTEREST PERIOD means different period according to the Information Memorandum’.

Page-15Fees &Commission According to the Sanction Letter of BANK 1 Bank LC opening Bank shall retain 10% of the LC commission and the rest shall be distributed among the other Lenders on pro-rata basis.Please note that in clause 8.1 of the consortium loan Agreement the percentage for LC opening bank has been shown as 20%.
CovenantsNew clause Please insert two new clauses as clause 10.1.21 and Clause 10.1.22 after clause 10.1.21 and renumber the subsequent clauses.“10.1.21. the floor of the project Building shall be higher then the flood level of the years 1988 and 1998;10.1.22.the borrower shall arrange money for “Loan amortization fund” to pay the installments of the respective Lenders at the end of each financial year before distribution of profit.”
Page-48Schedule of theSecurity

/Security

Documents

Please add the following security documents as number a) and b) in the instrument column of Serial No. 3 in the Schedule of Security and renumber the subsequent numbers:a)      Deed of Mortgage created in favour of the Bank by the Borrower being No. _________ dated ___________.b)      And Irrevocable General Power of Attorney No. _____ dated_______ executed by the Borrower in favour of  Bank.

2.     Pari Passu Security Sharing Agreement

SL Reference of the Agreement Suggestion
1. Page-1 Please insert the term “as Lender” under the name of each Lenders otherwise replace the term “as Lender” with “as Lenders” which has been used under the name of all Lenders.
2. Page2, Contents Please delete the name of the month “October” from the first line of he 2nd page and use appropriate month.
3. Page-2, name of the parties Please change the number “2-3” with “2-5” under the name of the parties.
4. Interpretation Please change the Definition of the following terms as follows:(d)   “AVAILABILITY PERIOD” means, subject to the completion and satisfaction of Conditions Precedent, the earlier of the period of 15 (fifteen) months from the date of Closing Date or 12 month from the first LC opening date. Any amount not drawn within this period will automatically be cancelled and the facility will be reduced accordingly.(e)  “BORROWER” means Company 1, a public company limited by shares incorporated under the relevant Companies Act of Bangladesh having its registered office at Sena Kalyan Bhaban, Suit No. 1003, 195, Motijheel C/A, Dhaka-1000.

(f ‘INTEREST PERIOD means different period according to the Information Memorandum’.

5. Page-5Security and Custody of the Security DocumentsNew Security Please insert new security documents in clause 3.1.1 and renumber the subsequent clauses as follows:3.1.1.      Deed of Mortgage No. _______ dated _________ created in favour of the Janata Bank by the Borrower and Irrevocable General Power of Attorney No. _____ dated_______ executed by the Borrower in favour of Janata Bank
6. Schedule A Please insert “Deed of Mortgage No. _______ dated _________ created in favour of the Janata Bank by the Borrower and Irrevocable General Power of Attorney No. _____ dated_______ executed by the Borrower in favour of Janata Bank” in serial No. 4  of Schedule A and renumber the subsequent securities.

3.    Mortgage Deed :

SL Reference of the Agreement Suggestion
1. cvZv-4 Fill in the blanks in the 4th row of “F‡bi †gqv`Ó on page 4 as follows:AvB. Gd. AvB. Wm. e¨vsK wjt Gi †gqv` 5 ermi| hvnv cÖ_g drawdown Gi 18 gvm ci †_‡K 8 wU lvb¥vwmK wKw¯—‡Z cwi‡kva †hvM¨|.

The document is in order.

4.    Power of Attorney Deed:

Please confirm the schedule of the deed and otherwise the document is in order.

5.    Loan Contract:

Please note that in presence of the Consortium Loan Agreement the above FY Pzw³cÎ need not be executed among the Lenders and the Borrower.

6.      Deed of Floating Charge:

SL Reference of the Agreement Suggestion
1. Page-2 Please replace the word “registered” with “registered” in the 8th line of the 2nd page.
2. Page –3Clause 2 Please use the term ‘present & future’ after the word “all” in the third line of clause 2.

Subject to the above the Deed of Hypothecation is in order.

7.        Creating equitable Mortgage of the Properties Ranking Pari Passu Charges:

In the recital of the above Deed it has been described that the original title deeds shall be deposited to all the four lenders but this is not possible and as such the description shall be like that the Agent shall retain all the original title deeds for itself and on behalf of all other Lenders as a common custodian. Please ensure that all the title deeds no, has been accurately shown in the deed of equitable mortgage and confirm the schedule.

Please note that Mortgage (registered) is to be created in favour of the lenders on the landed property standing in the name of the Borrower Company as such the mortgage deed (Certified copy) is required to be filed with the Registrar of Joint Stock Companies and Firms and the original title deed(s) must be kept with the lenders. Hence the creation of Equitable Mortgage in the above form is not necessary.

8.      Deed of Hypothecation:

SL Reference of the Agreement Suggestion
1. Page-2 Please replace the wordings “separate sheets of papers and” with “Schedule of the Hypothecated property” in the 16th line of the 1st recital and 3rd line of 3rd recital on page 2 and 10th line of Clause 1.
2.

In order.

9.     Form XVIII for Mortgage

The Borrower has to file the certified copy of the Registered Mortgage Deed with the Registrar of Joint Stock Companies and Firms as such Form must be made for Deed of Mortgage.

10. Form XVIII for Deed of Floating Charge:

Replace the description mentioned in the 3rd column of the 2nd page with the following:

“All lease assets, the furniture, machinery, fixture, fittings, material for manufacture, machinery, material for goods, tools, equipment, goods.”

11. Form XVIII for Deed of Hypothecation:

Replace the description mentioned in the 3rd column of the 2nd page with the following:

“Plants, Machineries, sprats, stock of primary raw materials, manufactured items.”

12.  Letter of Guarantee (three copies):

SL Reference of the Agreement Suggestion
1. Page-1 Please delete the expression “refereed to as the” in the 5th line of the 1st recital on page 1.
2.

Should you have any query, please do not hesitate to revert back to us. All papers/documents referred to us are returned herewith.

Thanking you.

Yours faithfully,

(______________________)

Barrister-at-Law

Drafted by:

 The Lawyers & Jurists
M.L.Hotel Tower Ltd, 208, Shahid Syed Nazrul Islam Sarani,
Bijoy Nagar, Dhaka-1000.
 www.lawyersnjurists.com