Dated: January 29, 2007
Senior Vice President
Sena Kalyan Bhaban (3rd, 4th & 5th floor)
195 Motijheel Commercial Area
Dhaka – 1000
RE: Vetting of the terms and conditions of “Memorandum of Understanding (MOU)” to be executed between Bank 1 and Company 1.
We refer to your letter no. BANK 1/100/10/2007/86 dated 22 January 2007 on the above subject.
We have perused the contents of your letter and other papers/documents referred to us in connection with the above Memorandum of Understanding (“MOU”) to be executed between Bank 1 (“BANK 1”) and Company 1 (“CRISL”).
Our opinion on the draft MOU is given below.
|Clause 3||According to Clause 5 of Bangladesh Bank BRPD circular no. 6 dated 05 July 2006, BANK 1 has to disclose their credit rating prominently in their published annual and half yearly financial statement. That is why we suggest that Clause 3 of the MOU be deleted and replaced with the following:“3. That the First Party has agreed to undertake the rating assignment and complete the same within six weeks from the date of the Second Party providing all information required vide CRISL’s primary questionnaire and satisfying subsequent queries. In any event, the First Party agrees that they would complete the rating assignment by ________________ 2007 so that the Second party will have adequate time to complete their Statutory accounts and be able to disclose the credit rating in their published financial statement.”|
|Clause 4||The terms contained in Clause 4 are commercial terms. Please check, whether BANK 1 agrees to pay the stated total service fee of Tk. 300,000 and also review the fact that 50% of the fees will have to be paid by pay order at the signing of the MOU and remaining 50% of the fees will have to be paid after the submission by CRISL of the draft report but before the declaration of rating.|
|Clause 5||Please delete Clause 5 and replace with the following:
“5. That the entire information and clarification furnished/provided by the Second Party for facilitating the credit rating by the First Party shall be held on trust by the First Party on behalf of the Second Party and the said information will solely be the property of the Second Party. The said information can only be used by the First Party for the purpose of providing the Second Party’s credit rating and peer analysis.”
|Clause 6||Please delete Clause 6 and replace with the following:
“6. That the First Party has agreed, in principle, to the surveillance of rating on yearly basis at a fee of Tk. 2,00,000 (Taka three lac) only subject to the acceptance in writing of the same by the Second Party. The surveillance report will be submitted to the management of the Second Party by the First Party within Four weeks from the date of the receipt of the complete information from the Second Party; in any event, the First Party agrees that they would complete the surveillance report within the _____ day of the month of _________ of the calendar year.”
|Clause 9||Please delete the second sentence of Clause 9 and replace it with the following sentence:
“Once the Credit Rating has been accepted and used by the Second Party, the First Party may only publish the same with the prior written permission of the Second Party.”
|Clause 10||Please delete clause 10 and replace with the following:
“10. That in the event of failure on the part of the Second Party to furnish, as required by the First Party from time to time, such relevant information, material and clarification which are needed to provide the Credit Rating or in the event of failure on the part of the Second Party to pay the fees as and when due, the First Party shall have the right to suspend/withdraw the rating assigned, subject to giving the Second Party a 7 (seven) days notice to rectify the defect.”
|Clause 11||Please delete clause 11 and replace with the following:
“11. That in case the Second Party gives any incorrect statement in any the public documents or publicity materials about the rating assigned to the First Party, then the First Party shall in writing draw the attention of the Second Party to the mistake and ask the Second party to rectify/ correct the mistake within 15 (fifteen) days. If the Second Party fails to comply with this request then the First Party shall have the right to disclose to the appropriate regulatory Government bodies/agencies the correct position.”
Subject to the above, the MOU referred to us appear to be in order.
If you have any further query, please do not hesitate to contact the undersigned.
The Lawyers & Jurists
M.L.Hotel Tower Ltd, 208, Shahid Syed Nazrul Islam Sarani,
Bijoy Nagar, Dhaka-1000.