FLOATING CHARGE

FLOATING CHARGE

LETTER OF HYPOTHECATION BY WAY OF FLOATING CHARGE

THIS LETTER OF HYPOTHECATION IS EXECUTED ON THIS THE ...….... DAY OF ..............................., 2008 OF THE CHRISTIAN ERA.

 

BY

PROPERTY DEVELOPMENT LTD., a private company limited by shares incorporated under the Companies Act, 1994 having its office at “ Property Height” 12 R. K. Mission Road, Dhaka-1000 represented by the Chairman, MR. LT. COL. MAHATABUDDIN AHMED (RETD.) (hereinafter called the “BORROWER”, which expression shall unless excluded by or repugnant to the contest mean and include its successors-in-interest, legal representatives, administrators and assigns);

IN FAVOUR OF

AB BANK LIMITED, MOTIJHEEL CORPORATE BRANCH, BSB BHABAN, 8 RAJUK AVENUE, DHAKA-1000, hereinafter referred to as the “Lender” (which expression shall unless excluded by or repugnant to the context mean and include its successor-in-interest, legal representatives, administrators and assigns).

WHEREAS

A.       The BORROWER has been extended various credit facilities (funded) of                                Tk. 3,50,00,000.00 (Taka Three crore fifty lac) only (the “Loan”) by the Lender on the terms and conditions set forth in the Sanction Letter No. MJ/CR/SANC/PC-02/057/07 dated May 21, 2007 (the “Sanction Letter”) duly accepted by the BORROWER;

B.       The execution and delivery of this Letter of Hypothecation is one of the conditions to the Lender granting the Loan extended to the BORROWER under the Sanction Letter.

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NOW THIS LETTER WITNESSES as follows:

In consideration of the Lender granting the BORROWER, the Loan in an aggregate amount of Tk. 3,50,00,000.00 (Taka Three crore fifty lac) only on the terms and conditions set forth in the Sanction Letter, the BORROWER hereby hypothecates to the Lender by way of a first priority floating charge with full title guarantee of the BORROWER’S floating assets, both present future and not limited to construction materials stored in its various project sites in Dhaka and including and all contracts and other documents whatsoever relating to such assets of the BORROWER, in which the BORROWER may have an interest (hereinafter called the “Hypothecated Property’) to secure as a continuing security until the full repayment of the Loan on the terms and conditions set forth in the Sanction Letter and all reasonable legal and other costs, charges and expenses incidental to this security and to the enforcement thereof (hereinafter called the “Secured Liabilities”) and this security shall be kept  in deposit with the Lender and the same may be enforceable by the Lender in an event of default by the BORROWER under the Sanction Letter.

If an Event of Default occurs as defined in the Sanction Letter, the Lender may, in terms of the Sanction Letter, sell, assign or otherwise dispose of all or any part of the Hypothecated Property and/or transfer or negotiate any and all documents of title relating to the Hypothecated Property at such times, in such manner and generally on such terms and conditions and for such consideration (whether payable or deliverable immediately or by installments) as the Lender in its absolute discretion thinks fit. The Lender will apply the proceeds of any such disposal in or towards the discharge of the Secured Liabilities only when due and payable and in such order as the Lender may from time to time conclusively determine. If such proceeds are insufficient for such purpose, the BORROWER hereby undertakes immediately to make good such deficiency.

The BORROWER shall, if and whenever properly and legally required by the Lender:

(a)     execute, sign and deliver all transfers, delivery orders and other documents which the Lender may from time to time require for perfecting title to all or any part of the Hypothecated Property, or for vesting or enabling it/them to vest any of the Hypothecated Property in, or for facilitating delivery of the same to the Lender or nominees; and

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(b)     do all such other acts and things as may be reasonably  necessary or expedient for effecting, or in connection with, any sale or other disposition which the Lender may make in respect of all or any of the Hypothecated Property, including the execution of any necessary documents/instruments in connection thereof.

The BORROWER hereby warrants and represents that:-

(1)     the Hypothecated Property is the BORROWER’S exclusive and absolute property in which no one else has any material claim, concern, right or interest of whatever nature and, as far as possible the BORROWER shall use its best endeavours to ensure the same shall continue to be free from any defect of title;

(2)     subject to the encumbrances disclosed in writing to the Lender by the BORROWER, the Hypothecated Property is free from encumbrances and charges and during the continuance of this security the BORROWER shall not create any charge or encumbrance over or allow any material lien to arise or affect the Hypothecated Property without prior consent of the Lender;

(3)     the BORROWER has legal right, full power and absolute authority to hypothecate the Hypothecated Property and, to the best of the BORROWER’S belief, the BORROWER has not concealed any material fact from the Lender;

(4)     the BORROWER has not prior to the date of these presents done, made, committed, caused or knowingly suffered to be done any act, deed or matter whereby or by reasons of which the right to hypothecate has been or may be impaired;

(5)     the BORROWER shall during the continuance of this security pay all rates, taxes, cesses, assessments, and such other imposition as are or may be payable in respect of the Hypothecated Property or any part thereof and shall keep the Lender fully indemnified at all times in case they have made any payments on those aforementioned accounts and observe all terms and conditions of the deeds and documents under which the Hypothecated Property is held by it;

 (6)    the BORROWER shall keep and hold the Lender secured, harmless and indemnified against all losses and damages suffered or sustained by the Lender as a result of any defect in the BORROWER’s title or any claim or demand preferred by anyone with respect to the Hypothecated Property or any part thereof arising from such a defect in title;

(7)     the BORROWER shall keep the Hypothecated Property free from being restrained for rent, rates or taxes, or taken or attached under any execution;

(8)     the BORROWER shall maintain, preserve and protect the Hypothecated Property and shall keep the same in good repair and proper condition and cause to be made all normal repairs, renovations, replacements and improvements thereto and shall not allow the same to deteriorate (except normal wear and tear) in value or otherwise until the Loan has been repaid on the terms and conditions mentioned in the Sanction Letter;

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(9)     the BORROWER shall insure and keep insured at its own expense to the full replacement or reinstatement value all or the Hypothecated Property of an insurable nature against loss or damage by fire, storm, lightning, explosion, riot, civil commotion, malicious damage, impact, flood, burst pipes, aircraft and other aerial devices or articles dropped there from (other than war risk), third party and public liability, such insurance to be effected with the interest of the Lender noted on the policies and with the policies duly assigned to the Lender;

(10)   this security shall continue as a continuing security to the Lender until the Secured Liabilities have been discharged in terms and conditions mentioned in the Sanction Letter; and

(11)   the authorized person(s) of the Lender may at any time or times with reasonable notice to the BORROWER may enter any premises where the Hypothecated Property or any of them may be and inspect the same. 

Nothing therein contained shall operate so as to merge or otherwise prejudice, affect or exclude any other security, guarantee or lien whether of or against the BORROWER or of third parties which the Lender for the time being hold or would have held but for this security or any of the rights or remedies of the Lender any such security, guarantee or lien or otherwise. Nothing herein contained shall prejudice rights of the Lender to hold any other securities for secured liabilities, whether in lieu of satisfaction or part satisfaction thereof or otherwise, or to exercise any rights or remedies thereto and to apply the proceeds thereof in satisfaction of the Lender.

The BORROWER agrees to indemnify the Lender on demand against all reasonable losses, actions, claims, expenses, demands and liabilities of whatever nature now or hereafter incurred or made against the Lender for anything done or omitted to be done in the exercise or purported exercise of powers herein contained or occasioned by any breach by the BORROWER of any of the BORROWER’S obligations hereunder.

The BORROWER hereby agrees that if an Event of Default occurs, upon the terms and conditions of the Sanction Letter or if the proceeds of the Hypothecated Property are not sufficient to discharge the obligations or liabilities of the BORROWER hereunder, the Lender may combine or consolidate all or any of its existing accounts wherever situate (including accounts in the name of the Lender or of the BORROWER jointly with others), whether such accounts are current, deposit, loan or of any other nature whatsoever, whether they are subject to notice or not and whether they are denominated in Taka or in any other currency, and set off or transfer any sums standing to the credit of any one or more such accounts in or toward satisfaction of the Secured Liabilities which, to the extent not then payable.

In any proceedings relating to this security a statement as to any amount due to the Lender under the Sanction Letter, which is certified as being correct by their officer shall be conclusive evidence that such amount is in fact due and payable.

Any notice or request required or permitted to be given or made hereunder shall be in writing, such notice or request shall be deemed to have been duly given or made when its has been or be delivered by hand, fax or post to the party to which it is required or permitted to be given or made at such party’s address specified hereinabove or at such other address as such party shall be designated by notice to the party giving such notice or making such request.

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This Letter of Hypothecation shall be binding on the BORROWER and its successor and shall ensure to the benefit of the Lender and their respective successors and the BORROWER will not assign or transfer all or any of its rights or obligations hereinabove to any third party without the consent of the Lender.

IN WITNESS WHEREOF WE EXECUTE THIS LETTER OF HYPOTHECATION ON THE DAY, MONTH AND YEAR MENTIONED ABOVE.

Signed in the presence of (signatures, names & addresses of the witnesses):-	For : PROPERTY DEVELOPMENT LTD.
1. 2.	_______________________________________ Name: Mr. Lt. Col. Mahatabuddin Ahmed (Retd.) Designation: Chairman

Drafted by:

Mohammed Manjur Hasan

Advocate

Supreme Court of Bangladesh

42/43 Purana Paltan, Dhaka.