DEED OF HYPOTHECMION

THIS DEED OF HYPOTHECATION executed at Mumbai this ..............day of …………..Two thousand and one by ABC POWER GENERATION COMPANY LIMITED, a Company  registered under the Companies Act, 1956 and having  its Registered Office at  …………Mumbai, In the State of Maharashtra (hereinafter referred to as the 'Borrower which expression shall, unless It be repugnant to the subject or context thereof, include its successors and assigns).
 
IN FAVOUR OF
 
THE XYZ FINANCE COMPANY LTD., a Company registered under the Companies Act, 1956. having its Registered Office at Mumbai whose name and address is set out in Schedule I hereto (hereinafter referred to as the "XYZF/"Lender which expression shall include its successors and assigns as the subject or context may require or admit).
 
WHEREAS
 
(1) By a Foreign Currency Loan Agreement dated the .............. day of 	1998 entered into between the Borrower and XYZF,(hereinafter referred to as the Foreign Currency Loan Agreement").XYZF has agreed. to sanction Foreign Currency Loan to the Borrower to the extent of Rs. 47.00 crore on the terms and conditions contained in the Foreign Currency Loan Agreement as  set out against its name in Schedule I hereto, (hereinafter referred to as "the Loan' or "the Loans' as the subject or context admits).
 
(2) One of the conditions of the Foreign Currency Loan Agreement is that the Loans together with interest at the agreed rates, liquidated damages, premia on prepayment or on redemption, costs, expenses and	other monyes including any increase as a, result of devaluation/revaluation/fluctuation in the foreign currencies involved payable whatsoever, as stipulated in the Foreign Currency. Loan Agreement shall be secured, Inter afia, by a first charge by, way of hypothecation of all the Borrower's movable including movable machinery, machinery spares, tools and accessories, (excluding Borrower's stocks of raw materials, semi-finished, finished goods, consumable stores and book debts) and such other movables present and future on pad passu basis with the other participating Financial Institutions and Banks (referred to as Lenders) under the Foreign Currency Loan Agreement.
 
(3) XYZF has called upon the Borrower to execute these presents, which the Borrower has agreed to do in the manner hereinafter expressed.
 
NOW THEREFORE THESE PRESENTS WITNESSETH THAT
 
1. In pursuance of the Foreign Currency Loan Agreement and in consideration of XYZF having lent and advanced and/or agreed to lend and advance the Loans to the Borrower, for the purposes and subject to the terms and conditions set out in the Foreign Currency Loan Agreement and in consideration of the premises, the Borrower do hereby covenant with XYZF that it shall repay the Loans to XYZF and shall pay all interest at the agreed rates, liquidated damages, premia on prepayment or on redemption, costs, charges and expenses and all other monies as stipulated and In the manner set out in the Foreign Currency Loan Agreement and shall duly observe and perform all the terms and conditions of the Foreign Currency Loan Agreement.
 
2. In pursuance of the Foreign Currency Loan Agreement and for the consideration aforesaid, the whole of the movable properties of the Borrower including its movable plant and machinery, machinery spares, tools and accessories, (excluding Borrowees stocks of raw materials,  semi-finished, finished goods, consumable stores and book debts) and such other movables both present and future whether installed or not and whether now lying loose or In cases or which are now lying or 	stored in or about or shall hereafter from time to time during the 	continuance of these presents be brought into or upon or be stored or be in or about all the Borrower's factories, premises and godowns or wherever else the same may be or be held by any party to the order or disposition of the Borrower or in the course of transit or on high seas or on order or delivery (hereinafter collectively referred to as the said Goods") short particulars whereof are given in Schedule II hereto, are hereby hypothecated as and by way of first charge to XYZF as security for and be charged with the repayment/redemption of the Loans and repayment or payment of other monies including all interest, liquidated damages, premia on prepayment or on redemption, costs, charges, expenses and all other monies including any increase as a result of devaluation/revaluation/fluctuation In the foreign currencies involved payable due to XYZF under the Foreign Currency Loan Agreement.
 
3. In further pursuance of the Foreign Currency Loan Agreement
	and for the consideration aforesaid, the' Borrower do hereby further agree, declare and covenant with XYZF as follows:

(i) The Borrower shall at its expense keep the said Goods in marketable and good condition and insure the same in the joint names of the Borrower and XYZC as provided in the Foreign Currency Loan Agreement, against any loss or damage by theft, fire, lightning, earthquake, explosion, Hot, strike, civil commotion, storm tempest, flood, marine risk, erection risk, war risk and such other risks as XYZF shall from time  to time require, with an insurance company or  companies. The Borrower shall deliver to XYZF the relevant policies of insurance duly assigned to XYZF and maintain such insurance through out the continuance of the security of these presents and deliver to XYZF the renewal receipts therefor and shall duly and punctually pay all premia and shall not do or suffer to be done or omit to do or be done any act which may invalidate or avoid such insurance. In default XYZF may (but shall not be bound to) keep in good condition and render marketable the 	said Goods and take out renew such insurance. Any premium paid by XYZF and any costs, charges and expenses incurred by XYZF shall forthwith on receipt of notice of demand be reimbursed to XYZF together with interest thereon at the  appilcable rates for the assistance on the date of the Foreign Currency Loan Agreement, from the date of payment and until such reimbursement by the Borrower, the same shall be debited to the Borrowees Loan Account and be a charge on, the said Goods.
 
(ii)The nominees 6 f XYZF shall, without any notice and at the risk and expense of the Borrower, be entitled at all times to enter any place where the said Goods may be and inspect, value, insure, superintend the disposal of and take particulars of all or any part of  the said Goods and check any statement, accounts, reports and information.
 
(iii) In the event of any breach or default by the Borrower in the performance of its obligations, hereunder or any of the terms, covenants, obligations and conditions stipulated in the Foreign Currency Loan Agreement or the related security documents or the deeds executed or that may, hereafter be executed by the Borrower in favour of XYZF, or in the event of, the Borrower failing to pay either the interest or any instalments of the principal of the Loans, or in the , event of the charge, or the, security created in favour of XYZF having become enforceable . for any reason whatsoever, XYZF or their nominees shall, in. case such breach or default is not remedied by the Borrower, to the satisfaction of XYZF within a period of fifteen days from the date of Intimation by XYZF of such breach or default or such extended time as may be granted by XYZF In Writing, without any notice and without assigning any reason and at the risk and expense of the Borrower and if necessary as Attorney for and in the name of the Borrower be  entitled to take charge and/or possession of, seize, recover, remove and-remove them and/or sell by public auction or by private contract, dispatch or consign for realisation or otherwise dispose off or deal with all or any part of the said Goods and to enforce, realise, settle, compromise and deal  with any rights or claims relating thereto, without being bound to exercise any of these powers or be, liable for, any losses in the exercise or non-exercise thereof and without prejudice to XYZFs rights and remedies of suit or otherwise.  Notwithstanding any pending suit or other proceeding, Borrower undertakes to give immediate possession to the nominees XYZF, on demand of the Said Goods and to transfer, and to deliver to XYZF all relative bills contracts securities and documents and the Borrower hereby agrees to accept XYZF's account of sales and realisations as sufficient proof of amounts realised and relative expenses And to pay on demand by XYZF any shortfall or , deficiency thereby shown Provided,  however, that XYZF shall not be in any way liable or responsible for any -loss, damage' or depreciation that the said Goods may suffer ,or sustain, on any Account, whatsoever, whilst the same are 	in possession of XYZF or by reason of exercise or non-exercise of rights- and remedies ava,ilabI61o XYZF as aforesaid and that all such loss, damage or depreciation shall be wholly debited to the account of the Borrower howsoever the same may have been caused.
 
(iv)XYZF at any time after the security hereby constituted has become enforceable and whether or not XYZF shall then have entered into or taken possession of and in addition to the powers herein before conferred upon XYZF, after such entry into or taking possession of, may have a receiver or receivers appointed of the said Goods or any part, thereof. The following provisions shall also apply to such
Receiver:
(a)	Unless otherwise directed by XYZF, such Receiver shall have and exercise all 	powers and authorities vested in XYZF;
(b)	Such Receiver shall, in the exercise of his powers, authorities and discretions, 	conform to the  regulation and direction from time to time made and given by 	XYZF;
(c)	XYZF may from, time to time fix the remuneration of such Receiver and shall 	direct payment thereof out, of the said Goods, but the Borrower alone shall be 	liable for the payment of such remuneration;
(d)	XYZF may from time to time and at any time require such Receiver to give 	security for the due performance of Ms duties, as such Receiver and may fix the 	nature and amount of the security to be given to XYZF, but VZF shall not be 	bound to require such security In any case;
(e)	XYZF may pay over such Receiver any monies constituting part of the securities, 	to the intent that, the same may be applied for the purpose hereof by such 	Receiver and XYZF may from time to time determine, what funds the Receiver 	shall be at liberty to keep in hand, With a view to the performance of his duties as 	such Receiver; 
(f)	Every such Receiver shall be the agent of the Borrower for all purposes and the 	Borrower alone shall be responsible for his acts and defaults loss or misconduct 	and liable on any ,contract or engagement made or entered into by him and for his 	remuneration and XYZF shall not incur any liability or responsibility therefor by 	reason of their making or consenting to his appointment as such Receiver. ;
 
4.All the said Goods and all sale realisations and insurance proceeds thereof and all documents under this security shall always be kept distinguishable and held as the exclusive property of XYZF specifically appropriated to this security and be. dealt with only under the directions of XYZF and the Borrower shall not create any charge, mortgage, lien, or other encumbrance upon or over the same, or any part thereof except in favour of the Lenders nor suffer any such charge,
mortgage, lien or other encumbrance or any attachment or distress to affect the same or any part thereof nor do or allow any thing that may prejudice this security and XYZF shall be, at liberty to incur all costs and expenses as may be necessary to preserve this security and to maintain the same undiminished and claim reimbursement thereof as mentioned in sub-clause (1) hereof PROVIDED, that the Borrower may create a second charge over the said goods, as permitted by XYZF in favour of the Commitment Charge Lenders (as defined in the Foreign Currency Loan Agreement). Except to the extent specifically permitted by XYZF, the Borrower shall not sell all or any of the said Goods. The Borrower shall on any and every such sale pay to XYZF, if so required by them, the net proceeds of the sale or disposal in satisfaction, so far as the same shall extend, of the monies, due and payable by the Borrower to XYZF PROVIDED, that the Borrower may without payment to XYZF, if XYZF so agrees, replace the outmoded equipment by equipment of equivalent or greater value.
 
5. The Borrower shall, whenever required by XYZF, give full particulars to XYZF of all the assets of the Borrower and of the said Goods and shall furnish and verify all statements, reports, returns, certificates and information from time to time and as required by XYZF and make furnish and execute all necessary documents to give effect to this security
 
6. This security shall be a continuing security for repayment of the Loan together with all interest, liquidated damages, premia on prepayment or on redemption and repayment or payment of all other monies including any increase as a result of devaluation/ revaluation/fluctuation in the foreign currencies involved payable due to XYZF under the Foreign Currency Loan Agreement and these presents, and shall not affect, impair or discharge the liability of the Borrower by winding up (voluntary or otherwise) or by any merger or amalgamation, reconstruction or otherwise of the Borrower with any other Borrower or take-over of the management or nationalisation of the undertaking of the Borrower.
 
7. The Borrower hereby declares that the said Goods are and will at all times be the absolute property of the Borrower at the sole disposal of the Borrower and subject to the charges created and/or to be created with the specific permission of XYZF be free from any prior charge, ''trust,, pledge, lien, claim or. encumbrance and as to future goods the same shall likewise be the unencumbered, absolute and disposable property of the Borrower with full power of disposition over the same provided that the Borrower may create a second charge over the said goods as permitted by XYZF, in favour of the Commitment Charge. Lenders. Provided further, that the Borrower shall be entitled at all times to sell or dispose off the said goods
 
 8. The Borrower hereby appoints XYZF as its attorney and authorises XYZF to act for and in the name of the Borrower to do whatever the Borrower may be required to do under these presents and generally to use the nameof the Borrower-in the exercise of all or any of the powers by these presents conferred on XYZF, and the Borrower shall bear the expenses that may be incurred in this regard.
 
9. Nothing herein shall prejudice the rights or remedies of XYZF in respect of any present or future security, guarantee, obligation or decree for any indebtedness or liability of the Borrower to XYZF.
 
10. The provisions contained herein, shall be read in conjunction with the provisions of. the Foreign Currency Loan Agreement as amended from time to time and to the extent of any inconsistency or repugnancy the latter shall prevail to all intents and purposes

 

 
                                                     SCHEDULEI 
                            PARTICULARS OF LENDER AND LOANS
__________________________________________________________________________
Name								Amount of Foreign Currency Loan
__________________________________________________________________________
The XYZ Finance Company Ltd	US$ 8.767 
……………………………….. 	                     Million(Rs.47.00 crore)
………………………………..
Mumbai 400023
___________________________________________________________________________
                                                                                         
                                                             SCHEDULEII
	(SHORT PARTICULARS OF MOVABLEPROPERTIFES)
The whole of the movable properties. of the Borrower including its movable plant and machinery, machinery spares, tools and accessories,	(save and except Borrower's stocks of raw materials, semi-finished, finished goods, consumable stores and book debts) and such other movables, both, present and future whether installed or not and. whether now, lying loose or in cases or which,, are now lying or stored in or about or shall hereafter from time to time during the continuance of the security of these presents be brought in to or upon or be stored or be in or about all the Borrowers factories, promises and godowns at ………….. IDA, …………..District, in the State of Maharashtra wherever else the same may be or be held by any party to the order or disposition of the Borrower or in the course of transitor on  high seas or on order, or delivery, howsoever and wheresoever in the possession of the Borrower and either by way of substitution or addition.
 
IN WITNESS WHEREOF the Borrower has caused its Common Seal to be affixed hereto on the day, month and year first above written. 
 
The Common Seal of ABC POWER GENERATION LIMITED, has pursuant to the Resolution of its Board of Directors passed in that behalf on the day of …………..2000 been hereunto affixed in the presence  of Mr. A Director, of the Borrower and Mr.C Company Secretary, who have signed these presents in token thereof.