Exhibit 10.6
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LOAN AND PLEDGE AGREEMENT
BETWEEN
COPYTELE INTERNATIONAL LTD.
AND
MARS OVERSEAS LIMITED
DATED 2nd NOVEMBER 2007
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TABLE OF CONTENTS
1. DEFINITION AND INTERPRETATION........................................3
2. LOAN & PAYMENT.......................................................5
3. CREATION OF SECURITY.................................................6
4. TAXES................................................................7
5. REPRESENTATIONS AND WARRANTIES.......................................7
6. BORROWERS' CONVENANTS................................................9
7. EVENTS OF DEFAULT...................................................10
8. REMEDIES ON EVENT OF DEFAULT........................................11
9. CONTINUING OBLIGATIONS..............................................12
10. COSTS, CHARGES AND EXPENSES.........................................12
11. INDEMNITY...........................................................12
12. RELEASE AND TERMINATION.............................................12
13. MISCELLANEOUS.......................................................12
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LOAN AND PLEDGE AGREEMENT
This LOAN AND PLEDGE AGREEMENT (this "Agreement") is made on the 2nd day of
November, 2007 by and among:
(1) COPYTELE INTERNATIONAL LTD., a company incorporated under the laws of
the British Virgin Islands and having its registered office at Icaza
Xxxxxxxx-Xxxx & Xxxxxx, (BVI) Trust Limited, Xxxxxxxxxx Plaza, Second
Floor, Xxxxxxx Xxx 1, Road Town, Tortola, British Virgin Islands
(hereinafter referred to as the "Lender" which expression shall include
its successors and permitted assigns); and
(2) MARS OVERSEAS LIMITED, a company incorporated under the laws of the
Cayman Islands and having its registered office at XX Xxx 000 XX,
Xxxxxx House, South Church Street, Xxxxxx Town, Grand Cayman, Cayman
Islands (the "Borrower" which expression includes its successors and
permitted assigns).
The Borrower and the Lender are individually referred to as a "Party" and
together as the "Parties".
WHEREAS
A. The Borrower has requested the Lender for a senior secured loan
for a sum of US$5,000,000.
B. The Borrower has agreed to acquire 20,000,000 shares of the
common stock of CopyTele Inc. ("Pledged Shares").
C. The loan will be secured by pledge of the Pledged Shares and will
be subject to other terms and conditions hereinafter appearing;
and
D. The Lender requires the Borrower to create the pledge and the
Borrower has agreed to create the pledge on the terms and
conditions set out under this Agreement.
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto, hereby agrees as follows:
1. DEFINITION AND INTERPRETATION
1.1. The following terms used in this Agreement shall have the
meanings assigned to them herein:
(a) "Agent Bank" means a bank acceptable to Lender and Borrower in
which Lender shall have an account for the purpose of repayment
of the Loan;
(b) "Applicable Law" includes all applicable statutes, enactments,
laws, ordinances, rules, by-laws, regulations, notifications,
guidelines, policies, directions, directives and orders of any
Governmental Authority, statutory authority, tribunal, board,
court or a recognized stock exchange, as may be applicable;
(c) "Approvals" means all approvals, permissions, authorizations,
consents and notifications whether from any Governmental
Authority, regulatory or departmental authority or otherwise
including, without limitation, approvals of any authority, or any
corporate authorizations as may be applicable;
(d) "Business Day" means a day (other than Saturday or Sunday) on
which banks are open for general business in London, England;
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(e) "Charter Documents" means the Memorandum of Association and
Articles of Association of Borrower;
(f) "Closing Date" means the date of the drawdown of the Loan
pursuant to this Agreement, which shall be a date mutually agreed
between the Parties hereto and which shall not in any event be
later than the 30th day from the date of execution of this
Agreement, and in the event the 30th day is not a Business Day or
is a Saturday or a Sunday, then the next Business Day, such that
on or prior to such date, the Lender shall have purchased
1,495,845 global depository receipts of Videocon Industries Ltd.
and the Borrower shall have purchased the Pleged Shares pursuant
to a certain Subscription Agreement, dated the date hereof,
between CopyTele Inc. and the Lender;
(g) "Designated Account" (i) of the Lender means the account of the
Lender in the Agent Bank for the purpose of repayment of the
Loan, and (ii) of the Borrower means the account of the Borrower
in the Agent Bank for purposes of receiving the Loan.
(h) "Encumbrance" means any mortgage, charge (whether fixed or
floating), pledge, lien, hypothecation, assignment, security
interest or other encumbrances of any kind securing or conferring
any priority of payment in respect of any obligation of any
Person;
(i) "Escrow Agent" means the Escrow Agent to be appointed pursuant to
the Escrow Agreement;
(j) "Escrow Agreement" means the escrow agreement to be executed on
or prior to the Closing Date among the Borrower, the Lender and
the Escrow Agent, in such form as the Borrower and Lender may
agree and as is acceptable to the Escrow Agent, in each case, as
amended from time to time;
(k) "Event of Default" means the occurrence of any of the events or
circumstances specified in Clause 7 of this Agreement;
(l) "Final Settlement Date" means the date on which all the
Obligations have been irrevocably and unconditionally paid and
discharged in full to the satisfaction of the Lender;
(m) "Finance Documents" means the following, executed in a form and
manner satisfactory to the Lender:
i) this Agreement;
ii) the Escrow Agreement;
iii) all other documents and agreements relating to the
above, as such documents may be amended or supplemented
from time to time.
(n) "Governmental Authority" means any government or political
subdivision thereof; any department, agency or instrumentality of
any government or political subdivision thereof; any court or
arbitral tribunal and includes the governing body of any
securities exchange;
(o) "Loan" shall have the meaning ascribed to it in Clause 2.1 of
this Agreement;
(p) "Maturity Date" shall mean the seventh anniversary of the Closing
Date;
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(o) "Maturity Value" shall mean, when the loan is repaid on the
Maturity Date, a sum of US$ 5 million;
(q) "Obligations" means all amounts payable pursuant to the terms of
the Finance Documents, including without limitation:
i) the principal amount of the Loan;
ii) any and all sums incurred by the Escrow Agent in order to
preserve the security provided under the Finance Documents
or its security interest therein; and
iii) in the event of any proceeding for the collection or
enforcement of the above, after a Default shall have
occurred, the expenses incurred for the purpose of retaking,
holding, preparing for sale, selling or otherwise disposing
of the Security, or of any exercise by the Lender and/or the
Escrow Agent of their respective rights under the various
Finance Documents, together with legal fees and court costs;
(r) "Security" means collectively, the Share Certificates or any
other document or instrument evidencing ownership of the Pledged
Shares, the transfer documents duly signed relating to the
Pledged Shares, and the Pledged Shares.
(s) "Share Certificate" means a certificate evidencing holding of the
Pledged Shares by the Borrower;
(t) "Taxes" shall mean any and all present and future taxes, levy,
impost, premium, duty or other charge of a similar nature,
including without limitation, gross receipts, sales, turn-over,
value added, use consumption, property, income, franchise,
capital, occupational, license, excise and documentary stamps
taxes, and customs and other duties, assessments, or fees,
however imposed, withheld, levied, or assessed by any country or
government subdivision thereof or any other taxing authority
together with interest thereon and penalties in respect thereof.
1.2. In this Agreement:
(a) a provision of law is a reference to that provision as amended or
re-enacted;
(b) a Clause is a reference to a section of this Agreement;
(c) words importing the plural shall include the singular and
vice-versa;
(d) a Person shall be construed as including references to an
individual, firm, company or other body, whether incorporated or
not; and
(e) the index and the headings in this Agreement are for convenience
and are to be ignored in construing this Agreement.
2. LOAN & PAYMENT
2.1. At the request of the Borrower, and subject to the terms and
conditions set out in this Agreement, on the Closing Date, the
Lender shall lend to the Borrower, and the Borrower shall
borrow from the Lender, the principal amount of US$5,000,000
(the "Loan"). The Loan shall not bear interest.
2.2. Lender shall make the Loan by making remittance of the said
amount to the Designated Account of the Borrower.
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2.3. The Maturity Value shall be due and payable in lump sum on the
Maturity Date. In no case and under no circumstances,
arrangements or events whatsoever, shall the Loan be repayable
before the seventh anniversary of the Closing Date; and the
Borrower shall also have no option to pre-pay before the
Maturity Date. The Borrower shall make repayment of the Loan
on the Maturity Date by depositing in the Designated Account
of the Lender cash in the amount of the Maturity Value.
2.4. In the event there is any pre-payment before the seventh
anniversary of the Closing Date in contravention of Clause
2.3 above, due to any reason whatsoever, the Borrower shall
be liable to pay and shall pay a pre-payment premium at 200%
of the Loan to the Lender. In case of pre-payment, the Loan
shall be paid in a single tranche and deposited to the
Designated Account of the Lender. Without prejudice to what
is stated hereinabove, in the event of the Borrower desires
to prepay the Loan before the Maturity Date, it shall be
mandatory that (a) pursuant to an escrow agreement among the
Lender, the Borrower and the Agent Bank dated the date
hereof the prepaid amount of the Loan shall be kept in
escrow in the Designated Account of the Lender until the
Maturity Date and shall be paid to the Lender on the date of
payment, (b) any interest accruing on the prepaid amount of
the Loan kept in escrow in the Designated Account of the
Lender shall be also retained in escrow in the Designated
Account until the Maturity Date and shall paid to the Lender
on the date of payment, and (c) the lien over the Security
will not be vacated until the Maturity Date.
2.5. The Borrower shall drawdown the Loan in a single tranche.
2.6. The Closing of the Loan pursuant to this Agreement and the
drawdown thereof shall take place on the Closing Date and is
subject to the fulfillment of the following conditions
precedent to the satisfaction of the Lender:
i) The Lender shall have received, the following, each
dated such day (unless otherwise specified), in form
and substance satisfactory to the Lender:
A) copies of the Charter Documents of the Borrower and
each amendment thereto, certified as true, correct and
complete by the company secretary / director of the
Borrower;
B) copies of the resolution of the shareholders and the
resolutions of the board of directors of the Borrower,
approving the transactions contemplated by the Finance
Documents to which the Borrower, is or will be a party,
in each case certified as true, correct and complete by
the company secretary / director of the Borrower.
ii) The Lender shall have acquired 1,495,845 global
depository receipts of Videocon Industries Ltd;
iii) The borrower shall have acquired the Pledged
Shares.;and
iv) The Parties and the Escrow Agent shall have entered
into the Escrow Agreement.
3. CREATION OF SECURITY
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3.1. In order to secure the due performance, payment and discharge
in full of the Obligations, and in consideration of the Loan
being advanced by the Lender the Borrower hereby pledges in
favour of the Escrow Agent, for the benefit of the Lender, as
security for the due discharge of the Obligations, the Pledged
Shares, and shall deposit and deliver to the Escrow Agent such
relevant instruments or documents, including Share
Certificates, or any other document required for effectuating
the pledge of the Pledged Shares.
3.2. The Borrower shall provide any information and assistance as
may be reasonably necessary to perfect the pledge created over
the Pledged Shares in favour of the Escrow Agent for the
benefit of the Lender.
3.3. The Borrower hereby agrees and undertakes that, until the
Final Settlement Date, the Borrower shall not, and shall not
attempt to, transfer any of the Pledged Shares directly or
indirectly or in any form or method whatsoever.
3.4. The Borrower agrees and undertakes that it shall not
sell/transfer or enter into any agreement for sale/transfer of
the Pledged Shares to any third party in any manner whatsoever
until the seventh anniversary of the Closing Date. The
Borrower shall give irrevocable instructions to the Escrow
Agent not to accept any instructions for
withdrawal/cancellation of the Pledged Shares or for
sale/transfer of the Pledged Shares other than in accordance
with the terms of the Escrow Agreement.
3.5. The Pledged Shares shall continue to remain pledged with the
Escrow Agent for security of repayment of the Loan for a
period of seven years or repayment of the Loan, whichever is
later. Further, even in case of prepayment of the Loan prior
to the expiry of seven years as stated above in Clause 2.4,
the Pledged Shares shall continue to remain pledged with the
Escrow Agent until the seventh anniversary of Closing Date.
4. TAXES
4.1. The Borrower shall bear all Taxes as may be applicable or as
may be levied in relation to each Facility and all other
amounts payable under the Finance Documents. Notwithstanding
anything to the contrary stated herein, it is expressly
agreed that all payments to be made to the Lender under the
Finance Documents shall be made free and clear of and
without any deduction for or on account of any Taxes and
without any set-off or counter-claim. If the Borrower is
required to make deduction on account of any Taxes, then, in
such case, the sums (other than the interest amounts)
payable to the Lender shall be increased to the extent
necessary to ensure that, after making such deduction, the
Lender receive and retain (without any liability for such
deductions) a sum equal to the sum which it would have
received and retained, had no such deduction been made or
required to be made.
4.2. Without prejudice to the provisions of Clause 4.1 above, if
the Lender is required to make any payment on account of any
Taxes in relation to any sum received or receivable by it
hereunder (excluding income tax payable by the Lender) or any
liability in respect of such payment is imposed, levied or
assessed against such Lender, the Borrower shall, upon demand
of such Lender, promptly reimburse to such Lender such payment
or liability together with interest, penalties and expenses,
if any, paid or incurred in connection therewith.
5. REPRESENTATIONS AND WARRANTIES
5.1. The Borrower hereby represents and warrants to the Lender as
of the date of this Agreement (which representations and
warranties shall survive the execution and delivery of this
Agreement and continue until the Final Settlement Date) as
follows:
(a) the Borrower is duly organised and validly existing under
the laws of the Cayman Islands and has the power and
authority to carry on business as is now being carried on
and to own its property and assets;
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(b) the Borrower has the power and authority to enter into and
perform its obligations under the Finance Documents in
accordance with the terms thereof and has taken all
necessary corporate and other actions to authorise the
execution, delivery and performance of the obligations under
the Finance Documents;
(c) the execution, delivery and performance of the Finance
Documents and creation of a valid and legally enforceable
pledge in favour of the Escrow Agent for the benefit of the
Lender by the Borrower will not contravene (i) any
Applicable Law or regulation to which the Borrower is
subject or (ii) any provision of the Charter Documents of
the Borrower or (iii) any agreement or obligation or
document binding on or applicable to the Borrower;
(d) the Finance Documents and the pledge created herein
constitute legally binding and enforceable obligations of
the Borrower;
(e) no clearance, authorizations, Approvals, waivers, no
objections or other action by, and no notice to or filing,
registration with, any Governmental Authority or any other
Person is required for the due execution, delivery,
recordation, filing or performance by the Borrower of any
Finance Document or for the creation, perfection and the
maintenance of the various security interest created
pursuant to the Finance Documents (including for the
maintenance of the first priority as contemplated therein);
(f) no Event of Default has occurred;
(g) the Borrower has not granted or agreed to grant in favour of
any other person any interest in or any option or other
rights in respect of any of the Pledged Shares;
(h) no actions, proceedings or steps have been taken and/or are
proposed or threatened for the liquidation, winding up or
dissolution, administration, reorganization or insolvency of
the Borrower, or for the appointment of a receiver, trustee
or similar officer in respect of the Borrower or its assets
before any court, Governmental Authority or administrative
body and/or under any applicable bankruptcy, insolvency,
winding-up or other similar law;
(i) no actions, suits, proceedings, investigations, litigation,
arbitration or administrative proceedings of any kind in any
court or before any arbitrator or any Governmental Authority
are at present current or pending against the Borrower or
its assets or threatened which has or is likely to have a
material adverse effect;
(j) there are no third party consents required to be obtained
for the Borrower to lawfully enter into and perform their
respective obligations under the Finance Documents;
(k) there are no actions, proceedings, disputes or claims
pending before any court, government agency or
administrative body, or threatened against or affecting the
Borrower or its assets and which would adversely affect the
ability of the Borrower to perform their respective
obligations under the Finance Documents;
(l) the Borrower is the legal and beneficial owner of, and has
good and marketable title to, or a valid and enforceable
rights in respect of, all of its property and assets over
which the security interest is proposed to be created in
favour of the Escrow Agent for the benefit of the Lender
pursuant to the Finance Documents and such assets are not
subject to any Encumbrances other than those created
pursuant to the Finance Documents.
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6. BORROWERS' CONVENANTS
6.1. Positive Covenants
The Borrower irrevocably and unconditionally covenants and undertakes
that so long as any Obligations remain outstanding, and until the Final
Settlement Date, it shall:
(a) maintain its corporate existence (to the extent applicable)
and all rights and privileges enjoyed and obtain, comply
with the terms of and do all that is necessary to maintain
in full force and effect all Approvals required to enable it
to lawfully carry on its business;
(b) obtain, comply with the terms of and do all that is
necessary to maintain in full force and effect all Approvals
as may be required to enable it to enter into and perform
its obligations under the Finance Documents and the
transactions contemplated thereby and to ensure the
legality, validity, enforceability or admissibility in
evidence of the Finance Documents and this Agreement;
(c) comply with all Applicable Laws and the terms and conditions
of the Approvals;
(d) pay regularly all Taxes, assessments, dues, duties and
impositions as may, from time to time be payable to any
Governmental Authority;
(e) comply in all respects with the terms of the Finance
Documents;
(f) use reasonable commercial efforts to do or cause to be done
everything which is necessary, in the reasonable opinion of
the Lender, to create and perfect the security with respect
to the Pledged Shares pursuant to the Finance Documents
(including, without limitation, any further registration or
filing in respect of the security);
(g) pay or reimburse to the Lender all charges, Taxes or
penalties imposed on or in pursuance of this Agreement or on
any instruments, issued hereunder, payable in relation to
the interest amounts on the pre-paid Loan amount paid to the
Lender;
(h) perform and execute, on the request of the Lender, such acts
and deeds, as may be reasonably necessary and/or required to
carry out the intent of the Finance Documents; and
(i) do all such acts and things as may be reasonably required by
the Lender to protect the interest of the Lender under the
Finance Documents.
6.2. Negative Covenants
The Borrower covenants and agrees that so long as any Obligations
remain outstanding and until the Final Settlement Date, without the
prior written consent of the Lender :
(a) the Borrower shall not undertake any further borrowing in
any manner whatsoever;
(b) the Borrower shall not dispose of or create any other
Encumbrance or grant any third party rights over the Pledged
Shares which has been pledged in favour of the Escrow Agent
for the benefit of the Lender;
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(c) the Borrower shall not effect and/or enter into any
transaction of merger, amalgamation, reconstruction,
consolidation, reconstruction, restructuring, reorganization
or other similar transactions including those relating to
change in its shareholding pattern (whether legal or
beneficial) other than those permitted in terms of the
Finance Documents, as a result whereof the Borrower is not
the surviving entity, or as a result of which an Event of
Default arises;
(d) the Borrower shall not amend, alter or modify its Charter
Documents in a manner which may affect the terms of the
Finance Documents or the rights of any of the Lender
thereunder in any manner whatsoever;
(e) the Borrower shall not wind up, liquidate or dissolve or
initiate any voluntary winding up process and/or cause any
circumstance to arise which could result in any person
initiating winding up actions against the Borrower and/or
any other actions which in the opinion of the Lender would
affect or is likely to affect the rights and benefits of the
Lender including their rights in relation to the security;
(f) the Borrower shall ensure that except as otherwise provided
in the Finance Documents, the security created thereunder
shall be free of encumbrances, except for the security
interest created thereon in favour of the Escrow Agent for
the benefit of the Lender;
(g) the Borrower shall not grant in favour of any other Person
any interest in or any option or other rights in respect of
the Pledged Shares or any part thereof.
(h) the Borrower shall not enter into any corporate arrangement
including but not limited to merger, amalgamation, joint
venture or partnership with any other entity.
(g) the Borrower shall not at any point of time, have any
creditors, unsecured lenders or any other outside liability
in any form whatsoever other than the unsecured loan not
exceeding US$ 21,300,000/- (US$ Twenty One Million Three
Hundred Thousand) from group companies. The loan so obtained
from the group companies shall be interest free and shall be
subordinate to the Loan obtained from the Lender.
7. EVENTS OF DEFAULT
7.1. The occurrence of any of the following events shall constitute
an Event of Default (the "Event of Default"):
(a) the Borrower fails to pay any amount due under the Finance
Documents on the due date or on demand, as the case may be;
(b) failure to maintain the first priority exclusive pledge over
the Pledged Shares in favour of the Escrow Agent for the
benefit of the Lender pursuant to the Finance Documents;
(c) any representation or statement made by the Borrower under
any of the Finance Documents, including any representation
or statement with respect to the security, or any
certificate or statement delivered by the Borrower pursuant
thereto is or proves to have been incorrect or misleading
when made and affects the performance of the obligations by
the Borrower under the Finance Documents or cause the breach
of any of the provisions of the Finance Documents;
(d) any amendment to or alteration or modification of the
Charter Documents in a manner which may affect the terms of
the Finance Documents or the rights of the Lender thereunder
in any manner whatsoever, without the consent of the Lender;
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(e) the Borrower fails to maintain a valid legal title to the
Pledged Shares;
(f) the Borrower commences or takes steps to initiate a
voluntary winding up or restructuring process under any
applicable bankruptcy, insolvency, winding up or other
similar laws now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary proceeding
under any such law, or consents to the appointment or taking
possession by a receiver, liquidator, assignee (or similar
official) for any part of their properties;
(g) the Borrower is deemed unable to pay its debts or becomes
unable to pay its debts as they fall due or suspends or
threatens to suspend making payments (whether principal or
interest) with respect to any of its debts;
(h) Breach of any of the covenants as mentioned in Clause 6.1
and Clause 6.2 above
8. REMEDIES ON EVENT OF DEFAULT
8.1. Upon an Event of Default, the Pledged Shares shall be
forfeited by the Escrow Agent for the benefit of the Lender
who shall hold the same as trustee for the Lender and then
deal with Pledged Shares as per the instructions of the
Lender.
8.2. In addition to the above, the Lender shall also have a right
to:
(a) enforce the security interest created pursuant to the
Finance Documents;
(b) exercise all the rights and remedies available to it under
the Finance Documents in such manner as the Lender may deem
fit without intervention of the Court and without any
consent of the Borrower and/or any Person.
8.3. The Borrower agrees that at any time after an Event of Default
occurs, the Lender shall have the right, without prejudice to
its other rights under this Agreement and the other Finance
Documents and/or under any Applicable Law, in its discretion
to exercise all the rights, powers and remedies vested in it
(whether vested in it by or pursuant to this Agreement, the
other Finance Documents or by any Applicable Law) for the
protection, perfection and enforcement of its rights in
respect of the Security, and the Lender shall be entitled,
without limitation, to exercise the rights set out below:
(a) to give suitable instructions to the Escrow Agent such that
the Pledged Shares are released and handed over to the
Lender;
(b) to transfer or register in the name of its nominees, as it
shall deem fit, all or any of the Pledged Shares, at the
cost of the Borrower;
(c) to receive all amounts payable in respect of the Security;
(d) to receive cash proceeds and/or to sell the non-cash
Security (or any part thereof), without the intervention of
the court or other judicial authority and/or Governmental
Authority, at public or private sale or on any securities
exchange for cash, or transfer or procure registration in
the name of the Escrow Agent, or any of its nominees at the
cost of the Borrower, as the Escrow Agent may deem
commercially reasonable and apply the proceeds thereof
towards payment of the Obligations, provided that the Escrow
Agent shall not be obliged to make any sale of any Security
relating to Pledged Shares if it desires not to do so,
regardless of the fact that notice of sale may have been
given;
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(e) to take all such actions including vote all or any part of
the Pledged Shares (whether or not transferred in the name
of the Escrow Agent) with respect thereto as though it were
the outright owner thereof;
(f) exercise such other rights as the Lender may deem fit under
Applicable Law.
9. CONTINUING OBLIGATIONS
The liabilities and obligations of the Borrower under or pursuant to
this Agreement and the other Finance Documents shall remain in full
force and effect notwithstanding any act, omission, event or
circumstance whatsoever until the Final Settlement Date.
10. COSTS, CHARGES AND EXPENSES
Each Party shall bear all its own costs, charges and expenses
(including legal and other fees on a full indemnity basis), and Taxes
on it pertaining to the Loan in connection with the negotiation,
preparation, execution, registration, administration, modification and
amendment of this Agreement, the other Finance Documents and any other
document delivered hereunder and in exercising, protecting, perfecting,
preserving or enforcing any of its rights or powers hereunder or there
under (including the security interest created under or pursuant to the
Finance Documents) or in suing for or seeking to recover any sums due
hereunder or thereunder or in defending any claims brought against it
in respect of this Agreement and any other document delivered hereunder
or pursuant to this Agreement or in releasing this Agreement, the other
Finance Documents or the security interest created hereunder or
pursuant to this Agreement and the other Finance Documents on the Final
Settlement Date.
11. INDEMNITY
The Borrower shall indemnify and hold harmless the Lender, the Escrow
Agent and their nominees, agents, officers, and directors ("Indemnified
Parties") against all actions, proceedings, claims, demands, judgments,
losses, liabilities, obligations, damages, costs and expenses
("Losses") imposed, asserted against or incurred by them which may be
incurred, sustained or raised in respect of any Event of Default or the
non-performance of or non-observance of any of the undertakings,
representations and warranties and agreements on the part of the
Borrower herein contained or contained in any other Finance Documents
or in respect of any inaccuracy in the representation and warranties
relating in any way whatsoever to the security interest created
hereunder.
12. RELEASE AND TERMINATION
Upon the occurrence of the Final Settlement Date, this Agreement shall
terminate and the Escrow Agent shall, as provided in the Escrow
Agreement, release the Security from the pledge granted hereby, and
shall deliver to Borrower such Security as may be in the possession of
the Escrow Agent. However, in no case or in no event whatsoever, the
securities shall be released to the Borrower before the seventh
anniversary of the Closing Date.
13. MISCELLANEOUS
13.1. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of England.
13.2. Dispute Resolution
(a) In the event any Party is in breach of any of the terms of
this Agreement, another Party may serve written notice to
require the Party in breach to cure such breach within
thirty (30) days of the receipt of such written notice
thereof.
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(b) In the case of any dispute or claim arising out of or in
connection with or relating to this Agreement, or the breach
(where such breach has not been cured by the Party in breach
within thirty (30) days of a written notice thereof),
termination or invalidity hereof, the Parties shall attempt
to first resolve such dispute or claim through discussions
between senior executives of the Investor.
(c) If the dispute is not resolved through such discussions
within thirty (30) days after one Party has served a written
notice on the other Party requesting the commencement of
discussions, dispute or claim shall be finally settled by
arbitration under the United Nations Commission on
International Trade Law Arbitration Rules (the "UNCITRAL
Rules") as are in force at the time of any such arbitration.
For the purpose of such arbitration, there shall be one
arbitrator jointly appointed by the Parties, failing which
there shall be three (3) arbitrators in accordance with the
UNCITRAL Rules (the "Arbitration Board"). The Company shall
appoint one arbitrator, and the Investor shall appoint one
arbitrator. The two arbitrators shall then jointly appoint a
third arbitrator, who shall serve as Chairman of the
Arbitration Board.
(d) All arbitration proceedings shall be conducted in the
English language and the place of arbitration shall be in
London, England, United Kingdom.
(e) Each Party shall co-operate in good faith to expedite (to
the maximum extent practicable) the conduct of any arbitral
proceedings commenced under this Agreement.
(f) The costs and expenses of the arbitration, including, the
fees of the third arbitrator on the Arbitration Board, shall
be borne equally by each Party to the dispute or claim and
each Party shall pay its own fees, disbursements and other
charges of its counsel and the arbitrators nominated by it,
except as may be otherwise determined by the Arbitration
Board. The Arbitration Board would have the power to award
interest on any sum awarded pursuant to the arbitration
proceedings and such sum would carry interest, if awarded,
until the actual payment of such amounts.
(g) Any award made by the Arbitration Board shall be final and
binding on each of the Parties that were parties to the
dispute.
13.3. Notice/Communication
(a) Each notice, demand or other communication given or made
under this Agreement shall be in writing and delivered or
sent to the relevant Party at its address or fax number set
out below (or such other address or fax number as the
addressee has by seven (7) Business Days' prior written
notice specified to the other Parties). Any notice, demand
or other communication given or made by letter between
countries shall be delivered by registered airmail or
international courier service. Any notice, demand or other
communication so addressed to the relevant Party shall be
deemed to have been delivered (i) if delivered in person or
by messenger, when proof of delivery is obtained by the
delivering Party, (ii) if sent by post within the same
country, on the fifth day following posting, and if sent by
post to another country, on the tenth day following posting,
and (iii) if given or made by fax, upon dispatch and the
receipt of a transmission report confirming dispatch.
(b) The initial address and facsimile for the Parties for the
purposes of the Agreement are:
If to the Lender:
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Name : COPYTELE INTERNATIONAL LTD.
Address : c/o CopyTele, Inc.
000 Xxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention : Xx. Xxxxx X. Xxxxxx
Fax : 000-000-0000
Telephone : 631-549-5900
If to the Borrower:
Name : MARS OVERSEAS LIMITED
Address : X/x Xxxxxxxx Xxxxxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxx Xxxxx,
Dr. D. N. Road, Fort ,
Mumbai, India: 400001
Attention : Xx. Xxxxxxxxx X. Xxxxx
Fax : x00 00 0000 0000
Telephone : + 91 22 6611 3600
13.4. Waiver/Forbearance
Any waiver of any provision of this Agreement and any waiver of any
default under this Agreement shall only be effective if made in writing
and signed by the Lender. Any waiver or forbearance or delay on the
part of the Lender to insist upon the performance of any terms and
conditions of this Agreement, or to exercise any right or privilege
conferred under this Agreement, or to demand any penalties resulting
from any breach of any of the terms or conditions of this Agreement
shall not be construed as a waiver on the part of the Lender of any of
the terms or conditions of this agreement or of its rights or
privileges or of any other default on the part of the Borrower, and all
original rights and powers of the Lender under this Agreement will
remain in full force, notwithstanding any such forbearance or delay.
For the avoidance of doubt it is clarified that the waiver by the
Lender of any of its rights under this Agreement on a particular
occasion shall not constitute a waiver on any subsequent occasion of
such right.
13.5. Severability
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, the legality, validity and enforceability of such
provision under the law of any other jurisdiction, and of the remaining
provisions of this Agreement shall not be affected or impaired thereby.
In the event that any of the terms or provisions of this Agreement or
portions or applications thereof, are held to be prohibited,
unenforceable or invalid under any law, a reasonable adjustment in such
term or provision shall be made with a view towards effecting the
purpose of such terms and provisions of this Agreement, and the
enforceability and validity of the remaining terms and provisions, or
portions or applications thereof, shall not be affected thereby.
13.6. Survival
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Any expiry or termination of this Agreement or the release of any
securities on the occurrence of the Final Settlement Date shall not
affect Clauses 1.1, 1.2, 11, 12 and 13 which shall survive expiry or
termination of this Agreement and/or the release of any of the
securities.
13.7. No Assignment
(a) The terms and provisions of this Agreement shall be binding
upon, and the benefits hereof shall inure to the Parties
hereto and their respective successors and assigns.
(b) Neither Party shall assign this Agreement or any of the
rights, duties or obligations hereunder without the prior
written consent of the other Party.
13.8. Variation of the Terms
No amendment, modification or variation of this Agreement shall be
binding on either the Borrower or the Lender unless such amendment,
modification or variation is in writing and is signed by each of the
Borrower and the Lender.
13.9. No Third Party Beneficiaries
This Agreement does not create, and shall not be construed as creating,
any rights enforceable by any person not a party to this Agreement
(except as provided in Clause 11) under the Contracts (Rights of Third
Parties) Xxx 0000 or otherwise.
13.10. Counterparts
This Agreement may be executed in one or more counterparts, including
counterparts transmitted by facsimile, each of which shall be deemed an
original, but all of which signed and taken together shall constitute 1
(one) document.
IN WITNESS WHEREOF the Parties hereto have executed these presents the day and
year first hereinabove written.
COPYTELE INTERNATIONAL LTD.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
MARS OVERSEAS LIMITED
By: /s/ Xxxxxxxxx X. Xxxxx
----------------------
Name: Xxxxxxxxx X. Xxxxx
Title: DIRECTOR
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