Exhibit 10.5
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LOAN AND PLEDGE AGREEMENT
BETWEEN
MARS OVERSEAS LIMITED
AND
COPYTELE INTERNATIONAL LTD.
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................................................8
7. EVENTS OF DEFAULT...................................................10
8. REMEDIES ON EVENT OF DEFAULT........................................11
9. CONTINUING OBLIGATIONS..............................................11
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 this 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 "Borrower" 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 "Lender" 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$5,000,000.
B. The Borrower has agreed to acquire 1,495,845 Global Depository
Receipts of Videocon Industries Ltd. ("Pledged GDRs") having a
face value of US$ 10 each.
C. The Loan will be secured by pledge of the Pledged GDRs 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 Borrower shall have
purchased the Pledged GDRs and the Lender shall have
purchased 20,000,000 shares of the common stock of
CopyTele Inc. 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 the 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) "GDR Certificate/Receipt" means a document evidencing
holding of GDRs by the Borrower;
(o) "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;
(p) "Loan" shall have the meaning ascribed to it in Clause
2.1 of this Agreement;
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(q) "Maturity Date" shall mean the seventh anniversary of
the Closing Date;
(o) "Maturity Value" shall mean, when the loan is repaid on
the Maturity Date, a sum of US$ 5 million;
(r) "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;
(s) "Security" means collectively, the GDR
Certificates/Receipts or any other document or
instrument evidencing ownership of GDRs, the transfer
documents duly signed relating to the Pledged GDRs, and
the Pledeged GDRs.
(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 Borrower shall have acquired the Pledged
GDRs; and
iii) The Parties and the Escrow Agent shall have
entered into the Escrow Agreement.
3. CREATION OF SECURITY
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
GDRs, and shall deposit and deliver to the Escrow Agent such
relevant instruments or documents, including security
receipts/forms/depository slips, GDR Certificate/Receipts or
any other document required for effectuating the pledge of the
Pledged GDRs.
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3.2. The Borrower shall provide any information and assistance as
may be reasonably necessary to perfect the pledge created over
the Pledged GDRs 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 GDRs 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 GDRs 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 GDRs or for
sale/transfer of the Pledged GDRs other than in accordance
with the terms of the Escrow Agreement.
3.5. The Pledged GDRs 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 GDRs 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 British Virgin Islands and has the
power and authority to carry on business as is now
being carried on and to own its property and assets;
(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;
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(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
GDRs;
(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) on the Closing Date, the Borrower shall be the legal
and beneficial owner of, and shall have good and
marketable title to, or 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 will not be subject to any Encumbrances other
than those created pursuant to the Finance Documents.
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:
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(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 GDRs 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 GDRs which has been pledged in favour of the
Escrow Agent for the benefit of the Lender;
(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;
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(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 GDRs 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 an
unsecured loan of an amount not exceeding US$
16,300,000/- (US$ Sixteen Million Three Hundred
Thousand) from CopyTele Inc., Parent Company of the
Borrower. The loan so obtained from CopyTele Inc.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 GDRs 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;
(e) the Borrower fails to maintain a valid legal title to
the Pledged GDRs;
(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;
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(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 GDRs 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 GDRs 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 GDRs 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 GDRs, 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 GDRs if it desires not to
do so, regardless of the fact that notice of sale may
have been given;
(e) to take all such actions including vote all or any part
of the Pledged GDRs (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.
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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.
(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.
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(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 Borrower:
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
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Telephone : 000-000-0000
If to the Lender:
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 : + 00 00 0000 0000
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
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.
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(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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