PARI PASSU AGREEMENT BETWEEN LENDING INSTITUTIONS
(Consortium agreement)

This Agreement made at…………on this……..day of……..20……..between ABC Financial Corporation, a statutory corporation constituted under the State Financial Corporation Act, and having one of its local Head Offices at    of the First Part; (2) XYZ Bank, a Banking Corporation constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and having its Head Office at………of the Second Part; (3) BCD Bank Ltd. a Banking Company registered under the Companies Act, 1956, and having its Registered Office at………..of the Third Part; (4) Bank of…………….also a bank constituted under the said Act of 1970 and having its Head Office at     of the Fourth Part (all the above mentioned institutions being hereinafter collectively referred to as "the Financial Institutions which expression wherever the context so permits shall mean and include each of them and/or any one or more of them and shall also include their respective successors and assigns) and EFG Company Limited, a company registered under the Companies Act, and having its registered office at   hereinafter referred to as the Company of the Fifth Part.
WHEREAS
(1) At the request of the said company the Financial Institutions have agreed to grant accommodation to it by way of term loan and or cash credit facility for an amount not exceeding an aggregate limit of Rs…………(Rupees……..only) in which aggregate limit participation by each of the Banks shall be in the following shares :-
Name of the participating Financial              Percentage of Participation
Institution                                                      in the aggregate limit
1. ABC Financial Corporation                            % i.e. Rs
2. Bank                                                                % i.e. Rs
3. BCD Bank Ltd.                                               % i.e. Rs
4. Bank of                                                            % i.e. Rs
(2) by a deed of mortgage dated…….the executed by the Company  in favour of the Financial Institutions and registered at the office of the Sub-Registrar of assurances at  under the serial No…..of Book No. I the Company has transferred and assigned the immoveable properties of the Company described in the first schedule thereunder written (being the same as described in the First Schedule hereunder) to secure the said aggregate amount of Rs………with interest thereon and other See Note at the end of Form No. 6. moneys payable by the company has therein mentioned subject to the covenant for redemption therein contained and with all other powers and provisions therein mentioned.
(3) By a Deed of hypothecation dated………executed by the Company in favour of the Financial Institution, which Deed of Hypothecation shall be taken as part hereof, the Company has created in favour of the Financial Institutions a first charge by way of hypothecation
(a) On the whole of the company's present and future stocks of raw materials, goods in process of manufacture and all finished or manufactured goods and articles, a particular and general description of which is given in the schedule to the said deed of Hypothecation (being the same as given in the Second Schedule hereunder written) together with all stores, components and spares which now belong to or may hereafter from time to time during the continuance of the said security belong to the Company and which are or shall may be brought into stored or be in or upon or about the company's factory, godown and/or other premises at……..or wherever else the same may be situated, stored or lying or being (including any such raw materials, articles or goods stores spares components or other moveable property in course of transit or delivery to the Company) and 
(b) all the Company's present and future book debts, outstanding moneys, receivables, claims, bills, rights to and in moveable property and moveable assets  to the intent that such charge in favour of the Financial Institution shall inter se rank pari passu and without any preference or priority to any one over the other(s).
(4) It has been agreed by and between the Financial Institutions  that the said ABC Financial Corporation (hereinafter referred to as the 'Leader' shall act and function in respect of the conduct of the said accommodation by way of term loan and/or cash credit facility and the security therefor for itself and on behalf of all the said other Financial Institutions and such other Financial Institutions having agreed to appoint the leader as their agent to act as provided hereunder on their behalf in matters and things pertaining to and connected with the said accommodation by way of term loan and/or cash credit facility and the security therefor.
(5) Pursuant to the said agreement by and between the Financial Institutions with a view to defining the rights and obligations inter se the Financial Institutions, they have agreed to enter into this Agreement: 
NOW THIS AGREEMENT WITNESSETH AND THE FINANCIAL INSTITUTIONS Agree and the Company confirms as follows:
1. That the Financial Institutions shall grant accommodation to the Company by way of cash credit facility of an amount not exceeding an aggregate limit of Rs……(Rupees only) and that such aggregate limit shall stand distributed among the Financial Institutions in the following shares:

Name of the Participating                                 Percentage of Participation
Financial Institution                                          in the aggregate limit
ABC Financial Corporation                                    % i. e. Rs
XYZ Bank                                                               % i.e. Rs
BCD Bank Ltd.                                                        % i.e. Rs	
Bank of                                                                     % i.e. Rs
And at the aggregate limit the respective shares of the Financial Institutions may be varied from time to time by mutual consent.
2. That the Financial Institutions will open in their respective books separate term loan and/or cash credit accounts in the name of the Company in respect of such term loan and/or cash credit facility with each of them and will ensure that drawings out of and payments into each of the said term loan and/or cash credit accounts are regulated by the Company in such manner that the amounts due from time to time for principal and interest on each of the said term loan and/or cash credit accounts are kept as nearly as practicable pro rata to the respective limits granted by the Financial Institutions.
3. That the rights under and in respect of the security created by the Company in favour of the Financial Institutions by way of mortgage and hypothecation shall rank pari passu in all respects and for all intents and to all purposes inter se the Financial Institutions and without any preference or priority of one over the other(s). The Financial Institutions shall stand in the same position without claiming prior rights and divide and appropriate the realisation of the security in such shares and such manner as mentioned herein.
4. That, except as regards acts, matters and things which may be done by each of the Financial Institution including as provided herein and/or in the said Deed of mortgage and the Deed of Hypothecation, the Leader will act on its own behalf and on behalf of the other Financial Institutions in all other acts, matters and things pertaining to and connected with the said accommodation by way of term loan and/or cash credit facility and the security therefor. The other Financial Institutions hereby authorise the Leader to act as their agent and for and on behalf of each of them to function as such Leading Financial Institution as provided herein in respect of all other acts matters and things pertaining to and connected with the said accommodation by way of cash credit facility and security thereof. 
5. That, except as regards acts, matters and things which may be done by each of the Financial Institutions including as provided herein, and/or in the said deed of mortgage and the hypothecation all rights and powers vested in the Financial Institutions under the said deed of mortgage and the deed of Hypothecation and under any other arrangements, agreements or otherwise in respect of all other acts matters and things pertaining to and connected with the said accommodation by way of term loan and/or cash credit facility and security therefor by way of mortgage and hypothecation or otherwise shall be exercised by the Financial Institutions, through the Leader. 
6. Without prejudice to the preceding two clauses, any one or more of the Financial Institutions may also take any steps to take possession or realise or enforce the mortgaged and hypothecated security either through the intervention of the court or otherwise howsoever and in whatever manner it/they may think fit and for that purpose exercise all rights and powers vested in it/them by law and/or under the said deed of mortgage and deed of Hypothecation and/or under any other arrangements or agreements  or otherwise,  or may close the term loan and/or cash  credit account(s).  Provided that in the morning of the full working day immediately preceding any such action intended to be taken by any one or more of the Financial Institutions under this clause, due notice of such intention and of the action intended to be taken shall be communicated in writing by such Financial Institutions to the other Financial Institutions and the latter or any of them shall immediately, as soon as possible, after the receipt of such notice, demand repayment of the monies due on the relative term loan and/or cash credit account(s)of the Company with its/them and notify its/their respective intentions in writing either to act jointly in such action with such Financial Institution (s) taking the action or otherwise.   In the event of the Financial Institution (s) agreeing to act jointly in such action then all the Financial Institutions shall act jointly through the Leader. 
7. In the event of failure, neglect or refusal by any one or more of such other Financial Institutions to join in any such action, the Financial Institution taking action shall make the other Financial Institutions so failing, neglecting or refusing, as party defendant(s) in any legal proceedings which such Financial Institution may take against the Company. The proceeds of any realisations in such legal proceedings shall be available for and be appropriated to the indebtedness of the Company to all the Financial Institutions due and outstanding under the respective term loan and/or cash credit account(s) with such Financial Institutions. The failure, neglect or refusal of any of the Financial Institutions to join in such action shall not affect the rights of such Financial Institutions so failing, neglecting or refusing in any manner whatsoever vis a vis the Company and/or the mortgaged and hypothecated security.
In the event of the Financial Institutions deciding in common to enforce the security and realise the amount due to them respectively, the Leader shall take necessary action, in consultation with the other Financial Institutions, to enforce the security either by selling the mortgaged property and hypothecated goods by auction sale outside the court and in exercise of the power contained in the said Deeds or by filing a suit in the proper Court for sale of the said properties and realisation of the amounts due to the Financial Institutions. In the event of taking such action the Leader will be entitled to take possession of the property or to get a receiver appointed thereof through court and to make all such applications and to take such other action as may be thought proper and in the interest of the Financial Institutions. The Leader will always keep informed the other Financial Institutions of such actions and applications and the results thereof. In the event of taking any legal proceeding the same may be taken by the Leader in its own name as plaintiff and join the other Financial Institutions as co-plaintiffs or as formal defendants and the other Financial Institutions shall give all co-operation to the Leader in that behalf as may be required by law.
8. Subject to the provisions of clauses 6 and 7 herein, in the event of the mortgaged and hypothecated security being realised howsoever and in whatever manner, the proceeds of such realisation, including monies received  from  insurance  companies  or  otherwise  in  respect  of the security, remaining after deducting therefrom the cost (between attorney/ advocate and client), charges and expenses incidental to such realizations shall in the first instance be appropriate towards or in satisfaction of all indebtness  of the  Company  due  and  outstanding  to  the  Financial Institution(s), such indebtedness being the amount outstanding under the term loan and/or cash credit accounts, and the interest due thereon upto the date of realisation of the security whether actually debited or not to the said term loan and/or cash credit accounts together with any cost (between attorney advocate and client) charges and expenses debitable to the term loan and/or cash credit accounts whether actually debited or not, pro-rata in accordance with the total amount of such indebtedness due and outstanding under and in respect of the said the term loan and/or cash credit accounts as aforesaid with each of the Financial Institutions and thereafter the balance, if any, shall be available for, and be appropriated to the outstanding indebtedness or liabilities of the Company on any account or in any manner to the Financial Institutions pro-rata in accordance with the total amount of such other outstanding indebtedness- or liabilities. And in the event of the net proceeds of realisation remaining as aforesaid being insufficient for repayment of whole of the respective amounts due to the Financial Institutions, the same shall be appropriated in liquidation of the indebtedness of the company to the Financial Institutions as aforesaid pro-rata in accordance with the total amount of such in debtedness and liabilities.  Until such appropriation, the monies realized by the Leader or any or more of the Financial Institutions or by its/their agents, nominees,  officers,  shall be held by the Leader or any such Financial Institutions or by its/their agents, nominees or officers in trust for all the Financial Institutions in accordance with their respective rights hereunder. In the event of the net sale proceeds found insufficient to pay of the amounts due to the Financial Institutions as aforesaid the Financial Institutions or any of them will be entitled to take separate proceedings to realise the deficit in such way or manner as they or it think fit. In this clause, the expression "Date of realisation" shall mean the date agreed upon amongst the Financial Institutions and failing such agreement, the date or, if more than one, the first of the dates on which any one of the Financial Institutions or all of them realise(s) the security under the said deed of mortgage and deed of Hypothecation or under any arrangement, agreement or otherwise.
9. That where it is desired that an increase in the aggregate term loan and/or cash credit limit shall be made and/or that the shares of the various Financial Institutions shall be varied, the Company shall be required to apply to the Leader which shall conduct the initial appraisal for the grant or otherwise of such increase in limit or change in the distribution of the limits and shall approve, after consultation with and by the consent of each of the Financial Institutions of such increased limit, including the distribution of such increased limit or any change in the allocation of the limit among the Financial Institutions.
10. That the Company shall be required to send  to all the Financial Institutions simultaneously the stock statements, all financial and other statements, reports, returns, certificates and information and such other periodical data as may be decided upon.  The Leader shall work out the drawing power of the Company under the term loan and/or cash credit accounts maintained with each Financial Institutions and advise as early as possible the other Financial Institutions of the drawing powers of the Company allocated to each of them.
11. That each of the Financial Institutions shall advise the other Financial Institutions before the 5th working day of each month figures relating to the average drawing, total credit and debit summations and maximum and minimum drawings during the previous month. 
12. That each of the Financial Institutions shall adhere to the drawing powers allocated to them and will not normally permit excess drawings otherwise than with the specific consent of all the Financial Institutions.
13. The Leader shall from time to time call upon the company and obtain from the company (1) an inventory of uptodate hypothecated goods and book debts (2) copies of the early balance sheet and profit and loss account statement of the Company (3) the names of directors and any change in the Board of Directors. (4) a copy of the annual report of the Company (5) a copy of the minutes of the General meetings of the share holders of the Company (6) information regarding any suits or legal proceedings taken by or against the Company (7) such other information as the Leader may think fit and such information and copies of such documents as aforesaid shall be supplied to the other Financial Institutions forthwith.
Nothing however will prevent any Financial Institution from calling for such documents and information from the company independently but in such case such information and copies of documents shall be passed on by such Financial Institutions to the others of them.
14. Nothing in this agreement shall prevent any of the Financial Institutions from enforcing any additional security by way of personal guarantees of the Directors of the company or otherwise taken in respect of the term loan and/or cash credit facility covered by the Deeds of Mortgage and Hypothecation provided that the moneys realised therefrom shall be credited to the account of the said term loan or cash credit facility and provided intimation in writing is given by such Financial Institutions to the others of them.
15. If any of the Financial Institutions advances any further loan to the Company and obtains further security of the properties comprised in the other banking business of the company already being handled by any or more of the Financial Institutions at the commencement of the participation arrangement and /or rights, benefits, obligations and liabilities arising from such business will not be shared with the other Financial Institutions and all rights, benefits, obligations and liabilities arising out of such business will accrue to or be suffered by the concerned Financial Institutions transacting such business.
16. That the Leader may charge a fee for its service rendered as a Lead Financial Institution and such fee shall be determined in consultation with and by the consent of all the Financial Institutions and such service fee shall be borne by the Company and shall be debitable to the term loan and/ or cash credit account maintained with the Leader. In case it is not possible to recover the service fee from the Company or from security realised, all the Financial Institutions will share the service fee in the proportion to the limits sanctioned by them and reimburse the Leader with the same.
17. That the Leader shall keep the other Financial Institutions informed of all the major developments relating to the affairs of the Company, suitably and, if necessary, by arranging periodical meetings of the representatives of all Financial Institutions being parties hereto to discuss the matters arising out of the said accommodation and take decisions in respect thereof and such meetings may be held with or without an invitation having been sent to the Company for attending the meetings.   Also, the other Financial Institutions or any one or more of them coming to know of any developments relating to the affairs of the Company shall keep the other Financial Institutions including the Leader informed about the same and the Leader shall in such cases, if necessary arrange special meetings of the Financial Institutions.
18. That all the monies received by the Leader or any one or more of the
Financial Institutions.
(a) by realisation of the mortgaged and hypothecated security from the insurers in respect of the insurance of mortgaged and hypothecated security.
(b) in any other manner from the Company, shall be held by the Leader or such other Financial Institutions for and on behalf of all the Financial Institutions and shall be paid and appropriated in the manner and proportion as indicated in these presents.

19. That in case any one or more of the Financial Institutions intend to withdraw from the participating arrangement, the manner in which and the extent to which such withdrawal shall take place shall be discussed and settled between all the Financial Institutions.
20. No Financial Institutions shall without the consent of the other(s) agree to any modification of the terms of the said Deed of mortgage and Deed of Hypothecation nor without like consent grant time or other indulgence to the Company after the mortgaged and hypothecated security has become enforceable or is being enforced.
21. All acts deeds and things done or purported to be done in accordance with this Agreement by the Leader for and on behalf of the Financial Institutions shall be treated as acts deeds and things done by all of them and the Financial Institutions shall ratify and confirm the same and shall indemnify and keep indemnified the Leader in respect thereof. 
22. Without prejudice to the generality on the rights, powers and responsibilities of the Leader herein contained, it shall be the responsibility of the Leader.

(1)To ensure that all the requirements of law (including registration of charges) necessary for the conduct of the said accommodation by way of the term loan and/or cash credit facility and the creation and continuance of the security therefor are complied with; and 
(2) in case it is necessary to file a suit for any reason whatsoever in the conduct of the said accommodation by way of term loan and/or cash credit facility to file a suit(s) against the Company on its behalf and on behalf of the Financial Institutions with the consent of and at the cost of all the Financial Institutions.

23. This agreement shall be deemed to be a part of the said Deed of Mortgage and Hypothecation and the Company hereby confirms what is provided herein and agrees to abide by the terms and provisions herein contained.
24. The Financial Institutions other than the Leader shall if necessary execute general power of attorney in favour of the Leader authorising the latter to execute all powers and rights given to the Financial Institutions under the said Deed of Mortgage and Deed of Hypothecation for the protection , enforcement and realisation of the security created thereby provided that no such powers or right shall be exercised by the Leader under such power of attorney without the express consent of  the other Financial Institutions and shall not be exercised to the prejudice of the rights of the other Financial Institutions.
25. The original deed of mortgage and Deed of Hypothecation and all the title deeds relating to the Mortgaged properties handed over by the Company shall remain in the custody of the Leader and the other Financial Institutions shall be furnished with true copies  thereof for their record.
The other Financial Institutions jointly or separately shall have the right to take inspection of such deeds and title deeds as and when required and to be furnished with copies or extracts therefrom as and when required.
IN WITNESS THEREOF the Parties hereto have put heir hands and seals the day and year first herein above written
FIRST SCHEDULE ABOVE REFERRED TO X        X        X        X
SECOND SCHEDULE ABOVE REFERRED TO X        X        X        X

Signed for and on behalf of M/s. ABC.......
Financial Corporation by 
in the presence of
Signed for and on behalf of X Y Z Bank by,
in the presence of
Signed for and on behalf of B C D Bank by
in the presence of
Signed for and on behalf of Bank of .......
By in the presence of
Signed for and on behalf of E F G Ltd
By in the presence of