, ,

, .AAXlSBANK

BANGALOREKAR/IGR/AUTH/PB-84

142 S8 q;""i~q;~ 177381 NOV 24 2009I 1lIO 1l!fOMIl two Ii¥e lBU ll!lO 1 6: 5 5

iNDIARs.0002500 PB6567

STAMP DUTY KARNATAKA

THISDEEDOFHYPOTHECATIONexecuted at Bangalore on ~4. tI ,).-oog byM/s Kon Chern India Pvt Ltd incorporated under the Companies Act, 1956and having itsregistered office at Flat 1-A, Prema Apartments, NO.50,11Ih Main Road, Malleshwaram,Bangalore-560003 through its authorized signatories Shri. Kishore Krishnaswamy(hereinafter referred to as the "Borrower" which expression shall unless excluded orrepugnant to the context or meaning thereof shall include itssuccessorsand assigns)

COMPOSITE HYPOTHECATION DEED(Current Assets,Movables, Plant & Machinery]I~

:I::J~>a;D.<o~~W

~ ~ IN FAVOUR OF

e ..........-'-.IAXISBANK LTD, a Company incorporated under the Companies Act, 1956,carrying on.f ~the Banking businessunder the provisionsof Banking Regulation Act, 1949and having its

Registered Office at 'Trishul',3rd Floor,Opposite Samartheshwar Temple, Law Garden, EllisBridge, Ahmedabad 380 006, Gujarat and Corporate office at 131,Maker Towers IF', 13thfloor, Cuffe Parade, Colaba, Mumbai 400 005 and a branch at Credit ManagementCentre, No.41, 1sl Floor, Anand Rao Circle, Sheshadri Road, Bangalore-09 (hereinafterreferred to as the "Bank' which term unless the context otherwise requires includes itssuccessorsand assigns)

WHEREASAt the Borrower'srequest, the Bank agrees/has agreed to grant/granted or to continue togrant to the Borrower, credit facility in the form of Cash Credit aggregating to Rs.25,00,000/- (Rupees Twenty Five lakhs Only) (hereinafter referred to as the "CreditFacility") vide its sanction letter no. SAG/BLR/247/2009-10 dated 20.11.2009 (hereinafterreferred to as the said "sanction letter") to be secured in the manner as follows:

In consideration of the premisesas stated above the Borrower hereby agrees as follows:

1. The Borrower hereby hypothecates by way of first charge in favour of the bank tosecure the said credit facility:all the stock in trade both present and future consisting stock including rawmaterial, stock in process, finished goods, cash, and other current assetswhatsoever, being movable properties now or at any time hereafter belonging tothe Borrower or at my/our disposal and now or at any time and from time to time

For KON CHEM INDIA PRIVATE LIMITED - 1 -

Director

hereafter stored or be stored or brought into or upon or in course of transit tomy/our factory or premisesor at any other place whatsoever and wheresoever inmy/our possessionor occupation or at any other premisesor place ( all of whichherein after collectively referred to as "stock" ), and outstanding moniesreceivable, claims and billswhich are now due and owing or which may at anytime hereafter during the continuance of thissecurity become due and owing tothe Borrower in the course of its businessby any person, firm, company or bodycorporate or by the Government Department or office or any Municipal or Localor Public or Semi Government body or authority or any body corporate orundertaking or project whatever in the public sector (the said "debts" ) (all ofwhich are hereinafter referred to as "Current assets" and more particularlydescribed in the Schedule IIC hereto);

2. The Borrower hereby also hypothecates by way of first charge in favour of thebank to secure the said Credit Facility all the movable fixed assetsboth presentand future consisting of plant, machinery spares, tools and accessories, fixtures,implements, fittings and other installations, furniture, vehicles, computers and allother articles, equipments and things both present and future whether installedand or fastened to earth or not, whether lying loose or in cases, at site or in transitor which may at any time hereafter during the continuance of this security beinstalled or lying loose or in cases of being in or upon or about the Borrower'sfactory premises, warehouses and Godowns at No.519, Shed 'C' 4th Phase,Peenya Industrial Area, Bangalore ,Flat 1-A, Prerna Apartments, No.50, 11 th MainRoad, Malleshwaram, Bangalore-560003or wherever else the same may be or beheld by any party anywhere to the order and disposition of the Borroweror in thecourse of transit to the Borrower described in general terms in the schedulehereto (all of which are hereinafter referred to as "Movable Properties"and moreparticularly described in the Schedule IIA & B);

The 'Current Assets ' and the 'Movable Properties" are hereinafter collectivelyreferred to as the "Hypothecated Properties"

3. That the said Credit Facility hereunder granted or continued by the bank shallbeapplied and utilized by the Borrower in the ordinary course and only for thepurpose for which the said Credit Facility isgranted.

4. That all the Hypothecated Propertiesand all salesand realizations and Insuranceproceeds thereof from all or any of them shall be held by the Borrower in trust forand on account of the Bank as the Bank's exclusive property especiallyappropriated to thissecurity and the Borrowershall not create any charge, lien orencumbrance affecting them or any part thereof or do anything which wouldprejudicially affect this security and the Borrower shall not part with theHypothecated properties save and except by way of sale in the ordinary courseof the Borrower'sbusinessand as herein under provided, nor shall any sale bemade after prohibition in writing by the Bank against selling and as regards theHypothecated Propertiesin Schedule IIA the same shall not be sold or alienatedunlessspecifically permitted by the Bank.

5. That the Borrower shall be at liberty from time to time to sell or dispose of in anymanner, the Hypothecated Propertiesin Schedule II Bor any part thereof in duecourse of businessPROVIDEDthe Borrowershallon any such sale on receipt of thedocuments or sale proceeds deliver the documents or pay the sale proceeds to

Director

For KON CHEM INDIA PRIVATE LIMITED

VD~r

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the Banktowards reduction of the Borrower'sliability or good of a similarnature tothose or any of those mentioned in the schedule hereto and of at least equalvalue are substituted for the goods so sold or disposed of and the marginrequired on the security isfully maintained.

6. That the Borrower shall permit the Bank, their agents and servants from time totime and at all times to enter upon any god own or premises wherein theHypothecated Properties or any part thereof and/or all records of the Borrowermay for the time being be, and to view, inspect and value the same and makeinventories thereof and render to the Bank and their agents all facilities as mayberequired for any of the purposes aforesaid. All costs, charges and expensesincurred by the Bank or anything incidental to such inspection and valuation,possessionand removal shall be paid by the Borrower to the Bank and if not paidbe debited to the Borrower's account which shall attract interest at the ratehereinafter mentioned. Any such valuation shall be conclusive and binding onthe Borrower.

7. That the Borrower shall at the Borrower's risk cost and expenses preserve theHypothecated properties in good condition and recondition the same from timeto time. The borrower shall put necessary notice board indicating hypothecationcharge in favour of the Bank over the Hypothecated properties in a conspicuouspart of godowns/premises where all or any of the Hypothecated Properties issituates/stored/processes. The Borrowershall punctually pay all rents, rates, taxes,cesses,duties and other outgoing of the factory premisesand godown whereinthe Hypothecated Properties shall be and keep the Hypothecated propertiesfree from distress.In default, the Bankmay without affecting its rights hereunder orat law and without being bound to do so pay such rents, rates, taxes, cess,dutiesand other outgoings and any such amount paid by the Bank shall be repaid bythe Borrower on demand and in default of such payment the said amount shallbe debited to such account/s of the Borroweras the Bank shall think fit and shallcarry interest at the rate hereinafter mentioned and be a charge on theHypothecated properties.

8 (a) That all the Hypothecated Properties,which isthe subject matter of this Deed,shall be insured by the Borrower against lossor damage by fire, theft, robbery,lightening, riot civil commotion, malicious damages, strikesand/or any other riskas the Borrower may think necessary or as may be required by the Bank in itsdiscretion in the joint name of the Borrower and the Bank with an Insurancecompany/Companies approved by the Bank to he extent of at least 10%inexcess of actual value of the Hypothecated Properties and the Borrower shallpunctually pay the premium due for such insurance and that the cover note/s orthe insurance policy/policies or certificate/s or copies thereof shall be deliveredto the Bank. .

(b)lf Borrower fails to effect such insurance the Bank may, but without beingbound to do so insurethe hypothecated properties against anyone or more theaforesaid risksas may be deemed necessary by the Bank in its discretion in suchjoint names and any premium and other charges paid by the Bank shall be paidby the Borrower and until payment isreceived the said amount shall be debitedto such account of the Borrower as aforesaid as the case may be and untilrepayment interest at the rate hereinafter mentioned shall be charged on thesaid amount ..

For KON CHEM INDIA PRIVATE LIMITED

V~ 7 DirectorDi~or

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(c)ln the event of loss, destruction by fire or otherwise or damage to thehypothecated properties or any part thereof, the Bank shall be entitled torecover and receive all monies payable under the insurance. In the event of theBank not receiving the entire amount payable for any reason whatsoever theBorrowershall be bound to pay forthwith the entire balance due to the Bank.

(d)AII sums of money recovered or received under the last preceding clausemay at the discretion of the Bank be applied either towardsrepairing/replacing/reinstating the Hypothecated Properties or be appliedtowards the liquidation and satisfaction of the balance due to the Bank and ifany part of the insurance moniesshall remain in the hands of the Bankafter suchapplication as aforesaid, the Bank shall be entitled to apply the same towardsany other sum/sumsof money which may be due and owing by the Borrowertothe Bank on any other account whatsoever. If after settlement of all claims ofthe Bank against the Borrower any surplusremains, such surplusshall remain atthe disposal of the Borrower but if the sum or sumsof money realized from theinsurance be insufficient to cover the balance due to the Bankand other moniesdue to the Bank as aforesaid the Borroweragrees forthwith to repay to the Bankthe deficiency on demand.

(e) The Bank shall be entitled to adjust, settle, compromise or refer to arbitrationany dispute between the insurance company and the Borrower arising under orin connection with the insurance policy and such adjustment, settlement,compromise and any award made on such arbitration shall be valid andbinding on the Borrower. The Borrower shall as and when called upon by theBank give all necessary assistancenecessary to enable the Bank to recover theamount of insurance claim.

(f) The Borrower shall not at any time raise any question that a larger sum mightor ought to have been received under such settlement, compromise or awardas the case may be or be entitled to dispute its liability for the balanceremaining due to the Bank.

9. (a)Subject to clause 9(c) below the Borrower shall pay interest to the Bank inrespect of the said Credit Facility from time to time on the outstanding in theirrespective Credit Facility account at the respective rate/s as contained in thesanction advice forming part of the Schedule I hereunder written PROVIDEDHOWEVERthe Bankshallat any time or from time to time be entitled to change orvary the rate of interest from time to time as per the directions of the ReserveBankof India/or as per Primelending Rate/PrimeTermLending Rate fixed by the Bankiswaived. Such variation in the rate notified in the Notice Board in the Bankpremises shall be sufficient notice to the Borrower and Borrower agrees to payinterest at the rate notified i'nthe notice board from time to time until all dues arecleared in full. Provided further that the interest payable by the Borrower shall besubject to the change in Primelending Rate/PrimeTermLending Rate of the Bankfrom time to time as determined and/or interest that may be levied/prescribed bythe Bank and/or RBIfrom time to time and this Deed shall be construed as if suchrevised rate/s of interest were already mentioned in the said Schedule andagreed to be paid by the Borrower and hereby secured. The Bank shall beentitled to demand payment of interest for the time being due or other amountspayable by the Borrower under these presents without at the same time

For KON CHEM INDIA PRIVATE LIMITED -4-

Director

demanding payment of the balance due to the Bank inclusive of such interest orother amounts.

(b)Interest payable at the rate/s aforesaid shall be calculated on the daily debitbalance in cash credit, current account, Term Loan and other CreditFacility/account (s) and charged accordingly in the said account(s) of eachmonth or quarter or half - year as the Bank may decide, provided however theBorrower shall also be bound to pay the interest accrued in the respectiveaccounts as per terms of this Deed but not actually debited to the respectiveaccounts.

(c)ln the event of the Borrower not paying any amount due on account ofinterest, fees, costs, charge and expensespayable from time to time under thesepresents the Bank shall be at its discretion entitled to debit or charge suchamount(s) to any of the Credit Facilityaccount(s) namely the Overdraft Account,Cash Credit Account, Current Account or any other account of the Borrower.Any amount(s) so debited to the overdraft account, cash credit account, currentaccount or any other account of the Borrowerwith the Bankshall form part of theaccount(s) to which such amount (s)is/are debited and shall carry interest at therate or rates in force at the relevant time applicable to the account(s) to whichthe amount(s) is/are so debited.

10 (A) In the event of one or more of the following events occurring, viz,

(a) If the Borrowermakes default in payment on demand of the balance due tothe Bank, the payment whereof is hereby secured or in the performance orobservance of any term or undertaking contained in this Deed and on thepart of the Borrowerto be observed and performed;

(b) If any of the representations made by the Borrower in the application forgranting the said Credit Facility isfound to be untrue or false.

(c) If the Borrower commits default in repayment of any installment of theprincipal or interest in such winding up is filed or notice of a meeting to passsuch a resolution issued;

(d) If an Order ismade or a resolutionpassed for the winding up of the Borrowerora Petition for such winding up is filed or notice of a meeting to pass such aresolution issued;

(e) If the Borrower shall become bankrupt or is adjudicated an insolvent or aninsolvency petition isfiled against the Borrower;

(f) If the Borrowerenters into a composition with itscreditors;(g) If a Receiver is appointed of the Borrowerof all or any of the property of the

Borrower;(h) If the Borrowerceases or threatens to cease to carry on business;(i) If any execution or other similarprocessislevied or issuedagainst the Borrower;OJ If any circumstances shall occur which in the opinion of the Bank is prejudicial

or imperilsor islikely to prejudice or imperil the security of the Bank.

The entire Credit Facility/advance outstanding under the said Credit Facilityforthwith become payable and the Bank shall be at liberty to recall the entireCredit Facility and/or to realize the security hereby created. (The Bank shall bethe sole judge to determine whether any of the event stated above has actuallyoccurred or not and the Bankmay at its full discretion decide either to recall the

For KON CHEM INDIA PRIVATE LIMITED

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Director

advances or to enforce the securitiesor to continue the said Credit Facility afterthe occurrence of such event)

(B) That on the happening of any of the event above stated above, if theBank decides for realization of security, the Bank's official/s or any personauthorized by the Bank may at any time/sl enter the premisesor placewhere the Hypothecated Properties may be and take and retainpossessionof the Hypothecated properties and seize and recover orremove the Hypothecated Propertiesto any place or places as the Bankshall think fit with or without notice to the Borrower and for those purposeor any of them break open any place/s where the HypothecatedProperties may be installed, lying or stored. The Borrower shall on beingrequired by the Bank take all steps necessary to give to the Bank or itsnominee/s possessionand control of the Hypothecated Propertiesand forthat purpose the Borrower shall endorse or deliver to the Bank alldocuments and do all such acts and things as may be required by theBank.

(C) After the Bank shall have taken possessionof, seized and/or removed theHypothecated Propertiesas aforesaid, the Borrowershall from time to timeon demand by the Bank forthwith pay all rents chargeable in respect ofany place or places of storage where the Hypothecated Propertiesshallhave been stored, salary and wages of watchmen, peons or any otherpersonsemployed by the Bankand all other charges, costs and expensesincurred or paid or chargeable by the Bank in the exercise of and giveeffect to the powers vested in the Bank.

(OJ TheHypothecated Propertiesthus taken possessionof or any part thereofmay be sold by public auction or private treaty and/or otherwise disposedof as the Bank may deem fit. The Bank shall be entitled to deduct andappropriate from the sale proceeds all or any expenses incurred or paidor chargeable in connection with the exercise of the powers of the Bankand the Bank will be entitled to appropriate the net sale proceedstowards the balance due to the Bankunder this Deed and the Bank shallalso be at liberty to enforce, realize, settle, compromise, deal with any ofthe rights aforesaid without being bound to exercise any of the powers orbeing liable for any loss incurred in the exercise thereof and withoutprejudice to the Bank'srightsand remedies of suitor otherwise against theBorrower and the Borrower hereby agrees to sign all such documents,furnishall such information, deliver all relative documents and do all suchacts and things as may be required by the Bank for enabling or facilitatingany such sale or realization of or dealing with the HypothecatedProperties or any rights as aforesaid and the Borrower hereby furtheragrees to accept the Bank's account of realisation and to pay anyshortfall or deficiency therein shown.

11 That if the net sum realized by such sale be insufficient to cover the balance thendue to the Bank, the Bankshall be at liberty to apply any other money or moniesin the hands of the Bankstanding to the credit of or belonging to the Borrowerinor towards payment of the balance for the time being due to the Bankand in theevent of there not being any such money or monies as aforesaid in the hands ofthe bank or in the event of such money or monies being still insufficient for the

For KON CHEM INDIA PRIVATE LIMITED

'VvDirector Director

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r

discharge in full of such balance the Borrowerpromisesand agrees forthwith, onproduction of an account prepared and signed as hereinafter provided, to payany further balance which may appear to be due by the Borrower thereonPROVIDED ALWAYS that nothing herein contained shall be deemed to negative,qualify or otherwise prejudicially affect, the right of the Bank (which it is herebyexpresslyagreed the Borrower to the Bank upon the said Account or Accountsnotwithstanding that all or any of the said Hypothecated Properties may nothave been realized for any reasonwhatsoever.

12 That in the event of there being a surplusavailable of the net proceeds of suchsale after payment in full of the balance due to the Bank it shall be lawful for theBank to retain and apply the said surplus together with any other money ormoniesbelonging to the Borrowerfor the time being in the hands of the Bankin orunder whatever account as far as the same shall extend against in or towardspayment or liquidation of any and all other monies which shall be or maybecome due from the Borrowerwhether solely or jointly with any other person orpersons,firm or company to the Bankby way of Credit Facilities,Discounted Bills,letter of Credit, Guarantees, charges or of any other debt or liability including Bills,Notes, Credits and other obligations current though not then due or payable orother demands, legal or equitable which the Bank may have against theBorrower whether the Borrower shall become or be adjudicated bankrupt orinsolvent or be in liquidation or otherwise, and interest thereon from the date onwhich any advance/advances in respect thereof shall have been made at therate or respective rates at which the same shallhave been soadvances.

13 Without prejudice to the provisionscontained in Clause 10above, the Bankshallbe entitled to appoint any Receiver, Manager or other person to exercise all orany of the powers hereby vested in the bank with reference to the securityhereby created and shall be entitled to recover and receive from the Borrowerthe remuneration and/or alternatively charges of such Receiver, Manager orother person. TheBankshall not be liable and shall be entitled to be indemnifiedand kept indemnified by the Borrower for and in respect of all acts, defaults,negligence and mistakes (whether arising in the usual course of businessorotherwise of any such Receiver, Manager or person) and all losses, claims,demands, suits,proceedings, costs, charges and expensessustained or made inrespect thereof.

14 That the Borrower agrees to accept as conclusive proof the correctness of anysumclaimed to be due from the Borrowerto the Bank under thisDeed statementof account made out from the books of the Bankand signed by the accountantor other duly authorised officer of the Bankwithout the production of any othervoucher, document or paper. The Borrower also agrees to repay the amountaccrued but not debited to the account/so

15 That this Deed is to operate as continuing security for the ultimate balance oraggregate balances with interest thereon to become payable upon the saidaccounts as aforesaid and the said account or accounts is/are not to beconsidered to be closed for the purpose of this security and the security isnot tobe considered exhausted merely by reason of the said account or accounts oreither or any of them being brought to credit at any time or from time to time orof the Borrowerhaving drawn to the full extent of the limitsgranted for respectiveaccounts if afterwards an account or accounts is/are reopened by a payment to

For KON CHEM INDIA PRIVATE LIMITED

vVDirector Director

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credit, and if the whole of Credit Facility or the whole the Bank's advances shallbe repaid and the whole of the security be withdrawn the account or accountsor either or any of them may nevertheless at any time before such account oraccounts has or have been closed be continued under this Deed upon securityas aforesaid being again furnished.

16 That the Borrower hereby declares that all the Hypothecated Properties are theabsolute property of the Borrower at the sole disposal of the Borrower anq freefrom any prior charge or encumbrance and that all future goods and propertyhereunder shall be likewise their unencumbered property and that the Borrowerhas not done or knowingly suffered or been a party or privy to anything wherebyhe is anyway prevented from hypothecating the hypothecated properties in themanner aforesaid and assuring the hypothecated properties or any part thereofin favour of the Bank as shall be required by the Bank and/or/their; officer/s,attorney /s for and in the name of the Borrower to act on behalf of the Borrowerand to execute and do any act, assurance and things which the Borrower oughtto execute and do under these presents and generally to do all the acts in thename of the Borrower in exercise of the powers hereby conferred.

17 That the borrower shall not during the continuance of this Deed hypothecate orotherwise charge or encumber any of the hypothecated properties over whichthe lien of the Bank shall extend or be expressed or intended to extend to othersnor do or permit any act whereby the security hereinbefore expressed to begiven the Bank shall be in way prejudicially affected, and that the borrower shallnot open any other Bank Account or avail credit facility from any otherBank/institution without the express written consent of the bank.

18 No changes whatsoever that may take place in the constitution of the Borroweror Bank (Whether by amalgamation or otherwise) shall impair or discharge theliability of the Borrower hereunder, it is hereby agreed that the Borrower shallexecute separate Credit Facility Agreement or any other document as may bestipulated by the Bank, notwithstanding creation of charge over thegoods/Machinery/Plant/lmplements, if any purchased out of such Credit Facilitybeing covered by these Presents.

19 In the event of default as specified in Clause 10 above, the Bank shall withoutprejudice to other rights available to the Bank shall also at its discretion in exerciseof its right of set off appropriate any deposits standing to the credit of theBorrower either singly or jointly towards the dues of the Bank in respect of the saidCredit Facility under this Deed. The Bank shall also have a right of general lien onany of the securities in the custody of the Bank other than those available underthis Deed and those items in safe custody standing in the name of the Borrower.

20 Delay in exercising or omission to exercise any right, power or remedy accruing tothe Bank or its representatives/agents, upon any default under this Deed shall notimpair any of the Bank's rights/remedies/powers nor shall be construed to be awaiver thereof or any acquiescence in such default nor shall the action orinaction of the Bank in respect of any default, affect or impair any right/power orremedy of the ban in respect of any other default.

21 It is hereby further agreed by the Borrower that the sanction letter/s issued by theBank sanctioning the said Credit Facility shall always be deemed to form part of

For KON CHEM INDIA PRIVATE LIMITED

yVDirector Director

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this Deed and be deemed to be incorporated herein provided in the event ofany conflict between such sanction letter/s and these presents the provisioncontained in thisDeed shallprevail and take precedence.

22 The Borrower further agrees that if the advance is eligible for the cover of theCredit Guarantee Fund Scheme formulated by Small Industries DevelopmentBankof India or any other such Scheme formulated by the Government of India,the Borrower agrees to pay the guarantee fee and annual service fee thereonand in the absence of such payment Bank may debit the current or cash creditaccount of the Borrowerfor the said amount/s and it is further agreed that suchpayment/debit shallnot reduce the liability of the Borrowerunder these presents.

23 Any notice or demand to be given or made to Borrower shall be deemed tohave been duly given or made if addressed to the Borrower or any of theindividuals constituting the Borrowerpersonally or may be left at the last knownplace of businessor residence of the Borrower or may be sent by post to theBorrower or any of such individuals as aforesaid and if sent by post such noticeshall be deemed to have been given at the time when it would be delivered indue course of post and in proving such notice when given by post it shall besufficient to prove the envelop containing the notice so posted and a certificatesigned by the Bank'sManager or agent that the envelope was so posted shallbeconclusive.

24 The Borroweragrees that the Bank at its discretion will charge and recover fromthe Borrower,a commitment fee at a rate which may be stipulated by it, on theunutilized portion of the said Credit Facility, for the period utilization of the creditlimit remains below the sanctioned limit/drawing power.

25 The Borrower expressly agree that any notice addressed to anyone of theBorrower regarding revision in the rate of interest or/and any other terms ofsanction governing the said credit facility, shall be deemed to be notice given toall and such notice shallbe sufficient and binding on all of usand each one of usexpresslyauthorises the others severally to receive such notice on each one'sbehalf. (Applicable to partnership firmsand multiple Borrowers)

26 In the event of the closure of the factory or stoppage of work due to strike,lock-out, mechanical breakdown, want of raw materials, non-movement of finishedgoods, power shortage or/and for any other reason, intimation will be sent to theBank by the Borrowerwithin 3 days of the occurrence of closure or stoppage ofwork.

27 Without prejudice to the general terms and conditions in this Deed, the Borrowerhereby consents inter alia for the specific terms with regard to the Cash Credit(BookDebts) Facilityas under:

(a) That the Borrower shall submit stock statement to the Bank at regularintervalsas stipulated by the Bankand also to maintain stipulated margin.

(b) That the hypothecated stock shall be sold or disposed of in such amanner that the advance value of the goods ispaid to the Bank towardsreduction of the Borrower'sliability or goods of similarnature issubstitutedfor the goods to be disposed of.

For KON CHEM INDIA PRIVATE LIMITED -9-

Director

28 As regards the Cash Credit (Book Debts) facility, the Borrower interalia (withoutprejudice to the general terms) agrees to the following terms:

(a) TheBorrower shall submit a statement of Book debts on a monthly basisorat such other intervals as advised by the Bank

(b) The Borrower shall endeavor to follow up with the debtors to enable thebank to obtain the payment of the debts on their respective due dates

(c) The Borrower shall not release or compound any of the said debtswithout the consent in writing of the Bank and will not do anythingimpeding recovery of the debts by the Bank

(d) The Borrower hereby appoints the Bank as its agent or Attorney in itsname and on its behalf on demand, sue for, recover and give effectualdischarges for all or any of the book debts hereby hypothecated to theBank and for that purpose to file suits,to declare plaints, make affidavits,to employ advocates, to compromise and do all other acts and things ascould have been done by the Borrowerfor the recovery of the debts.

29

30

31

32

Assignment and TransferThe Bank shall have a right to sell or transfer (by way of assignment,securitisation or otherwise) whole or part of the Credit Facility andoutstanding amounts under the Credit Facility or any other rights andobligations of the Bank under this Deed or any other document pursuanthereto to any person/entity in a manner or under or under such terms andconditions as the Bankmay decide in its sole discretion without referenceto or intimation to the Borrower.

The Borrower expresslyagrees, in the event of sale or transfer as aforesaid,to accept such person to whom the Credit Facility issold or transferred ashis lender and make the repayment of the Credit Facility to such personasmay be directed by the Bank.

TheBorrower shall not be entitled to directly or indirectly assignhisrights orobligations under thisDeed in part or in whole to any person.

Interest on the Credit Facility shall be computed and debited to the LoanAccount taking the basisof 365days a year.

The Bank shall be entitled to recover from the Borrower the prepaymentcharges and other charges as per the sanctioned terms.

CIBIL disclosure

TheBorroweralso agrees, undertakes and confirms as under:The Borrower understands that as a precondition relating to the grant ofand/or continuing the grant of Credit Facility to the Borrower, the Bankrequires the Borrower's consent for the disclosure by the Bank of,information and data relating to the Borrower, of the Credit Facilityavailed of/to be availed by the Borrower,in discharge thereof.

For KON CHEM INDIA PRIVATE LIMITED

yVDirector Director

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Accordingly, the Borrower hereby agrees and gives consent for thedisclosure by AXISBankof all or any such:

1. Information and data relating to the Borrower;2. The information of date relating to its credit Facility availed of/to be

availed by the Borrowerand3. Default, if any, committed by the Borrower, in discharge of the

Borrower'ssuch obligation;as the Bank may deem appropriate and necessary, to disclose and furnishto Credit Information Bureau (India) limited ["CIBIL"] and any otheragency authorised in thisbehalf by ReserveBank of India ["RBI"].

The Borrower declares that the information and data furnished by theBorrower to the Bank are true and correct.

TheBorrower also undertakes that:

1. CIBILand any other agency so authorised may use, process thesaid information and data disclosed by the Bank in the manner asdeemed fit by them; and

2. CIBIL and any other agency so authorised may furnish forconsideration, the processed information and data disclosed orproducts thereof prepared by them, to Bank(s)/FinancialInstitution(s)and other Credit Grantors or Registered Users,as maybe specified by the RBIin this behalf.

THE SCHEDULE ABOVE REFERRED TO

SCHEDULE I

Nature offacilityCash CreditunderCGTMSEScheme

Limit (Rupees)

Rs.25,00,000/-(RupeesTwenty Fivelakhsonly)

Rate of Interest

PLR -2.50%,presently at 12.25%p.a.payable monthly

Margin of Security

25%on Stock and

25% of Receivables(Receivables up to60 days will beeligible for drawingpower calculations)

SCHEDULE II

(A) All tangible movable machinery, plant machinery, fixtures, fittings otherinstallation, cranes, furniture, computers and other accessories vehiclestogether with spares tools and accessories and all other articles lying onthe premises or in the godowns of the Borrower or in the custody of nay

For KON CHEM INDIA PRIVATE \..IMITEO

~V Dlrec'Ol

o\reo\or

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person who are mercantile agents of the Borrower or in the course oftransit which may hereinafter be brought stored or be lying or upon thesaid premises of the borrower.

(B) The whole of the Borrower's movable goods and assets both present andfuture and including but without prejudice to generality of the foregoingwords all stocks of raw material work in progress semi-finished goods andfinished goods such as plastizer and coating materials for designer tileindustry, packing materials, consumable stores and spares etc.,whatsoever situate and or transit whether now belonging to or that mayat any time during the continuance of this security belong to the borroweror that may be held by any party any where to the order and dispositionof the borrower.

(e) All the present and future book-debts, outstanding monies, receivablesclaims bills, contracts, engagements and securities which are now dueand owing or which may at any time hereafter during the continuance ofthis security become due and owing to the borrower in the course of itsbusiness by any person firm company or body corporate or by theGovernment of India or any state Government or Indian Railways or anyGovernment Department or office or any Municipal or local or Public orSemi-Government body or authority whatsoever including those relatingto the assets leased out and/or given on hire purchase basis.

For KON CHEM INDIA PRIVATE LIMITEDyVDirector Director

IN WITNESSWHEREOFthe common seal of the Company has been hereunto affixed theday and year first hereinabove mentioned at Bangalore

fa l;i iHE COMMON SEAL OF MIs Kon Chem India Pvt Ltd:i 'having its registered office at Flat 1-A, Prerna Apartments,~ No.50, 11th Main Road, Malleshwaram, Bangalore-03,> Karnataka has been hereunto affixed pursuant to thef resolution of its Board of Directors passed at the Meeting< held on the JA-"fVl day of r-JQu em b u. ora 0 ~ in theis presence of Shri. Kishore Krishnaswamy and Shri. M.S3':::E Arun Kumar Directors who have in token thereof,w subscribed his signature hereto.

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