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REPUBLIC OF KENYA
THE REGISTRATION OF TITLES ACT
(CHAPTER 281 LAWS OF KENYA)
GRANT NUMBER: I.R.

CHARGE

THIS CHARGE (herein also referred to as "this Security") is made the day
of Two Thousand and BETWEEN NISHMA NIPOOL
SHAH of Post Office Box Number 1400 - 00606, Nairobi in the Republic of Kenya
(hereinafter called “the Chargor” which expression shall where the context so
admits include her personal representatives and assigns) of the first part and
CYO INVESTMENT LIMITED a limited liability company incorporated in the
Republic of Kenya under registration number C.140715 of Post Office Box
Number 1400 - 00606 Nairobi in the Republic of Kenya (hereinafter called "the
Borrower" which expression shall where the context so admits include its
successors and assigns) of the second part AND I & M BANK LIMITED also a
limited liability company incorporated in the Republic of Kenya under registration
number C.8/90 of Post Office Box Number 30238-00100 Nairobi aforesaid
(hereinafter called “the Bank” which expression shall where the context so admits
include its successors and assigns) of the third part.

WHEREAS:-
(1) The Chargor is pursuant to a Lease dated the 31st day of December
Two Thousand and Eight (hereinafter called “the Lease”) and made
between SANDALWOOD DEVELOPERS LIMITED (hereinafter called
“the Head Lessor”) of the first part and SANDALWOOD BROOKSIDE
LIMITED (hereinafter called “the Manager”) of the second part and the
Chargor of the third part and registered in the Land Titles Registry at
Nairobi as Number I.R. 116126/1) registered as proprietor as Lessee
for the term of Fifty (50) years from the First day of June Two
Thousand and Three (less the last seven days) (subject however to
the annual rent of a peppercorn if demanded and to the Acts covenants
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conditions and stipulations contained in or implied by the Lease and to

such charges leases and encumbrances as are notified by the
Memorandum endorsed hereon) of ALL THAT the one bed roomed
Apartment known as Apartment Number LB2 Lower Ground Floor
Block B which said Apartment is marked as Number LB2 on the
Building Plan registered in Volume D1 Folio 269/2545 File MMVIII
shaded blue (situate on ALL THAT piece of land situate in the City of
Nairobi in the Nairobi Area of the Republic of Kenya containing by
measurement nought decimal six one five one (0.6151) of a hectare or
thereabouts that is to say Land Reference Number 1870/III/92 which
said piece of land being the premises comprised in a Grant registered
as Number I.R. 94094/1 and is with the dimensions abuttals and
boundaries thereof delineated on the plan annexed to the said Grant
and more particularly on Land Survey Plan Number 225405 deposited
in the Survey Records office at Nairobi aforesaid) TOGETHER WITH
the rights as are mentioned in the Lease excepting and reserving as is
excepted and reserved in the Lease (hereinafter called “the Mortgaged
Property”).
(2) At the request of the Chargor and the Borrower, the Bank has agreed
by a Letter of Offer dated 4 th February, 2009 (Ref:
HO/024/2009/SC/mk) as amended by a Letter of Offer dated 30th April,
2009 (Ref: HO/384/2009/SC/rr) as the same may be further varied,
amended, replaced, renewed or supplemented from time to time on
the basis of which the Bank has afforded any facility hereby secured
as may be varied, amended, replaced, renewed or supplemented from
time to time (hereinafter together called “the Letters of Offer”) to make
advances to the Chargor by way of loan by permitting the Borrower to
overdraw the Borrower’s current account and/or by granting to the
Borrower a loan and/or other financial accommodation within such
limits as may from time to time be fixed by the Bank and/or to refrain
from demanding immediate repayment of moneys already owing by the
Borrower to the Bank in respect of any such advances already made
upon having the same secured in the manner hereinafter appearing.
(3) By a Debenture of even date (hereinafter called “the Debenture”) the
Borrower charged unto the Bank all its undertaking goodwill assets
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book debts and property whatsoever and wheresoever both present

and future including its uncalled capital for the time being with the
payment and discharge on demand of all moneys and liabilities
intended to be thereby secured that is to say the aggregate principal
sum of Kenya Shillings Fifty Million (Kshs.50,000,000/-) together with
interest thereon at the rate in the Debenture more particularly specified
and as therein expressed.
(4) The Chargor has agreed to give a Supplemental First Legal Charge
over the Mortgaged Property by way of a collateral security to secure
the payment and discharge to the Bank of all principal moneys interest
and liabilities whatsoever as is by the Debenture secured.
(5) In consideration of the Bank at the request of the Borrower and
Chargor not calling in or requiring the immediate repayment of any
existing indebtedness of the Borrower to the Bank and granting the
facilities aforementioned, the Chargor has agreed to charge to the
Bank all his right, title and interest in and to the Mortgaged Property
on the terms and conditions contained herein

NOW in pursuance of the said agreement and in consideration of the

premises THIS SECURITY WITNESSETH as follows:-

1. The Chargor and the Borrower hereby JOINTLY AND SEVERALLY

covenant and agree with the Bank:-
(a) On the Legal Date of Redemption (hereinafter defined) to pay to the
Bank such sum or sums as may then be due and owing by the
Borrower to the Bank not exceeding the Prescribed Maximum Debt
(hereinafter defined) together with interest thereon and other
charges as hereinafter provided whether in respect of moneys
advanced to or paid to or for the use of the Chargor or the Borrower
or charges incurred on the account of the Chargor or the Borrower
or for any money whatsoever which may then be due and owing by
the Chargor or the Borrower to the Bank either as a principal or
surety and either solely or jointly with any other person or persons
in partnership or any company society or corporation or otherwise
upon current banking accounts loans or bills of exchange or
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promissory notes drafts orders for payment or delivery of any

money bills of lading or other negotiable or mercantile instruments
drawn or accepted or endorsed by or on behalf of the Chargor or
the Borrower and discounted or paid or held by the Bank either at
the request of the Chargor or the Borrower or in the course of
business or otherwise or in respect of documentary credits opened
or bills of exchange accepted by the Bank on the instructions of the
Chargor or the Borrower or of the authorised agent or agents of the
Chargor or the Borrower or in respect of moneys which the Chargor
or the Borrower shall become liable to pay to the Bank either under
guarantee given by the Chargor or the Borrower to the Bank or for
money or any other facility guaranteed by the Bank for and on
behalf and at the request of the Chargor or the Borrower or in any
other manner whatsoever and whether any such moneys or
liabilities shall be paid to or incurred on behalf of the Chargor or the
Borrower or any other person or persons in partnership or any
company society or corporation or otherwise at the request of the
Chargor or the Borrower or for any other accounts whatsoever or
otherwise howsoever or for any actual or contingent liability
together with the commission and other usual Bank charges legal
and other costs charges and expenses as shall or may be paid
incurred or suffered by the Bank in anywise in connection with the
assertion or defence of the Bank’s rights under this Security as also
for the protection and defence of the property and assets hereby
charged as expressed so to be and for the demand realisation and
recovery of all moneys hereby secured and together with the
interest (as well after as before demand judgement or liquidation or
bankruptcy of the Chargor or the Borrower as the case may be) at
such rate or rates as the Bank shall in its own discretion from time
to time decide within the limits permitted by law with full power to
the Bank to charge different rates for different accounts and such
interest shall be calculated on daily cleared balances and
compounded in the event of it not being punctually paid with the
monthly rests and secured in the same manner as the principal
moneys hereby secured but without prejudice to the right of the
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Bank to require payment of such interest when due PROVIDED

ALWAYS THAT the Bank shall not be required to advise the
Chargor or the Borrower prior to any change in the rate of interest
so payable nor shall any failure by the Bank to advise the Chargor
or the Borrower as aforesaid prejudice in any way howsoever the
recovery by the Bank of interest charged subsequent to any such
change;
(b) On the Seventh day next after the same respectively shall have
been advanced or otherwise become due to pay to the Bank every
other sum which may be advanced by the Bank to the Chargor or
the Borrower on account of such facilities or for which the Chargor
or the Borrower may otherwise become liable to the Bank as
aforesaid together with the commission and other usual bank
charges legal and other costs charges and expenses and together
with interest thereon as aforesaid;
(c) At any time after the Legal date of Redemption or as the case may
be after any such seventh day as aforesaid ON DEMAND in writing
made to the Chargor or the Borrower by the Bank to pay to the
Bank all moneys which shall or may be for the time being owing as
aforesaid by the Chargor or the Borrower to the Bank together with
interest thereon as aforesaid PROVIDED ALWAYS THAT the total
moneys for which these presents constitute a security shall not at
any one time exceed the Prescribed Maximum Debt to which shall
be added interest at the rate aforesaid from the time of the
Mortgage Debt (hereinafter defined) becoming payable until actual
payment thereof and all other charges and expenses intended to be
hereby secured AND PROVIDED ALSO THAT this Security shall
be a continuing security for the Prescribed Maximum Debt together
with interest thereon at the aforesaid rates and all other costs
charges and expenses intended to be hereby secured (hereinafter
called "the Mortgage Debt") or so much thereof as may from time to
time be outstanding notwithstanding the winding-up insolvency
incapacity or liquidation of the Chargor or the Borrower (as the case
may be) or any settlement of account or other matter whatsoever
and is in addition to and shall not merge with or otherwise prejudice
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or affect any contractual or other right or remedy or any guarantee

lien pledge bill note mortgage or other security (whether created by
the deposit of documents or otherwise) now or hereafter held by or
available to the Bank and shall not be in any way prejudiced or
affected thereby or by the invalidity thereof or by the Bank now or
hereafter dealing with exchanging releasing varying or abstaining
from perfecting or enforcing any of the same or any rights which the
Bank may now or hereafter have or giving time for payment or
indulgence or compounding with any other person liable.
2. The Chargor and the Borrower hereby further JOINTLY AND
SEVERALLY covenant and agree with the Bank that during the
continuance of this Security the Chargor and the Borrower will:-
(a) Duly pay all rents (if any) and all rates taxes duties charges
impositions and other outgoings whatsoever payable in respect of
or charged assessed or imposed on the Mortgaged Property or on
the Chargor or the Borrower as or other the owner or occupier
thereof or the Bank or a receiver in respect thereof including
(without limitation) any charge or imposition in respect of any work
in or in connection with the construction repair maintenance or
improvement of any private road or street and any other charge or
imposition whether or not of capital or non-recurring nature AND
WILL on demand produce to the Bank the receipt for any such
payment AND WILL perform and observe the covenants conditions
and stipulations under and subject to which the Mortgaged
Property is held AND WILL indemnify and keep indemnified the
Bank from and against all actions claims and demands in respect of
or arising out of any non-payment or breach of any of the said
covenants conditions and stipulations AND THAT all expenses
costs and damages incurred paid or sustained by the Bank by the
reason of any such non-payment or breach shall be deemed to be
expenses properly incurred by the Bank in relation to this Security;
(b) Forthwith upon the receipt by the Chargor or the Borrower of any
notice schedule list claim or demand or other requirement
whatsoever from or by any person firm company local or other
authority or any other body whatsoever affecting or likely to affect or
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which may affect the Mortgaged Property or any part thereof or the
interest of the Chargor or the Borrower and the Bank or either of
them therein inform the Bank of the receipt thereof and give to the
Bank such further and other information and take at the expense of
the Chargor or the Borrower such action in respect thereof as the
Bank shall or may require;
(c) Use the Mortgaged Property for the permitted user only AND WILL
keep the buildings and improvements forming part of the
Mortgaged Property including all fixtures and additions thereto in
good and substantial repair and condition to the satisfaction of the
Bank;
(d) Permit the Bank or the agents of the Bank with or without workmen
or others at all reasonable times to enter upon the Mortgaged
Property and examine the state and the condition thereof AND
WILL forthwith repair and make good to the satisfaction of the Bank
all defects and wants of the reparation in and to the Mortgaged
Property of which notice in writing shall be given to the Chargor or
the Borrower by or on behalf of the Bank;
(e) Permit the Bank at any time should the Bank so require to instruct a
surveyor or valuer to inspect and report on the Mortgaged Property
at the expense of the Chargor or the Borrower and all money paid
by the Bank for that purpose shall be deemed to be expenses
properly incurred by the Bank in relation to this Security;
(f) Not pull down waste destroy or interfere or in any manner or by any
means lessen the value of the Mortgaged Property or any part
thereof and will not effect any alterations in and to the Mortgaged
Property without the prior written consent of the Bank;
(g) Not erect place or make nor cause or suffer to be erected placed or
made any buildings or other works on the Mortgaged Property or
any part thereof nor make or cause or suffer to be made any
material change in the use of the Mortgaged Property or any part
thereof without the prior written consent of the Bank;
(h) If the Mortgaged Property is leasehold not surrender or agree to
surrender the Mortgaged Property or any part thereof to any
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reversioner nor merge nor agree to merge the Mortgaged Property

or any part thereof in any reversion;
(i) Not lease, agree to lease or accept surrenders of leases, charge or
part with the possession of the Mortgaged Property or any part
thereof without the prior written consent of the Bank AND WILL
upon the execution of any lease procure from the lessee a
counterpart of such Leases duly executed by the lessee AND WILL
forthwith have the same duly registered AND WILL deliver the
same to the Bank within one month from the registration thereof;
(j) Not to sell or agree to sell subject to these presents or otherwise
the Mortgaged Property or any part thereof without the prior written
consent of the Bank PROVIDED THAT where the Chargor or the
Borrower is a company the issue of the shares in the Chargor or the
Borrower other than the issue to a holder of shares in the Chargor
or the Borrower at the date hereof or the transfer of a beneficial
interest in any part of the issued share capital of the Chargor or the
Borrower shall constitute a sale for the purpose of this sub-clause
and shall require consent as aforesaid;
(k) (i) Insure and keep insured all buildings being on or forming
part of the Mortgaged Property and such other property and
effects of an insurable nature (whether affixed to the freehold
or leasehold or not) as the Bank shall at any time and from
time to time require to be insured against loss or damage by
fire aircraft storm earthquake riots and civil commotions and
such other risks as the Bank may determine in the full
insurable value thereof (which expression shall include but
not be restricted to the full replacement value thereof and
shall include all architect's and surveyor's fee) as determined
by the Bank from time to time;
(ii) Effect every such insurance in the joint names of the
Chargor and the Borrower (as owners) and the Bank (as
mortgagees) or if required by the Bank in the sole name of
the Bank and place the same with some good and solvent
insurance company to be approved of in writing by the Bank;
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(iii) Immediately after any such insurance shall have been

effected or upon execution of these presents if the same
shall have been previously effected produce to and deposit
with the Bank the original policy relating thereto;
(iv) duly and punctually pay all premia and other moneys
necessary for effecting and keeping on foot any such
insurance and forthwith deliver to the Bank the receipt for or
other proper evidence of every such payment;
(v) hold any moneys received under any such insurance as a
trustee for the Bank and apply the same in or towards
making good the loss or damage in respect of which they
shall have been received PROVIDED ALWAYS that without
prejudice to any obligations to the contrary imposed by law
or special contract the Bank may require that all such
moneys be applied in or towards the discharge of the
Mortgage Debt interest thereon and all other moneys which
under these presents may then be payable by the Chargor
or the Borrower to the Bank in respect of this Security;
(vi) not effect without the prior written consent of the Bank any
insurance of the said buildings property and effects or any of
them otherwise than in accordance with the foregoing
covenant and agreement and if any insurance shall be
effected in breach of this covenant and agreement then will
hold any moneys received thereunder as trustee for the
Bank to be applied as if the same arose under a policy
effected under the said foregoing covenant and agreement;
(l) Comply with and observe at all times the terms and provisions
contained in any letters of commitment or other agreement on the
basis of which the Bank has afforded any facility hereby secured
and not apply for nor obtain any advance or loan nor create any
security which under or by virtue of any law for the time being in
force in Kenya or otherwise howsoever would or might rank in
priority to or pari passu with or puisne to this Security;
(m) Where the Chargor or the Borrower is a company comply with and
observe all the provisions of the Companies Act (Chapter 486 of the
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Laws of Kenya) or any amendment or re-enactment for the time

being in force;
(n) Where the Chargor or the Borrower is a company deposit with the
Bank a true copy of its Memorandum and Articles of Association in
force on the date hereof and of any amendment made from time to
time and not make or attempt to make any alteration thereto or to
its capital structure without the prior written consent of the Bank;
(o) Appoint and employ the Bank as the sole banker of the Chargor or
the Borrower and all sums received by the Chargor or the Borrower
in the course of the Chargor’s or the Borrower’s business or in
respect of subscriptions or calls upon the Chargor’s or the
Borrower’s shares where the Chargor or the Borrower is a company
or otherwise howsoever shall be paid to the Bank for the credit of
the Chargor or the Borrower into such account or accounts opened
or to be opened in the joint names of the Chargor or the Borrower
as the Bank shall from time to time direct and the Chargor or the
Borrower shall make all payments by cheques drafts promissory
notes or bills of exchange drawn on the Bank and all costs and
expenses incurred by the Bank in acting as such banker of the
Chargor or the Borrower as aforesaid shall be debited to the
Chargor or the Borrower and constitute a first charge upon the
Mortgaged Property;
(p) Where the Chargor or the Borrower is a company or are carrying on
business furnish to the Bank annually or often if required a balance
sheet profit and loss account and trading accounts showing the
position of the Chargor’s or Borrower’s affairs at a date not more
than three months previous certified by the auditors for the time
being of the Chargor or the Borrower and approved by the Bank
and also from time to time give to the Bank or to such persons as
the Bank may from time to time appoint such information as it he or
they shall require as to all matters relating to the business or any
existing or after acquired property or assets of the Chargor or the
Borrower or otherwise relating to the affairs thereof;
(q) If the Mortgaged Property be an agricultural property farm the
Mortgaged Property in a good and husbandlike manner AND WILL
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keep in a good state of cultivation and condition and clean and free
from weeds all portions thereof which are now or may hereafter be
put under cultivation and all crops from time to time thereon AND
WILL permit the Bank or the agent of the Bank at all reasonable
times to enter upon the Mortgaged Property and examine the state
of cultivation and condition thereof AND if any land which is now or
shall at anytime during this Security have been under cultivation or
the said crops or any part thereof shall not be found in proper state
of cultivation and notice in writing of any such defects or matters
shall be given, the Chargor or the Borrower WILL if and so far as
the case will admit make good the same in a proper manner to the
satisfaction of the Bank within the space of three(3) calendar
months next after every such notice shall have been so given;
(r) The Chargor or the Borrower will comply with and shall not commit
any offence under the provisions of Environmental Management
and Co ordination Act, 1999 (“EMCA”) and the Chargor or the
Borrower will procure that all occupiers and owners (as defined in
the EMCA) of the Mortgaged Property will comply with and will not
commit any offence under the provisions of the EMCA.
PROVIDED THAT the Bank may withhold its consent in relation to any of
the foregoing matters in respect of which such consent is a prerequisite as
hereinbefore provided without assigning any or any sufficient reason
therefor AND the Bank may give such consent upon and subject to such
terms and conditions as the Bank shall in its sole discretion think fit.
3. If the Chargor and/or the Borrower shall fail to perform any of the foregoing
covenants and agreements in clause 2 hereof it shall be lawful but not
obligatory for the Bank to do all or any of the following acts and things that
is to say:-
(a) To effect payment of the rent (if any) and any rates taxes or other
charges and impositions as therein mentioned unpaid by the
Chargor or the Borrower;
(b) To insure and keep insured the Mortgaged Property and effects or
any part thereof in any sum not exceeding the full insurable value
thereof (which expression shall include but not be restricted to the
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full replacement value) as determined by the Bank from time to

time;
(c) To enter the Mortgaged Property from time to time and repair or
keep in repair the Mortgaged Property or any part thereof or any
fixtures and additions thereto without thereby becoming liable as
mortgagee in possession;
AND the expenses of the Bank in so doing shall be deemed to be
expenses properly incurred by the Bank in relation to this Security
PROVIDED THAT nothing done by the Bank hereunder shall be deemed
to be or take effect as a waiver of or shall prejudice any right of action
which the Bank may have against the Chargor or the Borrower in respect
of any antecedent breach of the said foregoing covenants and agreements
or any of them or otherwise or any other right of the Bank under the
presents or otherwise.
4. (a) All costs charges and expenses incurred by the Bank in obtaining
or attempting to obtain payment of any moneys hereby secured or
properly incurred by the Bank in relation to or under this Security
including (without limitation) such payments as the Bank may
consider expedient from time to time to make and is hereby
authorised to make to any person whether the Chargor or the
Borrower personally or to the Directors of the Chargor or the
Borrower as the case may be or anyone acting at the request of the
Chargor or the Borrower or a receiver or a subsequent mortgagee
or to any person acting on the instruction of the Bank in connection
with the maintaining repairing amending altering or improving the
Mortgaged Property and all such further and other moneys as shall
by virtue of the provisions of sub-clause (b) of this present clause
deemed to be included in the expression "expenses" shall:-
(i) bear interest at the highest rate for the time being payable
hereunder upon any part of the Mortgage Debt from the time
of the same having been expended or incurred until the
same shall be repaid;
(ii) be repaid with interest as aforesaid by the Chargor or the
Borrower to the Bank on demand;
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(iii) until such repayment be charged upon the Mortgaged

Property;
(b) AND IT IS HEREBY AGREED AND DECLARED that the
expression "expenses" shall be deemed to include all costs charges
claims damages expenses and other moneys properly paid or
incurred by the Bank under this Security and (without prejudice to
the generality of the foregoing) properly paid or incurred by the
Bank:-
(i) in any action proceeding or claim brought by or against the
Bank for the enforcement protection preservation or
improvement of this Security; or
(ii) in any action proceeding claim or demand against or for the
recovery of the Mortgaged Property or any part thereof or
any compromise purchase or getting in thereof which the
Bank shall have full power to effect without the concurrence
of the Chargor or the Borrower, or
(iii) in connection with the negotiation preparation and
completion of any Further Mortgage Charge Deed of
Variation or other instrument or document supplemental to
or collateral with this Security or otherwise relating to the
Mortgaged Property (whether or not completed) and any
correspondence and attendances; or
(iv) in connection with any proposed lease surrender assurance
or other transaction concerning the Mortgaged Property for
which the Chargor or the Borrower may seek the consent of
the Bank (whether such consent be given or withheld)
including legal costs incurred in perusing and (if necessary)
copying any document (whether engrossed or in draft form)
required for carrying out any such proposed transaction and
any correspondence and attendances relating thereto; or
(v) in effecting any registration which the Bank may deem
necessary or expedient for the proper protection of their
security; or
(vi) to the advocates architects surveyors or other professional
or technical advisers of the Bank in respect of their costs
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fees and disbursements for attendances made advice given

correspondence written or other work done by such persons
or any of them in connection with any of the matters referred
to in the preceding paragraphs of this sub-clause or the
happening of any one or more of the events specified in sub-
clause (a) of Clause 7 hereof;
AND the legal costs and disbursements paid or incurred by the Bank
under this Security and falling within the definition of "expenses"
hereinbefore contained shall as against the Chargor or the Borrower be
deemed to include every sum which would be allowed to the advocates of
the Bank in a taxation as between the advocate and own client to the
intent that the Chargor or the Borrower shall afford to the Bank a complete
entitlement and unqualified indemnity in respect thereof.
5. (a) for the better securing to the Bank the repayment of the Mortgage
Debt interest and all other moneys and expenses hereby intended
to be secured the Chargor HEREBY CHARGES unto the Bank all
her leasehold interest in the Mortgaged Property in favour of the
Bank with the Mortgage Debt interest and all other monies and
expenses as aforesaid.
(b) PROVIDED ALWAYS that except as otherwise provided by clause
7(e)(ii) hereof if the Chargor and the Borrower shall on the Legal
Date of Redemption or on such other date as the same becomes
payable in accordance with clause 1 hereof pay to the Bank or to
one of the cashiers for the time being of the Bank all moneys
hereinbefore covenanted and agreed so to be paid then the Bank
shall at any time thereafter at the request and cost of the Chargor
discharge and release the Mortgaged Property unto the Chargor or
as the Chargor shall direct.
6. PROVIDED ALWAYS AND IT IS HEREBY EXPRESSLY AGREED AND
DECLARED by and between the parties hereto as follows:-
(a) That the Chargor and/or the Borrower shall be at liberty at any time
or times hereafter without notice to pay off all or any part of the
Mortgage Debt but so that upon any payment of the principal the
interest on the whole of the Mortgage Debt be fully paid;
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(b) That the Chargor and/or the Borrower shall effect all payments in
respect or on account of the Mortgage Debt and the interest
thereon as hereinbefore provided free of bank exchange
commission and other similar expenses by credit to such banking
account or accounts at such branch or branches of the Bank as the
Bank shall or may from time to time require.
7. PROVIDED ALWAYS AND THIS SECURITY FURTHER WITNESSETH
as follows:-
(a) That the Mortgage Debt and interest hereby secured shall
immediately become payable without demand and the statutory
power of sale of the Bank shall forthwith become exercisable
without any further or other notice:-
(i) If any amount due by the Chargor or the Borrower hereunder
or under any other agreement made between the Chargor or
the Borrower and the Bank is not paid when demanded or
on the due date for payment (whether or not demanded) or if
any amount due by the Chargor or the Borrower under any
other agreement or instrument made available by or to the
Bank or any other creditor lender person or company is not
paid when demanded or on the due date for payment; or
(ii) if a distress or execution either by virtue or legal process of
any court order or process or by appointment of a receiver is
levied upon any part of the Mortgaged Property or against
any of the chattels or other property of the Chargor or the
Borrower situate on or about or belonging to the Mortgaged
Property and the debt for which such levy is made or
receiver appointed is not paid off within seven days; or
(iii) if the title to the Mortgaged Property shall for any reason be
encumbered or terminated or threatened with either or if any
Charge Mortgage or encumbrance whatsoever or notification
by virtue of any order process decree or notice including a
Charge or notification of a Charge registered under the
Income Tax Act or any other legislation in the Republic of
Kenya is registered against the title without the consent of
the Bank; or
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(iv) If any judgement or order made against the Chargor or the

Borrower is not complied with in accordance with the terms
of the judgement or order unless a valid appeal has been
lodged by the Chargor or the Borrower against such
judgment or order or if any decree order warrant or
process is issued or other action is taken whereby a
distress attachment or execution is or may be levied or
enforced upon or against any of the assets of the Chargor
or the Borrower; or
(v) If a petition is presented or an application is made in
respect of or any order is made or any resolution is passed
for or any notice is issued to convene a meeting for the
purpose of passing such resolution for the liquidation
winding up or dissolution of the Chargor or the Borrower
pursuant to the provisions of the Companies Act (Chapter
486 of the Laws of Kenya); or
(vi) If a notification of charge or encumbrance either by Court
order decree or process or at the direction of any
competent authority is registered against any immovable
property of the Chargor or the Borrower or any other assets
of the Chargor or the Borrower; or
(vii) if the Chargor or the Borrower shall commit a breach of the
covenants and agreements on the part of the Chargor or the
Borrower herein or in any other security created by the
Chargor or the Borrower in favour of the Bank contained or
implied; or
(viii) where the Chargor or the Borrower is carrying on business if
any government or governmental authority shall condemn
nationalise seize or otherwise acquire or appropriate or shall
threaten to condemn nationalise seize or otherwise acquire
or appropriate all or any substantial part of the property and
the assets of the Chargor or the Borrower or shall take any
action for dissolution or disestablishment of the Chargor or
the Borrower; or
 17

(ix) where the Chargor or the Borrower is carrying on business if

any civil war revolution insurrection action by local national
or foreign or international forces blockade riot or any events
being acts of God or otherwise beyond the control of the
Chargor or the Borrower shall seriously impair the efficient
and proper conduct of the business of the Chargor or the
Borrower or render the same unreasonably hazardous; or
(x) if a receiver liquidator, trustee or sequestrator or other similar
officer is appointed upon any property or assets of the
Chargor or the Borrower; or
(xi) if the Chargor or the Borrower shall become bankrupt or
make any assignment for the benefit of the creditors of the
Chargor or the Borrower enter into any arrangement with the
creditors of the Chargor or the Borrower for liquidation of the
debts of the Chargor or the Borrower by composition or
otherwise; or
(xii) If the Chargor or the Borrower stops payment or becomes
unable to pay its debts within the meaning of Section 220
of the Companies Act or if the Chargor or the Borrower
proposes or enters into any composition or arrangement
with its creditors or any class of its creditors; or
(xiii) If any license authorisation consent or registration at any
time necessary or desirable to enable the Chargor or the
Borrower to comply with its obligations to the Bank or to
carry on its business in the normal course shall be revoked
withheld or materially modified or shall fail to be granted or
perfected or shall cease to remain in full force and effect;
or
(xiv) If the Chargor or the Borrower charges pledges or
otherwise encumbers (by way of fixed or floating security)
any of its assets or attempts so to do without the prior
consent in writing of the Bank; or
(xv) If any guarantee indemnity or other security created in
favour of the Bank is in jeopardy or is not or ceases to be
in full force and effect or is voidable or unenforceable or is
 18

disputed revoked, cancelled or terminated or it becomes

unlawful or impossible for the Bank to exercise any right or
power vested in it under any such security and is
considered by the Bank to be material; or
(xvi) If the control of the Chargor or the Borrower passes to any
person or persons (including institutions and companies)
either individually or in concert without the prior consent of
the Bank;
(xvii) If the Chargor or the Borrower without the consent of the
Bank ceases or threatens to cease to carry on its business
or any material part thereof or sells or threatens to sell or
otherwise disposes of all or a material part of its
undertaking or assets (other than in the normal course of
trading) whether by one or a series of transactions related
or not or if it changes the nature or mode of conduct of its
trading in any material respect; or
(xviii) If any guarantor(s).gives notice of termination of his or their
liability(ies) under the guarantee given in respect of the
Chargor’s or the Borrower’s liabilities to the Bank.
(xix) where the Mortgaged Property is an agricultural property if a
Management Order is made under section 187 of the
Agriculture Act (Chapter 318 of the Laws of Kenya) in
respect of the Mortgaged Property or any part thereof; or
(xx) If any representation or warranty made by the Chargor or
the Borrower being incorrect in any material respect or if
there is a material adverse change of position as set out in
such representation or warranty; or
(xxi) If any circumstances arise which may in the opinion of the
Bank materially and adversely affect the ability of the
Chargor or the Borrower to perform its obligations under
this Security; or
(xxii) If any of the above events occur in relation to any third
party who or which now or hereafter has guaranteed or
provided security or given an indemnity in respect of any of
the moneys obligations or liabilities secured by this
 19

Security or if any such person gives notice terminating his

or its liability under the relevant guarantee indemnity or
security.

b The Chargor and the Borrower represent and warrant to the Bank that:-

i) they have the power to grant the security set out in this
Security and to perform and observe their obligations
under this Security and under any other securities created
in favour of the Bank;

ii) they have the power to own the Mortgaged Property and
all its other property;

iii) there is no law decree or similar enactment binding on it so

far as they are aware and no provision in any mortgage,
indenture, trust deed, contract or agreement binding on it
or affecting their assets which would conflict with or
prevent it from entering into or performing and observing
the terms of any of the facilities made available to them by
the Bank under this Security;

iv) this Security constitutes valid and legally binding

obligations of the Chargor and the Borrower enforceable in
accordance with its terms;

v) neither the making of this Security nor the compliance with

its terms will conflict with or result in a breach of any of the
terms conditions or provisions of or constitute a default or
require any consent under any indenture, mortgage,
charge, agreement or other instrument or arrangement to
which the Chargor or the Borrower are a party or by which
the Chargor or the Borrower are bound or violate any of
the terms or provisions of any judgment, decree or order or
any statute, rule or regulation applicable to the Chargor or
the Borrower or the businesses undertaken by the Chargor
and the Borrower;
 20

vi) the Chargor or the Borrower is duly and properly registered

as lessee as proprietor of the Mortgaged Property;

vii) there is no outstanding Encumbrance on the Mortgaged

Property (or any part thereof) and (save in the case of this
Charge) no contracts or arrangements conditional or
unconditional exist for the creation by the Chargor or the
Borrower of any Encumbrance on or over the Mortgaged
Property (or any part thereof);

viii) the Chargor and the Borrower are not engaged in nor to
the best of the Chargor’s or the Borrower’s knowledge is
the Chargor or the Borrower threatened by any litigation,
arbitration or administrative proceedings the outcome of
which might materially affect the Chargor’s or the
Borrower’s business prospects or financial condition or
make it improbable that the Chargor and the Borrower will
be able to observe or perform the Chargor’s or the
Borrower’s obligations under this Security;

ix) the Chargor or the Borrower are not in violation of any

statute or regulation of any competent authority in Kenya
and no judgment or order has been issued which has or is
likely to have any material adverse effect on the Chargor’s
or Borrower’s business prospects or financial condition or
make it improbable that the Chargor or the Borrower will be
able to observe or perform the Chargor’s or the Borrower’s
obligations under this Security; and

x) no event or circumstance which constitutes or which with

the giving of notice lapse of time or the making of a
determination would constitute an event of default as set
out in clause 7 (a) has occurred and is continuing.

c The representations and warranties in clause 7 (b) shall be deemed

repeated by the Chargor and the Borrower on and as of each day
the Mortgage Debt remains outstanding to the Bank.
 21

d That without prejudice to and notwithstanding the provisions herein

contained the provisions of Section 69 to 69G both inclusive of the
Transfer of Property Act 1882 of India as applied to Kenya and as
amended by the Indian Transfer of Property Act (Amendment) Act
1959 and as varied by these presents shall have full application to
these presents and the security intended to be hereby created;
(e) (i) That sections 61 and 67A of the said Transfer of Property
Act 1882 of India shall not apply to these presents or the
security intended to be hereby created;
(ii) That without prejudice to any equitable right of consolidation
it is hereby declared that no other property of the Chargor
and/or the Borrower which at the date hereof or at any time
hereafter is subject to a Mortgage or Charge in favour of or
vested in the Bank shall be redeemed except on payment
not only of all moneys thereby secured but also of all
moneys hereby secured and vice versa;
(iii) That the statutory power to appoint a receiver may be
exercised at any time after payment of the moneys hereby
secured has been demanded and the Chargor or the
Borrower has made default in paying the same whether the
power of sale has arisen or not;
(f) (i) If at the time of entry into possession or receipt of the rents
and profits of the Mortgaged Property by the Bank such
property or any other part thereof shall be let furnished under
a tenancy which is or becomes binding on the Bank then
and in any and every such case the Bank or such receiver
shall be entitled to receive and apply the whole of the rent
reserved by such tenancy as if it were rent of the Mortgaged
Property and neither the Bank nor any such receiver shall be
required or be bound to make any apportionment of such
rent in respect of any furniture or chattels of the Chargor or
the Borrower comprised in the tenancy;
(ii) If upon entry by the Bank into possession of the Mortgaged
Property or any part thereof such property shall contain any
furniture or chattels of the Chargor or the Borrower which
 22

the Chargor or the Borrower shall refuse or fail to remove

within Twenty-eight days of the Chargor or the Borrower
being required in writing by the Bank so to do then and in
any and every such case the Bank shall thereupon become
and be the agent of the Chargor or the Borrower with full
authority at the Chargor’s or Borrower’s expense to remove
store preserve sell and otherwise dispose of such furniture
and chattels as last aforesaid in such manner in all respects
as the Bank shall think fit PROVIDED THAT the Bank shall
not sell such furniture or chattels hereunder until after the
expiration of one month from the date upon which the
Chargor or the Borrower are required by the Bank to remove
them from the Mortgaged Property as aforesaid;
(iii) The provisions of paragraph (i) and (ii) of this sub-clause
shall not be construed or operate to confer on the Bank any
right in equity to any furniture or chattels of the Chargor or
the Borrower or any charge or security thereon or otherwise
so as to constitute this Security an instrument under the
Chattels Transfer Act (Chapter 28 of the Laws of Kenya).
(g) That the Bank shall be at liberty without thereby affecting its rights
hereunder at any time:-
(i) to determine or vary any credit to the Chargor or the
Borrower,
(ii) to vary exchange or release any other securities held or to
be held by the Bank for or on account of the Mortgage Debt
and interest hereby secured or any part thereof;
(iii) to renew bills and promissory notes in any manner and to
compound with and give time for payment to accept
compositions from and make any other arrangements with
the Chargor or the Borrower or any person or persons liable
in bills notes or other securities held or to be held by the
Bank for or on behalf of the Chargor or the Borrower;
(h) It is hereby agreed that
(i) all moneys received or held by the Bank or by a receiver
under this Security may from time to time after demand
 23

has been made by the Bank be converted into such other

currency as the Bank considers necessary or desirable to
cover the Mortgage Debt in that other currency and such
conversion shall be made in accordance with the Bank’s
usual practice of converting the existing currency into the
other currency;
(ii) if and to the extent that the Chargor or the Borrower fails
to pay any amount due hereunder on demand the Bank
may in its absolute discretion without notice to the Chargor
or the Borrower purchase at any time thereafter so much
of any currency as the Bank considers necessary or
desirable to cover the Mortgage Debt in such currency
hereby secured and such purchase will be in accordance
with the Bank’s usual practice of purchasing such other
currency with the existing currency and the Chargor or the
Borrower hereby agrees to indemnify the Bank against the
full cost incurred by the Bank in respect of any such
purchase;
(iii) no payment to the Bank (whether under any judgment or
court order or otherwise) shall discharge the obligation or
liability of the Chargor or the Borrower in respect of which
it was made unless and until the Bank shall have received
payment in full in the currency in which such obligation or
liability was incurred and to the extent the amount of any
such payment shall on actual conversion into such
currency fall short of such obligation or liability actual or
contingent expressed in that currency the Bank shall have
a further separate cause of action against the Chargor or
the Borrower and shall be entitled to enforce this Security
to recover the amount of the shortfall; and
(iv) the Bank shall in its sole and absolute discretion be entitled
upon giving prior written notice to the Chargor or the
Borrower at any time to convert any facility made available
in a currency other than Kenya Shillings (“the Other
Currency”) into a Kenya Shilling Facility. In the event that
 24

the Bank shall exercise the aforesaid right to convert the

aggregate principal amount due owing or incurred
(whether actual or contingent) to the Bank in the Other
Currency it shall be converted into Kenya Shillings at a rate
of exchange determined by the Bank in accordance with
the usual practice adopted by the Bank in converting the
Other Currency into Kenya Shillings as at the date of
conversion. Upon the conversion the provisions of Clause
1 shall apply, mutatis mutandis, in relation to the charging
and payment of interest by the Chargor or the Borrower in
respect of the Kenya Shillings outstanding from time to
time and the Chargor or the Borrower shall be charged
and shall pay interest accordingly.
(i) That this Security given to the Bank shall be without prejudice and
in any addition to any other security whether by way of pledge legal
or equitable mortgage or charge or otherwise howsoever which the
Bank may now or at any time hereafter hold on the property and
assets of the Chargor or the Borrower or any part thereof for or in
respect of all or any part of the indebtedness of the Chargor or the
Borrower to the Bank howsoever arising or any interest thereon;
(j) That the Bank may at any time and without notice to the Chargor or
the Borrower combine or consolidate all or any of the accounts of
the Chargor or the Borrower with any liabilities to the Bank and set
off or transfer any sum or sums standing to the credit of any one or
more of such accounts in or towards satisfaction of any of the
liabilities of the Chargor or the Borrower to the Bank on any other
accounts or in any other respect whether such liabilities be actual or
contingent primary or collateral joint or several and whether such
accounts and liabilities be at or to one or more branches of the
Bank;
(k) That upon demand being made by the Bank for payment of the
Mortgage Debt and other moneys hereby secured or any part
thereof or upon such Mortgage Debt and other moneys for any
other reason becoming immediately payable the Bank shall be
 25

under no obligation to make any further advances or grant any

further facilities to the Chargor or the Borrower;
(l) That this Security shall be valid and binding for all purposes
notwithstanding any change by amalgamation consolidation or
otherwise which may be made in the constitution of the company by
which the business of the Bank may be for the time be carried on
and shall be available to and enforceable by the company carrying
on that business for the time being;
(m) That after the Security hereby constituted has become enforceable
the Chargor or the Borrower shall from time to time and at all times
execute and do all such acts and things as the Bank may
reasonably require for facilitating the realisation of the property and
assets hereby charged and for exercising all the powers authorities
and discretions hereby and/or by law conferred by the Bank;
(n) That the Chargor or the Borrower hereby irrevocably appoints the
Bank to be the attorney of the Chargor or the Borrower and in the
name and on behalf of the Chargor or the Borrower to execute and
do any assurances acts and things which the Chargor or the
Borrower ought to execute and do under the covenants and
agreements herein contained and generally to use the names of the
Chargor or the Borrower in the exercise of all or any of the powers
hereby or by law conferred on the Bank or any receiver or manager
appointed by the Bank;
(o) That any notice required or authorised by law or by this Security to
be served by the Bank on the Chargor or the Borrower shall be
deemed to have been properly served on the Chargor or the
Borrower if sent by registered post in a stamped envelope
addressed to the Chargor or the Borrower at the last known
address of the Chargor or the Borrower or if it be delivered to the
place of business or abode of the Chargor or the Borrower or left at
the Mortgaged Property. Where the addressee is a company any
notice required or authorised by law or by this Security shall be
deemed to have been properly served on the Bank if served on any
one of the Directors or the secretary of the addressee or if delivered
or sent by registered post telex or facsimile to the addressee at its
 26

registered office or any of its principal places of business in Kenya.

Any notice sent by registered post shall be deemed to have been
served on the addressee at 10 a.m. on the fifth succeeding
business day following the day of posting notwithstanding that it be
undelivered and in proving service it shall be sufficient to prove that
the notice or demand was properly addressed and posted. Any
notice or demand sent by telex or facsimile shall be deemed to
have been served at the time of transmission.
(p) (A) No dealing between the Chargor or the Borrower and
the Bank shall in any way: -
(i) prejudice or affect the covenants liabilities and
obligations of Chargor or the Borrower or the rights
and remedies of the Bank; or
(ii) release or discharge any mortgage or charge given
by the Chargor or the Borrower;
(B) As respects the Bank:-
(i) the Chargor or the Borrower shall be liable on the
covenants on the part of the Chargor or the Borrower
herein contained as principal;
(ii) every mortgage and every charge created by this
Security shall be a principal and primary security for
the moneys hereby secured;
(C) For the purpose of this clause a dealing shall include:-
(i) the giving of time or indulgence by the Bank;
(ii) the neglect or forbearance of the Bank in requiring or
enforcing payment of any moneys hereby secured;
(iii) the release of any property subject to this Security or
of any property mortgaged or charged to secure the
Mortgage Debt or of any covenant liability or
obligation hereunder or the release of any Guarantor
who has guaranteed payment of the Mortgage Debt;
(iv) any variation of any of the provisions of this Security;
(v) any arrangement or compromise between the
Chargor or the Borrower and the Bank;
 27

(vi) any act omission matter or thing whatsoever whereby

the Chargor or the Borrower would or might have
been released from any covenant liability or obligation
hereunder or any mortgage or charge given by the
Chargor or the Borrower;
8. If the Bank shall at any time receive notice of any subsequent
encumbrance or other like interest matter event or transaction affecting the
Mortgaged Property the Bank may open a new account or accounts for the
Chargor or the Borrower in its books. If the Bank does not in fact open any
such new account then unless the Bank gives express written notice to the
Chargor or the Borrower to the contrary the Bank shall be treated as if it
had in fact opened such account or accounts at the time when it received
such notice. As from that time and unless such express written notice shall
be given to the Chargor or the Borrower all payments by or on behalf of
the Chargor or the Borrower to the Bank shall (in the absence of any
express contrary appropriation by the Chargor or the Borrower) be
credited or treated as having been credited to a new account of the
Chargor or the Borrower and not as having been applied in reduction of
the Mortgage Debt at the time when the Bank received such notice. All
monies received recovered or released by the Bank may in its discretion
be credited to any suspense account and held in such account for so long
as the Bank may think fit pending application in or towards satisfaction of
the Mortgage Debt.
9. The Head Lessor hereby consents to the foregoing Charge.
10. In these presents where the context so admits:-
(i) the expression "Legal Date of Redemption" means the seventh day
after the date of this Security;
(ii) the expression "the Prescribed Maximum Debt" means the sum of
Kenya Shillings Fifty Million (Kshs.50,000,000/-) or equivalent in
any other Currency.
(iii) words importing the singular number only include the plural number
and vice versa and where there are two or more persons included
in the expression “the Chargor” or “the Borrower” such expression
shall include either one of such persons severally or all or both of
them jointly and covenants and agreements expressed to be made
 28

by the Chargor or the Borrower or shall be deemed to be made by

such persons jointly and severally and shall be binding on all or
both and each of such persons jointly and severally and any act
default or omission by the Chargor or the Borrower shall be
deemed to mean an act default or omission by any one or more of
such persons and these presents shall constitute a security for all
such moneys and liabilities as are referred to in Clause 1 hereof
whether due or owing or incurred by all or both or any one or any
combination of such person;
(vii) the expression "month" means calendar month;
(viii) the expression "covenant" means and includes "agree" and
"agreement"'
(ix) words importing the masculine gender only include the feminine
gender or (as the case may be) the neuter gender.

IN WITNESS WHEREOF the Chargor has hereunto set his hand and the
Borrower, the Head Lessor and the Bank have hereunto affixed their respective
Common Seals the day and year first above written.

MEMORANDUM

1. The provisions of the Government Lands Act, Chapter 280 of the Laws of
Kenya.
2. The Special Conditions contained in the Grant registered as No. I.R
94094/1.

SIGNED by the CHARGOR )

in the presence of: )
)
)
)
)
)
)
)
)

SEALED with the Common Seal )

Of the BORROWER in the )
presence of: )
 29

)
)
)
DIRECTOR )
)
)
)
)
DIRECTOR )
)
 30

SEALED with the Common Seal )

Of the BANK in the presence of: )
)
)
)
DIRECTOR )
)
)
)
)
DIRECTOR )
)

CERTIFICATE

I, Advocate of the High Court of Kenya hereby certify

that before the execution of this Charge by the Chargor NISHMA NIPOOL SHAH
I explained to her the effect of sub-section (1) of Section 69 and sub-section (1) of
Section 100A of the Transfer of Property Act 1882 of India as incorporated therein
by the Indian Transfer of Property Act (Amendment) Act 1959 and copies whereof
are set out hereunder and that I am satisfied that she understood the same.

ADVOCATE OF THE HIGH COURT OF KENYA

Section 69(1) of the Transfer of Property Act 1882 of India as amended by the
Indian Transfer of Property Act (Amendment) Act 1959 reads as follows:-
"69(1) A mortgagee, or any person acting on his behalf where the mortgage is an
English mortgage, to which this section applies, shall, by virtue of this Act and
without the intervention of the Court, have power when the mortgage money has
become due, subject to the provisions of this section, to sell, or to concur with any
other person in selling, the mortgaged property or any part thereof, either subject
to prior encumbrances or not, and either together or in lots, by public auction or
by private contract, subject to such conditions respecting title, or evidence of title,
or other matter, as the mortgagee thinks fit, with power to vary any contract for
sale, and to buy in at an auction, or to rescind any contract for sale, and to resell,
without being answerable for any loss occasioned thereby; the power of sale
 31

aforesaid is in this Act referred to as the mortgagee's statutory power of sale and
for the purposes of this Act the mortgage-money shall be deemed to become due
whenever either the day fixed for repayment thereof, or part thereof by the
mortgage instrument has passed or some event has occurred which, according to
the terms of the mortgage instrument, renders the mortgage-money, or part
thereof, immediately due and payable".
AND
Section 100A of the said Act as so amended as aforesaid reads as follows:-

"Section 100A(1) A Chargee under a charge executed in accordance with the

provisions of Section 46 of the Registration of Titles Act and duly registered under
that Act shall have the same rights powers and remedies (including the right to
take proceedings to obtain possession from the occupiers and the persons in
receipt of
rent and profits or any of them) as if the charge were an English mortgage to
which Section 69 of this Act applies"

I, NISHMA NIPOOL SHAH have read and had explained to me the above
Sections and confirm that I understand the same.

Signed..............................
 32

CONSENT
WE, STAR DEVELOPERS LIMITED hereby consent to the creation of the within
written Charge PROVIDED THAT the said Charge shall be subject to the
provisions of the Lease registered as Number I.R. ………………

SEALED with the Common Seal )

of SANDALWOOD DEVELOPERS )
LIMITED in the presence of: )
)
)
)
DIRECTOR )
)
)
)
DIRECTOR/SECRETARY )
)

DRAWN BY

S. S. JOWHAL & CO
ADVOCATES
WENTWORTH APARTMENTS
GITHUNGURI ROAD - KILELESHWA
P.O. BOX 42296 - 00100
NAIROBI