FOREIGN CURRENCY LOAN
AGREEMENT [CD1]
THIS FOREIGN CURRENCY LOAN
AGREEMENT ("Agreement") made at Delhi on
this the…………….day of
…………….Two
thousand and one between ABC Power Generation Limited, a company registered
under the Companies Act, 1956 (Act 1 of 1956) and having its registered office
at…………….Delhi, State of Maharashtra (hereinafter referred to as the
"Borrower" which expression shall, unless it be repugnant to the
subject or context thereof, include its successors and assigns);
AND
THE XYZ FINANCE COMPANY
LIMITED, a company registered under the Companies
Act, 1956 and having its registered office at ......................................
Delhi (hereinafter referred to as "XYZ" or "Lender" which
expression shall, unless it be repugnant to the subject or context thereof,
include its successors and assigns).
ARTICLE 1: DEFINITIONS
1.1
The following terms shall have the following meanings:
1. "ABC FC Loan
Agreement" shall mean the agreement entered into
or to be entered into in respect of the ABC Bank foreign currency loan.
2. "Commitment Charge
Lender(s)" shall mean the lender(s) providing fund
based or non-fund based finance for Commitment Charges under the Fuel Supply
Agreement.
3. "Counter
Guarantors" shall mean DEF Bank, GHI Bank and The
JKL Bank Limited.
4. "Due Date"
shall mean, in respect of:
I.
an instalment of principal,
the date on which the instalment falls due as stipulated in Schedule VI hereto;
and
II.
interest, the date on which
interest falls due as stipulated in Schedule V hereto.
5.
"Effluent
Discharge Agreement" shall mean the agreement
entered into between the Borrower and the Government of Maharashtra, dated
January 23, 2000.
6.
"EPC
Contracts" shall mean the agreements entered into
by the Borrower in respect of engineering, procurement and construction of the
power plant.
7.
"Escrow
Agreement" shall mean the agreement, dated 27th
July, 2000 entered into between Maharashtra State Electricity Board (MSEB), the
Borrower and MNO Bank.
8.
"FC
Lenders" shall mean the Lender, the Power
Finance Corporation Limited, the STR Development Bank and the ABC Bank .
…………….Branch.
9.
"FC
Loans" shall mean the amounts of various
foreign currencies specified in this Agreement, the STR FC Loan Agreement, the
PFC FC Loan Agreement and the ABC FC Loan Agreement or their equivalents in
other foreign currencies used for their purchase, agreed to be provided by the
FC Lenders for the Project or as the context requires.
10. "Financing Plan" means
the financing plan as described in Schedule III hereto.
11. "Fuel Supply
Agreement" shall mean the agreement entered into
between the Borrower and……………. Petroleum Corporation Limited, dated January 19,
2000.
12. "GOM Guarantee" shall
mean the Guarantee executed by the Government of Maharashtra in favour of the
Borrower dated August 7, 2000 with respect to the obligations of MSEB under the
Power Purchase Agreement, dated March 31, 1999 and amendment thereof, dated
October 9, 2000.
13. "General
Conditions" shall mean the General
Conditions No. GC-FC-1-88 applicable to foreign currency loans provided by
financial institutions as amended and attached herewith to this Agreement.
14. "Guarantor" or
"Guarantors" shall mean the XYZ Finance
Company Ltd., the STR Development Bank and the ABC Bank.
15. "STR FC Loan" shall
mean the foreign currency loan availed or to be availed by the Borrower
pursuant to The STR Development Bank Foreign Currency Loan Agreement.
16. "STR FC Loan
Agreement" shall mean the agreement entered into or
to be entered into in respect of The STR Development Bank Foreign Currency
Loan.
17. "FC Loan" shall
mean the foreign currency loan availed or to be availed by the Borrower
pursuant to this Agreement.
18. "ADIS" shall
mean The Asian Development Bank, which has agreed to provide a foreign currency
loan to the extent of US Dollar 89,750 Million to the Borrower.
19. "Lead Institution"
shall mean the XYZ Finance Company Limited designated by the Lenders and the
Commitment Charge Lenders to the Project as their attorney.
20. "Lenders"
shall mean the Rupee Lenders, the FC Lenders, Guarantors, the Counter
Guarantors, the Working Capital Lender(s) and the Commitment Charge Lenders.
21. "Loans" shall
mean the loans, subscription to NCDs, and/or guarantees availed by the Borrower
from FC Lenders, Rupee Lenders, Guarantors, Counter Guarantors, Working Capital
Lender(s) and Commitment Charge Lenders.
22. "Operations and
Maintenance Agreement" shall mean the agreement
dated 6th October, 1997 (as amended by amendment, dated May 29, 2000) entered
into between the Borrower and UVW Generation Company Limited.
23. "PFC FC Loan" shall
mean the foreign currency loan availed or to be availed by the Borrower
pursuant to the PFC FC Loan Agreement.
24. "PFC FC Loan
Agreement" shall mean the agreement entered into or
to be entered into in respect of the PFC FC Loan.
25. "Power Purchase
Agreement" shall mean the agreement, dated 31st
March, 1999 entered into between the Borrower and MSEB for purchase of
electricity generated by the Project.
26. "Project"
means the Project to be financed as described in Schedule 11 hereto.
27. "Project
Contracts" shall mean each of the following
agreements:
(a)
Power Purchase Agreement;
(b)
GOAP Guarantee;
(c)
EPC Contracts;
(d)
Operation and Maintenance
Agreement;
(e)
Escrow Agreement;
(f)
Fuel Supply Agreement;
(g)
Water Supply Agreement;
(h)
Effluent Discharge
Agreement; and
(i)
Such other contracts, deeds
and documents that are entered into and to be entered into by the Borrower in
respect of the Project.
28. "Promoters" shall
mean Santex Construction Limited, Santex Industries Limited, Santex Investments
Limited and UVW Power Generation Company Limited/XYZ Power Co. Limited.
29. "Receivables" shall
mean all monies due and to become due to the Borrower at any time including,
without limitation, all proceeds of disbursements of the Lenders, subscriptions
for shares in the share capital of the Borrower, working capital, cash credit
and instruments of similar nature, monies due or to become due to the Borrower
under the Project Contracts, and under all performance bonds, letters of credit
and instruments of a similar nature issued in its favour in respect of the
Project except the refund of Commitment Charges by Hindustan Petroleum
Corporation Limited pursuant to the Fuel Supply Agreement.
30. "Rupee Loans" means
the loans agreed to be provided by, or non-convertible debentures subscribed
by, the Rupee Lenders.
31. "Rupee Lenders" shall
mean the XYZ Finance Company Limited, DEF Bank, AAA Insurance and Finance
Company Ltd., BBB Insurance Company Ltd., Power Finance Corporation of India
and The JKL Bank Limited.
32. "Security" shall
mean the security created in favour of the Security Trustee/Lead Institution
under Article III of this Agreement.
33. "Security
Documents" shall mean the agreements entered into
or to be entered into between the Borrower and the Security Trustee for
creation of Security.
34. "Security Trustee"
shall mean the XYZ Finance Company Limited,
the Lead Institution among the Financial Institutions and Banks.
35. "Trust and Retention
Agreement" shall mean the agreement entered into or
to be entered into between the Borrower, the Security Trustee and the Account
Banks.
36. "Water Supply
Agreement" shall mean the agreement entered
between the Government of Maharashtra and the Borrower dated January 23, 2000.
37. "Working Capital
Lender(s)" shall mean the lender(s) providing
working capital facilities to the Borrower.
II General Conditions
The
FC Loan hereby agreed to be granted by the Lender shall be subject to the
Borrower complying with the terms and conditions set out herein and also in the
General Conditions, a copy of which is annexed hereto. The General Conditions
shall be deemed to form part of this Agreement and shall be read as if they are
specifically incorporated herein.
ARTICLE
II: AGREEMENT & TERMS OF LOANS
2.1
Amount and terms of loans
The
Borrower agrees to borrow from the Lender and the Lender agrees to lend to the
Borrower in the foreign currency(ies) specified in Schedule IV hereto, on the
terms and conditions contained herein and in the General Conditions, the sums
to the maximum extent in the various foreign currencies as set out in Schedule
1.
2.2
Interest
(i)
The Borrower shall pay to
the Lender interest on the FC Loan at the rate(s) and in the manner provided in
Schedule V hereto:
Provided,
however, interest on rupee-tied defaulted amounts, arrears of liquidated
damages and on sums incurred by the Lender by way of expenses in terms of
sections 4.1, 4.5 and 4.7 respectively of Article IV of the General Conditions
shall be payable half yearly on June 15 and December 15 each year.
(ii)
Disbursements made pending
creation of Security as stipulated in Article III hereof, in case of
non-creation of final security within 3 months from the date of first
disbursement shall carry further interest at the rate of 1% per annum plus
interest tax from the date of first disbursement till creation of Security.
2.3
Front end fee
The
Borrower shall pay to the Lender a one time front end fee at the rate of 1 % on
the amount of the FC Loan plus interest tax on or before the execution of the
Agreement.
2.4
Last date of withdrawal
Unless
the Lender otherwise agrees, the right to make drawals from the FC Loan(s)
shall cease on February 15, 2003.
2.5
Payment
The
Borrower undertakes to repay the principal amount of the FC Loan to the Lender
in accordance with the Amortization Schedule set forth in Schedule VI hereto.
2.6
Conversion right in case of default
(i)
If the Borrower commits a
default in payment or repayment of any instalment of principal amount of the FC
Loan or interest thereon or any combination thereof under section 10.1 (a), (b)
or (c), then the Lender shall have the right to convert (which right is
hereinafter referred to as "the conversion right") at its option 20%
of the rupee equivalent of the defaulted amount (determined in accordance with
section 4.10 of Article IV of the General Conditions) into fully paid-up equity
shares of the Borrower, at par, in the manner specified in a notice in writing
to be given by the Lender to the Borrower (which notice is hereinafter referred
to as the "notice of conversion") prior to the date on which the
conversion is to take effect, which date shall be specified in the said notice
(hereinafter referred to as the "date of conversion").
(ii)
On receipt of the notice of
conversion, the Borrower shall allot and issue the requisite number of fully
paid up equity shares to the Lender as from the date of conversion and the
Lender shall accept the same in satisfaction of the said defaulted amount(s) in
respect of the FC Loan to the extent so converted. The part of the Loans so
converted shall cease to carry interest as from the date of conversion and the
Loans shall stand correspondingly reduced. Upon such conversion, the
installments of the Loans payable after the date of conversion as per Schedule
VI herein shall stand reduced proportionately by the amount of the FC Loan so
converted. The equity shares so allotted and issued to the Lenders shall carry
from the date of conversion, the right to receive proportionately the dividends
and other distributions declared or to be declared in respect of the equity
capital of the Borrower. Save as aforesaid, the said shares shall rank pari
passu with the existing equity shares of the Borrower in all respects. The
Borrower shall, at all times, maintain sufficient unissued equity shares for
the above purpose.
(iii)
The conversion right
reserved as aforesaid may be exercised by the Lender on one or more occasions
during the currency of the FC Loan on the happening of the default as specified
in this Section.
(iv)
The Borrower assures and
undertakes that in the event of the Lenders exercising the right of conversion
as aforesaid, the Borrower shall use its best efforts to get the equity shares
which will be issued to the Lender as a result of the conversion listed with
the Stock Exchange(s) at Delhi and Delhi.
(v)
For the purposes of this
section, it shall not be construed as a default, if the Borrower approaches the
Lender well in advance for postponement of principal or interest as the case
may be and the Lender agrees to the same.
ARTICLE
III: SECURITY
3.1 Security for the loans
(A)
The Loans together with all interest, liquidated damages, front end fee, premia
on prepayment or on redemption, costs, expenses and other monies including any
increase as a result of devaluation/revaluation/fluctuation in the foreign
currencies involved payable whatsoever stipulated in this Agreement shall be
secured by:
(a)
a first mortgage and charge
in favour of the Security Trustee in a form satisfactory to the Lender of all
the
Borrower's
immovable properties both present and future;
(b)
a first registered mortgage
and charge in favour of the Security Trustee of all of the Borrower's immovable
properties in Maharashtra, and all its intangible assets both present and
future, and a charge over all Project
Contracts, insurance proceeds and bank accounts; and
(c)
a first charge by way of
hypothecation in favour of the Lenders of all the Borrower's movables, (save
and except book debts) including movable
machinery, machinery spares, tools and accessories, present and future, subject
to prior charges created and/or to be
created in favour of the Working Capital Lenders on the Borrower's stocks
of raw materials, semi-finished,
finished goods, consumable stores, book debts and such other movables as may be agreed by the Lead Institution.
The
mortgage and charge referred to above shall rank pari passu with the mortgages
and charges created and/or to be created in favour of the Lenders in respect of
the financial assistance as set out herein:
_________________________________________________________________________________________
Lender Rupee
Term Foreign
Currency Guarantee Total
Loan/NCD
Loan Amount Assistance^
Amount Amount
(Principal)
___________________________________________________
Rs. Crores US $ Rs. us
$ Rs.
Rs. Million Crores
Million Crores Crores
________________________________________________________________________________________
XYZ F
STR
DB
AAA
BBB
PFC
JKL
Bank
ABC
Bank
DEF
Bank
GHI
Bank
________________________________________________________________________________________
Total #@
_________________________________________________________________________________________
(B)
The Borrower shall make out a good and marketable title to its properties to
the satisfaction of the Lender and comply with all such formalities as may be
necessary or required for the said purpose.
3.2 Creation of additional security
If
at any time during the subsistence of this Agreement, the Lead Institution is
of the opinion that the security provided by the Borrower has become inadequate
to cover the balance of the Loans then outstanding, then, on the Lead
Institution advising the Borrower to that effect, the Borrower shall provide
and furnish to the Lender, to the satisfaction of the Lead Institution, such
additional security as may be available with the Borrower and as may be
acceptable to the Lead Institution to cover such deficiency.
3.3 Pledge of shares
The
Borrower shall cause the Promoters to create a pledge in favour of the Security
Trustee aggregating 51% of the total issued equity share capital of the
Borrower at all times, excluding the shares issued to the Lender pursuant to
clause 2.6 or similar provision in agreements with lenders in respect of the
Loans.
3.4 Trust and retention account
The
Borrower shall enter into a Trust and Retention Agreement and open the accounts
described therein in which the proceeds of Receivables of the Borrower would be
deposited for the due repayment of the principal amount of the Loans and
interest thereon, and all other payments under this Agreement and for making
all payments in accordance with the Trust and Retention Agreement. The
appointment of the trustee for operating the accounts shall be subject to
approval of the Security Trustee.
3.5 Acquisition of additional immovable properties
So
long as any monies remain due and outstanding to the Lender, the Borrower undertakes
to notify the Lender in writing of all its acquisition of immovable properties
and as soon as practicable thereafter to make out a marketable title to the
satisfaction of the Lender and charge the same in favour of the Lender, on a
pari passu basis with the other Lenders, by way of first charge in such form
and manner as may be decided by the Lender.
3.6 Guarantee
The
Borrower shall procure irrevocable and unconditional personal guarantee(s) of
S/Shri. A and B both joint and several and a Corporate Guarantee of Santex
Constructions Limited in favour of Lender for the due repayment of the Loans
and the payment of all interest and other monies payable by the Borrower in the
form prescribed by the Lender and to be delivered to the Lender before any part
of the loan is advanced. The Borrower shall not pay any guarantee commission to
the said Guarantors.
ARTICLE
IV: APPOINTMENT OF NOMINEE DIRECTOR(S)
The
Borrower agrees that Lender shall be entitled to appoint and withdraw from time
to time Director(s) on the Board of Directors of Borrower at any time during
the currency of this Agreement.
ARTICLE V: SPECIAL
CONDITIONS
The
FC Loan hereby granted shall also be subject to the Borrower complying with the
special conditions set out in Schedule VII hereto.
ARTICLE
VI: EFFECTIVE DATE OF AGREEMENT
This
Agreement shall become binding on the Borrower and the Lender on and from the
date first above written. It shall be in force till all the monies due and
payable under this Agreement are fully paid off.
SCHEDULE
1: PARTICULARS OF XYZ FC LOAN
Name
of the Lender |
Amount
in foreign currency |
THE XYZ FINANCE COMPANY LIMITED .. .............................. ………………………
Delhi
|
US
$ ………………Million |
SCHEDULE
II: THE PROJECT
The
Borrower proposes to set up a liquid fuel based combined cycle power project of
an installed capacity approximating …………..MW (ISO) at……………..Industrial
Development Area, District……………..in the State of Maharashtra. The plant comprises two gas
turbine units of approximately……………..MW each and a steam turbine of
approximately
........ MW
SCHEDULE III: FINANCING PLAN
Project
Cost
(Rs.
In crore)
Item |
Re Cost (Rs. Cr.) |
$ Cost (US$ M) |
Total (Rs. Cr.) |
Land and Site Development |
|
|
|
Payments under EPC
Contract |
|
|
|
Initial Spares |
|
|
|
Pre-Operative Costs |
|
|
|
Financing Expenses |
|
|
|
interest During
Construction |
|
|
|
Provision for Contingency |
|
|
|
Margin Money for Working
Capital |
|
|
|
Total Cost |
|
|
|
Other requirement of funds
Commitment Charges to Fuel
Supplier |
|
|
|
Liquidated
Damages Payable to APSEB |
|
|
|
Total Project Cost |
|
|
|
*
Exchange rate for conversion of US$ has been taken at 1 US $ = Rs. 46 during
appraisal in January/February 2000.
Means
of Financing |
(Rs.
In crores) |
|
Equity
|
|
|
Santex Group SMIL
SCUSIL
Santex
Group (SubTotal) UVW/WXY
Power Co. Limited
CDC
Hanjung
|
|
|
Means
of Financing |
(Rs.
In crores) |
|
Debt:
Rupee
Loan NCDs Fls/Banks
Foreign
Currency Loan Fls/Banks
Export Credit Assistance
from ADB |
(US$
Mn) (US$
mn) |
|
Total
|
|
SCHEDULE
IV: PARTICULARS OF XYZ FC LOAN
Foreign
currency loan of US Dollar……………..Million which is allocated out of Line of Credit to the Lender and the Borrower
has to abide by the terms of the above line of credit which are laid down in
Schedule-V enclosed hereto. The Borrower shall pay to the Lender interest on
the principal amount of the FC Loan outstanding from time to time, at the rate
of six-monthly US$ LIBOR plus 3.5% per annum plus interest tax as prevailing on
the date of each disbursement. The exact due dates of payment of interest are
June 15 and December 15, each year.
SCHEDULE V: PROVISIONS
APPLICABLE TO XYZ FC LOAN
Special terms and conditions applicable to sub-loans
allocated out of the private sector infrastructure facility of US$ 100 million
from Asian Development Bank (ADB)
International
Competitive Bidding (ICB)
For
acquisition of equipment valued at or in excess of US$ 10 million or Civil
Works valued at or in excess of US$ 20 million for any qualified project, the
Borrower shall have to follow the international competitive bidding procedure.
If the contract(s) are awarded to a local firm under ICB, the same would be
eligible for Private Sector Infrastructure Facility. Further, the Project
sponsor or Engineering Procurement and Construction (EPC) Contract shall be
selected through competitive bidding or should be selected amongst
international entities in accordance with the procedure acceptable to ADB.
SCHEDULE
VI: AMORTIZATION SCHEDULE
|
(In US$) |
Closing
Balance |
|
|
|
15-12.2001 |
|
|
15.06.2002 |
|
|
15-12.2002 |
|
|
15.06.2003 |
|
|
15.12.2003 |
|
|
15.06.2004 |
|
|
15.12.2004 |
|
|
15.06.2005 |
|
|
15-12.2005 |
|
|
15-06.2006 |
|
|
15.12.2006 |
|
|
15.06.2007 |
|
|
15-12.2007 |
|
|
15.06.2008 |
|
|
(XYZF's
FC Loan)
|
(in US$) |
Closing
Balance |
15.12.2008
|
|
|
15.06.2009
|
|
|
15.12.2009
|
|
|
SCHEDULE
VII: SPECIAL CONDITIONS A. Pre-commitment Conditions
Before
the financial assistance becomes effective, the Borrower shall to the
satisfaction of the Lender comply with the following conditions:
(i)
obtain in-principle sanction
from MSEBs banker(s) for opening of irrevocable and revolving letter of credit
for prompt payment of dues by MSEB;
(ii)
enter into an escrow account
arrangement with MSEB to cover payment of electricity dues from MSEB;
(iii)
amend the Operations and
Maintenance (O&M) agreement so as to provide for guarantee on heat
rate, liquidated damages for increase in
heat rate or decrease in availability of plant;
(iv)
furnish an undertaking from
Promoters i.e., Santex Constructions Limited (SCL), Santex Industries Limited
(SIL), Santex Investment Limited (SIL)
and UVW Power Generation Limited to the effect that cost overrun, if any, shall
be made good by Promoters without recourse to Fl's/Banks and in a manner
satisfactory to the
Lender;
(v)
arrange for ECA loans to the
extent of US$ ... million from ADB on terms satisfactory to the Lender. In the
event of any savings (as compared to provisions in the project cost) on account
of lower insurance cover charges, management fee on deferred payment guarantee,
etc. the Rupee Loan shall be reduced to that extent;
(vi)
furnish an undertaking from
Promoters to bridge the gap, if any, in raising equity capital by way of
private placement with SDC (Rs.1 15
crores);
(vii)
tie-up entire means of
financing on the terms satisfactory to the Lender;
(viii)
obtain all necessary
approvals from the Government of India (FIPB)/Reserve Bank of India, etc. for
the proposed foreign equity investment
in the equity share capital of the Borrower;
(ix)
appoint, in consultation
with the Lender, a reputed firm of Engineering Consultants as "Lender's
Engineers' for monitoring the power
project during the implementation period as well as during operation period
with direct reporting to the Lender, all
costs and expenses in this regard will be borne by the Borrower; (x) undertake
to comply with all the statutory requirements for preferential allotment of
SCL's shares to
NRI's/OCB's.
(xi)
get amended all approvals
obtained earlier in the name of Santex Power to the name of the Borrower.
(xii)
get amended the Government
of Maharashtra Guarantee to the effect that it continues to be valid
irrespective of Maharashtra Government's
shareholding in MSEB.
(xiii)
amend the Shareholders
Agreement (SA) to provide for
-disinvestment/dilution
of shareholding by Santex Group and UVW Generation Co. Limited/ABC Energy
Limited shall be in consultation with and prior approval of the Lender;
-SA
shall not be terminated without the prior approval of the Lender;
(xiv)
finalise the insurance
package including Advance Loss of Profit to the satisfaction of the Lender;
(xv)
appoint insurance Advisor
and Legal Advisor to Lenders. The necessary fees and other expenses for the
same shall be borne by the Borrower;
(xvi)
The Project
agreements/contracts shall be to the satisfaction of the Lender;
(xvii)
Modify the Memorandum &
Articles of Association of the Borrower to enhance the borrowing powers as per
the envisaged means of financing;
(xviii)
Ensure that the promoters
shall meet the liquidated damages payable to the APSEB from their own resources
without recourse to the Lender.
(xix)
Ensure that the envisaged
promoters contribution is subscribed to in full and paid up in cash to the
extent of 100% in respect of Santex Group aggregating Rs. 125.50 crores.
(xx)
Qbtain MSEB approval for
extension of the date of financial closure as per PPA.
(xxi)
Obtain all
statutory/non-statutory clearances and approvals required for the project
including Pollution
Control/Environmental Clearance and ensure that the equipment proposed
to be installed is adequate and
appropriate to the Pollution Control requirement.
B.
Pre-disbursement Conditions
Before
seeking disbursement of assistance sanctioned, the Borrower shall to the
satisfaction of the Lender comply with the following conditions:
(i)
modify the Memorandum &
Articles of Association to enhance the authorised capital and borrowing powers
as per the envisaged means of financing;
(ii)
bring in 50% of the proposed
equity contribution of UVW Power Generation Limited/ABC Power Co. Limited, and SDC aggregating Rs……………..crores i.e., Rs.
.........Crores;
(iii)
shall agree to open a Trust
and Retention Account in a bank and shall deposit all the cash inflows in the
said account and the proceeds shall be
utilised in a manner and priority to the satisfaction of the Lender;
(iv)
acquire and obtain
possession of the entire land with provision for mortgage of land in favour of
institutions and obtain all necessary
approvals for usage of the land for the purpose of the power plant;
(v)
constitute a Project
Management Committee of its Directors for the purpose of supervising and
monitoring the progress in the implementation of the project. The Committee
shall be responsible for the management of the
project during construction period including civil tendering, placement
of orders for supply of plant and machinery
and other assets and monitoring the implementation of the Project;
(vi)
agree and undertake to
furnish to the Lender such information and data as might be required by the
Lender to ensure that the physical progress as well as expenditure incurred on
the Project are as per the schedule;
(vii)
agree that the Lender shall
have the right to review the cost of the Project any time during the
implementation of the Project as also before the final disbursement of the loan
amount. Pending completion of the review, the Borrower shall obtain prior
approval of the Lender for utilising the amount of the loans equivalent to the
contingency provision in the cost of Project;
(viii)
agree that the Lenders shall
be entitled to appoint one or more nominee(s) on the Board of Directors of the
Borrower during the currency of financial assistance.
C.
Other conditions
The
Borrower shall
(i)
constitute an audit
sub-committee of its Directors (other than the Directors representing the
Promoters) for monitoring/guidance.
(ii)
arrange for carrying out
safety audit in connection with storage, handling and transportation of
petroleum products and shall comply with
the recommendations set out in the audit report.
(iii)
make satisfactory
arrangement with its bankers for meeting its working capital requirements and
shall furnish a letter from its bankers in this regard.
(iv)
agree that the Lender may at
its discretion withhold disbursement of the amount of the Loan equivalent to
the provision against margin money for
working capital in the cost of the Project till such time as the Project
is completed or the build up of working
capital commences.
(v)
shall not undertake any new
project or expansion of the existing projects or make any investment or take
assets on lease without prior approval
of the Lender during the currency of the proposed Loan from the Lender.
(vi)
the Lender shall have the
right to review and reset the rate of interest.(including the spread on LIBOR)
after seven years from the date of first
disbursement, provided that the Borrower shall have the right to prepay the
FC Loan without any penalty or premium
if the rate of interest is adversely reset after seven years from the date
of first disbursement.
(vii)
broad base its Board of
Directors by induction of experienced outside professionals to the satisfaction
of the Lender.
(viii)
obtain all other statutory
and non-statutory clearances for the Project.
(ix)
shall ensure the release of
funds from ADB in line with the disbursement of foreign currency loans from the
Financial Institutions/Banks.
(x)
all other terms and
conditions stipulated by other financial institution and banks over and above
the conditions stipulated herein shall apply mutatis mutandis for the
assistance sanctioned by the Lender (XYZF).
IN WITNESS WHEREOF
the Borrower has caused its Common Seal to be affixed hereto and to a duplicate
hereof on the day, month and year first hereinabove written and the Lender has
caused the same and the said duplicate to be executed by the hand of Mr. X
Chief Deputy General Manager of the Lender.
THE
COMMON SEAL OF ABC Power Generation Company
Limited, has pursuant to the Resolution of its Board of Directors passed in
that behalf on the……………..day of...........2000 hereunto been affixed in the
presence of Mr. A, Director and Mr. B Secretary, of the Borrower who have
countersigned the same in token thereof.
SIGNED AND DELIVERED FOR
The XYZ Finance Company Ltd. by the hands of Mr. A as authorised official of
the XYZ Finance Company Limited
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