SUBSCRIPTION AGREEMENT [CD1]
THIS AGREEMENT
made at Mumbai on this the ……..day of ……..
two thousand one between, ABC Power Corporation Ltd. a company
registered under the Companies Act, 1956 and having its registered office at
Mumbai in the State of Maharashtra (hereinafter referred to as "the Company",
which expression shall, unless it be repugnant to the subject or context
thereof, include its successors and assigns);
AND
THE
XYZ FINANCE COMPANY LTD., a company incorporated
under the Companies Act, 1956 and having its registered office at ……..Mumbai 400001 (hereinafter referred to as
"Subscriber", which expression shall include its successors and
assigns as the subject or context may require).
Capitalised terms used
herein shall have the meanings assigned in Schedule II hereto.
ARTICLE
1: ISSUE OF NCDs
The Company shall issue
54,00,000 Secured Redeemable Non-Convertible Debentures (hereinafter called
NCDs) of the face value of Rs. 100 each aggregating to Rs. 54.00 Crores (Rupees
fifty-four crores only) to the Subscriber.
The proceeds of the issue of
the said NCDs shall be utilised for implementing the Project as defined in
Schedule II. In case the Company fails, for any reason, to utilise the proceeds
of the issue for the said purpose or utilises the same for any purpose other
than the approved Scheme, the Subscriber would be entitled to rescind/avoid the
contract on that ground and to call back the money, if any, paid towards
subscription of the said NCDs.
ARTICLE
II : AGREEMENT AND TERMS OF SUBSCRIPTION
2.1
Amount and terms of subscription
The Subscriber agrees to
subscribe to and the Company agrees to allot to the Subscriber on the terms and
conditions contained herein, 54,00,000 NCDs of Rs. 100 each aggregating Rs.
54.00 crores on private placement basis as set out against their name in
Schedule I hereto.
2.2
Issue of Debenture Certificates
The Company shall issue the
debenture certificates in such manner and form as will be required by the
Subscriber. The Company shall amend its Articles of Association for such
purpose where necessary.
2.3
Front-end fee
The Company shall pay
front-end fee at the rate of 1%, plus interest tax, upfront, on the agreed
amount of Subscription, i.e. on Rs. 54.00 crores.
2.4
Rate of interest/Coupon rate
The NCDs shall carry
interest on the principal amount of NCDs outstanding from time to time at the
prime lending rate ("PLR") of the Subscriber plus 3.5% per annum plus
interest tax as prevailing on the date of each subscription, payable quarterly
or at such oftler higher rate as may be applicable in terms of section 2.5 below.
The first instalment of interest shall accrue for the broken period from the
date of subscription upto the date immediately following 15th June and 15th
December as the case may be and subsequently be payable on the said dates 15th
March, 15th June, 15th September and 15th December. The interest for the broken
period shall be payable together with the last instalment of the redemption of
the said NCDs.
The applicable rate of
interest would be fixed at the end of the total Subscription (for NCDs of Rs.
54.00 Crores) period on the basis of the weighted average of the interest rates
at which the subscriptions were made.
In the event of any default
in the payment of interest on the NCDs on the dates as stated above, compound
interest at half-yearly rests at the said rates will become due and payable for
the moneys due for the period of default.
2.5
Review of rate of interest
Subscriber would have the
right to reset the rate of interest at the end of seven years from the date of
first disbursement provided that the company will have the right to redeem the
NCDs if the reset is adverse to the Company.
2.6
Further interest
All interest which shall
become due during the currency of the NCDs or any part thereof and for the time
being remaining unpaid and all other moneys which have become payable by
Company to Subscriber, in case the same be not paid on the dates on which they
accrue due, carry further interest at the maximum lending rate of the
Subscriber (top of the Interest Rate Band), as applicable on the date of
default or at the applicable rate under the Subscription agreement, whichever
is higher, computed from the respective date(s) of such interest of moneys
accruing due and all such interest and further interest which have become payable
but not paid, shall become payable upon the footing of compound interest with
rests taken or made quarterly as herein before provided.
2.7
Liquidated damages
An additional charge of 2%
per annum plus interest tax by way of Liquidated Damages will be levied for
defaults in the payment of interest, redemption of NCDs and other moneys
payable to the Subscriber. The arrears of Liquidated damages shall carry
interest at the maximum lending rate of the Subscriber (i.e., top of the
interest rate band) or at the applicable under the Subscription Agreement,
which ever is higher.
2.8
Repayment Schedule
The NCDs shall be redeemed
in 34 quarterly equal instalments, commencing from 15th December, 2001. Such
instalments shall be payable quarterly, each year, on 15th day of December,
March, June and September.
2.9
Validity period
The validity period of the
commitment to subscribe NCDs by the Subscriber will be upto February 15, 2003,
unless extended by a letter in writing addressed by the Subscriber to the
Company.
2.10
Additional Interest
Disbursements made pending
creation of final security as stipulated in Article VII 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% plus interest tax
from the date of first disbursement till creation of such security.
ARTICLE III: COMPANY'S
WARRANTIES
3.1
Except to the extent already disclosed in writing to the Lead Institution, the
Company shall be deemed to have assured, confirmed and undertaken as follows:
(a)
Information.-That
the information furnished by the Company in its application to the Subscriber
for sanction of Subscription as also that furnished from time to time is true
and correct and is not misleading in any respect.
(b)
Due
payment of public and other demands.-The
Company is not in arrears on any public demands such as income-tax, corporation
tax and all other taxes and revenues or any other statutory dues payable to the
Central or State Government(s) or any local or other authority except which
have been disputed and/or contested by the Borrower or taken up by way of
appeal/review/revision, etc. with the appropriate authority unless the Company
has made provision for adequate reserves in respect of such demands.
(c)
Selling
and purchasing arrangements. -The Company has entered
into requisite selling and purchasing arrangements to the satisfaction of the
Lead Institution.
(d)
Management
agreement.-The terms and conditions of appointment of
Managing Director or any other person holding substantial powers of management
by whatever name called shall be subject to the approval of the Lead
Institution.
(e)
Conflict
with Memorandum and Articles of Association.-Nothing
in the Subscription Agreement conflicts with the Memorandum and Articles
Association of the Company.
(f)
Import
licence.-The Company or its contractors have obtained
import licence(s) (if required) with list of equipment/necessary information
about eligibility, scope and validity of imports under Open General Licence for
equipment to be imported for the project. The Company further undertakes to
obtain information regarding changes in import policy, eligibility and scope of
import and shall advise the Subscriber in this regard from time to time.
3.2
The Company has full power,
capacity and authority to execute, deliver and perform this Agreement and has
taken necessary action (corporate, statutory or otherwise) to allot the NCDs on
private placement basis to the Subscriber on the terms and conditions contained
in this Agreement and to authorise execution, delivery and performance of this
Agreement
3.3
The Company shall revise the
terms and conditions relating to the monetary benefits available to the
Subscriber in the event of the Central Government announcing, in future, any
modification/amendment/restriction in the guidelines for the purpose of Issue
of Debentures by Public Limited Companies.
ARTICLE
IV: PRE-SUBSCRIPTION CONDITIONS
4.
Conditions precedent to subscription
4.1
The obligations of the Subscriber to subscribe to the NCDs shall be subject to
the Company performing all its obligations and undertaking to observe the
subscription procedure stipulated by the Subscriber such as submission of
necessary information, documents, etc., to the satisfaction of the Subscriber
as also compliance with the following conditions:
(a)
Recovering
calls in arrears.-The Company shall make
arrangement for recovering calls in arrears of its shareholding in a time bound
manner and to the said effect it shall furnish an undertaking to the Subscriber
in such form and manner as may be prescribed by the Lead Institution.
(b)
Legal
and Other charges.-All legal/other charges,
costs and/or other expenses incurred by the Subscriber relating to the NCDs
shall be borne/paid by the Company.
(c)
Pre-commitment
Conditions.- Before the Subscription to NCD becomes
effective, the Company shall to the satisfaction of the Lead Institution comply
with the following conditions:
(i)
obtain in-principle sanction
from MSEB's 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 &
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) 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 Subscriber.
(v)
arrange for ECA loans to the
extent of US$ 80 million from ADB on terms satisfactory to the Subscriber. In
the event of any savings 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 CDC (Rs. 100 crores).
(vii)
tie-up entire means of
financing on the terms satisfactory to the Subscriber.
(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
Company.
(ix)
appoint, in consultation
with the Subscriber, a reputed firm of Engineering Consultants during the
implementation period as well as during operation period with direct reporting
to the Subscriber, all costs and expenses in this regard will be borne by the
Company.
(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 Company.
(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 Santex Group and UVW Power Generation Limited/WEB Energy Limited
shall be in consultation with and prior approval of the Subscriber.
-
SA shall not be terminated
without the prior approval of the Subscriber.
(xiv)
finalise the insurance
package including Advance Loss of Profit to the satisfaction of the Subscriber.
(xv)
appoint insurance Advisor
and Legal Advisor to Lenders. The necessary fees and other expenses for the
same shall be borne by the Company.
(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.212.00 crores.
(xx)
Obtain 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/Environ mental Clearance and ensure that the
equipment proposed to be installed is adequate and appropriate to the Pollution
Control requirement.
4.2
Before seeking Subscription of the NCDs by the Subscriber, the Company shall to
the satisfaction of the Subscriber comply with the following conditions:
(i)
modify the Memorandum and
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/MNC Energy Limited, and CDC aggregating Rs ........Crores i.e
........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 Subscriber.
(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 Subscriber such information and data as might be required by the
Subscriber to ensure that the physical progress as well as expenditure incurred
on the Project are as per the schedule.
(vii)
agree that the Subscriber
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 Company shall obtain prior
approval of the Subscriber for utilising the amount of the loans equivalent to
the contingency provision in the cost of Project.
(viii)
agree that the Subscriber
shall be entitled to appoint one or more nominee(s) on the Board of Directors
of the Company during the currency of financial assistance.
4.3
Other conditions
The Company 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 Subscriber
may at its discretion withhold disbursement of the amount of the NCDs 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 Subscriber during the currency of
the NCDs from the Subscriber.
(vi)
The Subscriber 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 NCDs without any penalty or premium
if the rate of interest is adversely reset after seven years from the date of
first disbursement.
(vii)
broadbase its Board of
Directors by induction of experienced outside professionals to the satisfaction
of the Subscriber.
(viii)
obtain all other statutory
and non-statutory clearances for the Project.
(ix)
shall ensure the release of
funds from K-EXIM 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 (XYZ Finance Company Ltd.).
ARTICLE
V: CONDITIONS
APPLICABLE DURING CURRENCY OF THIS
AGREEMENT
5.1
Project
The Company shall
(i)
Project
Implementation.-Carry out and operate the Project with
due diligence and efficiency and in accordance with sound engineering,
technical, administrative, financial and managerial and industrial standards
and business practices with qualified and experienced management and personnel
in accordance with the Financing Plan and cause the financing specified in the
Financing Plan to be applied exclusively to the Project.
(ii)
Project
Changes.-Promptly notify the Subscriber of any
proposed changes in the nature or scope of the Project and of any event or
condition which might materially and adversely affect or delay completion of
the Project or result in subscribing to overrun in the original estimate of
costs. Any proposed change in the nature or scope of the project shall not be implemented
or funds committed thereof without the prior approval of the Lead Institution.
(iii)
Contract
changes.-Obtain prior concurrence of the Subscriber
to any material modification or cancellation of the Company's agreements with
its contractors, machinery suppliers, collaborators and technical consultants
and suppliers of raw materials.
(iv)
Delay
in Completing the Project.-Promptly inform the
Subscriber of the circumstances and conditions which are likely to disable the
Company from implementing the Project or which are likely to delay its
completion or compel the Company to abandon the same.
5.2
Utillisation of subscription amount
The Company shall
(i)
use the Subscription amount
solely for the purpose of which it has subscribed to be used i.e., exclusively
in the carrying out of the Project.
(ii)
furnish to the Subscriber at
the end of each quarter a statement showing the manner in which the said monies
have been utilised.
(iii)
Trust and Retention
Agreement
(a)
keep the Subscription amount
in special account in the name of the Company in accordance with the Trust and
Retention Agreement; and
(b)
not transfer the
subscription amount or any portion thereof from the said special account for
being kept in call or in deposit except
for investment in Authorised Investments without obtaining the prior approval
of the Subscriber,
5.3
General covenants
(A) Without the prior
approval of the Subscriber the Company shall not:
(i)
New
Project.-Undertake any new project, diversification,
modernization or substantial expansion of the Project described herein, The
word "substantial" shall have the same meaning as under The
Industries (Development and Regulation) Act, 1951.
(ii)
Loans
and Debentures.-Except as provided for in the Financing
Plan annexed to this Agreement, issue any debentures, raise any loans, accept
deposits from public, issue equity or preference capital, change its capital
structure or create any charge on its assets or give any guarantees. This
provision shall not apply to normal trade guarantees or temporary loans and
advances granted to staff or contractors or suppliers in the ordinary course of
business or to raising of unsecured loans, overdrafts, cash credit or other
facilities from Banks in the ordinary course of business.
(iii)
Premature
Repayment.-Prepay any loan availed of by it from any
other party, unless a proportionate repayment is offered to the Subscriber,
with prepayment premium as may be determined by the Subscriber.
(iv)
Commission.-Except
as provided for in the Financing Plan annexed to this Agreement, pay any
commission to its Promoters, directors, managers or other persons for
furnishing guarantees, counter guarantees or indemnities or for undertaking any
other liability in connection with any other obligation undertaken for or by
the Company for the purpose of the Project.
(v)
Dividend.-Declare
or pay any dividend to its shareholders during any financial year unless it has
paid all the dues to the Subscriber up to the date on which the dividend is
proposed to be declared or paid or has made satisfactory provisions therefore,
provided that approval of the Subscriber shall not be necessary if:
(a)
the ADSCR is equal to or
greater than 1:4;
(b)
the Required Balances in the
Debt Service Reserve Account and the Current Debt Service Reserve (as defined
in the Trust and Retention Agreement) are maintained; and
(c)
no Event of Default or
potential Event of Default is then in existence (or would be in existence after
such dividend payment).
For the purposes of this
clause,
"ADSCR"
or "Average Debt Service Coverage Ratio"
shall mean the ratio of (i) below to (ii) for the twenty-four month period
comprising the twelve months ending on the Calculation Date and the twelve
months immediately following the Calculation Date:
(i)
the aggregate of profit
after tax; plus aggregate fees and interest charges; plus non-cash items, if
any debited from the Borrower's Profit & Loss Account; minus non-cash
items, if any credited from the Borrower's Profit & Loss Account; plus the
balances standing to the credit of Borrower's bank accounts and the Overhaul
and Reserve Accounts; plus the principal amount of the Authorised Investments
made by the Borrower;
(ii)
the aggregate of the
financing costs, which among others, include the installments of principal paid
during the twelve month period ending on the Calculation Date; plus projected
over the twelve month period immediately after the Calculation Date.
"Calculation
Date" means the four quarterly debt repayment
dates.
"Overhaul
Costs" means those costs projected to be
incurred during scheduled major overhaul outages and excluding costs to be
incurred for routine annual overhaul and more frequent maintenance outages as
envisaged in the Trust and Retention Agreement.
"Overhaul
Reserve Account" means the account so named
and established and maintained by the Borrower to accumulate the amount
projected to be required to fund Overhaul Costs for the ensuing twelve months
as envisaged in the Trust and Retention Agreement.
(vi) Subsidiaries.-Create
any subsidiary or permit any company to become its subsidiary.
(vii)
Merger,
Consolidation, etc..-Undertake or permit any
merger, consolidation, reorganisation, scheme or arrangement or compromise with
its creditors or shareholders or effect any scheme of amalgamation or
reconstruction.
(viii)
Investments
by Company.-Without the prior approval of the Subscriber,
the Company shall not make any investments except hereinafter appearing
("Authorised Investments").
"Authorised
Investments" shall mean:
(a)
In relation to investment of
Rupee funds:
(1) Indian
Government Securities, Treasury Bills; or
(2) Bonds,
Certifications of Deposit of Financial Institutions, or
(3) Fixed
Deposits with Scheduled Commercial Banks;
The instruments floated by
the FIs/Banks should at least be rated as AAA/P1 by ICRA or equivalent ratings
by other recognised rating agencies like CARE/CRISIL and should have maturity
of not more than 365 days.
(b)
In relation to investments
of Dollar funds:
(1)Securities issued to
directly and fully guaranteed or insured by the United States or any agency of
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than six
months from the date of acquisition; or
(2)Time deposits and
certificate of deposit, with maturities of not more than six months from the
date of acquisition; of any international commercial bank of recognised
standing having capital and surplus in excess of US$ 500,000,000 and having the
highest rating on its commercial paper by MMM International Corporation or the
equivalent thereof by MMM Investors Service, Inc.
(c)
Any other investment as may
be approved in writing by the Lead Institution.
(ix)
Revaluation
of Assets.-Revalue its assets at any time during the
currency of the NCDs except as required by law.
(x)
Trading
Activity.-Carry on any general trading activity other
than the sale of its own products.
(B) Unless otherwise agreed
to by the Subscriber, the Company shall,
(i)
Accounting
and Cost Control Systems.-Promptly and diligently
install and thereafter maintain an accounting and cost control system
satisfactory to the Subscriber and maintain books of accounts and other records
adequate to reflect truly and fairly the financial position of the Company and
the results of its operations (including the progress of the Project) in
conformity with sound accounting principles consistently applied. Such records
and books shall be open to examination by the Subscriber.
(ii)
Information
on Goods, Services, etc.-Provide to the Subscriber
all such information relating to the goods and services financed out of the
Subscription amount, the Project and its operations and other related matters
as the lead institution shall, from time to time, at their discretion request,
including information relating to the administration, management and financial
condition of the Company.
(iii)
Notice
of Winding up or Other Legal Process.-Promptly
inform the Subscriber if it has notice of any application for winding up having
been made or any statutory notice of winding up under the provisions of the
Companies Act, 1956, or any other notice under any other Act or otherwise of
any suit or other legal process intended to be filed or initiated against the
Company or if a receiver is appointed of any of its properties or business or
undertaking.
(iv)
Adverse
Changes in Profits and Production.-Promptly
inform the Subscriber of the happening of any labour strikes, lockouts,
shutdowns, fires or any event likely to have a substantial effect on the
Company's profits or business and of any material changes in the rate of
production or sales of the Company with an explanation of the reasons thereof.
(V)
Insurance
(a)
Insure and keep insured
against such risks as may be determined in the insurance plan approved by the
Lead Institution, all the goods to be imported for the purpose of the Project
whether financed out of the proceeds of the loan or not and in particular the
goods to be financed out of the proceeds of the loan as are of an insurable
nature against all marine, transit and other hazards incident to the
acquisition, transportation and delivery of the goods to the place of use of
installation, and for such insurance any indemnity shall be payable in any
currency freely usable by the Company to replace or repair such goods.
(b)
Keep insured up to the
replacement value thereof as approved by the Lead Institution (including
surveyor's and architect's fee) the properties charged or to be charged in
favour of the Subscriber and other Subscriber and such of its other properties
and risks as are of an insurable nature against fire, theft, lightning explosion,
earthquake, riot, strike, civil commotion, storm, tempest, flood, marine risks
including war risks, erection risks, and such other risks as may be specified
in the insurance plan approved by the Subscriber.
(c)
Duly pay all premia and
other sums payable for that purpose. The insurance in respect of properties
charged or to be charged to the Subscriber and other Lenders and Commitment
Charge Lenders shall be taken in the joint names of the Company and the
Subscriber and any other person or institution having an insurable interest in
the properties of the Company and acceptable to the Lead Institution. The
Company shall keep deposited with the Lead Institution, the insurance policies
and renewals thereof.
(d)
Agree that in the event of
failure on the part of the Company to insure the properties or to pay the
insurance premia, the Lead Institution may get the properties insured or pay
the insurance premia and other sums referred to above, as the case may be, and
recover the insurance premia and such other sums referred to above from the
Company.
(vi)
Loss
or damage by uncovered risks.-Promptly inform the
Subscriber of any loss or damage which the Company may suffer due to any force
majeure circumstances or act of God, such as earthquake, flood, tempest or
typhoon, etc., against which the Company may not have insured its properties.
(vii)
Costs
and charges.-Pay all taxes, duties, cesses, costs,
charges and expenses, in connection with or relating to the issue of NCDs
(including cost of investigation of title and protection of the Subscriber's
interest). In the event of the Company failing to pay the aforesaid monies, the
Subscriber shall be at liberty but shall not be obliged to pay the same.
(viii)
Annual
Accounts/Working Results.-Submit to the Subscriber its
duly audited annual accounts within six months from the close of its accounting
year. In case statutory audit (if required) is not likely to be completed
during this period, the Company shall get its accounts audited by an
independent firm of Chartered Accountants and furnish the same to the
Subscriber.
(ix)
Memorandum
and Articles of Association.-Carry out such alterations
to its Memorandum and Articles of Association as may be deemed necessary in the
opinion of the Lead Institution to
safeguard the interests of the Subscriber arising out of this Agreement..
(x)
Selling
and Purchase Agreement.-If so required by the Lead
Institution, the Company shall take reasonable steps to suitably modify or
terminate the contracts entered Into by the Company in relation to the Project.
The Company shall.-not enter into any fresh agreement for the appointment of
sole selling agents / sole purchasing agents without the prior, approval of the
Lead Institution. Any such arrangement shall be subject to such terms and
conditions as may be stipulated by the Lead Institution.
5.4
Security Margin
The Company shall maintain a
minimum security cover of 1.50 times of its net fixed assets over all the Loans
and or debentures outstanding including the present issue of NCI)s and any
other borrowings which may have a charge over the assets of the Company on
padpassu basis. The assets revalued would not be taken into account for
determining the minimum security cover.
ARTICLE VI: NOMINEE
DIRECTORS
6.1
Nominee director
(i)
The Subscriber shall have
the right to appoint and remove from time to time, Director(s) on the Board of
Directors of the Company at any time during the currency of this Agreement
(such directors are hereinafter referred to as 'Nominee Director(s)').
(ii)
The Nominee Director(s)
shall not be required to hold qualification shares nor be liable to retire by
rotation.
(iii)
The Nominee Director(s)
shall be entitled to all the rights and privileges of other Directors including
the sitting fees and expenses as payable to other Directors but if any other
fees, commission, monies or remuneration in any form is payable to the
Directors, the fees, commission, monies and remuneration in relation to such
Nominee Director(s) shall accrue to the Subscriber and the same shall
accordingly be paid by the Company directly to the Subscriber:
Provided that, if any such
Nominee Director(s) is an officer of the Subscriber, the sitting fees in
relation to such Nominee Director(s) shall also accrue to the Subscriber and
the same shall accordingly be paid by the Company directly to the Subscriber.
Any expenditure incurred by
the Subscriber or the Nominee Director(s) In connection with his appointment as
Director shall be borne by the Company.
(iv)
The Nominee Director(p)
shall be appointed. as a Member of the Management Committee or other Committees
of the Board, if so desired by the Subscriber.
(v)
The Nominee Director(s)
shall be entitled to receive notices, agenda, etc., and to attend all General
Meetings and Board Meetings and Meetings of any Committees of the Board of
which he is a member.
(vi)
If, at any time, the Nominee
Director(s) is not able to attend a meeting of the Board of Directors; or any
of its Committees of which he is a member, the Subscriber may depute an
observer to attend the meeting. The expenses incurred by the Subscriber in this
connection shall be borne by the Company.
6.2
Management
Unless the Lead Institution
otherwise agree:
(i)
Existing
Management-The Company shall not remove any person,
by whatever name called, exercising substantial powers of management of the
affairs of the Company at the time of execution of this Agreement.
(ii)
Payment
of Compensation.-The Company shall not pay
any compensation to any person(s) mentioned in (i) above in the event of loss
of his/their office(s) for any reason whatsoever if there is a default in
repayment of dues to the Lead Institution.
(iii)
Payment
of Commission.-The person(s) referred to in (i) above
shall not be paid any commission in any year unless all the dues of the
Subscriber in that year have been paid to the satisfaction of the Subscriber.
(iv)Undertakings.-The
Company shall obtain suitable undertakings for giving effect to (i) and (ii)
above from the person(s) mentioned in (i) above. The appointment and/or
reappointment including terms of appointment (or alteration in such terms) of
the person(s) mentioned in (i) above shall be subject to the prior approval of
the Subscriber.
(v)
Future
Arrangement-The Company shall, as and when required
by the Lead
Institution, appoint and
change to the satisfaction of the Lead Institution suitable technical,
financial and executive staff of proper qualifications and experience for the
key posts. The terms of such appointments including any changes therein, shall
be subject to prior approval of the Lead Institution.
(vi) Review of Management-In
case of default in payment of any dues to the Lead Institution or if in the
opinion of the Subscriber the business of the Company is conducted in a manner
opposed to public policy or in a manner prejudicial to the Subscriber's
interest, the Lead Institution shall have the right to review the management
set up or organisation of the Company and to require the Company to restructure
it as may be considered necessary by the Lead Institution including the
formation of Management Committees with such powers and functions as may be
considered suitable by the Subscriber.
(vii)Appointment
of Technical/Management Consultants/Chartered Accountants.The
Lead Institution shall have the right to appoint, whenever it considers
necessary, any person, firm, company or association of persons engaged in
technical, management or any other consultancy business to inspect and examine
the working of the Company and its factory and to report to the Lead
Institution. The Lead Institution shall have the right to appoint, whenever it
considers necessary any Chartered Accountants/Cost Accountants as auditors for
carrying out any specific assignment(s) or to examine the financial or cost
accounting systems and procedures adopted by the Company for its working or as
concurrent or internal auditors, or for conducting a special audit of the
Company. The costs, charges and expenses including professional fees and
traveling and other expenses of such consultants or auditors shall be payable
by the Company.
(viii)
Committees.-The
Company shall constitute such Committees of the Board on such composition and
functions as may be required by the Lead Institution for close monitoring of
the different aspects of its working.
(ix)
Undertaking
for Non-Disposal of Shareholdings.-The
Company shall not recognise or register any transfer of shares in the Company's
capital made or to be made by the Promoters their friends or their associates
as specified by the Lead Institution. The Company shall obtain and furnish to
the Lead Institution suitable undertakings from the Promoters for giving effect
to the above.
ARTICLE VII: SECURITY
7.1
Security
(A) The NCDs together with
all interest, liquidated damages, management fee, premia on prepayment or on
redemption, costs, expenses and other monies' 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
Subscriber of all the Company'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, its
intangible assets both present and future, charge over Project Contracts,
insurance proceeds and bank accounts; and
(c) a first charge by way of
hypothecation in favour of the Lenders of all the Company'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, semifinished, finished
goods, consumables stores, book debts and such other movables as may be agreed by the Lead Institution.
The mortgage and charge
referred to above shall rank pad 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 Foreign
Currency Guarantee
^
Total
Term
Loan Amount Assistance
Amount
Loan/NCD
(Principal)
Amount
_________________________________________________
Rs. us $ Rs.
us
$ Rs.
Rs.
Crores Million
Crores
Million
Crores Crores
_________________________________________________________________________________________
XYZ Finance Co.
Ltd.
STR
Development
MNO
AAB
PFC
JKL
Bank
ABC
Bank
DEF
Bank GHI Bank
_________________________________________________________________________________________
Total
_________________________________________________________________________________________
Provided that Borrower may
create in favour of the Commitment Charge Lenders:
1. First charge on the
refund amounts by the fuel supplier in respect of Commitment
Charges (second charge being
in favour of the Lender), subject to the following conditions:
(a)
The Borrower shall maintain
a separate bank account for the refund of amounts from the fuel supplier in
respect of commitment charges;
(b)
The Borrower shall service
loans taken for commitment charges out of the proceeds of refund of amounts
from the fuel supplier without any
recourse to escrow account and/or Trust and Retention account.
2. Second
charge on fixed assets; and
3. Pledge
of equity shares of the Borrower owned by the Promoters aggregating 12.9% of the equity share capital (which
shall be over and above the shares to the extent of 51 % to be pledged to the
Lenders).
7.2
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 Company has become inadequate as determined by clause
5.4 to cover the balance of the NCDs then outstanding, then on the Lead
Institution advising the Company to that effect, the Company shall provide and
furnish to the Lead Institution, to the satisfaction of the Subscriber, such
additional security, as may be available with the Borrower, and as may be
acceptable to the Lead Institution to cover such deficiency.
7.3
Pledge of Shares
The Company shall cause the
Promoters to create a pledge in favour of the Security Trustee aggregates 51%
of the total issued equity share capital of the Company at all times excluding
shares issued to the Lenders pursuant to conversion rights in respect of the
Loans.
7.4
Trust and Retention Agreement
The Company shall enter into
a Trust and Retention Agreement and open the accounts described therein in
which the proceeds of Receivables of the Company 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.
7.5
Acquisition of Additional Immovable properties
So long as any moneys remain
due and outstanding to the Subscriber, the Company undertakes to notify the
Subscriber in writing of all its acquisitions of immovable properties and as
soon as practicable thereafter to make out a marketable title to the
satisfaction of the Subscriber and charge the same in favour of the Subscriber
by way of first charge in such form and manner as may be decided by the
Subscriber.
7.6
Guarantee
The Borrower shall procure
irrevocable and unconditional personal guarantee(s) of S/A & 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
VIII: REPORTS
8. The Company shall furnish
to the Lead Institution quarterly reports on its workings with in general or in
specific relation to this Agreement as may be required by the Lead
Institution.
ARTICLE
IX: INSPECTION
9. The Company shall,
(a)
Project Expenditure Records.-Maintain records and
procedures adequate to recordand monitor the progress of the Project-
(including its cost and the benefits to be derived from it), to identify the
goods and services financed out of the Subscription amounts, to disclose their
use in the Project and the operations and financial condition of the Company
and such records shall be open to examination by the Subscriber.
(b)
Technical, Financial and Legal Inspections
(i)
Permit the Subscriber, and
their authorised representatives, to carry out technical, financial and legal
inspections of the goods purchased out of the Subscription amounts and to visit
any facilities and construction sites included in the Project and to examine
any plants, installations, sites, works, buildings, property, equipment,
records and documents relating to the Company. Any such representative of the
Subscriber shall have free access at all reasonable times to the Company's
properties and shall receive full co-operation and assistance from the
employees of the Company.
(ii)
Permit any whole-time
officer of the Subscriber or a qualified practising Auditor to examine the
Company's books and papers and will give all facilities to enable any
technically qualified person chosen by the Subscriber to report on the business
of the Company at any time. Provided that, if the technically qualified person
is not a whole-time employee of the Subscriber such technically qualified
person shall be reasonably acceptable to the Company having regard to his other
activities, if any.
(iii)
The cost of inspection,
including travelling and all other expenses, shall be payable by the Company to
Subscriber in this behalf.
ARTICLE
X: SUSPENSION AND TERMINATION
10.1
Suspension
Access by the Company to the
subscription may be suspended or terminated by the Subscriber and the
Subscriber may request the Debenture Trustee to declare the principal amount of
the NCDs, all interest and all other monies under the Debenture Trustee Deed to
be due and payable in accordance with the Debenture Trust Deed and the Security
created in terms of Article VII of this Agreement shall become enforceable and
the Subscriber by notice in writing to the Company upon the happening of all or
any of the following events ("Events of Default") and the Subscriber
shall have the following rights viz.:
(i)
to enter upon and take
possession of the assets of the Company,
(ii)
to transfer the assets of
the Company by way of lease or leave and licence or sale,
(iii)
to enforce the Security
created pursuant to Article V11 of this Agreement,
(iv)
to draw monies in the bank
accounts of the Company pursuant to the Trust and Retention Agreement,
(v)
to call the Promoters to
subscribe to the equity committed pursuant to the Financing Plan, and
(vi)
(vi) to exercise any other rights the
Subscriber may have under this Agreement or under law, in accordance with the
Security Documents.
Events
of Defaults
(a)
Default in
redemption.-Default has occurred in the redemption of a principal amount of the
NCDs on the due dates and such default continues for 30 days.
(b)
Default in payment of
interest.-Default has been committed by the Company in payment of any
instalment of the NCDs owned by the Subscriber and such default continues for
30 days.
(c)
Arrears of
interest.-Interest amounting to at least Rs. 500 has been in arrears and unpaid
for a period of 30 days after becoming due.
(d)
Default in performance of
covenants and conditions.-Default has occurred in the performance of any
covenant, condition or agreement on the part of the Company under this
Agreement or any other agreement and such default has continued for a period of
thirty days after notice in writing thereof has been given to the Company by
the Subscriber setting out the nature of the default.
(e)
Supply of misleading
information.-Any information given by the Company in its application for
assistance for the Project, in the reports and other information furnished by
the Company in accordance with the Reporting System and the warranties
given/deemed to have been given by the Company to the Subscriber is misleading
or incorrect in any material respect at the time given.
(f)
Inability to pay debts.-If
the Company is unable to pay its debts or proceedings for taking it into
liquidation, either voluntarily or compulsorily, may be or have been commenced
and such proceedings have not been stayed within 30 days from commencement thereof.
(g)
Inadequate insurance.-If the
properties and assets offered to the Lender as security for the FC Loan have
not been kept insured by the Borrower or depreciate in value to such an extent
that, in the opinion of the Lead Institution, further security to the
satisfaction of the Lender should be given and on advising the Borrower to that
effect such security, where available with the Borrower, has not been given to
the Security Trustee.
(h)
Sale, disposal and removal
of assets.-If, except in accordance with the Financing Plan or in the ordinary
course of business, without the prior approval of the Lead Institution, any
land, buildings, structures or plant and machinery of the Borrower are sold,
disposed off, charged, encumbered or alienated or the said buildings,
structures, machinery, plant and machinery are removed, pulled down or
demolished, or a whole or substantial part of the Project suffers irreparable
damage, is destroyed or abandoned.
(i)
Refusal to disburse loans by
other financial institutions.-If the other financial institution(s) or bank(s)
with whom the Borrower has entered into agreements for financial assistance
have refused to disburse its/their loan(s) or any part thereof or have recalled
its/their loan(s) under their respective loan agreement(s) with the Borrower
due to breach of the terms of such agreement(s) by the Borrower.
(j)
Proceedings against
Company.-The Company has voluntarily or involuntarily become the subject of
proceedings under any bankruptcy or insolvency law unless such proceedings have
been stayed within 30 days from commencement thereof or the Company is
voluntarily or involuntarily dissolved.
(k)
Inability to pay debts on
maturity.-The Company is unable or has admitted in writing its inability to pay
its debts as they mature.
(l)
Liquidation or dissolution
of the Company.-The Company has taken or appointed or allowed to be appointed a
liquidator of all or any part of the undertaking of the Company.
(m)
Appointment of receiver or
liquidator.-A receiver or liquidator has been appointed or allowed to be
appointed of all or any part of the undertaking of the Company provided such
appointment has not been set aside or application has not been made for setting
aside such appointment within 30 days from such date.
(n)
Attachment or distraint on
mortgaged properties.-If an attachment or distraint has been levied on the
properties of the Company or any part thereof or certificate proceedings have
been taken or commenced for recovery of any dues from the Company unless such
proceedings have been stayed within 30 days.
(o)
Extraordinary
circumstances.-If, extraordinary circumstances have occurred which in the
reasonable opinion of the Subscriber, make it improbable for the project to be
carried out and for the Company to fulfill its obligations under this
Agreement.
(p)
Default in repayment of
principal, payment of interest and perforn7ance of covenants and conditions of
financial assistance.-Default has occurred in the repayment of any instalment
of the principal sum or payment of interest in respect of financial assistance,
if any, granted by the Subscriber or default has occurred in the performance of
any covenant, condition or agreement on the part of the Company under any
agreement(s) in respect of such existing financial assistance and such default
has continued for a period of thirty days after the notice in writing thereof
has been given to the Company by the Subscriber therein.
(q)
Termination, Cancellation of
Project Contracts and approvals.-Any Project Contract or any governmental
approval necessary for the construction and operation of the Project is
suspended, cancelled, revoked, repudiated or terminated in whole or a material
part thereof or ceases to be in full force and effect in each case which has a
material adverse effect on the implementation of the Project in the opinion of
the Subscriber and which is not remedied, cured or substituted to the
satisfaction of the Subscriber within 45 days.
(r)
Compulsory Acquisition.-The
Government of India, the appropriate State Government or any other statutory
authority compulsorily acquires all or a material part of the Project assets
and the Company has not taken steps to set aside the acquisition within 30 days
thereof.
(s)
Default under Project
Contracts.-Failure of any counter parties to Project Contracts to meet any
material obligations under the respective Project Contracts and such failure
has a material adverse effect on the Company and is not remedied within 60 days
after notice by the Subscriber or the cure periods provided under the
respective Project Contracts.
(t)
Equity Contribution.-Failure
of the Promoters to make equity contribution in accordance with the Financing
Plan and such failure has not been remedied within 7 days thereof after notice
by the Subscriber.
(u)
Insolvency of
Promoters.-Bankruptcy, insolvency or liquidation of the Promoters prior to
completion of construction of the Project unless either Santex Industries
Limited, Santex Constructions Limited, Santex Investments or UVW Power
Generation Limited have exercised their rights under the Shareholders Agreement
to purchase the shares of the Promoter in bankruptcy, insolvency or liquidation
within a period of 60 days.
(v)
Non-disposal of
shares.-Failure of Santex Industries Limited, Santex Constructions Limited and
Santex Investments to collectively hold 33.9% of equity in the Company or
failure of UVW Power Generation Limited to hold 30% equity in the Company,
excluding for this purposes any shares
(a)
transferred within the
Promoters group pursuant to the Shareholders Agreement upon the occurrence of
an Event of Default; and
(b)
any shares subscribed by the
Promoters to meet cost of overruns, if any.
(w) ADSCR.-The
Borrower fails to maintain an Average Debt Service Coverage Ratio of 1.21 and
the Lender declares that the Borrower is in default.
(x) TRA
Default.-A TRA Default (as defined in the Trust and Retention Agreement)
occurs.
SECTION
10.2: CONSEQUENCES OF DEFAULT
On the happening of any of
the Events of Default, in addition to the rights specified in section 10.1
hereof, the Subscriber shall be entitled to appoint and remove from time to
time one Whole-time Director on the Board of Directors of the Company (such Director
is hereinafter referred to as 'the Whole-time Nominee Director'). Such
Whole-time Nominee Director shall exercise such powers and duties as may be
approved by the Subscriber and have such rights as are usually exercised by or
are available to a Whole-time Director, in the management of the affairs of the
Company. Such Whole time Nominee Director shall not be required to hold
qualification shares nor be liable to retire by rotation and shall be entitled
to receive such remuneration, fees, commission and monies as may be approved by
the Subscriber. Such Whole-time Nominee Director shall have the right to
receive notices of and attend all General Meetings and Board meetings or any
committee(s) of the Company of which he is a Member.
Any expense that may be
incurred by the Subscriber or such Whole-time Nominee Director(s) in connection
with their appointment of directorship shall be paid or reimbursed by the
Company to the Subscriber, or as the case may be, to such Whole-time Nominee Director.
SECTION
10.3: NOTICE TO THE LEAD INSTITUTION ON THE HAPPENING OF AN EVENT OF DEFAULT
If any Event of Default or
any event which, after notice, or lapse of time, or both, would constitute an
Event of Default has happened, the Company shall, forthwith, give notice
thereof to the Subscriber in writing specifying the nature of such Event of
Default, or of such event.
SECTION
10.4: EXPENSES OF PRESERVATION OF ASSETS OF COMPANY AND OF COLLECTIONS
All expenses incurred by the
Subscriber after an Event of Default has occurred in connection with:
(i) preservation of the
Company's assets (whether then or thereafter existing); and (ii) collection of
amounts due under this Agreement, shall be payable by the Company.
SECTION
10.5: CANCELLATION BY NOTICE TO THE SUBSCRIBER
The
Company may, by notice in writing to the Subscriber, cancel the financial
assistance sanctioned by the Subscriber or any part thereof which the Company
has not drawn prior to the giving of such notice.
SECTION
10.6: SUSPENSION
Further access by the
Company to the use of the undrawn amount of NCDs may be suspended or terminated
by the Subscriber in the following circumstances:
(a)
Non-Compliance
of Terms and Conditions.-Upon failure by the Company
to carry out all or any of the terms of the Foreign Currency Loan Agreement or
on the happening of any Event of Default referred to in Article X hereof.
(b)
Extraordinary
Situation.-If any extraordinary situation makes it
improbable that the Company would be able to perform Its obligations under this
Agreement.
(c)
Assignment
or Transfer of Properties to Receiver, Assignee, etc.-If
the Company takes or permits to be taken any action or proceedings whereby any
of its properties shall or may be assigned or, in any manner, transferred or
delivered to any receiver, assignee, liquidator or other person whether
appointed by the Company or by any Court of Law whereby such property shall or
may be distributed among the creditors of the Company or the Company suffers
any charge to be created over its properties in any legal proceedings.
(d)
Changes
In the Company's Organisational Structure.-If
any change in the Company's organisational structure has taken place which, in
the opinion of the Lead Institution, would adversely affect the conduct of the
Company's business or the financial position or the efficiency of management or
personnel or the execution of the Project.
SECTION
10.7: SUSPENSION TO CONTINUE UNTILL THE DEFAULT REMEDIED
The right of the Company to
make withdrawals from the undrawn amount of NCDs shall continue to be suspended
until the Subscriber has notified the Company that the right to withdrawals has
been restored and during such suspension the Company shall not be liable to
make any payment towards commitment fees. SECTION 10.8: TERMINATION
Upon the occurrence and
subsistence of any of the events described above or in Article X hereof has
been continuing or if the right of the Company to make withdrawals from the
undrawn amount of NCI)s shall have been suspended with respect to any amount of
the NCI)s for a continuous period of thirty days or if the Company has not
drawn the NCDs by the date referred to in this Agreement or such later date as
may be agreed to by the Subscriber, then in such event, the Subscriber may, by
notice in writing to the Company terminate the right of the Company to make
withdrawals. Upon such notice, the undrawn amount of the NCDs shall stand
cancelled. Notwithstanding any cancellation, suspension or termination pursuant
to the aforesaid provisions, all the provisions of this Agreement shall
continue to be in full force and effect as herein specifically provided.
ARTICLE
XI: WAIVER
11.
Waiver not to Impair the rights of the subscriber
No delay in exercising or
omission to exercise any right, power or remedy accruing to the Subscriber upon
any default under this Agreement, security documents or any other agreement or
document shall impair any such right, power or remedy or shall be construed to
be a waiver thereof or any acquiescence in such default, nor shall the action
or inaction of the Subscriber in respect of any default or any acquiescence by
them in any default, affect or impair any right, power or remedy of the
Subscriber in respect of any other default.
ARTICLE
XII: MISCELLANEOUS 12.1 Approvals
The Company shall approach
the Subscriber for obtaining all consents and approvals required under this
agreement.
12.2
Service of notice
Any notice or request to be
given or made to the Subscriber or to the Company or to any other party shall
be In writing. Such notice or request shall be deemed to have been given or
made when it is delivered by hand or dispatched by mail or telegram to the
party to which it is required to be given or made at such party's designated
address.
12.3
Headings
The headings of various
Articles and Sections in this Agreement are inserted for convenience of
reference and are not deemed to affect the construction of this relative
provisions.
12.4
Effective date of agreement
This Agreement shall become
binding on the Company and the Subscriber on and from the date first above
written. It shall be in force till the Subscriber continues to hold the NCDs
acquired by them in terms of this Agreement.
12.5
Application of other statutes
Nothing contained in this
Agreement shall prejudice or in any way affect the rights vested in the
Subscriber under any statute.
12.6
Evidence of debt
(a)
The Subscriber shall
maintain, in accordance with their usual practice, accounts evidencing the
amount from time to time subscribed by and owing to it under the Subscription
Agreement.
(b)
In any legal action or
proceedings arising out of or in connection with the Subscription Agreement the
entries made in the accounts maintained pursuant to sub-clause (a) above shall
be prima facie evidence of the existence and amount of obligations of the
Company as therein recorded.
12.7
Benefit of the agreement
This Agreement shall be
binding upon and inure to the benefit of party thereto and its successors and
assigns.
SCHEDULE
1: SUBSCRIBER, PARTICULARS OF SUBSCRIPTION
_________________________________________________________________________________________
Name of the Subscriber Subscription
Amount
_________________________________________________________________________________________
THE XYZ FINANCE COMPANY LTD.
Rs.54.00
Crores
............................
............................
Mumbai
________________________________________________________________________________________
SCHEDULE
II: DEFINITIONS
38. "ABC FC Loan
Agreement" shall mean the agreement entered into
or to be entered into in respect of the Bank of Baroda foreign currency loan.
39. "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.
40. "Counter
Guarantors" shall mean DEF Bank, GHI
Bank, and The JKL Bank Limited.
41. "Due Date"
shall mean, in respect of:
I.
an instalment of principal,
the date on which the instalment falls due as stipulated in Schedule IV hereto;
and
II.
interest, the date on which
interest falls due as stipulated in Schedule IV hereto.
42. "Effluent Discharge
Agreement" shall mean the agreement entered into
between the Borrower and the Government of Maharashtra, dated January 23, 2000.
43. "EPC Contracts" shall
mean the agreements entered into by the Borrower in respect of engineering,
procurement and construction of the power plant.
44. "Escrow Agreement"
shall mean the agreement, dated 27th July, 2000 entered into between
Maharashtra State Electricity Board (MSEB), the Borrower and MNO Bank
45. "FC Lenders" shall
mean the XYZ Finance Company Limited, the Power Finance Corporation Limited,
the STR Development Bank and the ABC Bank
46. "FC Loans"
shall mean the amounts of various foreign currencies specified in the XYZ FC FC
Loan Agreement, the STRDB FC Loan Agreement, the PFC 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.
47. "Financing Plan"
means the financing plan as described in Schedule III hereto.
48. "Fuel Supply
Agreement" shall mean the agreement entered into
between the Borrower and…………….. Petroleum Corporation Limited, dated January
19, 2000.
49. "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, 2000.
50. "Guarantor" or
"Guarantors" shall mean the XYZ Finance
Company Ltd. the STR Development Bank and ABC Bank.
51. "STR 1313 FC Loan"
shall mean the foreign currency loan availed
or to be availed by the Borrower pursuant to the STR DB FC Loan Agreement.
52. "STR 1313 FC Loan Agreement"
shall mean the agreement entered into or to
be entered into in respect of the STR DB FC Loan.
53. FC Loan" shall
mean the foreign currency loan availed or to be availed by the Borrower
pursuant to this Agreement.
54. "ADB" shall
mean Asian Development Bank which has agreed to a foreign currency loan to the
extent of US Dollar ………………..Million to the Borrower.
55. "Lead Institution"
shall mean the XYZ Finance Company Ltd. designated by the Lenders and the
Commitment Charge Lenders to the Project as their attorney.
56. "Lenders"
shall mean the Subscriber, the Rupee Lenders, the FC Lenders, Guarantors, the
Counter Guarantors the Working Capital Lender(s) and the Commitment Charge
Lenders.
57. "Loans"
shall mean the loans and/or guarantees availed, NCDs issued by the Borrower
from/to the Subscriber, FC Lenders, Rupee Lenders, Guarantors, Counter
Guarantors, Working Capital Lender(s) and Commitment Charge Lenders.
58. "Operations and
Maintenance Agreement" shall mean the agreement dated
6th October 1999 entered into between the Borrower and UVW Power Generation
Company Limited.
59. "Overhaul Costs"
means those costs projected to be incurred during scheduled major overhaul
outages and excluding costs to be incurred for routine annual overhaul and more
frequent maintenance outages.
60. "Overhaul Reserve
Account" means the account so named and
established and maintained by the Borrower to accumulate the amount projected
to be required to fund Overhaul Costs the ensuing twelve months.
61. "PFC FC Loan"
shall mean the foreign currency loan availed or to be availed by the Borrower
pursuant to the PFC FC Loan Agreement.
62."PFC
FC Loan Agreement" shall mean the agreement
entered into or to be entered into in respect of the PFC FC Loan.
63. "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.
64. "Project" means
the Project to be financed as described in Schedule II hereto.
65. "Project
Contracts" shall mean each of the following
agreements:
(a) Power
Purchase Agreement;
(b) GOM
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.
66.
"Promoters"
shall mean Santex Constructions Limited,
Santex Industries Limited, Santex Investments Limited and UVW Power Generation
Limited/WEB Energy Limited.
67.
"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……………..
Petroleum Corporation Limited pursuant to the Fuel Supply Agreement].
68.
"Rupee
Loans" means the loans agreed to be provided
by, or non-convertible debentures subscribed by, the Rupee Lenders.
69.
"Rupee
Lenders" shall mean the Subscriber, DEF Bank,
AAB Ltd., BBB Ltd., Power Finance Corporation of India and JKL Bank Ltd.
70.
"Security"
shall mean the security created in favour of the Security Trustee/Lead
Institution under Article VII of this Agreement.
71.
"Security
Documents" shall mean the agreements entered into
or to be entered into between the Borrower and the Security Trustee for
creation of Security.
72.
"Security
Trustee" shall mean the Industrial Finance
Corporation of India Limited, the Lead Institution among the Financial Institutions
and Banks.
73.
"Trust
and Retention Agreement" shall mean the
agreement entered into or to be entered into between the Borrower, the Lenders
and the Account Banks.
74.
"Water
Supply Agreement" shall mean the agreement
entered between the Government of Maharashtra and the Borrower, dated January
23, 2000.
75.
"Working
Capital Lender(s)" shall mean the lender(s)
providing working capital facilities to the Borrower.
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 |
|
|
|
|
Inifial
Spares |
|
|
|
|
Pre-Operative
Costs |
|
|
|
|
Financing
Expenses |
|
|
|
|
Interest
During Construction |
|
|
|
|
Provision
for Contingency |
|
|
|
|
Margin
Money for Working Capital |
|
|
|
|
Total
Cost |
|
|
|
|
Item
|
Re
Cost
(Rs. Cr.)
|
$ Cost (US M) |
Total (Rs. Cr.) |
|
Other
requirement of funds Commitment
Charges to Fuel Suppliei |
|
|
|
|
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 SIL
SCUSIL
Santex
Group (Sub-Total) UVW/WEB
Energy Limited CDC
Debt:
Rupee
Loan NCDs Fls/Banks
Foreign
Cuffency Loan Fls/Banks
Export
Credit Assistance from Korea Exim
Bank (K-EXIM) |
|
|
Total
|
|
SCHEDULE IV: REDEMPTION
SCHEDULE
NCD AMOUNT OF Rs. 54.00
Crores
|
1 |
Due Date |
Opening
Balance |
Instalment |
Closing Balance |
|
1. |
December 15, 2003 |
|
|
|
|
2. |
March 15, 2004 |
|
|
|
|
3. |
June 15, 2004 |
|
|
|
|
4. |
September 15, 2004 |
|
|
|
|
5. |
December 15, 2004 |
|
|
|
|
6. |
March 15, 2005 |
|
|
|
|
7. |
June 15,2005 |
|
|
|
|
8. |
September 15, 2006 |
|
|
|
|
9. |
December 15, 2006 |
|
|
|
|
10. |
March 15, 2007 |
|
|
|
|
11. |
June 15,2007 |
|
|
|
|
12. |
September 15, 2007 |
|
|
|
|
13. |
December 15, 2007 |
|
|
|
|
14. |
March 15, 2008 |
|
|
|
|
|
Due Date |
Opening Balance |
Instalment |
Closing
Balance |
|
15. |
June
15, 2008 |
|
|
|
|
16. |
September
15, 2008 |
|
|
|
|
17. |
December
15, 2008 |
|
|
|
|
18. |
March
15, 2009 |
|
|
|
|
19. |
June
15, 2010 |
|
|
|
|
20. |
September
15, 2010 |
|
|
|
|
21. |
December
15, 2010 |
|
|
|
|
22. |
March
15, 2011 |
|
|
|
|
23. |
June
15, 2011 |
|
|
|
|
24. |
September
15, 2011 |
|
|
|
|
25. |
December
15, 2011 |
|
|
|
|
26. |
March
15, 2012 |
|
|
|
|
27. |
June
15, 2012 |
|
|
|
|
28. |
September
15, 2012 |
|
|
|
|
29. |
December
15, 2012 |
|
|
|
|
30. |
March
15, 2013 |
|
|
|
|
|
Total |
|
|
|
IN
WITNESS WHEREOF the Company 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 Subscriber have caused the same and the said
duplicate to be executed by the hand of Mr. A M Chief General Manager of the
Subscriber as hereinafter appearing.
THE
COMMON SEAL OF ABC Power Company Ltd. 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 and B Director
and Mr. C Secretary, of the Borrower who have countersigned the same in token
thereof.
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