Corporate Rupee Loan Facility Agreement - Wipro Finance Ltd. and ICICI Ltd.
[GRAPHIC OMITTED - TWENTY RUPEES]
ICICI LIMITED
ICICI TOWERS
BANDRA KURLA COMPLEX
MUMBAI 400051 (INDIA)
CORPORATE RUPEE LOAN FACILITY AGREEMENT
THIS FACILITY AGREEMENT made this 21st day of February, Two Thousand between
WIPRO FINANCE LIMITED, a public company within the meaning of the Companies Act,
1956 and having its Registered Office at Wipro Centre, 5, Papanna Street, St.
Mark's Road, Bangalore 560 001 (the "Company", which expression shall, unless it
be repugnant to the subject or context thereof, include its successors and
permitted assigns) of the ONE PART
AND
ICICI LIMITED, a public company incorporated under the Indian Companies Act,
1913 and having its Registered Office at ICICI Towers, Bandra Kurla Complex,
Bandra (East), Mumbai 400051 and a Zonal Office at "Raheja Towers", East Wing,
II Floor, 26-27, M.G. Road, Bangalore 560 001 ("ICICI", which expression shall,
unless it be repugnant to the subject or context thereof, include its successors
and assigns) of the OTHER PART.
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ARTICLE I
DEFINITIONS
1.1 In the Facility Agreement and the General Conditions, unless there is
anything repugnant to the subject or context thereof, the expressions
listed below shall have the following meanings viz.:
(a) "Due Date" means, in respect of -
i) an instalment of principal amount of the Facility - the date
on which the instalment falls due as stipulated in Schedule I
hereof;
ii) interest - the date on which interest falls due as stipulated
in Section 2.2 hereof;
iii) any other amount payable under the Facility Agreement - the
date on which such amount falls due in terms of the Facility
Agreement.
or such other dates on which any amounts including principal, interest
or other monies, fall due in terms of the Facility Agreement.
(b) "Facility" - shall have the meaning ascribed thereto in Section 2.1
hereof.
(c) `General Conditions' means the GENERAL CONDITIONS GC-C-99 APPLICABLE TO
FACILITIES PROVIDED BY ICICI. The Facility hereby agreed to be provided
by ICICI shall be subject to the Company complying with the terms and
conditions set out herein and also in the General Conditions, which is
annexed hereto. The General Conditions shall be deemed to form part of
the Facility Agreement and shall be read as if they are specifically
incorporated herein.
PROVIDED HOWEVER the General Conditions shall in their application to
the Facility Agreement stand modified as follows:
A. Section 3.3 - Interest - Clause (iv) stands deleted;
B. Section 8.3 B (i) - Appointment of Whole - Time Director(s)
stands deleted;
C. Section 6.4 - Appointment of Nominee Director stands
renumbered as Section 8.3 B (i);
D. Section 3.8 - Reimbursement of Expenses - Clause (i) - The
words "6.4(ii)" stand substituted with the words "Section
8.3B(i)(A)(c) & (B)";
E. Section 6.2(f) - Insurance - Stands deleted
F. Section 4 - Representations and Warranties - Clause (u) -
Encumbrances stands deleted;
G. Section 8.3 - Consequences of Default and Remedies - Clause A
Sub clauses (i) and (ii) are modified as follows:
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(i) to transfer all or any part of the shares of Wipro
Limited comprised within the security created in
favour of ICICI by way of sale or otherwise."
H. Section 4 - Representations and Warranties - Clause (n) -
Insurances stands deleted;
I. Section 8.1 - Events of Default - Clause (e) - Inadequate
Security and Insurance - stands deleted.
(d) "Long Term Prime Rate" or "LTPR" means the percentage rate per annum
decided by ICICI from time to time as applicable to long term rupee
loans (excluding interest tax or other statutory levy) as notified by
ICICI from time to time.
(e) "Security Cover" means the ratio of the aggregate market value of the
shares pledged to ICICI in terms of the Facility Agreement, to the
Facility.
All capitalised terms used but not defined in the Facility Agreement shall have
the respective meanings assigned to them under the General Conditions.
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ARTICLE II
AMOUNT AND TERMS OF FACILITY
2.1 AMOUNT
The Company agrees to borrow from ICICI and ICICI agrees to lend to the Company,
on the terms and conditions contained herein as also in the General Conditions,
for the purpose of meeting a part of the Company's requirement of funds for the
year 1999-2000 (the "Purpose") a Rupee term loan not exceeding Rs. 150.0 million
(the "Facility").
2.2 INTEREST
i) The company shall pay to ICICI on the 15th of every month, interest on
the loan outstanding from time to time at ICICI Long Term Prime Rate
(LTPR) prevailing on the date of disbursement of the Loan + 1.25% p.a.
+ applicable interest tax or other statutory levy, if any.
ii) ICICI may, at its sole discretion, charge interest on the Facility at
the weighted average rate of interest on the disbursements made out of
the Facility. For the purpose of this clause "weighted average rate"
means the weighted mean of the rates of interest applicable to the
Facility.
2.3 COMPUTATION OF INTEREST AND OTHER CHARGES
Interest and all other charges shall accrue from day to day and shall be
computed on the basis of 365 days year and the actual number of days elapsed.
2.4 FRONT END FEE
The Company confirms having paid to ICICI, non-refundable Front End Fee of 0.5%
of the Facility.
2.5 DRAWDOWN SCHEDULE
The Company shall provide to ICICI on or before signing of the Facility
Agreement an irrevocable draw down schedule in writing for the entire Facility,
disbursements pursuant to which shall however be subject to the provisions of
Section 3.1 of the General Conditions.
2.6 NOTICE OF DRAWAL
The Company shall furnish to ICICI an irrevocable notice of drawal not more than
45 nor less than 30 Business Days before each draw down date, which draw down
date should be a Business Day.
2.7 LAST DATE OF DRAWAL
Unless ICICI otherwise agrees, the right to make drawals from the Facility shall
cease on MARCH 31, 2000.
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2.8 REPAYMENT
a) The Company undertakes to repay the principal amounts of the Facility
in accordance with the repayment schedule set forth in Schedule I
hereto.
b) If, for any reason, the amount finally disbursed by ICICI out of the
Facility is less than the amount of the Facility, the instalments of
repayment of the Facility shall stand reduced proportionately but shall
be payable on the same dates as specified in the repayment schedule set
forth in Schedule I hereto.
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ARTICLE III
SECURITY
3.1 SECURITY FOR THE FACILITY
The Facility together with all interest, liquidated damages, premia on
prepayment if any, costs, charges, expenses and other monies whatsoever
stipulated in or payable under the Facility Agreement shall be secured by Pledge
of such number of equity shares of Wipro Limited held by Shri Azim H. Premji, so
that the value of the shares so pledged computed on the basis of the lower of
last 6 months average closing price/the previous day's closing price of the
shares on the Bombay Stock Exchange on the date of pledge is 2.0 times the
Facility. The company shall also undertake to provide such additional equity
shares of Wipro Limited as pledge, in the event the coverage of the Facility
computed on the basis of the lower of last 6 months average closing price/the
previous day's closing price of the shares on the Bombay Stock Exchange fall
below 1.5 times at any point of time, to as to maintain a coverage of at least
2.0 times of the Facility.
Provided that in the event the coverage of the Facility computed on the basis of
the lower of last 6 months average closing price/the previous day's closing
price of the shares on the Bombay Stock Exchange exceeds 2.5 times at any point
of time, ICICI shall release such equity shares pledged, so as to maintain a
coverage of 2.0 times of the Facility.
3.2 CREATION OF ADDITIONAL SECURITY
If, at any time during the subsistence of the Facility Agreement, ICICI is of
the opinion that the security provided for the Facility has become inadequate to
cover the Facility then outstanding, then, on ICICI advising the Company to that
effect, the Company shall procure, provide and furnish to ICICI, to the
satisfaction of ICICI such additional security including, but not by way of
limitation, a pledge of such additional equity shares of Wipro Limited so as to
meet the minimum requirements as to Security Cover in terms of the Facility
Agreement, as may be acceptable to ICICI to cover such deficiency.
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ARTICLE IV
SPECIAL CONDITIONS
The Facility hereby granted shall also be subject to the Company complying with
the special conditions set out in Schedule II hereto.
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ARTICLE V
EFFECTIVE DATE OF FACILITY AGREEMENT
The Facility Agreement shall become binding on the Company and ICICI on and from
the date first above written. It shall be in full force and effect till all the
monies due and payable by the Company under the Facility Agreement are fully
paid off to the satisfaction of ICICI.
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SCHEDULE - I
REPAYMENT SCHEDULE
The Company shall repay each Tranche of the Facility in 12 (twelve) monthly
instalments commencing from August 15, 2002 and ending on July 15, 2003.
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SCHEDULE - II
SPECIAL CONDITIONS
(a) SPECIAL BANK ACCOUNT
The Company shall:
i) keep the drawals from the Facility in special accounts in the name of
the Company with ICICI Banking Corporation Limited or such other
scheduled bank as may be approved by ICICI, the payments from which
account shall be subject to verification by any person authorised in
this behalf by ICICI. The Company shall also obtain and furnish to
ICICI a letter (in a form approved by ICICI) from the said bank
forgoing its right of set-off or lien in respect of such account.
ii) keep such records as may be required by ICICI to facilitate
verification of the entries in the said account. The Company shall also
authorise the said bank to furnish to ICICI, as and when required by
it, certified true copy of the said account with details for
verification by ICICI, at the expense of the Company.
iii) not transfer the Facility or any portion thereof from the said account
for being kept in call or any deposit in any bank without obtaining the
approval of ICICI.
(b) SECURITY COVER
Unless otherwise permitted by ICICI, the Company shall maintain a minimum
Security Cover of 1.5 times during the currency of the Facility.
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IN WITNESS WHEREOF the Company and ICICI have caused the Facility Agreement to
be executed in duplicate on the day, month and year first hereinabove written as
hereinafter appearing.
THE COMMON SEAL of WIPRO FINANCE LIMITED
has pursuant to the Resolution of its
Board of Directors passed in that behalf
on the 21st day of February, 2000,
hereunto been affixed in the presence of
Shri P.V. Srinivasan Director and
________________________ who
have signed these presents in token
thereof and Shri T.R. Ranchandran
authorized person who has countersigned
the same in token thereof.
SIGNED AND DELIVERED by the withinnamed
ICICI LIMITED by the hand of Shri K.V.
Unni, its authorised official.
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GENERAL CONDITIONS GC-C-99
APPLICABLE TO FACILITIES PROVIDED BY ICICI LIMITED
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ARTICLE I
APPLICABILITY
The General Conditions (the "General Conditions") set out herein shall, if the
Facility Agreement so provides, be applicable to Facilities provided by ICICI.
If there is any inconsistency between the General Conditions and the Facility
Agreement, the Facility Agreement will prevail.
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ARTICLE II
DEFINITIONS AND CONSTRUCTION
SECTION 2.1 - DEFINITIONS
In the Facility Agreement and the General Conditions, unless there is anything
repugnant to the subject or context thereof, the expressions listed below shall
have the following meanings viz.:
1. "Business Day" means a day on which the Zonal/Regional Office of ICICI
described in the Facility Agreement, or such other office as may be
notified by ICICI to the Company, is open for normal business
transactions.
2. "Credit Application" means the application/request for credit facility
made by the Company to ICICI and all information, particulars and
clarifications furnished by the Company to ICICI from time to time in
respect thereof.
3. "Event of Default" means any of the Events of Default specified in
Section 8.1 hereof.
4. "Facility Agreement" means the particular facility agreement entered
into between the Company and ICICI in respect of the Facility and
includes the General Conditions as applied thereto, and all schedules
and amendments to such Facility Agreement. Unless the term 'General
Conditions' is used separately, the term 'Facility Agreement', wherever
used in the Facility Agreement or the General Conditions, shall be
deemed to refer to the Facility Agreement read together with and
including the General Conditions.
5. "Foreign Lending Agency" means the foreign lending agency if any,
described in the Facility Agreement.
6. "Indebtedness" means any indebtedness whatsoever of the Company at any
time for or in respect of monies borrowed, contracted or raised
(whether or not for cash consideration) or liabilities contracted by
whatever means (including under guarantees, indemnities, acceptance,
credits, deposits, hire-purchase and leasing).
7. "Intellectual Property" means all patents, trademarks, permits, service
marks, brands, trade names, trade secrets, proprietary information and
knowledge, technology, computer programs, databases, copyrights,
licences, franchises, formulae, designs, rights of confidential
information and all other intellectual property.
8. "Intellectual Property Rights" mean all rights, benefits, title or
interest in or to any Intellectual Property, anywhere in the world
(whether registered or not and including all applications for the
same).
9. "Maximum Lending Rate" means the rate of interest per annum equivalent
to 5.5% over the long term prime lending rate of ICICI for Rupee loans
prevailing from time to time or such other rate of interest as may be
specified by ICICI from time to time as its Maximum Lending Rate.
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10. "Material Adverse Effect" means the effect or consequence of any event
or circumstance which is or is likely to be:
(a) adverse to the ability of the Company or any person to perform
or comply with any of their respective obligations under the
Facility Agreement or any Transaction Document in accordance
with their respective terms; or
(b) prejudicial to any of the businesses, operations or financial
condition of the Company or its projects or of any person who
is party to any Transaction Document.
11. "Purpose" - shall have the meaning ascribed thereto in Section 2.1 of
the Facility Agreement.
12. "Tranche" - shall have the meaning ascribed thereto in Section 3.1
hereof.
13. "Transaction Documents" - include all agreements, instruments,
undertakings, indentures, deeds, writings and other documents (whether
financing, security or otherwise) executed or entered into, or to be
executed or entered into, by the Company or as the case may be, any
other person, in relation, or pertaining, to the transactions
contemplated by, or under the Facility Agreement or any Transaction
Document, and each such Transaction Document as amended from time to
time.
All capitalised terms used but not defined in the General Conditions shall have
the respective meanings assigned to them under the Facility Agreement.
SECTION 2.2 - CONSTRUCTION
In the Facility Agreement, unless the contrary intention appears:
(a) a reference to:
an "amendment" includes a supplement, modification, novation,
replacement or re-enactment and "amended" is to be construed
accordingly;
"assets" include all properties whatsoever both present and future,
(whether tangible, intangible or otherwise) (including Intellectual
Property and Intellectual Property Rights), investments, cash-flows,
revenues, rights, benefits, interests and title of every description;
an "authorisation" includes an authorisation, consent, clearance,
approval, permission, resolution, licence, exemption, filing and
registration;
"control" includes the power to direct the management and policies of
an entity, whether through the ownership of voting capital, by contract
or otherwise;
"encumbrance" includes a mortgage, charge, lien, pledge, hypothecation,
security interest or any lien of any description whatsoever.
"person" includes an individual, corporation, partnership, joint
venture, association of persons, trust, unincorporated organisation,
government (central,
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state or otherwise), sovereign state, or any agency, department,
authority or political subdivision thereof, international organisation,
agency or authority (in each case, whether or not having separate legal
personality) and shall include their respective successors and assigns
and in case of an individual shall include his legal representatives,
administrators, executors and heirs and in case of a trust shall
include the trustee or the trustees for the time being.
"law" includes any constitution, statute, law, rule, regulation,
ordinance, judgement, order, decree, authorisation, or any published
directive, guideline, requirement or governmental restriction having
the force of law, or any determination by, or interpretation of any of
the foregoing by, any judicial authority, whether in effect as of the
date of the Facility Agreement or thereafter and each as amended from
time to time.
"repayment" includes "redemption" and vice-versa and repaid, repayable,
repay, redeemed, redeemable and redemption shall be construed
accordingly.
(b) a reference to a Sub-clause, Section or a Schedule of the Facility
Agreement or the General Conditions shall denote a reference to such
Sub-clause, Section or Schedule as specified, of the Facility Agreement
or the General Conditions;
(c) the singular includes the plural (and vice versa);
(d) the index to and the headings in the Facility Agreement are inserted
for convenience of reference only and are to be ignored in construing
and interpreting the Facility Agreement;
(e) reference to the words "include" or "including" shall be construed
without limitation;
(f) reference to a gender shall include references to the female, male and
neuter genders;
(g) all approvals, permissions, consents or acceptance required from ICICI
for any matter shall require the "prior", "written" approval,
permission, consent or acceptance of ICICI;
(h) the words 'hereof', 'herein', and 'hereto' and words of similar import
when used with reference to a specific Section or Sub-clause in, or
Schedule to, the Facility Agreement or the General Conditions shall
refer to such Section or Sub-clause in, or Schedule to, the Facility
Agreement or as the case may be, the General Conditions, and when used
otherwise than in connection with specific Sections, Sub-clauses or
Schedules, shall refer to the Facility Agreement as a whole;
(i) in the event of any disagreement or dispute between ICICI and the
Company regarding the materiality of any matter including of any event,
occurrence, circumstance, change, fact, information, document,
authorisation, proceeding, act, omission, claims, breach, default or
otherwise, the opinion of ICICI as to the materiality of any of the
foregoing shall be final and binding on the Company.
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ARTICLE III
DISBURSEMENT, INTEREST, OTHER CHARGES AND REPAYMENT
SECTION 3.1 - TERMS OF DISBURSEMENT
Disbursements may be made by ICICI in one or more instalments (each a "Tranche")
as may be decided by ICICI, subject to the Company complying with the provisions
of the Facility Agreement. If the Facility is denominated in Rupees, all
disbursements shall be by cheques/authorisations and if the Facility is
denominated in foreign currencies, all disbursements shall be by authorisations.
All the collection/remittance charges will be borne by the Company.
SECTION 3.2 - ADJUSTMENT OF OVERDUES
ICICI may at its sole discretion deduct from sums to be lent and advanced to the
Company any monies then remaining due and payable by the Company to ICICI,
whether under the Facility Agreement or otherwise.
SECTION 3.3 - INTEREST
i) The Company shall pay to ICICI interest on the principal amounts of the
Facility in the manner and on the dates specified in the Facility
Agreement.
ii) The Company shall pay to ICICI interest on all other monies payable to
ICICI under the Facility Agreement, at the Maximum Lending Rate or at
the applicable rate under the Facility Agreement, whichever is higher.
Such interest shall also be paid on the dates specified in Sub-clause
(i) above.
iii) All interest on the Facility and on all other monies accruing due under
the Facility Agreement shall, in case the same be not paid on the
respective Due Dates, carry further interest at the Maximum Lending
Rate or at the applicable rate under the Facility Agreement, whichever
is higher. Such interest will be computed from the respective Due Dates
and shall become payable upon the footing of compound interest with
monthly/quarterly/half-yearly/yearly rests as provided in the Facility
Agreement and shall be payable on the dates specified in Sub-clause (i)
above.
iv) The interest rates mentioned in Sub-clauses (i), (ii) and (iii) above
shall until creation of final security for the Facility in accordance
with the Facility Agreement be increased by the same percentage as
provided in the Facility Agreement for disbursements made pending
creation of full and final security in accordance with the Facility
Agreement.
SECTION 3.4 - IMPOSTS, COSTS AND CHARGES
i) The Company shall, bear all interest tax as may be levied from time to
time under the Interest Tax Act, 1974 and all other imposts, duties and
taxes (of any description whatsoever) as may be levied from time to
time by the Government or other authority pertaining to or in
connection with the Facility.
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ii) The Company shall pay all costs, charges (including legal fees, cost of
investigation of title to the Company's assets and protection of
ICICI's interest) and expenses in any way incurred by ICICI and such
stamp duty, other duties, taxes, charges and penalties if and when the
Company is required to pay according to the laws for the time being in
force.
iii) In the event of the Company failing to pay the monies referred to in
sub-clause (i) and (ii) above, ICICI will be at liberty (but shall not
be obliged) to pay the same. The Company shall reimburse all sums paid
by ICICI in accordance with the provisions contained herein.
iv) All payments by the Company under the Facility Agreement shall be made
free and clear of and without any deduction, except to the extent that
the Company is required by law to make payment subject to any taxes. If
any tax or amounts in respect of tax must be deducted, or any other
deductions must be made, from any amounts payable or paid by the
Company, the Company shall pay such additional amounts as may be
necessary to ensure that ICICI receives a net amount equal to the full
amount which it would have received had payment not been made subject
to tax or other deduction. Provided that, all taxes required by law to
be deducted by the Company from any amounts of interest paid or payable
under the Facility Agreement shall be paid by the Company when due and
the Company shall, within 30 days of the payment being made, deliver to
ICICI evidence satisfactory to ICICI (including all relevant tax
receipts in originals) that the payment has been duly remitted to the
appropriate authority.
SECTION 3.5 - PREMATURE REPAYMENT
The Company shall not, without the approval of ICICI (which approval may be
given subject to such terms and conditions as may be stipulated by ICICI
including payment of prepayment premium), prepay the outstanding principal
amounts of the Facility in full or in part, before the Due Dates.
SECTION 3.6 - DUE DATE OF PAYMENT
If the Due Date in respect of an instalment of the principal amount of the
Facility, interest, front end fee or any other payment falls on a day which is
not a Business Day at the place where the payment is to be made, the immediately
preceding Business Day shall be the Due Date for such payment.
SECTION 3.7 - LIQUIDATED DAMAGES ON DEFAULTED AMOUNTS
In case of default in payment of instalment of principal amounts of the
Facility, interest, front end fee and all other monies (except liquidated
damages) on their respective Due Dates, the Company shall pay on the defaulted
amounts, liquidated damages at the rate of 2.1% per annum for the period of
default. Liquidated damages shall be payable in the manner, and on the Due Dates
specified for payment of interest under the Facility Agreement.
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SECTION 3.8 - REIMBURSEMENT OF EXPENSES
(i) The Company shall reimburse all sums paid and/or expenses incurred by
ICICI under the Facility Agreement within 20 Business Days from the
date of notice of demand from ICICI. All such sums shall be debited to
the Company's loan account and shall carry interest from the date of
payment till such reimbursement at the rate specified in Section 3.3
(ii) hereof. Provided that in respect of amounts incurred or paid by
ICICI in terms of Sections 6.4 (ii) hereof, interest at the rate
specified in Section 3.3 (ii) hereof in respect of such amounts
incurred or paid by ICICI shall be payable only from the day falling
after 5 Business Days after the date of notice of demand from ICICI.
(ii) In case of default in making such reimbursement in accordance with
Sub-clause (i) above within 20 Business Days from the date of notice of
demand, the Company shall also pay on the defaulted amounts, liquidated
damages at the rate of 2.1% per annum from the expiry of 20 Business
Days from the date of notice of demand till reimbursement, in
accordance with the provisions of Section 3.7 hereof.
SECTION 3.9 - APPROPRIATION OF PAYMENTS
The Company agrees and confirms that ICICI may at its absolute discretion,
appropriate any payments made by the Company under the Facility Agreement,
towards the dues payable by the Company to ICICI under the Facility Agreement
and/or other financing agreements entered into between the Company and ICICI,
and such appropriation by ICICI shall be final and binding on the Company in all
respects.
SECTION 3.10 - PROVISIONS RELATING TO ALTERATION IN THE CURRENCY/
FACILITY/CURRENCY OR INTEREST SWAPS IF THE FACILTY IS DENOMINATED IN FOREIGN
CURRENCIES
If the Facility is denominated in foreign currencies, ICICI may at any time, at
its absolute discretion, substitute the original currency or its equivalent
currency as the case may be of the Facility or any part thereof, with a new
currency or its equivalent currency. In such an event, the liability of the
Company in respect of the Facility or such part thereof, as regards rate of
interest, repayment of principal, date and mode of such payment/repayment shall
be as applicable to such new currency or its equivalent currency as intimated by
ICICI to the Company, which shall be final and binding on the Company.
If the Facility is denominated in foreign currencies, ICICI may, at any time, at
its absolute discretion, effect currency and/or interest rate swap for the
Facility or any part thereof provided/agreed to be provided under the Facility
Agreement. In such an event, the liability of the Company in respect of the
Facility or such part thereof, as regards the currency or currencies of
repayment, payment of principal, interest and all other monies payable under the
Facility Agreement/rate of interest on principal of the Facility or such part
thereof, shall be as intimated by ICICI to the Company, which shall be final and
binding on the Company.
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SECTION 3.11 - PLACE AND MODE OF PAYMENTS AND CREDIT THEREFOR IF THE FACILITY IS
DENOMINATED IN RUPEES
If the Facility is denominated in Rupees, all monies payable by the Company to
ICICI shall be paid to ICICI at its office in Mumbai or at such other place as
may be specified by it by telegraphic, telex or mail transfer to the account of
such office or by cheque/bank draft drawn in favour of ICICI on a Scheduled Bank
at Mumbai or such other place or to such other account as ICICI may notify to
the Company and shall be so paid as to enable IC1CI to realise, at par, the
amount on or before the relative Due Date.
Credit for all payments by local cheque/bank draft will he given on the
immediately next Business Day after the date of receipt of the instrument or the
relative Due Date, whichever is later. Credit for all payments by outstation
cheque/bank draft will be given only on realisation or on the relative Due Date,
whichever is later.
SECTION 3.12 - PLACE AND MODE OF PAYMENTS AND CREDIT THEREFOR IF THE FACILITY
IS DENOMINATED IN FOREIGN CURRENCIES
If the Facility is denominated in foreign currencies, notwithstanding anything
contained in the Facility Agreement, but subject to Sub-clause (g) below, the
Company shall make payments to ICICI, whether of principal amount of the
Facility, interest, premium on prepayment, if any, in equivalent rupees in lieu
of foreign currencies. For the purpose of this Section 3.12, the following
conditions shall apply:
a) The Rupee sum shall be the Rupee equivalent of the foreign currencies
to be remitted on the Due Dates inclusive of all commissions or other
bank charges and out of pocket expenses as determined by ICICI.
b) The Rupee sum shall be paid by the Company to ICICI 10 Business Days in
advance of the Due Dates to enable ICICI to remit the foreign
currencies on the Due Dates.
c) The Rupee sum shall be paid by the Company to ICICI at their office in
Mumbai or to such other places as may be specified by them by
telegraphic, telex or mail transfer to the account of such offices or
by cheque /bank draft drawn in favour of ICICI on a Scheduled Bank at
Mumbai or such other places or to such other accounts as ICICI may
notify to the Company and shall be so paid as to enable ICICI to
realise the amounts at par.
d) Credit for all payments by local cheque /bank draft will be given on
the immediately next Business Day after the date of receipt of the
instrument or the relative Due Date, whichever is later. Credit for all
payments by outstation cheque/bank draft will be given only on
realisation or on the relative Due Date, whichever is later.
e) For the purpose of Sub-clause (a) above a statement signed by a
designated officer of ICICI shall be sufficient evidence of the Rupee
equivalent of the foreign currencies, costs, commission, charges and
expenses.
f) Any difference on account of exchange fluctuations in the rates of
foreign currencies involved between the payment made by the Company to
ICICI and the
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actual amounts incurred by ICICI as referred to in Sub-clause (a) above
shall be borne by or be given credit to the Company.
g) If ICICI decides not to call for payment in equivalent Rupees in the
manner provided above, ICICI shall have the right to notify the Company
the place or places where and the person or persons to whom the
payments in foreign currencies falling due thereafter shall be made and
all expenses involved in making payments in the manner so notified
shall be borne by the Company.
SECTION 3.13 - RUPEE TYING OF DEFAULTED AMOUNTS IF THE FACILITY IS DENOMINATED
IN FOREIGN CURRENCIES
If the Facility is denominated in foreign currencies, without prejudice to any
of the obligations of the Company in terms of the Facility Agreement, in the
event of default by the Company in making payment in discharge of any of its
obligations under the Facility Agreement on the Due Dates, then, notwithstanding
anything to the contrary contained in the Facility Agreement, the liability of
the Company thereafter in respect of such amounts shall be in Rupees, which sums
shall be determined and notified by ICICI to the Company in accordance with the
provisions of Sub-clause 3.12 (a) hereof ("the Rupee tied defaulted amounts").
Notwithstanding anything to the contrary contained in the Facility Agreement,
the Rupee tied defaulted amounts will, during the period of default, carry
interest from the respective Due Dates at the Maximum Lending Rate or the
applicable rate under the Facility Agreement, whichever is higher, and shall be
payable on the Due Dates for payment of interest under the Facility Agreement.
SECTION 3.14 - INCREASED COSTS IF THE FACILITY IS DENOMINATED IN FOREIGN
CURRENCIES
If the Facility is denominated in foreign currencies, in the event of ICICI
being called upon to pay any additional amount by the Foreign Lending Agency in
terms of their respective financing agreements or on account of factors beyond
the control of ICICI, the Company shall forthwith on receipt of a notice of
demand from ICICI, reimburse all such amounts to ICICI.
SECTION 3.15 - GENERAL
(i) The Company acknowledges that the rates of further interest and
liquidated damages under Section 3.3 (iii) and Section 3.7 hereof are
reasonable and that they represent genuine pre-estimates of the loss
expected to be incurred by ICICI in the event of non payment of any
monies by the Company.
(ii) The Company acknowledges that the Facility provided under the Facility
Agreement is for a commercial transaction and waives any defence
available under usury or other laws relating to the charging of
interest.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4 - REPRESENTATIONS AND WARRANTIES
In order to induce ICICI to enter into the Facility Agreement and to provide the
Facility in terms of the Facility Agreement, the Company makes the following
representations, warranties and agreements and confirms that they are, true,
correct, valid and subsisting in every respect as of the date of the Facility
Agreement, as of the date of each disbursement by ICICI under the Facility
Agreement (in each case, before and after giving effect to disbursements
occurring on such date) and as on each Due Date, which representations,
warranties and agreements shall survive the execution and delivery of the
Facility Agreement and the provision of the Facility under the Facility
Agreement and repayment/payment in full of the Facility and all monies in
respect thereof:
(a) CREDIT APPLICATION
The Credit Application is true and accurate in all material respects, is not
misleading and does not omit any material fact, the omission of which would make
any fact or statement therein misleading and the Credit Application shall be
deemed to form part of the warranties herein contained.
(b) STATUS AND AUTHORISATIONS
i) The Company is a body corporate duly incorporated and validly existing
under the laws of India and has the power to enter into the Facility
Agreement and the Transaction Documents and to own its assets and carry
on its business and operations as it is being or is proposed to be
conducted.
ii) All acts, conditions and things required to be done, fulfilled or
performed, and all authorisations required or essential, for the entry
and delivery of the Facility Agreement and the Transaction Documents or
for the performance of the Company's obligations in terms of and under
the Facility Agreement and the Transaction Documents have been done,
fulfilled, obtained, effected and performed and are in full force and
effect and no such authorisation has been, or is threatened to be,
revoked or cancelled.
iii) The Company has not received any notice, nor is it aware that any
authorisation necessary or required to be obtained in present or in
future, will not be granted or obtained.
iv) The Company is in compliance in all respects with all laws and
regulations affecting its assets and its business and operations.
(c) LEGAL VALIDITY
The Facility Agreement has been duly and validly executed by its authorised
Directors or executives and the Facility Agreement constitutes, and each
Transaction Document constitutes or when executed in accordance with its terms
will constitute, legal, valid and binding obligations of the Company enforceable
in accordance with their respective
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terms. The Company has taken all steps and done all acts to ensure that the
Facility Agreement and each Transaction Document is admissible in evidence in
India.
(d) NON-CONFLICT
The entry into, delivery and performance by the Company of, and the transactions
contemplated by, the Facility Agreement and the Transaction Documents do not and
will not conflict with:
i) any law;
ii) the constitutional documents of the Company; or
iii) any document which is binding upon the Company or on any of its assets.
(e) NO DEFAULT
i) No default is subsisting or might result from the execution of, or the
availing of the Facility under, the Facility Agreement by the Company.
ii) No other event or circumstance is subsisting which constitutes (or with
the giving of notice, lapse of time, determination of materiality or
the fulfilment of any other applicable condition or any combination of
the foregoing, might constitute) a default under any document which is
binding on the Company or any of its assets.
iii) The Company is not in breach of the terms of the Facility Agreement or
any Transaction Document and no Event of Default is subsisting.
(f) TAXES ON PAYMENTS
Save as otherwise specified in the Facility Agreement, all amounts payable by
the Company under the Facility Agreement will be made free and clear of and
without deduction for or on account of any tax or levy.
(g) OWNERSHIP OF ASSETS
The Company has good title to, or valid leases or licences of, or is otherwise
entitled to use its assets.
(h) IMMUNITY
i) The execution or entering into by the Company of the Facility Agreement
and the Transaction Documents constitute, and its exercise of its
rights and performance of its obligations under the Facility Agreement
and the Transaction Documents will constitute, private and commercial
acts done and performed for private and commercial purposes.
ii) The Company is not, will not be entitled to, and will not claim
immunity far itself or any of its assets from suit, execution,
attachment or other legal process in any proceedings in relation to the
Facility Agreement or the Transaction Documents.
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(i) JURISDICTION/GOVERNING LAW
The Company's:
i) irrevocable submission to the jurisdiction of courts as specified in
Section 11.3 hereof, and
ii) agreement that the Facility Agreement is governed by Indian law,
are legal, valid and binding on the Company under Indian law.
(j) ACCOUNTS
The most recent audited accounts of the Company delivered to ICICI:
i) have been prepared in accordance with accounting principles and
practices generally accepted in India, consistently applied;
ii) have been duly audited by the statutory auditors of the Company; and
iii) represent a true and fair view of its financial condition as at the
date to which they were drawn up,
and there has been no Material Adverse Effect since the date on which those
accounts were drawn up.
(k) LITIGATION
No litigation, arbitration, administrative or other proceedings are pending or
threatened against the Company or its assets, which, if adversely determined,
might have a Material Adverse Effect.
(l) INFORMATION
i) All information communicated to or supplied by or on behalf of the
Company to ICICI from time to time, whether in writing, electronic form
or otherwise, is true, correct and complete in all respects as on the
date on which it was communicated or supplied.
ii) Nothing has occurred since the date of communication or supply of any
information to ICICI which renders such information untrue or
misleading in any respect and which, if disclosed, might adversely
affect the decision of ICICI to enter into, or to make disbursements
under the Facility Agreement.
(m) INTELLECTUAL PROPERTY
i) The Company owns, has licence to use or otherwise has the right to use,
free of any pending or threatened liens, all Intellectual Property or
Intellectual Property Rights, which are required or desirable for the
conduct of the Company's business and operations and the Company does
not, in carrying on its business and operations, infringe any
Intellectual Property Rights of any person.
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ii) None of the Intellectual Property or Intellectual Property Rights owned
or enjoyed by the Company, or which the Company is licensed to use,
which are material in the context of the Company's business and
operations are being infringed nor, so far as the Company is aware, is
there any infringement or threatened infringement of those Intellectual
Property or Intellectual Property Rights licensed or provided to the
Company by any person.
iii) All Intellectual Property or Intellectual Property Rights owned by the
Company or which the Company is licensed to use are valid and
subsisting. All actions (including registration, payment of all
registration and renewal fees) required to maintain the same in full
force and effect have been taken.
(n) INSURANCES
i) All insurances which are required to be maintained or effected by the
Company or any other person pursuant hereto or any of the Transaction
Documents are in full force and effect and no event or circumstance has
occurred, nor has there been any omission to disclose a fact, which
would in either case entitle any insurer to avoid or otherwise reduce
its liability under any policy relating to the insurances.
ii) The Company has complied with its obligations with respect to
insurances under the Facility Agreement and each Transaction Document.
(o) NO OTHER BUSINESS
The Company has not engaged in any business or activities, either alone or in
partnership or joint venture other than those disclosed to, or permitted by,
ICICI.
(p) TAXES
i) Save for stamp duty and relevant registration and filing charges and
duties, no tax or levy is or will be imposed on, or by virtue of, the
execution, entering into or delivery of the Facility Agreement or any
Transaction Document.
ii) The Company has complied in all material respects with all taxation
laws in all jurisdictions in which it is subject to taxation and has
filed all tax returns and paid all taxes and statutory dues due and
payable by it and, to the extent any taxes are not due, has established
reserves that are adequate for the payment of those taxes and statutory
dues.
(q) BANKRUPTCY
The Company has not taken any action and no other steps have been taken or legal
proceedings started by or against it in any court of law for its winding-up,
dissolution, administration or re-organisation or for the appointment of a
receiver, administrator, administrative receiver, trustee or similar officer of
the Company or of any or all of its assets.
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(r) ENVIRONMENT
i) The Company has obtained all authorisations under applicable
environmental laws and is and has been in compliance with all such
authorisations and laws and there are no circumstances that may at any
time prevent or interfere with such compliance.
ii) As at the date of the Facility Agreement, no further environmental
authorisations other than those already obtained are required for the
carrying on of the business and operations of the Company as currently
conducted.
iii) There is no claim pending or threatened, against the Company for any
breach of environmental law which, if adversely determined, might have
a Material Adverse Effect.
(s) YEAR 2000 COMPLIANCE
i) Any programming or reprogramming required to permit and ensure the
efficient and proper functioning, in and following the year, 2000, of:
(a) the Company's computer systems; and
(b) equipment containing embedded microchips (including systems
and equipment supplied by others or with which the Company's
systems interface),
and the successful testing of all such systems and equipment, as so
programmed or reprogrammed, has been completed.
ii) The computer and management information systems of the Company are and,
with ordinary course of upgrading and maintenance, will continue for
the tenure of the Facility to be, sufficient to permit the Company to
conduct its business and operations without any Material Adverse
Effect.
(t) AFFILIATES
Except to the extent disclosed to ICICI, the Company is not a party to any
contract or agreement with, or any commitments to, whether or not in the
ordinary course of business, any affiliates or group companies other than on a
commercial basis and on terms no less favourable to the Company than those that
the Company would have obtained had the Company entered into any contracts or
agreements with any party other than such affiliates or group companies.
(u) ENCUMBRANCES
Except as otherwise disclosed to ICICI in writing or unless otherwise permitted
by ICICI, there are no encumbrances subsisting or in existence on any of the
Company's assets.
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ARTICLE V
PRE-DISBURSEMENT CONDITIONS
SECTION 5 - CONDITIONS PRECEDENT
The obligation of ICICI to make disbursements under the Facility Agreement shall
be subject to the Company performing all its obligations and undertakings under
the Facility Agreement besides compliance by the Company with the disbursement
procedure stipulated by ICICI, and compliance with the conditions, set out below
to the satisfaction of ICICI:
SECTION 5.1 - CONDITIONS PRECEDENT TO FIRST DISBURSEMENT
(a) CORPORATE DOCUMENTS
The Company shall submit the following information and documents:
i) An up-to-date certified true copy of the Memorandum and Articles of
Association, and certificate of incorporation and commencement of
business, of the Company.
ii) A certified true copy of a resolution of the board of directors of the
Company:
(a) approving the terms and execution of, and the transactions
contemplated by, the Facility Agreement and the Transaction
Documents;
(b) authorising, the affixation of the common seal on the Facility
Agreement and the Transaction Documents, and/or a director or
directors or other authorised executives to execute the
Facility Agreement and the Transaction Documents; and
(c) authorising a person or persons, on its behalf, to sign and/or
despatch all documents and notices to be signed and/or
despatched by it under or in connection with the Facility
Agreement and the Transaction Documents.
iii) A specimen signature of each such person authorised by the resolutions
referred to in Sub-clauses (a)(ii)(b) and (a)(ii)(c) above.
iv) A certified true copy of a resolution of the shareholders of the
Company if required under the Companies Act, 1956, authorising, inter
alia, the borrowing contemplated under, and the execution of, the
Facility Agreement and the Transaction Documents.
v) A certificate of the statutory auditors of the Company confirming that:
(a) the borrowing or the availing of Facility under the Facility
Agreement would not cause any borrowing limit binding on the Company to
be exceeded, and (b) the assets to be mortgaged/charged/pledged as
security for the Facility, are the absolute property of the Company and
are free from any encumbrance.
vi) A certificate of the legal advisers of the Company certifying that the
Company and its Directors have the necessary powers under the
constitutional documents of the Company to borrow or avail the Facility
and enter into the Facility Agreement
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and that the borrowing or availing of the Facility under the Facility
Agreement would not cause any borrowing limit binding on the Company to
be exceeded.
vii) Documentary evidence that the Company has complied with all of its
obligations to file all of its corporate and other documents with the
relevant Registrar of Companies.
viii) A copy of the Company's most recent audited accounts and auditors
report and un-audited accounts.
(b) AUTHORISATIONS
The Company shall submit the following:
i) Certified copies of each authorisation necessary or desirable in
connection with the entry into, performance, validity, enforceability
and admissibility of the Facility Agreement and the Transaction
Documents (and the transactions contemplated thereby), including
authorisations from its secured creditors stating that they have no
objection to the Company creating the security interests on its assets
in accordance with the Facility Agreement.
ii) Documentary evidence that each of the Transaction Documents has been
duly executed by the parties to it and that each of the Transaction
Documents is in full force and effect.
iii) Documentary evidence that all registration, notices and filings which
are necessary or desirable in relation to the Transaction Documents
have been completed.
(c) SECURITY
Unless otherwise permitted by ICICI, the Company shall create the security as
stipulated in the Facility Agreement to secure the Facility.
(d) TRANSACTION DOCUMENTS
Unless otherwise permitted by ICICI, the Company shall execute or enter into all
Transaction Documents as may be required by ICICI.
SECTION 5.2 - CONDITION PRECEDENT TO ALL DISBURSEMENTS
(a) SUBMISSION OF INFORMATION AND DOCUMENTS
The Company shall furnish to ICICI, such information and documents, financial or
otherwise, as may be required by ICICI from time to time in relation to the
Facility and its business and operations.
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ARTICLE VI
CONDITIONS APPLICABLE DURING CURRENCY OF THE FACILITY
AGREEMENT
SECTION 6.1 - INFORMATION COVENANTS
The Company shall promptly:
(a) REPRESENTATIONS AND WARRANTIES
notify ICICI upon becoming aware, having used best endeavours of the occurrence
of any event or the existence of any circumstances which constitutes or results
in any representation, warranty, covenant or condition under the Facility
Agreement being or becoming untrue or incorrect in any respect.
(b) ACCOUNTS
deliver to ICICI, its duly audited annual accounts, in any event, within four
months from the close of its accounting year. The Company shall also deliver to
ICICI, as soon as the same are available and in any event within 45 days of the
end of each quarter its audited, or as the case may be, unaudited accounts for
that quarter.
(c) ADVERSE CHANGES IN IMPLEMENTATION, PROFITS AND PRODUCTION
notify ICICI of the circumstances and conditions which are likely to disable or
disables the Company from implementing any of its projects, or which are likely
to delay completion of such projects, or which may compel or compels the Company
to abandon any of its projects, or which may result in substantial overrun in
the original estimate of costs, or the happening of any labour strikes,
lockouts, shut-downs, fires or other similar happenings likely to have a
Material Adverse Effect, with an explanation of the reasons therefor.
(d) LOSS OR DAMAGE
notify ICICI of any material loss or damage which the Company may suffer due to
any event, circumstances or act of God.
(e) WINDING-UP AND LEGAL PROCESS
i) notify ICICI of any action or steps taken or legal proceedings started
by or against it in any court of law for its winding-up, dissolution,
administration or reorganisation or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar officer of
the Company or of any or all of its assets.
ii) notify ICICI of any litigation, arbitration, administrative or other
proceedings initiated or threatened against the Company or any of its
assets.
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(f) NEW PROJECTS
notify ICICI of any new project, or diversification, modernisation or
substantial expansion of any of its existing projects or of any project that it
may undertake during the currency of the Facility.
(g) CHANGES IN BOARD AND MANAGEMENT SET-UP
notify ICICI of any change that may occur or is likely to occur in the
composition of its Board of Directors or in its management set-up.
(h) OTHER INFORMATION
deliver to ICICI, copies of all documents despatched by the Company to all its
creditors (or any general class of them) at the same time as they are
despatched.
SECTION 6.2 - AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees that until all the monies due and
payable by the Company under the Facility Agreement are fully paid off to the
satisfaction of ICICI, the Company shall comply with the following:
(a) CARRYING ON BUSINESS AND OPERATIONS
The Company shall:
i) maintain its corporate existence and right to carry on its business and
operations and ensure that it has the right and is duly qualified to
conduct its business and operations as it is conducted in all
applicable jurisdictions and will obtain and maintain all franchises
and rights necessary for the conduct of its business and operations in
such jurisdictions.
ii) develop, maintain and implement its projects in accordance with prudent
industry standards and accepted industry practices and conduct its
business and operations with due diligence and efficiency and in
accordance with sound technical, financial and managerial standards and
business practices.
(b) AUTHORISATIONS
The Company shall promptly obtain, maintain and comply with the terms of all
authorisations necessary for entering into or performing its obligations under
the Facility Agreement or for conducting its business and operations.
(c) UT1LISATION OF THE FACILITY
The Company shall use the proceeds of the Facility for the Purpose. If, for any
reason the Company finds itself unable to comply with this condition, it shall
immediately inform ICICI in writing of the same and the reasons therefor and
shall, unless otherwise agreed to by ICICI, repay forthwith the outstanding
balance of the Facility together with interest and all other monies payable in
respect thereof.
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(d) RANKING OF CLAIMS
The Company shall ensure that, save as otherwise provided in the Facility
Agreement and the Transaction Documents, its obligations under the Facility
Agreement and the Transaction Documents do and will rank above and prior to all
its other present and future obligations.
(e) COMPLIANCE WITH LAWS AND PAYMENT OF TAXES
The Company shall comply with all laws applicable to or binding on it or its
business and operations. The Company shall file all relevant tax returns and pay
all its taxes promptly when due.
(f) INSURANCE
i) The Company shall keep insured upto the reinstatement value thereof as
approved by ICICI (including surveyors and architects fees) the assets
charged/to be charged to ICICI and such of its other assets as are of
an insurable nature against fire, theft, lightning, explosion,
earthquake, riot, strike, civil commotion, storm, tempest, flood,
marine risks, erection risks, war risks and such other risks as may be
specified by ICICI.
ii) The Company shall duly pay all premia and other sums payable for the
aforesaid purpose. The insurance in respect of the assets charged/to be
charged to ICICI shall be taken in the joint names of the Company and
ICICI and any other person or institution having an insurable interest
in the assets of the Company (pursuant to the approval of ICICI) and
acceptable to ICICI.
iii) The Company agrees that, in the event of failure on the part of the
Company to insure the assets or to pay the insurance premia or other
sums referred to above, ICICI may at its sole discretion get the assets
insured or pay the insurance premia and other sums referred to above,
as the case may be.
iv) The Company shall deliver to ICICI promptly and in no event, later than
10 days after the same are issued, originals of all policies of
insurance and renewals thereof and endorsements thereto.
SECTION 6.3 - NEGATIVE COVENANTS
The Company hereby covenants and agrees that until all the monies due and
payable by the Company under the Facility Agreement are fully paid off to the
satisfaction of ICICI, without the approval of ICICI the Company shall not:
(a) INDEBTEDNESS
contract, create, incur, assume or suffer to exist any Indebtedness in any
manner whatsoever except as otherwise permitted under the Facility Agreement.
This provision shall not apply to normal trade guarantees.
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(b) MERGER, CONSOLIDATION ETC.
undertake or permit any merger, de-merger, consolidation, reorganisation, scheme
or arrangement or compromise with its creditors or shareholders or effect any
scheme of amalgamation or reconstruction.
(c) NEGATIVE PLEDGE
(a) create or permit to subsist any encumbrance (save and except for securing
borrowings for working capital requirements in the ordinary course of business,
upto the limit approved by ICICI) or any type of preferential arrangement
(including retention arrangements or escrow arrangements having the effect of
granting security), in any form whatsoever on any of its assets, or (b) (whether
voluntarily or involuntarily) sell, transfer, grant lease or otherwise dispose
of or deal with (or agree to do any of the foregoing at any future time), all or
any of its assets.
(d) DIVIDEND
declare or pay any dividend or authorise or make any distribution to its
shareholders: (a) unless it has paid all the dues in respect of the Facility
upto the date on which the dividend is proposed to be declared or paid, or has
made satisfactory provisions therefor, or (b) if an Event of Default has
occurred and is subsisting or would occur as a result of such declaration or
payment of dividend or authorisation or making of distribution.
SECTION 6.4 - APPOINTMENT OF NOMINEE DIRECTOR
ICICI shall have the right to appoint and remove from time to time, Director(s)
on the Board of Directors of the Company (such directors are hereinafter
referred to as "the Nominee Director(s)").
(i) The Nominee Director(s) shall:
a) not be required to hold qualification shares nor be liable to
retire by rotation.
b) 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 be paid by the Company directly to
ICICI.
Provided that if any such Nominee Director(s) is an employee
of ICICI, the sitting fees and expenses in relation to such
Nominee Director(s) shall be paid by the Company directly to
ICICI.
Any expenditure incurred by ICICI or the Nominee Director(s)
in connection with his appointment of directorship shall be
borne and payable by the Company.
c) be appointed a member of committees of the Board, if so
desired by ICICI.
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d) be entitled to receive all 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.
(ii) 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, ICICI may depute an observer to attend the meeting. The
expenses incurred by ICICI in this connection shall be borne and
payable by the Company.
(iii) The Nominee Director(s)/the observer shall furnish to ICICI a report of
the proceedings of all such meetings.
(iv) The appointment/removal of the Nominee Director(s) shall be by a notice
in writing by ICICI addressed to the Company and shall (unless
otherwise indicated by ICICI) take effect forthwith upon such a notice
being delivered to the Company.
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ARTICLE VII
RECORDS
SECTION 7 - RECORDS
The Company shall keep and maintain in accordance with good business practice
and applicable laws, all statutory books, books of accounts, bank statements and
other records of the Company and in particular, maintain records showing
utilisation of the disbursements under the Facility Agreement, and such records
shall be open to examination by ICICI and their authorised representatives.
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 - EVENTS OF DEFAULT
a) DEFAULT IN PAYMENT OF PRINCIPAL SUMS OF THE FACILITY
Default has occurred in the payment of principal sums of the Facility on the Due
Dates (whether at stated maturity, by acceleration or otherwise) for payment
thereof.
b) DEFAULT IN PAYMENT OF INTEREST AND OTHER MONIES
Default has occurred in payment of interest on the Facility or any other monies
payable under the Facility Agreement.
c) DEFAULT IN PERFORMANCE QF COVENANTS AND CONDITIONS
Default (other than a payment default) has occurred in the performance of any
covenant, condition or agreement on the part of the Company under the Facility
Agreement or by the Company or any other person under the Transaction Documents
and such default has continued for a period of 30 days after notice in writing
thereof has been given to the Company or as the case may be, to such other
person, by ICICI (except where ICICI is of the opinion that such default is
incapable of remedy, in which event, no notice shall be required).
d) MISLEADING INFORMATION AND REPRESENTATIONS
Any information given by the Company in its Credit Application, in the reports
and other information furnished by or on behalf of the Company in accordance
with the reporting system is incorrect or misleading, or a representation;
warranty or statement made or repeated or deemed to be made or repeated in or in
connection with the Facility Agreement or any Transaction Document by the
Company or any other person, is incorrect or misleading in any respect.
e) INADEQUATE SECURITY AND INSURANCE
(i) If the Company's assets have not been kept insured by the Company or
depreciate in value to such an extent that such depreciation in value
could in the opinion of ICICI, have a Material Adverse Effect.
(ii) Any insurance contracted or taken by the Company is not, or ceases to
be, in full force and effect at any time when it is required to be in
effect or any insurance is avoided, or any insurer or re-insurer avoids
or suspends or becomes entitled to avoid or suspend, any insurance or
any claim under it or otherwise reduce its liability under any
insurance or any insurer of any insurance is not bound, or ceases to be
bound, to meet its obligations in full or in part under any insurance.
f) PROCEEDINGS AGAINST OR DISSOLUTION OF COMPANY
The Company, has voluntarily or involuntarily become the subject of proceedings
under any bankruptcy or insolvency law, or is voluntarily or involuntarily
dissolved, or if the
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Company has taken or suffered to be taken any action for its reorganisation,
liquidation or dissolution or if a receiver or liquidator has been appointed or
allowed to be appointed of all or any part of the assets of the Company or if an
attachment or distraint has been levied on the Company's assets or any part
thereof or certificate proceedings have been taken or commenced for recovery of
any dues from the Company or if one or more judgements or decrees have been
rendered or entered against the Company and such judgements or decrees are not
vacated, discharged or stayed for a period of 30 days, and such judgements or
decrees involve in the aggregate, a liability which in the opinion of ICICI,
could have a Material Adverse Effect.
g) CESSATION OR CHANGE IN BUSINESS
If the Company ceases or threatens to cease to carry on any of its businesses or
gives notice of its intention to do so or if all or any part of the assets of
the Company required or essential for its business or operations are damaged or
destroyed or in the opinion of ICICI, there occurs any change from the date of
the Facility Agreement in the general nature or scope of the business,
operations, management or ownership of the Company, which, in the opinion of
ICICI, could have a Material Adverse Effect.
h) SECURITY IN JEOPARDY
If, in the opinion of ICICI, the security for the Facility is in jeopardy or
ceases to have effect or if any Transaction Document including any security
document executed or furnished by or on behalf of the Company becomes illegal,
invalid, unenforceable or otherwise fails or ceases to be in effect or fails or
ceases to provide the benefit of the liens, rights, powers, privileges or
security interests purported or sought to be created thereby or if any such
Transaction Document shall be assigned or otherwise transferred, amended or
terminated, repudiated or revoked without the approval of ICICI.
i) EXPROPRIATION EVENTS
Any government (including any political or administrative sub-division thereof),
governmental authority, agency, official or entity takes or threatens any
action:
(i) for the dissolution of the Company, or any action which deprives or
threatens to deprive the Company: (a) from conducting any of its
businesses or carrying out its operations in the manner it is being
conducted or carried out, or (b) of the use of any of its assets;
(ii) to revoke or terminate or to refuse to provide or renew any
authorisation or to impose onerous conditions on or on the grant or
renewal of any authorisation; or
(iii) with a view to regulate, administer, or limit, or assert any form of
administrative control over the rates applied, prices charged or rates
of return achievable, by the Company in connection with its business;
which, in each case, in the opinion of ICICI, could have a Material Adverse
Effect.
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j) CHANGE IN CONTROL
Any person acting singularly or with any other person (either directly or
indirectly) acquires control of the Company or of any other person who controls
the Company, without the approval of ICICI.
k) ILLEGALITY
(i) It is or becomes unlawful for the Company or any person (including
ICICI) to perform any of their respective obligations under the
Facility Agreement or any Transaction Document;
(ii) The Facility Agreement or any Transaction Document or any provision
thereof are required by any law to be amended, waived or repudiated; or
(iii) Any obligation under the Facility Agreement or any Transaction Document
is not or ceases to be a valid and binding obligation of any person
party to it or becomes void, illegal, unenforceable or is repudiated by
such person (other than ICICI).
l) CROSS DEFAULT
(i) The Company is unable or has admitted in writing its inability to pay
any of its Indebtedness as they mature or when due.
(ii) An event of default howsoever described (or any event which with the
giving of notice, lapse of time, determination of materiality or
fulfilment of any other applicable condition or any combination of the
foregoing would constitute an event of default) occurs under any
agreement or document relating to any Indebtedness of the Company or if
any other lenders of the Company including financial institutions or
banks with whom the Company has entered into agreements for financial
assistance have recalled its/their assistance or any part thereof.
(iii) Any person is in breach of, or does not comply with, any term or
condition (whether, financial, performance or otherwise) of any
Transaction Document including any security document or undertaking.
m) MATERIAL ADVERSE EFFECT
One or more events, conditions or circumstances (including any change in law)
shall occur or exist which in the opinion of ICICI, could have a Material
Adverse Effect.
SECTION 8.2 NOTIFICATION OF DEFAULT
The Company shall promptly notify ICICI in writing upon becoming aware of any
default and any event which constitutes (or, with the giving of notice, lapse of
time, determination of materiality or satisfaction of other conditions, would be
likely to constitute) an Event of Default and the steps, if any, being taken to
remedy it.
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SECTION 8.3 - CONSEQUENCES OF DEFAULT AND REMEDIES
A. On the happening of any of the Events of Default, ICICI may, by a
notice in writing to the Company, declare: (a) the principal of and all accrued
interest on and all other monies in respect of the Facility to be due and
payable forthwith, and/or (b) the security created in terms of the Facility
Agreement and the Transaction Documents to be enforceable, and ICICI or such
other person in favour of whom such security or any part thereof is created
shall have inter alia, the following rights (anything in the Facility Agreement
or the Transaction Documents to the contrary notwithstanding) namely:
(i) to enter upon and take possession of the assets of the Company; and/or
(ii) to transfer the assets of the Company comprised within the security
created in favour of ICICI or such other person by way of lease, leave
and licence, sale or otherwise.
B. In addition to the rights specified in Sub-clause (A) above, ICICI
shall also have the following rights:
(i) APPOINTMENT OF WHOLE-TIME DIRECTOR(S)
ICICI shall have the right to appoint and remove from time to time,
whole time Director(s) on the Board of Directors of the Company (such
directors are hereinafter referred to as the "Whole time Nominee
Director(s)").
(A) The Whole time Nominee Director(s) shall:
a) not be required to hold qualification shares nor be liable to
retire by rotation.
b) exercise such powers and duties as may be approved by ICICI
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.
c) be entitled to receive such remuneration, fees, commission and
monies as may be approved by ICICI.
Any expenditure incurred by ICICI or the Whole time Nominee
Director(s) in connection with his appointment of directorship
shall be borne and payable by the Company.
d) be appointed a member of committees of the Board, if so
desired by ICICI.
e) be entitled to receive all 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.
(B) If, at any time, the Whole time 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, ICICI may depute an
observer to attend the meeting. The expenses incurred by ICICI
in this connection shall be borne and payable by the Company.
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(C) The Whole time Nominee Director(s)/the observer shall furnish
to ICICI a report of the proceedings of all such meetings.
(D) The appointment/removal of the Whole time Nominee Director(s)
shall be by a notice in writing by ICICI addressed to the
Company and shall (unless otherwise indicated by ICICI) take
effect forthwith upon such a notice being delivered to the
Company.
(ii) REVIEW OF MANAGEMENT
ICICI shall have a 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 ICICI, including the formation of
management committees with such powers and functions as may be
considered suitable by ICICI. The Company shall comply with all such
requirements of ICICI.
(iii) CONVERSION RIGHT IN CASE OF DEFAULT
(a)(1) If the Facility is denominated in Rupees, in the event the Company
commits a default in payment or repayment of two consecutive
instalments of principal amounts of the Facility or interest thereon or
any combination thereof, then ICICI shall have the right to convert
(which right is hereinafter referred to as "the conversion right") at
its option the whole or part of the outstanding amount of the Facility
(whether then due and payable or not), into fully paid up equity shares
of the Company, at par from the date (which date is hereinafter
referred to as the "date of conversion") and in the manner specified in
a notice in writing to be given by ICICI to the Company (which notice
is hereinafter referred to as "the notice of conversion").
(a)(2) If the Facility is denominated in foreign currencies, in the event the
Company commits a default in payment or repayment of any instalment of
principal amounts of the Facility or interest thereon, then ICICI shall
have the right to convert (which right is hereinafter referred to as
"the conversion right") at its option the Rupee equivalent of the whole
or part of the outstanding amount of the Facility (whether then due and
payable or not), into fully paid-up equity shares of the Company, at
par from the date (which date is hereinafter referred to as the "date
of conversion") and in the manner specified in a notice in writing to
be given by ICICI to the Company (which notice is hereinafter referred
to as "the notice of conversion").
Provided however, and notwithstanding anything to the contrary
contained in Sub-clauses (a)(l) and (a)(2) above, in the event the
principal amount of the Facility is repayable in one instalment, ICICI
shall be entitled to exercise the conversion right if the Company
defaults in repayment of such instalment of principal amounts of the
Facility or in payment of any interest thereon.
(b) The conversion right reserved as aforesaid may be exercised by ICICI on
one or more occasions during the currency of the Facility on the
happening of the event specified above.
(c) On receipt of notice of conversion, the Company shall allot and issue
the requisite number of fully paid-up equity shares to ICICI as from
the date of conversion and
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ICICI shall accept the same in satisfaction of the part of the Facility
so converted. The part of the Facility so converted shall cease to
carry interest as from the date of conversion and the Facility shall
stand correspondingly reduced. Upon such conversion, the instalments of
the Facility payable after the date of conversion as per the Facility
Agreement shall stand reduced proportionately by the amounts of the
Facility so converted. The equity shares so allotted and issued to
ICICI 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 Company. Save as
aforesaid, the said shares shall rank pari passu with the existing
equity shares of the Company in all respects. The Company shall, at all
times, maintain sufficient un-issued equity shares for the above
purpose.
(d) In the event of ICICI exercising the conversion right as aforesaid, the
Company shall at its cost get the equity shares, issued to ICICI as a
result of the conversion, listed with such Stock Exchanges as may be
prescribed by ICICI.
(iv) APPOINTMENT OF TECHNICAL/MANAGEMENT CONSULTANT
ICICI shall have the right to appoint, whenever it considers necessary,
any person engaged in technical, management or any other consultancy
business to inspect and examine the working of the Company and its
assets including its premises, factories and facilities and to report
to ICICI. ICICI shall also have the right to appoint, whenever it
considers necessary, any Chartered Accountants/Cost Accountants as
auditors for carrying out any specific assignments or to examine the
financial or cost accounting system 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 travelling and other expenses
of such consultants or auditors shall be borne and payable by the
Company.
C. OTHER CONSEQUENCES OF DEFAULT
On the happening of any of the Events of Default and so long as such
Event of Default is subsisting, the Company shall not, without the
approval of ICICI:
(i) undertake any new project, modernisation, diversification or
substantial expansion of any project.
(ii) change the composition of its Board of Directors and/or its management
set-up or appoint/re-appoint/remove the managing director or any other
person holding substantial powers of management by whatever name
called.
(iii) amend or modify its Memorandum and Articles of Association.
(iv) make any investments whether by way of deposits, loans, or investments
in share capital or otherwise, in any concern or provide any credit or
give any guarantee, indemnity or similar assurance.
(v) (a) buy back, cancel, retire, reduce, redeem, re-purchase, purchase or
otherwise acquire any of its share capital now or hereafter
outstanding, or set aside any funds for the foregoing purposes, or (b)
issue any further share capital whether on
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a preferential basis or otherwise or change its capital structure in
any manner whatsoever.
(vi) change its financial year-end from 31st March (or such other date as
may be approved by ICICI).
(vii) change the accounting method or policies currently followed by the
Company.
SECTION 8.4 - EXPENSES OF PRESERVATION OF ASSETS OF COMPANY AND OF COLLECTION
All expenses incurred by ICICI after an Event of Default has occurred including
in connection with:
i) preservation of, or enforcement action against the Company's assets or
the assets comprised within the security for the Facility (whether then
or thereafter existing); and
ii) collection of amounts due under the Facility Agreement and the
Transaction Documents,
shall be payable by the Company.
SECTION 8.5 - SUSPENSION AND TERMINATION
A. If any Event of Default has occurred or is continuing or if the Company
has not availed of or drawn from the Facility by the date referred to
in the Facility Agreement or such later date as may be permitted by
ICICI, then, in such event, ICICI may, by notice in writing to the
Company:
i) suspend further access by the Company to the use of the
Facility under the Facility Agreement. The right of the
Company to avail of or make drawals from the Facility shall
continue to be suspended until ICICI has notified the Company
that the right to avail of or make drawals from the Facility
has been restored; or
ii) terminate the right of the Company to avail of or make drawals
from the Facility. Upon such notice, the unutilised amount of
the Facility shall stand cancelled.
B. If the Facility is denominated in foreign currencies, in the event
ICICI is, for any reason, denied further access to their loan facility
from the Foreign Lending Agency, ICICI 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 Facility shall stand cancelled.
C. Notwithstanding any suspension or termination pursuant to Sub-clauses
(A) or (B) above, all the provisions of the Facility Agreement for the
benefit or protection of ICICI and its interests shall continue to be
in full force and effect as specifically provided in the Facility
Agreement.
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ARTICLE IX
CANCELLATION
SECTION 9.1 - CANCELLATION
The Company shall not cancel the Facility or any part thereof without the
approval of ICICI.
SECTION 9.2 - BENEFIT OR PROTECTION
Notwithstanding any cancellation, all the provisions of the Facility Agreement
for the benefit or protection of ICICI and its interests shall continue to be in
full force and effect as specifically provided in the Facility Agreement.
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ARTICLE X
WAIVER
SECTION 10 - WAIVER NOT TO IMPAIR THE RIGHTS OF ICICI
No delay in exercising or omission to exercise any right, power or remedy
accruing to ICICI upon any default or otherwise under the Facility Agreement or
the Transaction Documents 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 ICICI in respect of any default or any
acquiescence by it in any default, affect or impair any right, power or remedy
of ICICI in respect of any other default. The rights of ICICI under the Facility
Agreement and the Transaction Documents may be exercised as often as necessary,
are cumulative and not exclusive of their rights under the general law and may
be waived only in writing and specifically and at ICICI's sole discretion.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 - SERVICE OF NOTICE
a) All notices or other communications under or in connection with the
Facility Agreement shall be given in writing and, unless otherwise
stated may be made by letter, telex or facsimile. Any such notice or
other communication will be deemed to be effective:
(i) if sent by letter, when delivered personally or if despatched
by post, when recall of the letter is outside the control of
the sender;
(ii) if sent by telex, when sent (if, at the time of transmission,
the correct answer-back appears at the start and at the end of
the sender's copy of the notice); and
(iii) if sent by facsimile, when sent (on receipt of a confirmation
to the correct facsimile number).
Provided, however, that no notice or communication to ICICI shall be
effective unless actually received by ICICI.
b) Notices or communication may be made to: (i) the Company's recognised
address, telex or facsimile number, and (ii) ICICI's address, telex or
facsimile number of its Registered Office and Zonal/Regional Office
specified in the Facility Agreement, or to such other address, telex or
facsimile number as may be designated by the Company and ICICI in
writing to each other.
SECTION 11.2 - EVIDENCE OF DEBT
a) ICICI shall maintain, in accordance with its usual practice, accounts
evidencing the amounts from time to time lent by and/or owing to it
under the Facility Agreement and the Transaction Documents.
b) In any legal action or proceedings arising out of or in connection with
the Facility Agreement, the entries made in the accounts maintained
pursuant to Sub-clause (a) above shall be prima-facie and conclusive
evidence of .the existence and amount of obligations of the Company as
therein recorded.
SECTION 11.3 - JURISDICTION
ICICI and the Company agree that any legal action or proceedings arising out of
the Facility Agreement shall be brought in the High Court of Judicature at
Mumbai in India and irrevocably submit themselves to the jurisdiction of that
Court. ICICI may, however, in its absolute discretion commence any legal action
or proceedings arising out of the Facility Agreement in any other court,
tribunal or other appropriate forum, and the Company hereby consents to that
jurisdiction.
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SECTION 11.4 - GOVERNING LAW
The Facility Agreement and the Transaction Documents (unless otherwise specified
in any Transaction Document) shall be governed by and construed in accordance
with the laws of India.
SECTION 11.5 - ASSIGNMENT
The Company shall not assign or transfer all or any of its rights, benefits or
obligations under the Facility Agreement and the Transaction Documents without
the approval of ICICI. ICICI may, at any time, assign or transfer all or any of
its rights, benefits and obligations under the Facility Agreement and the
Transaction Documents.
SECTION 11.6 - BENEFIT OF THE FACILITY AGREEMENT
Subject to Section 11.5 hereof, the Facility Agreement shall be binding upon and
enure to the benefit of each party hereto and its successors and assigns.
SECTION 11.7 - SEVERABILITY
Any provision of the Facility Agreement or any Transaction Document which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of prohibition or un-enforceability but that shall
not invalidate the remaining provisions of the Facility Agreement or such
Transaction Document or affect such provision in any other jurisdiction.
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