Loan Agreement [Amendment] - Wipro Ltd. and ICICI Ltd.
Wipro Limited
Note setting out amendment to the Loan Agreement dated September 19, 1996 as
amended by the Note of Amendment dated December 23, 1996 and December 12,
1997 for Rupee Loan of Rs.2000 lacs under Asset Credit Scheme entered into
between Wipro Limited as the Borrower and ICICI as the Lender
I. In ARTICLE I, under the heading DEFINITIONS, the following shall be
added as Section 1.1 (h):
"Short Term Prime Rate" means the percentage rate per annum decided by
the Lender from time to time as applicable to funding of rupee amounts
for a period of one (1) year (excluding interest tax or other statutory
levy) as notified by the Lender from time to time.
II. In ARTICLE II, under the heading AGREEMENT AND TERMS OF LOAN, Section
2.3 (1) relating to INTEREST shall be substituted by the following:
a) The Borrower shall pay to the Lender interest on the principal amount
of Rs.1000 lacs disbursed on September 20, 1996 out of the Loan and
outstanding from time to time, quarterly in each year, on March 15,
June 15, September 15, and December 15, at 20% per annum plus
applicable interest tax, till December 14, 1997.
b) The Borrower shall pay to the Lender interest on the principal amount
of Rs.500 lacs disbursed on December 23, 1996 out of the Loan and
outstanding from time to time, quarterly in each year, on March 15,
June 15, September 15 and December 15, at 19% per annum plus applicable
interest tax, till December 14, 1997.
The Lender may, at its sole discretion, charge interest on the amounts
of Rs.1000 lacs and Rs.500 lacs disbursed out of the Loan on September
20, 1996 and December 23, 1996 rspectively at the weighted average
rates. For the purpose of this clause "weighted average rate" means the
weighted mean of the rates of interest applicable to the disbursements
out of the Loan.
c) The Borrower shall pay to the Lender interest on the principal amount
of Rs.1282 lacs out of the Loan outstanding as on December 15, 1997 and
outstanding from time to time, quarterly in each year, on March 15,
June 15, September 15 and December 15, at 1.75% over the Short Term
Prime Rate prevailing on December 15, 1997 plus applicable interest tax
or other statutory levy, if any, with effect from December 15, 1997.
Provided that the aforesaid interest rate in respect of the amount of
Rs.1282 lacs out of the Loan outstanding as on December 15, 1997 will
be reset annually commencing from December 15, 1998 (the "Reset
Date(s)") based on the then prevailing Short Term Prime Rate and the
Borrower shall pay interest at such reset rate as may be notified by
the Lender to the Borrower.
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III. In SCHEDULE II, the AMOTIZATION SCHEDULE shall be substituted by the
following:
(Rs in lacs)
DATE OF PAYMENT PAYMENT OF PRINCIPAL AMOUNT
PRINICPAL OUTSTANDING AFTER
EACH PAYMENT
1,500
September 15, 1997 125 1,375
December 15, 1997 93 1,282
December 15, 1998 200 1,082
December 15, 1999 200 882
December 15, 2000 200 682
December 15, 2001 200 482
December 15, 2002 200 282
December 15, 2003 282
All other terms and conditions of the Loan Agreement dated September
19, 1996 as amended by the Notes of Amendment dated December 23, 1996
and December 12, 1997 entered into between the Borrower and the Lender
shall remain unchanged.
IN WITNESS WEREOF the Borrower has caused its common seal to
be affixed hereto and to a duplicate hereof on the day, month and year written
below and the Lender has caused the same and the said duplicate to be executed
by the hand of Shri. V.M. Ketkar, an authorised official of the Lender.
The COMMON SEAL OF WIPRO LIMITED has pursuant to the Resolution of its Bored of
Directors passed in that behalf on the 20th day of August, 1996 hereunto been
affixed in the presence of Shri (illegible) and Shri (illegible) who have signed
these presents in token thereof.
SIGNED AND DELIVERED BY the withinnamed Lender by the hand of Shri V.M. Ketkar,
an authorised official of the LENDER.
Dated at Bangalore, this 15th day of (illegible)
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WIPRO LIMITED
Note setting out Amendment to the Loan Agreement dated September 19, 1996 for
Rupee Loan of Rs.2000 lacs under Asset Credit Scheme entered into between Wipro
Limited as the Borrower and The Industrial Credit and Investment Corporation of
India Limited as the Lender
I. In ARTICLE II, under the heading AGREEMENT AND TERMS OF LOAN, Section
2.3 (i), the clause relating to interest shall be substituted by the
following:
2.3 INTEREST
a) The Borrower shall pay to the Lender interest on the principal amount
of Rs.1000 lacs disbursed on September 20, 1996 out of the Loan and
outstanding from time to time, quarterly in each year, on March 15,
June 15, September 15 and December 15 at 20% per annum plus applicable
interest tax.
b) The Borrower shall pay to the Lender interest on the balance principal
amount of Rs. 1000 lacs out of the Loan and outstanding from time to
time, quarterly in each year, on March 15, June 15, September 15 and
December 15. The rate of interest for each disbursement shall be the
higher of the following:
2.5% over the ICICI Advance Rate (IAR) per annum as prevailing on the
date of each disbursement of balance amount out of the Loan plus
applicable interest tax
or
Minimum rate of 19% per annum plus applicable interest tax. The minimum
rate of interest given hereinabove is valid only in case of
disbursements made on or before January 31, 1997. For disbursements
required after this date the minimum rate shall be intimated by the
Lender before such disbursements.
The Lender may, in its sole discretion, charge interest on the Loan at
the weighted average rates. For the purpose of this clause, "weighted average
rates" means the weighted mean of the rates of interest applicable to the
disbursements out of the Loan.
All the other terms and conditions of the Loan Agreement dated
September 19, 1996 shall remain unaltered.
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IN WITNESS WHEREOF the Borrower has caused its Common Seal to be affixed hereto
and to a duplicate hereof on the date, month and year written below and the
Lender has caused the same and the said duplicate to be executed by the hand of
Shri A.J.V. Jayachander, an authorised official of the Lender.
THE COMMON SEAL of WIPRO LIMITED has
pursuant to the Resolution of its Board
of Directors passed in that behalf on
the 20th day of August, 1996 hereunto
been affixed in the presence of Shri
Satish Menon, Company Secretary and
Corporate Counsel and Shri Kapil K.
Jain, Corporate Finance Manager have
signed these presents in token thereof.
/s/ SHRI SATISH MENON
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Shri Satish Menon
/s/ SHRI KAPIL K. JAIN
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Shri Kapil K. Jain
SIGNED AND DELIVERED BY the withinnamed
Lender by the hand of Shri A.J.V.
Jayachander, an authorised official of
the Lender.
/s/ SHRI A.J.V. JAYACHANDER
------------------------------
Shri A.J.V. Jayachander
Dated at Bangalore, this 23rd day of December, 1996.
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LOAN AGREEMENT
(ASSET CREDIT SCHEME)
BETWEEN
WIPRO LIMITED
AS BORROWER
AND
THE INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA LIMITED
AS LENDER
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INDIA
TWENTY RUPEES
LOAN AGREEMENT
(ASSET CREDIT SCHEME)
THIS AGREEMENT made this 19th day of September, One Thousand Nine
Hundred Ninety Six between WIPRO LIMITED, a public company within the meaning of
the Companies Act, 1956 (I of 1956) and having its Registered Office at Du Parc
Trinity, 10th Floor, 17 M.G. Road, Bangalore 560 001 (hereinafter referred to as
"the Borrower" which expression shall, unless it be repugnant to the subject or
context thereof, include its successors and assigns) of the ONE PART
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AND
THE INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA LIMITED, a public
company incorporated under the Indian Companies Act, 1913 (7 of 1913) and having
its Registered Office at 163, Backbay Reclamation, Mumbai 400 020 and a Branch
Office at Raheja Towers, East Wing, II Floor, 26-27, M.G. Road, Bangalore 560
001 (hereinafter referred to as "the Lender", 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 this Agreement, 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 - the date on which the instalment
falls due as stipulated in Schedule II hereto;
ii) interest - the date on which interest falls due as stipulated
in Section 2.3 hereof;
b) "Event of Default" - means any of the events of default specified
in Article IX hereof;
c) "Loan Application" - means the application/s for the Loan made by
the Borrower to the Lender and all information, particulars and
clarifications furnished by the Borrower to the Lender from time
to time in respect thereof;
d) "Project" - means the purpose, described in Schedule I hereto, for
which the Loan is agreed to be lent and advanced by the Lender;
e) "the Agreement" - means this Agreement and the Schedules hereto
and includes the amendments made thereto from time to time;
f) "Normal Loan" means that component of a rupee term loan which
carries interest at the maximum rate applicable to a widely held
public limited company.
g) 'ICICI Advance Rate' means the percentage rate per annum decided
by ICICI from time to time as applicable for Rupee Loans to Prime
Borrowers plus applicable interest tax or other statutory levy, as
notified by ICICI from time to time.
1.2 The headings of the Articles and Sections are inserted for convenience
of reference only and are not deemed to affect the interpretation of
this Agreement.
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ARTICLE II
AGREEMENT AND TERMS OF LOAN
2.1 AMOUNT AND TERMS OF LOAN
The Borrower agrees to borrow from the Lender and the Lender agrees to
lend to the Borrower, on the terms and conditions contained herein
Rupee Term Loan not exceeding Rs.2000 lacs (Rupees Two Thousand lacs
only) (hereinafter referred to as "the Loan").
2.2 TERMS OF DISBURSEMENT
The Loan will be disbursed to the Borrower in one or more instalment(s)
as may be decided by the Lender subject to the Borrower complying with
the provisions of this Agreement and the disbursement procedure
stipulated by the Lender. All disbursements shall be by
cheque(s)/authorisation(s) and the collection/ remittance charges, will
be borne by the Borrower. The interest on the Loan will accrue from the
date of cheque(s)/authorisation(s).
2.3 INTEREST
i) The Borrower shall pay to the Lender interest on the principal
amount of the Loan outstanding from time to time, quarterly in
each year, on March 15, June 15, September 15 and December 15. The
rate of interest for each disbursement shall be the higher of the
following :
3% over the ICICI Advance Rate (IAR) per annum as prevailing on
the date of each disbursement out of the Loan plus applicable
interest tax
or
Minimum rate of 20% per annum plus applicable interest tax. The
minimum rate of interest given hereinabove is valid only in case
of disbursements made on or before December 31, 1996. For
disbursements required after this date the minimum rate shall be
intimated by the Lender before such disbursements.
The Lender may, in its sole discretion, charge interest on the
Loan at the weighted average rates. For the purpose of this
clause, 'weighted average rates' means the weighted mean of the
rates of interest applicable to the disbursements out of the Loan.
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ii) ADDITIONAL INTEREST FOR INTERIM SECURITY
Disbursements made pending creation of final security as
stipulated in Article III shall carry further interest at the rate
of 1.05% per annum till creation of such security.
iii) All interest on the Loan and on all other monies accruing due
under this Agreement shall, in case the same be not be paid on the
respective Due Dates, carry further interest at the maximum
lending rate of the Lender on Rupee Loans as prevailing from time
to time or at the applicable rate under this 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 quarterly rests as hereinbefore provided. The
maximum lending rate of the Lender on Rupee Loans shall, until
creation of final security for the Loan, be increased by 1.05% per
annum.
iv) All interest and other monies which shall accrue under the
provisions of this Agreement shall also be payable in the manner
and on the dates specified in Section 2.3(i).
2.4 FRONT END FEE
The Borrower shall pay to the Lender Front End Fee of 1.05% of the Loan
on or before issue of the Letter of Intent.
2.5 COSTS AND OTHER CHARGES
The Company shall pay all taxes, duties, costs, charges and expenses in
connection with or relating to the Loan transaction (including costs of
investigation of title and protection of the Lender's interests). In
the event of the Borrower failing to pay the aforesaid monies, the
Lender will be at liberty but shall not be obliged to pay the same.
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2.6 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 number of days
elapsed.
2.7 ADJUSTMENT OF OVERDUES
The Lender may deduct from sums to be lent and advanced by it to the
Borrower any monies then remaining due and payable by the Borrower to
the Lender.
2.8 LAST DATE OF WITHDRAWAL
Unless the Lender otherwise agrees, the right to make drawals from the
Loan shall cease on March 31, 1997.
2.9 REPAYMENT
i) The Borrower undertakes to repay the principal amounts of the Loan
in accordance with the Amortization Schedule set forth in Schedule
II hereto.
ii) The Lender may, in suitable circumstances revise, vary or postpone
the repayment of the principal amounts of the Loan or the balance
outstanding for the time being or any instalment(s) of the said
principal amount of the Loan or any part thereof upon such terms
and conditions as may be decided by the Lender.
iii) In the event of any default in the payment of instalments of
principal, any interest and liquidated damages, postponement, if
any, allowed by the Lender shall be at the rate of interest as may
be stipulated by the Lender at the time of postponement.
iv) If for any reason, the amount finally disbursed by the Lender out
of the Loan is less than the Loan, the instalment(s) of repayment
of the Loan shall stand reduced proportionately but will be
payable on the same dates as specified in Schedule II hereto.
2.10 ACCELERATION OF REPAYMENT BY THE LENDER
If the Lender finds that the profitability of the Borrower, the cash
flow and other circumstances so warrant, the Lender may, on previous
intimation to the Borrower, require the Borrower to prepay the Loan on
dates earlier than the dates set out in Schedule II hereto and also to
increase the amount(s) of the instalment(s) of repayment fixed in that
Schedule.
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2.11 PREMATURE REPAYMENT
The Borrower shall not prepay the outstanding principal amounts of the
Loan in full or in part before the due dates except after obtaining the
prior approval of the Lender (which may be granted conditionally).
2.12 DUE DATE OF PAYMENT
If the Due Date in respect of an instalment of the Loan, interest,
Front End Fee or any other payment falls on a Saturday or a day which
is a bank holiday at the place where the payment is to be made, the
immediately preceding working day shall be the due date for such
payment.
2.13 LIQUIDATED DAMAGES ON DEFAULTED AMOUNTS
In case of default in payment of instalment(s) of principal, interest,
Front End Fee and all other monies (except liquidated damages) on their
respective Due Dates, the Borrower 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
dates specified in Section 2.3(i) above. Arrears of liquidated damages
shall carry interest at the applicable rate for Normal Loans prevailing
on the date of this Agreement.
2.14 REIMBURSEMENT OF EXPENSES
i) The Borrower shall reimburse all sums paid by the Lender under
Article II - Section 2.5, Sections 6.1(c), 6.3, Article VIII -
Section 8(b)(iii) and Article IX - Section 9.4 within 30 days from
the date of notice of demand from the Lender. All such sums shall
be debited to the Borrower's Loan Account and shall carry interest
from the date of payment till such reimbursement at the applicable
rate for Normal Loans prevailing on the date of this Agreement.
ii) In case of default in making such reimbursement within 30 days
from the date of notice of demand, the Borrower shall also pay on
the defaulted amounts, liquidated damages at the rate of 2.1% per
annum from the expiry of 30 days from the date of notice of demand
till reimbursement in accordance with the provisions of Section
2.13.
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2.15 APPROPRIATION OF PAYMENTS
a) Unless otherwise agreed to by the Lender, any payments due and
payable under this Agreement and made by the Borrower shall be
appropriated towards such dues in the following order viz :
i) Premium on prepayment;
ii) Costs, charges, expenses and other monies;
iii) Interest on costs, charges, expenses and other monies;
iv) Interest including additional interest;
v) Further interest and liquidated damages on defaulted amounts
payable in terms of Section 2.13; and
vi) Repayment of instalments of principal;
due and payable under this Agreement.
b) Notwithstanding anything contained in Clause(a) hereinabove, the
Lender may, at its discretion, appropriate such payments towards
the dues, if any, payable by the Borrower in respect of earlier
loan(s) availed of by the Borrower from the Lender in the order
specified in the relative Loan Agreement(s).
2.16 PLACE AND MODE OF PAYMENTS AND CREDIT THEREFOR
All monies payable by the Borrower to the Lender shall be paid to the
Lender at their office in Mumbai/Bangalore or to such other office(s)
as may be specified by them by telegraphic, telex or mail transfer to
the account of such office(s) or by cheque or bank draft drawn in
favour of the Lender on a scheduled bank at Mumbai or such other place
or to such other account as the Lender may notify to the Borrower and
shall be so paid as to enable the Lender to realise, at par, the amount
on or before the relative Due Date.
Credit for all payments by local cheque/bank draft will be given on the
Lender's immediately next working 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.
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2.17 CONVERSION RIGHT IN CASE OF DEFAULT
i) If the Borrower commits a default in payment or repayment of three
consecutive instalments of principal amounts of the Loan or
interest thereon or any combination thereof.
The Lender shall have the right to convert (which right is
hereinafter referred to as "the conversion right") at its option
the whole of the out-standing amount of the Loan, or a part not
exceeding 20% of the Loan, whichever is lower, into fully paid-up
equity shares of the Borrower, at par, in the manner specified in
a notice in writing to be given by the Lender to the Borrower
(which notice is hereinafter referred to as the "notice of
conversion") prior to the date on which the conversion is to take
effect, which date shall be specified in the said notice (which
date is hereinafter referred to as the "date of conversion").
ii) On receipt of notice of conversion, the Borrower shall allot and
issue the requisite number of fully paid-up equity shares to the
Lender as from the date of conversion and the Lender shall accept
the same in satisfaction of the principal amount of the Loan to
the extent so converted. The part of the Loan so converted shall
cease to carry interest as from the date of conversion and the
Loan shall stand correspondingly reduced. Upon such conversion,
the instalments of the Loan payable after the date of conversion
as per Schedule II hereto shall stand reduced proportionately by
the amounts of the Loan so converted. The equity shares so
allotted and issued to the Lender shall carry, from the date of
conversion, the right to receive proportionately the dividends and
other distributions declared or to be declared in respect of the
equity capital of the Borrower. Save as aforesaid, the said shares
shall rank pari passu with the existing equity shares of the
Borrower in all respects. The Borrower shall, at all times,
maintain sufficient unissued equity shares for the above purpose.
iii) The conversion right reserved as aforesaid may be exercised by the
Lender on one or more occasions during the currency of the Loan on
the happening of any of the events specified in sub-clause (i)
above.
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iv) The Borrower assures and undertakes that in the event of the
Lender exercising the right of conversion as aforesaid, the
Borrower shall get the equity shares which will be issued to the
Lender as a result of the conversion, listed with the Stock
Exchange(s) at Mumbai and Bangalore.
v) For purposes of sub-clause (i) above it shall not be construed as
a default, if the Borrower approaches the Lender well in advance
for postponement of principal or interest, as the case may be, and
the Lender agrees to the same.
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ARTICLE III
SECURITY
3.1 SECURITY FOR THE LOAN
(A) The Loan together with all interest, liquidated damages, premium on
prepayment, costs, expenses and other monies whatsoever stipulated in
this Agreement to the extent of utilised for installation of assets at
the Borrower's Lighting Division at Aurangabad, Maharashtra, shall be
secured by a first mortgage and charge on the immoveable and moveable
properties of the Borrower's Lighting Division, save and except book
debts, both present and future, in such form as may be required by
ICICI, subject to the charges created/to be created in favour of the
bankers for securing working capital requirements.
The above mortgage and charge shall rank pari passu with the charges
created/to be created in favour of ICICI for its foreign currency term
loan assistance of USD 4,437,401.
B) The Loan together with all interest, liquidated damages, premium on
prepayment, costs, expenses and other monies whatsoever sipulated in
this agreement to the extent utilised for financing of equipment to be
installed at the Borrower's various divisions other than the Lighting
Division at Aurangabad, Maharashtra, shall be secured by an exclusive
charge by way of hypothecation of the equipment and accessories to be
acquired out of the loan, in a form and manner satisfactory to the
Lender.
3.2 AUDITORS' CERTIFICATE
The Borrower shall produce a certificate from its Auditors stating that
the said equipment undertaken to be charged to the Lender as security
for the Loan, are the absolute property of the Borrower and are free
from any charge, lien, or claim thereon of whatsoever nature and submit
a copy of final invoice(s) and such other documents of title in respect
of the said equipment.
3.3 CREATION OF ADDITIONAL SECURITY
If, at any time during the subsistence of this Agreement, the security
provided by the Borrower has been lost or in the opinion of the Lender,
has become inadequate to cover the Loan to the satisfaction of the
Lender, the Borrower shall provide and furnish to the Lender to their
satisfaction such security/additional security as may be required and
acceptable to the Lender.
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ARTICLE IV
BORROWER'S WARRANTIES
4. Except to the extent already disclosed in writing by the Borrower to
the Lender, the Borrower shall be deemed to have assured, confirmed and
undertaken as follows :
a) LOAN APPLICATION
The Loan 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 shall be deemed to form part of the warranties
herein contained.
b) CONSENTS AND LICENSES
The Borrower undertakes to satisfy the Lender that all consents,
licenses, approvals, etc. as are necessary in connection with the
execution, validity and enforceability of this Agreement and the
implementation of the Project have been duly obtained and
undertakes to keep them effective in full force and effect during
the subsistence of this Agreement.
c) DUE PAYMENT OF PUBLIC AND OTHER DEMANDS
The Borrower is not in arrears of any public demand such as
income-tax, corporation tax and all other taxes and revenues or
any other statutory dues payable to the Central or State
Governments or any local or other authority.
d) CONFLICT WITH MEMORANDUM AND ARTICLES OF ASSOCIATION
Nothing in this Agreement conflicts with the Memorandum and
Articles of Association of the Borrower.
e) IMPORT LICENCE
The Borrower has obtained import licence(s) 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, and final quotation therefor. The
Borrower undertakes to obtain information regarding changes in
import policy, eligibility and scope of import and shall advise
the Lender in this regard from time to time.
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ARTICLE V
CONDITIONS PRECEDENT TO DISBURSEMENT OF THE LOAN
5. The obligations of the Lender to make the disbursement under this
Agreement shall be subject to the Borrower performing all its
obligations and undertakings under this Agreement besides compliance by
the Borrower with the Disbursement Procedure stipulated by the Lender,
such as submission of necessary information, documents etc. to the
satisfaction of the Lender. Before seeking disbursement, the Borrower
shall also comply with the following conditions :-
a) CONSENT OF SECURED CREDITORS
Furnish to the Lender the consents from its secured creditors that
they have no objection to the Borrower creating in favour of the
Lender an exclusive charge on the assets referred to in Article
III hereof.
b) SECURITY IN FAVOUR OF THE LENDER
The Borrower shall have created security in favour of the Lender
as stipulated in Article III hereof.
c) NON EXISTENCE OF EVENT OF DEFAULT
The Borrower shall satisfy the Lender that no event of default as
defined in Article IX hereof and no event which, with the lapse of
time or notice and lapse of time as specified in the said Article,
would become an event of default, has happened and been
continuing.
d) OTHER SPECIAL CONDITIONS
i) The loan shall be utilised only for the purpose of financing
the cost of equipment acquired/to be acquired by the Borrower.
The disbursements under the Loan would be made to the company
as a reimbursement to the expenditure incurred on procurement
of the assets. For the disbursement made towards payment of
advance for procurement of these assets, the company shall pay
additional interest at the rate of 1.05% or such other rate as
may be applicable.
ii) The Borrower shall make arrangements with its bankers to meet
its requirements of working capital to the satisfaction of the
Lender.
iii) The Borrower shall obtain a certificate to the satisfaction of
the Lender from a Chartered Engineer certifying the value of
the second-hand machinery proposed to be installed for
manufacture of Circular Fluorescent Lamps. The Chartered
Engineer shall also certify that the machinery is fully
operational and its minimum effective ife is five years.
iv) The Lender shall retain the right to appoint one nominee on
the Board of Directors of the Borrower during the currency of
its assistances.
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ARTICLE VI
CONDITIONS APPLICABLE DURING THE CURRENCY OF THIS AGREEMENT
6.1 PARTICULAR AFFIRMATIVE COVENANTS
The Borrower shall
a) UTILISATION OF LOAN
Use the proceeds of the Loan and the goods/services
purchased/obtained with such proceeds for the purpose of the
Project. If, for any reason the Borrower finds itself unable to
comply with this condition, it shall immediately inform the Lender
in writing of the same and the reasons therefor and shall, unless
otherwise agreed to by the Lender, repay forthwith the outstanding
balance of the Loan together with interest and all other monies
payable in respect thereof.
b) CONDUCT OF BUSINESS
Carry out its operations with due diligence and efficiency and in
accordance with sound technical, financial and managerial
standards and business practices.
c) INSURANCE
i) Insure and keep insured against such risks as may be
determined by the Lender, all the goods to be acquired 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 or installation and for such insurance any
indemnity shall be payable in any currency freely usable by
the Borrower to replace or repair such goods.
ii) Keep insured upto the replacement value thereof as approved by
the Lender (including surveyor's and architect's fees) the
properties charged/to be charged to the Lender and such of its
other properties 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
the Lender.
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iii) Duly pay all premia and other sums payable for that purpose.
The insurance in respect of the properties charged/to be
charged to the Lender shall be taken in the joint names of the
Borrower and the Lender and any other person or institution
having an insurable interest in the properties of the Borrower
and acceptable to the Lender. The Borrower shall keep
deposited with the Lender the insurance policies and renewals
thereof.
iv) Agree that, in the event of failure on the part of the
Borrower to insure the properties or to pay the insurance
premia or other sums referred to above, the Lender may get the
properties insured or pay the insurance premia and other sums
referred to above, as the case may be.
d) CORPORATE EXISTENCE
Maintain its corporate existence and right to carry on its
operations and promptly inform the Lender of any resolution
passed/intended to be passed by the Borrower for its voluntary
winding up or if it has notice of any application for winding up
having been made or of 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 filed/initiated or intended to be filed/initiated against
the Borrower or if a Receiver is appointed or any of its
properties or business or undertaking.
e) CAUSES OF DELAY IN COMPLETING THE PROJECT
Promptly inform the Lender of the circumstances/conditions which
are likely to delay the completion of the Project or disable the
Borrower from implementing it or force the Borrower to abandon the
same.
f) CHANGES IN BOARD AND MANAGEMENT SET UP
Keep the Lender promptly informed of any change that may occur or
is likely to occur in the composition of its Board of Directors
and its management set-up.
g) NEW PROJECT
Keep the Lender informed of the progress of the Project and of any
new Project, modernisation, diversification or substantial
expansion of any Project that it might undertake during the period
of the Loan.
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6.2 NEGATIVE COVENANTS
Unless the Lender otherwise agrees, the Borrower shall not :
a) DIVIDENDS
Declare or pay any dividend to any of its Shareholders during any
financial year, unless it has paid all the dues of the Lender upto
the date on which the dividend is proposed to be declared or paid
or has made satisfactory provision therefor.
b) CHARGES
Create or permit any charge or lien on or transfer or alienate, in
any manner, the assets referred to in Article III hereof.
c) LOANS AND DEBENTURES
Issue any debentures, raise any loans, 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.
d) MERGER, CONSOLIDATION, ETC.
Undertake or permit any merger, consolidation reorganisation,
scheme of arrangement or compromise with its creditors or
shareholders or effect any scheme of amalgamation or
reconstruction.
6.3 IMPOSTS, CHARGES AND OTHER EXPENSES
i) The Borrower shall, during the currency of the Loan, bear all
imposts, charges and other duties, taxes and penalties as may be
levied from time to time by the Government or any other authority,
pertaining to or in respect of this Loan transaction.
ii) The Borrower shall pay all costs, charges and expenses in any way
incurred by the Lender pertaining to this Loan transaction.
iii) In the event of the Borrower failing to pay the monies referred to
in Sub-Clauses (i) and (ii) above, the Lender will be at liberty
(but shall not be obliged) to pay the same.
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ARTICLE VII
REPORTS
7. The Borrower shall furnish to the Lender, such reports as may be
required by the Lender.
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ARTICLE VIII
INSPECTION
8. The Borrower shall,
a) PROJECT EXPENDITURE RECORDS
Maintain records showing expenditure incurred on the Project,
utilisation of the disbursements out of the Loan, progress of the
Project and the operations and financial conditions of the
Borrower and such records shall be open to examination by the
Lender and their authorised representatives.
b) TECHNICAL, FINANCIAL AND LEGAL INSPECTIONS
i) Permit the Lender and its authorised representatives to carry
out technical, financial and legal inspections of the goods
purchased out of the Loan and to visit any facilities and
construction sites included in the Project and to examine any
plants, installations, sites, works, buildings, properties,
equipment, records and documents relevant to the performance
of the obligations of the Borrower under this Agreement. Any
such representative of the Lender shall have free access at
all reasonable times to the Borrower's properties and shall
receive full cooperation and assistance from the employees of
the Borrower.
ii) Permit any whole-time officer of the Lender or a qualified
practising Auditor to examine the Borrower's books and papers
and will give all facilities to enable any technically
qualified person chosen by the Lender to report on the
business of the Borrower at any time.
Provided that, if the technically qualified person is not a
whole-time employee of the Lender such technically qualified
person shall be reasonably acceptable to the Borrower having
regard to his other activities, if any.
iii) The cost of inspection, including travelling and all other
expenses, shall be payable by the Borrower to the Lender in
this behalf.
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ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
9.1 If one or more of the events specified in this Section, happen(s), the
Lender may, by a notice in writing to the Borrower, declare the
principal of and all accrued interest on the Loan to be due and payable
forthwith and the security created in terms of Article III of this
Agreement shall become enforceable.
EVENTS OF DEFAULT
a) DEFAULT IN PAYMENT OF PRINCIPAL SUMS OF THE LOAN
Default has occurred in the payment of principal sums of the Loan
on the due dates.
b) DEFAULT IN PAYMENT OF INTEREST
Default has been committed by the Borrower in payment of any
interest on the Loan and such default has continued for a period
of thirty days.
c) DEFAULT IN PERFORMANCE OF COVENANTS AND CONDITIONS
Default has occurred in the performance of any other covenant,
condition or agreement on the part of the Borrower under this
agreement and any other agreement and such default has continued
for a period of thirty days after notice in writing thereof has
been given to the Borrower by the Lender.
d) SUPPLY OF MISLEADING INFORMATION
Any information given by the Borrower in its Loan application, in
the reports and other information furnished by the Borrower in
accordance with the Reporting System and the warranties
given/deemed to have been given by the Borrower to the Lender is
misleading or incorrect in any material respect.
e) INABILITY TO PAY DEBTS
If there is reasonable apprehension that the Borrower is unable to
pay its debts or proceedings for taking it into liquidation,
either voluntarily or compulsorily, may be or have been commenced.
f) INADEQUATE INSURANCE
If the properties and assets offered to the Lender as security for
the Loan have not been kept insured by the Borrower or depreciate
in value to such an extent that, in the opinion of the Lender
further security to the satisfaction of the Lender should be given
and on advising the Borrower to that effect such security has not
been given to the Lender.
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g) SALE, DISPOSAL AND REMOVAL OF ASSETS
If, without the prior approval of the Lender, any properties
charged to the Lender are sold, disposed of, charged, encumbered
or alienated or removed, pulled down or demolished.
h) 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.
i) PROCEEDINGS AGAINST BORROWER
The Borrower has voluntarily or involuntarily become the subject
of proceedings under any bankruptcy or insolvency law or the
Borrower is voluntarily or involuntarily dissolved.
j) INABILITY TO PAY DEBTS ON MATURITY
The Borrower is unable or has admitted in writing its inability to
pay its debts as they mature.
k) LIQUIDATION OR DISSOLUTION OF THE BORROWER
The Borrower has taken or suffered to be taken any action for its
reorganisation, liquidation or dissolution.
l) 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 Borrower.
m) ATTACHMENT OR DISTRAINT ON PROPERTIES
If an attachment or distraint has been levied on the Borrower's
properties or any part thereof or certificate proceedings have
been taken or commenced for recovery of any dues from the
Borrower.
n) EXTRA-ORDINARY CIRCUMSTANCES
If extraordinary circumstances have occurred which make it
improbable for the Project to be carried out and for the Borrower
to fulfil its obligations under this Agreement.
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9.2 CONSEQUENCES OF DEFAULT
On the happening of any of the Events of Default, in addition to the
rights specified in Section 9.1 hereof, the Lender shall have the right
to appoint and remove from time to time, Director(s) on the Board of
Directors of the Borrower [such directors are hereinafter referred to
as 'Nominee Director(s)'].
i) The Nominee Director(s) shall not be required to hold
qualification shares and not be liable to retire by rotation.
ii) The Nominee Director(s) shall be entitled to all the rights and
privileges as 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 Lender
and the same shall accordingly be paid by the Borrower directly to
the Lender.
Provided that if any such Nominee Director is an officer of the
Lender, the sitting fees in relation to such Nominee Director
shall also accrue to the Lender and the same shall accordingly be
paid by the Borrower directly to the Lender.
Any expenditure incurred by the Lender or the Nominee Director in
connection with his appointment or directorship shall be borne by
the Borrower.
iii) The Nominee Director shall be appointed a Member of the Management
Committee or other Committees of the Board, if so desired by the
Lender.
iv) The Nominee Director shall 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.
v) If, at any time, the Nominee Director is not able to attend a
meeting of the Board of Directors or any of its Committees of
which he is a member, the Lender may depute an observer to attend
the meeting. The expenses incurred by the Lender in this
connection shall be borne by the Borrower.
9.3 NOTICE TO THE LENDER ON THE HAPPENING OF AN EVENT OF DEFAULT
If any Event of Default or any event which, after the notice, or lapse
of time, or both, would constitute an Event of Default has happened,
the Borrower shall, forthwith give notice thereof to the Lender in
writing specifying the nature of such Event of Default, or of such
event.
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9.4 EXPENSES OF PRESERVATION OF ASSETS OF BORROWER AND OF COLLECTION
All expenses incurred by the Lender after an Event of Default has
occurred in connection with -
i) preservation of the Borrower's assets (whether then or thereafter
existing); and
ii) collection of amounts due under this Agreement shall be payable by
the Borrower.
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ARTICLE X
CANCELLATION, SUSPENSION AND TERMINATION
10.1 CANCELLATION BY NOTICE TO THE LENDER
The Borrower may, by notice in writing to the Lender, cancel all or any
part of the Loan which the Borrower has not withdrawn prior to the
giving of such notice provided that the Borrower satisfies the Lender
that the Project has been or will be completed without requiring the
balance of the Loan.
10.2 SUSPENSION
Further access by the Borrower to the use of the Loan may be suspended
or terminated by the Lender on the happening of any Event of Default.
The right of the Borrower to make withdrawals from the Loan shall
continue to be suspended until the event which gave rise to such
suspension shall have ceased to exist to the satisfaction of the Lender
or until the Lender shall have notified the Borrower that the right to
make withdrawals has been restored, whichever is earlier.
10.3 TERMINATION
If any of the Events of Default shall occur and shall continue or if
the Borrower shall not have withdrawn the Loan by the date referred to
in Section 2.8 hereof or such later date as may be agreed to by the
Lender or if the right of the Borrower to make withdrawals from the
Loan shall have been suspended with respect to any amount of the Loan
for a continuous period of thirty days, then, the Lender may, by notice
in writing to the Borrower, terminate the right of the Borrower to make
withdrawals. Upon such notice the undrawn amount of the Loan shall
stand cancelled.
10.4 BENEFIT OR PROTECTION
Notwithstanding any cancellation, suspension or termination, all the
provisions of this Agreement for the benefit or protection of the
Lender shall continue to be in full force and effect as herein
specifically provided.
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ARTICLE XI
WAIVER
11. WAIVER NOT TO IMPAIR THE RIGHTS OF THE LENDER
No delay in exercising or omission to exercise any right, power or
remedy accruing to the Lender upon any default under this Agreement or
security document shall impair any such right, power or remedy or shall
be construed to be waiver thereof or any acquiescence in such default,
nor shall the action or inaction of the Lender in respect of any
default or any acquiescence affect or impair any right, power or remedy
of the Lender in respect of any other default.
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ARTICLE XII
MISCELLANEOUS
12.1 SERVICE OF NOTICE
Any notice or request required or permitted to be given or made under
this Agreement to the Lender or to the Borrower shall be in writing.
Such notice or request shall be deemed to have been duly given or made
when it shall be delivered by hand, mail or telegram to the party to
which it is required or permitted to be given or made at such party's
recognised address or at such other address as may be designated by
such party.
12.2 EVIDENCE OF DEBT
a) The Lender shall maintain, in accordance with their usual
practice, accounts evidencing the amounts from time to time lent
by and owing to them under this Agreement.
b) In any legal action or proceedings arising out of or in connection
with this Agreement, the entries made in the accounts maintained
purusuant to sub-clause (a) above shall be prima-facie evidence of
the existence and amount of obligations of the Borrower as therein
recorded.
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SCHEDULE I
THE PROJECT
The Borrower proposes to install equipment at its various divisions.
The details of these equipment are given below:
<TABLE>
<CAPTION>
Name of the Cost of
No. Details of equipment supplier Asset Location
--- -------------------- ----------- ------- --------
<S> <C> <C> <C> <C>
1 Two nos. fully automatic Impianti Macchine CIF US $1,009,000 Amalner,
soap stamping and packaging Saponi Affini equivalent to about Maharashtra
machines s.r.l., Italy Rs.350 lacs plus and Tumkur,
customs duty, Karnataka
clearing charges,
octroi and other
charges aggregating
Rs.504 lacs
2 One no. circular fluorescent Asia Lamp CIF US $1,380,000 Aurangabad
lamp manufacturing machine Industry Company, equivalent to about Maharashtra
Thailand Rs.500 lacs plus
customs duty,
clearing charges,
octroi and other
charges, aggre-
gating Rs.723
lacs
3 One no. electrostatic powder Falma Production CIF - Sw Fr 400,000 Aurangabad
coating machine Limited, equivalent to about Maharashtra
Switzerland Rs.115 lacs plus
customs duty,
clearing charges,
octroi and other
charges, aggre-
gating Rs.149
lacs
4 Nine nos. Very Small Wipro BT Limited Rs.72 lacs Delhi,
Aperture Terminals Bangalore,
Calcutta,
Secunderabad,
Madras,
Lucknow,
Ahmedabad,
and Mysore
(2 Nos)
5 Normal capital expenditure -- Rs. 552 lacs Various
divisions of
the Borrower
-------------------
Total Rs. 2000 lacs
-------------------
</TABLE>
The Borrower has requested the Lender for a Rupee Loan of Rs.2000 lacs in the
form of asset credit assistance to finance the cost of acquisition of the above
equipment, which the Lender has agreed to provide.
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SCHEDULE II
AMORTIZATION SCHEDULE
(Rs. in lacs)
Date of payment Payment of Principal amount
--------------- principal outstanding after
---------- each payment
-----------------
2000.00
September 15, 1997 125.00 1875.00
December 15, 1997 125.00 1750.00
March 15, 1998 125.00 1625.00
June 15, 1998 125.00 1500.00
September 15, 1998 125.00 1375.00
December 15, 1998 125.00 1250.00
March 15, 1999 125.00 1125.00
June 15, 1999 125.00 1000.00
September 15, 1999 125.00 875.00
December 15, 1999 125.00 750.00
March 15, 2000 125.00 625.00
June 15, 2000 125.00 500.00
September 15, 2000 125.00 375.00
December 15, 2000 125.00 250.00
March 15, 2001 125.00 125.00
June 15, 2001 12.50 112.50
September 15, 2001 12.50 100.00
December 15, 2001 12.50 87.50
March 15, 2002 12.50 75.00
June 15, 2002 12.50 62.50
September 15, 2002 12.50 50.00
December 15, 2002 12.50 37.50
March 15, 2003 12.50 25.00
June 15, 2003 12.50 12.50
September 15, 2003 12.50 0.00
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