Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Form S-4 Registration Statement 253 1.33M
2: EX-2.1 Amended & Restated Agreement & Plan of Reorg 50 253K
3: EX-2.2 Form of Agree. of Merger of Jts Corp.& Atari Corp. 8 31K
4: EX-3.1 Restated Certificate of Incorp - Jt Storage 21 72K
5: EX-3.2 Form of Restated Cert. of Incorp - Jts Corp. 4 24K
6: EX-3.3 By-Laws of Jt Storage, Inc. 14 48K
7: EX-3.4 Form of By-Laws of Jts Corporation (Post Merger) 28 135K
8: EX-4.1 Form of Common Stock Certificate Jts Corporation 2 20K
9: EX-4.2 Jt Storage Registration Rights Agreement 18 79K
10: EX-4.3 Atari & Security Pac.Natl Bank Indenture 4/29/87 94 263K
11: EX-4.4 Federated Grp/Security Pacific Natl Bank Indenture 102 366K
12: EX-4.5 Federated Group/Security Pacific 1st Sup Indenture 8 31K
13: EX-4.6 Warrant to Purchase Common Stock/Venture Lending 15 63K
14: EX-4.7 Warrant to Purchase Stock/Silicon Valley Bank 9 45K
15: EX-4.8 Warrant to Purchse Common Stock/Lunenburg S.A. 7 33K
16: EX-5.1 Opinion of Cooley Godward Et. Al. 1 17K
17: EX-8.1 Form of Cooley Godward Tax Opinion 3 23K
18: EX-8.2 Form of Wilson Sonsini Et. Al Tax Opinion 3 22K
19: EX-9.1 Atari Corp. Amended & Restated Voting Agreement 5 32K
20: EX-9.2 Jt Storage Amended & Restated Voting Agreement 5 32K
21: EX-10.1 Jt Storage 1995 Sop Amended & Restated 3/19/96 33 106K
30: EX-10.10 Restricted Stk Pur Agree/Kenneth D. Wing 1/2/96 22 77K
31: EX-10.11 Restricted Stk Pur Agree/W. Virginia Walker 1/5/96 22 78K
32: EX-10.12 Restricted Stk Pur Agree/David B. Pearce 1/2/96 21 70K
33: EX-10.13 Convertible Promissory Note 5 24K
34: EX-10.14 Promissory Note/Certain Principal Stkhldrs 1/19/96 6 25K
35: EX-10.15 Subord Secured Convertible Prom Note/Atari 2/13/96 35 136K
36: EX-10.16 Stock Purchase Agreement/Lunenburg 4/4/96 29 138K
37: EX-10.17 Draft/Technical Know How License Agreement 12 45K
38: EX-10.18 Lease Jts & Cilker Revocable Trust 6/15/95 41 161K
39: EX-10.19 Loan Agree Modular Elec (I) & Indusrial Credit 37 94K
22: EX-10.2 Jt Storage 1996 Non-Employee Directors Sop 3/19/96 14 52K
40: EX-10.20 Loan Agree Modular & Industrial Credit 10/11/94 44 113K
41: EX-10.21 Loan Agree Modular Electronic/Credit Invest India 19 48K
42: EX-10.22 Agreed Order Comprising Controversies 2/4/94 27 90K
43: EX-10.23 Master Agreement/Teac & Jt Storage, Inc. 32 95K
44: EX-10.24 License Agree Teac & Jt Storage 2/24/94 28 110K
45: EX-10.25 Development Agree Compaq & Jt Storage 6/16/94 32 120K
46: EX-10.26 Purchase Agree/Jts & Compaq 6/16/94 11 48K
47: EX-10.27 Technology Transfer Agree Western Digital 2/3/95 42 89K
48: EX-10.28 Agree Jt Storage & Pont Peripherals 1/31/95 24 100K
23: EX-10.3 Putnam Streamlined Standard 401(K) & Profit Shar 109 365K
24: EX-10.4 Indemnity Agreement 7 33K
25: EX-10.5 Employment Agreement 4 27K
26: EX-10.6 Jt Storage Consulting Agreement/Roger W. Johnson 5 29K
27: EX-10.7 Restricted Stk Pur Agree/David T. Mitchell 1/2/96 22 76K
28: EX-10.8 Restricted Stk Pur Agree/David T. Mitchell 3/6/96 21 79K
29: EX-10.9 Restricted Stk Pur Agree/Sirjang Lal Tandon 3/6/96 21 79K
49: EX-21.1 List of Subsidiaries 1 13K
50: EX-23.1 Consent of Arthur Andersen LLP 1 14K
51: EX-23.2 Consent of Deloitte & Touche LLP 1 14K
52: EX-27.1 Financial Data Schedule 1 16K
53: EX-99.1 Form of Jts Proxy 2 16K
54: EX-99.2 Form of Atari Proxy 2 16K
EX-10.20 — Loan Agree Modular & Industrial Credit 10/11/94
Exhibit Table of Contents
EXHIBIT 10.20
[CURRENCY]
The Industrial Credit & Investment
Corporation of India Limited
163, Backbay Reclamation
Bombay 400 020
Dear Sirs:
In consideration of your having agreed to grant to Moduler Electronics
(I) Pvt. Ltd. ("the Company"), the financial assistance in terms of the Foreign
Currency Loan Agreement dated the 11th day of October 1994, we the Directors
of the Company, do hereby, in pursuance of the said Loan Agreement, jointly and
severally, undertake to you that we shall not demand or withdraw nor shall the
Company repay any unsecured loans/deposits or any part thereof brought in/to be
brought in by us for financing the capital cost and the requirement of working
capital for the Company's project as per the Financing Plan approved by you so
long as any moneys remain due by the Company to you under the said Loan
Agreement or till the project is duly completed whichever is later without your
prior approval.
: 2 :
We agree that if a dispute arises whether the Project is duly completed
or not, your decision shall be final and binding on us.
We note that such unsecured loans/deposits shall carry interest as may
be agreed to by you. We further agree that the Company shall not pay any
interest on such unsecured loans/deposits, if at the time of such payment,
there is a default in the payment of installments of principal and/or interest
due and owing by the Company to you.
Yours faithfully,
[SIG]
[*]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
: 3 :
We note the above and agree and confirm that we shall not repay to the
above mentioned the unsecured loans/deposits or any part thereof when received
by us for financing the capital cost and the requirement of working capital for
our Project as per the Financing Plan approved by you so long as any moneys
remain due by us to you under the said Loan Agreement or till our Project is
duly completed, whichever is later, without your prior approval. We shall pay
such interest on the said unsecured loans/deposits as may be agreed to by you.
We agree not to pay any interest on the said unsecured loans/deposits if at the
time of such payment thee is a default in the payment of installments of
principal and/or interest due and owing by us to you.
For Moduler Electronics (I) Pvt. Ltd.
[SIG]
Director
Dated this 11th day of October 1994,
[CURRENCY]
LOAN AGREEMENT
FC-Foreign Currency
THIS AGREEMENT made this 11th day of October One Thousand Nine Hundred
and Ninety Four at Bombay between Moduler Electronics (I) Pvt. Ltd., a Company
within the meaning of the Companies Act, 1956 (1 of 1956) and having its
Registered Office at 406, Dalamal Towers, Nariman Point, Bombay 400 021
(hereinafter referred to as "the Borrower" which expression shall, unless it be
repugnant to the subject or context thereof, include its successors and
assigns);
AND
THE 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, Bombay 400 020
(hereinafter referred to as "the Lenders" which expression shall, unless it be
repugnant to the subject or context thereof, include its successors and
assigns);
: 2 :
ARTICLE - I
DEFINITIONS
1.1 The following terms shall have the following meanings:
(a) "Due Date" means, in respect of
i) an instalment of principal - the date on which the instalment falls due
as stipulated in Schedule V hereto.
ii) interest - the date on which interest falls due as stipulated in
Schedule V hereto.
iii) commitment charge - the date on which commitment charge falls due as
stipulated in Section 2.3 of Article II hereof.
: 3 :
(b) "Financing Plan" means the financing plan as described in Schedule III
hereto.
(c) "General Conditions" means the GENERAL CONDITIONS No. GC-FC-88 APPLICABLE
TO FOREIGN CURRENCY LOANS PROVIDED BY FINANCIAL INSTITUTIONS.
(d) "Loan" or "Loans" - means the amounts of various foreign currencies
specified in Section 2.1 of Article II hereof or their equivalents in other
foreign currencies used for their purchase, agreed to be provided by the
Lenders for the Project or (as the context requires) so much thereof as may
be outstanding from time to time.
(e) "Project" - means the project to be financed as described in Schedule II
hereto.
1.2 GENERAL CONDITIONS
The Loan(s) hereby agreed to be granted by the Lenders shall be subject
to the Borrower complying with the terms and conditions set out herein and also
in the General Conditions a copy of which is annexed hereto. The General
Conditions shall be deemed to form part of this Agreement and shall be read as
if they are specifically incorporated herein.
ARTICLE - II
AGREEMENT AND TERMS OF LOAN
2.1 AMOUNT AND TERMS OF LOAN
The Borrower agrees to borrow from the Lenders and the Lenders agree to
lend to the Borrower out of foreign currencies specified in Schedule IV hereto,
on the terms and conditions contained herein as also in the General Conditions,
the sums to the maximum extent in various foreign currencies set out in Schedule
I equivalent in the aggregate to about Rs.803 lacs.
2.2 INTEREST
i) The Borrower shall pay to the Lenders interest on the Loan(s) at the
rate(s) and in the manner provided in Schedule V hereto.
ii) Disbursements made pending creation of final security as stipulated in
Article III hereof shall carry further interest at the rate of 1% per
annum till creation of such security.
: 4 :
iii) Provided however, interest on rupee tied defaulted amounts, arrears of
liquidated damages and sums incurred by the Lenders by way of expenses in
terms of Sections 4.11, 4.5 and 4.7 respectively of the General Conditions
shall be payable quarterly on January 1, April 1, July 1 and October 1.
2.3 FRONT END FEE
The Borrower shall pay to the Lenders Front End Fee of 1.05% of the Loan
on or before signing this Agreement.
2.4 LAST DATE OF WITHDRAWALS
Unless the Lenders otherwise agree, the right to make drawals from the
Loan(s) shall cease on January 31, 1995.
2.5 REPAYMENT
The Borrower undertakes to repay the principal amount of the Loan(s) in
accordance with the Amortization Schedule set forth in Schedule VI hereto.
2.6 CONVERSION RIGHT IN CASE OF DEFAULT
If the Borrower commits a default in payment or repayment of any
instalment of principal amount of the Loans or interest thereon or any
combination thereof, then, the Lenders shall have the right to convert (which
right is hereinafter referred to as "the conversion right") at its option 20% of
the rupee equivalent of the defaulted amount determined in accordance with
Section 4.11 of Article IV of the General Conditions into fully paid up equity
shares of the Borrower, at par, in the manner specified in the notice in writing
to be given by the Lenders to the Borrower (which notice is hereinafter referred
to as the "notice of conversion") prior to the date on which the conversion is
to take effect, which date shall be specified in the said notice (hereinafter
referred to as the "date of conversion").
i) On receipt of notice of conversion, the Borrower shall allot and
issue the requisite number of fully paid-up equity shares to the Lenders as from
the date of conversion and the Lenders shall accept the same in satisfaction of
the said defaulted amount(s) in respect of the Loans to the extent so converted.
The amount so converted shall cease to carry interest as from the date of
conversion and the outstanding amount in respect of the loans shall stand
correspondingly reduced. The equity shares so allotted and issued to the
Lenders shall carry, from the date of conversion, the right to receive
proportionately the dividends and other distributions declared or to be declared
in respect of the equity capital of the Borrower. Save as aforesaid, the said
shares shall rank pari passu with the existing equity shares of the Borrower in
all respects. The Borrower shall, at all times, maintain sufficient unissued
equity shares for the above purpose.
: 5 :
ii) The conversion right reserved as aforesaid may be exercised by the
Lenders on one or more occasions during the currency of the Loan(s)
on the happening of the default as specified in this Section.
iii) The Borrower assures and undertakes that in the event of the Lenders
exercising the right of conversion as aforesaid, the Borrower shall get
the equity shares which will be issued to the Lenders as a result of
the conversion, listed with the Stock Exchange(s) as Bombay.
ARTICLE - III
SECURITY
3.1 SECURITY FOR THE LOAN
(A) The Loan(s) together with all interest, liquidated damages, commitment
charges premia on prepayment or on redemption, costs, expenses and other monies
whatsoever stipulated in this Agreement shall be secured by: -
a) a first charge by way of hypothecation in favour of the Lenders of all
the Borrower's moveables (save and except book debts), including
moveable machinery, machinery spares, tools and accessories present and
future, subject to prior charges created and/or to be created:-
i) in favour of the Borrower's Bankers on the Borrower's stocks of raw
materials, semi- finished and finished goods, consumable stores and
such other moveables as may be agreed to by the Lead Institution for
securing the borrowings for working capital requirements in the
ordinary course of business; and
The charges referred to above shall rank pari passu with the mortgages
and charges created and/or to be created in favour of ICICI for its existing
loans.
(B) The borrower shall make out a good and marketable title to its
properties to the satisfaction of the Lenders and comply with all such
formalities as may be necessary or require for the said purpose.
: 6 :
3.2 CREATION OF ADDITIONAL SECURITY
If at any time during the subsistence of this Agreement, the Lenders is
of the opinion that the security provided by the Borrower has become inadequate
to cover the balance of the Loans then outstanding, then, on the Lenders
advising the Borrower to that effect, the Borrower shall provide and furnish to
the Lenders, to the satisfaction of the Lenders, such additional security as
may be acceptable to the Lenders to cover such deficiency.
3.3 ACQUISITION OF ADDITIONAL IMMOVEABLE PROPERTIES
So long as any monies remain due and outstanding to the Lenders, the
Borrower undertakes to notify the Lenders in writing of all its acquisitions of
immoveable properties and as soon as practicable thereafter to make out a
marketable title to the satisfaction of the Lenders and charge the same in
favour of the Lenders by way of first charge the same in favour of the Lenders
by way of first charge in such form and manner as may be decided by the Lenders.
3.4 GUARANTEE
The Borrower shall procure irrevocable and unconditional personal
guarantee(s) from [*] in favour of the Lenders for the due repayment
of the Loans and the payment of all interest and other monies payable by the
Borrower in the form prescribed by the Lenders and to be delivered to the
Lenders before any part of the Loan is advanced. The Borrower shall not pay
any guarantee commission to the said Guarantor.
ARTICLE - IV
APPOINTMENT OF NOMINEE DIRECTOR(S)
The Borrower agrees that the Lenders shall be entitled to appoint and
withdraw from time to time One Director on the Board of Directors of the
Borrower during the currency of this Agreement.
ARCICLE - V
SPECIAL CONDITIONS
The loan(s) hereby granted shall also be subject to the Borrower
complying with the special conditions set out in Schedule VII hereto.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
: 7 :
ARTICLE - VI
EFFECTIVE DATE OF AGREEMENT
This Agreement shall become binding on the Borrower and the Lenders on
and from the date first above written. It shall be in force till all the monies
due and payable under this Agreement are fully paid of.
: 8 :
SCHEDULE I
PARTICULARS OF LOANS
[Download Table]
NAME OF THE LENDER LOAN
------------------ ----
RC Equal US$ (Rs. in lacs)
--- --------- -------------
The Industrial Credit and Investment US$ 16,50,375 520
Corporation of India Limited (ICICI) SGD 8,45,395 266
163 Backbay Reclamation BEF 6,627 2
Bombay 400 020 YEN 47,603 15
--------- ---
TOTAL 25,50,000 803
========= ===
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SCHEDULE II
PROJECT
The Loan(s) shall be utilised by the Borrower for import of Capital
Goods under Open General Licence.
The Rupee figure has been arrived at on the basis of rates of exchange
of the foreign currencies involved prevailing at the time of sanction of the
Loan(s) and is subject to revision based on the fluctuations in foreign currency
rates.
: 10 :
SCHEDULE III
FINANCING PLAN
A. The total estimated cost of the project is Rs.2274 lacs made up as
under:
[Download Table]
(Rc in lacs)
Rupee equivalent
Rupee of foreign currency
Cost cost
----- -------------------
Plant & Machinery -
a) Imported
i) CIF value 910
Technical know-how fees 630
Miscellaneous fixed assets 75
Preoperative expenses 15
Contingencies 50
Margin money for working capital 594
---- -----
734 1,540
-----
Total of Rupee & foreign currency cost 2,274
=====
B. The proposed sources of financing are as follows:
[Download Table]
(Rs. in lacs)
(1) SHARE CAPITAL
a) Promoters 200
(2) FOREIGN CURRENCY LOANS
a) ICICI 803
(3) DEFERRED PAYMENTS
Technical knowhow fees 630
(4) UNSECURED LOANS FROM PROMOTERS 641
-----
2,274
=====
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SCHEDULE IV
(Particulars of ICICI Loans)
The Loan referred to in Section 2.1 herein is comprised of the following:-
i) US $ 16,50,375
ii) SGD 12,85,000
iii) BEF 2,15,900
iv) YEN 46,87,500
which is agreed to be provided as follows:-
i) US $ 16,50,375
ii) SGD 12,85,000
iii) BEF 2,15,900
iv) YEN 46,87,500
equivalent in the aggregate to US$ 25,50,000 (hereinafter referred to as
the "US Dollars Loan - 1994") (which expression shall, unless expressly
provided otherwise, mean the aggregate to the amounts of various foreign
currencies used for their purchase expressed in US$ equivalent or so much as
may be outstanding from time to time) out of the US Dollars available with
ICICI.
: 12 :
SCHEDULE V
PART I
SUB PART Y
(US DOLLAR LOAN - 1994)
The following provisions shall apply to the US Dollars Loan - 1994 :
I. REPAYMENT
The US Dollar Loan - 1994 is repayable in accordance with the
amortization schedule set forth in Schedule VI. The amortization schedule has
been drawn up on the basis of the aggregate US $ equivalent of the foreign
currencies involved at the rates of exchange prevailing at the time of each
disbursement. In such an event the Borrower shall, unless otherwise determined
by ICICI, repay to ICICI, the principal amount of the US Dollar Loan - 1994 in
accordance with the amortization schedule as of revised.
All sums payable by the Borrower under this Agreement, shall be paid in
full without set off or counter claim and without any deduction or withholding
on account of any present or future taxes, levies, imposts, duties, charges or
withholdings of any future taxes, levies, imposts, duties, charges or
withholdings of any nature or otherwise imposed in India or by any taxing
authority in India.
II. INTEREST:
The Borrower shall pay to ICICI interest on the principal amount of the
US Dollar Loan - 1994 outstanding from time to time quarterly in each year on
January 1, April 1, July 1 and October 1 at the rate of US Dollar LIBOR +2.75%
per annum.
III. COMPUTATION OF INTEREST AND OTHER CHARGES:
Interest and all other charges will be calculated on the basis of a 360
day year and the actual number of days elapsed.
IV. PREPAYMENT
Unless expressly agreed to by ICICI and subject to payment of such
premium as may be stipulated by ICICI, the Borrower shall not be entitled to
prepay in whole or in part, the US Dollar Loan - 1994 before the due date(s).
: 13 :
SCHEDULE VI
AMORTISATION SCHEDULE FOR ICICI LOAN
IN US$
[Download Table]
Principle
amount
outstanding
Date after
payment Payment of each
due Principle payment
------- ---------- -----------
25,50,000
April 1, 1997.......................... 1,96,150 23,53,850
July 1, 1997.......................... 1,96,150 21,57,100
Oct. 1, 1997.......................... 1,96,150 19,61,550
Jan. 1, 1998.......................... 1,96,150 17,65,400
April 1, 1998.......................... 1,96,150 15,69,250
July 1, 1998.......................... 1,96,150 13,73,100
Oct. 1, 1998.......................... 1,96,150 11,76,950
Jan. 1, 1999.......................... 1,96,150 9,80,800
April 1, 1999.......................... 1,96,150 7,84,650
July 1, 1999.......................... 1,96,150 5,88,500
Oct. 1, 1999.......................... 1,96,150 3,02,350
Jan. 1, 2000.......................... 1,96,150 1,96,200
April 1, 2000.......................... 1,96,200 0
---------
Total.......................... 25,50,000
=========
[SEAL]
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SCHEDULE - VII
SPECIAL CONDITIONS
1) The company shall obtain from the promoters, unsecured loans of Rs. 641 lacs
for financing a part of the cost of the project. Such unsecured loans may
carry interest at the rate of 17.5%p.a. or the rate of dividend paid on
equity capital whichever is lower. The payment of interest on such
unsecured loans and repayment thereof shall be subordinate to payment of
interest and repayment of ICICI dues. Such unsecured loans shall not carry
interest for the year in which the company has not paid dividends on its
equity capital.
2) The company shall arrange with Tandon Associates Inc, USA for deferred
payment of technical knowhow fees of Rs. 630 lacs over a period of 3 years
begining in 1996 and ending in 1998. The payment of the deferred technical
knowhow fees and royalty will be subordinate to payment of interest on and
repayment of ICICI dues. Such deferred technical knowhow fees and royalty
shall not carry any interest.
3) The Company does not undertake any new project or expansion or make any
investment or take any assets on lease without prior approval of ICICI
during the currency of ICICI loans.
4) The company shall undertake in terms of section 6(g) of GC-FC-88.
5) The company undertakes that during the currency of the loans from ICICI, it
shall not, without obtaining prior consent in writing of ICICI declare
dividend in excess of the rate stipulated in the Loan Agreement nor declare
any dividend on its share capital, if it fails to meet its obligations to
pay interest and / or instalments and / or other moneys payable to ICICI so
long as it is in default.
6) ICICI shall be entitled to appoint one nominee on the Board of Directors of
the company during the currency of ICICI assistance.
: 15 :
IN WITNESS WHEREOF the Borrower has caused its Common Seal to be
affixed hereto and to duplicate hereof and ICICI has caused this Agreement to
be executed in duplicate on the day, month and year first above written as
hereinafter appearing:
THE COMMON SEAL of Moduler
Electronics (I) Pvt. Ltd. has
pursuant to the Resolution of its
Board of Directors passed in that
behalf on the 10th day of October
1994 hereunto been affixed in the
presence of Shri /s/ [SIG] /s/ [SIG]
Director who has signed these -------------------
presents in token thereof and
Shri
Secretary/authorised person who
has countersigned the same in
token hereof. /s/ [SIG]
------------------
SIGNED AND DELIVERED by the
withinnamed Lenders by the hand of
Shri /s/ [SIG] an authorised /s/ [SIG]
official of ICICI. ------------------
27/53
GENERAL CONDITIONS
NO. GC-FC-88
APPLICABLE TO FOREIGN CURRENCY LOANS PROVIDED BY
FINANCIAL INSTITUTIONS
TABLE OF CONTENTS
-----------------
[Download Table]
ARTICLE NUMBER TITLE PAGE NO.
-------------- ----- --------
I Applicability 01
II Definitions 01-02
III Approvals 02
IV Disbursement, Interest, Commitment 02-06
and other charges and Repayment
V Borrower's warranties 06-07
VI Predisbursement conditions 07-09
VII Conditions applicable during currency
of the Loan Agreement
1. Project 09-10
2. Utilisation of the Loans 10
3. General Covenants 10-14
4. Nominee Director 14
5. Management 14-16
VIII Reports 16
IX Inspection 16
X Events of default and remedies 17-20
XI Cancellation, suspension and termination 20-22
XII Waiver 22
XIII Applicability of other Statutes 22
XIV Miscellaneous 22
1
ARTICLE I
APPLICABILITY
The General Conditions set out herein shall, if the Loan Agreement so
provides, be applicable to the foreign currency loans provided singly or
jointly by the Industrial Development Bank of India (IDBI), The Industrial
Finance Corporation of India (IFCI) and the Industrial Credit and Investment
Corporation of India Limited (ICICI).
If there is any inconsistency between these General Conditions and the
Loan Agreement, the Loan Agreement will prevail.
All the provisions of these General Conditions and the Loan Agreement
shall have full force and effect till all monies due from the Borrower to the
Lenders under the Loan Agreement are paid/repaid in full.
ARTICLE II
DEFINITIONS
The following terms have the following meanings in these General
conditions and in the Loan Agreement:
1. "Borrower" means the party to the Loan Agreement to which the Loans are
made.
2. "Foreign Lending Agency" means the Agency providing foreign currency funds
to the Lenders pursuant to terms of their Agreements.
3. "Lead Institution" means any one of the Lenders as may be designated by them
from time to time, as their attorney in a particular loan transaction. In the
event of any Lender granting loan(s) to the Borrower singly (and not jointly
with other Lenders), the expression "Lead Institution" wherever it appears in
these General Conditions or in the Loan Agreement shall mean only the "Lender".
4. "Lenders" means IDBI, IFCI and ICICI or anyone or more of them where the
subject or context so admits.
5. "Loan Agreement" means the particular loan agreement and includes these
General Conditions and applied thereto, and all schedules and amendments
supplemental to the Loan Agreement.
6. "Loan" or "Loans" means amounts of various foreign currencies or their
equivalents in other foreign currencies used for their purchase, agreed to be
provided by the Lenders under the Loan Agreement or (as the context requires)
so much thereof as may be outstanding from time to time.
2
7. "Project" means the project for which the Loans are agreed to be granted,
as described in the Loan Agreement.
8. All other terms used in these General Conditions shall have the meanings
assigned to them under the Loan Agreement.
ARTICLE III
APPROVALS
Unless otherwise agreed to by the Lead Institution, the Borrower shall
approach the Lead Institution for obtaining all consents and approvals required
under the Loan Agreement. All acts and deeds done, and all consents and
approvals given, by the Lead Institution shall be deemed to have been done and
given by every Lender individually.
ARTICLE IV
DISBURSEMENT, INTEREST, COMMITMENT AND OTHER CHARGES AND REPAYMENT
SECTION 4.1 - TERMS OF DISBURSEMENT
(i) The Loans will be disbursed by the Lenders in such manner as may
be decided by the Lenders subject to the Borrower complying with the provisions
of the Loan Agreement and the disbursement procedure(s) stipulated by the
Lenders (including production/execution of evidences/documents required for
disbursement) and the expenditure incurred on the Project being in consonance
with the details mentioned in the Loan Agreement.
(ii) In the event of the Lenders agreeing to disburse any amount of the
Loans pending creation of final security as stipulated in the Loan Agreement,
the same may be disbursed on such terms as may be decided by the Lenders.
All disbursements shall be by authorisation(s) and the
collection/remittance charges will be borne by the Borrower. The interest on
the Loans will accrue as from the value date as specified in the authorisation.
SECTION 4.2 - INTEREST
(i) All interest on the Loans and on all other monies accruing due under
the Loan Agreement shall, in case the same be not paid on the respective due
dates, carry further interest at the applicable rate(s) under the Loan
Agreement, computed from the respective due dates and shall become payable upon
the footing of compound interest with quarterly/half yearly/yearly rests as
provided in the Loan Agreement.
3
(ii) All interest and other monies which shall accrue under the provisions
of the Loan Agreement shall also be payable in the manner and on the dates as
mentioned in the Loan Agreement for payment of interest on the principal
amounts of the Loans.
SECTION 4.3 - COMMITMENT CHARGE
(i) Commitment charge shall be payable in the manner and on the dates
specified in the Loan Agreement.
(ii) Arrears of commitment charge shall carry interest at the lending
rate(s) of the Lenders for normal rupee term loans prevailing on the date of
default.
(iii) Commitment charge shall be payable even though the Loans are
ultimately cancelled or not availed of for any reason whatsoever.
(iv) In the event of such cancellation, the commitment charge in respect
of the Loans or any part thereof which has been cancelled, shall cease to
accrue from the day on which the Borrower's request for cancellation is
received by the Lenders.
SECTION 4.4 - REPAYMENT
(i) The Lenders may, in suitable circumstances, revise, vary or postpone
the repayment of the principal amounts of the Loans or the balance outstanding
for the time being or any installments) of the said principal amounts of the
Loans or any part thereof upon such terms and conditions as may be decided by
the Lenders.
(ii) In the event of any default in the payment of installment(s) of
principal, any interest, commitment charge or liquidated damages, postponement,
if any, allowed by the Lenders shall be at the rate of interest as may be
stipulated by The Lenders at the time of postponement.
(iii) If, for any reason, the amount finally disbursed by the Lenders out
of the Loans is less than the amount of the Loans, the installment(s) of
repayment of the Loans shall stand reduced proportionately but shall be payable
on the due dates as specified in the Amortization Schedule(s) in the Loan
Agreement.
SECTION 4.5 - LIQUIDATED DAMAGES ON DEFAULTED AMOUNTS
In case of default in payment of installment(s) of principal,
interest, commitment charge 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% per annum for the period of default.
Liquidated damages shall be payable in the manner and
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on the dates as specified in the Loan Agreement for payment of interest.
Arrears of liquidated damages shall carry interest at the lending rate(s) of
the Lenders for normal rupee term loans prevailing on the date of default.
4.6 - INCREASED COSTS
In the event of the Lenders being called upon to pay any additional
amount by the Foreign Lending Agency, in terms of their respective agreements,
or on account of factors beyond the control of the Lenders, the Borrower shall
reimburse all such amounts to the Lenders.
SECTION 4.7 - REIMBURSEMENT OF EXPENSES
(i) The Borrower shall reimburse all sums paid by the Lead Institution/the
Lenders under Article IV - Sections 4.6 and 4.10(f) Article VII - Sections
7.3(B)(v), 7.3(B)(vii), 7.5(vii), Article IX-Section 9(b)(iii) and Article X
- Section 10.4 within 30 days from the date of notice of demand from the Lead
Institution/Lenders. 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 lending rate(s) of the Lenders for normal rupee term loans
prevailing on the date of payment.
(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% per annum from the expiry of 30 days from
the date of notice of demand till reimbursement in accordance with the
provisions of Section 4.5.
SECTION 4.8 - APPROPRIATION OF PAYMENTS
a) Unless otherwise agreed to by the Lenders, any payments due and
payable under the Loan 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) Commitment charge;
(v) Interest on arrears of commitment charge;
(vi) Interest payable in terms of the Loan Agreement;
(vii) Further interest and liquidated damages on defaulted amounts
payable in terms of Section 4.2(i) and 4.5;
(viii) Repayment of installments of principal due and payable under the Loan
Agreement.
5
b) Notwithstanding anything contained in Clause(a) hereinabove, the
Lenders may, at their 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 Lenders in the order specified in the relative Loan
Agreement(s).
4.9 - ALTERATION IN SOURCE(S) OF THE LOAN/CURRENCY/INTEREST SWAPS
The Lenders may, at any time, in their absolute discretion, alter the
sources from which the Loans or any part thereof is agreed to be
provided/provided under the Loan Agreement. In such an event, the liability of
the Borrower in respect of the Loans or such part thereof in respect of which
the source(s) has been altered as regards rate(s) of interest, repayment(s) of
principal and currencies and date(s) and mode of such payment/repayment shall
be as applicable to the loan(s) out of such altered source(s) as intimated by
the Lenders, which shall be final and binding on the Borrower.
The Lenders may, at any time, in their absolute discretion, effect
currency and/or interest rate swap for the Loans or any part thereof agreed to
be provided/provided herein. In such an event, the liability of the Borrower
in respect of which the Loans or such part thereof in respect of the currency
or currencies of repayment/payment of principal, interest and all other monies
payable hereunder/rate(s) of interest on principal of the Loans/or such part
thereof shall be as intimated by the Lenders, which shall be final and binding
on the Borrower.
SECTION 4.10 - PLACE AND MODE OF PAYMENT
Notwithstanding anything contained hereinbefore, the Borrower shall
make payments to each of the Lenders, whether of principal amount of the Loan,
interest, commitment charge, premium on prepayment or on redemption, if any, in
equivalent rupees in lieu of foreign currencies. For the purpose of this
section, the following conditions shall apply: -
a) The rupee sum shall be determined by the Lenders with reference to the
actual cost to the Lenders (including all commission or other bank charges and
out-of-pocket expenses) in remitting the foreign currencies on the due dates.
b) The rupee sum shall be paid by the Borrower to the Lenders 15 days in
advance of the due dates to enable the Lenders to remit the foreign currencies
on the due dates.
c) The rupee sum shall be paid by the Borrower to the Lenders by cheque or
bank draft drawn on a Scheduled Bank in Bombay/New Delhi and the
collection/remittance charges, if any, in respect thereof will be borne by the
Borrower.
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d) Credit for all payments made by the Borrower in terms of Agreement by
cheque/bank draft will be given only on realisation or on the relative due
date, whichever is later.
e) For the purpose of sub-section (a) hereof a statement signed by a
designated officer of the Lenders shall be sufficient evidence of the costs,
commission, expenses, etc.
f) Any difference on account of exchange fluctuations in the rates of
foreign currencies involved between the payment made by the Borrower to the
Lenders and the actual cost to the Lenders as referred to in sub-section (a)
above shall be borne by or be given credit to the Borrower.
In the case of ICICI, if ICICI decides not to call for payment in
equivalent rupees in the manner provided above, ICICI shall have the right to
notify the Borrower 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 Borrower.
SECTION 4.11 - RUPEE TYING OF DEFAULTED AMOUNTS
Without prejudice to any of the obligations of the Borrower in terms
of the Loan Agreement, in the event of default by the Borrower in making
payment in discharge of any of its obligations under the Loan Agreement on the
due dates then, notwithstanding anything to the contrary contained in the Loan
Agreement, the liability of the Borrower thereafter in respect of such amounts
shall be in rupees, which shall be determined and notified by the Lenders to
the Borrower in accordance with the provisions of sub-section 4.10(a)
hereinabove (hereinafter referred to as "the rupee tied defaulted amounts").
Notwithstanding anything to the contrary contained in the Loan
Agreement, the rupee tied defaulted amounts will carry interest and further
interest from the respective due dates at the lending rate(s) of the Lenders
for normal rupee term loans prevailing on the date of default and shall be
payable on the dates specified in the Loan Agreement.
ARTICLE V
SECTION 5 - BORROWER'S WARRANTIES
Except to the extent already disclosed in writing by the Borrower to
the Lenders, the Borrower shall be deemed to have assured, confirmed and
undertaken as follows:
7
(a) DUE PAYMENT OF PUBLIC AND OTHER DEMANDS
The Borrower is not in arrears of any public demands such as
income-tax, corporation tax and all other taxes and revenues or any other
statutory dues payable to the Central or State Government(s) or any local or
other authority.
(b) SELLING AND PURCHASING ARRANGEMENTS
The Borrower has entered into requisite selling and purchasing
arrangements to the satisfaction of the Lead Institution.
(c) MANAGEMENT AGREEMENT
The terms and conditions of appointment of Managing Director or any
other person holding substantial powers of management, by whatever name called,
shall be subject to the approval of the Lead Institution.
(d) CONFLICT WITH MEMORANDUM AND ARTICLES OF ASSOCIATION
Nothing in the Loan 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 further undertakes to
obtain information regarding changes in import policy, eligibility and scope of
import and shall advise the Lenders in this regard from time to time.
ARTICLE VI
PREDISBURSEMENT CONDITIONS
SECTION 6 - CONDITIONS PRECEDENT TO DISBURSEMENT
The obligation of the Lenders to make disbursements under the Loan
Agreement shall be subject to the Borrower performing all its obligations and
undertakings under the Loan Agreement besides compliance by the Borrower with
the Disbursement Procedure stipulated by the Lenders, such as submission of
necessary information, documents, etc. to the satisfaction of the Lenders.
Before seeking disbursement the Borrower shall also comply with the following
conditions:
8
(a) RAISING OF SHARE CAPITAL
The Borrower shall raise share capital as stipulated in the Loan
Agreement and the promoters shall subscribe to such share capital to the extent
stipulated by the Lenders.
(b) SECURITY IN FAVOUR OF THE LENDERS
The Borrower shall create security as stipulated in the Loan
Agreement in favour of the Lenders.
(c) BORROWING FROM OTHER INSTITUTIONS/BANKS
The Borrower shall enter into effective agreements with other
institutions/banks in the form and substance satisfactory to the Lenders for
raising of funds as per the Financing Plan.
(d) NON-EXISTENCE OF EVENT OF DEFAULT
The Borrower shall satisfy the Lenders that no event of default as
defined in Article X hereof and no event which, with the lapse of time or
notice and lapse of time as specified in Article X would become an event of
default, has happened and been continuing.
(e) DRAW DOWN SCHEDULE
The Borrower shall, within a period of 30 days from the date of the
Loan Agreement or such extended period as may be agreed to by the Lenders,
supply to the Lenders full information regarding the orders for the equipment
placed by it with its foreign suppliers and the schedule showing the dates on
which it expects to establish Letters of Credit under the disbursement
procedure and the dates on which payments under those Letters of Credit are
expected to be made.
(f) LETTERS OF CREDIT
The Borrower shall open Letter(s) of Credit for import of capital
goods approved under the financing plan only through the Lead Institution/the
Lenders.
(g) COMPLIANCE WITH SPECIAL CONDITIONS
The Borrower shall comply with such special conditions as may be
stipulated by the Lenders at the time of communication of the sanction of the
Loan or subsequently.
(h) DETAILED REVIEW OF THE PROGRESS
The Lenders shall have the right to review the cost of the Project
before final disbursement of the Loan.
9
(i) UNDERTAKING FOR MEETING SHORTFALL
The Borrower shall procure undertaking(s) from such persons as may be
specified by the Lead Institution in the form required by the Lead Institution
whereby it/he/they shall take the responsibility for making arrangements
satisfactory to the Lead Institution for meeting the shortfall, if any, in the
resources of the Borrower for completing the Project and for working capital.
The Borrower shall join in such undertaking as a confirming party. The funds
brought in to meet the shortfall in the resources of the Borrower for
completing the Project and/or working capital shall be in such form and manner
and on such terms as may be required by the Lead Institution
ARTICLE VII
CONDITIONS APPLICABLE DURING CURRENCY OF THE LOAN AGREEMENT
SECTION 7.1 - PROJECT
The Borrower shall,
(i) PROJECT IMPLEMENTATION
Carry out and operate the Project with due diligence and efficiency
and in accordance with sound engineering, technical, administrative, financial,
managerial and industrial standards and business practices with qualified and
experienced management and personnel and in accordance with the Financing Plan
and cause the financing specified in the Financing Plan to be applied
exclusively to the Project.
(ii) PROJECT CHANGES
Promptly notify the Lead Institution of any proposed change in the
nature or scope of the Project and of any event or condition which might
materially and adversely affect or delay completion of the Project or result in
substantial overrun in the original estimate of costs. Any proposed change in
the nature or scope of the Project shall not be implemented or funds committed
therefor without the prior approval of the Lead Institution.
(iii) CONTRACT CHANGES
Obtain prior concurrence of the Lead Institution to any material
modification or cancellation of the Borrower's agreements with its machinery
suppliers, collaborators, technical consultants and suppliers of raw materials.
10
(iv) DELAY IN COMPLETING THE PROJECT
Promptly inform the Lead institution of the circumstances and
conditions which are likely to disable the Borrower from implementing the
Project or which are likely to delay its completion or compel the Borrower to
abandon the same.
SECTION 7.2 - UTILISATION OF THE LOANS
(i) The Borrower shall use the Loans solely for the purposes
described in the Loan Agreement and covenants that the capital goods and
services purchased from the Loan shall be used exclusively in the carrying out
of the Project.
(ii) The Borrower shall purchase the capital goods and services to be
financed out of the Loans at a reasonable price, account being taken also of
other relevant factors such as time of delivery, efficiency, reliability of the
goods, their suitability for the Project and availability of maintenance
facilities and spare parts therefor and in the case of services, their quality
and the competence of the parties rendering them.
(iii) The Borrower shall not use the proceeds of the Loan for the purpose of
trading in any other currency.
SECTION 7.3 - GENERAL COVENANTS
(A) Without the prior approval of the Lead Institution, the Borrower shall
not
(i) NEW PROJECT
Undertake any new project, diversification, modernisation or
substantial expansion of the Project described herein. The word
"substantial" shall have the same meaning as under the Industries (Development
and Regulation) Act, 1951.
(ii) LOANS AND DEBENTURES
Issue any debentures, raise any loans, accept deposits from public,
issue equity or preference capital, change its capital structure, create any
charge on its assets or give any guarantees. This provision shall not apply to
normal trade guarantees or temporary loans and advances granted to staff or
contractors or suppliers in the ordinary course of business or to raising of
unsecured loans, overdrafts, cash credit or other facilities from banks in the
ordinary course of business.
(iii) PREMATURE REPAYMENT
Prepay any loan availed of by it from any other party.
11
(iv) COMMISSION
Pay any commission to its promoters, directors, managers or other
persons for furnishing guarantees, counter guarantees or indemnities or for
undertaking any other liability in connection with any financial assistance
obtained for or by the Borrower or in connection with any other obligation
undertaken for or by the Borrower for the purpose of the Project.
(v) DIVIDEND
Declare or pay any dividend to its shareholders during any financial
year unless it has paid all the dues to the Lenders up to the date on which the
dividend is proposed to be declared or paid or has made satisfactory
provisions therefor. Further, the Borrower shall not declare dividend to the
equity shareholders in excess of 15% or the average of the dividend paid in the
three preceding years, whichever is higher, without prior approval of the Lead
Institution, which may be given conditionally.
(vi) SUBSIDIARIES
Create any subsidiary or permit any company to become its subsidiary.
(vii) MERGER, CONSOLIDATION, ETC.
Undertake or permit any merger, consolidation, reorganisation, scheme
of arrangement or compromise with its creditors or shareholders or effect any
scheme of amalgamation or reconstruction.
(viii) INVESTMENTS BY BORROWER
Make any investments by way of deposits, loans, share capital, etc.
in any concern.
(ix) REVALUATION OF ASSETS
Revalue its assets at any time during the currency of the Loans.
(x) TRADING ACTIVITY
Carry on any general trading activity other than the sale of its own
products.
(B) Unless otherwise agreed to by the Lead Institution, the Borrower
shall,
(i) ACCOUNTING AND COST CONTROL SYSTEMS
Promptly and diligently instal and thereafter maintain an accounting
and cost control system satisfactory to the Lenders and maintain
12
books of accounts and other records adequate to reflect truly and fairly the
financial position of the Borrower and the results of its operations (including
the progress of the Project) in conformity with sound accounting principles
consistently applied. Such records and books shall be open to examination by
the Lenders and any authorised representative of the Foreign Lending Agency.
(ii) INFORMATION OF LOANS, GOODS, ETC.
Provide to the Lenders all such information relating to the Loans,
the goods and services financed out of the Loans, the Project and its
operations and other related matters as the Lenders or the Foreign Lending
Agency shall, from time to time, at their discretion request, including
information relating to the administration, management and financial condition
of the Borrower.
(iii) NOTICE OF WINDING UP OR OTHER LEGAL PROCESS
Promptly inform the Lenders if it has notice of any application for
winding up having been made or any statutory notice of winding up under the
provisions of the Companies Act, 1956, or any other notice under any other Act
or otherwise of any suit or other legal process intended to be filed or
initiated against the Borrower and affecting the title to the properties of the
Borrower or if a receiver is appointed of any of its properties or business or
undertaking.
(iv) ADVERSE CHANGES IN PROFITS AND PRODUCTION
Promptly inform the Lead Institution of the happening of any labour
strikes, lockouts, shutdowns, fires or any event likely to have a substantial
effect on the Borrower's profits or business and of any material changes in the
rate of production or sales of the Borrower with an explanation of the reasons
therefor.
(v) INSURANCE
a) Insure and keep insured against such risks as may be
determined by the Lenders all the goods to be imported for the purpose of the
Project whether financed out of the proceeds of the Loans or not and in
particular the goods to be financed out of the proceeds of the Loans as are of
an insurable nature against all marine, transit and other hazards incidental 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 a
currency freely usable by the Borrower to replace or repair such goods.
b) Keep insured up to the replacement value thereof as approved
by the Lead Institution (including surveyor's and architect's fees) the
properties charged/to be charged to the Lenders 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 Lead Institution.
13
c) Duly pay all premia and other sums payable for that purpose. The
insurance in respect of the properties charged/to be charged to the Lenders
shall be taken in the joint names of the Borrower and the Lenders and any other
person or institution having an insurable interest in the properties of the
Borrower and acceptable to the Lead Institution. The Borrower shall keep
deposited with the Lead Institution the insurance policies and renewals
thereof.
d) Agree that, in the event of failure on the part of the Borrower to
insure the properties or to pay the insurance premia or other sums referred to
above, the Lenders may get the properties insured or pay the insurance premia
and other sums referred to above, as the case may be.
(Vi) LOSS OR DAMAGED BY UNCOVERED RISKS
Promptly inform the Lead Institution of any loss or damage which the Borrower
may suffer due to any force majeure circumstances or act of God such as
earthquake, flood, tempest or typhoon, etc. against which the Borrower may not
have insured its properties.
(vii) COSTS AND CHARGES
Pay all taxes, duties, cesses, costs, charges and expenses in connection with
or relating to the Loan transaction (including cost of investigation of title
and protection of the Lenders' interest). In the event of the Borrower failing
to pay the aforesaid monies, the Lenders/Lead Institution shall be at liberty
but shall not be obliged to pay the same.
(viii) ANNUAL ACCOUNTS
Submit to each of the Lenders its duly audited annual accounts
within six months from the close of its accounting year. In case
statutory audit (if required) is not likely to be completed during this
period, the Borrower shall get its accounts audited by an independent firm of
Chartered Accountants and furnish the same to the Lead Institution.
(ix) MEMORANDUM AND ARTICLES OF ASSOCIATION
Carry out such alterations to its Memorandum and Articles of Association as
may be deemed necessary in the opinion of the Lead Institution to safeguard the
interests of the Lenders arising out of the Loan Agreement.
(x) SELLING AND PURCHASING ARRANGEMENTS
Undertake that if so required by the Lead Institution, the Borrower shall
take steps to suitably modify or terminate the existing selling/purchasing
arrangements in such manner as may be required by the Lead Institution. The
Borrower shall not enter into any fresh agreement for the appointment of sole
selling agents/sole purchasing agents without the
14
prior approval of the Lead Institution. Any such arrangement shall he subject
to such terms and conditions as may be stipulated by the Lead Institution.
SECTION 7.4 - NOMINEE DIRECTOR
(i) Each of the Lenders shall have the right to appoint and remove
from time to time, Director(s) on the Board of Directors of the Borrower as set
out in the Loan Agreement (such directors are hereinafter referred to as
'Nominee Director(s)').
(ii) The Nominee Director(s) shall not be required to hold qualification
shares and not be liable to retire by rotation.
(iii) The Nominee Director(s) shall be entitled to all the rights and
privileges of other Directors including the sitting fees and expenses as
payable to other Directors but if any other fees, commission, monies or
remuneration in any form is payable to the Directors, the fees, commission,
monies and remuneration in relation to such Nominee Director(s) shall accrue to
the Lenders and the same shall accordingly be paid by the Borrower directly to
the Lead Institution for the account of the concerned Lender. Provided that,
if any such Nominee Director(s) is an officer of the Lenders, the sitting fees
in relation to such Nominee Director(s) shall also accrue to the Lenders and
the same shall accordingly be paid by the Borrower directly to the Lead
Institution for the account of the concerned Lender.
Any expenditure incurred by the Lenders or the Nominee Director(s) in
connection with his appointment or directorship shall be borne by the Borrower.
(iv) The Nominee Director(s) shall be appointed a Member of the Management
Committee or other Committees of the Board, if so desired by the Lenders.
(v) The Nominee Director(s) 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.
(vi) If, at any time, the Nominee Director(s) is not able to attend a
meeting of the Board of Directors or any of its Committees of which he is a
member, the Lenders may depute an observer to attend the meeting. The expenses
incurred by the Lenders in this connection shall be borne by the Borrower.
SECTION 7.5 - MANAGEMENT
Unless the Lead Institution otherwise agrees:
15
(i) EXISTING MANAGEMENT
The Borrower shall not remove any person, by whatever name called,
exercising substantial powers of management of the affairs of the Borrower at
the time of execution of the Loan Agreement.
(ii) PAYMENT OF REMUNERATION
The person(s) referred to in (i) above shall not be paid any
commission in any year unless all the dues of the Lenders in that year have
been paid to the satisfaction of the Lead Institution.
(iii) PAYMENT OF COMPENSATION
The Borrower shall not pay any compensation to any of the persons
mentioned in (i) above in the event of loss of his/their office(s) for any
reason whatsoever if there is a default in repayment of dues to the Lenders.
(iv) UNDERTAKINGS
The Borrower shall obtain suitable undertakings for giving effect to
(ii) and (iii) above from the persons mentioned in (i) above. The
appointment/reappointment including terms of appointment (or alteration in such
terms) of the persons mentioned in (i) above shall be subject to the prior
approval of the Lead Institution.
(v) FUTURE ARRANGEMENT
The Borrower shall, as and when required by the Lead Institution,
appoint and change to the satisfaction of the Lead Institution suitable
technical, financial and executive staff of proper qualifications and
experience for the key posts. The terms of such appointments including any
changes therein, shall be subject to prior approval of the Lead Institution.
(vi) REVIEW OF MANAGEMENT
In case of default in payment of any dues to the Lenders or if in the
opinion of the Lead Institution the business of the Borrower is conducted in a
manner opposed to the public policy or in a manner prejudicial to the Lenders'
interest, the Lead Institution shall have the right to review the management
set up or organisation of the Borrower and to require the Borrower to
restructure it as may be considered necessary by the Lead Institution,
including the formation of Management Committees with such powers and functions
as may be considered suitable by the Lead Institution.
(vii) APPOINTMENT OF TECHNICAL/MANAGEMENT CONSULTANTS/CHARTERED ACCONTANTS
The Lead Institution shall have the right to appoint, whenever it
considers
necessary, any person, firm, company or association of persons engaged in
technical, management or any other consultancy business to inspect and examine
the working of the Borrower and its factory and to report to the Lead
Institution. The Lead Institution shall have the right to appoint, whenever it
considers necessary, any Chartered Accountants/Cost Accountants as auditors for
carrying out any specific assignments) or to examine the financial or cost
accounting systems and procedures adopted by the Borrower for its working or as
concurrent or internal auditors, or for conducting a special audit of the
Borrower. The costs, charges and expenses including professional fees and
travelling and other expenses of such consultants or auditors shall be payable
by the Borrower.
(viii) COMMITTEES OF BOARD
The Borrower shall constitute such committees of the Board
with such composition and functions as may be required by the Lead Institution
for close monitoring of different aspects of its working.
(ix) UNDERTAKINGS FOR NON-DISPOSAL OF SHAREHOLDINGS
The Borrower shall not recognise or register any transfer of shares in the
Borrower's capital made or to be made by promoters, their friends or associates
as may be specified by the Lead Institution. The Borrower shall obtain and
furnish to the Lead Institution suitable undertakings from such person for
giving effect to the above.
ARTICLE VIII
REPORTS
Section 8 - The Borrower shall furnish to the Lenders such reports at may be
required by the Lenders.
ARTICLE IX
INSPECTION
Section 9 - The Borrower shall,
a) PROJECT EXPENDITURE RECORDS
Maintain records and procedures adequate to record and monitor the progress of
the Project (including its cost and the benefits to be derived from it) to
identify the goods and services financed out of the Loan, to disclose their use
in the Project and the operations and financial condition of the
17
Borrower and such records shall be open to examination by the Lenders, the
Foreign Lending Agency and their authorised representatives.
b) TECHNICAL, FINANCIAL AND LEGAL INSPECTIONS
(i) Permit the Lenders, by themselves or jointly with the Foreign
Lending Agency and their authorised representatives, to carry out technical,
financial and legal inspections of the goods purchased out of the Loans and to
visit any facilities and construction sites included in the Project and to
examine any plants, installations, sites, works, buildings, property,
equipment, records and documents relevant to the performance of the obligations
of the Borrower under the Loan Agreement. Any such representative of the
Lenders and/or the Foreign Lending Agency 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 Lenders or any authorised
representative of the Foreign Lending Agency 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 tile Lenders or the Foreign
Lending Agency 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 Lenders or an authorised representative of the Foreign Lending Agency
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 tile Borrower to the Lenders/the Foreign
Lending Agency in this behalf.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 16.1 If one or more of the events specified in this Section
(hereinafter called 'events of default') happen(s), the Lead Institution or the
Lenders or any of them may, by a notice in writing to the Borrower, declare the
principal of and all accrued interest on the Loans to be due and payable
forthwith and the security created in terms of Article III of, the Loan
Agreement shall become enforceable and the Lenders shall have the following
rights (anything in the Loan Agreement to the contrary notwithstanding) namely:
(i) to enter upon and take possession of the assets of the Borrower; and
(ii) to transfer the assets of the Borrower by way of lease or leave
and licence or sale.
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EVENTS OF DEFAULT
a) DEFAULT IN PAYMENT OF PRINCIPAL SUMS OF THE LOANS
Default has occurred in the payment of principal sums of the Loans on the due
dates.
b) DEFAULT IN PAYMENT OF INTEREST
Default has been committed by the Borrower in payment of any instalment of
interest on the Loans and such default has continued for a period of thirty
days.
c) ARREARS OF INTEREST
Interest amounting to at least Rs. 500 has been in arrears and unpaid for
thirty days after becoming due.
d) DEFAULT IN PERFORMANCE OF COVENANTS AND CONDITIONS
Default has occured in the performance of any other covenant, condition or
agreement on the part of the Borrower under the Loan Agreement or any other
agreement and such default has continued for a period of thirty days after
notice in writing thereof has been given to the Borrower by the Lenders/Lead
Institution.
e) 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 Lenders/Lead Institution is misleading or incorrect in any
material respect.
f) 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.
g) INADEQUATE INSURANCE
If, the properties and assets offered to the Lenders as security for the Loans
have not been kept insured by the Borrower or depreciate in value to such an
extent that, in the opinion of the Lead Institution, further security to the
satisfaction of the Lead Institution should be given and on advising the
Borrower to that effect such security has not been given to the Lenders.
19
h) SALE, DISPOSAL AND REMOVAL OF ASSETS
If, without the prior approval of the Lead Institution any
land, buildings, structures or plant and machinery of the Borrower are sold,
disposed of, charged, encumbered or alienated or the said buildings,
structures, machinery, plant or other equipment are removed, pulled down or
demolished.
i) REFUSAL TO DISBURSE LOANS BY OTHER FINANCIAL INSTITUTIONS
If the other financial institutions 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.
j) 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.
k) INABILITY T0 PAY DEBTS ON NATURITY
The Borrower is unable or has admitted in writing its
inability to pay its debts as they mature.
l) LIQUIDATION OR DISSOLUTION OF THE BORROWER
The Borrower has taken or suffered to be taken any action for
its reorganisation, liquidation or dissolution.
m) APPOINTMENT OF RECEIVER OR LIQUIDATOR
A receiver or liquidator has been appointed or allowed to be
appointed of all or any part of the undertaking of the Borrower.
n) ATTACHMENT OR DISTRAINT ON MORTGAGED PROPERTIES
If, an attachment or distraint has been levied on the
mortgaged properties or any part thereof or certificate proceedings have been
taken or commenced for recovery of any dues from the Borrower.
o) EXTRAORDINARY CIRCUMSTANCES
If, extraordinary circumstances have occured which make it
improbable for the Project to be carried out and for the Borrower to fulfill
its obligations under the Loan Agreement.
Section 10.2 CONSEQUENCES OF DEFAULT
On the happening of any of the events of default, in addition
to
20
the rights specified in Section 10.1 hereof, each of the Lenders shall be
entitled to appoint and remove from time to time Whole-time Director(s) on the
Board of Directors of the Borrower (such Director (s) are hereinafter referred
to as "the Whole-time Nominee Director(s)"). Such Whole-time Nominee
Director(s) shall exercise such powers and duties as may be approved by the
Lenders 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 Borrower. Such
Whole-time Nominee Director(s) shall not be required to hold qualification
shares nor be liable to retire by rotation and shall be entitled
to receive such remuneration, fees, commission and monies as may be approved by
the Lead Institution. Such Whole-time Nominee Director(s) shall have the right
to receive notices of and attend all General meetings and Board Meetings or any
committee(s) of the Borrower of which they are members.
Any expense that may be incurred by the Lenders or such
Whole-time Nominee Director(s) in connection with their appointment or
directorship shall be paid or reimbursed by the Borrower to the Lenders or as
the case may be, to such Whole-time Nominee Director(s).
Section 10.3 NOTICE TO THE LENDERS 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 Lead Institution in
writing specifying the nature of such event of default, or of such event.
Section 10.4 EXPENSES OF PRESERVATION OF ASSETS OF BORROWER AND OF COLLECTION
All expenses incurred by the Lenders 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 the Loan Agreement shall
be payable by the Borrower.
ARTICLE XI
CANCELLATION, SUSPENSION AND TERMINATION
Section 11.1 CANCELLATION BY NOTICE TO THE LENDERS
The Borrower may, by notice in writing to the Lead
Institution, cancel the Loans or any part thereof which the Borrower has not
withdrawn prior to the giving of such notice. Provided that such cancellation
shall be pro-rata for each Lender.
21
Section 11.2 SUSPENSION
Further access by the Borrower to the use of the Loans may be
suspended or terminated by the Lenders/Lead Institution:
a) NON-COMPLIANCE OF TERMS AND CONDITIONS
Upon failure by the Borrower to carry out all or any of the
terms of the Loan Agreement or on the happening of any event of default
referred to in Article X hereof.
b) EXTRAORDINARY SITUATION
If, any extra ordinary situation makes it improbable that the
Borrower would be able to perform its obligations under the Loan Agreement.
c) ASSIGNMENT OR TRANSFER OF PROPERTIES T0 RECEIVER, ASSIGNEE, ETC.
If, the Borrower takes or permits to be taken any action or
proceedings whereby any of its properties shall or may be assigned or, in any
manner, transferred or delivered to any receiver, assignee ' liquidator or
other person, whether appointed by the Borrower or by any Court of Law, whereby
such property shall or may be distributed among the creditors of the Borrower
or the Borrower suffers any charge to be created over its properties in any
legal proceedings.
d) CHANGE IN THE BORROWER'S SET-UP
If, any chance in the Borrower's set-up has taken place which,
in the opinion of the Lead Institution (which shall be final and binding on the
Borrower), would adversely affect the conduct of the Borrower's business or the
financial position or the efficiency of the Borrower's management or personnel
or the execution of the Project.
e) DENIAL OF ACCESS
If, for any reason, the Lenders are denied further access to
their loan(s) facility from the Foreign Lending Agency.
Section 11.3 SUSPENSION TO CONTINUE TILL DEFAULT REMEDIED
The right of the Borrower to make withdrawals from the Loans
shall continue to be suspended until the Lead Institution has notified the
Borrower that the right to make withdrawals has been restored.
Section 11.4 TERMINATION
If any of the events described above or in Article X hereof
has been continuing or if the right of the Borrower to make withdrawals from
the Loans shall have been suspended with respect to any amount of the Loans
22
for a continuous period of thirty days or if the Borrower has not withdrawn the
Loans by the date referred to in the Loan Agreement or such later date as may
be agreed to by the Lenders or if the Lenders are denied access to their
loan(s) by the Foreign Lending Agency, then, in such event, the Lead
Institution 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
Loans shall stand cancelled. Notwithstanding any cancellation, suspension or
termination pursuant to the aforesaid provisions, all the provisions of the
Loan Agreement shall continue to be in full force and effect as herein
specifically provided.
ARTICLE XII
WAIVER
Section 12. WAIVER NOT TO IMPAIR THE RIGHTS OF THE LENDERS
No delay in exercising or omission to exercise any right, power or
remedy accruing to the Lenders/Lead Institution upon any default under the Loan
Agreement, security documents or any other agreement or document shall impair
any such right, power or remedy or shall be construed to be a waiver thereof or
any acquiescence in such default, nor shall the action or inaction of the
Lenders/Lead Institution in respect of any default or any acquiescence by them
in any default, affect or impair any right, power or remedy of the Lenders/Lead
Institution in respect of any other default.
ARTICLE XIII
APPLICABILITY OF OTHER STATUTES
Section 13. APPLICATION OF OTHER STATUTES
Nothing contained in the Loan Agreement shall prejudice or in any way
affect the rights vested in the Lenders under the Industrial Development Bank of
India Act, 1964 (18 of 1964), Industrial Finance Corporation Act, 1948 (15 of
1948), or any other statute.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 SERVICE OF NOTICE
Any notice or request to be given or made to the Lenders/Lead
Institution or to the Borrower or to any other party shall be in writing.
Such notice or request shall be deemed to have been given or made when it
23
is delivered by hand or despatched by mail or telegram to the party to which it
is required to be given or made at such party's designated address.
Section 14.2 EVIDENCE OF DEBT
a) Each of the Lenders shall maintain, in accordance with
their usual practice, accounts evidencing the amounts from time to time lent by
and owing to them under the Loan Agreement.
b) In any legal action or proceedings arising out of or in
connection with the Loan Agreement, the entries made in the accounts maintained
pursuant to sub-clause (a) above shall be prima-facie evidence of the existence
and amount of obligations of the Borrower as therein recorded.
Section 14.3 BENEFIT OF THE LOAN AGREEMENT
The Loan Agreement shall be binding upon and enure to the benefit of
each party thereto and its successors and assigns.
Section 14.4 HEADINGS
The headings of various Articles and Sections herein and in the Loan
Agreement are inserted for convenience of reference and are not deemed to affect
the construction of the relative provisions.
The Industrial Credit and Investment
Corporation of India Limited
Dear Sirs,
Foreign Currency Loan aggregating US$ 2550,000 equivalent to
about Rs.803 lacs sanctioned by your Corporation to us
With reference to the circular sent by you alongwith your sanction
letter 07??400?? dated October 5, 1994 for the above mentioned Foreign Currency
Loan, we do hereby undertake to your Corporation that we shall submit to your
Corporation (Foreign Exchange Department) quarterly statement in the prescribed
form as and when any part of the Foreign Currency Loan is drawn by us.
We are aware that on the faith of the above undertaking given by us,
you have agreed to consider our eligibility, inter alia, to provide the above
mentioned Foreign Currency Loan and to sign the Heads of Agreement with your
Corporation in respect of the same.
Yours faithfully,
Shri [*]
Director
Dated this 11th day of October, 1994.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-4’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 4/1/00 | | 16 | | | | | None on these Dates |
| | 1/1/00 | | 16 |
| | 10/1/99 | | 16 |
| | 7/1/99 | | 16 |
| | 4/1/99 | | 16 |
| | 1/1/99 | | 16 |
| | 10/1/98 | | 16 |
| | 7/1/98 | | 16 |
| | 4/1/98 | | 16 |
| | 1/1/98 | | 16 |
| | 10/1/97 | | 16 |
| | 7/1/97 | | 16 |
| | 4/1/97 | | 16 |
| Filed on: | | 6/24/96 |
| | 1/31/95 | | 7 |
| | 10/5/94 | | 44 |
| List all Filings |
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