1
Exhibit 10.31
[20 RUPEES NOTE]
[SEAL] [SEAL]
PERSONAL GUARANTEE
THIS DEED OF GUARANTEE executed at Mumbai on this 13th day of June 1996
by Shri Manohar Lal Tandon aged about 57 years, son of Shri Darbari Lal Tandon,
residing at 37, Merry Niketan, Mount Mary Road, Landra (West), Mumbai - 400 050
(hereinafter referred to as "the Guarantor" individually and collectively as
"the Guarantors" which expression shall unless it be repugnant to the subject
or context thereof, include their respective heirs, executors and
administrators) in favour of SCICI LIMITED, a public company incorporated under
the provisions of the Companies Act, 1956 and having its Registered Office at
141, Maker Tower-"F", Cuffe Parade, Mumbai 400005 (hereinafter referred
2
5. The Guarantors hereby agree that, without the concurrence of the
Guarantors, the Borrower and SCICI shall be at liberty to vary, alter or
modify the terms and conditions of the Loan Agreement(s) and of the
security documents executed by the Borrower in favour of SCICI and in
particular to defer, postpone or revise the repayment of the Foreign
Currency Loan and/or the Rupee Loan and/or payment of interest and other
monies payable by the Borrower to SCICI on such terms and conditions as
may be considered necessary by SCICI including any increase in the rate
of interest. SCICI shall also be at liberty to absolutely dispense with
or release all or any of the security/securities furnished or required
to be furnished by the Borrower to SCICI to secure the said Foreign
Currency Loan and/or the Rupee Loan. The Guarantors agree that the
liability under this Guarantee shall in no manner be affected by any
such variations, alterations, modifications, waiver, dispensation with
or release of security, and that no further consent of the Guarantors is
required for giving effect to any such variation, alteration,
modification, waiver, dispensation with, or release of security.
6. SCICI shall have full liberty, without notice to the Guarantors and
without in any way affecting this guarantee, to exercise at any time and
in any manner any power or powers reserved to SCICI under the Loan
Agreement(s) to enforce or forbear to enforce payment of the Foreign
Currency Loan and/or Rupee Loan or any part thereof or interest or other
monies due to SCICI from the Borrower or any of the remedies or
securities available to SCICI, to enter into any composition or compound
with or to grant time or any other indulgence or facility to the
Borrower AND the Guarantors shall not be released by the exercise by
SCICI of their liberty in regard to the matters referred to above or by
any act or omission on the part of SCICI or by any other matter or thing
whatsoever which under the law relating to sureties would, but for this
provision, have the effect of so releasing the Guarantors AND the
Guarantors herby waive in favour of SCICI so far as may be necessary to
give effect to any of the provisions of this Guarantee, all the
suretyship and other rights which the Guarantors might otherwise be
entitled to enforce.
7. This Guarantee shall be enforceable against the Guarantors
notwithstanding that any security or securities comprised in any
instrument(s) executed or to be executed by the Borrower in favour of
SCICI shall, at the time when the proceedings are taken against the
Guarantors on this Guarantee, be outstanding or unrealised or lost.
8. The Guarantors hereby agree and give consent to the sale, mortgage on
prior, pari-passu or first charge basis, release etc., of any of its
assets by the Borrower from time to time as may be approved by SCICI or
the transfer of any of the assets of the Borrower from one unit to the
other or to the release or lease out by SCICI any or whole of the assets
charged to SCICI on such terms and conditions as SCICI may deem fit and
this may be treated as a standing and continuing consent for each and
every individual act of transfer, mortgage, release or lease of any of
such assets of the Borrower. The Guarantors hereby declare and agree
that no separate consent for each such transfer, mortgage, release or
lease of any of such assets would be necessary in future.
9. The Guarantors hereby agree and declare that the Borrower will be free
to avail of further loan/s or other facilities from SCICI or any other
financial institution or bank in addition to the Foreign Currency Loan
and/or the Rupee Loan and/or to secure the same during the subsistence
of this guarantee and in that event the guarantee herein contained will
not be affected or vitiated in any way whatsoever but will remain in
full force and effect and binding on the Guarantors.
3
to as "SCICI" which expression shall, unless it be repugnant to the subject or
context thereof, include its successors and assigns).
WHEREAS
(1) MODULAR ELECTRONICS INDIA (P) LTD LIMITED, a company incorporated under
the provisions of the Companies Act, 1956 and having its Registered
office at 406 Dalamal Towers Nariman Point (hereinafter referred to as
"the Borrower") has requested SCICI to lend and advance to it a Foreign
Currency Loan of US$ 3 million (equivalent to Rs100 million at current
rates of exchange) for its proposed expansion scheme in Madras
-----------------------------------------------------------------------
(specify the project financed)
(2) SCICI has agreed to lend and advance to the Borrower the said Loan(s) on
the terms and conditions contained in the Foreign Currency Loan
Agreement dated the 13th day of June 1996 and in the Rupee Loan
Agreement (hereinafter referred to as "the Loan Agreement(s)") and
entered into between the Borrower and SCICI and the terms, conditions
and provisions whereof have been noted by the Guarantors.
(3) At the request of the Guarantors, SCICI has agreed to make to the
Borrower, disbursement(s)/interim disbursement(s) from out of the said
Foreign Currency Loan and/or the said Rupee Loan.
NOW THIS DEED WITNESSETH AS FOLLOWS:
In consideration of the premises, the Guarantors hereby unconditionally,
absolutely and irrevocably guarantee to and agree with SCICI as follows:
1. SCICI shall have the sole discretion -
i) to make disbursement(s) and/or interim disbursement(s) from out
of the Foreign Currency Loan and/or the Rupee Loan and/or
ii) to lend and advance to the Borrower, the Foreign Currency Loan
and/or the Rupee Loan, at such time, on such conditions and in
such manner as SCICI may decide.
2. The Borrower shall duly and punctually repay the said Loan(s) together
with all interest, liquidated damages, premium on prepayment or on
redemption, costs, expenses and other moneys in accordance with the Loan
Agreement(s) and perform and comply with all the other terms, conditions
and covenants continued in the said Loan Agreement(s).
3. In the event of any default on the part of the Borrower in
payment/repayment of any of the monies referred to above, or in the
event of any default on the part of the Borrower to comply with or
perform any of the terms, conditions and covenants contained in the Loan
Agreement(s), the Guarantors, shall, upon demand, forthwith pay to SCICI
without demur all the amounts payable by the Borrower under the Loan
Agreement(s). The Guarantors shall pay interest at the rate prevailing
for the short term loans of SCICI on the amounts so demanded from them
in the event there is any delay in their making the payment to SCICI in
terms of the notice of demand issued in this behalf by SCICI.
4. The Guarantors shall also indemnify and keep SCICI indemnified against
all losses, damages, costs, claims and expenses whatsoever which SCICI
may suffer, pay or incur by reason of or in connection with any such
default on the part of the Borrower/Guarantors including legal
proceedings taken against the Borrower and/or the Guarantors for
recovery of the monies referred to in Clause 2 and 3 above.
4
20. Any demand for payment or notice under this Guarantee shall be
sufficiently given if sent by post to or left at the last known address
of the Guarantors or their heirs or executors or administrators as the
case may be. Such demand or notice is to be made or given, and shall be
assumed to have reached the addressee in the course of post, if given by
post, and no period of limitation shall commence to run in favour of the
Guarantors until after demand for payment in writing shall have been
made or given as aforesaid and in proving such notice when sent by post
it shall be sufficiently proved that the envelope containing the notice
was posted and a certificate by any of the responsible officers of SCICI
that to the best of his knowledge and belief, the envelope containing
the said notice was so posted, shall be conclusive as against the
Guarantors, even though it was returned unserved on account of refusal
of the Guarantors or otherwise.
21. The liability of the Guarantors hereunder shall not be affected by any
dispute between the Borrower and SCICI raised or pending before any
Court, Tribunal or Arbitrator(s) and the Guarantors shall remain liable
under these presents notwithstanding any orders passed therein.
22. The Guarantors agree and declare that the rights and powers conferred on
SCICI by these presents may be exercised against them jointly and/or
severally at the discretion of SCICI.
23. The Competent Court at Bombay shall have jurisdiction over any matter
arising out of these presents or in connection thereto.
IN WITNESS WHEREOF the Guarantors have hereunto set their hands on the day,
month and year first hereinabove written.
SIGNED AND DELIVERED )
by the withinnamed )
) /s/ M.L. Tandon
Shri/Smt M.L. TANDON )
----------------
SIGNED AND DELIVERED )
by the withinnamed )
)
Shri/Smt )
----------------
SIGNED AND DELIVERED )
by the withinnamed )
)
Shri/Smt )
----------------
[SEAL
R.S. DEVADIGA Before Me
NOTARY /s/ R.S. Devadiga 12/6/96
GREATER -----------------------
BOMBAY] R.S. DEVADIGA B.A.L.E.D.
NOTARY GREATER BOMBAY
5
10. The rights of SCICI against the Guarantors shall remain in full force
and effect notwithstanding any arrangement which may be reached between
SCICI and the other Guarantor/s, if any, or notwithstanding the release
of that other or others from liability and notwithstanding that any time
hereafter the other Guarantor/s may cease for any reason whatsoever to
be liable to SCICI, SCICI shall be at liberty to require the performance
by the Guarantors of their obligations hereunder to the same extent in
all respects as if the Guarantors had at all times been solely liable to
perform the said obligations.
11. To give effect to this Guarantee, SCICI may act as though the
Guarantors were the principal debtors to SCICI.
12. The Guarantors hereby declare and agree that they have not received and
shall not, without the prior consent in writing of SCICI receive any
security or commission from the Borrower for giving this guarantee so
long any monies remain due and payable by the Borrower to SCICI under
the Loan Agreement(s).
13. The Guarantors shall not in the event of the liquidation of the
Borrower prove in competition with SCICI in the liquidation proceedings.
14. A certificate in writing signed by a duly authorised official of SCICI
shall be conclusive evidence against the Guarantors of the amount for
the time being due to SCICI from the Borrower in any action or
proceeding brought on this Guarantee against the Guarantors.
15. This Guarantee shall not be wholly or partially satisfied or exhausted
by any payments made to or settled with SCICI by the Borrower and shall
be valid and binding on the Guarantors and operative until repayment in
full of all monies due to SCICI under the Loan Agreement(s).
16. This Guarantee shall be irrevocable and the obligations of the
Guarantors hereunder shall not be conditional on the receipt of any
prior notice by the Guarantors or by the Borrowers and the demand or
notice by SCICI as provided in Clause 20 hereof shall be sufficient
notice to or demand on the Guarantors.
17. The liability of the Guarantors under this Guarantee shall not be
affected by -
i) any change in the constitution or winding up of the Borrower or
any absorption, merger or amalgamation of the Borrower with any
other company, corporation or concern; or
ii) any change in the management of the Borrower or take over of the
management of the Borrower by Central or State Government or by
any other authority; or
iii) acquisition or nationalisation of the Borrower and/or of any of
its undertaking(s) pursuant to any law; or
iv) any change in the constitution of SCICI.
18. This Guarantee shall be a continuing one and shall remain in full force
and effect till such time the Borrower repays in full the Foreign
Currency Loan and/or the Rupee Loan together with all interest, premium
on prepayment or on redemption, costs, expenses and other moneys that
may from time to time become due and payable and remain unpaid to SCICI
under the Loan Agreement.
19. The liability of the Guarantors hereunder shall not exceed the sum of
US$ 3 million (equivalent to Rs. 100 million at the current rates of
exchange) and Rs. XXXXXXX Pacs plus all interest, premium on prepayment
or on redemption, costs, expenses and other monies payable by the
Borrower to SCICI under the Loan Agreement(s).
6
- -------------------------------------------------------------------------------
| |
| |
- -------------------------------------------------------------------------------
Company Assistance Serial
Code Number Number
FOREIGN CURRENCY LOAN AGREEMENT
BETWEEN
Moduler Electronic India (Private) Limited
("THE BORROWER")
AND
SCICI LIMITED
("SCICI")
7
[TWENTY RUPEES NOTE]
12 JUNE 1996
MODULER ELECTRONICS
LOAN AGREEMENT
THIS AGREEMENT made at Mumbai on this 13th day of June, 1996 between
Moduler Electronics (India) Private Limited, a company within the meaning of
the Companies Act, 1956 and having its Registered Office at 406, Dalamal
Tower, Nariman Point - 400 021, India (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
SCICI LIMITED, a public limited company incorporated under the
Companies Act, 1956 and having its Registered Office at 141, Maker Tower "F",
Cuffe Parade, Mumbai 400 005 (hereinafter referred to as "SCICI", which
expression shall, unless it be repugnant to the subject or context thereof,
include its successors and assigns).
8
: 2 :
ARTICLE - 1
The Project financed by these presents, the amount of the Loan, the
applicable rate of interest, the security for the Loan and its amortization are
more particularly set out in Schedule 1 attached hereto.
ARTICLE - 2
DEFINITIONS
2.1 - The following terms shall have the meanings assigned below:
a) "Borrower" means the party to the Loan Agreement to which the
Loan is sanctioned and/or disbursed.
b) "Loan Agreement" means this particular Loan Agreement and all
schedules and amendments supplemental to the Loan Agreement.
c) "Loan" means the amount agreed to be provided under the Loan
Agreement as described in Schedule 1 or so much thereof as may
be outstanding from time to time.
d) "Project" means the Project as described in Schedule 1 hereto.
e) "Financing Plan" means the financing plan as described in
Schedule 1 hereto.
f) "Security" means the security more particularly described in
Schedule 1 hereto.
g) "Out-of-pocket expenses" means all expenses incurred in the
administration of the Loan during its currency.
All references in the singular in these presents shall be deemed to
include references in the plural wherever the context so requires or admits and
vice versa. Similarly all references to the masculine gender made under these
presents shall be deemed to include the feminine gender also.
The headings of various Articles and Clauses herein are inserted for
convenience of reference and are not deemed to affect the construction of the
relative provisions.
2.2 - The Loan hereby agreed to be granted by SCICI shall be subject to the
Borrower complying with the terms and conditions set out herein.
ARTICLE - 3
AMOUNT OF LOAN AND TERMS OF DISBURSEMENT
3.1 - Amount of Loan:
The Borrower agrees to borrow from SCICI and SCICI agrees to lend to
the Borrower, on the terms and conditions contained herein, the sum as
described in Schedule 1.
9
: 3 :
3.2 - Terms of disbursement:
i) The Loan shall be disbursed by SCICI in one or more instalment(s)
as may be decided by SCICI subject to the Borrower complying with
the provisions of the Loan Agreement and the disbursement
procedure(s) stipulated by SCICI including production of evidences
and execution of documents required for disbursement and the
expenditure incurred on the Project being in accordance with the
details mentioned in the Loan Agreement.
ii) All disbursements shall be by cheque(s)/authorisation(s) and the
collection/remittance charges and all other costs thereto shall be
borne by the Borrower.
iii) Pending creation of security as stipulated in the Loan Agreement,
SCICI may disburse any amount of the Loan on such terms as it may
decide.
3.3 - Last date of Drawal:
Unless SCICI otherwise agrees, the right to make drawals from the Loan
shall cease on the last date as mentioned in Schedule 1.
ARTICLE - 4
MANAGEMENT FEE AND INTEREST
4.1 - Management fee: The Borrower shall pay to SCICI a lump sum Management
Fee as described in Schedule 1 on the rupee equivalent of the Loan as specified
by SCICI to the Borrower on the date of execution of these presents, which
shall not be refundable under any circumstances.
4.2 - Interest: The Borrower shall pay to SCICI interest on the principal
amount of the Loan outstanding from time to time, at the rate and on the dates
as specifically set out in Schedule 1. The interest shall accrue as from the
drawdown date mentioned in the notice of drawdown of Loan or part thereof as
the case may be in a form and manner stipulated by SCICI.
The rate of interest applicable to the Loan shall be a fixed rate of
interest and/or a floating rate as stipulated in Schedule 1 hereto.
In the case of floating rates of interest, the term LIBOR (London
InterBank Offered Rate) and other similarly quoted rates shall mean, in
relation to any period for which a rate of interest is to be determined under
this Agreement, the rate as notified by SCICI to the Borrower in relation to
the due dates of payment of the instalment of loan and interest from time to
time.
For the purpose of calculation of interest, each completed interest
period shall be regarded as an appropriate fraction of a year and each day in
such period which is not part of a complete interest period comprised therein
shall be regarded as 1/360th of a year.
Notwithstanding anything contained hereinbefore, for the purpose of
calculation of interest in respect of U.S. Dollar loans, each day shall be
regarded as 1/360th of a year.
10
: 4 :
ARTICLE - 5
SECURITY
5.1 - SECURITY FOR THE LOAN:
i) The Loan together with all interest, premium on prepayment,
costs, expenses and other monies whatsoever stipulated in this
Loan Agreement shall be secured by first mortgage/hypothecation
or other charge on the assets as described in Schedule 1.
ii) Pending creation of the first mortgage, hypothecation or charge
as aforesaid, the Borrower shall furnish to SCICI an irrevocable
Power of Attorney and an undertaking to create such mortgage,
hypothecation or charge in such form as may be acceptable to
SCICI.
iii) The Borrower shall make out a good and marketable title to the
security to the satisfaction of SCICI and comply with all such
formalities as may be necessary or required for the said
purpose.
iv) The Borrower shall procure personal/corporate/bank guarantees
from such person(s) or bodies corporate, as set out in Schedule
I.
5.2 - ACQUISITION OF ADDITIONAL MOVEABLE/IMMOVABLE PROPERTIES:
So long as any monies remain due and outstanding to SCICI, the Borrower
undertakes to notify SCICI in writing at the end of each calendar year, a
summary of the amounts spent towards all its acquisitions of moveable and
immoveable properties and to make out a marketable title thereto as soon as
practicable to the satisfaction of SCICI and to create a charge in such form
and manner as may be decided by SCICI.
5.3 - INADEQUACY OF SECURITY:
If in the opinion of SCICI, the security offered by the Borrower is
found to be inadequate, the Borrower shall furnish such additional security
within such time as SCICI may stipulate.
5.4 - PAYMENT/REIMBURSEMENT OF EXPENSES:
The Borrower shall pay or reimburse all sums payable/paid by SCICI for
protection and maintenance of the security, cost of title investigation and
perfection of security and all other legal and out of pocket expenses including
travel and related expenses under these presents, within 30 days from the date
of notice of demand from SCICI. In default, all such sums shall be debited to
the Borrower's Loan Account (in equivalent rupees, if incurred in Foreign
Currency) and shall carry interest from the date of payment till such
reimbursement at the rate of 2.1% per annum over and above the applicable SPAR
(SCICI's Prime Advance Rate) + margin. The applicable SPAR for this purpose,
would be the one as prevailing at the time of default."
5.5 - RELEASE OF SECURITY:
SCICI shall release the security mortgaged, hypothecated or charged
when the entire amount of the Loan, together with interest and other sums
hereby agreed to be paid, are duly and fully repaid by the Borrower and all
other terms and conditions have been complied with by the Borrower.
11
: 5 :
5.6 - Sale of assets of the Borrower:
If at any time during the currency of the Loan, the Borrower requests
SCICI for permission to sell by way of scrap or otherwise any of the assets
constituting the security, SCICI may at its discretion and on such terms and
conditions as it may deem fit, permit such sale.
Provided however SCICI shall have the liberty to refuse or withdraw
such permission in case the value realisable on sale is not to its
satisfaction.
ARTICLE - 6
INSURANCE
6.1 - The Borrower shall, at its own expense, during the currency of the
Loan, insure the assets constituting the security, with the widest security
cover available, against all risks including fire, pollution, tempest, cyclone,
flood, theft, explosion, earthquake, storm, strikes, riot and civil commotion,
marine risks, erection risks, war risks and against third party risks where
applicable.
The Borrower shall also take an appropriate cover under the Public
Liability Insurance Act, 1991 in case its activities involve the handling of
hazardous substances as defined in the Environment (Protection) Act, 1986.
6.2 - The insurance of the security referred to in 6.1 above shall be for
values in accordance with the norms prevailing for the insurance of the subject
matter described above and shall be either for its market value or the amount
outstanding in respect of the Loan whichever is higher or for replacement
values wherever appropriate.
In case the Public Liability Insurance Act, 1991 is applicable to the
Borrower, due compliance shall be ensured of Section 4 of the said Act by the
Borrower.
6.3 - The insurance of the security shall be kept in force throughout the
currency of the Loan by renewals from time to time as and when the covers
expire and the Borrower shall ensure that all premiums are paid in good time so
that the insurance covers do not lapse for non-payment of premium.
6.4 - All the policies of insurance shall be assigned in favour of SCICI
under the Common Seal of the Borrower and the Borrower shall ensure that the
Underwriters have noted the interest of SCICI under the policies, and custody
thereof shall be with SCICI.
In case there are other institutions participating in the financing of
the Project, the insurance policies shall be assigned by the Borrower under its
common seal in favour of all the said participating institutions including
SCICI. After the assignment has been noted by the insurance companies, the
custody of the original insurance policies shall be with ICICI on behalf of
itself and the participating institutions.
* The Borrower shall keep the insurance policies in its safe custody on behalf
of SCICI and furnish its Auditor's certificate to SCICI at the end of each
quarter including the numbers and values of all policies together with a
confirmation that the assignment of policies in favour of SCICI has also been
noted by the insurance company/companies and that there are no outstanding
premiums due in respect of the said policies. (*applicable only in the case of
finance companies.)
12
: 6 :
6.5 - The Borrower shall promptly notify SCICI of the incidence of all claims
under the respective policies to the Underwriters and the prior written
approval of SCICI shall be sought for claiming any amounts under the policies.
While approval shall be granted by SCICI so long as the Borrower is not in
default, all claims shall be paid by the Underwriters directly to SCICI if the
Borrower is in default of its obligations under the Loan Agreement to SCICI.
6.6 - It is the paramount obligation of the Borrower to maintain the assets
constituting the security in good working condition and in a proper state of
repair or in a state as is enjoined by the respective policy conditions and in
the event of a casualty the Borrower shall do everything that is necessary for
the preservation of the security or for the restoration of the security to its
original condition, as the case may be, as if the Borrower were a prudent
uninsured owner of the said assets constituting the security.
ARTICLE - 7
PROJECT CHANGES AND UTILISATION OF THE LOAN
7.1 - Project:
i) Changes in the Project:
The Borrower shall promptly notify SCICI of any proposed change
in the nature of scope of the Project and of any event or
condition which might materially alter or delay completion of
the Project or result in substantial revision in the original
estimate of costs or which may cause the Borrower to abandon
the Project. No change in the nature of scope of the Project
shall be implemented or funds committed therefor without the
prior written approval of SCICI.
ii) Changes in the contract:
The Borrower shall obtain prior concurrence of SCICI to any
material modification or cancellation for the Borrower's
contracts such as its contracts with its machinery suppliers,
collaborators, builders, technical consultants and suppliers of
raw materials.
7.2 - Utilisation of the Loan:
The Borrower shall utilise the Loan for no other purpose than the one
for which the Loan has been sanctioned and furnish to SCICI its periodic
reports, at such intervals as may be stipulated by SCICI, showing the manner in
which the Loan monies have been utilised.
ARTICLE - 8
REPAYMENT
8.1 - The Borrower undertakes to repay the principal amount of the Loan in
accordance with the Amortization Schedule(s) set forth in Schedule 1 hereto.
8.2 - If, for any reason, the amount finally disbursed by SCICI out of the
Loan is less than the amount of the Loan, the Amortization Schedule shall be
revised by SCICI.
13
: 7 :
8.3 - Manner of discharge of obligations:
The Borrower shall discharge all its obligations under the Loan
Agreement in respect of the principal amount of loan, interest, liquidated
damages, premium on prepayment or on redemption, or any other charges in the
currency or currencies stipulated in the Loan Agreement.
8.4 - Option to call for payment in Rupees:
Without prejudice to any of the obligations of the Borrower in terms of
the Loan Agreement, and notwithstanding anything contained hereinbefore, SCICI
shall be entitled at its option to call upon the Borrower to make payments to
SCICI, whether of principal amount of the Loan, interest, liquidated damages,
premium on prepayment or on redemption or any other charges, if any, in
equivalent rupees in lieu of foreign currencies. For the purpose of this
article, the following conditions shall apply:
i) The rupee sum shall be determined by SCICI with reference to the
actual costs to SCICI (including all commission and other bank
charges and out-of-pocket expenses) in remitting the foreign
currencies on the due dates.
ii) The rupee sum shall be paid by the Borrower to SCICI at least
three working days in advance of the due dates to enable SCICI
to remit the foreign currencies on the due dates.
iii) The rupee sum shall be paid by the Borrower to SCICI in cash or
by cheque or bank draft drawn on a Scheduled Bank in Bombay and
the collection/remittance charge, if any, in respect thereof
will be borne by the Borrower.
iv) For the purpose of sub article (i) hereof, a statement signed by
the designated officer of SCICI, shall be sufficient evidence of
costs, commissions, expenses etc.
v) Any difference on account of fluctuation in the rates of
exchange of foreign currencies involved between the payment made
by the Borrower to SCICI and the actual costs to SCICI as
referred to in sub article (i) above shall be borne by or
credited to the Borrower as the case may be.
vi) In the event that for any reason SCICI shall decide not to
exercise the option of accepting payment in equivalent rupees in
the manner provided above, SCICI shall have the right to notify
the Borrower the place or places where the person or persons to
whom the payments in foreign currencies falling due thereafter
shall be made and all expenses involved in making payment in the
manner so notified shall be borne by the Borrower.
8.5 - Prepayment:
The Loan or any part thereof shall not be prepaid by the Borrower
except with the prior written approval of SCICI and on such terms and
conditions including prepayment premium as may be stipulated by SCICI.
14
: 8 :
8.6 - JUDGEMENT IN OTHER CURRENCY:
If any sum payable by the Borrower under these presents is ordered and
decreed to be paid to SCICI by a court of competent jurisdiction in a currency
other than the currency of this Agreement, the Borrower shall indemnify SCICI
to the extent of difference in exchange rates prevaling on the date of actual
payment resulting from the conversion of the decreed debt from the currency of
judgement to the currency of this Agreement.
The foregoing indemnity shall constitute a separate obligation of the
Borrower, distinct from its other obligations hereunder, and shall survive the
giving or making of any judgement or order in relation to all or any of such
other obligations.
8.7 - FORWARD COVER:
Before the due date of payment of any amount payable hereunder, if the
Borrower has taken a forward cover for the same it shall notify SCICI of its
utilisation at least 15 days in advance of the due date. In the event of the
Borrower failing to do so, SCICI shall at its option enter into a forward cover
on behalf of the Borrower and the same shall be binding on the Borrower.
8.8 - APPROPRIATION OF PAYMENTS:
i) All monies due and payable under the Loan Agreement and paid by
the Borrower shall be appropriated towards such dues in the
following order, viz, -
a) Reimbursement of out-of-pocket expenses;
b) Interest on arrears of interest;
c) Interest including additional interest(s);
d) Premium on prepayment of principal; and
e) Repayment of principal.
ii) Notwithstanding anything contained in sub article (i)
hereinabove, SCICI 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 SCICI
in the order specified in the relative Loan Agreement(s).
8.9 - PLACE AND MODE OF PAYMENT BY THE BORROWER:
All monies payable by the Borrower to SCICI shall be paid to SCICI at
such office(s) as may be specified by SCICI, by telegraphic, telex or mail
transfer to the account of such office(s) or by cheque or bank draft drawn in
favour of SCICI on a scheduled bank at Bombay or such other place or to such
other account as SCICI may notify to the Borrower and shall be so paid as to
enable SCICI to realise, at par, the amount on or before the relative due date.
Credit for all payments by cheque/bank draft shall be given only on the date of
realisation or on the relative due date, whichever is later.
If the due date in respect of any instalment of principal, interest and
all other monies payable under the Loan Agreement 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.
15
: 9 :
ARTICLE - 9
PREDISBURSEMENT CONDITIONS
9.1 - The obligation of SCICI 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 SCICI, such as submission of necessary
information and documents to the satisfaction of SCICI. Before seeking
disbursement, the Borrower shall furnish satisfactory evidence of having
complied with the following conditions:
i) STATUTORY APPROVALS:
The Borrower shall obtain all the requisite statutory approvals
and permissions as may be required from time to time in relation
to the Project.
ii) RAISING OF SHARE CAPITAL:
If so stipulated in Schedule 2 to this Loan Agreement the
Borrower shall raise share capital and the promoters shall
subscribe to such share capital to the extent stipulated by
SCICI.
iii) DOCUMENTS RELATED TO BORROWING POWER AND CREATION OF SECURITY:
The Borrower shall furnish to SCICI duly certified copies of the
resolutions together with certificates from the Income-tax
authorities, as specified in the Companies Act, 1956 and the
Income-tax Act, 1961, respectively, relating to the borrowing
powers of the Borrower and the creation of security in favour of
SCICI. The Borrower shall also furnish a certificate from its
Auditors confirming that this Loan together with the amounts
already borrowed by it, does not exceed the borrowing limits
sanctioned by the resolutions referred to above.
iv) BORROWING FROM OTHER INSTITUTION(S)/BANK(S):
The Borrower shall enter into effective agreement(s) with the
other participating institution(s) or bank(s) in the form and
substance satisfactory to SCICI for raising funds as per the
Financing Plan described in Schedule 1.
v) NON-EXISTENCE OF EVENT OF DEFAULT:
The Borrower shall satisfy SCICI that no event of default, as
defined in Article 14 of this Loan Agreement and with respect to
previous Loan Agreements, executed with SCICI, if any, and no
event, which with the lapse of time or notice as specified in
Article 14 of this Loan Agreement, shall become an event of
default, has happened or is continuing.
vi) COMPLIANCE WITH SPECIAL CONDITIONS:
The Borrower shall also comply with such special
pre-disbursement conditions as may be stipulated by SCICI at the
time of communication of the sanction of the Loan and which are
more specifically set out in Schedule 2 to this Agreement.
16
: 10 :
vii) DETAILED REVIEW OF THE PROGRESS:
a) SCICI shall have the right to satisfy itself that the
physical progress as well as expenditure incurred on the
Project are as per the original schedules.
b) SCICI shall have the right to review the cost of the
Project before final disbursement of the Loan. Pending
completion of the review, the Borrower shall obtain prior
approval of SCICI for utilising the amount of the Loan
equivalent to the contingency provision in the cost of the
Project.
viii) ARRANGEMENTS FOR MEETING SHORTFALL:
The Borrower shall assume the responsibility for making
arrangements and of bringing in additional funds in the form of
unsecured loans/deposits, satisfactory to SCICI, to meet the
shortfall, if any, that may arise in financing the Project
and/or working capital requirements due to overrun in the
Project cost or cash losses, without recourse to additional
assistance from SCICI.
The funds brought in to meet the shortfall shall not be
withdrawn without the prior written approval of SCICI during
the currency of the Loan.
ix) DISBURSEMENT SCHEDULE:
At least 15 days prior to the disbursement of the Loan or any
part thereof as required by the Borrower, the Borrower shall
furnish to SCICI a statement indicating the amount required to
be disbursed together with the purpose for which the said
amount shall be utilised.
ARTICLE -10
RIGHT TO APPOINT NOMINEE DIRECTOR
10.1 - SCICI during the currency of the Loan shall have the right to appoint
one or more nominees (hereinafter referred to as "Nominee Director(s)") on
the Board of Directors of the Borrower and if the Borrower's Articles do not
contain a provision for such appointment, the Borrower shall suitably amend its
Articles for the purpose. The following provisions shall apply to such
"Nominee Director(s)".
i) The Nominee Director(s) shall not be required to hold
qualification shares and shall not be liable to retire by
rotation.
ii) 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.
Provided that if any such Nominee Director is an Officer of
SCICI, the sitting fees, expenses and all other monies in
relation to such Nominee Director shall accrue to SCICI and
the same shall accordingly be paid by the Borrower directly to
SCICI.
iii) Any expenditure incurred by SCICI or the Nominee Director(s)
in connection with his/their appointment or directorship shall
be borne by the Borrower.
17
: 11 :
10.2 - The Nominee Director(s) shall be appointed as a Member of the
Management Committee or other Committees of the Board, if so desired by SCICI.
10.3 - 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/they is/are member(s).
10.4 - If, at any time, the Nominee Director(s) is/are not able to attend a
meeting of the Board of Directors or any of its Committees of which he/they
is/are member(s), SCICI may depute an observer to attend the meeting. The
expenses incurred by SCICI in this connection shall be borne by the Borrower.
ARTICLE - 11
MANAGEMENT & RELATED MATTERS
11.1 - The Borrower shall not remove any person(s), by whatever name called,
exercising substantial powers of management of the affairs of the Borrower at
the time of execution of the Loan Agreement. The appointment/reappointment
including terms of appointment (or alteration in such terms) of such persons
shall be subject to the prior written approval of SCICI.
11.2 - The person(s) referred to in clause 11.1 above shall not be paid any
commission in any year unless all the dues of SCICI in that year have been paid
to the satisfaction of SCICI.
11.3 - The Borrower shall not pay any compensation to any of the person(s)
mentioned in Clause 11.1 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 SCICI.
11.4 - The Borrower shall obtain suitable undertakings for giving effect to
Clauses 11.2 and 11.3 above from the persons mentioned in Clause 11.1 above.
11.5 - The Borrower shall, as and when required by SCICI, appoint and change
to the satisfaction of SCICI, suitable technical, financial and executive staff
of proper qualifications and experience, for the key positions in its
organisation. The terms of such appointments including any changes therein,
shall be subject to prior written approval of SCICI.
11.6 - In case of default in payment of any dues to SCICI or if in the
opinion of SCICI the business of the Borrower is conducted in a manner opposed
to public policy or in a manner prejudicial to SCICI's interest, SCICI 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
SCICI including the formation of Management Committees with such powers and
functions as may be considered suitable by SCICI.
11.7 - SCICI shall have the power at any time or times to order inspection of
the assets constituting the security by officers of SCICI or such other persons
as may be designated by SCICI in order to ensure their proper maintenance
during the period the Loan or any part thereof including interest thereon
remains outstanding and the Borrower shall facilitate such inspection and pay
all costs and expenses thereof with interest thereon at the lending rate for
short term loans of SCICI applicable to the Borrower at the time of default.
18
: 12 :
11.8 - SCICI shall have the right to appoint, whenever it considers
necessary, any Chartered Accountants/Cost Accountants and auditors for carrying
out any specific assignment(s) or to examine the financial or cost accounting
system 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.
11.9 - The Borrower shall constitute such committees with such composition
and functions as may be required by SCICI for the functioning of different
aspects of its operations.
11.10 - The Borrower shall give SCICI prior intimation of any
transfer/transmission of its shares that is likely to result in a change in
excess of two per cent in its share holding pattern and/or a change in the
composition of its Board of Directors or in its management.
11.11 - The Borrower undertakes to broad-base its Board of Directors in
consultation with and to the satisfaction of SCICI, if called upon to do so
by SCICI.
ARTICLE - 12
GENERAL COVENANTS
THE BORROWER SHALL:
12.1 - undertake to obtain all documents, both legal and technical, from the
appropriate parties or any other competent authority, essential for
registration of the security and arrange for mortgaging the same to SCICI in
accordance with the provisions of the Companies Act, 1956, Transfer of Property
Act, 1882, and other applicable statutes;
12.2 - obtain all the necessary consents and approvals from statutory or
other authorities required under the laws in force from time to time as
applicable to the Borrower and the Project covered by the Loan Agreement;
12.3 - agree and undertake to always maintain the security as stipulated by
SCICI for the Loan under these presents;
12.4 - bring to the notice of SCICI, underwriters, insurers and appropriate
authorities any accident or damage to the security, and/or affecting the
Borrower's operations immediately upon its receiving such information and the
Borrower shall take necessary steps at its own cost to ensure that the security
is restored to its original condition of fitness;
12.5 - not convert itself from a Public Limited company to a Private Limited
company during the currency of the Loan.
12.6 - not encumber the security offered to SCICI for this Loan or for any
other assistance without the prior written approval of SCICI;
12.7 - utilise in the first instance all monies received from its operations
or otherwise for repayment of the Loan, interest and other sums due to SCICI;
12.8 - undertake not to engage in any transaction which in the opinion of
SCICI is of a speculative or unsound character;
19
: 13 :
12.9 - intimate to SCICI, on 30th September and 31st March every year, the
particulars of any financial assistance including corporate guarantee provided
by it to other companies, Directors or bodies corporate whether or not under
the same management in terms of the provisions of the Companies Act, 1956;
12.10 - not undertake any new project, by acquisition, diversification,
modernisation or substantial expansion of the Project described herein or
acquire any asset on lease without the prior written approval of SCICI during
the currency of the Loan;
12.11 - not issue any debentures, raise any loans, accept any deposits from
public, issue any equity or preference capital other than as stipulated or
change its capital structure or create any charge on the security and on any
other properties and assets or give any guarantees without the prior written
approval of SCICI. 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 the raising of unsecured loans,
overdrafts, cash credit or other facilities from banks in the ordinary course
of business.
12.12 - not prepay any unsecured loan(s) and deposits availed of by it from
any other party without the prior written approval of SCICI;
12.13 - not 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 purposes of the Project;
12.14 - promptly inform SCICI 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;
12.15 - promptly inform SCICI of the happening of any labour strikes,
lockouts, shut-downs, fires or other similar happenings likely to have an
adverse effect on the Borrower's profits or business with an explanation of the
reasons therefor;
12.16 - submit its duly audited annual accounts, within six months from the
close of its accounting year. In case statutory audit 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 SCICI within
the time specified;
12.17 - not declare any dividend to the equity shareholders except from out of
the current year's profits. The dividend declared shall not be in excess of 15%
or the average of three years dividend whichever is lower without the prior
written approval of SCICI which shall not be unreasonably withheld. However no
such dividend shall be declared if any dues or liabilities remain to be paid or
discharged to SCICI as on the contemplated date of declaration of such dividend;
12.18 - not form any subsidiary or permit any company to become its subsidiary
without the prior written approval of SCICI;
12.19 - carry out such alterations to its Memorandum and Articles of
Association as may be deemed necessary in the opinion of SCICI to safeguard the
interests of
20
12.20 - not undertake or permit any merger, consolidation, reorganisation,
scheme or arrangement or compromise with its creditors or shareholders or
effect any scheme of amalgamation or reconstruction without the prior written
approval of SCICI;
12.21 - not make any investments by way of deposits, loans, share capital etc,
in any concern, without the prior written approval of SCICI. Provided that if
the Borrower is not in default, SCICI may allow the Borrower to deploy funds in
short term investments. The Borrower shall, however, submit periodic reports of
such investments in such form and manner as may be stipulated by SCICI.
12.22 - not revalue its assets at any time during the currency of the Loan
without the prior written approval of SCICI;
12.23 - at its expense when called upon by SCICI, undertake fresh valuation of
the assets constituting the security and upon a shortfall in security being
perceived in the opinion of SCICI on such valuation, furnish such additional
security within the time stipulated by the SCICI, including the assignment of
hire/other income;
12.24 - promptly notify and furnish to SCICI information in respect of any
casualty or other accident or damage to the security and the other assets;
12.25 - ensure, during the currency of the Loan, the maintenance of proper
accounting and cost control system satisfactory to SCICI to reflect truly and
fairly the financial position of the Borrower and the results of its operations
including the progress of the Project. Such records and books shall be open to
examination by SCICI through any authorised representative of SCICI;
12.26 - provide, if SCICI so requires, information relating to the
administration, management and financial condition of the Borrower.
12.27 - if after the date of this Agreement by reason of any change in law, or
in its interpretation or administration, there is any increase in the cost to
SCICI whether by way of tax expenses or otherwise of funding, or maintaining
the Loan and or performing any of its obligations hereunder, the same shall be
borne by the Borrower. The amounts payable hereunder shall, for the purpose of
Article 8.9 be treated as "Out-of-Pocket Expenses."
ARTICLE - 13
OTHER PROJECT SPECIFIC COVENANTS
13.1 - The Loan hereby granted shall also be subject to the Borrower complying
with the conditions set out in Schedule 2.
21
: 15 :
ARTICLE - 14
EVENTS OF DEFAULT
14.1 - The following, either singly or collectively, shall constitute an
"Event of Default" for the purpose of enforcing the security, recalling the
Loan and such other articles SCICI may take under these presents:
i) REFUSAL TO DISBURSE LOAN BY THE PARTICIPATING LENDER:
The participating lender, with whom the Borrower intends to
enter into an agreement for financial assistance, has refused to
disburse its Loan or any part thereof or has recalled its Loan
under its Loan Agreement with the Borrower.
ii) FAILURE IN THE IMPLEMENTATION OF THE PROJECT:
The Borrower has failed to implement 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 has failed to cause the financing
specified in the Financing Plan to be applied exclusively to the
Project and/or has, in the opinion of SCICI, made substantive
changes in the project without prior written approval of SCICI.
iii) DEFAULT IN PAYMENT OF INTEREST, PRINCIPAL AND OTHER DUES:
Default has been committed by the Borrower in payment of any
instalment of interest on the Loan or in the repayment of one or
more instalment of the principal of the Loan on the due date(s)
or in the payment of any other monies payable by the Borrower to
SCICI.
iv) INABILITY TO PAY DEBTS:
There is reasonable apprehension in the opinion of SCICI that
the Borrower is unable to pay its debts or proceedings for
taking it into liquidation, either voluntarily or compulsorily,
may be or have commenced.
v) INADEQUATE INSURANCE AND SECURITY:
(a) The assets offered to SCICI 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
SCICI, further security to the satisfaction of SCICI
should be given and on advising the Borrower to that
effect, such security has not been given to SCICI
forthwith.
(b) Failure of the Borrower to create mortgage/charge on the
assets constituting the security within the time
stipulated by SCICI in Schedule 2 hereto.
22
: 16 :
vi) Sale, disposal or removal of assets:
The assets constituting the security of the Borrower are sold, disposed
of, charged, encumbered, alienated, or deliberately damaged or destroyed
without the prior written approval of SCICI.
vii) 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/liquidated.
viii) Liquidation or dissolution of the company:
The Borrower has taken or suffered to be taken any action for its
reorganisation, liquidation or dissolution.
ix) 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.
x) Attachment or distraint on mortgaged security:
An attachment or distraint has been made of the mortgaged security or
legal proceedings have been taken or commenced for recovery of any dues
from the Borrower or if the security has become subject to forfeiture.
xi) Non-Submission of periodic monitoring reports:
The Borrower has failed to submit to SCICI its periodic performance
monitoring report in the form and manner and within the time as
specified by SCICI.
xii) Supply of misleading information:
Any information given by the Borrower in its application for the Loan,
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 SCICI is/are misleading or incorrect
in any material aspect.
xiii) Failure of inform change in shareholding pattern, etc.
Failure of the Borrower to give prior information to SCICI of change in
its shareholding pattern, composition of its Board of Directors or in
its management in terms of Article 11.10 above
xiv) Default in performance of other covenants and conditions:
Default has occurred in the performance of any covenant, condition or
agreement on the part of the Borrower under these presents, Deed of
Mortgage/Hypothecation 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 SCICI.
23
: 17 :
xiv) Extra-ordinary circumstances:
Extra-ordinary circumstances have occurred which, in
the opinion of SCICI, make it improbable for the project
to be implemented and for the Borrower to fulfil its
obligations under the Loan Agreement.
The decision of SCICI as to whether or not the Borrower
has committed a breach of the terms and conditions of
these presents shall be final and binding upon the
Borrower.
14.2 - Notice to SCICI on the happening of an event of default:
If any event of default or any event which, after the notice of such
default, or lapse of time, or both, would constitute an event of default, has
happened, the Borrower shall forthwith give notice thereof to SCICI in writing
specifying the nature of such event of default, or of such event.
14.3 - Consequences of default: On the happening of any event of default,
SCICI shall be entitled to exercise any or all of the following remedies
without prejudice to each other:
i) Penal Interest:
(a) 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
either in Rupees or in Foreign Currency at the option of
SCICI which shall be determined and notified by SCICI to
the Borrower.
(b) In case of the aforesaid liability remaining in foreign
currency, the Borrower shall pay on the defaulted amounts
a penal interest at the rate of 2.1% per annum over and
above the applicable interest rate for this Loan.
In case of the aforesaid liability being Rupee-tied,
interest at the 2.1% per annum over and above the SPAR +
4% (please fill in the applicable margin). Whereas the
applicable SPAR for the purpose would be as prevailing on
the date of default.
ii) Enforcement of security:
If one or more of the events specified in Article 14.1 above
happen(s), SCICI by a notice in writing to the Borrower, shall
declare the principal and all interest, costs, expenses and
other monies whatsoever stipulated herein to be due and payable
forthwith and the security created in terms of Article 5.1 above
shall become enforceable and it shall be lawful for SCICI
(notwithstanding anything to the contrary contained herein) to
enter into possession of the security and to exercise the
control of an owner in using/operating the said security. SCICI
shall also have the unfettered right of disposal of the security
and to take such steps as may be necessary for recovering the
entire amount due under these presents.
24
: 18 :
The decision of SCICI as to whether or not the Borrower has
committed any breach of the terms and conditions of these
presents or the Deed of Mortgage/Hypothecation and other
assurances shall be binding on the Borrower.
iii) CONVERSION RIGHT:
If an event of default occurs in terms of Article 14.1 (iii)
above, then SCICI shall have the right to convert (which right
is hereinafter referred to as "the conversion right") at its
option the whole of the defaulted amount of the Loan, interest
and other sums referred to in 14.1 (iii) above or a part thereof
into fully paid-up equity shares of the Borrower, at par, in the
manner specified in a notice in writing to be given by SCICI 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").
On receipt of notice of conversion, the Borrower shall allot and
issue the requisite number of fully paid-up equity shares to
SCICI as from the date of conversion and SCICI 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 1 hereto shall be reduced proportionately by the
amounts of the Loan so converted. The equity shares so allotted
and issued to SCICI 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.
The conversion right reserved as aforesaid may be exercised by
the SCICI on one or more occasions during the currency of the
Loan.
If at any time on or after service of the notice on the Borrower
as above, the Borrower issues bonus or rights shares in any
proportion, then SCICI shall be entitled to be allotted such
further equity shares in the same proportion and in the same
manner as SCICI would have been eligible for had SCICI exercised
the aforesaid conversion right in full before such issue of
bonus or rights shares. The Borrower shall pass requisite
resolution in terms of Section 81(1-A) of the Companies Act,
1956 to enable it to issue to SCICI such bonus or rights shares
at such time and in such form as may be required by SCICI.
The bonus or rights shares shall be so issued and reserved for
allotment by the Borrower and the amount thereof determined
after taking into account the entitlement referred to above.
The Borrower shall not, except with the prior written approval
of SCICI prepay the Loan or any part thereof and unless SCICI
otherwise agrees, the Borrower shall not:
25
: 19 :
(a) raise or increase its share capital;
(b) modify in any way the rights attached to its share
capital of any class;
(c) consolidate or subdivide any equity shares (except with
proper adjustment to the basis of conversion)
(d) reduce its share capital or any share premium account;
(e) grant any option to subscribe for shares in its equity
capital or any right to convert any obligation into such
capital to persons other than the public financial
institutions as defined in Section 4A of the Companies
Act, 1956;
(f) issue any bonus shares by capitalising its undistributed
profits or reserves.
In case of the Borrower being a listed company, the Borrower
assures and undertakes that in the event of the SCICI exercising
the right of conversion as aforesaid, the Borrower shall get the
equity shares which shall be issued to the SCICI as a result of
the conversion, listed with the same Stock Exchange(s) where its
equity shares are listed.
iv) WHOLE TIME DIRECTORS:
On the happening of any of the Events of Default, in addition to
the rights specified in Article 10 above, SCICI 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 SCICI 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 SCICI. 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 SCICI or such whole time Nominee
Director(s) in connection with their appointment or directorship
shall be paid or reimbursed by the Borrower to SCICI, or as the
case may be, to such Whole time Nominee Director(s).
v) PROVISION FOR ADDITIONAL SECURITY:
If the Borrower fails to provide and maintain the security as
stipulated by SCICI for the Loan, SCICI may call upon the
Borrower forthwith to furnish additional security acceptable to
SCICI for the amount of the deficiency. If however, the Borrower
fails to furnish such additional security within 30 days of
demand, SCICI shall be entitled to demand forthwith payment of
the entire amount of the Loan or any part thereof and in default
of such payment enforce the security. The Borrower agrees that
all the expenses, if any, to be incurred by SCICI in enforcing
the said security shall be added to the amount secured by the
said mortgage to be recovered by SCICI from the Borrower along
with the principal sum and interest in terms of these presents
and other securities as may be furnished by the Borrower to
SCICI.
26
: 20 :
vi) Maintenance of secured assets:
If the Borrower does not provide and maintain the security as
stipulated by SCICI for the Loan, within 30 days from a demand
being made in this behalf by SCICI, or fails to effect such
repairs to the satisfaction of SCICI, whose opinion in this
behalf shall be final and binding on the Borrower, SCICI shall
have the necessary powers to carry out such repairs as may, in
its opinion, be necessary at its cost and recover all such costs
from the Borrower together with interest thereon at the lending
rate for short term loans of SCICI applicable to the Borrower.
If the Borrower fails to repay all the said amounts as herein
stipulated the same shall be added to the amount secured by the
mortgage without prejudice to SCICI's rights as to the recovery
of the principal sum and interest and other moneys due under the
Loan.
vii) Maintenance of Insurance cover:
If the Borrower fails to maintain the insurance of the assets
constituting the security as specifically set out in Article 6
above, SCICI shall have the right to maintain the cover at its
own cost and the expenses incurred shall be payable by the
Borrower together with the interest at the lending rate for
short term loans of SCICI applicable to the Borrower and in
case the Borrower fails to reimburse the same immediately on
demand made by SCICI, the amount shall be added to the amount
secured by the mortgage.
ARTICLE - 15
MISCELLANEOUS
15.5 - Borrower's warranties:
Except to the extent already disclosed in writing by the Borrower to
SCICI, the Borrower shall be deemed to have assured, confirmed and undertaken
as follows:
i) 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.
ii) Conflict with Memorandum and Articles of Association:
Nothing in the Loan Agreement conflicts with the Memorandum and
Articles of Association of the Borrower.
15.2 - Working Capital:
i) The Borrower shall make satisfactory arrangements with its
Bankers for meeting its working capital requirements and shall
furnish confirmatory advices from its Bankers in this regard to
SCICI.
27
: 21 :
ii) The Borrower agrees that SCICI may, at its discretion, withhold
disbursement of the amount of the Loan equivalent to the
provision against margin money for working capital in the cost
of the Project, until such time the Project is completed and the
build-up of working capital commences.
15.3 - Suspension, Restoration and Termination:
i) Suspension:
Further access by the Borrower to the use of the Loan may be
suspended or terminated by SCICI: -
a) 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 14.1 above.
b) If any extraordinary situation makes it improbable that
the Borrower would be able to perform its obligations
under the Loan Agreement.
c) 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) If any change in the Borrower's set-up has taken place
which 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 in the opinion of SCICI
(which shall be final and binding on the Borrower).
e) If for any reason there is any suspension or
cancellation in the credit facility to SCICI from which
the Loan is funded.
ii) Restoration:
The right of the Borrower to make drawals from the Loan shall
continue to be suspended until SCICI notifies the Borrower that
the right to make withdrawals has been restored.
iii) Termination:
If any of the events described above is also specifically in
Article 14.1 above, has been continuing or if the Borrower has
not withdrawn the Loan by the date referred to in Article 3.3
above or such later date as may be agreed to by SCICI then, in
such event, SCICI may, by notice in writing to the Borrower,
terminate the right of the Borrower to make drawals. Upon such
notice, the undrawn amount of the Loan shall stand cancelled.
Notwithstanding any cancellation, suspension
28
: 22 :
or termination pursuant to the aforesaid provisions, all the
provisions under these presents shall continue to be in full
force and effect as herein specifically provided.
15.4 - Service of notice:
Any notice or request to be given or made to SCICI, 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 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.
15.5 - Evidence of debt:
i) SCICI shall maintain, in accordance with its usual practice,
accounts evidencing the amounts from time to time lent by and
owing to it under these presents.
ii) SCICI shall maintain in its books a control account or accounts
in which shall be recorded:
a) the amount of any advance made under these presents by
SCICI.
b) the amount of any principal or interest due or to become
due from the Borrower to SCICI under these presents.
c) the amount of any sum received or recovered by SCICI
under these presents and/or security documents executed
in favour of SCICI.
In any legal action or proceedings arising out of or in
connection with this Loan Agreement, the entries made in
the accounts maintained pursuant to sub- clauses (i) and
(ii) above shall be prima-facie evidence of the
existence and the extent of obligations of the Borrower
as therein recorded.
15.6 - Benefit of this Loan Agreement:
This Loan Agreement shall be binding upon and enure to the benefit of
each party hereto and its successors and assigns.
15.7 - Jurisdiction:
The Competent Court at MUMBAI shall have jurisdiction in the matters
arising out of these presents or any other documents connected with these
presents and executed between SCICI and the Borrower and the laws of India
shall apply.
The submission to the above jurisdiction shall not be construed as
limiting the right of SCICI to take proceedings against the Borrower in any
other jurisdiction that seems fit to SCICI and nor shall the taking of
proceedings in any one or more jurisdiction preclude the taking of proceedings
in any other jurisdiction, whether concurrently or not.
29
: 23 :
15.8 - Stamp duty:
The expenses of providing the proper stamp duty and other costs of an
incidental to the execution of these presents shall be borne by the Borrower.
15.9 - Waiver not to impair the rights of SCICI:
No delay in exercising or omission to exercise any right, power or
remedy accruing to SCICI upon any default under these presents,
security documents and/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 SCICI in
respect of any default or any acquiescence by it in any default, affect or
impair any right, power or remedy of SCICI in respect of any other default.
ARTICLE - 16
EFFECTIVE DATE OF AGREEMENT
This Agreement shall become binding on the Borrower and SCICI on and
from the date first above written. It shall be in force till all the monies due
and payable under this Agreement or such supplementary or amending agreements
as may be entered into between the Borrower and SCICI are fully paid off.
30
: 24 :
- -------------------------------------------------------------------------------
| |
| |
- -------------------------------------------------------------------------------
Company Assistance Serial
Code Number Number
SCHEDULE - 1
THE PROJECT
Modular Electronics India (P)Ltd proposes to undertake an expansion scheme to
increase the installed capacity for manufacture of 3.5" hard disk drives (HDDs)
from 5 lac number per annum (Inpa) to 121npa at its existing facilities to
Madras Export Processing, Madras.
FINANCING PLAN
Cost of Project Rs. 692.0 million
Means of financing
- ------------------
Share capital 199.0
FCL
- ICICI 260.0
- SCICI 100.0 360.0
-----
Unsecured loans 129.6
Internal accruals 131.9
Subsidy 8.5
-----
829.0
The Borrower shall implement the project/scheme within the overall project cost
and in accordance with the financing plan as set out in this Schedule and
shall commence commercial production after implementation of the project on or
before March 31, 1997 ("the completion date").
31
: 25 :
NO. & REPAYMENT PERIODICITY
SCHEUDLE OF PERIOD
AMOUNT OF LOAN RATE OF INTEREST INSTALMENTS FROM TO
The aggregate amount of the
Loan will comprise of:
(A) A sum to the maximum of ___ per cent per annum* on the #________________ _____ _____
________________ only loan outstanding from time to
time, payable monthly/quarterly/
half-yearly on the ______ day of
________________________________
________________________________
and _________________ each year.
(B) A sum to the maximum of ___ per cent per annum* on the [infinity symbol]________________ _____ _____
________________ only loan outstanding from time to
time, payable monthly/quarterly/
half-yearly on the ______ day of
________________________________
________________________________
and _________________ each year.
(C) A sum to the maximum of 4% per cent over six month @ 12 quarterly ________________
US$ 3 million only LIBOR first quarter last quarter
________________________________ of the year 1998 of the year 2000
_____ payable quarterly on the
_____ day of
To be indicated at the time of
disbursement and _______________
each year.
(D) A sum to the maximum of ___ per cent over ____________ = ________________ _____ _____
________________ only ________________________________
________________________________
_____ payable monthly/quarterly/
half-yearly on the ______ day of
________________________________
________________________________
and _________________ each year.
# See page 28 for Amortisation Schedule/[infinity symbol] See page 29 for
Amortisation Schedule
@ See page 30 for Amortisation Schedule/= See page 31 for Amortisation Schedule
- --------------------------------------------------------------------------------
* The words per annum in the Schedule is with reference to a year of 360 days.
Refer article 4.2 at page 3.
32
: 26 :
ADDITIONAL INTEREST: 1.05 per cent per annum on the amount of the loan
disbursed from the date of first disbursement until
creation of security on all assets specified herein
and until submission of satisfactory proof thereof to
SCICI.
* ____ per cent per annum on the loan outstanding from
time to time until the Borrower's shares are listed on
any recognised stock exchange or on the OTC Exchange of
India.
"Where Borrowers are Companies, security creation on both movable and immovable
properties would be considered complete, when the Registrar of Companies (ROC)
affixes his stamp on the relative forms and accompanying instruments with the
word "REGISTERED" under his signature with the date and a copy thereof is
delivered to the Borrower and the chargeholder". In the alternative the
Borrower may produce the Certificate of registration issued by the ROC office.
Additional interest for non-creation of security would cease to accrue only
upon receipt of the forms as aforesaid.
*(delete if inapplicable)
LAST DATE OF DRAWAL: January 15, 1997
MANAGEMENT FEE: 1.05 per cent on the rupee equivalent of the Loan as
specified by SCICI to the Borrower on date of
execution of these presents.
SECURITY FOR THE LOAN
(A) The Loan together with all interest, premium on prepayment, costs,
expenses and other monies whatsoever stipulated in this Loan Agreement shall be
secured by first mortgage/hypothecation or other charge on the following:
All the immoveable properties of the Borrower including Land(s) bearing
survey no(s). _________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
and situate at ________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
including building(s), factory site(s), godown(s), warehouse(s) and
appurtenances thereof;
and/or
All moveable properties of the Borrower including its plant and
machinery. ___________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
together with machinery spares, tools and accessories, located at the
Borrower's premises at Units 6, 23, 34, 35, 36, 37, 38, 45, 46, 51, 52
33
: 27 :
53,54,55,56 at Madras Export Processing Zone, Phase I as units 4F and 4G at
Madras Export Processing Zone, Phase II and the Borrower's vehicles and other
moveables, both present and future, and its current assets and receivables
(save and except specified moveables which are charged or may require to be
charged only with the prior written approval of SCICI in favour of lenders of
working capital).
(B) The Borrower shall procure a Personal Guarantee from _____________________
Limited/Smt/Shri ___________________, Smt/Shri _________________________, and
Shri M L TANDON in a form and manner satisfactory to SCICI.
(C) ____________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The mortgages/charges referred to above in favour of SCICI will rank
pari passu with the mortgages/charges created/to be created by the Borrower in
favour of The Industrial Credit and Investment Corporation of India Limited
(ICICI).
The custody of the documents related to the security referred herein
shall be with ICICI on behalf of itself and all the participating institutions
in the Project.
SPECIAL BANK ACCOUNT:
The Borrower shall:
(a) Keep the drawals from the Loan in a special account in the name of the
Borrower with a Scheduled Bank to be approved by SCICI, the payments
from which accounts shall be subject to verification by any person
authorised in this behalf by SCICI. The Borrower shall also obtain and
furnish to SCICI a letter (in a form approved by SCICI) from the said
bank foregoing its right of set-off or lien in respect of such account.
(b) Keep such records as may be required by SCICI to facilitate verification
of the entries in the said account. The Borrower shall also authorise
the said bank to furnish to SCICI, as and when required by it, certified
true copy of the said account with details for verification by SCICI, at
the expense of the Borrower.
(c) Not transfer the Loan or any portion thereof from the said special
account for being kept in call or any deposit in any bank without
obtaining the prior written approval of SCICI.
34
: 28 :
Repayment:
(a) During the implementation period of the project, the loan shall be
repayable on demand being made by SCICI at any time.
(b) SCICI shall have a right to conduct a review of the project before
completion of the project and the Borrower agrees that:-
(i) If as a result of such review, SCICI determines that the
Borrower has implemented/is likely to implement the
project within the project cost and in accordance with
the Financial Plan and has commenced/likely to commence
commercial production by the completion date, the
Borrower shall repay the Loan in 12 quarterly
instalments commencing from first quarter of 1998 and
ending on last quarter of 2000.
(ii) If, however, as result of such review, SCICI
determines that the Borrower has not implemented/nor is
likely to implement the Project within the Project cost
and/or in accordance with the Financing Plan and/or the
Borrower has not commenced/nor is likely to commence
commercial production after implementation of the
proposed scheme by the completion date, SCICI shall have
the right to revise the repayment schedule and stipulate
such additional conditions (including strengthening of
the management set up, change in means of financing,
raising of additional equity capital/other interest free
unsecured funds from the promoters) as SCICI in its
absolute discretion deem fit and to require the Borrower
to take such measures as may be stipulated by SCICI in
the light of the revised cost of the Project/means of
financing/date of completion of project. Unless
otherwise agreed to by SCICI the loan would continue to
be repayable on demand until the Borrower complies with
the stipulated terms and conditions to the satisfaction
of SCICI and commence commercial production. Upon such
compliance of the conditions and commencement of
commercial production, the Borrower shall repay the
loans in accordance with the repayment schedule as may
be stipulated by SCICI, which repayment schedule shall
be final and binding on the Borrower.
35
: 29 :
AMORTISATION SCHEDULE#
Due Date Amount*
- --------------------------------------------------------------------------------
* The Borrower shall execute a Note of Amendment for crystallisation of the
amortisation schedule after disbursement of the Loan indicated above, if
necessary.
36
: 30 :
AMORTISATION SCHEDULE [infinity symbol]
Due Date Amount*
- --------------------------------------------------------------------------------
* The Borrower shall execute a Note of Amendment for crystallisation of the
amortisation schedule after disbursement of the Loan indicated above, if
necessary.
37
: 31 :
AMORTISATION SCHEDULE@
Due Date Amount*
TO BE INDICATED AT THE TIME OF DISBURSEMENT
- ---------------------------------------------------------------------------
* The Borrower shall execute a Note of Amendment for crystallisation of the
amortisation schedule after disbursement of the Loan indicated above, if
necessary.
38
: 32 :
AMORTISATION SCHEDULE [infinity symbol]
Due Date Amount*
- -------------------------------------------------------------------------------
* The Borrower shall execute a Note of Amendment for crystallisation of the
amortisation schedule after disbursement of the Loan indicated above, if
necessary.
39
: 33 :
SCHEDULE - 2
SPECIAL CONDITIONS
(Project Specific)
1. Any surcharge levied on loans drawn for import of capital goods, if any,
shall be recovered from the Borrower in addition to the interest as
mentioned above excluding interest tax, if payable in terms of Reserve
Bank of India guidelines or any other rules, regulations, law etc. that
may be applicable from time to time.
2. The Borrower shall, out of the envisaged cash accruals of Rs. 222
million during the one year period ending March 31, 1997, utilise a sum
of Rs. 197.7 million for meeting a part of the cost of the Project
and/or other requirements of funds.
3. The Borrower shall raise Rs. 199 million by issue of Equity Shares to
promoters to the satisfaction of SCICI for meeting a part of the cost of
the Project and/other requirements of funds.
4. Before the loan become effective,
a) the Borrower shall raise at least 50% of the abovementioned
equity capital of Rs. 199 million i.e., at least Rs. 99.5 million, to
the satisfaction of SCICI for meeting a pert of the cost of the project.
b) the Borrower shall raise at least 50% of the above mentioned
unsecured loans of Rs. 129.6 million, i.e. at least Rs. 64.8 million, to
the satisfaction of SCICI for meeting a part of the cost of the project.
5. The Borrower shall obtain State Subsidy of Rs. 8.5 million for meeting a
part of the cost of the project. In the event the Borrower is unable to
obtain the subsidy, it shall raise funds on terms satisfactory to SCICI
to meet the shortfall.
6. The Borrower shall raise unsecured loan of Rs. 129.6 million, to the
satisfaction of SCICI for meeting a part of the cost of the project. The
unsecured loans, shall not carry any interest till the Borrower
commences payment of dividend. Thereafter, the interest on such loan
shall be equal to the interest on secured loans or the percentage of
dividend, whichever is lower.
7. The Borrower shall obtain sanction for its requirement of power for the
project from State Electricity Board(s) to the satisfaction of SCICI.
40
: 34 :
8. The Borrower shall make arrangements for meeting its requirement of
water for its schemes to the satisfaction of SCICI.
9. The Borrower shall suitably amend its Article of Association to provide
for appointment of nominee director by SCICI on the Board of the
Company.
41
: 35 :
42
: 36 :
43
: 37 :
IN WITNESS WHEREOF THE Borrower has caused its Common Seal to be affixed hereto
and to the duplicate hereof and SCICI has caused this Agreement to be exercised
on the day, month and year first above written and as hereafter appearing:
* The COMMON SEAL OF withinnamed
Moduler Electronics India (Pvt) Ltd
____________________________________
____________________________________
was affixed pursuant to the Board
Resolution passed in that behalf on
the 6th day of June 1996 in the
presence of Shri M L Tandon and
Shri Bhupendra V. Shah, Directors
____________________________________
____________________________________
____________________________________
who have subscribed their signatures
hereto in token thereof and in the
presence of ________________________
____________________________________
who has countersigned hereto as
Authorised Signatory.
* As per Borrower's Articles of
Association.
SIGNED, AND DELIVERED by the
withinnamed SCICI LIMITED By
the hand of Shri K. V. UNNI
its Authorised Signatory.