1
Exhibit 10.3
20 Rs
[Facsimile of Indian Rupee]
LOAN AGREEMENT
THIS AGREEMENT made this day of One Thousand Nine Hundred
and Ninety Four between Seec, Incorporated, a corporation domesticated in the
Commonwealth of Pennsylvania, having its Registered Office at 0000, Xxxx Xxxx.,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000, XXX (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 Lender", which expression shall, unless it be repugnant to
the subject or context thereof, include its successors and assigns);
2
LOAN AGREEMENT
BETWEEN
SEEC, INCORPORATED
AS BORROWER
AND
THE INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA LIMITED
AS LENDER
UNDER
PROGRAM FOR THE ADVANCEMENT OF COMMERCIAL TECHNOLOGY
3
CONTENTS
Article Subject
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I DEFINITIONS: GENERAL CONDITIONS
II AGREEMENT AND TERMS OF LOAN
III SECURITY
IV APPOINTMENT OF NOMINEE DIRECTOR(S)
V SPECIAL CONDITIONS
VI EFFECTIVE DATE OF AGREEMENT
VII MISCELLANEOUS CONDITIONS
SCHEDULE I - THE PROJECT
SCHEDULE II - FINANCING PLAN
SCHEDULE III - AMORTIZATION SCHEDULE
SCHEDULE IV - SPECIAL CONDITIONS
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W H E R E A S
A. An Agreement (hereinafter referred to as "the PACT Agreement") has been
executed on 30th August, 1985 between the Government of India and the
Government of United States of America acting through United States
Agency for International Development (hereinafter referred to as ("AID")
for undertaking a Program for the Advancement of Commercial Technology
(PACT) which is designed to accelerate the pace and quality of
technological innovation for products and production processes having
applications in industry, agriculture, health and other areas, wherein The
Industrial Credit and Investment Corporation of India Limited (ICICI) has
been appointed as implementing agency for the PACT project;
B. Under the PACT Agreement, the Government of the United States of America
acting through AID has agreed to contribute a certain sum for PACT
(hereinafter referred to as "AID Grant Resources");
C. The AID Grant Resources alongwith return flows therefrom are to be used to
promote and finance Indo-US joint technology development ventures and
towards achieving objectives of PACT in general;
D. AID Grant Resources would be disbursed by AID to ICICI through GOI but ICICI
shall not have any present or future beneficial interest therein and ICICI
has agreed to manage and administer the same in accordance with the PACT
Agreement for the purpose of implementing PACT;
E. The Borrower was earlier provided financial assistance from PACT for
"Development of tools for data bases reengineering for applications in
Relational Databases Management Systems (RDBMS)". The Borrower with Era
Software Systems Pvt. Ltd. had jointly entered into Cooperation and Project
Financing (CPF) Agreement with ICICI dated 20th day of June, 1990, and
Supplemental Cooperation and Project Financing Agreement dated 25th day of
November, 1992. The Borrower has since completed the development.
F. The Borrower has heretofore submitted to PACT a loan proposal (hereinafter
called "the Proposal"). For and on the basis of the Proposal, the Borrower
has applied to ICICI for financial assistance out of the PACT resources for
commercialising the product; and
G. In accordance with the provisions of the PACT Agreement, the appropriate
authority has examined and approved the Proposal for financing out of the
AID Grant Resources and ICICI has agreed on behalf of GOI to provide
financing for the implementation of the Proposal on the terms and conditions
hereinafter set forth.
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NOW THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS: GENERAL CONDITIONS
I. DEFINITIONS
1.1 The following terms shall have the following meanings:--
(a) "General Conditions" means the GENERAL CONDITIONS APPLICABLE TO FOREIGN
CURRENCY LOANS PROVIDED BY financial institutions (GC-FC-88);
(b) "Project" means the project to be financed as described by "the Proposal"
dated the 17th day of December 1993, incorporated by reference and made a
part of this Agreement. Provided that if any of the said Proposal is
inconsistent with any other provision of this Agreement, the provision
otherwise set forth in this Agreement shall prevail. A brief description of
the project is included in SCHEDULE I hereto; and
(c) "Financing Plan" means the financing plan as described in SCHEDULE II
hereto.
1.2 GENERAL CONDITIONS
The Loan hereby agreed to be granted by the Lender shall be subject to the
Borrower complying with the terms and conditions set out herein and also the
General Conditions No. GC-FC-88, a copy of which has been attached hereto. The
General Conditions shall be deemed to form part of this Agreement and shall be
read as if they are specifically incorporated herein. As specified in Article I
of the General Conditions No. GC-FC-88, the provisions of this Loan Agreement
shall take precedence over any inconsistent provision in the General
Conditions.
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ARTICLE II
AGREEMENT AND TERMS OF LOAN
2.1 AMOUNT AND TERMS OF LOAN:
The Borrower agrees to borrow from the Lender and the Lender agrees to lend to
the Borrower, on the terms and conditions contained herein as also in the
General Conditions No. GC-FC-88, a sum to the maximum extent of US$ 300,000
(US$ Three Hundred Thousand Only).
2.2 INTEREST:
(i) The Borrower shall pay to the Lender interest at a rate based on a
spread of 2.5% above US prime rate on the principal amounts of the
Loan outstanding on a quarterly basis in each year, on January 15,
April 15, July 15 and October 15, subject to a cap of 9% and a floor
of 6%.
The prime rate as defined in this agreement refers to the US prime
rate (as published in The Wall Street Journal) for the first work day
of each quarter beginning January 1, April 1, July 1 and October 1
respectively of each year. This rate would be applicable for the next
3 months. The borrower shall inform ICICI by telefax within one week
after January 1, April 1, July 1 and October 1 respectively or each
year of such rate.
2.3 COSTS AND CHARGES:
The Borrower shall pay all taxes, duties, costs, charges and expenses in
connection with or relating to the Loan transaction (including costs of
investigation of title and protection of Lender's interests). In the event of
the Borrower failing to pay the aforesaid moneys, the Lender will be at liberty
but shall not be obliged to pay the same. All such sums shall be reimbursed
by the Borrower to the Lender within 30 days from the date of notice of demand
from the Lender and shall be debited to the Borrower's Loan Account and shall
carry interest at the highest lending rate of the lender from the date of
payment till such reimbursement.
2.4 LAST DATE OF WITHDRAWAL:
Unless the Lender otherwise agrees, the right to make withdrawals from the
Loan shall cease on September 30, 1994.
2.5 REPAYMENT:
The Borrower undertakes to repay the principal amounts of the Loan in
accordance with the Amortization Schedule set forth in SCHEDULE III hereto.
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2.6 REVIEW OF THE PROJECT
1. The Borrower shall implement the Project within the overall project cost of
US$ 600,000 (US$ Six Hundred Thousand Only) ("the Project Cost") and in
accordance with the financing plan ("the Financing Plan") both as agreed to
between the Borrower and the Lender and set out in SCHEDULE II hereto.
2. The Borrower agrees that the Lender shall have the right to conduct a
review of the Project before and after completion of the Project.
3. The Borrower agrees that :--
If, however, as a result of such review the Lender 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, the Lender
shall have the right to revise the Repayment Schedule and stipulate such
additional conditions (including strengthening of management set up, change
in means of financing, raising of additional equity capital / other
interest-free unsecured funds from the Promoters) as the Lender in its
absolute discretion deem fit and to require the Borrower to take such other
measures as may be stipulated by the Lender in the light of the revised
cost of the Project/means of financing/date of commencement of commercial
production. Unless otherwise agreed to by the Lender and in such event, the
Loan shall become repayable on demand until the Borrower complies with the
stipulated terms and conditions to the satisfaction of the Lender and
commences commercial production. Upon such compliance of the conditions
and commencement of commercial production the Borrower shall repay the
Loan in accordance with the Repayment Schedule as may be stipulated by
the Lender, which Repayment Schedule shall be final and binding on
the Borrower.
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ARTICLE III
SECURITY
3.1 SECURITY FOR THE LOAN
(A) The Loan together with interest, additional interest, and other costs,
expenses and other moneys whatsoever stipulated in this Agreement shall be
secured by a first charge by way of hypothecation in favour of the Lender
of ALL THE BORROWER'S MOVEABLES (save and except book debts), including
movable machinery, machinery spares, tools and accessories, present and
future, pertaining to the project, subject to prior charges created and/or
to be created 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 Lender for securing the
borrowings for working capital requirements in the ordinary course of
business. The terms "moveables" and "immovables" as used herein do not
include source codes, copyrights and trademarks.
(B) The Borrower shall make out a good and marketable title to its properties
to the satisfaction of the Lender and comply with all such formalities as
may be necessary or required for the said purpose.
(C) The Borrower shall not sell, give on lease, license to conduct, mortgage,
charge or otherwise dispose off its immovable properties, the plant and
machinery or equipment or other assets purchased out of the loan or
otherwise except with the prior permission from ICICI and agree to furnish
suitable undertaking in this regard. Such equipment/machinery and other
assets purchased out of loan shall be clearly identified.
(D) SECURITY INTEREST IN ACCOUNTS RECEIVABLE. So long as there remains any
outstanding unpaid balance on the loan, the lender shall have a security
interest in the borrower's present and future accounts receivable up to
the loan amount. The lender hereby agrees that if the borrower should at
any time be in default of its loan obligations to the lender, and if the
lender collects any account receivable of the borrower, the lender will
retain not more than 30% of each account receivable on account of
borrower's unpaid balance, and lender will remit to borrower the remaining
70% of each account receivable which lender collects. Borrower will, at
the time this Loan Agreement is signed, sign and deliver to lender for
filing with the Commonwealth of Pennsylvania, a UCC -1 Financing Statement
which will enable lender to perfect its said security interest in
borrower's accounts receivable.
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3.2 CREATION OF ADDITIONAL SECURITY
If, at any time during the subsistence of this Agreement, the Lender is of the
opinion that the security provided by the Borrower has become inadequate to
cover the balance of the Loan then outstanding, then, on the Lender advising
the Borrower to that effect, the Borrower shall provide and furnish to the
Lender, to the satisfaction of the Lender such additional security as may be
acceptable to the Lender to cover such deficiency. The Borrower will not be
required to furnish security totaling more than one hundred and twenty (120%)
percent of the unpaid balance of principal and accrued interest on the loan.
3.3 ACQUISITION OF ADDITIONAL IMMOVABLE PROPERTIES
So long as any moneys remain due and outstanding to the Lender, the Borrower
undertakes to notify the Lender in writing of all its acquisitions of immovable
properties and as soon as practicable thereafter to make out a marketable title
to the satisfaction of the Lender and include the same in the undertaking as
mentioned in Section 3.1 (c).
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ARTICLE IV
APPOINTMENT OF NOMINEE DIRECTOR
In the event the borrower is in default under the terms of this Loan Agreement,
the Borrower agrees that the Lender shall be entitled to appoint and withdraw
from time to time one Director on the Board of Directors of the Borrower at any
time during the currency of this Agreement.
ARTICLE V
SPECIAL CONDITIONS
5.1 The Loan hereby granted shall also be subject to the Borrower complying
with the special conditions set out in SCHEDULE IV hereto.
5.2 CAP ON COSTS. As used in this paragraph, the term "costs" shall include any
and all payments due under this Loan Agreement and the General Conditions
GC-FC-88, other than payments of principal or interest made or due on the Loan.
The parties agree that any costs imposed on Borrower under the terms of this
Loan Agreement and General Conditions GC-FC-88, shall not exceed a maximum of
Five Thousand ($5000) US Dollars in the aggregate.
5.3 EXERCISE OF DISCRETION. In all instances in which the Loan Agreement and
General Conditions GC-FC-88 give the Lender the right to act unilaterally,
and/or at its sole discretion, the Lender covenants and agree that it will
exercise its discretion in a reasonable manner. Any dispute regarding the same
may be submitted to binding arbitration by either party.
ARTICLE VI
EFFECTIVE DATE OF AGREEMENT
This Agreement shall become binding on the Borrower and the Lender on and from
the date first above written. It shall be in force till all the moneys due and
payable under this Agreement are fully paid off.
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ARTICLE VII
1 MISCELLANEOUS CONDITIONS:
(i) This Agreement shall be construed and interpreted in accordance with the
laws of India and neither the Borrower or the Lender shall request the
Borrower to do anything contrary to any United States law or regulation.
(ii) BINDING ARBITRATION. Notwithstanding any provision in the Loan Agreement
and the General Conditions GC-FC-88 to the contrary, the parties agree
that all disagreements, claims and disputes between them arising from or
related to the Loan Agreement and the General Conditions GC-FC-88, shall
be decided by binding arbitration by arbitrators approved by the
Indo-American Chamber of Commerce. All such arbitration proceedings shall
be conducted under the auspices of, and in accordance with the rules of,
the Indo-American Chamber of Commerce, at a location to be mutually agreed
to by the parties, or failing agreement, to be decided by the arbitrators.
The decision of the arbitrators shall be final and binding on the parties.
(iii) All disputes or differences whatsoever arising between the parties out of
or relating to the construction, meaning and operation or effect of this
Agreement or breach thereof shall be settled by arbitration in accordance
with the Rules of Arbitration of the Indian council of Arbitration and the
award made in pursuance thereof shall be binding on the parties. The venue
of arbitration will be Bombay.
(iv) The Proposer undertakes to comply with all applicable laws, rules and
regulations as prevailing in India and United States of America as the
case may be and will also apply and obtain all necessary licenses,
consents and permits for the purposes of entering into and carrying out
their obligations.
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SCHEDULE I
THE PROJECT
The Borrower, an already existing company, proposes commercialisation of tools
for software reengineering. The cost of the project estimated at US $ 600,000
is proposed to be financed by Founder's contribution of US $ 300,000, and
foreign currency term loan from ICICI of US $ 300,000.
The Borrower has approached the Lender to provide term loan of US $ 300,000 to
finance a part of the cost of project. The lender has agreed to provide a
Foreign Currency Term Loan of US $ 300,000 to the borrower from PACT Resources.
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SCHEDULE II
COST OF PROJECT AND FINANCING PLAN
COST OF THE PROJECT
The cost of the project is estimated at US $ 600,000 as follows:
(US $ '000)
Capital equipment 50
Salaries and Wages 350
Brochures and Support material 10
Direct mail campaign 10
Trade and Road shows 50
Travel 40
Advertising & Tele marketing 90
---
600
===
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MEANS OF FINANCING
The above project cost estimated at US $ 600,000 is proposed to be financed as
follows :
(US $ '000)
SEEC Revenues & Reservers 300
Foreign Currency Term Loan
from PACT Resources 300
---
600
===
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SCHEDULE III
AMORTIZATION SCHEDULE
Name of the Lender : ICICI
Amount of Amount outstanding
Date of instalment after each payment
instalment Due (US$ '000) (US$ '000)
------------------ ---------- ------------------
December 15, 1995 30 270
March 15, 1996 30 240
June 15, 1996 30 210
September 15, 1996 30 180
December 15, 1996 30 150
March 15, 1997 30 120
June 15, 1997 30 90
September 15, 1997 30 60
December 15, 1997 30 30
March 15, 1998 30 0
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SCHEDULE IV
SPECIAL CONDITIONS as listed herein below
1. Before the loan become effective
a) The Borrower shall make necessary arrangements for bringing in a part of
the funds agreed to for financing the project.
b) In the event the Borrower is in default under the terms of this loan
agreement it shall if required by ICICI, broadbase its Board of Directors
and finalise/strengthen its management set-up in consultation with and
to the satisfaction of the ICICI.
c) The company shall make arrangements with its bankers, satisfactory to
ICICI, for meeting its working capital requirements.
2. The company undertakes that during the currency of the loan it shall not
declare any dividend on its share capital, if it fails to meet its
obligations to pay interest and/or instalment of instalments and/or other
moneys payable to ICICI so long as it is in such default.
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3. a) The company undertakes to maintain proper books of accounts for
utilisation of PACT funds and to submit auditors' certificate for the
same. It has to get them audited by a firm of chartered Accountants on
the approved list of AID/W, Regional Inspector General (RIG/A/S) and
submit a report in accordance with the guidelines issued by RIG/A/S.
b) The company shall also enable periodic visits by ICICI and United States
Agency for International Development (USAID) officers for assessing
progress of work and monitoring the project.
c) The company shall comply with such special conditions as may be
stipulated by ICICI at the time of disbursement of loan or subsequently.
4. In case of default under the terms of this loan agreement ICICI shall be
entitled to appoint one nominee on the Board of Directors of the company
during the currency of the ICICI assistance.
5. In case of default (set forth in General Conditions GC-FC-88), ICICI has an
option to convert moneys due to common stock of the borrower at fair value
to be decided by an independent evaluator.
6. The borrower shall provide ICICI with the opinion of the Borrower's counsel
that the Borrower is a validly existing organisation and is authorised to
enter into all aspects of the transaction, that no liens affecting the
Property other than these to which ICICI specifically consents exist and
that the Borrower is authorised and empowered to borrow the sum specified
herein and to create security in favour of ICICI.
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IN WITNESS WHEREOF the Borrower has caused its Common Seal to be affixed hereto
and to a duplicate hereof on the day, month and year first hereinabove written
and the Lender has caused the same to be executed by the head of authorised
official of the Lender as hereinafter appearing.
THE COMMON SEAL of SEEC, INC. was
pursuant to the Resolution of its Board
of Directors passed in that behalf on the
day of 1994 hereunto
affixed in the presence of
Xx. Xxxxx X'Xxxxxx [SEAL]
who has signed these presents in token
thereof.
SIGNED AND DELIVERED BY the within named
Lender by the hand of Shri
an authorised official of the Lender.
19
GENERAL CONDITIONS
NO. GC-FC-88
APPLICABLE TO FOREIGN CURRENCY LOANS PROVIDED BY
FINANCIAL INSTITUTIONS
20
TABLE OF CONTENTS
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
* * * * *
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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 any one or more of them where the
subject or context so admits.
5. "Loan Agreement" means the particular loan agreement and includes these
General Conditions as 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 such thereof as may be outstanding from time to time.
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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.
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(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 instalment(s) 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 instalment(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 instalment(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 instalment(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 instalments of principal due and payable
under the Loan Agreement.
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b) Notwithstanding anything contained in clause(s) 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 LOANS/CURRENT/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 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 rupees 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 rupees 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 this 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 X
XXXXXXX 0 - XXXXXXXX'X XXXXXXXXXX
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:
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(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:
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(a) RAISING OF SHARE CAPITAL
The Borrower shall raise share capital as stipulated in the Loan Agreement
and the promoters shall subscribe to such 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 term 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 sites 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.
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(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.
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(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
of 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.
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(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 t its shareholders during any financial year
unless it has paid all the dues to the Lenders upto 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
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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 ON 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, shut-downs, 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 upto 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, xxxxx, xxxxxxx, flood, marine risks, erection risks,
war risks and such other risks as may be specified by the Lead Institution.
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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 DAMAGE 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 safequard
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
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prior approval of the Lead Institution. Any such arrangement shall be subject
to such terms and conditions as may be stipulated by the Lead Institution.
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 expenditures 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:
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(i) EXISTING MANAGEMENT
The Borrower shall not remove any person, by whatever name called,
exercising substantial power 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 ACCOUNTANTS
The Lead Institution shall have the right to appoint, whenever it considers
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necessary, any person, firm, company or association of persons engaged in
technical, management or any other consulting 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 assignment(s) 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 as 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
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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 the 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 the Borrower to the Lenders/the Foreign Lending Agency in
this behalf.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1 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 occurred 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 formation 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 talking 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.
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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 institution(s) or bank(s) with whom the Borrower
has entered into agreements for financial assistance have refused to disburse
its/their loan(s) or any part thereof or have recalled its/their loan(s) under
their respective loan agreement(s) with the Borrower.
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 TO PAY DEBTS ON MATURITY
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 OF 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 debt from the Borrower.
o) EXTRA-ORDINARY 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
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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 II
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.
41
: 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) EXTRA-ORDINARY SITUATION
If, any extra ordinary situation makes it improbable that the Borrower
would be unable to perform its obligations under the Loan Agreement.
c) ASSIGNMENT OR TRANSFER OF PROPERTIES TO RECEIVER, ASSIGNEE, ETC.
If, the Borrower takes or permits to be taken any action or proceedings
whereby any or 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, where by 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 change 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
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
42
: 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 or 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 Financial 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
43
: 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-facia 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 to each
party thereto and its successors and assigns.
SECTION 14.4 HEADINGS
The headings of various Article and Sections herein and in the Loan
Agreement are inserted for convenience of reference and are not deemed to
affect to construction of the relative provision.
44
50 Rs.
[Facsimile of Indian Rupee]
DEED OF HYPOTHECATION
45
20 Rs.
[Facsimile of Indian Rupee]
DEED OF HYPOTHECATION
THIS DEED OF HYPOTHECATION executed at Bombay this day
of , One Thousand Nine Hundred and Ninety Four by Seec, Inc., having its
Registered Office at 0000, Xxxx Xxxx., Xxxxxxxxxx, Xxxxxxxxxxxx 00000, XXX
(hereinafter referred to as "the Borrower" which expression shall, unless it be
repugnant to the subject or context thereof, include its successors and
assigns) in favour of THE INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA
LIMITED, a public company incorporated under the Indian Companies Act, 1913
(VII of 1913) and having its Registered Office at 163, Backbay Reclamation,
Bombay 400 020 (hereinafter referred to as " the Lender" which expression
shall, unless it be repugnant to the subject or context thereof include its
successors and assigns).
... 2
46
: 2 :
WHEREAS
(1) By an Agreement dated the day of , 1994, entered into between
the Borrower and the Lender (hereinafter referred to as "the Loan
Agreement") the Lender has agreed to lend and advance to the Borrower and
the Borrower has agreed to borrow from the Lender on the terms and
conditions contained in the Loan Agreement a sum to the maximum extent of
US $ 300,000 (US $ Three hundred thousand only) out of funds provided by
United States Agency for International Development (USAID) under the
Program for Advancement of Commercial Technology (PACT).
(2) One of the conditions of the Loan Agreement is that the Loan together with
all interest, liquidated damages, premia on prepayment or on redemption,
costs, expenses and other moneys whatsoever stipulated in the Loan
Agreement shall be secured, inter alia, by a first charge by way of
hypothecation of all the Borrower's moveables (save and except book debts)
including movable machinery, machinery spares, tools and accessories,
present and future, subject to prior charges created and/or to be created
in favour of the 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 Lender (hereinafter referred to
as "the Bankers' Goods") for securing the borrowings for working capital
requirements in the ordinary course of business. The terms "moveables" and
"immoveables" as used herein do not include source codes, copyrights and
trademarks; and
(3) The Lender has called upon the Borrower to execute these presents which
the borrower has agreed to do in the manner hereinafter expressed.
NOW THEREFORE THESE PRESENTS WITNESSETH THAT :
1. In pursuance of the Loan Agreement and in consideration of the Lender
having lent and advanced and/or agreed to lend and advance the Loan to the
Borrower for the purposes and subject to the terms and conditions set out
in the Loan Agreement and in consideration of the premises, the Borrower
doth hereby covenant with the Lender that it shall repay the Loan to the
Lender and shall pay interest, additional
... 3
47
: 3 :
interest, premia on prepayment or on redemption, costs, charges and
expenses and all other moneys as stipulated and in the manner set out in
the Loan Agreement and shall duly observe and perform all the terms and
conditions of the Loan Agreement.
2. In pursuance of the Loan Agreement and for the consideration aforesaid, the
whole of the movable properties of the Borrower including its movable plant
and machinery, machinery spares, tools and accessories and other moveables,
both present and future, (save and except book debts) whether installed or
not and whether now lying loose or in cases or which are now lying or
stored in or about or shall hereafter from time to time during the
continuance of these presents be brought into or upon or be stored or be in
or about all the Borrower's factories, premises and godowns situated at
Pittsburgh, USA, or wherever else the same may be or be held by any party
to the order or disposition of the Borrower or in the course of transit or
on high seas or on order or delivery (hereinafter collectively referred to
as "the said Goods") short particulars whereof are given in Schedule
hereto, are hereby hypothecated as and by way of first charge to the Lender
as security for and be charged with the repayment of the Loan and repayment
or payment of other moneys including all interest, additional interest,
premia on prepayment or on redemption, costs, charges and expenses and all
other moneys due to the Lender under the Loan Agreement and these presents,
provided that the charge of the Lender thereon shall be subject to the
charges created and/or to be created by the Borrower in favour of its
bankers on the Bankers' Goods, to secure borrowings in the ordinary course
of the business of the Borrower for its working capital requirements. The
terms "moveables" and "immoveables" as used herein do not include source
codes, copyrights and trademarks;
3. In further pursuance of the Loan Agreement and for the consideration
aforesaid, the borrower doth hereby further agree, declare and covenant
with the Lender as follows:
... 4
48
: 4 :
i) The Borrower shall at its expense keep the said Goods in marketable and good
condition and insure the same in the joint names of the Borrower and the
Lender as provided in the Loan Agreement against any loss or damage by
theft, fire, lightning, earthquake, explosion, riot, strike, civil
commotion, xxxxx, xxxxxxx, flood, marine risk, erection risk, war risk, and
such other risks as the Lender shall, from time to time, require with an
insurance company or companies. The Borrower shall deliver to the Lender the
relevant policies of insurance dully assigned to the Lender and maintain
such insurance throughout the continuance of the security of these presents
and deliver to the Lender the renewal receipts therefor and shall duly and
punctually pay all premia and shall not do or suffer to be done or omit to
do or be done any act which may invalidate or avoid such insurance. In
default the Lender may (but shall not be bound to) keep in good condition
and render marketable the said Goods and take out/renew such insurance. Any
premium paid by the Lender and any costs, charges and expenses incurred by
the Lender shall, forthwith on receipt of a notice of demand from the
Lender, be reimbursed to the Lender together with interest thereon at the
applicable rate for the Normal Loan on the date of the Loan Agreement from
the date of payment and until such reimbursement by the Borrower the same
shall be debited to the Borrower's Loan Account and be a charge on the
said Goods.
ii) The nominees of the Lender and the UNITED STATES AGENCY FOR INTERNATIONAL
DEVELOPMENT shall, without any notice and at the risk and expense of the
Borrower, be entitled at all times to enter any place where the said Goods
mat be and inspect, value, insure, superintend the disposal of and take
particulars of all or any part of the said Goods and check any statement,
accounts, reports and information.
... 5
49
: 5 :
iii) In the event of any breach or default of the Borrower in the performance
of it obligations hereunder or any of the terms, covenants, obligations
and conditions stipulated in the Loan Agreement or the related security
documents or the deeds executed or that may hereafter be executed by the
Borrower in favour of the Lender or in the event of the Borrower failing
to pay either the interest or any instalment/s of the principal of the
Loan, or in the event of the charge or the security created in favour of
the Lender having become enforceable for any reason whatsoever, the Lender
or its nominees shall, in case such breach or default is not remedied by
the Borrower to the satisfaction of the Lender within a period of fifteen
days from the date of intimation by the Lender of such breach or default
or such extended time as may be granted by the Lender in writing, without
any notice and without assigning any reason and at the risk and expense of
the Borrower and if necessary as Attorney for and in the name of the
Borrower seize, recover, receive and remove them and/or sell by public
auction or by private contract, despatch or consign for realisation or
otherwise dispose of or deal with all or any part of said Goods and to
enforce, realise, settle, compromise and deal with any rights or claims
relating thereto without bound to exercise any of these powers or be
liable for any losses in the exercise or non-exercise thereof and without
prejudice to the Lender's rights and remedies or suit or otherwise.
Notwithstanding any pending suit or other proceeding, the Borrower
undertakes to give immediate possession to the nominees of the Lender on
demand of the said Goods and to transfer and to deliver to the Lender all
relative bills, contracts, securities and documents and the Borrower
hereby agrees to accept the Lender's account of sales and realisations as
sufficient proof of amounts realised and relative expenses and to pay on
demand by the Lender any shortfall or deficiency thereby shown Provided
however that the Lender shall not be in any way liable or responsible for
any loss, damage or depreciation that the said Goods may suffer or sustain
on any account whatsoever whilst the same are in possession of the Lender
or by reason of exercise or non-exercise of rights or remedies
... 6
50
: 6 :
available to the Lender as aforesaid and that all such loss, damage or
depreciation shall be wholly debited to the account of the Borrower
howsoever the same may have been caused.
iv) The Lender, at any time after the security hereby created has become
enforceable and whether or not the Lender shall then have entered into or
taken possession of and in addition to the powers hereinbefore conferred
upon the Lender after such entry into or taking possession of, may have a
receiver or receivers appointed of the said Goods or any part thereof. The
following provisions shall apply to such Receiver:
a) Unless otherwise directed by the Lender, such Receiver shall have and
exercise all powers and authorities vested in the Lender;
b) Such Receiver shall, in the exercise of his powers, authorities and
discretions, conform to the regulation and directions from time to
time made and given by the Lender;
c) The Lender may, from time to time, fix the remuneration of such
Receiver and shall direct payment thereof out of the said Goods, but
the Borrower alone shall be liable for the payment of such
remuneration;
d) The Lender may, from time to time and at any time, require such
Receiver to give security for the due performance of his duties as
such Receiver and may fix the nature and amount of the security to be
given to the Lender but the Lender shall not be bound to require such
security in any case;
e) The Lender may pay over to such Receiver any moneys constituting part
of the securities to the intent that the same may be applied for the
purpose hereof of such Receiver and the Lender may, from time to time,
determine what funds the Receiver shall be at liberty to keep in hand
with a view to the performance of his duties as such Receiver;
... 7
51
: 7 :
f) Every such Receiver shall be the agent of the Borrower for all purposes
and the Borrower alone shall be responsible for his acts and defaults,
loss or misconduct and liable on any contract or engagement made or
entered into by him and for his remuneration and the Lender shall not
incur any liability or responsibility therefor by reason of its making
or consenting to his appointment as such Receiver.
v) All the said Goods and all sale realisations and insurance proceeds
thereof and all documents under this security shall always by kept
distinguishable and held as the exclusive property of the Lender
specifically appropriated to this security and be dealt with only under
the directions of the Lender and the Borrower shall not create any charge,
mortgage, lien or other encumbrance upon or over the same or any part
thereof except in favour of the Lender nor suffer any such charge,
mortgage, lien or other encumbrance or any attachment or distress to
affect the same or any part thereof nor do or allow anything that may
prejudice this security and the Lender shall be at liberty to incur all
costs and expenses as may be necessary to preserve this security and to
maintain the same undiminished and claim reimbursement thereof as
mentioned in Sub-clause (i) hereof PROVIDED that except to the extent
specifically permitted by the Lender, the borrower shall not sell all or
any of the said Goods. The borrower shall on any and every such sale pay
to the Lender, if so required by it, the net proceeds of the sale or
disposal in satisfaction, so far as the same shall extend, of the moneys,
due and payable by the Borrower to the Lender PROVIDED that the Borrower
may without payment to the Lender, if the Lender so agrees, replace the
outmoded equipment by equipment of equivalent or greater value.
vi) The Borrower shall, whenever required by the Lender, give full particulars
to the Lender of all the assets of the Borrower and of the said Goods and
shall furnish and verify all statements, reports, returns, certificates
and information from time to time and as required by the Lender and make
furnish and execute all necessary documents go give effect to this
security.
... 8
52
: 8 :
vii) This security shall be a continuing security for repayment of the
Loan together with all interest, additional interest, premia on
prepayment or on redemption and repayment or payment of all other
moneys due to the Lender under the Loan Agreement and these presents
and shall not affect, impair or discharge the liability of the
Borrower by winding up (voluntary or otherwise) or by any merger or
amalgamation, reconstruction or otherwise of the Borrower with any
other company or take over of the management or nationalisation of
the undertaking of the Borrower.
viii) The Borrower hereby declares that the said Goods are and will at all
times be the absolute property of the Borrower at the sole disposal
of the Borrower and subject to the charges created and/or to be
created with the specific permission of the Lender be free from any
charge, trust, pledge, lien, claim or encumbrance and as to future
goods the same shall likewise be unencumbered, absolute and
disposable property of the Borrower with full power of disposition
over the same provided that the Borrower shall be entitled at all
times to sell or dispose of the Bankers' Goods in the ordinary course
of business and also to hypothecate the Bankers' Goods by way of
first charge in favour of its Bankers, such charge(s) in favour of
the Bankers to rank in priority over the charge hereby created.
ix) The Borrower hereby appoints the Lender as its attorney and
authorises the Lender to act for and in the name of the Borrower
to do whatever the Borrower may be required to do under these
presents and generally to use the name of the Borrower in the
exercise of all or any of the powers by these presents conferred
on the Lender and the Borrower shall bear the expenses that may
be incurred in this regard.
x) Nothing herein shall prejudice the rights or remedies of the
Lender in respect of any present or future security, guarantee
obligation or decree for any indebtedness or liability of the
Borrower to the Lender.
... 9
53
: 9 :
xi) The provisions contained herein shall be read in conjunction with the
provisions of the Loan Agreement as amended from time to time and
to the extent of any inconsistency or repugnancy the latter shall
prevail to all intents and purposes.
IN WITNESS WHEREOF the Borrower has caused its Common Seal to be
affixed hereto on the day, month and year first above written.
The Common Seal of SEEC, INC. has,
pursuant to the Resolution of its Board
of Directors passed in that behalf on
the day of 1994, hereunto been
affixed in the presence of
Xx Xxxxx X'Xxxxxx/and Xx Xxxx X. Xxxxxxx who have [SEAL]
signed these presents in token thereof
and Xx. Xxxx Ravindra
authorised person who has countersigned
the same in token thereof.
54
SCHEDULE
(Short particulars of movable properties)
The whole of the movable properties of the Borrower pertaining to the
Project including its movable plant and machinery, machinery spares, tools and
accessories and other moveables, both present and future, (save and except book
debts) whether installed or not and whether now lying loose or in cases or
which are now lying or stored in or about or shall hereafter from time to time
during the continuance of the security of these presents be brought into or
upon or be stored or be in or about all the Borrower's factories, premises and
godowns situated at Pittsburgh, USA or wherever else the same may be or be held
by any party to the order or disposition of the Borrower or in the course of
transit or on high seas or on order, or delivery, howsoever and wheresoever in
the possession of the Borrower and either by way of substitution or addition.
The terms "moveables" and "immoveables" as used herein do not include source
codes, copyrights and trademarks.
55
20 Rs.
[Facsimile of Indian Rupee]
The Industrial Credit and Investment
Corporation of India Limited
163 Backbay Reclamation
Bombay 400 - 020 - 25
Dear Sirs,
In consideration of your having agreed to grant to Seec, Inc. the
financial assistance in terms of the Loan Agreement dated day
of , 1994, we the Directors/Promoters of the Company, do hereby, in
pursuance of Article VI (i) of the General Conditions (GC-FC-88) of the said
Loan Agreement, jointly and severally, undertake to you that if there is any
shortfall in the resources of the Company for completing its project and/or
working capital due to any circumstances whatsoever either at the time of
starting of the project or subsequently, we shall make arrangements
satisfactory to you to provide to the Company in these events and when called
upon by you, such additional funds as may be required to complete its project
and for working capital.
... 2
56
: 2 :
We also hereby jointly and severally undertake to you that such additional
funds as and when provided by us shall be in the form and manner and on such
terms as may be required by you and shall not involve any charge or lien on or
other interest in the assets of the Company. In the event of such funds being
brought in by us by way of unsecured loans/deposits to the Company, we shall not
demand or withdraw such funds or any part thereof nor shall the Company repay
such funds or any part thereof 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 written approval.
We agree that if a dispute arises whether the Project is duly completed or
not, your decision shall be final and binding to 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 instalments of principal and/or interest due and
owning by the Company to you.
Yours faithfully,
/s/ K. Ravindra
We note the above and agree and confirm that we shall not repay to the
abovementioned the unsecured loans/deposits or any part thereof when received by
us to meet the shortfall in our resources for completing our project and/or for
working capital 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
you prior written approval.
... 3
57
: 3 :
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 there is a default in the payment
of instalments of principal and/or interest due and owing by us to you.
For
Seec, Inc.
Dated this day of 199 .
58
20 Rs.
[Facsimile of Indian Rupee]
The Industrial Credit and Investment
Corporation of India Limited
163 Backbay Reclamation
Bombay 400 020 - 25
Dear Sirs,
In consideration of your having agreed to grant to Seec, Inc. the
financial assistance in terms of the Loan Agreement dated this day
of 1994, we do hereby, undertake to you that we shall not
transfer, assign, dispose off, pledge, charge or create any lien or in any way
encumber our existing or future shareholdings in the Company in favour of any
person or Company so long as any moneys remain due
.... 2
59
: 2 :
by the Company to you under the said Loan Agreement or till our project is
dully completed which ever is later without your prior written approval.
Yours faithfully,
/s/ XXX XXXXX /s/ XXXXXXXX XXXX
------------------------- -----------------------
XXX XXXXX XXXXXXXX XXXX
/s/ XXXX X. XXXXXXX
------------------------- ------------------------
XXXX X. XXXXX XXXX X. XXXXXXX
We note the above and agree and confirm that we shall not recognise or register
any transfer of shares by the abovementioned Directors/Promoters in the
capital of the Company nor shall we note any lien in respect of such shares in
favour of third parties 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 written approval.
For
Seec, Inc.
Dated this day of 1994.
60
20 RS.
[Facsimile of Indian Rupee]
The Industrial Credit and Investment
Corporation Of India Limited
163 Bombay Reclamation
Bombay 400 020 - 25
Dear Sirs,
In consideration of your having agreed to grant to Seec, Inc., the
financial assistance in terms of the Loan Agreement dated day
of , 1994, we the Directors / Promoters of the Company, do
hereby, in pursuance of ARTICLE VI (i) of the General Conditions (GC-FC-88) of
the said Loan Agreement, jointly and severally, undertake to you that to the
extent we may make unsecured loans to the company for the project, if we are in
default of any payment due to you under the loan agreement 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 in default by the
Company to you under the said Loan Agreement.
... 2
61
: 2 :
We agree that if a dispute arises whether the Project is duly completed or
not, the dispute will be resolved by the process specified in the loan
agreement.
We note that such unsecured loans/deposits shall carry interest at a rate
not to exceed the rate of your loan to the company. 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 instalments of
principal and /or interest due and owing by the Company to you.
Yours faithfully,
/s/ K. Ravindra
------------------
We note the above and agree and confirm that we shall not repay to the
abovementioned 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 nay moneys due by
us to you under the said Loan Agreement are in default 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 at a rate not to exceed the
rate of your loan to the company. We agree not to pay any interest on the said
unsecured loans/deposits if at the time of such payment there is a default in
the payment of instalments of principal and/or interest due and owing by us to
you.
For
Seec, Inc.
Dated this day of 1994.
62
20 Rs.
[Facsimile of Indian Rupee]
The Industrial Credit and Investment
Corporation of India Limited
163 Backbay Reclamation
Bombay 400 020 - 25
Dear Sirs,
I, Xxxx Xxxx, the President and CEO of Seec, Inc., (hereinafter
referred to as "the Company") refer to the Loan Agreement dated this day
of , 1994, entered into between the Company and yourselves
together with General Conditions (GC-FC-88) attached thereto.
As desired, I hereby agree and undertake that so long as any moneys
remain due and owing by the Company to you:
1. I shall not accept any commission from the Company in any year unless the
instalments of principal sum and interest and other moneys due to you has
been paid or suitable provision for payment thereof has been made to your
satisfaction.
.... 2
63
: 2 :
2. I shall not accept any compensation from the Company in the event of loss of
my office for any reason whatsoever if there is any default on the part of
the company in payment of any instalment or instalments of principal sum,
interest and other moneys due and owing by the Company to you.
Yours faithfully,
/s/ K. Ravindra
------------------
Dated this day of 1994.
64
[LETTERHEAD]
July 23, 1996
Mr. U. A. Xxxxxxxx
Industrial Credit Investment Corporation
of India Limited
Regd. Office
163 Backbay Reclamation
Bombay, India 400 020
Dear Xx. Xxxxxxxx:
In confirming our agreement regarding extending the ICICI loan agreement for
one year, I am submitting this amendment for your signature.
o ICICI is agreeable to extend repayment of the loan for an additional one
(1) year. Repayment of principal is to begin on December 15, 1996.
o Interest will continue to acrue on the loan principal at 2.5% above the US
Prime Rate subject to a cap of 9% and a floor of 6% as per section 2.21 of
the loan agreement.
o Interest payments will be made quarterly.
o Royalty revenue will continue to accrue, Payment of Royalties has also been
extended one year. Interest will be charged on Royalties as of February 1,
1996 at a rate of 2.5% above the US Prime rate subject to a cap of 9% and a
floor of 6%. Our records show that current Royalties due total $89,475.74
as of July 1. Accrued interest thru July 31, 1996 is $3,330.51.
Please sign both pages and return to me as soon as possible.
Sincerely,
/s XXXX XXXX
-------------------------
Xxxx Xxxx
President
Enclosure
Agreed to:
ICICI
/s/ U.A. DESHPANDE Date: 06.08.96
------------------------- ------------------
U.A. Deshpande
65
[LETTERHEAD]
Amortization Schedule
Name of Lender: ICICI
Date Of Amount of Installment Amount outstanding after
Installment Due (USS '000) each installment (USS '000)
--------------- --------------------- ---------------------------
December 15, 1996 30 270
March 15, 1997 30 240
June 15, 1997 30 210
September 15, 1997 30 180
December 15, 1997 30 150
March 15, 1998 30 120
June 15, 1998 30 90
September 15, 1998 30 60
December 15, 1998 30 30
March 15, 1999 30 0
ICICI SEEC, Inc
/s/ U.A. DESHPANDE /s/ XXXXXXXX XXXX
--------------------------- -------------------------
U.A. Deshpande
06.08.96 6/8/96
Date: --------------------- Date: -------------------
66
[Letterhead]
September 25, 1996
Mr. U. A. Deshpande
Industrial Credit Investment
Corporation of India
Registered Office
163 Backbay Reclamation
Bombay, 400 020
India
Dear Xx. Xxxxxxxxx:
In connection with the audit of the financial statements of SEEC, Inc.
(the Company) as of March 31, 1996 and 1995 and for the years ended March 31,
1996, 1995 and for the years ended March 31, 1995 and 1994, we are requesting
that the Industrial Credit Investment Corporation of India (ICICI) take certain
actions as indicated with respect to various requirements and covenants
contained in the Company's term loan agreement dated May 3, 1994 and the
Cooperation and Product Financing Agreement dated June 1, 1990 with ICICI. We
understand that oral waivers have been granted previously and are requesting
that these waivers, as identified herein, be confirmed in writing.
TERM LOAN AGREEMENT DATED MAY 3, 1994
1. Payments of interest are to be made quarterly. The Company is in
arrears on interest payments totaling $20,250 at March 31, 1996 and
$27,000 at June 30, 1996. The Company paid $11,000 toward the
outstanding balance on August 1, 1996 and intends to bring the
balance to current status by September 30, 1996.
ICICI ACTION REQUESTED: Please indicate by signing below in the space
provided that ICICI agrees with this payment plan, waives the
Company's non-compliance, and will not declare any event of default
if the balance is paid by September 30, 1996.
2. Installment payments of principal were to commence December 15, 1995.
Payments have been deferred until December 15, 1996 pursuant to your
letter dated July 23, 1996.
ICICI ACTION REQUESTED: Please indicate by signing below in the space
provided ICICI's agreement that this deferral constitutes a waiver of
previous non-payments of principal and as such cures any potential
events of default that may have existed.
67
Mr. U. A. Deshpande
Industrial Credit Investment
Corporation of India
September 25, 1996
Page 2
3. General Conditions No. GC-FC-88, Section 7.3 General Covenant (A) (ii) -
The referenced section of the General Conditions prohibits the Company
from issuing equity or preference capital or changing its capital
structure. The Company has issued shares of its Common Stock and granted
options to purchase shares of its Common Stock since May 3, 1994, the
date of the Loan Agreement. The Company also intends to offer and sell
shares of its Common Stock in an underwritten public offering and in
connection therewith to issue warrants to purchase shares of its Common
Stock to the representative of the Underwriters. Further, the Company
intends to amend its Articles of Incorporation to increase the
authorized number of shares of Common Stock to 20,000,000 and to
authorise 10,000,000 shares of preferred stock, and it intends to effect
a reverse split of its outstanding Common Stock prior to the
aforementioned public offering.
ICICI ACTION REQUESTED: Please indicate by signing below in the space
provided (i) ICICI's agreement that the provision in Section 7.3 (A)
(ii) of the General Conditions prohibiting the Company from issuing
equity or preference capital or changing its capital structure is
deleted from the General Conditions to the Loan Agreement and is no
longer applicable to the Company; (ii) ICICI's waiver of the application
of this prohibition to any and all issuances of capital by the Company,
including the issuance of Common Stock, options and warrants, from May
3, 1994 and through the date ICICI agrees to the modification hereby
requested; and (iii) ICICI's consent to the Company's planned actions as
described above and agreement that they will not constitute a violation
of, or an event of default under, the Loan Agreement or General
Conditions.
4. General Conditions No. GC-FC-88, section 7.3 General Covenant (B)
(viii) - The Company is required to submit audited annual financial
statements to ICICI each year within six months after year end. The
Company has not submitted annual financial statements but intends to
provide ICICI with its audited March 31, 1996 financial statements on or
before October 15, 1996.
ICICI ACTION REQUESTED: Please indicate by signing below in the space
provided that ICICI waives the Company's non-compliance with this
requirement for all years through March 31, 1996 and that the Company's
plan to submit audited financial statements by October 15, 1996, is
acceptable to ICICI.
68
Mr. U. A. Deshpande
Industrial Credit Investment
Corporation of India
September 25, 1996
Page 3
5. The loan agreement requires the Company to submit an auditors'
certificate for the utilization of PACT funds. To date, such report
has not been furnished to ICICI.
ICICI ACTION REQUESTED: Please indicate by signing below in the
space provided that ICICI waives the Company's non-compliance with
this requirement for all years through March 31, 1996, and that ICICI
no longer requires the Company to file this report, nor does it
intend to declare an event of default on this requirement.
6. General Conditions No. GC-FC-88, section 7.3 (A) (iii) - The Company
is prohibited from making prepayment of any lean from any other
party. The Company converted all subordinated debt and accrued
interest with related parties, prior to the stated maturity date of
the debt, to shares of its common stock in July 1996.
ICICI Action Requested: Please date and sign below in the space
provided ICICI's consent to such conversion, its agreement that the
prohibition described above is deleted from the General Conditions
and no longer applicable to the Company, and its acknowledgement that
such conversion does not violate or constitute an event of default
under the Loan Agreement or General conditions.
7. General conditions No. GC-FC-88, section 7.3 (A) (V) states the
Company is prohibited from declaring or paying any dividends to
shareholders in excess of 15%, without the prior approval of ICICI.
However, the loan agreement provides that the payment of dividends is
restricted if the loan payments are installments. The loan agreement
further specifies that where language in the General Conditions
differs from the loan agreement, the loan agreement is the
controlling document.
ICICI ACTION REQUESTED: Please indicate by signing below in the
space provided that the language in the loan agreement controls and
the Company is not restricted in the future payment of dividends,
unless the Company is not current with loan payments.
8. General Conditions No. GC-FC-88, section 10.3, Notice to the Lenders
on the Happening of an Event of Default - The Company is required to
notify ICICI in writing specifying the nature of any event of
default.
ICICI ACTION REQUESTED: Please indicate by signing below in the
space provided that this letter satisfies the requirement of section
10.3 in that ICICI has been properly notified by the Company of all
items that may be considered possible events of default.
69
Mr. U. A. Deshpande
Industrial Credit Investment
Corporation of India
September 25, 1996
Page 4
COOPERATION AND PRODUCT FINANCING AGREEMENT DATED JUNE 1, 1990
9. Royalty payments are to be made to ICICI semiannually on January 15
and July 15 of each year. The Company was in arrears on the royalty
payments and has been granted a deferral until January, 1997.
ICICI ACTION REQUESTED: Please indicate by signing below in the
space provided that ICICI's deferral of payments through January
1997, constitutes a waiver of previous non-payments of royalties and
as such cures any potential event of default that may have existed.
10. annual sales are to be certified by the Company's independent
auditors and semiannual sales are to be certified by a principal
officer of the Company. To date, only one report, for the year ended
March 31, 1995, has been submitted to ICICI.
ICICI ACTION REQUESTED: Please indicate by signing below in the
space provided that ICICI waives the Company's non-compliance with
this requirement for all years through March 31, 1996, and that
ICICI does not intend to declare an event of default on this
requirement. Further, please confirm that by submitting a copy of
the audited financial statements as of and for the year ended March
31, 1996, ICICI will accept such financial statements in
satisfaction of this requirement.
Please respond directly to our auditors, Xxxxx Xxxxxx & Co., Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000.
Very truly yours,
/s/ XXXXXXXX XXXX
----------------------------------
Xxxxxxxx Xxxx, President
70
Mr. U. A. Deshpanda
Industrial Credit Investment
Corporation of India
September 25, 1996
Page 5
Dear Xxxxx Xxxxxx & Co.:
ICICI hereby takes the actions, grants and consents and waivers and agrees
to the modifications of the Loan Agreement and General Conditions, as requested
above, except as follows:
NIL
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/s/ U.A. DESHPANDA
-----------------------------
Authorized Signature
(U.A. Deshpanda)
------------------------------
Date: 07.10.96
