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Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
III. FINANCING AND INDEBTEDNESS
We have perused / reviewed the information and documents as set out in Part – III
of Annexure – A to the Report which was provided for our review by the Company.
The Company has represented to us that other than the information and documents
as set out in Part – III of Annexure - A, there is no other financing information and/or
documents.
Upon perusal of the said documents / information we observe as follows:
The indebtedness of the Company can be broadly classified as set out below:
I. AXIS BANK
We understand that vide sanction letter No AXISB/CO/MC/RB/0994/08-09
dated March 17, 2009 issued by Axis Bank, the Company was permitted to
avail the following facility.
FacilityLimit
(Rs. in crores)
Cash Credit 15.00
Total Fund Based 15.00
Letter of Credit 10.00
Total Non Fund Based
10.00
Total 25.00
Comments
The Company has represented to us that this loan has been fully repaid by
the Company to the Bank. However the no dues certificate from the Bank is
still awaited.
II. STANDARD CHARTERED BANK
We understand that vide sanction letter No SCB/529/09/MM1617 dated April
8, 2009 issued by Standard Chartered Bank to the Company, the Company
was permitted to avail the following facility.
FacilityLimit
(Rs. in crores)
Fund Based (name of the facility)
23.00
Sublimit 6.00
Total 23.00
Preliminary and tentativeDraft for discussion purposes only Page 1 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Comments
The Company has represented to us that the Company has paid off the entire
loan amount to the Bank. However the no dues certificate from the Bank is
awaited.
III. HDFC BANK LIMITED
We understand that vide sanction letter dated April 20, 2008, issued by HDFC
Bank to the Company was permitted to avail the following facility.
Facility
Existing (Rs.
in million)
Enhancement
(Rs. in million)
Total(Rs. in million)
Fund Based Facilities
Cash Credit/Working capital demand Loan
81.50 NIL 81.50
Total Fund Based Facilities (A) 81.50 NIL 81.50
Non Fund Based Facilities
Letter of credit/bank Guarantees 40.00 10.00 50.00
Total Non Fund Based facilities (B)
40.00 10.00 50.00
Total facilities (A+B) 121.50 10.00 131.50
Comments
The Company has represented to us that the Company has paid off the entire
loan amount to the Bank. Vide letter dated October 4, 2010, the Bank has
represented that the Company has paid off the entire limits aggregating to
Rs. 131.50 million and there are no dues outstanding under the said facilities.
IV. UNION BANK
We understand that vide sanction letter No. IFB:ADV:VMK:SA:867 dated
August 18, 2010 issued by Union Bank of India (“Union Bank”) to the
Company, the Company was permitted to avail financial assistance from
Union Bank. Vide the same sanction letter as mentioned above, the Company
was informed that the Bank will release the Cash Credit Hyp limit of Rs.
12,00,00,000/- (Rupees Twelve Crore only) out of the sanctioned limit of Rs.
37,50,00,000/- (Rupees Thirty Seven Crores Fifty Lakhs only). The terms and
conditions pertaining to the above facility has been provided in Appendix -
1.
The Company has availed of the following credit facilities from Union Bank.
FacilityExistin
gMargin
Preliminary and tentativeDraft for discussion purposes only Page 2 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Cash Credit 37.50 25%
V. CENTRAL BANK OF INDIA
Vide sanction letter bearing No. POONAC/CR/2010-11/305 dated October 8,
2010 issued by Central Bank of India (“Central Bank”) to the Company,
Central Bank has agreed to enhance the existing credit limits to the
Company. The terms and conditions of the above mentioned sanction letter
have been set out in Appendix – 1.
The Company has availed of the following credit facilities from Central Bank.
FacilityExisting (Rs. In crore)
Revised (Rs. in crore)
Margin
Fund Based
Cash Credit 7.00(28.00)
9.00(35.40)
25%
Working Capital Demand Loan 28.00(112.00)
36.00(141.60)
25%
Total FB WC limits 35.00(140.00)
45.00(177.00)
Non Fund based
Inland/ Foreign Letter of Credit (DP/DA-usance 120 days)
8.75(19.75)
8.75(25.00)
10%
Bank Guarantee 0.25(0.25)
0.25(0.25)
10%
Total NFB limits 9.00(20.00)
9.00(25.25)
Total 44.00 54.00
VI. BANK OF BARODA
Vide its sanction letter No. CFS:Pune:TLPL:2010/547 dated August 4, 2010
issued by Bank of Baroda (“BOB”) to the Company, the Company was
permitted to avail financial assistance from BOI. The terms and conditions of
the above mentioned sanction letter have been set out in Appendix – 1.
The Company has availed of the following credit facilities from BOB.
FacilityExistin
gPropose
dMargin
Cash Credit NIL 22.50 25% on RM, WIP, FG, Spares and Stores, Packing material, Book debts
VII. BANK OF INDIA
Preliminary and tentativeDraft for discussion purposes only Page 3 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Vide its sanction Letter No PMCB:VYG:1137 dated September 27, 2010, issued
by Bank of India (“BOI”) to the Company, the Company was permitted to
avail financial assistance from BOI. The terms and conditions of the above
mentioned sanction letter have been set out in Appendix – 1.
The Company has availed of the following credit facilities from BOI.
Facility
Existing (Rs.
in crore)
Revised (Rs. in crore)
Margin
Fund Based
Term Loan 15.00 NIL -
Corporate Loan NIL 15.00
WCFBL: Cash Credit-Stock/EPC-180days Cash Credit- Book debts/ FPB-90
days
10.005.00
Stock and book Debts 25%
Non Fund based
Letter of credit I/F-90 days - 10.00 15%
Total 15.00 40.00
Comments
The Company has represented to us that the term loan/corporate loan of Rs.
15 crore is not a part of the consortium. The term loan of Rs. 15 crore has
been restructured as a corporate loan. The Company has also represented
that out of the sanctioned Fund based Limit of Rs. 15 crore, the Company has
availed of only Rs. 14 crores.
VIII. BARCLAYS BANK PLC
Vide its sanction letter No. Barclays/Mumbai/194/09 dated July 1, 2009,
Barclays Bank Plc has amended its earlier sanction letters bearing reference
No Barclays/ Mumbai/42/07, Barclays/Mumbai/517/08 and
Barclays/Mumbai/66/09. The terms and conditions of the above mentioned
revised sanction letter have been mentioned in Appendix – 1.
The Company has availed of the following credit facilities from Barclays Bank.
(revised amounts)
Descriptionof the Facility
Facility Limit
(Existing)
(INR in Million)
Enhanced/ Fresh Limits/
Reduction
(INR in Million)
Total Limits(INR in Million
)
Margin
Revolving Working Capital line
90 +100 190 25% margin on Book Debts and
Preliminary and tentativeDraft for discussion purposes only Page 4 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Inventory.
Fund Based (I) (90) (+100) (190)
Short Term Loan (INR/USD)(Sublimit of Fund Based Limits)
(90) (+100) (190)
Pre Shipment (Packing Credit)/Post Shipment Credit (Sublimit of Fund Based Limits)
(90) (-90) NIL
Non Fund Based (II) 90 (-90) NIL
Inland Letter of Credit) (90) (-90) NIL
Adhock Short Term Loan (20) (-20) NIL
IX. ICICI BANK LIMITED
Vide its sanction letter dated February 11, 2009 issued by ICICI Bank Ltd
(“ICICI”) to the Company, the Company was permitted to avail the enhanced
credit facilities from ICICI. The terms and conditions of the above mentioned
sanction letter have been set out in Appendix – 1.
The Company has availed of the following credit facilities from ICICI.
FacilityCurrent
Sanction (Rs. in million)
New Sanction(Rs. in million)
Fund Based Limits
Cash Credit 176.0 450.0
Total 176.0 450.0
Comments
There are discrepancies in the amounts in the Consortium documents and the
sanction letter.
Preliminary and tentativeDraft for discussion purposes only Page 5 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Appendix - 1
Significant terms and conditions of loan documentation
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
1. Union
Bank
(the“Bank
”)
Sanction Letter
bearing No.
IFB:ADV:VMK:SA:867
dated August 18,
2010.
Tenor
One year from the date of sanction
i.e. upto August 2011.
Security
First charge on stock and book
debts of the Company to be shared
on pari passu basis with working
capital consortium members.
Collateral
1st charge on the fixed assets
(immovable and moveable, present
and future) of the Company situated
at plot Nos. 39, 40 Sector II, Vasai
Co-Operative Industrial Estate, S. No
42/1, Goraipada, Vasai (East), on pari
passu basis with working capital
lenders in the consortium.
2nd charge on the fixed assets
(Immovable and moveable, present
and future) of the Company situated
at plot no B-22, H Block MIDC Pimpri
and S. No 1162/2 and 117/2 Near
Chakan Phata, Talegaon, Vadgaon on
the pari passu basis with working
capital lenders in the Consortium.
Interest
11.75% per annum
Covenants
The CC Hyp limit of Rs. 12 crores out
of the sanctioned limit of Rs. 37.50
Preliminary and tentativeDraft for discussion purposes only Page 6 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
crores shall be released by the Bank
subject to:
The Company shall
submit an undertaking that Union
Bank of India will be inducted in
the consortium within a period of
2 months from the disbursement
by allocating Fund Based Working
Capital limit of Rs. 37.50 crores.
The Company shall give
another undertaking that the total
Fund based Working capital at the
disposal of the Company will not
exceed Rs. 177.00 crores from all
the Banks.
Hypothecation of stock
and book debts with personal
guarantee of 3 directors namely
Mr. Rajendra C. Bora, Mr. Gopal
Ramourti and Nainish R. Bora and
Mr. Abhijeet Bora.
Corporate guarantee of
Borachem Industries.
Personal guarantee of Mr.
Abhijeet Bora to be submitted on
or before September 10, 2010.
The Company to take adequate
insurance of stocks of raw materials,
work in progress, finished goods and
stores and spares etc at various
godowns and factory and the copy of
the same will be submitted to our
Bank.
Delayed submission of CMA/renewal
data for the period beyond 1 month
from due date and non compliance of
Preliminary and tentativeDraft for discussion purposes only Page 7 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
the terms of sanction will attract
penal interest of 1% per annum,
subject to a maximum of 2% per
annum.
The Company shall submit QPR/HOF
statement within one month/six
months after the Non
submission/delayed submission of
QPR and non submission of audited
financials will attract penal interest
of 2% per annum.
2. Central
Bank of
India
(the“Bank
”)
Sanction Letter No
POONAC/CR/2010-
11/305 dated
October 8, 2010
Tenor
Not mentioned.
Security
Primary
First pari passu hypothecation of
stocks and book debts.
Collateral
First charge on pari passu basis on
the block assets of the Company at
Vasai for the limits sanctioned by the
present consortium.
Second pari passu charge on the
company’s block assets at Pimpri
and Vadgaon in favour of the
consortium members.
Personal Bungalow of CMD, Shri R.S
Bora situated at Baner S No 257/2,
Plot No .10 & 11, I Green Park, Pune.
(Exclusively for Central Bank of India)
Pledge of 7,81,000 shares of the
Company value of Rs. 1.83 crore.
(Exclusively for Central Bank of India)
Preliminary and tentativeDraft for discussion purposes only Page 8 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
Interest
Base rate+5% for the Fund Based
and normal charges for the Non Fund
Based.
Covenants
Guarantors:
Mr. Rajendra Bora
Mr. Gopal Ramourti
Nainish Bora
Abhijeet Bora
Borachem Industries.
The Bank shall have the right to
withdraw concessions and charge
normal rate of interest/charges
together with applicable penal
interest in the event of default by the
Company.
Penal interest of 1% per annum will
be charged for delayed/non
submission of QIS/MSOD and stock
statements.
The Company shall give a specific
undertaking that the working capital
will not be diverted either for long
term purpose/ purpose other than for
which it is sanctioned.
All fixed assets including moveable/
immovable and all current assets
mortgaged/hypothecated to
consortium are to be insured against
all risks and the original policy to be
held with Bank.
The Company shall inform the Bank
Preliminary and tentativeDraft for discussion purposes only Page 9 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
on happening of any contingency
which shall affect the Company’s
ability to repay the facilities.
The Company and Directors
respectively to give an undertaking
that no commission/consideration is
paid to the directors for their giving
guarantee to secure the advances
given to the company.
All the necessary undertakings shall
be executed as stipulated in the
Loan policy.
Bank reserves the right to enhance
the rate of interest in case of
downgrading of Credit Risk Rating
(External/ Internal).
The Bank reserves the right to
withdraw the concessions and
charge normal rate of interest/
charges together with applicable
penal interest in the event of default
by the Company.
Joint mortgage for securing the
revised limits under the Consortium
to be completed before releasing the
enhanced limits.
The Bank reserves the right to
cancel any undrawn portion of the
limit without any notice or reserves
the right to levy commitment
charges as per rules on undrawn
portion.
3. Bank of
Baroda
(the“Bank
”)
Sanction letter No.
CFS:Pune:TLPL:2010/5
47 dated August 4,
2010
Tenor
12 months
Security
Preliminary and tentativeDraft for discussion purposes only Page 10 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
Primary
First charge on stock and book
debts of the Company to be shared
on pari passu basis with working
capital consortium lenders.
Collateral
1st charge on the fixed assets
(immovable and moveable, present
and future) of the Company situated
at Plot Nos. 39, 40 Sector II, Vasai
Co- Opt Industrial Estate, S. No. 42/1,
Goraipara, Vasai (East) on pari passu
with working capital lenders in the
consortium.
2nd charge on the fixed assets
(immovable and moveable, present
and future) of the company situated
at plot No. B-22, H Block MIDC Pimpri
and S. No 1162/2 and 117/2, Near
Chakan Phata, Talegaon, Vadgaon on
pari passu basis with working capital
lenders in the consortium.
Sublimit
Letter of credit (Inland/Foreign) of 5
crores within CC limit.
Interest
11.50% per annum
Covenants
Hypothecated/mortgaged security
charged to the Bank shall be kept
fully insured against fire and other
risks and the copies shall be
Preliminary and tentativeDraft for discussion purposes only Page 11 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
submitted with the Bank.
The Company shall not without the
permission of the Bank:
Effect any change in its
capital structure.
Dilute the shareholding of
the promoters/guarantors.
Formulate any scheme of
amalgamation or reconstruction.
Invest by way of share
capital, invest funds or place
deposits wit any other concern.
Declare dividends,
provide loans to
directors/associates or guarantee
obligations on behalf of the
company.
Make any drastic change
in their management set up.
Make any further
investments in its
subsidiaries/associate concerns by
way of loans and advances,
investment in shares or any other
manner.
The Bank has the right to recall the
entire/or any part of the loan if it
apprehends that that the loan is
being utilized for any other purpose
other than mentioned in the
application.
The promoters shall not without the
prior approval of the Bank,
Preliminary and tentativeDraft for discussion purposes only Page 12 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
sell/pledge their
balance/unencumbered shareholding
with any Bank/FI/Individuals/entity.
The Bank has the right to withdraw,
modify and amend the terms of the
sanction and is not bound to disburse
the whole of the loan amount in the
event of the Company not satisfying
any terms and conditions stipulated.
Penal interest of 2% per annum
shall be charged by the Bank in case
of non compliance of ay of the terms.
4. Bank of
India
(the“Bank
”)
Sanction Letter No
PMCB:VYG:1137
dated September 27,
2010
Tenor
For 1 year subject to annual review.
Next review will fall due on or before
September 27, 2011.
Security
Principal
Corporate Loan- Pari Passu first
charge on fixed assets at Baddi plant
along with ICICI Bank Ltd.
Pari passu first charge on current
assets of the Company for WCFBL
and NFBL
Margin in TDR for NFBL.
Collateral
Pari passu 1st charge on fixed
assets of the company at Vasai
plant.
Pari passu 2nd charge on fixed
assets of the Company at Pimpri
Preliminary and tentativeDraft for discussion purposes only Page 13 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
plant and Vadgaon plant for WCFBL
and NFBL.
Creation/extension of charges to be
completed within 3 months.
Guarantors
Mr. Rajendra Bora
Mr. Gopal ramourti
Mr. Nainish Bora
Mr. Abhijeet Bora
Borachem Industries
Interest
3% over base rate (11% at the date
of sanction) for WCFBL and
applicable charges for NFBL.
Covenants
The repayment of the corporate loan
will be in 8 quarterly installments of
Rs. 75 lakhs and thereafter 6
installments of Rs. 150 lakhs with 3
months moratium.
All the enhanced credit limits are to
be utiised within a period of 6
months from the date of sanction
(i.e. before 27 March, 2011) failing
which the facilities will lapse and any
revalidation of the same will be
considered at the sole discretion of
the Bank.
Non submission of stock/book debts
and MSOD statements by 15th of the
succeeding month will attract penal
interest of 1% per annum.
All the assets charged to the Bank
Preliminary and tentativeDraft for discussion purposes only Page 14 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
shall be kept fully insured against
fire risks and original insurance cover
will be lodged with the Bank.
Penal interest of 2% per annum will
be levied on the overdue amount for
the period account remains
overdrawn due to irregularities such
as non payment of interest
immediately on application, non
payment of installments within one
month of their falling due etc.
Any default in complying with terms
of sanction within the stipulated time
will attract penal interest of 1% per
annum from the date of expiry of
such time.
The Company’s entire banking
business should be routed through
the Bank/members of the consortium
proportionate to the sharing of the
working capital facilities.
The Company shall not without the
prior permission in writing of the
Bank:
effect any adverse
changes in the Company’s capital
structure or formulate any
scheme of amalgamation or
merger or reconstruction.
invest by way of share
capital or advance funds or place
deposits with any other
company/firm/concern.
declare dividend for any
year except out of profits.
Preliminary and tentativeDraft for discussion purposes only Page 15 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
make any drastic
changes in the management set
up.
approach the capital
market for mobilizing additional
resources either in the form of
debt or equity.
The Company shall give an
undertaking that the Bank has a right
to sell/transfer/ assign the
securities/loans at any time.
The credit facilities shall not be ‘
diverted’ or ‘siphoned off’ or used for
any other purposes other than for
which they are granted.
The Bank shall from time to time be
entitled to notify the Company and
charge interest/commission/charges
at notified rates.
The Bank shall reserve the right to
carry out the credit rating exercise of
the facilities at frequencies
considered necessary and the rate of
interest chargeable to the facilities
would depend upon the rating
obtained by the borrowing Company.
The Bank shall have a charge on all
the credit balances, deposits,
securities or other assets of the
Company which are with any of the
branches of the Bank and on
happening of any of the event of
default the Bank shall be entitled to
exercise a right of set off between
the amounts due and payable to the
Bank and the said credit balances,
deposits, securities and other assets.
Preliminary and tentativeDraft for discussion purposes only Page 16 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
The Company shall not without the
prior permission of the Bank, make
any alterations in its constitution or
any documents relating to it,
controlling ownership or any material
change in the management set up or
nature of Business.
The Bank reserves the right to add,
amend, alter, cancel and modify any
of the terms of the sanction letter.
5. Barclays
Bank Plc
(the“Bank
”)
Sanction letter No.
Barclays/Mumbai/194/
09 dated July 1, 2009
Tenor
Till June 30, 2010
Security
First pari passu charge on the entire
current assets of the Company.
First pari passu charge on the
immovable and moveable fixed
assets of the Company situated at
Vasai, Maharashtra to all the
consortium members except ICICI
Bank Ltd.
Second pari passu charge on all the
movable and immovable fixed assets
situated at Pimpri and Vadgaon,
Maharashtra to all consortium
members.
Any other security that may be
offered to the existing bankers of the
Company shall be extended to the
Bank.
Interest
To be mutually agreed at the time of
drawdown.
Preliminary and tentativeDraft for discussion purposes only Page 17 of 32
Project Flower DSK LegalFinancing and Indebtedness Private and Confidential
Sr. No.
Lender Document and Date Key Terms, Security and Covenants
Covenants
Personal guarantee of Mr. R. C.
Bora, Mr. Gopal Ramourti, Mr. Abhijit
Bora, Mrs. Preeti Bora, Mrs. Pooja
Bora and Mrs. Lalita Bora.
The facilities availed by the
Company in foreign currency shall be
compulsorily hedged.
The Company shall inform the Bank
before taking any additional debt.
The Company has to ensure that the
minimum amount of exports shall
not fall below Rs. 50 million in a
quarter.
The Company shall ensure that all
stocks and collateral securities like
immovable properties are kept fully
insured against all risks including
fire, strikes, riot etc and all the
insurance policies are to be assigned
in favour of the Bank.
6. ICICI Bank
Limited
Sanction letter dated
February 11, 2009
( Documents yet to be confirmed)
Preliminary and tentativeDraft for discussion purposes only Page 18 of 32
Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
Appendix – 2
(1) Security Trustee Agreement ( the “ Agreement ”)
Name of the
Parties
Twilight Litaka Pharma Limited (The “Company”) and
Consortium Members and Central Bank of India (“Security
Trustee”)
Date of the
Agreement
July 29, 2009
Security Trustee Central Bank of India
Loan Amount Rs. 160 crores
Purpose For appointing the Security Trustee so as to hold the security
interest in all the properties of the Company in trust for and
benefit of the Secured Lenders.
Security First pari passu charge on all the current assets and
moveable fixed assets of the Company.
First pari passu charge of all the Consortium Members
except ICICI Bank Ltd on the immovable fixed assets
situated at Vasai.
Second pari passu charge of ICICI Bank Ltd on the
immovable fixed assets situated at Vasai.
Second pari passu charge of all the Consortium Members
on immovable fixed assets situated at Pimpri and
Vadgaon.
Terms and
Conditions
The Company undertakes with the Security Trustee that
unless the Security Trustee otherwise agree, the
Company shall-
pay all rents, taxes and rates relating to any
part of the Security so as to keep the same free from
any other security interest other than ones created
with the approval of the Security Trustee.
reimburse the penalty or legal costs or any
other charges for stamping or registration of any of
the security documents or any supplement thereto
whether it is paid by the Security Trustee or the
secured lenders.
deliver to the Security Trustee certified
copies of the receipts evidencing payment of stamp
duty and other charges in connection with the
Preliminary and tentativeDraft for discussion purposes only Page 19 of 32
Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
stamping and registration of the security documents.
The Security Trustee undertakes and confirms that it
shall not revoke the trusts create in favour of the
secured lenders until all the mortgage debts due to the
secured lenders are paid in full, unless by express
consent and permission in writing of such secured
lenders.
All realizations and the sale proceeds from the secured
assets will be handed over to the Security Trustee and
the Security trustee shall distribute the same among the
secured lenders on a pari passu basis without any
preference to one over the other in the manner provided
in the Inter creditor Agreement.
Transfer and
Assignment
The Company shall not transfer or assign any of its
rights and obligations under a Finance Document without
the consent of the secured lenders.
The secured lender shall be entitled to transfer or
assign any of its obligations and benefits in the facility to
any other person in accordance with a
Novation/Assignment Agreement to which the outgoing
secured lender shall be a party.
Accession The assignees of the secured lenders and future lenders
can accede to this Agreement by executing and delivering
to the Security Trustee an accession undertaking in the
form contained in the Agreement.
Termination This Agreement shall be terminated on due payments of
all sums due and payable under the finance documents.
This Agreement shall be terminated at the option of the
secured lenders by delivery of 90 days prior written
notice to the Security Trustee, if such notice shall be
accompanied by the written agreement of all the
secured lenders assuming all of the obligations of the
Security Trustee under the security documents have
been incurred.
Indemnity The Security Trustee and any receiver, attorney, manager
appointed by the Security Trustee shall be entitled to be
indemnified out of the trust securities in respect of all
liabilities and expenses incurred by the Security Trustee in
the execution and purported execution of the powers and
trusts under the trust securities and provided that the
reasonable precautions have been exercised by the
Preliminary and tentativeDraft for discussion purposes only Page 20 of 32
Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
Security Trustee.
(2) Intercreditor Agreement (the “ Agreement ”)
Name of the
Parties
Twilight Litaka Pharma Limited (The “Company”) and
Consortium Members and Central Bank of India (“Security
Trustee”)
Date of the
Agreement
July 29, 2009
Loan Amount Rs. 160 crores
Purpose For providing consultation and coordination procedures for
certain actions taken or to be taken in respect of amounts
owed to secured lenders under the finance documents
including the sharing of the proceeds of enforcement of the
security interest.
Terms and
Conditions
The secured lenders shall share with each other any
information it receives regarding:
the financial condition or business of the
Company;
the Company’s ability to pay debts when due;
the Security interest;
any other matter relating to the Company,
security interest or the facility including information of
common interest obtained by the secured lender from
its nominee director and any material communication
pertaining to the above.
The secured lenders agree not to bring any action suit,
or proceeding against any other secured lender or
implead any such persons, in connection with any
action, suit or proceeding brought by any other person,
in each case arising out of any representation, warranty,
covenant or agreement contained in the respective
finance documents or certificates delivered pursuant to
the terms thereof.
The secured lender shall notify the other lender of any
payment received in respect of the facility, which is
known to him to be in excess of the amount to which he
is entitled to under the respective loan document and
shall return such amount together with any interest if
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Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
received, to the credit of the designated account.
The secured lenders shall neither solicit nor accept, any
compensation or consideration (other than the Security
Trustees fees) whether directly or indirectly, in cash or
in kind, in connection with any consent, waiver,
amendment, modification, permission or similar
approval under any financing document unless other
secured lenders shall have been offered compensation
or consideration therewith.
In the event of obtaining payment of amounts in
respect of the secured obligations owed to the secured
lender, whether-
through right of set off, lien or counterclaim; or
from realization (whether through foreclosure,
attachment or otherwise) of security interest; or
from any revenue, cash, investments or other
assets of the Company or from or as a result of
proceedings before any court, administrative body or
governmental tribunal for enforcement of the security
interest; or
obtaining of any other like payment;
such payment should be appropriated in accordance
with the terms of the Agreement.
Any amount received by the secured lender other than
the amount due and payable under the respective loan
agreements shall be divided amongst the secured
lenders as follows:
Firstly, to the payment of all costs and
expenses incurred in preservation, sale or realization of
the security interest or exercising rights and duties.
Secondly to payment of costs and fees to
Security Trustee.
Thirdly to payment of all amounts other than
principal i.e. interest, liquidated damages etc to
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Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
secured lenders
Fourthly, to payment of principal amounts due
to secured lenders.
Lastly, for payment to persons entitled to any
surplus if remaining.
The secured lender shall at all times maintain inter se a
pari passu position in proportion to the amounts due to
each of them from the Company.
Term This Agreement shall remain in full force and effect until
the outstanding dues and every part thereof shall have
been paid in full.
(3) Indenture of Mortgage (the “ Indenture ”)
Name of the
Parties
Twilight Litaka Pharma Limited (the “Company”/
“Mortgagor”) and Central Bank of India (the “Security
Trustee”)
Date of Execution July 30, 2009
Purpose For governing the terms under which the Central Bank of
India as Security trustee will hold the security interest
created by the Mortgagor in its favour over the mortgaged
properties. (please check)
Security First pari passu charge on all the current assets and
moveable fixed assets of the Company.
First pari passu charge of all the Consortium Members
except ICICI Bank Ltd on the immovable fixed assets
situated at Vasai.
Second pari passu charge of ICICI Bank Ltd. on the
immovable fixed assets situated at Vasai.
Second pari passu charge of all the Consortium Members
on immovable fixed assets situated at Pimpri and
Vadgaon.
Terms and
Conditions
The Company shall maintain a minimum security cover
of 1.25 times of its net fixed assets over all the long
term loans and/or debentures outstanding including the
Facility and any other borrowings which may have a
charge over the fixed assets of the Company.
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Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
As long as any monies remain due and outstanding
under the loan agreements, the Company shall-
not create any security interest over any
additionally acquired immovable property acquired by
way of ownership of any immovable property or
beneficial interest therein except as expressly
permitted under the Loan Agreements.
shall notify the lender of all acquisitions by way
of ownership of any immovable property.
within 90 days of acquisition/execution of lease
deeds, charge the same in favour of the Security
Trustee by way of mortgage on first pari passu charge
in the form required by the Security Trustee.
The Company shall give to the Security Trustee
unfettered access to the mortgaged properties at all
times.
Provision for Redemption
The Security Trustee shall, on repayment of
all the outstanding dues and upon the written request
of the Company, reassign, retransfer and release unto
the Company or as the Company shall direct, the
mortgaged properties or only such part of the
mortgaged properties which have not sold or
otherwise foreclosed, applied or released pursuant to
this Indenture.
The Security trustee shall do all such other
things as may be necessary to release from the
security created, for the benefit of the lender without
recourse or representation by the Security Trustee.
In case of an event of default, the Security Trustee can
enter into and take possession of the mortgaged
property and the Company shall take no action
inconsistent with or prejudicial to the right of the
Security Trustee as such for the benefit of the lender to
possess the same and to receive the income, profits and
benefits without hindrance by the Company or any other
person.
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Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
The Company shall at all times punctually pay all taxes,
imposts, duties and other outgoings in respect of the
mortgaged properties and also maintain all buildings
and erections forming part of the mortgaged properties
at its own costs and expenses.
The Company shall permit the Security Trustee to
inspect the first mortgaged properties (B-22 ‘H’ Block,
MIDC, Pimpri 116/2 Chakan Phata, Mumbai Pune Road,
Vadgaon Maval and 39/40 Vasai Taluka Industrial Estate,
Sector II, Goraipada, Vasai (East), Dist. Thane) and if
there is any want of repair thereof, the Security Trustee
shall call upon the Company to carry out such repair.
The Company shall at all times ensure that the
mortgaged properties remain the absolute property of
the Company.
The Company shall ensure that the mortgaged
properties are duly and effectively insured jointly in the
name of the Company and the Security Trustee as the
co insured.
On happening of an event of default, it shall be lawful
for the Security Trustee on receiving lender’s
instructions, without further consent of the Company, to
sell, assign, transfer, charge or concur with any other
person in selling, assigning, charging or transferring the
mortgaged properties and any future assets comprised
under the present security or any part thereof.
Discharges and Releases
Notwithstanding any discharge, release or settlement
between the Security Trustee, lender and the Company,
if any discharge or any payment in respect of the
mortgaged debt by the Company or any other person is
avoided or set aside, ordered to be surrendered, paid
away, refunded or reduced for any reason, the Security
Trustee shall be entitled to enforce this indenture as if
no discharge, release or settlement had occurred.
Indemnity The Security Trustee and any person appointed by it shall be
entitled to be indemnified out of mortgaged properties in
respect of all liabilities and expenses incurred by it against all
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Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
actions, proceedings costs, claims and demands in respect
of any ,matter or thing done or omitted to be done in
anyways relating to the mortgaged properties.
(5) Supplemental Agreement (“ Agreement ”)
Name of the
Parties
Twilight Litaka Pharma Limited (the “Company”) and the
Consortium Members and Central Bank of India (the
“Security Trustee”)
Dated Date of
Execution
March 17, 2010
Purpose For the purposes of recording the terms of enhancement of
the credit limits from Rs. 30.85 crores to Rs. 44 crores by
Central Bank of India which is effective from March 26, 2010.
Terms and
Conditions
The said credit mentioned above shall be a part of-
Security Trustee Agreement dated July 29,
2010;
Deed of Mortgage dated July 30, 2009
between the Company and Central Bank of India (the
“Security Trustee”);
Deed of Accession dated September 29, 2009
between the lenders, the Company and DBS Bank
Limited.
All other terms of the existing documents shall remain the
same and apply to all the Lenders and the entire amount
of borrowing by the Company.
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Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
(6) Supplemental Mortgage Deed (“ Agreement ”)
Name of the
Parties
Twilight Litaka Pharma Limited (the “Company”) and the
Central Bank of India (the “Security Trustee”).
Date of execution May 18, 2010
Purpose For the purposes of recording the terms of enhancement of
the credit limits from Rs. 30.85 crores to Rs. 44 crores by the
Central Bank of India which is effective from March 26, 2010.
Terms and
Conditions
The above mentioned credit facility will be a part of and
secured by the existing documents which include as follows:
Indenture of Mortgage dated July 30, 2010;
Securities Trustees Agreement dated July 29, 2009;
Deed of Accession dated September 29, 2009 between
the lender, the Company and DBS Bank Limited.
(7) Deed of Accession (“ Agreement ”)
Name of the
Parties
Twilight Litaka Pharma Limited (the “Company”) and the
Central Bank of India (the “Security Trustee”) and the
Consortium Members and DBS Bank Limited (the “Acceding
Lender”).
Date of Execution September 29, 2009
Purpose DBS Bank Limited has entered into Working Capital Facilities
Agreement dated February 4, 2009 with the Company for
extending financial assistance by way of working capital
facilities for a sum of Rs. 4.00 crores. Pursuant to clause 26.8
of the Security Trustee Agreement, DBS Bank has entered
into this Agreement and it is supplemental to the Security
Trustee Agreement dated July 29, 2009.
Terms and
Conditions
The Acceding Lender represents that it is agreeable to be
entitled to all the rights and benefits and be bound by and
comply with all obligations expressed to be assumed by it as
an Acceding Lender under the related security documents.
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Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
(8) Director’s Declaration (“ Declaration ”)
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Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
Name of the
Director
Gopal Ramourti
Date of execution July 29, 2009
Purpose
Terms and
Conditions
First mortgaged properties
Property being plot bearing Survey No.116, Hissa no.2
(Part) and Survey N0. 116, Hissa no 2-B, admeasuring 1
hector 21.41 acres, together with the factory and other
structures standing thereon situated at Vadgaon, Taluka
Maval,sub district Maval, District-Pune.
Property being plot bearing no B-22 in ‘H’ block
admeasuring 6500 sq meters situated at Pimpri industrial
Area in the village Pimpri,Taluka and Sub District Haveli,
District-Pune, together with all the buildings and
structures thereon, fixtures, fittings and all plant and
machinery attached to the earth or permanently fastened
to anything attached to the earth, both present and
future.
Second mortgaged property
Property bearing Survey No 229, Hissa no 1, situated at
Mouje Achole admeasuring 1540 sq meters, consisting of
Plot no 39 and 40, in the Vasai taluka industrial Co-
Operative Estate Ltd, situated at Gauraipada, Vasai (E),
having plot no 36 together with all buildings and
structures thereon and all plant and machinery attached
to the earth or permanently fastened to anything
attached to earth both present and future.
Director’s Declaration
The director declares that the Company is seized and
possessed of or otherwise well and sufficiently entitled to
all the First and Second Mortgaged properties as
described above except for the encumbrances as
mentioned below:
On First Mortgaged properties
vide Memorandum of Entry dated October 19,
2007, the First Mortgaged Properties have been
mortgaged for securing on first charge basis facilities
worth Rs 40 crores by ICICI Bank Limited (“ICICI”) by
way of deposit of title deeds of the said property with
ICICI.
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Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
Vide Memorandum of Entry dated October 13,
2008 the First Mortgaged properties have been
mortgaged for securing on Second Pari passu charge
basis, the working capital facilities aggregating to Rs
86.31 crores availed from the following banks:
Name of the Bank
Amount Secured (Rs in
crores)
Central Bank of India
28.35
HDFC Bank Limited 13.15
ICICI Bank Limited 27.81
Barclays Bank PLC 09.00
Standard Chartered Bank
08.00
Total 86.31
The First Mortgaged Property is charged in
favour of Central Bank of India (“Central Bank”) in its
capacity as Security Trustee to secure the facilities
aggregating to Rs 160 Crores on second pari passu
charge basis.
On Second Mortgaged Properties
Vide Memorandum of entry dated February 1,
2008, the Second Mortgaged Properties have been
mortgaged by Mr. S.D Tole for securing the facilities
aggregating to Rs 62.50 crores by deposit of title deeds
with Central Bank on first pari passu charge basis for-
Name of the bank Amount secured
(in Crores)
Central bank of India
27.85
HDFC Bank Limited 12.15
Total 40.00
On second pari passu charge basis for:
Name of the bank Amount secured
(in Crores)
ICICI Bank Limited 22.50
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Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
The title deeds of the Second Mortgaged
Properties was further redeposited for securing facilities
aggregating Rs 86.31 crores by way of constructive
delivery of the said properties with Central Bank on first
pari passu charge basis for:
Name of the Bank
Amount Secured (Rs in crores)
Central Bank of India
28.35
HDFC Bank Limited 13.15
Barclays Bank PLC 09.00
Standard Chartered Bank
08.00
Total 58.50
On second pari passu charge basis for:
Name of the Bank Amount Secured
(in Crores)
ICICI Bank Limited 27.81
The Second Mortgaged Properties have been
charged for the purpose of securing the facilities
aggregating Rs 160 crores on first pari passu charge
basis for:
Name of the Bank Amount Secured
(in Crores)
Central bank of India
30.85
Axis Bank Limited 25.00
HDFC Bank Limited 13.15
Barclays Bank PLC 19.00
Standard Chartered Bank Limited
23.00
Total 111.00
On second pari passu charge basis for:
Name of the Bank Amount Secured
(in
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Arrow Textiles Limited DSK LegalFinancing and Indebtedness Private and Confidential
Crores)
ICICI Bank Limited 49.00
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