dated november 27, 2019 debenture trust deed ......1 debenture trust deed this debenture trust deed...
TRANSCRIPT
DATED NOVEMBER 27, 2019
DEBENTURE TRUST DEED
BETWEEN
EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED
as the Company
AND
SBICAP TRUSTEE COMPANY LIMITED
as the Trustee
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TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION ................................................................................... 1 2. TERMS OF DEBENTURES ........................................................................................................ 25 3. COVENANTS TO PAY ............................................................................................................... 26 4. CONDITIONS .............................................................................................................................. 28 5. APPOINTMENT OF THE TRUSTEE AND DECLARATION OF TRUST .............................. 29 6. POWERS AND DUTIES OF THE TRUSTEE ............................................................................ 31 7. SECURITY AND UNDERTAKINGS ......................................................................................... 34 8. REALISATION OF TRUST PROCEEDS AND APPROPRIATION ......................................... 40 9. LIMITATION OF LIABILITIES OF TRUSTEE ........................................................................ 42 10. REPRESENTATIONS AND COVENANTS .............................................................................. 43 11. EVENTS OF DEFAULT ............................................................................................................. 44 12. REDRESSAL OF DEBENTURE HOLDERS GRIEVANCES ................................................... 53 13. RETIREMENT & REMOVAL OF TRUSTEE............................................................................ 53 14. COSTS AND EXPENSES ........................................................................................................... 55 15. INDEMNITY ............................................................................................................................... 56 16. TAX GROSS UP .......................................................................................................................... 57 17. NOTICES….. ............................................................................................................................... 59 18. DISCLOSURE ............................................................................................................................. 61 19. GOVERNING LAW AND JURISDICTION ............................................................................... 63 20. LIABILITY TO SECURED PARTIES FOR DEFICIENCY ....................................................... 64 21. MISCELLANEOUS ..................................................................................................................... 64 SCHEDULE 1: TERMS AND CONDITIONS .......................................................................................... 68 SCHEDULE 2: PROVISIONS FOR MEETINGS OF DEBENTURE HOLDERS ................................... 72 SCHEDULE 3: COVENANTS AND UNDERTAKINGS ......................................................................... 77 SCHEDULE 4: REPRESENTATIONS AND WARRANTIES ................................................................. 95 SCHEDULE 5: CONDITIONS PRECEDENT ........................................................................................ 103 SCHEDULE 6: CONDITIONS SUBSEQUENT ..................................................................................... 106 SCHEDULE 7: END USE CERTIFICATE ............................................................................................. 109 SCHEDULE 8: EXISTING FINANCIAL INDEBTEDNESS ................................................................. 110 SCHEDULE 9: REQUEST FOR APPROVED INSTRUCTIONS FOR EOD ........................................ 112 SCHEDULE 10: FORM OF ACCELERATION NOTICE ...................................................................... 113 SCHEDULE 11: COMPLIANCE CERTIFICATE .................................................................................. 114 SCHEDULE 12: SPECIFIED NCDs ........................................................................................................ 116 SCHEDULE 14: FORMAT OF COMPANY AUDITOR REPORT ........................................................ 120 SCHEDULE 15: FORMAT OF THE INDEPENDENT VALUER REPORT ......................................... 122 PART A: SUMMARY ................................................................................ Error! Bookmark not defined. PART B: INFLOWS (MONTHLY) ............................................................ Error! Bookmark not defined. PART C: INFLOWS (YTD) ........................................................................ Error! Bookmark not defined. PART C: OUTFLOWS ................................................................................ Error! Bookmark not defined.
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DEBENTURE TRUST DEED
This DEBENTURE TRUST DEED is made at New Delhi on this 27th day of November, 2019:
BETWEEN
1. EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED, a company
incorporated under the Companies Act (as defined below) with corporate identification number
U67100MH2007PLC174759 and having its registered office at Edelweiss House, Off C.S.T.
Road, Kalina, Mumbai – 400 098 (hereinafter referred to as the “Company”, which expression
shall, unless repugnant to the context or meaning thereof, be deemed to mean and include its
successors and permitted assigns);
AND
2. SBICAP TRUSTEE COMPANY LIMITED, a company incorporated under the Companies
Act (as defined below) with its corporate identification number U65991MH2005PLC158386
and having its registered office at 202, Maker Tower- ‘E’, Cuffe Parade Colaba, Mumbai – 400
005 and having its corporate office at Apeejay House, 6th Floor, 3, Dinshaw Waccha Road,
Churchgate, Mumbai- 400020 and an office at 610, 6th Floor, Ansal Bhavan, Kasturba Gandhi
Marg, New Delhi – 110001 (hereinafter referred to as the “Trustee”, which expression shall,
unless repugnant to the context or meaning thereof, be deemed to mean and include its
successors,
The Company and the Trustee are collectively referred to as “Parties” and individually as a “Party”.
WHEREAS:
(A) The Company is an asset reconstruction company registered with the RBI (as defined below)
under the provisions of SARFAESI Act, 2002 (as defined below).
(B) The Company proposes to issue and allot up to 12,500 (twelve thousand and five hundred only)
listed, rated, senior, secured, redeemable, non-convertible debentures of the face value of INR
10,00,000 (Rupees ten lakhs) each (“Face Value”) aggregating up to INR 1250,00,00,000
(Rupees one thousand and two hundred and fifty crores only) (“Debentures”) in accordance
with Applicable Law.
(C) The Company has, pursuant to an agreement dated on or about the date of this Deed, appointed
the Trustee to act as the debenture trustee for and on behalf of and for the benefit of the
Debenture Holders (as defined below) and that of each of their respective successors and
assigns (the “Debenture Trustee Agreement”).
(D) The Company now proposes to execute this Deed, with a view to record the various terms and
conditions and stipulations of the Debentures as well as the Company’s obligation in respect of
the Debentures including redemption of the Debentures, terms and conditions of the
appointment of the Trustee and all costs, charges, expenses and other monies payable in relation
to the Debentures.
NOW, THEREFORE, in consideration of the premises and mutual agreements and covenants
contained in this Deed and other good and valuable consideration (the receipt and adequacy of which
are hereby mutually acknowledged), the Parties hereby agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
2
In this Deed, except where the context otherwise requires (a) capitalised terms defined
anywhere in this Deed by inclusion in quotations and/or parenthesis have the meanings so
ascribed, and (b) the following terms shall have the following meanings:
“Acceleration Notice” has the meaning ascribed to such term in Clause 11 (w) (Consequences
of Event of Default) of this Deed.
“Account Assets” means the Escrow Account and the amounts lying therein, from time to time
as more particularly described in the Deed of Hypothecation.
“Account Bank” means ICICI Bank Limited, Capital Markets Division, Churchgate, Mumbai
branch or any other bank acceptable to the Trustee, with whom the Escrow Account is required
to be maintained in accordance with the Transaction Documents.
“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company
of that person or any other Subsidiary of that Holding Company.
“Anti-Bribery and Corruption Laws” means, with respect to the Secured Parties, the
Company or the Obligor, the Prevention of Corruption Act, 1988, the FCPA, the Indian Penal
Code, 1860, the UK Bribery Act of 2010 or any similar laws, rules or regulations issued,
administered or enforced by India, the United Kingdom, the United States of America, the
European Union or any of its member states, or any other country or Governmental Agency
having jurisdiction over the Secured Parties, Company or the Obligor, including all anti-bribery
or anti-corruption laws and international conventions and other laws regarding bribery or
commercial bribery, in each case, as amended and together with the rules and regulations issued
thereunder or in connection therewith.
“Anti-Money Laundering Laws and Anti-Terrorism Financing Laws” means all applicable
financial record keeping and reporting requirements and money laundering statutes (including
all applicable rules and regulations thereunder) and all applicable rules and regulations and any
related or similar rules, regulations or guidelines: (a) issued, administered or enforced by any
governmental agency having jurisdiction over the Obligors (or any of its respective officers,
directors, employees, shareholders or agents) or otherwise issued, administered or enforced in
each of the jurisdictions in which the Obligors are incorporated or domiciled (as the case may
be); and/or (b) of all jurisdictions in which the Obligors (or any of its officers, directors,
employees shareholders or agents) conducts business.
“Applicable Law(s)” means all applicable laws, bye-laws, rules, regulations, orders,
ordinances, protocols, codes, guidelines, policies, notices, directions, judgments, decrees or
other requirements or official directives of any Governmental Authority or Person acting under
the authority of any Governmental Authority and/or of any statutory authority, and specifically
including, the RBI, SEBI and/or of a stock exchange, whether in effect on the date of this Deed
or thereafter.
“Approved Instructions” means:
(a) in relation to the Critical Majority Resolution Items, the prior written instructions of the
Debenture Holders pursuant to a Critical Majority Resolution;
(b) in relation to the Super Majority Resolution Items, the prior written instructions of the
Debenture Holders pursuant to a Super Majority Resolution;
(c) in relation to the Majority Resolution Items and all matters other than as set out in
paragraphs (a) and (b) above, the prior written instructions of the Debenture Holders
pursuant to a Majority Resolution.
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“ARC(R)” has the meaning ascribed to such term in paragraph 3.22 (Specified NCDs) of
Schedule 3 (Covenants and Undertakings) of this Deed.
“Associate” has the meaning ascribed to the term ‘associate company’ in the Companies Act,
2013.
“Authorisation” means:
(d) an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation,
lodgement or registration; or
(e) in relation to anything which will be fully or partly prohibited or restricted by law if a
Governmental Authority intervenes or acts in any way within a specified period after
lodgement, filing, registration or notification, the expiry of that period without
intervention or action.
“Big Four” means Deloitte Haskins LLP, Pricewaterhouse Coopers LLP, KPMG Limited and
Ernst & Young LLP.
“Business Day” means a day (other than Sunday or a bank holiday) on which banks and stock
exchanges are open for general business in Mumbai, New Delhi, New York and London.
“Cash Balance” means any unencumbered credit balance or any cash equivalent in the form
of fixed deposits or government securities in terms of the Escrow Accounts Agreement in the
Escrow Account.
“Change of Control” means:
(a) in relation to the Company, any of the following: (i) EFSL at any time and for any
reason ceasing to hold, directly or indirectly, at least 51% fifty one per cent.) of the
economic, beneficial and voting interests in the Company’s share capital (determined
on a fully diluted basis); (ii) any Person or group, other than EFSL (directly or
indirectly), obtaining the power (whether or not exercised) to elect a majority of the
board of directors of the Company; or (iii) EFSL at any time and for any reason ceasing
to directly or indirectly control, the management and policy decisions of the Company;
(b) in relation to EFSL, any change in Control thereof.
“CIBIL” means TransUnion CIBIL Limited.
“Coercive Practice” means the impairing or harming, or threatening to impair or harm, directly
or indirectly, any person or the property of the person with a view to influence improperly the
actions of a person.
“Collusive Practice” means an arrangement between two or more persons designed to achieve
an improper purpose, including to influence improperly the actions of another person.
“Companies Act” means the Companies Act, 2013 and shall include the rules, regulations,
circulars and notifications issued thereunder and any other statutory amendment or re-
enactment thereof.
“Company Auditor” means a either (i) any of the Big Four accounting firms, Grant Thorton
LLP, BDO India LLP / Haribhakti & Co LLP, Khimji Kunverji & Co LLP; or (ii) any other
internationally reputed accounting firm appointed by the Company, as may be acceptable to the
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Trustee for the purpose of preparation of its Financial Statements.
“Company Group Debentures” has the meaning ascribed to it in paragraph 45 of Schedule 2
(Provisions for Meetings of Debenture Holders).
“Company Permitted Existing Financial Indebtedness” means the Existing Financial
Indebtedness as set out in Part A (Company Permitted Existing Financial Indebtedness) of
Schedule 8 (Existing Financial Indebtedness).
“Company Permitted Indebtedness” means:
(a) the Debt;
(b) the Existing Financial Indebtedness;
(c) the Company Permitted Indebtedness (Partial Voluntary Redemption);
(d) any other Financial Indebtedness availed by the Company including any Specified
Unsubordinated Indebtedness provided that: (A) no Event of Default is continuing or
will occur as a result; (B) no adverse impact on the Security Interest created on the
Secured Assets will occur as a result; and (C) the Debt shall not be less than 34.5%
(thirty four decimal five per cent.) of the Total Debt of the Company on a proforma
basis (which for the removal of doubts, shall include all amounts payable in relation to
crystallised and undisputed Financial Indebtedness availed from the operational
creditors and guarantors of the Company).
“Company Permitted Indebtedness (Partial Voluntary Redemption)” means any Financial
Indebtedness availed by the Company pursuant to a Partial Voluntary Redemption Event as set
out in Clause 7.7 (d) (i) (Permitted Security Release pursuant to a Partial Voluntary
Redemption Event) of this Deed provided that: (A) no Event of Default is continuing or will
occur as a result; (B) no adverse impact on the Security Interest created on the Secured Assets
will occur as a result; (C) the Debt shall not be less than 34.5% (thirty four decimal five per
cent.) of the Total Debt of the Company on a proforma basis (which for the removal of doubts,
shall include all amounts payable in relation to crystallised and undisputed Financial
Indebtedness availed from the operational creditors and guarantors of the Company) excluding
the Specified NCDs; (D) amount of such Financial Indebtedness is not greater than the
outstanding Nominal Value of the Debentures proposed to be redeemed by the Company
pursuant to a Partial Voluntary Redemption Event less available Cash Balance in the Escrow
Account, and (E) the proceeds of such Financial Indebtedness are utilised solely to repay the
Debt pursuant to the Partial Voluntary Redemption Event.
“Company Permitted Security Interest” means the following:
(a) any Security Interest created by the Company to secure the Debt pursuant to the
Transaction Documents;
(b) any Security Interest created in relation to the Company Permitted Indebtedness (other
than Company Financial Indebtedness (Partial Voluntary Redemption)), provided that:
(A) there is no adverse impact on the Security Interest created on the Secured Assets
as a result; and (B) no Event of Default is continuing or arises pursuant to the creation
of such Security Interest;
(c) any Security Interest created pursuant to the Company Permitted Indebtedness (Partial
Voluntary Redemption), provided that: (A) there is no adverse impact on the Security
Interest created on the Secured Assets as a result; (B) the security cover ratio agreed to
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be maintained by the Company in relation to such Financial Indebtedness does not
exceed 1.5x; (C) the valuation methodology adopted for the purpose of calculation of
the security cover ratio in relation to such Company Permitted Indebtedness (Partial
Voluntary Redemption) is not more favourable to the relevant lender as compared to
the methodology adopted for the purpose of computation of the Security Cover Ratio;
and (D) no Event of Default is continuing or arises pursuant to the creation of such
Security Interest.
“Company Pledge Agreement” means the pledge agreement to be entered into between the
Company and the Trustee creating a first ranking and exclusive pledge over the Pledged SRs,
in favour of the Trustee.
“Company SRs” means the security receipts issued by the Trusts to the Company in accordance
with the SARFAESI Act, 2002.
“Competing Firm” has the meaning given to the term in Clause 6.6 (Observer) of this Deed.
“Compliance Certificate” means a certificate delivered pursuant to paragraph 1.2
(Compliance Certificate) of Schedule 3 (Covenants and Undertakings) and signed by any
authorised signatory of the Company, substantially in the form set out in Schedule 11
(Compliance Certificate) and satisfactory to the Trustee.
“Control” has the meaning ascribed to such term in the Companies Act.
“Corporate Guarantee” means the unconditional and irrevocable deed of guarantee, if any,
that is executed by any Corporate Guarantor in favour of the Trustee for the benefit of the
Secured Parties, in a form acceptable to the Trustee (acting on behalf of the Debenture Holders).
“Corporate Guarantor” means any entity that may provide a Corporate Guarantee.
“Corrupt Practice” means the offering, giving, receiving or soliciting, directly or indirectly,
of anything of value to influence improperly the actions of another person.
“Credit Rating Agency” means CRISIL Limited or any other credit rating agency, as approved
by the Trustee in writing.
“Critical Majority Resolution” means:
(a) a resolution passed at a Meeting of the Debenture Holders duly convened and held in
accordance with the provisions set out in Schedule 2 (Provisions for the meetings of the
Debenture Holders); or
(b) written instructions given,
in each case, by a majority of Debenture Holders representing not less than 90% (ninety per
cent.) of the aggregate Nominal Value of the outstanding Debentures.
“Critical Majority Resolution Items” mean the items set out in Clause 21.1 (b) (Critical
Majority Resolution Items) of this Deed which are required to be approved by a Critical
Majority Resolution.
“Debentures” means redeemable, senior, secured, listed, rated non-convertible debentures of
a face value of INR 10,00,000 (Rupees ten lakhs only) each and aggregating up to INR
1,250,00,00,000 (Indian Rupees One Thousand and Two Hundred and Fifty Crores only),
issued or to be issued by the Company to the Debenture Holders pursuant to this Deed and other
6
Transaction Documents.
“Debenture Holders” means the persons who are, for the time being and from time to time,
the holders of any Debentures and whose names appear in the Register of Beneficial Owners
including the Initial Original Debenture Holders (as defined below), and “Debenture Holder”
means any of them.
“Debenture Holders Account(s)” means the bank accounts of each of the Debenture Holders
linked to the demat accounts where their respective Debentures will be held, in which all
Interest, Default Interest, Redemption Premium and any other amounts payable by any Obligor
to the Debenture Holders pursuant to the Transaction Documents shall be deposited in
accordance with the provisions of this Deed and other Transaction Documents.
“Debenture Regulations” means the Debt Listing Regulations, the LODR Regulations and all
the rules, regulations, notifications, circulars, press notes or orders, issued by SEBI or any other
Governmental Authority in relation to, or in connection with, non-convertible debentures.
“Debenture Trust Property” means the Initial Contribution, and all other Security (including
any substitution or replacement thereof) created or to be created, now or in the future, by any
Obligor under or pursuant to any Security Document in favour of the Trustee, all of the
Trustee’s rights under and pursuant to any Transaction Document and all sums received by the
Trustee under or pursuant any Transaction Document (save for any sums received solely for its
own account), all monies received by it out of, whether prior to or as a result of enforcement of
the Security created hereunder or under any Security Document or the exercise of rights and
remedies under any Transaction Document.
“Debenture Trustee Agreement” means the debenture trustee agreement dated on or about
the date hereof entered into between the Company and the Trustee for the appointment of the
Trustee as a trustee for the Debenture Holders.
“Debenture Trustee Regulations” means the Securities and Exchange Board of India
(Debenture Trustees) Regulations, 1993, as amended from time to time.
“Debt” means at any time all the amounts payable by the Company to the Secured Parties
pursuant to the terms of the Transaction Documents (in each case, whether alone or jointly, or
jointly and severally, with any other person, whether actually or contingently, and whether as
principal, surety or otherwise), including, without limitation, the following amounts:
(a) the aggregate principal amount of all the outstanding Debentures,
(b) the accrued Interest, the Redemption Premium and the Default Interest whether fallen due
or not and calculated at any point in time as if it had become due as on such date;
(c) all other monies, debts and liabilities of the Company, including indemnities, liquidated
damages, costs, charges, expenses, application money, stamp duties, fees and interest
incurred under, arising out of or in connection with the Transaction Documents;
(d) all unpaid fees, cost and expenses of the Trustee, Delegates, Receivers and professional
advisors appointed by or for the benefit of the Secured Parties;
(e) any and all sums expended (including any stamp duty paid) by or on behalf of any Secured
Party or by any other person in order to create or preserve any Security Interest; and
(f) any and all costs, expenses, fees and duties for the enforcement and collection of any
amounts due under the Transaction Documents, including costs, expenses, fees and duties
7
of enforcement and realisation of the Security Interest under the Security Documents.
“Debt Listing Regulations” means the Securities and Exchange Board of India (Issue and
Listing of Debt Securities) Regulations, 2008, as amended from time to time.
“Deed” means this debenture trust deed (together with all its Schedules), as may be amended,
modified, supplemented, novated and/or restated from time to time.
“Deed of Hypothecation” means the deed of hypothecation entered into or to be entered into
between Company and the Trustee creating a first ranking and exclusive charge on the
Hypothecated Assets.
“Deemed Date of Allotment” means, in respect of the Debentures, the relevant deemed date
of allotment as set out in the respective Information Memorandum.
“Default Interest” has the meaning ascribed to such term in Clause 3.3(a) (Covenant to pay
Default Interest) of this Deed.
“Default Rate” has the meaning ascribed to such term in Clause 3.3(a) (Covenant to pay
Default Interest) of this Deed.
“Delegate” means any delegate, agent, attorney or co-trustee appointed by the Trustee.
“Depository” means National Securities Depositories Limited and/or Central Depository
Services (India) Limited, as the case may be.
“Discount Rate” means the rate which is the higher of: (a) 12% p.a. (twelve per cent. per
annum); and (b) the prevailing 1 (one) year rate applicable to Indian government securities as
represented by the GIND1YR ticker published by Bloomberg or its replacement ticker as of
the Testing Date, plus 500 (five hundred) basis points.
“Dispute” has the meaning ascribed to such term in Clause 19.2 (Jurisdiction) of this Deed.
“Early Redemption Date” means a date:
(a) when the Trustee requires the Debentures to be redeemed on a date prior to the
Scheduled Redemption Date upon the occurrence of an Event of Default or the
Specified Early Redemption Date as the case may be;
(b) any other date when the Company is permitted or required to redeem the Debentures,
prior to the Scheduled Redemption Date in accordance with the terms of this Deed
including but not limited to a Partial Voluntary Redemption Date or a Full Voluntary
Redemption Date, as the case may be; or
(c) any date pursuant to any redemption in relation to a Voluntary Redemption Event
pursuant to paragraph 2.4 (Other Voluntary Redemption) of Schedule 1 (Terms and
Conditions).
“EFSL” means Edelweiss Financial Services Limited having a corporate identification number
L99999MH1995PLC094641with its registered office at Edelweiss House, Off. C.S.T Road,
Kalina, Mumbai- 400098 including any of its successors, transferees and permitted assigns.
“End Use Certificate” means a certificate signed by an authorised signatory of the Company
substantially in the form set out in Schedule 7 (End Use Certificate) hereto and supported
separately by a certificate provided by an independent chartered accountant.
8
“Escrow Account” means bank account of the Company bearing account number
___________________ opened and maintained with the Account Bank in accordance with the
Escrow Accounts Agreement.
“Escrow Accounts Agreement” means the account agreement dated on or about the date
hereof to be entered into among the Company, the Trustee and the Account Bank, inter alia, in
respect of the Escrow Account.
“Existing Financial Indebtedness” means the Financial Indebtedness availed by the Company
as set out in Part A, Part B and Part C of Schedule 8 (Existing Financial Indebtedness) of this
Deed.
“Existing Security” means the security created for securing the Existing Financial
Indebtedness.
“Event of Default” means any event or circumstance specified as such in Clause 11 (Events of
Default), other than Clauses 11 (w) (Consequences of Event of Default), 11 (y) (Trustee to be
Indemnified) and 11 (z) (Fees and Expenses) and 11 (aa) (Communication with third party, etc.)
of this Deed.
“Excluded Amounts” means the Excluded Fees, yield (if any), upside income, redemption
amounts, and amounts payable to gross up deductions on account of Taxes payable in relation
to the Specified NCDs.
“Excluded Fees” means the fees including without limitation any management fee or incentive
fee payable to the Company by the relevant Trusts in relation to any Specified NCDs.
“Face Value” shall have the meaning ascribed to it in Recital B of this Deed.
“FATCA” means:
(a) sections 1471 to 1474 of the Code or any associated regulations;
(b) any treaty, law or regulation of any other jurisdiction, or relating to an
intergovernmental agreement between the US and any other jurisdiction, which (in
either case) facilitates the implementation of any law or regulation referred to in
paragraph (a) above; or
(c) any agreement pursuant to the implementation of any treaty, law or regulation referred
to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US
government or any governmental or taxation authority in any other jurisdiction.
“FATCA Deduction” means a deduction or withholding from a payment under a Transaction
Document required by FATCA.
“FCPA” means the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.
“Final Listing Approval” means the final approval issued by the Stock Exchange in
accordance with Applicable Law approving the listing of the Debentures on the Stock
Exchange.
“Final Settlement Date” means the date when all and not less than and all Debentures have
been redeemed and all outstanding Debt (whether then due or not) has been irrevocably and
unconditionally paid and discharged in full to the satisfaction of the Trustee.
9
“Financial Covenants” means financial covenants as set out under paragraph 2 (Financial
Covenants) of Schedule 3 (Covenants and Undertakings) of this Deed.
“Financial Half Year” means the period of six calendar months falling on the expiry of March
and September of each calendar year.
“Financial Indebtedness” means any indebtedness for or in respect of:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit facility or
dematerialised equivalent;
(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes,
debentures, loan stock or any similar instrument;
(d) the amount of any liability in respect of any lease or hire purchase contract which
would, in accordance with GAAP, be treated as a finance or capital lease;
(e) receivables sold or discounted (other than any receivables to the extent they are sold
on a non-recourse basis);
(f) any amount raised under any other transaction (including any forward sale or purchase
agreement) having the commercial effect of a borrowing;
(g) any derivative transaction entered into in connection with protection against or benefit
from fluctuation in any rate or price (and, when calculating the value of any derivative
transaction, only the marked to market value shall be taken into account);
(h) shares which are expressed to be redeemable or any shares or instruments convertible
into shares or any shares or other securities which are otherwise the subject of a put
option or any form of guarantee;
(i) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby
or documentary letter of credit or any other instrument issued by a bank or financial
institution;
(j) any amount of any liability under any advanced or deferred purchase agreement if one
of the primary reasons behind the entry into such agreement is to raise finance;
(k) any obligation under any put option arrangement or guarantee or indemnity in respect
of any put option where that put option or guarantee is granted or entered into
primarily as a method of raising or assuring the payment or repayment of any
indebtedness; and
(l) the amount of any liability in respect of any guarantee or indemnity (without double
counting) for any of the items referred to in paragraphs (a) to (k) above.
“Financial Quarter” means the quarters ending on June 30, September 30, December 31 and
March 31 in a Financial Year.
“Financial Statements” means the latest financial statements prepared for the latest Financial
Half Year by the Company in accordance with GAAP and other Applicable Laws;
“Financial Year” means accounting period commencing from April 1st of each year till March
31st of the next year.
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“Fraudulent Practice” means any action or omission, including any misrepresentation that
knowingly or recklessly misleads, or attempts to mislead, a person to obtain a financial benefit
or to avoid an obligation.
“Full Voluntary Redemption Amount (A)” means the amount payable in respect of each
Debenture being redeemed being the sum of: (i) outstanding Nominal Value of the Debenture
proposed to be redeemed; (ii) accrued but unpaid Interest and Default Interest, (iii) the
Redemption Premium (Pro-rata) (A); and (iv) all other amounts payable in respect of such
Debenture in accordance with the Transaction Documents.
“Full Voluntary Redemption Amount (B)” means the amount payable in respect of each
Debenture being redeemed being the sum of: (i) outstanding Nominal Value of the Debenture
proposed to be redeemed; (ii) accrued but unpaid Interest and Default Interest, (iii) the
Redemption Premium (Pro-rata) (B); and (iv) all other amounts payable in respect of such
Debenture in accordance with the Transaction Documents.
“Full Voluntary Redemption Date” means the date falling on the expiry of 36 (thirty) six
months from the Pay In Date.
“Further Pledged SRs” means the Company SRs which shall be pledged upon the discharge
of the Retiring Existing Financial Indebtedness (External) and the Company SRs which shall
be pledged upon the acquisition of Company SRs from the Group in accordance with paragraph
2.8 (e) (Purpose) in accordance with the timelines set out in this Deed.
“GAAP” means generally accepted accounting principles, standards and practices applicable
in India.
“Governmental Authority” means any national, supranational, regional or local government
or governmental, administrative, fiscal, judicial, or government-owned body, department,
commission, authority, tribunal, agency or entity, or central bank (or any person, whether or not
government owned and howsoever constituted or called, that exercises the functions of a central
bank).
“Group” means the Company, the Obligor and each entity Controlled by and exercising
Control in relation to the Company.
“Holding Company” means, in relation to a company, any other company of which it is a
Subsidiary.
“Hypothecated Assets” means the Account Assets and the Receivables which are secured by
the Company on a first ranking sole and exclusive basis pursuant to the relevant Security
Documents.
“IBC” means the provisions of the Insolvency and Bankruptcy Code, 2016 and shall include
any rules, re-enactments, regulations, directives or such other notification as may be issued
pursuant thereto.
“Indemnified Parties” has the meaning ascribed to such term in Clause 15 (a) (i) (General
Indemnity) of this Deed.
“Independent Valuer” means any of the Big Four accounting firms or any other internationally
reputed accounting or financial services firm as may be acceptable to the Trustee.
“Indirect Tax” means any, present or future, goods and services tax, consumption tax, value
added tax or any tax of a similar nature.
11
“Information Memorandum” means an information memorandum issued or to be issued by
the Company for the issue of the Debentures on a private placement basis in accordance with
Applicable Laws.
“Information Utilities” means an information utility established in accordance with the
provisions of the Insolvency and Bankruptcy Code, 2016 and the rules and regulations made
thereunder.
“Initial Contribution” has the meaning ascribed to such term in Clause 5.3 (a) (Declaration
of Trust by the Trustee) of this Deed.
“Initial Pledged SRs” means the Pledged SRs as identified and set out in Part A of Schedule
I (Initial Pledged SRs) of the Company Pledge Agreement.
“Initial Required Security Cover Ratio” has the meaning ascribed to such term in paragraph
21.1 (Security) of Schedule 4 (Representations and Warranties) of this Deed.
“INR” or “Rs.” or “Rupees” means the lawful currency of the Republic of India.
“Insider Trading Regulations” shall mean the Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations, 2015, as may be amended, modified and
supplemented from time to time.
“Insolvency Event” means the admission of an application in relation to the corporate
insolvency resolution process of any Obligor under the IBC or similar Applicable Laws.
“Interest Payment Date” means March 31, June 30, September 30 and December 31 of each
calendar year.
“Interest Period” means each period of 3 (three) months beginning on an Interest Payment
Date and ending on the day immediately before the next Interest Payment Date, except in (i)
the case of the first period applicable when it means the period beginning on the Pay in Date
and ending on the day immediately before the next Interest Payment Date, and (ii) in case of
the last Interest Period, when it means the period beginning on the day after the preceding
Interest Period and ending on the relevant Redemption Date.
“Interest Rate” means an interest rate of 11.5% (eleven decimal five per cent.) per annum
payable quarterly.
“Investment Limit” means an amount, which is equal to 17.5% (seventeen decimal five per
cent.) of the Security Cover (Net) in each Investment Period less the aggregate amount
withdrawn from the Escrow Account pursuant to paragraph 3.25 (b) (Permitted Payouts) of
Schedule 3 (Covenants and Undertakings) of this Deed.
“Investment Limit Certificate” has the meaning ascribed to such term in Clause 7.7 (a) (i)
(Permitted Company SRs) of this Deed.
“Investment Period” means either the period from: (i) January 16 to June 30; or (ii) the period
from July 16 to December 31 in each year save and except the first period which shall
commence from the Deemed Date of Allotment until June 30, 2020.
“Investment Proposal” has the meaning ascribed to such term in Clause 7.7 (b) (i) (Restricted
Company SRs) of this Deed.
“IRR” means, in relation to a Debenture Holder, the internal rate of return per annum calculated
12
from the Pay In Date to the relevant Redemption Date, calculated by taking into account the
timing and amounts of (a) all subscriptions in the Debentures of the Company, and (b)
repayments of Nominal Value of the outstanding Debentures, payments of Interest (excluding
Default Interest) and Redemption Premium received by the Debenture Holder in relation to
such subscriptions in the relevant Debentures issued and allotted by the Company, from the
Company and/or Obligors.
“IRR Calculation Method” means the method for determining the IRR, namely using the
exact dates of receiving cash flows or making of investments by the Debenture Holders, using
the 'XIRR' function in Microsoft Excel.
“Key Covenants” means the undertakings and covenants made by the Company as set out in
Clause 7.5 (Security Cover Ratio), Clause 7.6 (Testing), and paragraph (a) (Permitted Company
SRs) and paragraph (b) (Restricted Company SRs) of Clause 7.7 (Additional Security) of this
Deed.
“Key Managerial Person” has the meaning given to the term in the Companies Act.
“LODR Regulations” means the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015, as amended from time to time.
“Majority Resolution” means:
(a) a resolution passed at a Meeting of the Debenture Holders duly convened and held in
accordance with the provisions set out in Schedule 2 (Provisions for meetings of
Debenture Holders); or
(b) written instructions given,
in each case, by a majority representing not less than 51% (fifty one per cent) of the aggregate
Nominal Value of the outstanding Debentures.
“Majority Resolution Items” mean the items set out in Clause 21.1 (d) (Majority Resolution
Items) of this Deed which are required to be passed by a Majority Resolution.
“Material Adverse Effect” means, as of any date of determination by the Trustee (acting on
Approved Instructions), a material and adverse effect on:
(a) the business, condition (financial or otherwise), operations, performance or credit
standing, business activities or Secured Assets of any Obligor from the date of
execution of this Deed;
(b) the ability of any Obligor to perform and comply with any of its obligations under any
Transaction Document to which it is a party;
(c) the validity, legality or enforceability of any Transaction Documents (including the
effectiveness or ranking of any Transaction Security) against any Obligor;
(d) the validity, legality or enforceability of, or the rights or remedies of any Secured Party
under any Transaction Document; or
(e) the imposition of any suspension or moratorium on the payment of any Financial
Indebtedness by any applicable authority.
“Meeting of the Debenture Holders” means a meeting of the Debenture Holders duly called,
13
convened and held in accordance with the provisions set out in Schedule 2 (Provisions for
Meeting of Debenture Holders). For the avoidance of doubt it is clarified that any reference to
decisions taken pursuant to a Meeting of the Debenture Holders shall mean a decision taken
either (a) at a physical meeting of the Debenture Holders; or (b) by way of a written consent
from each Debenture Holder, in a manner determined by the Trustee as per the terms of this
Deed.
“New Investments” means the investments that may be made by the Company in the Permitted
SRs and/or the Restricted SRs in accordance with the terms of the Deed.
“Nominal Value” has the meaning ascribed to such term in Clause 2.1 (Amount of Debentures)
of this Deed.
“Nominee Director” has the meaning ascribed to such term in Clause 6.5 (Nominee Director)
of this Deed.
“Obligors” means the Company, any Corporate Guarantor and any other Person who provides
any security by way of hypothecation, mortgage, pledge or guarantee in connection with the
Debentures or Transaction Documents on and from the date such person provides the guarantee
or security , and “Obligor” means any of them.
“Obstructive Practice” means (i) deliberately destroying, falsifying, altering or concealing
evidence material to the investigation or the making of false statements, in order to materially
impede a government, a Secured Party or third party investigation into allegations of a Coercive
Practice, Collusive Practice, Corrupt Practice, Fraudulent Practice and/or threatening, harassing
or intimidating any party to prevent it from disclosing its knowledge of matters relevant to the
investigation or from pursuing the investigation, or (ii) acts intended to materially impede the
exercise of a government’s, a Secured Party’s or third party’s access to contractually required
information in connection with an investigation into allegations of a Coercive Practice,
Collusive Practice, Corrupt Practice or Fraudulent Practice.
“Observer” has the meaning ascribed to such term in Clause 6.6 (Observer) of this Deed.
“OFAC” means the Office of Foreign Asset Control of the Department of Treasury of the
United States of America.
“Original Debenture Holder” means the initial subscriber to the Debentures.
“Partial Voluntary Redemption Amount” means the amount payable in respect of each
Debenture being redeemed being the sum of: (i) outstanding Nominal Value of the Debenture
proposed to be redeemed; (ii) accrued but unpaid Interest and Default Interest, (iii) the
Redemption Premium (Pro-rata) (A); and (iv) all other amounts payable in respect of such
Debenture in accordance with the Transaction Documents.
“Partial Voluntary Redemption Date” means the date falling on the expiry of 15 (fifteen)
months from the Pay In Date.
“Partial Voluntary Redemption Event” has the meaning given to the term in Clause 2.3 (a)
(Partial Voluntary Redemption) of Schedule 1 (Terms and Conditions) of this Deed.
“Partial Voluntary Redemption Release Pledged SRs” means such Pledged SRs as proposed
by the Company and approved by the Trustee (acting on Approved Instructions), as are required
to be released to facilitate the raising of further Financial Indebtedness for redemption of the
Debentures pursuant to paragraph 2.3 (Partial Voluntary Redemption) of Schedule 1 (Terms
and Conditions) and whose value does not exceed 1.5x of the outstanding Nominal Value of
14
the Debentures proposed to be redeemed pursuant to a Partial Voluntary Redemption Event.
“Partial Voluntary Redemption Notice” has the meaning given to the term in Clause 2.3 (a)
(Partial Voluntary Redemption) of Schedule 1 (Terms and Conditions) of this Deed.
“Pay In Date” means the date on which the subscription monies are remitted by the Debenture
Holders into the designated account on or prior to the Deemed Date of Allotment.
“Permitted Company SRs” has the meaning ascribed to such term in Clause 7.7 (a) (ii)
(Permitted Company SRs) of this Deed.
“Permitted Investments” has the meaning ascribed to such term in Clause 6.1 (a) (Power to
Make Permitted Investments) of this Deed.
“Permitted Loans” means any financial assistance by way of loans granted by the Company
out of the Cash Balance to: (i) a Secured Trust for meeting its expenses which shall not exceed
2% (two per cent.) of the corpus of the Trust Fund of such Secured Trust provided that the
aggregate principal outstanding amount of all such loans to all Secured Trusts (out of the Cash
Balance) shall not exceed INR 50,00,00,0000 (Indian Rupees fifty crores only) at any given
time; and (ii) one or more portfolio companies provided: (A) such financial assistance shall not
exceed collectively, at any given time, on and from the Deemed Date of Allotment, an aggregate
amount of INR 358,00,00,000 (Indian Rupees three hundred and fifty eight crores only) taking
into account all financial assistance provided to all portfolio companies from the Cash Balance,
(B) such financial assistance granted to any one portfolio company shall not exceed INR
143,00,00,000 (Rupees one hundred and forty three crores only), and (C) in each case, such
financial assistance is not provided to a Person who is a Related Party.
“Permitted Parties” has the meaning ascribed to such term in Clause 18.1 (a) (i) (Disclosure
of Information) of this Deed.
“Permitted Shareholder Payouts” means the payouts to be made by the Company as set out
in Schedule 17 (Permitted Shareholder Payouts).
“Permitted Voluntary Redemption Event” has the meaning ascribed to such term in
paragraph 2.4 (Other Voluntary Redemption) of Schedule 1 (Terms and Conditions) of this
Deed.
“Pledged SRs” means the Initial Pledged SRs, the Further Pledged SRs and any other Company
SRs which are pledged to secure repayment of the Debt in favour of the Trustee in accordance
with the Company Pledge Agreement and this Deed;
“Pledged SR Upside” means the upside amounts (howsoever described under the Trust
Documents) received or to be received by the Company in relation to the Pledged SRs from the
Trusts.
“Potential Event of Default” means any event or circumstance specified in Clause 11 (Events
of Default) which would with the expiry of a cure period be or become an Event of Default.
“Proceedings” shall have the meaning ascribed to such term in Clause 19.2 (Jurisdiction) of
this Deed.
“RBI” means the Reserve Bank of India.
“Realisation Proceeds” has the meaning ascribed to such term in Clause 8 (a) (Realisation of
Trust Properties) of this Deed.
15
“Receivables” means:
(a) the cashflows received on and from the Pay In Date or to be received by the Company
(in its capacity as the holder of the Pledged SRs) including but not limited to all
redemption amounts, upside income, past overdues, interest charges for delayed
payments, indemnities, default interest, damages and/or all other charges, fees,
expenses, costs and yield generated from the Pledged SRs and all other monies in
relation to the Pledged SRs under the terms of the Trust Documents;
(b) all Trust Fees;
(c) all rights, title, interest, benefit, claims and demands whatsoever of the Company in
relation to any and all proceeds, consideration and amounts owing, accrued, payable to
and/or received by or to be received by the Company and which are now/may be due,
owing, payable, belonging to the Company or which may at any time become due,
owing, payable or belonging to the Company, each in relation to the Permitted Loans
(d) all other monies accruing to the Company pursuant to the Secured Trusts other than the
Excluded Amounts.
For avoidance of doubt, it is clarified that “Receivables” shall not include any Excluded
Amounts
“Receiver” means a receiver or receiver and manager or administrative receiver of the whole
or any part of the Secured Assets.
“Record Date” means the date falling 15 (fifteen) calendar days prior to the date on which
Interest is due and payable on the Debentures, or the date of redemption of such Debentures (as
applicable).
“Redemption Date” means: (a) a Scheduled Redemption Date, or (b) an Early Redemption
Date; or the (c) Final Settlement Date, as the case may be.
“Redemption Premium” in respect of each Debenture, means an amount which is the sum of
Redemption Premium (Pro-rata) and where applicable, the Redemption Premium (Make-
whole), in accordance with the Transaction Documents.
“Redemption Premium (Make-whole)” means the amount that is computed as per the
following calculation:
(i) gross amount payable to achieve the IRR set out in the table below, on the relevant
outstanding Debentures, calculated from the Pay In Date until the date falling on the
expiry of 36 (thirty six) months from the Pay In Date, computed as per the IRR
Calculation Method in accordance with the Transaction Documents. It is clarified that
such gross amount shall be calculated after taking into account any redemption of
Debentures (together with payment of relevant amounts) pursuant to any voluntary
redemption pursuant to Clause 2.3 (Voluntary Redemption) of Schedule 1 and assuming
the Interest has been duly paid on the respective due date.
reduced by
(A) the amounts already paid/repaid (or being paid/repaid on such early
redemption) by the Obligors towards Nominal Value of Debentures, Interest
(excluding Default Interest) and Redemption Premium (Pro-rata);
16
and further reduced by
(B) the amount equivalent to prevailing interest rate applicable to India government
securities as represented by the prevailing 1 (one) year rate applicable to Indian
government securities as represented by GIND1YR ticker published by Bloomberg (or
its replacement ticker) on the proposed date of prepayment less 50bps (fifty basis points)
on the Nominal Value of the Debentures being pre-paid for the period commencing from
the proposed date of prepayment until the expiry of 36 (thirty six) months from the Pay
In Date.
For the purpose of this definition, the applicable IRR rate shall be as per the following
table:
Scenario Rate of IRR
In case of any pre-payment within
15 months of the Pay In Date
14.75%
In case of any pre-payment within
15 months to 36 months of the
Pay In Date (provided that the
Company has redeemed 10% of
the Debentures pursuant to Partial
Voluntary Redemption Event)
14.75%
In case of any pre-payment within
15 months to 36 months of the
Pay In Date (provided that the
Company has not redeemed 10%
of the Debentures pursuant to
Partial Voluntary Redemption
Event)
14.91%
“Redemption Premium Non-Conditionality Event” means the occurrence of each of the
following conditions on a cumulative basis:
(a) the Company has no Financial Indebtedness outstanding other than the Debt;
(b) the Security Cover Ratio equals or exceeds 4.00x; and
(c) all the security receipts issued by the Secured Trusts have a recovery risk rating in the range
of 150% (one hundred and fifty per cent.) or more by the following recognized credit rating
agencies namely: Brickwork Ratings India Pvt. Ltd; (ii) India Ratings and Research Private
Limited; (iii) ICRA Limited; (iv) CARE Ratings Ltd., and (v) CRISIL Limited.
“Redemption Premium (Pro-rata)” in respect of each Debenture, means the Redemption
Premium (Pro- rata) (A), Redemption Premium (Pro- rata) (B) or Redemption Premium (Pro-
rata) (C), as the case may be.
“Redemption Premium (Pro-rata) (A)” in respect of each Debenture, means the amount
which, when received by the Debenture Holder on the relevant Redemption Date, shall yield
an IRR of 14.75% (fourteen decimal seven five per cent.), computed as per the IRR Calculation
Method in accordance with the Transaction Documents.
“Redemption Premium (Pro-rata) (B)” in respect of each Debenture, means the amount
which, when received by the Debenture Holder on the relevant Redemption Date, shall yield
an IRR of 14.91% (fourteen decimal nine one per cent.), computed as per the IRR Calculation
17
Method in accordance with the Transaction Documents.
“Redemption Premium (Pro-rata) (C)” in respect of each Debenture, means the amount
which, when received by the Debenture Holder on the relevant Redemption Date, shall yield
an IRR of 15.07% (fifteen decimal zero seven per cent.), computed as per the IRR Calculation
Method in accordance with the Transaction Documents.
“Register of Beneficial Owners” means the register of beneficial owners of the Debentures
maintained in the records of the relevant Depository.
“Related Party” has the meaning ascribed to the term under the Companies Act.
“Required Security Cover Ratio” has the meaning ascribed to such term in Clause 7.5
(Security Cover Ratio) of this Deed.
“Relative” has the meaning assigned to it under the Companies Act, 2013.
“Resolution Period” has the meaning ascribed to such term in Clause 7.6 (g) (Testing) of this
Deed.
“Response” has the meaning ascribed to such term in Clause 7.6 (f) (Testing) of this Deed.
“Restricted Company SRs” has the meaning ascribed to such term in Clause 7.7 (b) (i)
(Restricted Company SRs) of this Deed.
“Retiring Existing Financial Indebtedness (External)” means the Existing Financial
Indebtedness as set out in Part B of Schedule 8 (Existing Financial Indebtedness), which will
be repaid in accordance with the terms of this Deed.
“Retiring Existing Financial Indebtedness (Group)” means the Existing Financial
Indebtedness as set out in Part C of Schedule 8 (Existing Financial Indebtedness), which will
be partly repaid in accordance with the terms of this Deed.
“Sanctionable Practice” means any Coercive Practice, Collusive Practice, Corrupt Practice,
Fraudulent Practice or Obstructive Practice.
“Sanctioning Body” means any of the United Nations Security Council, the European Union,
the United Kingdom (including Her Majesty’s Treasury) and the United States of America
(including OFAC).
“Sanctions” means the economic sanctions laws, regulations, embargoes or restrictive
measures administered, enacted or enforced by any Sanctioning Body.
“Sanctions List” means the 'Specially Designated Nationals and Blocked Persons' list
maintained by OFAC, the Consolidated List of Financial Sanctions Targets maintained by Her
Majesty’s Treasury and any similar list maintained by any Sanctioning Body.
“SARFAESI Act” means the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002, as amended from time to time.
“Scheduled Redemption Amount” means in respect of a Debenture being redeemed on a
Scheduled Redemption Date, an amount being the sum of: (i) outstanding Nominal Value of
the Debenture proposed to be redeemed; (ii) accrued but unpaid Interest, Default Interest if any,
(iii) the Redemption Premium Pro Rata (B) - if Partial Voluntary Redemption has taken place;
otherwise the Redemption Premium Pro Rata (C); and (iv) all other amounts payable in respect
18
of that Debenture in accordance with Transaction Documents.
“Scheduled Redemption Date” means the date falling on the expiry of 42 (forty two) months
from the Deemed Date of Allotment, on which date all outstanding Debentures shall be
mandatorily redeemed in full in accordance with the Terms and Conditions.
“SEBI” means the Securities and Exchange Board of India.
“Secured Assets” means the Pledged SRs, the Hypothecated Assets, the Account Assets, any
other asset and/or any other assets over which Security Interest is created or proposed to be
created pursuant to a Transaction Document to secure the Debt or any part thereof.
“Secured Parties” shall collectively mean the Trustee and the Debenture Holders and
Receivers.
“Secured Trusts” means the Trusts which have issued the Pledged SRs.
“Security Cover” means, at any time, an amount which is equal to SC in the following
equation:
SC = FMV of Secured Assets + FMV of Trust Fees +CB.
(i) Where ‘‘FMV of Secured Assets’’ is the net present value (discounted at the Discount
Rate) of all cashflows receivable by the Company (howsoever described in the Trust
Documents) on account of: (A) redemption of the Pledged SRs and the Pledged SR
Upside (where applicable); and (B) repayment of Permitted Loans granted under
paragraph (ii) of the definition of the term ‘Permitted Loans’ to one or more portfolio
companies, less: (a) all Taxes payable by the Company on such cashflows (other than
the income tax attributable to the income from such cashflow); and (b) all material
statutory liabilities payable on such cashflows by the Company;
(ii) Where ‘‘FMV of Trust Fees’’ is 75% (seventy five percent) of the net present value
(using the Discount Rate) of the following:
Trust Fees payable by the Secured Trusts and any other amounts payable by the
relevant Secured Trust to the Company in respect of the security receipts issued by the
Secured Trusts, less:
(a) all Taxes payable by the Company on such Trust Fees (other than the income tax
attributable to such income from the Trust Fees); and
(b) any Excluded Fees payable by the relevant Secured Trusts;
(iii) Where ‘CB’ is the Cash Balance lying to the credit of the Escrow Account subject to
the conditions in paragraph 3.24 (Accounts) of Schedule 3 (Covenants and
Undertakings) of this Deed;
“Security Cover (Company)” means the Security Cover computed based on the expected
cashflows receivable by the Company in relation to the Secured Trusts as determined by the
Company Auditor for the purpose of the Financial Statements.
“Security Cover (Debenture Holder)” means the Security Cover computed based on the
expected cashflows receivable the Company in relation to the Secured Trusts as determined by
the Independent Valuer.
19
“Security Cover (Net)” means the simple average of the Security Cover (Debenture Holder)
and the Security Cover (Company).
“Security Cover Ratio” means the result obtained by dividing the Security Cover by the sum
of: (a) the Nominal Value of each of the outstanding Debentures; (b) accrued but unpaid
Interest; (c) Default Interest; and (d) the Redemption Premium (Pro-Rata) applicable on the
date of calculation in accordance with the Transaction Documents.
“Security Cover Ratio (Company)” means the ratio computed by the Company Auditor,
which is calculated by dividing:
(i) Security Cover (Company); by
(ii) sum of: (A) the Nominal Value of each of the outstanding Debentures; (B) accrued
but unpaid Interest; (C) accrued but unpaid Default Interest; and (D) the Redemption
Premium (Pro-Rata) applicable on the date of calculation in accordance with the
Transaction Documents.
“Security Cover Ratio (Debenture Holder)” means the ratio computed by the Independent
Valuer which is obtained by dividing:
(i) Security Cover (Debenture Holder); by
(ii) sum of: (A) the Nominal Value of each of the outstanding Debentures; (B) accrued
but unpaid Interest; (C) accrued but unpaid Default Interest; and (D) the Redemption
Premium (Pro-Rata) applicable on the date of calculation in accordance with the
Transaction Documents.
“Security Cover Ratio (Net)” means the simple average of the Security Cover Ratio
(Company) and the Security Cover Ratio (Debenture Holder).
“Security Documents” means the following:
(a) this Deed;
(b) the Escrow Accounts Agreement;
(c) the Company Pledge Agreement;
(d) the Deed of Hypothecation;
(e) the powers of attorney issued by the Company in relation to the Company Pledge
Agreement; and
(f) any other document entered into from time to time for creation of, or evidencing the
creation of, any Security Interest for the benefit of the Secured Parties.
“Security Interest” means any mortgage, charge (whether fixed or floating) pledge, lien,
hypothecation, guarantee, assignment, deed of trust, title retention, or other encumbrance of
any kind securing, or conferring any priority of payment in respect of, any obligation of any
Person, including any right granted by a transaction which, in legal terms, is not the granting of
security but which has an economical or financial effect similar to the undertakings or security
net arrangement, any proxy, power of attorney, voting trust agreement, interest, right of pre-
emption, options, right of first offer, refusal or transfer restriction or any lock-in rights in favour
of any Person, and any adverse claim as to title, possession or use.
20
“Senior Management” means, with respect to any Obligor, the Key Managerial Person of such
Obligor.
“SNCD(R)” has the meaning ascribed to such term in paragraph 3.22 (Specified NCDs) of
Schedule 3 (Covenants and Undertakings) of this Deed.
“Specified Covenants” means the Key Covenants, the Financial Covenants and the obligation
of the Company to procure that the Debentures are listed within 15 (fifteen) days from the
Deemed Date of Allotment pursuant to Clause 2.5 (Listing of Debentures) of this Deed.
“Specified Early Redemption Amount” means in respect of a Debenture being redeemed on
a Specified Early Redemption Event, an amount being the sum of:
(a) outstanding Nominal Value of that Debenture proposed to be redeemed;
(b) accrued but unpaid Interest payable including any Default Interest if any, until the
proposed Specified Early Redemption Event Date;
(c) the relevant Redemption Premium; and
(d) all other amounts payable by the Company in accordance with Transaction Documents.
“Specified Early Redemption Date” has the meaning ascribed to such term in paragraph 2.5
(Specified Early Redemption) of Schedule 1 (Terms and Conditions) of this Deed.
“Specified Early Redemption Event” has the meaning ascribed to such term in paragraph 2.5
(Specified Early Redemption) of Schedule 1 (Terms and Conditions) of this Deed.
“Specified Early Redemption Notice” has the meaning ascribed to such term in paragraph 2.5
(Specified Early Redemption) of Schedule 1 (Terms and Conditions) of this Deed.
“Specified Exposure Limit” means the limit as set out in Schedule 18 (Specified Exposure
Limits) of this Deed.
“Specified NCDs” means non-convertible debentures issued by the Company, and as more
particularly identified in Schedule 12 (Specified NCDs) of this Deed or such non-convertible
debentures permitted to be issued by the Company in accordance with the provisions of this
Deed.
“Specified Voluntary Redemption Event” has the meaning ascribed to such term in paragraph
2.4 (Other Voluntary Redemption) of Schedule 1 (Terms and Conditions) of this Deed.
“Specified Unsubordinated Indebtedness” means any payments to be made by the Company
for the discharge/debt servicing of Financial Indebtedness: (a) that is availed by the Company
by way of a revolving facility from any member of the Group (or their Affiliates) as a temporary
funding which shall in no event exceed an aggregate amount of INR 215,00,00,000 (Indian
Rupees two hundred and fifteen crores only) at any time provided: (X) the rate of interest
payable on such revolving facility does not exceed 16% (sixteen per cent) per annum; and (Y)
such revolving facility shall be availed only after the Retiring Existing Financial Indebtedness
(Group) has been fully repaid; (b) not exceeding principal amount of INR 30,00,00,000 (Rupees
Thirty Crores) (together with applicable interest) currently outstanding from Edelweiss Tokio
Life Insurance Company Limited, a joint venture company; (c) comprising the Retiring Existing
Financial Indebtedness (Group) for an aggregate amount not exceeding a principal amount of
INR 250,00,00,000 (Rupees two hundred and fifty crores only) that shall be discharged upon
receipt of an amount of at least INR 250,00,00,000 (Rupees two hundred and fifty crores only)
21
or more received on and from the Deemed Date of Allotment in a lumpsum amount or in one
or more instalments pursuant to any resolution of an account of a corporate debtor; and (d)
existing and future Specified NCDs.
“Stock Exchange” means BSE Limited and/or NSE Limited.
“Subscription Amount” means the aggregate amount of up to INR 1250,00,00,000 (Rupees
One Thousand and Two Hundred and Fifty Crores only) to be paid by the Debenture Holders
towards subscription of the Debentures.
“Subsidiary” has the meaning ascribed to such term in Section 2(87) of the Companies Act,
2013.
“Subordinated Indebtedness” means any payment obligations of the Company in respect of
any Financial Indebtedness availed by the Company from any member of the Group other than
any Specified Unsubordinated Indebtedness.
“Successor Trustee” has the meaning ascribed to such term in Clause 13 (a) (i) (Resignation
of Trustee) of this Deed.
“Super Majority Resolution” means:
(a) a resolution passed at a Meeting of the Debenture Holders duly convened and held in
accordance with the provisions as set out under Schedule 2 (Provisions for the meetings of
the Debenture Holders) of this Deed; or
(b) written instructions given,
in each case, by a majority of Debenture Holders representing not less than 75% (seventy five
percent) of the aggregate Nominal Value of the outstanding Debentures.
“Super Majority Resolution Items” mean the items set out in Clause 21.1 (c) (Super Majority
Resolution Items) of this Deed which are required to be passed by a Super Majority Resolution.
“Tax” means any and all forms of direct or indirect tax, deduction, levy, duty, fee, surcharge,
cess or other charge of a similar nature including without limitation, goods and service tax,
sales, turn-over, value added, use, consumption, property, income, franchise, capital,
occupational, license, excise and documentary stamps, taxes, service tax and customs and other
duties, assessments, or fees, however imposed, withheld, levied, or assessed by any
Governmental Authority under Applicable Laws of India.
“Tax Certificate” has the meaning set out in Schedule 6 (Conditions Subsequent) of this Deed.
“Tax Deduction” has the meaning ascribed to such term in Clause 16 (Tax Gross Up) of this
Deed.
“Tax Payment” has the meaning ascribed to such term in Clause 16 (Tax Gross Up) of this
Deed.
“Terms and Conditions” means certain terms and conditions to be observed and performed
by the Company in respect of the Debentures as set out in Schedule 1 (Terms and Conditions)
as the same may, from time to time, be modified in accordance with this Deed.
“Testing Date” means has the meaning given to the term in Clause 7.6 (a) (Testing) of this
Deed.
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“Testing Report” means has the meaning given to the term in Clause 7.6 (d) (Testing) of this
Deed.
“Total Debt” means the aggregate of the Financial Indebtedness of the Company including the
Debt, the Specified Unsubordinated Indebtedness, any loans (including working capital loans),
including any capitalised interest, accrued interest, coupon and redemption premium payable
whether or not capitalised excluding Specified NCDs;
“Top-Up” has the meaning given to the term in Clause 7.6 (d) (ii) (Testing) of this Deed.
“Transaction” means any transaction financed by the proceeds of any Debentures.
“Transaction Documents” means:
(a) this Deed;
(b) the Debenture Trustee Agreement;
(c) Information Memorandum;
(d) each Security Document; and
(e) any other document that may be designated as a Transaction Document by the Trustee
and the Company.
“Transaction Security” means the Security Interest and rights created or to be created in terms
of this Deed and other Security Document.
“Trusts” means the trusts established presently or in the future by the Company in accordance
with the SARFAESI Act and the Securitisation Companies and Reconstruction Companies
(Reserve Bank) Guidelines and Directions, 2003 (as amended, modified, and supplemented
from time to time);
“Trust Accounts” means the bank accounts opened by the trustee of each Trust as more
particularly detailed in Schedule 13 (Details of the Trust Accounts).
“Trust Documents” means the relevant documents executed/to be executed in relation to the
Trusts including the trust deed, the assignment agreement, the collection and servicing agency
agreement, disclosure documents and all other agreements, document, arrangements,
undertakings setting out all the rights, obligations and disclosures arising in relation to the
Trusts.
“Trust Fees” means the gross fees, charges and remuneration (without reducing any Taxes)
received or to be received by the Company (in its capacity as the trustee, manager or howsoever
described of the Secured Trusts) including but not limited to any management fee, incentive
fee, breakage cost and/or any other monies under the terms of the Trust Documents inclusive
of Taxes, with respect to each of the Secured Trusts other than the Excluded Fees.
“Trust Funds” means, in respect of a Trust, the contributions, the loans, other financial assets
acquired by such Trust from time to time, the relevant Trust Accounts including all sub-
accounts thereof, all investments made by or in the name of the relevant Trust, if any and shall
include any income and/or realisation and any other assets or property of the relevant Trust.
“Unpaid Sum” means any sum due and payable but unpaid by the Company under the
Transaction Documents.
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“Unpublished Price Sensitive Information” shall have the meaning ascribed to the term
‘unpublished price sensitive information’ under the Insider Trading Regulations.
“Updated Report” has the meaning ascribed to such term in Clause 7.6 (e) (Testing) of this
Deed.
“US” means the United States of America.
“Voluntary Redemption Amount” means the amounts payable upon the occurrence of any
Voluntary Redemption Event, being the sum of: (i) Nominal Value of the outstanding
Debenture; (ii) accrued but unpaid Default Interest, the Redemption Premium; and (iii) any
costs and expenses, as determined by each such Debenture Holder.
“Voluntary Redemption Event” means the occurrence of: (a) the Specified Voluntary
Redemption Event; and/or (b) Permitted Voluntary Redemption Event as set out in paragraph
2.4 (Other Voluntary Redemption) of Schedule 1 (Terms and Conditions).
“Voluntary Redemption Notice” has the meaning ascribed to such term in paragraph 2.4
(Other Voluntary Redemption) of Schedule 1 (Terms and Conditions) of this Deed.
“Warranties” has the meaning ascribed to such term in Clause 10 (a) (i) (Representations and
Warranties of the Company) of this Deed.
1.2 Construction
Unless a contrary indication appears, any reference in this Deed to:
(a) The recitals and Schedules constitute an integral and operative part of this Deed.
(b) Unless the context otherwise requires, reference to a Clause and/or a Schedule is to a
clause and/or schedule of this Deed and reference to a paragraph is to a paragraph of a
Schedule to this Deed.
(c) Headings to Clauses, Schedules and parts and paragraphs of the Schedules are for
convenience only and do not affect the interpretation of this Deed.
(d) Reference to any statute or statutory provision shall include:
(i) all statutory instruments or orders including subordinate or delegated legislation
(whether by way of rules, notifications, bye-laws and guidelines) made from time
to time under that statute or statutory provision (whether or not amended,
modified, re-enacted or consolidated); and
(ii) such provision as from time to time amended, modified, re-enacted or
consolidated (whether before or after the date of this Deed) to the extent such
amendment, modification, re-enactment or consolidation applies or is capable of
applying to any transactions entered into under this Deed and (to the extent
liability thereunder may exist or can arise) shall include any past statute or
statutory provision (as from time to time amended, modified, re-enacted or
consolidated) which the statute or statutory provision referred to has directly or
indirectly replaced.
(e) Reference to any document includes an amendment to that document, but disregarding
any amendment made in breach of this Deed.
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(f) Reference to an “amendment” includes a supplement, modification, novation,
replacement or re-enactment and “amended” is to be construed accordingly.
(g) Words denoting the singular shall include the plural and vice versa.
(h) Words denoting any gender include all genders.
(i) Reference to the word “include” or “including” shall be construed without limitation.
(j) References to a “person” or “Person” (or to a word importing a person) shall be
construed so as to include:
(iii) individual, sole proprietorship, firm, partnership, limited liability partnership,
trust, joint venture, company, corporation, body corporate, unincorporated
body, association, organisation, any Governmental Authority or other entity or
organisation (whether or not in each case having separate legal personality);
(iv) that person’s successors in title, executors, and permitted transferees and
permitted assignees; and
(v) references to a person’s representatives shall be to its officers, employees, legal
or other professional advisers, sub-contractors, agents, attorneys and other duly
authorised representatives.
(k) Reference to a “Party” to any document includes that Party’s successors, executors and
permitted transferees and permitted assignees, as the case may be.
(l) Words “hereof”, “herein”, “hereto”, “hereunder” and words of similar import when
used with reference to a specific clause in this Deed shall refer to such clause in this
Deed and when used otherwise than in connection with specific clauses shall refer to
this Deed as a whole.
(m) In the computation of periods of time from a specified date to a later specified date, the
words “from” and “commencing on” mean “from and including” and “commencing
on and including”, respectively, and the words “to”, “until” and “ending on” each
mean “to but not including”, “until but not including” and “ending on but not
including” respectively.
(n) Where a wider construction is possible, the words “other” and “otherwise” shall not
be construed ejusdem generis with any foregoing words.
(o) Unless otherwise specified, whenever any payment to be made or action to be taken
under this Deed, is required to be made or taken on a day other than a Business Day,
such payment shall, subject to Applicable Law, be made or action be taken on the
immediately preceding Business Day.
(p) Any consent, approval, determination, waiver or finding to be given or made by the
Trustee, shall be made or given based on the Approved Instructions.
(q) Any consent, approval, determination, waiver or finding to be given or made by any
Debenture Holder shall be made or given by such Debenture Holder in its sole
discretion.
(r) Any reference to the Trustee shall be a reference to the Trustee in its capacity as the
trustee of the Debenture Holders.
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(s) References to a “fully diluted basis” mean the total of all classes and series of equity
shares outstanding on a particular date, combined with (i) all outstanding warrants,
options and rights exercisable for equity shares or securities convertible into or
exchangeable for equity shares, including, without limitation, the preference shares, the
equity shares and any right of subscription for equity shares and loan stock or any other
instrument evidencing indebtedness issued by a company in conjunction with any issue
of equity shares or an instrument carrying rights to subscribe for or convert into equity
shares but excluding any debt instrument and warrants issued to investors or lenders
who are not shareholders (whether or not by their terms then currently convertible,
exercisable or exchangeable), (ii) convertible securities of all kinds, (iii) any other
arrangements relating to the company’s equity, and (iv) the effect of any anti-dilution
protection regarding previous financings, all on an “as if converted” basis, where “as if
converted” basis means as if such instrument, option or security had been converted,
exercised or exchanged with equity shares.
(t) Where any statement in this Deed is qualified by the expression “to the knowledge” or
“to the best of the knowledge or information or belief” or any similar expression,
that statement shall, save as expressly provided to the contrary herein, be deemed to
mean that it has been made after due and careful inquiry by the Person making such
statement.
(u) Any consent, approval, determination, waiver or finding to be availed from or made by
the Trustee or the Debenture Holders shall mean consent, approval, determination,
waiver or finding, in writing. Any consent or approval of the Trustee, whenever referred
in this Deed shall mean prior written consent or approval of the Trustee. Any consent,
approval, determination, waiver or finding to be availed from or made by the Trustee
or any exercise of rights by the Trustee shall mean consent, approval, determination,
waiver or finding or exercise of such rights, as applicable by the Trustee on the basis of
the Approved Instructions.
(v) Any determination with respect to the materiality or reasonableness of any matter
including of any event, occurrence, circumstance, change, fact, information, document,
authorisation, proceeding, act, omission, claims, breach, default or otherwise shall be
made by the Trustee acting reasonably.
(w) An Event of Default being outstanding or continuing means that it has not been waived
in writing by the Trustee (acting on Approved Instructions).
2. TERMS OF DEBENTURES
2.1 Amount of Debentures
The Debentures constituted and issued in terms of this Deed are senior, secured, listed, rated,
redeemable, non-convertible debentures of the face value of INR 10,00,000 (Rupees ten lakhs
only each for an aggregate nominal value of up to INR 1250,00,00,000 (Rupees One Thousand
and Two Hundred and Fifty Crores only) to be issued (“Nominal Value”).
2.2 Terms
The Debentures shall be subject to the Terms and Conditions.
2.3 Dematerialised form
The Company has entered into depository arrangements with the Depository for the issue of the
Debentures in dematerialised form. The Debentures shall be issued in dematerialized form on
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the Deemed Date of Allotment and credited to the demat account of the Debenture Holders
within 2 (two) Business Days from the Deemed Date of Allotment. The Debenture Holders
shall hold the Debentures in dematerialised form and shall deal with the same as per the
provisions of the Depositories Act, 1996 and the regulations thereunder, the rules and bye-laws
of the Depository and other Applicable Law.
2.4 Minimum Application
Application for subscription to the Debentures must be made for a minimum of 1 (one)
Debenture.
2.5 Listing of Debentures
The Company undertakes to list the Debentures on the wholesale debt market segment of the
Stock Exchange as soon as reasonably practicable and in any event no later than 15 (fifteen)
days from the Deemed Date of Allotment, and shall make an application for the listing of the
Debentures on the Stock Exchange on the Pay-in Date.
2.6 Failure to list Debentures
In case the Debentures are not listed within 15 (fifteen) days of the Deemed Date of Allotment
for any reason whatsoever subject to the cure periods as set out in this Deed, the Company shall,
if required by the Trustee and if permitted by Applicable Law immediately redeem/ buy back
the Debentures and shall reimburse the Secured Parties for any and all accrued but unpaid
Interest, Default Interest, the Redemption Premium, costs and expenses, as determined by each
such Debenture Holder that such Debenture Holder may have incurred in connection with the
investment in the Debentures.
2.7 Credit Rating
The Debentures are rated CRISIL A+/ Stable (pronounced ‘CRISIL A plus Stable’) by the
Credit Rating Agency.
2.8 Purpose
The Subscription Amount shall be utilized by the Company solely towards the following (and
for no other purpose):
(a) full repayment of Retiring Existing Financial Indebtedness (External);
(b) partial repayment of Retiring Existing Financial Indebtedness (Group);
(c) purchase of any security receipts issued to any member of the Group aggregating up to
Rs. 300,00,00,000 (Rupees three hundred crores only);
(d) general corporate purposes; and
(e) payment of all costs, fees and expenses in connection with the issue of the Debentures.
2.9 Debentures free from equities
The Debenture Holders will be entitled to their Debentures free from equities or cross claims
by the Company against the original or any intermediate holders thereof.
3. COVENANTS TO PAY
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3.1 Covenant to pay principal
The Company hereby agrees and covenants with the Trustee that it shall, on the Scheduled
Redemption Date, unconditionally pay to, or to the order of, each Debenture Holder in INR,
the aggregate of the Nominal Value of the outstanding Debentures along with all other amounts
due in respect of each Debenture being redeemed on the Scheduled Redemption Date in
accordance with the Transaction Documents.
3.2 Covenant to pay Interest
(a) During each Interest Period, the outstanding Nominal Value of each Debenture shall
bear interest at the Interest Rate for that Interest Period payable on the each Interest
Payment Date.
(b) Interest on the outstanding Nominal Value of each Debenture shall accrue from day to
day, and be prorated on the basis of a 365 / 366 day year (as the case may be) for the
actual number of days in the relevant Interest Period and shall be be payable in arrears
on the Interest Payment Date immediately following the end of that Interest Period. The
Company hereby acknowledges and agrees that there shall be no moratorium period for
the payment of interest.
3.3 Covenant to pay Default Interest
(a) If the Company fails to pay any amount payable by it under a Transaction Document
on its due date, then interest shall accrue on the Unpaid Sum from the due date up to
the date of actual payment (both before and after judgment) at a rate which is 4% (four
per cent.) per annum over and above the Interest Rate (“Default Rate”). The Company
shall pay interest at the Default Rate accruing under this Clause 3.3 (Covenant to pay
Default Interest) (“Default Interest”) compounded on a quarterly basis on the
immediately succeeding Interest Payment Date or on demand by the Trustee, whichever
is earlier.
(b) The Company agrees that the Default Interest is a genuine pre-estimate of the loss likely
to be suffered by the Debenture Holders on account of any default by the Company.
(c) The obligation of the Company to make payment of the default interest under this
Clause 3.3 (Covenant to pay Default Interest), shall be without prejudice to all other
rights of the Secured Parties under the Transaction Documents, Applicable Laws or
otherwise.
3.4 Covenant to pay on the Early Redemption Dates
(a) The Company hereby agrees and covenants with the Trustee that it shall, on the relevant
Early Redemption Date (other than the Partial Voluntary Redemption Date, the Full
Voluntary Redemption Date and the Specified Early Redemption Date),
unconditionally pay to, or to the order of, each Debenture Holder in INR, the aggregate
of the Nominal Value of each of the outstanding Debentures, accrued but unpaid
Interest, Default Interest and Redemption Premium and all other amounts due in respect
of each Debenture being redeemed on the Early Redemption Date (other than the Partial
Voluntary Redemption Date, the Full Voluntary Redemption Date and the Specified
Early Redemption Date) in accordance with the Transaction Documents.
(b) The Company hereby agrees and covenants with the Trustee that it shall, on the relevant
Partial Voluntary Redemption Date, unconditionally pay to, or to the order of, each
Debenture Holder in INR, the relevant Partial Voluntary Redemption Amount in
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accordance with paragraph 2.3 (Partial Voluntary Redemption) of Schedule 1 (Terms
and Conditions) of this Deed in accordance with the Transaction Documents.
(c) The Company hereby agrees and covenants with the Trustee that it shall, on the Full
Voluntary Redemption Date, unconditionally pay to, or to the order of, each Debenture
Holder in INR the Full Voluntary Redemption Amount in accordance with the
Transaction Documents.
(d) The Company hereby agrees and covenants with the Trustee that it shall, on the
Specified Early Redemption Date, unconditionally pay to, or to the order of, each
Debenture Holder in INR the Specified Early Redemption Amount in accordance with
the Transaction Documents.
3.5 Covenant to pay Redemption Premium
(a) The Company hereby agrees and covenants with the Trustee that it shall, on each
Redemption Date, unconditionally pay to, or to the order of, each Debenture Holder in
INR, the Redemption Premium in accordance with the Transaction Documents. For the
avoidance of doubt, save and except any redemption pursuant to a Partial Voluntary
Redemption Event or Full Voluntary Redemption Event the Company shall have the
obligation to pay the Redemption Premium (Make- Whole) for any redemption of the
Debentures prior to the Scheduled Redemption Date.
(b) Notwithstanding anything to the contrary contained in the Transaction Documents, no
Redemption Premium shall be payable if all of the Redemption Premium Non-
Conditionality Events have been achieved concurrently and cumulatively for a
continuous period of at least 1 (one) year preceding the relevant Redemption Date.
4. CONDITIONS
4.1 Conditions Precedent
(a) The Company shall fulfil the conditions precedent set out in Schedule 5 (Conditions
Precedent) and shall provide to the Trustee with all documents and other evidence listed
therein, in a form and substance satisfactory to the Trustee at least 4 (four) days prior
to the Deemed Date of Allotment.
(b) The Debenture Holders shall only remit the Subscription Amount or part thereof to the
Company in the Escrow Account in relation to the issue of Debentures if,
(i) there exists no Material Adverse Effect;
(ii) no Event of Default or Potential Event of Default is continuing or would result
from the proposed issuance of such Debentures; and
(iii) the Warranties are true and correct in all material respects.
4.2 Conditions Subsequent
The Company shall, and shall procure that each Obligor shall, fulfill the conditions subsequent
set out in Schedule 6 (Conditions Subsequent), and shall provide the Trustee with all documents
and other evidence listed therein, in a form and substance satisfactory to the Trustee within the
time periods set out in Schedule 6 (Conditions Subsequent).
4.3 Waiver of Conditions
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The fulfilment of any conditions precedent or conditions subsequent may be waived or deferred
in writing by the Trustee (only acting in accordance with the Approved Instructions), following
a written request from the Company setting out (a) the condition precedent or condition
subsequent in respect of which the Company seeks a waiver; and (b) the reasons for seeking
such waiver.
5. APPOINTMENT OF THE TRUSTEE AND DECLARATION OF TRUST
5.1 Appointment of Trustee
The Company has appointed SBICAP Trustee Company Limited as the Trustee pursuant to the
Debenture Trustee Agreement. The Trustee has agreed and hereby re-affirms that it shall act as
the debenture trustee for the benefit of the Secured Parties and their successors, transferees and
assigns under the trust created pursuant to Clause 5.3 (Declaration of trust by the Trustee)
below.
5.2 Authority of the Trustee
(a) In such trust capacity, the Trustee agrees and is authorised:
(i) to execute and deliver for and on behalf of the Secured Parties, the Transaction
Documents and other documents, agreements, instruments and certificates
contemplated by the Transaction Documents which are to be executed and
delivered by the Trustee or as the Trustee shall deem advisable and in the best
interests of the Secured Parties;
(ii) to exercise its rights and powers, and perform its obligations and take whatever
action as shall be required to be taken by the Trustee under the Transaction
Documents, and other documents, agreements, instruments and certificates
referred to in Clause 5.2 (a) (Authority of the Trustee);
(iii) without prejudice to the above, allow any bank or other institution providing
safe custody services or any professional provider of custody services to retain
any of those documents in its possession;
(iv) enforce the Security Interest in accordance with the provisions of the
Transaction Documents;
(v) monitor and require, from time to time, compliance by the Obligors with the
terms contained in the Transaction Documents (to which each of them are a
party) and apprise the Debenture Holders of any significant or persistent
defaults committed by the Obligors; and
(vi) subject to the terms and provisions of the Transaction Documents, to take such
other action in connection with the foregoing pursuant to the Approved
Instructions from time to time.
PROVIDED that before taking any action or exercising any right under any Transaction
Document, the Trustee shall seek Approved Instructions, and unless the inaction or non-
exercise of any right immediately by the Trustee would harm the interests of the
Debenture Holders or be in violation of the Applicable Law, the Trustee shall take such
action or exercise such right only upon the receipt of such Approved Instructions. In
the event of any action or inaction by the Trustee, it shall notify the Debenture Holders
as soon as reasonably practicable.
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(b) Upon the occurrence of an Insolvency Event and the constitution of the committee of
creditors under the IBC, to the extent permitted by Applicable Law, the Debenture
Holders reserve the right to:
(i) attend the meetings of the committee of creditors;
(ii) vote on behalf of themselves to the extent of their voting share; and
(iii) appear before any court, tribunal or Governmental Authority,
in their own capacity or authorise the Trustee in writing to carry out such actions on
their behalf.
5.3 Declaration of Trust by the Trustee
(a) The Company hereby settles in trust with the Trustee a sum of INR 1,000 (Rupees One
Thousand) being the initial corpus (“Initial Contribution”). The Trustee hereby
declares and confirms that it has, simultaneously with the execution of this Deed, kept
apart the Initial Contribution of the trust created in terms of this Deed, to have and hold
the same together with all additions or accretions thereto including the investments
representing the same, subject to the provisions herein contained.
(b) The Trustee hereby declares that in relation to the Debenture Holders, it shall, as the
case may be, hold:
(i) the Initial Contribution;
(ii) the Transaction Security;
(iii) all of its rights under or pursuant to the Transaction Documents and all sums
received by it under the Transaction Documents (save for any sums received
solely for its own account); and
(iv) all monies received by it out of, whether prior to or as a result of enforcement
of the Transaction Security or the exercise of rights and remedies under the
Transaction Documents,
upon trust and for the benefit of the Secured Parties and subject to the provisions
contained herein, for due payment and discharge of the Debt.
(c) The Trustee declares that it shall not revoke the trust hereby declared till the Debt is
irrevocably discharged in full as per the Transaction Documents to the satisfaction of
the Trustee (acting on Approved Instructions).
5.4 Compliance with Applicable Law
The Trustee shall be guided in discharge of its duties and exercise of its rights by the Debenture
Trustee Regulations, the Debenture Regulations and the Companies Act.
5.5 Remuneration of Trustee
The Company shall pay to the Trustee, remuneration as mentioned in the Debenture Trustee
Agreement or in any separate fee letter executed with the Trustee.
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6. POWERS AND DUTIES OF THE TRUSTEE
6.1 Power to make Permitted Investments
(a) The Trustee shall, acting on the Approved Instructions, invest (i) the monies referred
to in Clause 8 (Realisation of Trust Proceeds and Appropriation) of this Deed and (ii)
any unclaimed amounts after provision for payment and satisfaction of the Debt in
accordance with this Deed, in the name of the Trustee in any of the investments in
which trust monies can invest under Applicable Law (“Permitted Investments”) with
power to vary and transpose such investments, and in so far as the same shall not be
invested it shall be placed on deposit or in current account in the name of the Trustee
with any bank which has been included in the Second Schedule of the Reserve Bank of
India Act, 1934.
(b) The Trustee shall have the power, at its discretion, to, from time to time, vary the
Permitted Investments and resort to any Permitted Investments for any purpose for
which such proceeds are authorised under this Deed to be expended. Subject as
aforesaid, the Trustee shall stand possessed of the Permitted Investments to hold the
Permitted Investments and income thereof upon the trust and purposes hereinbefore
expressed concerning the monies to arise from any sale, calling in, collection and
conversion of the Debenture Trust Property or any part thereof.
6.2 Power to accumulate Trust Proceeds
(a) If the amount of the monies at any time apportionable under Clause 8 (b)
(Appropriation of Realisation Proceeds) is less than 10% (ten per cent) of the nominal
amount of the Debentures then outstanding, the Trustee may (acting on the Approved
Instructions), at its discretion, invest such monies in any Permitted Investments with
power, from time to time, at its discretion to vary such investments.
(b) The investments with the resulting income thereof may be accumulated until the
accumulations together with any other fund for the time being under the control of the
Trustee and available for the purpose shall amount to a sum sufficient to pay at least
10% (ten per cent) of the nominal amount of the Debentures, and then outstanding and
the accumulations and funds shall be applied in the manner aforesaid.
(c) The Trustee shall not be liable for any loss which may be occasioned by any investment
or variation thereof made by it pursuant to this Clause 6.2 (Power to accumulate Trust
Proceeds) except for the losses arising due to the negligence, wilful misconduct, fraud,
illegal act, breach of trust or bad faith of the Trustee.
6.3 Power to delegate
(a) The Trustee being a company or a corporation or any public financial institution may,
in the execution and exercise of all or any of the trusts, powers, authorities and
discretions vested in it by this Deed act through its officer or officers for the time being.
(b) The Trustee may also, whenever it thinks it is expedient, delegate by power of attorney
or otherwise, to any such officer all or any of the trusts, powers, authorities and
discretions vested in the Trustee by this Deed. Any such delegation may be made upon
such terms and conditions and subject to such regulations (including power to sub-
delegate) as the Trustee may think fit.
(c) The Trustee shall be liable for any negligence, wilful misconduct, fraud, illegal act,
breach of trust or bad faith of the officer to whom the Trustee has delegated its powers.
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6.4 Power to employ agents
(a) The Trustee may, at its own expense, in carrying out the trust business employ and pay
any Person to transact or concur in transacting any business and do or concur in doing
all acts required to be done by the Trustee including the receipt and payment of monies.
(b) The Trustee shall be entitled to charge and be paid all usual professional and other
charges for business transacted and acts done by it in connection with the trusts hereof
and also its reasonable charges in addition to the expenses incurred by them in
connection with matters arising out of or in connection with these presents.
6.5 Nominee Director
(a) The Debenture Holders and the Trustee shall have a right to appoint a nominee director
on the board of directors of the Company (hereinafter referred to as the “Nominee
Director”) in accordance with Applicable Laws upon the occurrence of:
(i) 2 (two) consecutive defaults in payment of Interest to the Debenture Holders;
(ii) default in creation of Transaction Security in terms of the Transaction
Documents;
(iii) default in redemption of Debentures; or
(iv) any other Event of Default.
(b) The Company shall appoint the Nominee Director forthwith on receiving a nomination
notice from the Trustee (acting upon Approved Instructions).
(c) The Nominee Director shall be appointed on all committees of the board of directors,
unless otherwise agreed by the Trustee (acting on the Approved Instructions).
(d) The Nominee Director shall not be liable to retire by rotation nor required to hold any
qualification shares. The Company shall ensure that the Nominee Director is not and
not deemed to be an “officer in default” or “person in-charge” or “key managerial
personnel” of the Company.
(e) The Nominee Director shall not be personally liable and responsible for day to day
management or affairs of the Company to the public or any Governmental Authority,
or for any inaction, mistake or non-compliance relating to the management of the affairs
of the Company by the Board of Directors or otherwise.
6.6 Observer
(a) The Parties agree that on and from the Deemed Date of Allotment, the Trustee shall
have a right to depute an observer (acting on Approved Instrutions) (the “Observer”)
to attend the meetings of the board of directors in person or telephonically.
(b) The Parties further agree and acknowledge that the Company, at its own costs shall
undertake all such actions including any corporate authorisations and filings, as may
be required under Applicable Law for such appointment.
(c) The Observer shall be entitled to receive notices, agenda, etc. of and attend all general
meetings and Board meetings of the Company of which they are members including
any correspondence with the Governmental Authorities including the RBI.
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(d) The Observer shall be appointed/removed/ replaced/ substituted by a notice in writing
by the Trustee addressed to the Company which shall (unless otherwise indicated by
the Trustee) take effect as soon as reasonably practicable, upon such a notice being
delivered to the Company.
(e) The Observer shall not be personally liable and responsible for day to day management
or affairs of the Company to the public or any Governmental Authority, or for any
inaction, mistake or non-compliance relating to the management of the affairs of the
Company by the Board of Directors or otherwise.
(f) The Observer shall, at the costs of the Company, have all the rights and privileges as
may be required for the discharge of his responsibilities pursuant to the Transaction
Documents.
(g) Pending the appointment of the Observer by the Trustee, upon the request of the
Trustee, the Company shall provide access to, at its corporate office, all documents as
may be required by the Trustee including the minutes / observations of all the meetings
of the Board within 5 (five) days of the date of the relevant meeting.
(h) The Company, shall bear and promptly reimburse all fees, costs, expenses, operational
charges including any out of pocket expenses incurred by the Observer in relation to
the exercise of any rights, remedies, powers or duties under any Transaction
Documents.
(i) The Observer shall be bound by standard confidentiality obligations and execute a
standard non-disclosure agreement if required by the Company, on mutually agreeable
terms.
(j) The Observer shall not be a Person who is a director or observer on the board of
directors of a Competing Firm.
For the purpose of this Clause, the term “Competing Firm” means: (i) any Person engaged in
the business of securitisation and reconstruction of financial assets and enforcement of security
interests under the SARFAESI Act; or (ii) an Affiliate of the Person mentioned in (i) above; or
(iii) any Person who has entered into any managed account partnership or co-investment
agreement or any other arrangement with similar economic or commercial effect with Persons
specified in (i) or (ii) above for acquiring and/or investing in and/or managing distress assets;
or (d) any Affiliate of any Person specified in (iii) above.
6.7 Consultants and Representatives
(a) The Company agrees and undertakes that the Trustee shall have the right to appoint any
agents, representatives or any other professional advisor in the manner and on such
terms as prescribed by the Trustee for exercising the specific powers available to the
Trustee pursuant to this Deed. Further, the Company agrees that any reasonable costs
and expenses in relation to such appointment shall be borne by the Company and shall
be promptly paid to the Trustee upon demand.
(b) The Company agrees that the Trustee shall have the right to appoint an Independent
Valuer to carry out the functions and actions as expressly contemplated in this Deed to
be performed by the Independent Valuer.
6.8 Duties of the Trustee
In performing its obligations in relation to the Debentures:
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(a) The Trustee shall, subject to these presents, perform its duties and obligations, and
exercise its rights and discretions, in keeping with the trust reposed in the Trustee by
the Debenture Holders, and shall further conduct itself, and comply with the provisions
of the Indian Trusts Act, 1882 and all other Applicable Laws.
(b) The Trustee shall carry out all its obligations, duties and functions as the Trustee in
accordance with Applicable Law and the terms set out in the Transaction Documents
on the Approved Instructions. It is hereby clarified that the Trustee shall seek written
instructions from the Debenture Holders and only upon receipt of Approved
Instructions from the Debenture Holders, shall the Trustee exercise such rights and
perform such duties and obligations referred to in the Transaction Documents.
Notwithstanding such requirement for instructions in writing, the Trustee shall never
take any action inconsistent with the best interests of the Debenture Holders. The
Trustee shall not act contrary to the Approved Instructions.
(c) If the Trustee shall have knowledge of the occurrence or continuance of any Event of
Default or Potential Event of Default, the Trustee shall promptly notify the Debenture
Holders.
(d) The Trustee shall provide the Debenture Holders with information relating to any cure
periods (if any) being availed by the Company under the Transaction Documents and
any steps the Company takes or proposes to take to remedy the Event of Default or
Potential Event of Default, as the case may be.
(e) The Trustee shall promptly provide and notify all Debenture Holders once it receives
any information or documents in relation to any Obligor.
(f) The Trustee shall not do any act, deed or thing which is prejudicial or detrimental to
the interest of the Debenture Holders.
(g) The Trustee shall do any act, deed or thing or refrain from doing any act, deed or thing,
which may be reasonably expected of the Trustee under the given circumstances at that
point in time, in exercise of its rights and to perform its duties and obligations under
this Deed and the other Transaction Documents, including, for the management,
administration, preservation or maintenance of the Security.
(h) The Trustee shall forward notice of any Tax or Security Interest received by the Trustee
in respect of any of the assets over which a Transaction Security has been created or in
respect of the Obligors, to the Debenture Holders.
(i) Except as otherwise provided herein, or in the other Transaction Documents and under
written instructions from the Debenture Holders, monies received by the Trustee
hereunder (or pursuant to the other Transaction Documents) for the benefit of the
Debenture Holders shall be kept segregated from the other assets of the Trustee;
provided however that the Trustee shall not be liable to make payment of any interest
thereon.
(j) The Trustee shall keep copies of all reports and returns delivered to it by the Company
or filed by it on behalf of the Company, at the cost of the Company.
(k) The duties and obligations of the Trustee as set forth in the Companies (Share Capital
and Debentures) Rules, 2014 shall be deemed to be incorporated herein by reference.
7. SECURITY AND UNDERTAKINGS
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7.1 Description of Transaction Security
In consideration of the Debenture Holders subscribing to or purchasing the Debentures and to
secure the repayment of the Debt, the Company agrees and shall procure that the following
Security Interests shall be created in favour of the Trustee for the benefit of the Secured Parties:
(a) a first ranking sole and exclusive charge by way of hypothecation of the Hypothecated
Assets by the Company pursuant to the Deed of Hypothecation;
(b) a first ranking sole and exclusive charge by way of pledge over the Pledged SRs
pursuant to the Company Pledge Agreement; and
(c) any other Security Interest as may be mutually agreed between the Company and the
Secured Parties.
7.2 Ranking of Transaction Security
The Transaction Security created or to be created in favour of the Trustee (for the benefit of the
Secured Parties) shall at all times be in the nature of a first ranking and exclusive Security
Interest.
7.3 Execution of Security Documents
The Company shall, and shall procure that the other Obligors shall, execute the relevant
Security Documents for creation, or evidencing the creation of, and perfection of Transaction
Security in favour of the Trustee (for the benefit of the Secured Parties) to secure all obligations
in relation to the Debentures in accordance with the terms of the Transaction Documents.
7.4 Filing and Registration
For the purposes of enabling the Trustee to have a claim to the extent provided herein over all
other secured and unsecured creditors, the Company shall make, and shall procure that each
Obligor shall make, all such filings and registrations (at its own cost and expense) with the
relevant Governmental Authorities and take all other steps necessary to ensure that the Security
Interest created under the Security Documents is created, perfected and maintained in full force
and effect, in each case in accordance and compliance with Applicable Laws.
7.5 Security Cover Ratio
(a) The Company undertakes and shall procure that, at all times, until the Final Settlement
Date, the Security Cover Ratio (Net) shall not be less than 2.00 (“Required Security
Cover Ratio”).
(b) The Parties agree and acknowledge that the Security shall not be released until the Final
Settlement Date notwithstanding the Security Cover Ratio (Net) being in excess of the
Required Security Cover Ratio except in accordance with Clause 7.7 (d) (i) (Permitted
Security Release pursuant to a Partial Voluntary Redemption Event).
7.6 Testing
(a) The Company shall ensure that the Security Cover Ratio shall be tested as of the last
date of each Financial Half Year and as of one additional date per Financial Year falling
on the expiry of any calendar month as notified by the Trustee 15 (fifteen) days prior
to such testing (each, a “Testing Date”).
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(b) The Company shall procure that the Company Auditor, within 10 (ten) days from the
expiry of timelines prescribed under Applicable law for preparation of audited financial
statements of the Company (which is currently 60 days from end of Financial Half Year
as on the date of this Deed), shall provide to the Company, a report prepared by the
Company Auditor in accordance with the generally accepted accounting principles
(GAAP) which sets out the calculation of the Security Cover Ratio (Company) as at
the relevant Testing Date, and in accordance with the format as set out in Schedule 14
(Format of Company Auditor Report). The Company shall then forward the aforesaid
report to the Trustee along with a compliance certificate from the Company in the
format as set out in Schedule 19 (Format of Testing Compliance Certificate).
(c) The Trustee shall within 28 (twenty eight) days from the expiry of timelines prescribed
under Applicable law for preparation of audited financial statements of the Company
(which is currently 60 days from end of Financial Half Year as on the date of this Deed),
ensure that the Independent Valuer acceptable to and appointed by the Trustee
furnishes a report which sets out the calculation of the Security Cover Ratio (Debenture
Holder) as at the relevant Testing Date, and in accordance with the format as set out in
Schedule 15 (Format of the Independent Valuer Report), setting out the calculation of
the Security Cover Ratio (Debenture Holder) maintained as at the relevant Testing
Date. The Company agrees and confirms that it shall provide to and authorise access
by the officers or authorized representatives of the Trustee or Independent Valuer, (as
the case may be), all information, documents, records and shall extend all co-operation,
as may be required by the Trustee or the Independent Valuer for such computation.
(d) The Independent Valuer shall, promptly but no later than 28 (twenty eight) days from
the date the Company submits the report pursuant to paragraph (b) above, to the
Trustee, provide a report (“Testing Report”) which sets out the calculation of the
Security Cover Ratio (Net) as at the relevant Testing Date, and in accordance with the
format as set out in Schedule 19 (Format of Testing Compliance Report) to the Trustee
which shall be forwarded to each Debenture Holder by way of an electronic mail within
no later than 1 (Business Day) of receipt by the Trustee. The Parties agree and
acknowledge that if the Security Cover Ratio (Net) is less than 2 (two), the Company
shall create the following additional Security Interest within 15 days of the Testing
Report:
(i) pledge over additional Company SRs as may be acceptable to the Trustee as
Transaction Security wherein the valuation of such additional Company SRs
shall be in accordance with the methodology adopted for the calculation of the
Security Cover (Debenture Holder) above; and/or
(ii) any other Security Interest over other assets which an Obligor is willing to
provide and is acceptable to the Trustee (acting on Majority Resolution),
wherein the value thereof shall be confirmed and certified by the Independent
Valuer in accordance with general business valuation principles,
so as to ensure that the Security Cover Ratio (Net) is equal to or greater than the
Initial Required Security Cover Ratio (as certified and confirmed by the
Independent Valuer) (a “Top-up”).
For the removal of doubts, the Trustee may in its sole discretion reject the
additional Company SRs offered by the Company pursuant to paragraph (i)
above and require the Company to provide any alternate Company SRs, as
acceptable to the Trustee.
(e) The Company irrevocably undertakes that upon completion of the Top-Up in the
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manner as set out in paragraph (d) above, the Company shall provide the Trustee an
updated report (“Updated Report”) prepared by the Independent Valuer certifying the
Security Cover Ratio (Net) maintained by the Company in relation to the Debentures.
(f) The Parties further acknowledge that upon the receipt of a Testing Report or the
Updated Report, as applicable, the Trustee, acting on the Approved Instructions may
provide a response disputing any provision of the Testing Report or the Updated
Report, as the case may be (“Response”).
(g) The Company agrees and undertakes that upon the receipt of such Response, it shall
discuss with the Trustee to arrive at a consensus in relation to the Response within 30
days of the Response, as the case may be (“Resolution Period”). The Parties agree that
in case of receipt of a Response, the Investment Limit shall be calculated in accordance
with the values agreed between the Parties during this Resolution Period.
(h) In the event the Parties do not arrive at a consensus on the disputed portion of the
Response within the Resolution Period, the Company shall, within 15 (fifteen) days
from the expiry of such Resolution Period:
(i) redeem such Debentures in accordance with the paragraph 2.4 (Other
Voluntary Redemption) of Schedule 1 (Terms and Conditions) of this Deed; or
(ii) provide any security in the form of term deposits, liquid mutual funds, bank
guarantee, cash collateral, or such other Security acceptable to the Trustee
(acting on Approved Instructions) which shall be excluded from sum of the
Nominal Value of each of the outstanding Debentures, accrued but unpaid
Interest, Default Interest and Redemption Premium, with respect to each
outstanding Debenture under Security Cover Ratio.
(i) Without prejudice to anything contained in this Deed or any other Transaction
Document, the Parties hereby agree and acknowledge that no prepayment or
redemption pursuant to this Deed will be considered a valid payment unless
accompanied by all regulatory and other approvals (if required) under Applicable Laws
in connection with such payment to the satisfaction of the Trustee.
7.7 Additional Security
(a) Permitted Company SRs
(i) The Company shall, simultaneously with the submission of the Testing Report
furnish a certificate setting out the Investment Limit for the Investment Period
in respect of such Testing Date to the Trustee in the format as set out in
Schedule 20 of this Deed (Investment Limit Certificate) (such certificate, the
“Investment Limit Certificate”).
(ii) So long as: (i) no Potential Event of Default or Event of Default has occurred
or is continuing; and (ii) the Corporate Guarantee has been executed in a
manner satisfactory to the Trustee, the Company may invest the Cash Balance
available in the Escrow Account during the Investment Period provided that:
(A) the aggregate investments made during the relevant Investment Period do
not exceed the Investment Limit; (B) such Cash Balance is utilized for either
(x) acquisition of further Company SRs and/or for making Permitted Loans
(collectively, “Permitted Company SRs”); or (y) any payout pursuant to
paragraph 3.25 (b) (Permitted Payouts) of Schedule 3 (Covenants and
Undertakings) of this Deed; (C) the Company has submitted the Investment
38
Limit Certificate to the Trustee, along with the Independent Valuer having
submitted the Independent Valuer Report in accordance with Clause 7.6 (c)
(Testing) (in a form and substance satisfactory to the Trustee); (D) other than
in respect of the first Investment Period (which commences on and from the
Deemed Date of Allotment and ends on June 30, 2020), such investment is
made on a date that falls after the expiry of 15 (fifteen) days from the
submission of the report by the Independent Valuer pursuant to Clause 7.6 (c)
above; and (E) if a Response has been provided by the Trustee, all
disputes/disagreement in such Response have been adequately resolved to the
satisfaction of the Trustee.
(iii) The Company hereby further agrees and acknowledges that the value of the
Permitted Company SRs along with the Pledged SRs shall be reviewed by the
Secured Parties on each Testing Date in the manner as set out in Clause 7.6 (c)
(Testing). The Company hereby undertakes that it shall, within 3 (three) days
from the acquisition of the Permitted Company SRs (if in dematerialised form)
and in any event no later than 15 (fifteen) days from such acquisition of the
Permitted Company SRs (if in physical form at the time of such acquisition),
create and perfect a Security Interest (other than filing of Form-CHG 9) by way
of a first ranking exclusive pledge on all such Permitted Company SRs, in a
form and substance satisfactory to the Trustee and execute such documents,
deeds and undertaking and make such filings as may be required by Applicable
Law or by the Trustee to create and perfect a Security Interest by way of a first
ranking exclusive pledge on all such Permitted Company SRs.
(b) Restricted Company SRs
(i) So long as: (i) no Potential Event of Default or Event of Default has occurred
or is continuing; and (ii) the Corporate Guarantee has been executed in a
manner satisfactory to the Trustee, the Company may invest any Cash Balance
available in the Escrow Account during the relevant Investment Period for an
amount exceeding the Investment Limit to acquire further Company SRs only
with the prior approval of the Trustee. In the event the Company proposes to
acquire further Company SRs pursuant to this paragraph (b) (i) (Restricted
Company SRs), it shall submit an investment proposal to the Trustee prepared
and certified by an Independent Valuer, identifying the Company SRs (such
security receipts “Restricted Company SRs”) along with all other relevant
details of such security receipts of Trusts that it proposes to acquire
(“Investment Proposal”).
(ii) If the Investment Proposal is acceptable to the Secured Parties, the Company
shall be permitted to make investments in such Restricted Company SRs.
(iii) The Company further undertakes that where the Investment Proposal is
approved by the Secured Parties, and the Company acquires any Restricted
Company SRs, pursuant to the approved Investment Proposal, the Company
shall, within 3 (three) days from the acquisition of the Restricted Company SRs
(if in dematerialised form) and in any event no later than 15 (fifteen) days from
such acquisition of the Restricted Company SRs (if in physical form at the time
of such acquisition), create and perfect a Security Interest (other than filing of
Form-CHG 9), by way of a first ranking exclusive pledge on all such Restricted
Company SRs, in a form and substance satisfactory to the Trustee and execute
such documents, deeds and undertaking and make such filings as may be
required by Applicable Law or by the Trustee to create and perfect a Security
Interest by way of a first ranking exclusive pledge on all such Restricted
39
Company SRs.
(iv) The Company further undertakes that where the Investment Proposal is
approved by the Secured Parties, and the Company acquires any Restricted
Company SRs, pursuant to the approved Investment Proposal, the Company
shall, within 3 (three) days from the acquisition of the Restricted Company SRs
(if in dematerialised form) and in any event no later than 15 (fifteen) days from
such acquisition of the Restricted Company SRs (if in physical form at the time
of such acquisition), create and perfect a Security Interest (other than filing of
Form-CHG 9), by way of a first ranking exclusive pledge on all such Restricted
Company SRs, in a form and substance satisfactory to the Trustee and execute
such documents, deeds and undertaking and make such filings as may be
required by Applicable Law or by the Trustee to create and perfect a Security
Interest by way of a first ranking exclusive pledge on all such Restricted
Company SRs.
(c) Concentration Limits
(i) Other than as set out in (ii) and (iii) below, the Company shall ensure that at all
times, the amounts invested in the Pledged SRs and the Permitted Loans
attributable to a single Person or entities Controlling it or Controlled by it shall not
exceed INR 358,00,00,000 (Indian Rupees three hundred and fifty eight crores
only) on an aggregate basis at any given time.
(ii) In respect of the entities set out in Schedule 18 (Specified Exposure Limit), the
Company shall ensure that at all times the amounts invested (on and from the
Deemed Date of Allotment) in the Pledged SRs and the Permitted Loans
attributable to a single Person or entities Controlling it or Controlled by it, shall not
exceed the limits set out in Schedule 18 (Specified Exposure Limit) applicable to
each such entity on an aggregate basis.
(iii) The Company shall ensure that in respect of BILT Graphic Paper Private Limited,
the amounts invested at all times in the Pledged SRs and the Permitted Loans
attributable to BILT Graphic Paper Private Limited or entities Controlling it or
Controlled by it, shall not exceed INR 500,50,00,000 (Rupees Five Hundred Crores
and Fifty Lakhs only).
(d) The Transaction Security created over the Secured Assets shall not be released at any
time until the Final Settlement Date other than upon the occurrence of the following
events:
(i) Permitted Security Release pursuant to a Partial Voluntary Redemption
Event
The Parties agree and acknowledge that in the event the Company does not
have sufficient Cash Balance in the Escrow Account to make all payments
pursuant to the occurrence of a Partial Voluntary Redemption Event in
accordance with paragraph 2.3 (Partial Voluntary Redemption) of Schedule 1
(Terms and Conditions) of this Deed, the Company may request the Trustee
and the Trustee may acting on Critical Majority Resolution, consent to release
the Security Interest created by the Company over the Partial Voluntary
Redemption Release Pledged SRs, provided that, the Trustee shall not be
required to give its consent unless it is satisfied that:
(C) the Company shall utilize the Partial Voluntary Redemption Release
Pledged SRs solely to secure further Financial Indebtedness availed by the
40
Company (to the extent of the insufficient Cash Balance in the Escrow
Account) for making payments pursuant to the Partial Voluntary
Redemption Event;
(D) such further Financial Indebtedness obtained by the Company in accordance
with the provisions of this Deed, shall be utilized solely to make all
payments in relation to the Partial Voluntary Redemption Event in
accordance with paragraph 2.3 (Partial Voluntary Redemption) of Schedule
1 (Terms and Conditions) of this Deed, on the same Business Day as when
the Security Interest is released on the Partial Voluntary Redemption
Release Pledged SRs;
(E) Either the proceeds of the proposed Financial Indebtedness are deposited
into the Escrow Account or the Company has put in place an escrow
mechanism to the satisfaction of the Trustee to ensure that the proceeds from
any further Financial Indebtedness shall be credited only to the account of
the Debenture Holders.
(ii) Any release of Security Interest only after receiving the prior written consent
of the Trustee in connection with any Financial Indebtedness to be availed by
the Company to facilitate Permitted Voluntary Redemption Event on such
terms and conditions as may be acceptable to the Trustee.
(iii) For permitting any payouts from the Escrow Account, in accordance with and
pursuant to paragraph 3.25 (Permitted Payouts) of Schedule 3 (Covenants and
Undertakings) of this Deed.
8. REALISATION OF TRUST PROCEEDS AND APPROPRIATION
(a) Realisation of Trust Properties
The Trustee shall hold upon trust the monies received by it in respect of the Trust
Properties (“Realisation Proceeds”) or any part thereof arising out of:
(i) any sale, disposal, transfer, release, calling in, collection or conversion under
the power of sale in relation to any Secured Asset;
(ii) any income, dividends, rent or profits arising in respect of the Debenture Trust
Properties;
(iii) any insurance contracts or proceeds or claims paid under any insurance contract
in relation to the Secured Assets;
(iv) compensation money in respect of any acquisition, requisition or
nationalisation or take-over of the management of the Company as provided in
Clause 8 (c) (Claims for compensation monies);
(v) enforcement or invocation of any guarantee provided by any Corporate
Guarantor;
(vi) enforcement of Transaction Security; and
(vii) any other realisation whatsoever.
(b) Appropriation of Realisation Proceeds
41
(i) All Realisation Proceeds received or recovered by the Trustee from time to time
shall be distributed by the Trustee in the following order of priority:
(A) firstly, in discharging any sums owing to the Trustee, the Account
Bank, and any Receiver or any Delegate;
(B) secondly, in payment of all costs and expenses incurred by the Trustee
or any other Secured Party or any of their Receiver or any Delegate in
connection with any realisation or enforcement of any guarantee or
Transaction Security taken in accordance with the terms of the Security
Documents or exercise of rights under any Transaction Documents;
(C) thirdly, towards payment to the Secured Parties, pari passu, of all
further or Default Interest in case of an Event of Default and liquidated
damages remaining unpaid under the Transaction Documents;
(D) fourthly, towards payment to the Debenture Holders, pari passu, of all
arrears of Interest remaining unpaid on the Debentures held by them;
(E) fifthly, in or towards payment to the Debenture Holders, pari passu, of
all principal amounts owing on the Debentures held by them and the
Redemption Premium and whether such amounts shall or shall not then
be due and payable; and
(F) the surplus (if any) of such monies to the Company or any other
Obligors as the Company may request in writing to the Trustee;
Provided that if the Trustee is of the opinion that it is expedient to do so,
payments may be made on account of principal before the whole or any part of
the Interest due on the Debentures or Default Interest, Redemption
Premium and liquidated damages have been paid off, but such alteration in the
order of payment of principal and Interest herein prescribed shall not prejudice
the right of the Debenture Holders to receive the full amount to which they
would have been entitled if the ordinary order of payment had been observed.
(ii) Clause 8 (b) (Appropriation of Realisation Proceeds) above will override any
appropriation made by any Obligor.
(iii) The Trustee shall not be affected by any notice, express or implied, of the right,
title or claim of any Person to the Realisation Proceeds other than the Debenture
Holders.
(c) Claims for compensation monies
In the event of a Governmental Authority taking over the management of the Company
and/or the entire undertaking of the Company and/or in the event of nationalisation of
the Company or its business or a moratorium being passed or in case the running of the
Business of the Company or its management or control is taken away either as part of
any unemployment relief scheme or for any other reason whatsoever or any Applicable
Law, the Trustee shall be entitled to receive the whole of the compensation to which
the Company shall be entitled and to apply the same or a sufficient portion thereof in
accordance with the provisions set out in Clause 8 (b) (Appropriation of Realisation
Proceeds) and the Debt shall become immediately payable and the Transaction
Security created under the Security Documents shall become enforceable.
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(d) Receipt by Trustee to be effectual discharge
Upon any dealing or transaction under the provisions herein contained, the receipt by
the Trustee of the proceeds upon any of the Debenture Trust Property or any part
thereof sold or realised and for any other monies paid otherwise howsoever, to it shall
effectually discharge the purchaser or purchasers or person paying the same therefrom
and from being concerned to see to the application or being answerable for the loss or
misapplication or non-application thereof.
9. LIMITATION OF LIABILITIES OF TRUSTEE
In addition to the other powers conferred hereunder on the Trustee and the provisions hereof
for its protection and not by way of limitation or derogation of anything contained in the
Transaction Documents or any statute limiting the liability of the Trustee, it is expressly
declared as follows:
(a) Reliance on opinion and advice
(i) The Trustee may, in relation to these presents, act on the opinion or advice of
or any information obtained from any solicitor, counsel, advocate, valuer,
surveyor, broker, auctioneer, qualified accountant, or other expert whether
obtained by the Company or by the Trustee or otherwise.
(ii) The Trustee shall not be responsible for any loss occasioned by so acting and
any such advice, opinion or information and any communication passing
between the Trustee and their representative or attorney may be obtained or
sent by letter, email, facsimile transmission, telex or telephonic message and
the Trustee, their representative or attorney shall not be liable for acting on any
advice, opinion or information purporting to be conveyed by any such letter,
email, facsimile transmission, or telephonic message.
(b) Reliance on certificates
(i) Unless otherwise instructed pursuant to the Approved Instructions, the Trustee
shall be at liberty to accept a certificate signed by any one of the directors of
the Company:
(A) as to any act or matter conclusive as sufficient evidence thereof;
(B) that any property or assets are in the opinion of the director so
certifying worth a particular sum or suitable for the Company's
purpose or business, as sufficient evidence that it is worth that sum or
so suitable;
(C) that any particular dealing or transaction or step or thing is in the
opinion of the director so certifying expedient, as sufficient evidence
that it is expedient.
(ii) Unless otherwise instructed pursuant to the Approved Instructions, the Trustee
shall not be bound in any such case to call for further evidence or be responsible
for any loss that may be occasioned by its failing to do so, unless otherwise
required by the Debenture Holders pursuant to a Majority Resolution.
(c) Not bound to exercise any rights or powers
43
Except as mandatorily required by Applicable Law, the Trustee shall not be bound in
any way to exercise any of its rights or powers under the Transaction Documents and
Applicable Law unless authorised by Approved Instructions.
(d) Custody of documents
The Trustee, at its own costs and expenses, shall be at liberty to keep this Deed, the
other Transaction Documents and all other deeds and documents of title relating to any
portion of the Debenture Trust Property at its registered office or elsewhere or if the
Trustee so decides with any bank or company whose business includes undertaking the
safe custody of documents or with any firm of advocates or solicitors. The Trustee shall
not be responsible for any loss incurred in connection with any such deposit, unless
such loss is incurred due to negligence, wilful misconduct, fraud, illegal act, breach of
trust or bad faith of the Trustee.
(e) Not bound to ascertain defaults
Unless (a) the Trustee receives Approved Instructions; (b) required under Applicable
Law; or (c) required under the Transaction Documents, the Trustee shall not be bound
to take any steps to ascertain whether any Event of Default or Potential Event of Default
has occurred.
(f) Not bound to supervise use of application monies
Unless required under Applicable Law or the Transaction Documents, the Trustee shall
not be responsible for the monies paid by the applicants for the Debentures or be bound
to see to the application thereof.
10. REPRESENTATIONS AND COVENANTS
(a) Representations and Warranties of the Company
(i) The Company makes the representations and warranties set out in Schedule 4
(Representations and Warranties) (“Warranties”) to the Trustee and each
Debenture Holder on the date of this Deed.
(ii) Unless specified otherwise in the Warranties, each of the Warranties are
deemed to be repeated by the Company to the Trustee and each Debenture
Holder, by reference to the facts and circumstances then existing, on the Pay In
Date, the Deemed Date of Allotment, each Interest Payment Date and each
Redemption Date until the Final Settlement Date.
(iii) The Company acknowledges that the Warranties, when they are made or
deemed to be made as above, are an integral part of this Deed and each
Debenture Holder has agreed to subscribe or subscribed to the Debentures by
relying on the same.
(iv) Each of the Warranties is separate and independent and none of the Warranties
shall be treated as qualified by any actual or constructive knowledge on the part
of any Debenture Holder or the Trustee or any of their agents, representatives,
officers, employees or advisers.
(v) The Warranties and the liability of the Company for any breach thereof shall
not be in any manner limited by any information disclosed or made available
to or received by any Debenture Holder or the Trustee or any of its agents,
44
representatives, officers, employees or advisers.
(b) Representation and Warranties of the Trustee
The Trustee hereby warrants that:
(i) it is duly organised and validly existing under the laws of the jurisdiction in
which it is incorporated and has full power and authority to enter into this Deed
and other Transaction Documents to the extent it is a party thereto and to
perform its obligations under this Deed and other Transaction Documents to
the extent it is a party thereto in accordance with their respective terms;
(ii) this Deed constitutes a legal, valid and binding obligation, enforceable against
it in accordance with its terms;
(iii) there are no pending proceedings for the dissolution, bankruptcy, liquidation,
insolvency or rehabilitation of it whether voluntary or involuntary and to the
best of its knowledge, there are no reasonable grounds on which a petition or
application could be based for winding up or appointment of a receiver;
(iv) it does not beneficially hold any shares in the Company;
(v) it is not a promoter, director or key managerial personnel or any other officer
or an employee of the Company or its Holding Company, Subsidiary or
Associate company;
(vi) it is not beneficially entitled to moneys which are to be paid by the Company
otherwise than as remuneration payable to the Trustee;
(vii) it is not indebted to the Company, or any of its Subsidiaries or Holding
Company or Associate, or any Subsidiary of such Holding Company;
(viii) it has not furnished any guarantee in respect of the principal debts secured by
the Debentures or coupon thereon;
(ix) it does not have any pecuniary relationship with the Company amounting to
2% (two per cent) or more of its gross turnover or total income of INR
50,00,000 (Rupees Fifty Lakhs only) during the 2 (two) immediately preceding
Financial Years or during the current Financial Year;
(x) it is not a Relative of the promoter or any person who is in the employment of
the Company as a director or key managerial personnel; and
(xi) it is not disqualified under Applicable Law to act as a debenture trustee in
connection with the Debentures.
(c) Covenants and Undertakings
The Company agrees and undertakes to abide by the covenants and undertakings set
out in Schedule 3 (Covenants and Undertakings) on the date hereof and at all times
until the Final Settlement Date.
11. EVENTS OF DEFAULT
Each of the events or circumstances set out in the following sub-clauses of this Clause 11
(Events of Default) (other than Clauses 11 (w) (Consequences of Event of Default), 11 (y)
45
(Trustee to be Indemnified), 11 (z) (Fees and Expenses)) and 11 (aa) (Communication with third
party, etc.) is an Event of Default.
(a) Non-payment
Any Obligor does not pay on the due date any amount payable pursuant to a Transaction
Document to which it is a party.
(b) Financial Covenants
Any requirement of paragraph 2 (Financial Covenants) of Schedule 3 (Covenants and
Undertakings) is not satisfied subject to a cure period of 15 (fifteen) days from the date
of its occurrence.
(c) Non-compliance with Terms and Conditions
Any Obligor fails to comply with any Terms and Conditions or does not comply with
any of its obligations under any of the Transaction Documents (other than in relation
to the Specified Covenants) to which it is a party, subject to a cure period of 30 (thirty)
days from the date of notice of its occurrence.
(d) Misrepresentation
Any representation, warranty, covenant, undertaking or certification, confirmation,
information made or repeated by the Company or an Obligor under or pursuant to the
Transaction Documents, including but not limited to any representation or statement
with respect to the Secured Assets or any certificate or statement delivered by the
Company pursuant hereto, is found to have been incorrect or misleading or untrue when
made or deemed to have been made, such that it has a material impact on the ability of
the Company to fulfil its payment obligations under the Transaction Documents,
subject to a cure period of 45 (forty five) days from the date of occurrence of such
misrepresentation provided that such misrepresentation is capable of being remedied.
(e) Cross Default
(i) Any Financial Indebtedness of the Company or an Obligor is not paid when
due within any originally applicable grace period.
(ii) Any Financial Indebtedness of the Company or an Obligor is declared to be or
otherwise becomes due and payable prior to its specified maturity as a result of
an actual default, event of default or any other similar event (however
described).
(iii) Any commitment for any Financial Indebtedness of the Company or an Obligor
is cancelled or suspended by a creditor of the Company or an Obligor as a result
of an event of default (however described).
(iv) Any creditor of the Company or an Obligor becomes entitled to declare any
Financial Indebtedness due and payable prior to its specified maturity as a result
of an event of default (however described).
(v) The Company or an Obligor is declared a wilful defaulter.
(f) Insolvency
46
(i) The Company or an Obligor is, or if under Applicable Law, is presumed or
deemed to be unable, or admits inability to pay its debts (or any class of them)
as they fall due, suspends making payments on any of its debts or, by reason of
its inability to repay dues to any financial creditor, commences negotiations
with one or more of its financial creditors (or any class of them) with a view to
(i) rescheduling any of its indebtedness; or (ii) in respect of any compromise,
restructuring, settlement or such arrangement with any financial creditor of
such Obligor.
(ii) If the Company or an Obligor commences a voluntary proceeding under any
applicable bankruptcy, insolvency, reorganisation, winding up or other similar
law now or hereafter in effect, or consents to the entry of an order for relief in
an involuntary proceeding under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee (or similar official) for
any or a substantial part of its property.
(iii) Initiation of any actions or proceedings against the Company or an Obligor
pursuant to the any guidelines issued or framework set up by the RBI or any
other Governmental Authority in relation to resolution of stressed assets.
(iv) Initiation of any actions or proceedings against the Company or an Obligor by
the RBI or any other Governmental Authority in relation to the initiation of any
insolvency resolution process against the Company or an Obligor under the
IBC or any other Applicable Laws.
(v) An application in relation to the insolvency resolution process of the Company
or any Obligor has been initiated by a financial creditor of the Company or any
Obligor, as the case may be, under the IBC or any other Applicable Laws or
any proceedings have been filed by such financial creditor in relation to the
same before any Governmental Authority or any court or tribunal or a petition
being presented or analogous proceeding being taken including for the
liquidation, winding up or dissolution of the Company or any Obligor by a
financial creditor.
(vi) An application in relation to the insolvency resolution process or any similar
proceedings have been initiated including for the liquidation, winding up or
dissolution of the Company or any Obligor by an operational creditor of the
Company or any Obligor (as the case may be) for an amount exceeding (i) INR
10,00,00,000 (Rupees ten crores only) in respect of the Company; or (ii) INR
50,00,00,000 (Rupees fifty crores) in respect of any other Obligor, as the case
may be, under the IBC or any other Applicable Laws which is not vacated or
stayed within a period of 10 (ten) days from date of filing of such petition.
(vii) An application in relation to the insolvency resolution process or any similar
proceedings have been initiated including for the liquidation, winding up or
dissolution of the Company or any Obligor by an operational creditor of the
Company or any Obligor with respect to a crystallised undisputed liability
aggregating for an amount not exceeding (i) INR 10,00,00,000 (Rupees ten
crores only) in respect of the Company; or (ii) INR 50,00,00,000 (Rupees fifty
crores) in respect of any other Obligor, as the case may be, under the IBC or
any other Applicable Laws which is not vacated or stayed within a period of 10
(ten) days from date of filing of such petition.
(viii) An application in relation to the insolvency resolution process or any similar
proceedings have been initiated including for the liquidation, winding up or
47
dissolution of the Company or any Obligor by an operational creditor of the
Company or any Obligor for an amount not exceeding (i) INR 10,00,00,000
(Rupees ten crores only) in respect of the Company; or (ii) INR 50,00,00,000
(Rupees fifty crores) in respect of any other Obligor, as the case may be, under
the IBC or any other Applicable Laws which is not vacated or stayed within a
period of 30 (thirty) days from date of filing of such petition.
(ix) Any analogous procedure or step (to what is set out above) is taken in any
jurisdiction outside India by or against the Company or any Obligor, which in
respect of any insolvency action is not vacated before the earlier of (i) the
maximum time period that exists under applicable law of that jurisdiction for
the admission of such action; or (ii) the time period within which a general
moratorium will become applicable in relation to the relevant Obligor; or (iii)
10 (ten) Business Days from the initiation of such proceeding.
(g) Insolvency proceedings
Any corporate action, legal proceeding or other procedure or step which has resulted
in:
(i) Any suspension of payments, a moratorium of any indebtedness, or
reorganisation (by way of voluntary arrangement, scheme of arrangement or
otherwise) of the Company or any Obligor except any demerger permitted
under any Transaction Document;
(ii) Any financial creditor lawfully taking possession or an insolvency resolution
professional, liquidator, receiver (appointed on behalf of a financial creditor),
or any analogous officer being appointed in respect of the whole or any part of
the property of any Obligor;
(iii) An attachment, sequestration, distress or execution (or analogous process in
any jurisdiction) being levied or enforced upon or issued against of any assets
or property of the Company or any Obligor in any jurisdiction, which has or is
likely to have a Material Adverse Effect in the reasonable opinion of the Trustee
acting on Approved Instructions;
(iv) Declaration of any Obligor as a relief undertaking or commencement of any
moratorium, insolvency resolution process or liquidation process under the IBC
or any other Applicable Laws or any order for winding up, bankruptcy or
dissolution being passed under the IBC or any other Applicable Laws, as may
be applicable;
(v) Enforcement of any Transaction Security over any assets of the Company or
any Obligor or any analogous procedure or step in any jurisdiction; or
(vi) Any analogous procedure or step is taken in any jurisdiction against or in
relation to the Company or any Obligor.
(h) Unlawfulness and Invalidity
(i) It is or becomes unlawful for any Obligor to perform any of its obligations
under the Transaction Documents;
(ii) Any obligation or obligations of any Obligor under any Transaction Documents
are not or cease to be legal, valid, binding or enforceable; or
48
(iii) Any Transaction Document ceases to be in full force and effect or is alleged by
a party to it (other than the Secured Parties) to be ineffective.
(i) Repudiation and Rescission of agreements
Any Obligor rescinds or purports to rescind or repudiates or purports to repudiate a
Transaction Document or evidences an intention (in writing) to rescind or repudiate a
Transaction Document.
(j) Litigation and Final Judgments or Court Orders
Any litigation, arbitration, administrative, governmental, regulatory or other
proceeding or dispute is commenced or pending:
(i) in relation to the Transaction Documents or the transactions contemplated therein
against any Obligor or its assets which has or is likely to have, in the reasonable
opinion of the Debenture Holders pursuant to a Majority Resolution, has or is
likely to have a Material Adverse Effect in the reasonable opinion of the Trustee
acting on Approved Instructions; or
(ii) which adversely affects the Secured Assets, unless the Company is able to cure
any breach in respect of the maintenance of the Required Security Cover Ratio
within 15 days of the relevant Testing Report.
(iii) Any Obligor fails to pay or perform or comply with any final judgment or court
order unless the relevant Obligor has filed an appeal against such judgment or
order.
(iv) Any adverse decision or judgment by any court of law or tribunal or any
Governmental Authority has been issued in relation to any litigation, arbitration,
investigative or administrative proceeding against the Company, the Transaction
Documents or any obligor’s title to any part of the Secured Assets which have a
Material Adverse Effect.
(v) If any of the Governmental Authority including the SEBI and the RBI initiates
any proceedings (by way of prosecution or filing of a chargesheet) against the
Company or their respective promoters or directors (as applicable) under
Applicable Laws which has or is likely to have a Material Adverse Effect in
the reasonable opinion of the Trustee acting on Approved Instructions.
(k) Moratorium on Indebtedness
The Government of India or any relevant Governmental Authority declares a general
moratorium or “standstill” (or makes or passes any order or regulation having a similar
effect) in respect of the payment or repayment of any Financial Indebtedness (whether
in the nature of principal, interest, redemption premium or otherwise) which impacts
the Debentures (and whether such declaration, order or regulation is of general
application, applies to a class of persons which includes any Obligor alone) unless such
moratorium or standstill is vacated or set aside.
(l) Cessation of Business and Expropriation
(i) Any Obligor suspends or ceases to carry on or dispose of (or threatens to suspend
or cease to carry on or to dispose of) all or a material part of its business.
49
(ii) The authority or ability of any Obligor to conduct its business is limited or wholly
or substantially curtailed by any seizure, compulsory acquisition, expropriation,
nationalisation, intervention, restriction or other action by or on behalf of any
Governmental Authority or other person in relation to any Obligor or any of its
assets.
(iii) Any material act of fraud, embezzlement, misstatement, misappropriation or
siphoning off of funds or revenue of any Obligor or any other act having a similar
effect being committed by the management or an officer, employee or agent of
any Obligor.
(iv) Any change in general nature of the business carried out by the Company from
that carried on at the date of this Deed
(m) Material Adverse Effect
Any event or circumstance occurs with respect to the Company or any Obligor which
has had or is likely have a Material Adverse Effect in the reasonable opinion of the
Trustee acting on Approved Instructions.
(n) Revocation of Licences or Authorisations
(i) Any license or Authorisation required by the Company to operate its business
as an asset reconstruction company is revoked, suspended or cancelled or not
renewed within the time prescribed under Applicable Law.
(ii) Any license or Authorisation required by any Obligor to conduct its principal
business is revoked, suspended or cancelled or not renewed within the time
prescribed under Applicable Law.
(o) Security
(i) The Pledged SRs cease to be validly issued;
(ii) Any Security Document does not (once entered into) create or evidence the
creation of, in favour of the Trustee for the benefit of the Secured Parties,
Transaction Security which it is expressed to create or whose creation it
evidenced, as the case may be, fully perfected with the ranking and priority it
is expressed to have;
(iii) If there is any impairment of any Transaction Security or any part thereof
(whether actual or reasonably anticipated), which causes the Transaction
Security or any part thereof, to be in jeopardy or the Secured Assets are not
capable of being dealt with in any manner including the sale of the Secured
Assets due to any action on the part of the Company adversely affecting the
marketability of such Secured Assets;
(iv) Any Transaction Security created pursuant to, or evidenced by, any Security
Document ceases to inure to the benefit of the Secured Parties;
(v) Acquisition of any Secured Assets by the Company is or becomes invalid,
illegal or unenforceable or the Company has repudiated or terminated (before
the stated termination date thereof) or any other Person has taken any action to
50
challenge the validity or enforceability of such acquisition of the Secured
Assets by the relevant Company,
Provided that where: (A) the value of Secured Assets affected does not exceed INR
600,00,00,000 (Rupees six hundred crores only) (calculated based on the last available
Testing Report); and (B) there has been a breach of the Required Security Cover Ratio
(calculated based on the last Testing Report), the Company shall create and perfect a
pledge over additional Company SRs as may be acceptable to the Trustee as Transaction
Security (wherein the valuation of such additional Company SRs shall be in accordance
with the methodology adopted for the calculation of the Security Cover (Debenture
Holder) above) so as to ensure that the Security Cover Ratio (Net) is equal to or greater
than the Initial Required Security Cover within a cure period of 15 days from the earlier
of: (X) date the Company becomes aware of such event; and (Y) the Trustee notifies
the Company of the occurrence of any such event as set out in paragraphs (i) to (v)
above.
(p) Listing of the Debentures.
(i) The Company fails to get the Debentures listed on the Stock Exchange within
15 (fifteen) days from the Deemed Date of Allotment.
(ii) The Debentures are ceased to be listed, delisted or are suspended for trading
from the Stock Exchange during the tenure of the Debentures for any reason.
(q) Purpose
All or any part of the Subscription Amount is not utilized in accordance with the
Transaction Documents subject to a cure period of 30 (thirty) days from its occurrence.
(r) Trust related matters
(i) The Company is discharged or removed in writing, or discharged and/or
removed in its capacity as the trustee or manager (howsoever described) in
relation to any Secured Trust;
(ii) The holders of any Company SRs in respect of the Secured Trusts initiating or
intending to initiate any action which, at the sole discretion of the Trustee, is
detrimental to the interest of the Secured Parties (including convening any
meeting for revocation of contributions made in relation to the Secured Trusts);
(iii) Any security receipts, notes or securities issued by the Secured Trusts, ranking
in priority (in relation to payments or otherwise) to the Pledged SRs without
the consent of the Trustee;
(iv) The Company resigns or notifies its intent in writing to resign in capacity of the
trustee in relation to any Secured Trust;
(v) The Trust incurs any Financial Indebtedness or creates Security Interest over
the Receivables which is likely to or could adversely affect the Debenture
Holders without the consent of the Trustee in accordance with this Deed; or
51
(vi) The Company deals, assigns, transfers or disposes, in any manner, the Trust
Funds, which is under the control of the Company as on the date of this Deed,
to any Person other than as permitted under the Trust Documents,
Provided that where: (A) the value of Secured Assets affected does not exceed INR
600,00,00,000 (Rupees six hundred crores only) (calculated based on the last available
Testing Report); and (B) there has been a breach of the Required Security Cover Ratio
(calculated based on the last Testing Report), the Company shall create and perfect a
pledge over additional Company SRs as may be acceptable to the Trustee as Transaction
Security (wherein the valuation of such additional Company SRs shall be in accordance
with the methodology adopted for the calculation of the Security Cover (Debenture
Holder) above) so as to ensure that the Security Cover Ratio (Net) is equal to or greater
than the Initial Required Security Cover subject to a cure period of 15 (fifteen) days
from the earlier of: (X) date the Company becomes aware of such event; and (Y) the
Trustee notifies the Company of the occurrence of any such event as set out in
paragraphs (i) to (v) above.
(s) Audit Qualification
The Company Auditor issues any audit qualification in relation to the Financial
Statement or passes any adverse remark with respect to the Financial Statements or the
accounting policies of the Company which has or is likely to have a Material Adverse
Effect in the reasonable opinion of the Trustee acting on Approved Instructions.
(t) Amendment to constitutional documents
Any constitutional document of the Company is amended in any way which materially
impacts the interests of the Debenture Holders without the prior written consent of the
Secured Parties.
(u) Change of Control
Any Change of Control of the Company and/or Corporate Guarantor.
(v) Key Covenants
Any breach in compliance with any obligations of any Obligors pursuant to the Key
Covenants.
(w) Consequences of Event of Default
(i) Upon the occurrence of an Event of Default, the Company shall immediately
inform the Trustee of such occurrence, together with all details related thereto.
The Trustee shall thereafter or upon becoming aware of an Event of Default
immediately notify the Debenture Holders of the occurrence of such Event of
Default in the form set out in Schedule 9 (Request for Approved Instructions
for EOD), requesting Approved Instructions as to whether immediate payment
by the Company of the Debt is required and other actions to be taken in relation
to the Event of Default.
(ii) Upon receipt of Approved Instructions for declaring the Debt due and payable,
whether pursuant to the delivery of the notice under Clause 11 (w)
52
(Consequences of Event of Default) above or otherwise, the Trustee shall
declare all or any part of the Debt to be immediately (or on such dates as may
be specified in the Approved Instructions) due and payable whereupon it shall
become so due and payable, and simultaneously send the Company a notice in
the form set out in Schedule 10 (Form of Acceleration Notice) (“Acceleration
Notice”) requiring the Company to immediately pay all or part of the
outstanding Debt to the Debenture Holders.
(iii) If the Company fails to pay the outstanding Debt in accordance with the
Acceleration Notice, the Trustee shall exercise one or all of the following rights
in accordance with the Approved Instructions:
(A) require the Company to mandatorily redeem the Debentures and repay
all or part of the Debt due and including the principal amount on the
Debentures, along with accrued but unpaid Interest, the Default
Interest, the Redemption Premium, and other costs, charges and
expenses incurred under or in connection with the Transaction
Documents;
(B) enforce the Security Interest created pursuant to the Security
Documents including but not limited to initiating the sale of all the
Pledged SRs in accordance with the Company Pledge Agreement
subject to Applicable Laws;
(C) exercise voting rights in relation to the Pledged SRs;
(D) invoke the Corporate Guarantee and enforce any Transaction Security
towards discharge of the Debt;
(E) transfer, assign or appropriate the amounts lying in the Escrow
Account in relation to the Secured Assets;
(F) appoint one Nominee Director on the board of directors of the
Company in accordance with Applicable Laws; or
(G) appoint a representative on the investment committee of the board of
directors of the Company in the manner as set out in this Deed.
(iv) Notwithstanding anything contained above, upon the occurrence of an Event of
Default as set out in paragraph (p) (i) of Clause 11 (Events of Default), the
Company shall pay a penal interest of atleast 1 % p.a. (one per cent. per annum)
over the Interest Rate from the date falling on the expiry of 30 (thirty) days
from the Deemed Date Of Allotment until the listing of the Debentures.
(x) Board Committee
The Company shall procure that, upon the occurrence of an Event of Default, the
Trustee shall have the remedies as available under Applicable Laws including but not
limited to:
(A) exercise complete control over the Secured Assets and do all things as may be
required in this regard; and
(B) take such other action, or exercise such rights, as the Trustee may deem fit,
53
under Transaction Documents or Applicable Law.
(y) Trustee to be Indemnified
At any time after the occurrence of an Event of Default and subject to the provisions of
this Clause 11 (Events of Default) above, the Trustee shall, on receipt of Approved
Instructions, and without further notice to any Obligor institute proceedings against any
Obligors to enforce repayment of the Debt but it shall not be bound to take any such
proceedings unless:
(i) sufficient monies are advanced by the Debenture Holders to the Trustee for
enforcement of the Transaction Documents and the Security; and
(ii) the Trustee is reasonably indemnified, under separate undertaking in writing, by
the Debenture Holders pursuant to a Majority Resolution.
(z) Fees and Expenses
All fees, duties, costs and expenses (including legal fees) incurred by the Secured
Parties after an Event of Default has occurred in connection with the Debt including in
relation to:
(i) preservation of the assets (whether then or thereafter existing) of any Obligor;
(ii) preservation or enforcement of Secured Assets or the invocation of the Corporate
Guarantee;
(iii) collection or any repayment of Debt; and
(iv) any litigation, proceeding, steps or action taken, initiated and defended by the
Trustee or any Debenture Holder in connection with (i) to (ii) above,
shall be payable by the Company to the satisfaction of the Trustee.
(aa) Communication with third party, etc.
Upon the occurrence of an Event of Default, the Trustee shall be entitled to
communicate, in any manner as it may deem fit, to or with any person or persons with
a view to receiving assistance of such person or persons in recovering the defaulted
amounts.
12. REDRESSAL OF DEBENTURE HOLDERS GRIEVANCES
The Company shall furnish to the Trustee details of all grievances received from the Debenture
Holders and the steps taken by the Company to redress the same. At the request of any
Debenture Holder, the Trustee shall, by notice to the Company call upon the Company to take
appropriate steps to redress such grievances and shall, if necessary, at the request of any
Debenture Holder, call a meeting of the Debenture Holders.
13. RETIREMENT & REMOVAL OF TRUSTEE
(a) Resignation of Trustee
(i) The Trustee may, at any time, without assigning any reason and without being
responsible for any loss or costs occasioned thereby, resign as the trustee by
54
providing a written notice of at least 90 (ninety) calendar days in this regard;
provided that it shall continue to act as the Trustee until a successor trustee,
acceptable to the Debenture Holders (acting on Majority Resolution), (“Successor
Trustee”) is appointed by the Company.
(ii) Upon receipt of the notice of resignation from the Trustee, the Debenture Holders
shall acting on Majority Resolution, within 20 (twenty) Business Days of the
resignation, approve another entity to act as the Successor Trustee and notify the
Company of its decision. The Company shall within 5 (five) Business Days of
receipt of notice from the Debenture Holders acting on Majority Resolution, take
all necessary steps to appoint the entity approved by the Debenture Holders acting
on Majority Resolution as the Successor Trustee and complete all necessary
formalities to give effect to such appointment.
(iii) In the event that the Company fails, for any reason whatsoever, to take requisite
steps or actions required to appoint the Successor Trustee in terms of this Clause
13 (Retirement and Removal of the Trustee), the Debenture Holders (acting on
Majority Resolution) may, but without being bound to do so, appoint the Successor
Trustee in accordance with the terms stated and by following the procedure set out
above in this Clause 13 (Retirement and Removal of the Trustee) and shall have all
the rights and powers set out therein. All costs, fees, charges and expenses
whatsoever related to such appointment of the Successor Trustee shall be borne
solely on the account of the Company and the Company shall forthwith reimburse
to the Debenture Holders (acting on Majority Resolution) any amounts expended
by the Debenture Holders (acting on Majority Resolution) in this regard on receipt
of a written notice from the Successor Trustee in this behalf (acting on behalf of
the Debenture Holders (acting on Majority Resolution).
(b) Successor Trustee as the Trustee
On appointment of the Successor Trustee pursuant to paragraph (c) (Removal of the
Trustee) below or paragraph (a) (Resignation of the Trustee) above, all references in
this Deed to the Trustee shall, unless repugnant to the context thereof, mean and refer
to the Successor Trustee and the Successor Trustee shall without any further act or deed
succeed to all the powers and authorities of the Trustee as if it had been originally
appointed as the Trustee.
(c) Removal of Trustee
The Trustee hereof may be removed by the Debenture Holders by a resolution passed
by, or written instructions given by, Debenture Holders representing 75% (seventy five
per cent) of the nominal value of the Debentures then outstanding. The Company shall
appoint such person or persons as may be nominated by Debenture Holders
representing 75% (seventy five per cent) of the nominal value of the Debentures then
outstanding as new Trustee or Trustee hereof who shall accede to all the Transaction
Documents.
(d) Convening meeting of Debenture Holders
For the purposes aforesaid, forthwith upon receipt of the notice of retirement from the
Trustee for the time being hereof or on the occurrence of a vacancy in the office of the
Trustee or Trustee hereof, the Company shall convene a Meeting of the Debenture
Holders. A company, body corporate or a statutory corporation, which is a financial
institution in the public sector, may be appointed to be a Trustee hereof. If there are
55
more than two Trustees appointed hereof, the majority of such Trustees shall be entitled
to exercise the powers, authorities and discretions hereby vested in the Trustee.
14. COSTS AND EXPENSES
(a) Obligation to bear costs and expenses
The Company shall bear and promptly pay the following:
(i) All reasonable fees for services performed by Trustee, all out of pocket, and
travelling expenses and so long as no Event of Default has occurred, other
reasonable costs, charges and expenses in any way incurred by Trustee, its officers,
employees or agents in connection with the negotiation, preparation, execution,
modification or amendment of or the preservation, protection or release of the rights
of the Debenture Holders on exercise of any rights, remedies or powers granted
under any Transaction Documents or any documents or instruments contemplated
or in connection with or relating to Transaction Documents including, without
limitation, due diligence and costs of investigation of title as may be mutually
agreed;
(ii) all legal fees for drafting, preparation and stamping of this Deed and all other
Transaction Documents, costs, charges and expenses of the external legal counsel
of the Trustee, or of the Debenture Holders and all such sums incurred or paid by
Trustee and the Debenture Holders or any of them in connection with and incidental
to or in connection with these presents including all reasonable transaction and out
of pocket related expenses related to due diligence, documentation and execution
for the issuance of the Debentures regardless of whether the Debentures have been
allotted to the Subscribers in accordance with the terms of the Transaction
Documents;
(iii) all fees, costs and expenses incurred in connection with the enforcement of any
rights hereunder and/or under any other Transaction Document including any cost
incurred in the assertion or defence of the rights of Trustee as such for itself and for
the benefit of the Secured Parties, for the protection and preservation of whole or
any part of the Transaction Security and for the demand, realisation and recovery
of the Debt; and
(iv) all stamp duty, taxes, charges and penalties on any Transaction Documents if and
when the Company or any other Obligor may be required to pay the same according
to the Applicable Laws.
(b) Consequences of failure to pay
If the Company fails in defraying the costs, expenses, charges, duties or fees referred
to in Clause 14 (a) (Obligations to bear costs and expenses) as and when required, the
Trustee may (but is not obligated to) make such payments on behalf of the Company
or other Obligors, as the case may be. All such payments made by the Trustee shall be
for the account of the Company and the Company undertakes promptly on demand, to
reimburse the Trustee or its authorized agents, representatives, successors and
assignees for any such monies so paid, together with the interest thereon if such
amounts are not reimbursed within 5 (five) days of receipt of demand at the rate of 18%
(eighteen per cent) per annum from the end of 5 (five) days’ notice period until the date
such amounts are actually reimbursed by the Company.
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(c) Debt
All costs and expenses and fees referred to in this Clause 14 (Costs and Expenses)
which are to be borne by the Company shall be part of the “Debt” and shall be a charge
upon the Debenture Trust Property in priority to the charge securing the Debentures.
15. INDEMNITY
(a) General Indemnity
(i) The Company shall, without protest or demur, irrevocably and unconditionally pay,
indemnify, defend and hold harmless, the Debenture Holders and the Trustee, and
each of their attorneys, agents, directors, officers, representatives and advisors
(collectively the “Indemnified Parties”), promptly upon demand at any time and
from time to time, against any and all direct (and not indirect or inconsequential)
losses, liabilities, obligations, damages, judgments, costs, expenses (including,
without limitation, advisors’ fees), claims, fines, penalties, proceedings, actions or
demands, of any kind or nature whatsoever incurred or likely to be incurred by any
of the Indemnified Parties arising out of or in connection with:
(A) the issuance and subscription to or purchase of the Debentures;
(B) illegality or any occurrence of an Event of Default or a Specified Early
Redemption Event;
(C) any stamp duty, registration and other similar Taxes payable in respect
of any Debentures or any Transaction Document at any time;
(D) exercise of any rights or performance of any obligations of the
Indemnified Parties under any Transaction Documents, including
enforcement of any Security;
(E) any delay, omissions, variations, mutilations or other errors in the
transmission of the form of communication and instructions; and
(F) a sale of the Debentures due to non-listing of the Debentures within 15
(fifteen) days of the Deemed Date of Allotment at a price which is
lower than the face value of Debentures till the date of realisation of
proceeds by sale of Debenture Holders.
(ii) The Trustee or Receiver may retain and pay out of any money in its possession all
sums necessary to effect the indemnities contained in this Clause 15 (Indemnity)
and all sums payable by the Company under this Clause 15 (Indemnity) shall form
a part of the Debt.
(iii) Any indemnification payment made by the Company shall be grossed up to take
into account any Taxes, payable by the Indemnified Parties or deductible by the
Company on such payment.
(iv) The indemnification rights of the Indemnified Parties under this Deed are
independent of, and in addition to, such other rights and remedies as the
Indemnified Parties may have at law or in equity or otherwise, including the right
to seek specific performance or other injunctive relief, none of which rights or
remedies shall be affected or diminished thereby.
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(v) The Company acknowledges and agrees that any payments to be made pursuant to
this Clause 15 (Indemnity) are not in the nature of a penalty but merely reasonable
compensation for the loss that would be suffered, and therefore, the Company
waives all rights to raise any claim or defense that such payments are in the nature
of a penalty and undertakes that it shall not raise any such claim or defense.
16. TAX GROSS UP
16.1 Definitions
In this Clause 16 (Tax Gross Up):
“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment
under a Transaction Document, other than a FATCA Deduction.
“Tax Payment” means a payment made by the Company to a Secured Party under Clause 16.3
(Tax Indemnity).
Unless a contrary indication appears, in this Clause 16 (Tax Gross Up) a reference to
“determines” or “determined” means a determination made in the absolute discretion of the
person making the determination.
16.2 Tax Gross-up
(a) All payments to be made by the Company to a Secured Party under the Transaction
Documents shall be made free and clear of, and without any Tax Deduction unless the
Company is required to make a Tax Deduction.
(b) The Company shall, promptly upon becoming aware that it must make a Tax
Deduction, or that there is any change in the rate or the basis of a Tax Deduction, notify
the relevant Secured Party accordingly. Similarly, the relevant Secured Party shall
notify the Company on becoming so aware in respect of a payment payable to that
Secured Party.
(c) If the Company is required to make a Tax Deduction, it shall make that Tax Deduction
and any payment required in connection with that Tax Deduction within the time
allowed and in the minimum amount required by Applicable Law. The Debenture
Holders shall provide such documents and information including the income tax
registration details and tax remittance letter, as may be reasonably requested by the
Company from time to time in connection with this Clause 16.2 (Tax Gross- up).
(d) If a Tax Deduction is required by Applicable Law to be made by the Company in
respect of any payments to be made by it to a Debenture Holder, the amount of the
payment due from the Company shall be increased to an amount which leaves an
amount equal to the payment which would have been due if no such Tax Deduction
had been required.
(e) Within 120 (one hundred and twenty) days or any other period as may be prescribed
under Applicable Law of making either a Tax Deduction or any payment required in
connection with that Tax Deduction, the Company making that Tax Deduction or
payment, shall deliver to the Secured Party evidence reasonably satisfactory to such
Secured Party that the Tax Deduction has been made or (as applicable) any appropriate
payment paid to the relevant taxing authority.
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16.3 Tax Indemnity
(a) Without prejudice to Clause 16.2 (Tax Gross-up), if the Secured Parties are required to
make any payment of, or on account of, Tax on or in relation to a Tax Deduction or in
relation to any sum received or receivable under the Transaction Documents (including
any sum deemed for purposes of Tax to be received or receivable by such Secured Party
whether or not actually received or receivable) or if any liability in respect of any such
payment is asserted, imposed, levied or assessed against the Secured Party, the
Company shall, within no later than 10 (ten) days of demand of such Secured Party,
promptly indemnify, without protest or demur, the relevant Secured Party which suffers
a loss or liability as a result against such payment or liability, together with any interest,
penalties, costs and expenses payable or incurred in connection therewith as determined
by the Secured Party. The Debenture Holders / Trustee shall, to the extent reasonably
practicable, inform the Company in writing prior to incurring any such cost or expense
such that the Company has the opportunity to defend itself and contest any such claims
or liability and the Debenture Holders / Trustee shall, to the extent reasonably
practicable, provide such documents as may be reasonably requested by the Company
in connection with such liability and (ii) this Clause 16.3 (Tax Indemnity) shall not
apply to:
(i) any Tax imposed on and calculated by reference to the net income actually received
or receivable by the Secured Parties (but, for the avoidance of doubt, not including
any sum deemed for purposes of Tax to be received or receivable by the Secured
Parties but not actually receivable) by the jurisdiction in which such Secured Party
is incorporated; or
(ii) any Tax imposed on and calculated by reference to the net income of the Secured
Party actually received or receivable by such Secured Party (but, for the avoidance
of doubt, not including any sum deemed for purposes of Tax to be received or
receivable by the Secured Parties but not actually receivable) by the jurisdiction in
which such Secured Party is located; or
(iii) a FATCA Deduction required to be made by a Party.
(b) If a Secured Party makes a claim under paragraph (a) above, it shall notify the Company
of the event giving rise to the claim.
(c) The Company further irrevocably and unconditionally represents, warrants and
confirms to the Trustee that for the purposes of Section 281 of the Income Tax Act,
1961 and Section 81 of the Central Goods and Services Tax Act, 2017, the Company
has satisfactorily paid all its dues as on date for or on account of income tax due and
payable to the Governmental Authority, and as such there are no outstanding dues
payable by the Company to any Governmental Authority for or on account of income
tax except those that are being contested in good faith aggregating up to such amount
as disclosed in the Tax Certificate, as of the Deemed Date of Allotment.
(d) The Company has not received any notice or intimation till date of any Taxes or any
other sums due and payable by the Company to any Governmental Authority; and/ or
any proceedings pending and/ or initiated or threatened in writing against the Company
for or on account of any taxes or any other sums, which may be due and payable by the
Company to any Governmental Authority except those that are being contested in good
faith aggregating up to such amounts, as of the Deemed Date of Allotment as disclosed
in the Tax Certificate.
(e) The Company hereby indemnifies and undertakes to irrevocably and unconditionally
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indemnify the Secured Parties and keep the Secured Parties indemnified without protest
or demur for any actual direct (and not indirect or consequential)expenses, costs, losses,
claims, actions, damages arising out of or in connection with any inaccuracy or breach
of any representation or warranty contained in this Clause 16.3 (Tax Indemnity) or non-
receipt of any no-objection certificate from the Assessing Officer under Section 281 of
the Income Tax Act, 1961 which has an adverse impact on the Secured Assets, or by
virtue of any notice being enforced against the Company rendering the Company
incapable of making any payment to the Secured Parties. Provided however, the terms
of this paragraph (e) of Clause 16.3 (Tax Indemnity) shall not apply against any actions,
proceedings, claims, demands, judgments, costs, charges, liabilities and expenses
incurred by any Secured Party arising directly from, and solely on account of its own
gross negligence, wilful misconduct, fraud or illegal act and the Company shall not be
liable on any theory of liability for any consequential, indirect or punitive damages
under this Clause 16.3 (Tax Indemnity) or under any provision of this Deed.
16.4 FATCA Deduction
(a) Each Party may make any FATCA Deduction it is required to make by FATCA, and
any payment required in connection with that FATCA Deduction, and no Party shall
be required to increase any payment in respect of which it makes such a FATCA
Deduction or otherwise compensate the recipient of the payment for that FATCA
Deduction.
(b) Each Party shall promptly, upon becoming aware that it must make a FATCA
Deduction (or that there is any change in the rate or the basis of such FATCA
Deduction), and in any case at least 3 (three) Business Days prior to making a FATCA
Deduction, notify the Party to whom it is making the payment and, on or prior to the
day on which it notifies that Party in addition, shall also notify the Company, the
Trustee and the other Secured Parties.
16.5 Indirect Tax
(a) All consideration expressed to be payable under a Transaction Document by the
Company to the Secured Party shall be deemed to be exclusive of any Indirect Tax.
(b) Where a Transaction Document requires the Company to reimburse a Secured Party for
any costs or expenses, the Company shall also at the same time pay and indemnify the
Secured Party, without protest or demur against any Indirect Tax incurred by such
Secured Party in respect of the costs or expenses to the extent the Secured Party
reasonably determines that it is not entitled to credit or repayment in respect of the
Indirect Tax.
17. NOTICES
17.1 Communications in Writing
Any communication to be made under or in connection with the Transaction Documents shall
be made in writing and, unless otherwise stated, may be made by fax or letter or, under Clause
17.6 (Electronic Communication), by email.
17.2 Addresses
The address and fax number and (if applicable) email address (and the department or officer, if
any, for whose attention the communication is to be made) of each Party for any communication
or document to be made or delivered under or in connection with the Transaction Documents
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is:
(a) in the case of the Company, that identified with its name below; and
(b) in case of the Trustee, that identified with its name below.
17.3 Delivery
(a) Any communication or document made or delivered by one person to another under or
in connection with the Transaction Documents will only be effective, if sent:
(i) by way of fax, when received in legible form; or
(ii) by way of letter, when it has been left at the relevant address or 2 (two) Business
Days after being deposited in the post postage prepaid in an envelope addressed to
it at that address; or
(iii) by way of email, if it complies with the rules set out in Clause 17.6 (Electronic
Communication),
and, if a particular department or officer is specified as part of its address details
provided under Clause 17.2 (Addresses), if addressed to that department or officer.
(b) Any communication or document to be made or delivered to the Trustee, will be
effective only when actually received by the Trustee (or any substitute department or
officer as the Trustee shall specify for this purpose).
(c) Any communication or document which becomes effective, in accordance with Clause
17.3 (a) (Delivery) and 17.3 (b) (Delivery) above, after 5:00 (five) p.m. in the place of
receipt shall be deemed only to become effective on the following day.
17.4 Notification of Address and Fax Number
Promptly upon receipt of notification of an address and fax number or change of address or fax
number pursuant to Clause 17.2 (Addresses) or changing its own address or fax number, a Party
shall notify the other Party.
17.5 English Language
(a) Any notice given under or in connection with any Transaction Document must be in
English.
(b) All other documents provided under or in connection with any Transaction Document
must be:
(i) in English; or
(ii) if not in English, and if so required by the Trustee, accompanied by a certified
English translation and, in this case, the English translation will prevail unless
the document is a constitutional, statutory or other official document.
17.6 Electronic Communication
(a) Any communication to be made between the Parties under or in connection with the
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Transaction Documents may be made by electronic mail or other electronic means, if
the Parties:
(i) agree that, unless and until notified to the contrary, this is to be an accepted
form of communication;
(ii) notify each other in writing of their electronic mail address and/or any other
information required to enable the sending and receipt of information by that
means; and
(iii) notify each other of any change to their address or any other such information
supplied by them.
(b) When a Party includes an email address as part of the “administration details” it
provides to the other Party from time to time in connection with the Transaction
Documents, such Party shall be deemed to have agreed to the receipt of
communications from the other Party by electronic mail to such address.
(c) Any electronic communication made between the Parties shall be effective only when
actually received in readable form and, in the case of any electronic communication
made by the Trustee only, if it is addressed in such a manner as the recipient shall
specify for this purpose.
(d) A Party shall notify the affected other Party promptly upon becoming aware that its
electronic mail system or other electronic means of communication cannot be used due
to technical failure (if such failure is likely to last for more than 24 (twenty four) hours).
Until that Party has notified the other affected Party that the failure has been remedied,
all notices between those parties shall be sent by fax or letter in accordance with this
Clause 17 (Notices).
18. DISCLOSURE
18.1 Disclosure of Information
(a) To the extent such information does not constitute Unpublished Price Sensitive
Information, the Secured Parties may deliver copies of the Transaction Documents
and/or disclose any information received by them under or pursuant to any Transaction
Document and any other information about any Obligor as the Secured Parties shall
consider appropriate in accordance with Applicable Laws to:
(i) any Affiliate of such Secured Party (together with such Secured Party, the
“Permitted Parties”);
(ii) professional advisers, auditors, insurers, insurance brokers and service
providers of a Permitted Party on a need to know basis who are under a duty of
confidentiality to a Permitted Party;
(iii) whom information is required to be disclosed by any court or tribunal of
competent jurisdiction or any governmental or regulatory authority or similar
body, or pursuant to any Applicable Law or regulation (including, without
limitation, any information utility);
(iv) any hedge counterparty or any actual or potential participant, assignee or other
transferee in relation to a Secured Party’s rights and/or obligations under any
agreement (or any of its agents or professional advisers) on a need to know
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basis;
(v) any rating agency or direct or indirect provider of credit protection to a
Permitted Party (or its brokers);
(vi) any actual or potential sub-participant (of its obligations, economic interest,
synthetic transfer or other interest under any Transaction Document or the
Debentures) in relation to any of that Permitted Party’s rights and/or obligations
under any agreement (or any agent or adviser of any of the foregoing);
(vii) any actual or potential purchaser or transferee of the Debentures;
(viii) any person for the purpose of giving effect to the transactions as contemplated
herein (including, without limitation, such information as is requested or
required by agent, correspondent, intermediary or beneficiary banks for the
purpose of effecting payment or transfers of funds) who are under a duty of
confidentiality to a Permitted Party;
(ix) any host server and storage provider of the Permitted Party in any jurisdiction
for the purpose of processing transactions and storing statements of accounts,
advices, transaction records and other documents, data or records on which the
Company’s name or other particulars appear who are bound by a duty of
confidentiality to the Permitted Party;
(x) any court or tribunal or regulatory, supervisory, governmental or quasi-
governmental authority with jurisdiction over the Permitted Parties, or any
party as required by law, regulation or directive (including, without limitation,
any information utility);
(A) if required to do so under any Applicable Law or regulation (including,
but not limited to any regulation applicable for the prevention of
money laundering and/or countering the financing of terrorism);
(B) to any Obligor.
(b) For the purpose of this Clause 18 (Disclosure) a "person" includes any individual, firm,
company, corporation, government, state or agency of a state or any association, trust,
joint venture, consortium, partnership or other entity (whether or not having separate
legal personality).
18.2 Regulatory Disclosure
(a) The Company agrees and gives consent to the disclosure by any Secured Party of all or
any:
(i) information and data relating to the Company;
(ii) the information or data relating to the Debentures or the Debt and the Company’s
obligations in under the Transaction Documents; and
(iii) default, if any, committed by the Company in discharge of any obligation under
the Transaction Documents,
as the Secured Party may deem appropriate and necessary, to disclose and furnish to
CIBIL, any information utility formed under Applicable Law and any other agency
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authorized in this behalf by the RBI or any other Governmental Authority.
(b) The Company further declares that the information, data and documents (including
faxed copies and by electronic means) furnished by the Company to any Debenture
Holders or the Trustee or any of its consultants and advisors is/shall be true, correct,
complete and the copies conform in all respects to the originals and further undertakes
and declares that:
(i) CIBIL, SEBI, RBI, any information utility formed under Applicable Law and
any other agency so authorized may use, process the said information and data
disclosed by any Secured Party in the manner as deemed fit by them; and
(ii) CIBIL, any information utility formed under Applicable Law and any other
agency so authorized may furnish for consideration, the processed information
and data or products thereof prepared by them to banks/financial institutions and
other credit grantors or registered users, as may be specified by the RBI in this
behalf.
(c) Upon the occurrence of any Event of Default, any Secured Party may disclose the name
of the Obligors and the directors of the Company as defaulters to the RBI, CIBIL, any
credit information registered with the RBI any information utility formed under
Applicable Law, or any other credit information bureau. The Company acknowledges
and also hereby provides its consent to the Secured Parties, RBI, CIBIL or any other
credit information bureau to publish its name and the names of its directors as defaulters
in such manner and through such medium as the Secured Parties, RBI, CIBIL or any
other credit information bureau may in their absolute discretion think fit.
18.3 Other Conditions
(a) This Clause 18 (Disclosure) shall not be deemed to constitute, an express or implied
agreement by the Secured Parties with the Company for a higher degree of
confidentiality than that prescribed by Applicable Law, if any.
(b) This Clause 18 (Disclosure) supersedes any previous confidentiality undertaking given
by a Secured Party in connection with the Debentures.
19. GOVERNING LAW AND JURISDICTION
19.1 Governing law
This Deed shall be governed by Indian law.
19.2 Jurisdiction
(a) The courts and tribunals of New Delhi shall have exclusive jurisdiction to settle any
dispute arising out of or in connection with this Deed (including a dispute regarding the
existence, validity or termination of this Deed) (a “Dispute”).
(b) The Company agrees that the courts and tribunals of New Delhi
(c)
(d) are appropriate and convenient courts and tribunals to settle Disputes and accordingly
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the Company shall not argue to the contrary.
(e) This Clause 19.2 (Jurisdiction) is for the benefit of the Secured Parties only. As a result,
the Secured Parties shall not be prevented from taking proceedings relating to a Dispute
in any other courts and tribunals with jurisdiction. To the extent allowed by Applicable
Law, the Secured Parties may take concurrent proceedings in any number of
jurisdictions.
(f) For the avoidance of doubt, the Secured Parties shall be entitled to enforce their rights
under the Transaction Documents including, their rights in relation to the Secured
Assets and to seek any and all remedies under the Applicable Law prevailing in India
from time to time including, without limitation, the remedies under the SARFAESI
Act, 2002.
19.3 Waiver of Immunity
The Company waives generally all immunity it or its assets or revenues may otherwise have in
any jurisdiction, including immunity in respect of:
(a) the giving of any relief by way of injunction or order for specific performance or for
the recovery of assets or revenues; and
(b) the issue of any process against its assets or revenues for the enforcement of a judgment
or, in an action in rem, for the arrest, detention or sale of any of its assets and revenues.
19.4 Waiver of Consequential Damages
In no event shall the Secured Parties or any of their representatives be liable on any theory of
liability for any special, indirect, consequential or punitive damages and the Company hereby
waives, releases and agrees not to sue upon any such claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favour.
20. LIABILITY TO SECURED PARTIES FOR DEFICIENCY
The Company shall remain liable to the Secured Parties for any deficiency occurring, arising or
existing under the Transaction Documents.
21. MISCELLANEOUS
21.1 Amendments
(a) Amendments
Subject to paragraphs (b), (c) and (d) of this Clause 21.1 (Amendments) below, this
Deed may be amended only by an instrument in writing signed by duly authorised
representatives of the Company and the Trustee (acting on Approved Instructions).
(b) Critical Majority Resolution Items
An amendment or waiver that has the effect of changing or any action which relates to
(each of the items specified in Clauses 21.1 (b) (i) to 21.1 (b) (vi) (Critical Majority
Resolution Items) below will be referred to individually as a “Critical Majority
Resolution Item” and collectively, as the “Critical Majority Resolution Items”):
(i) any change in or addition to the Obligors (excluding such change that is already
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permitted in the Transaction Documents);
(ii) the rate of Interest;
(iii) the release of Security Interest other than the release or modification of the terms
of the Corporate Guarantee;
(iv) extension of the Scheduled Redemption Date and any Interest Payment Date;
(v) change, waiver of, or any modification to the Redemption Premium;
(vi) the provisions of this Clause 21.1 (b) (Critical Majority Resolution Items),
shall not be made without the prior written consent of the Debenture Holders pursuant
to the Critical Majority Resolution.
(c) Super Majority Resolution Items
An amendment or waiver that has the effect of changing or any action which relates to
(each of the items specified in Clauses 21.1 (c) (i) to 21.1 (c) (v) (Super Majority
Resolution Items) below will be referred to individually as a “Super Majority
Resolution Item” and collectively, as the “Super Majority Resolution Items”):
(i) amendment to the Transaction Documents;
(ii) removal of the Trustee;
(iii) exoneration of liability of the Trustee
(iv) appointment of a new debenture trustee; and/or
(v) the provisions of this Clause 21.1 (c) (Super Majority Resolution Items),
shall not be made without the prior written consent of the Debenture Holders pursuant
to a Super Majority Resolution.
(d) Majority Resolution Items
An amendment or waiver that has the effect of changing or any action which relates to
(each of the items specified in Clauses 21.1 (d) (i) to 21.1 (d) (iv) (Majority Resolution
Items) below will be referred to individually as a “Majority Resolution Item” and
collectively, as the “Majority Resolution Items”):
(i) acceleration of the Debentures upon the occurrence of an Event of Default or on
an Early Redemption Date, as the case may be;
(ii) initiation of any process with respect to the commencement of any restructuring,
resolution and/or any insolvency process with respect to the Obligors in
accordance with Applicable Laws;
(iii) execution of amendments, modifications, supplements, waivers and any other
documents with respect to the Transaction Documents; and
(iv) any other matter save and except the Critical Majority Resolution Items and the
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Super Majority Resolution Items,
(v) shall not be made without the prior written consent of the Debenture Holders
pursuant to a Majority Resolution.
21.2 Further Assurances
The Company shall, and shall procure that each other Obligor shall, at its own cost and expense,
promptly upon receiving a request from the Trustee:
(a) execute such further writings and take all such further actions as may be necessary for
creating the Security Interest over the Secured Assets or over any assets provided in
lieu thereof;
(b) execute all transfers, conveyances, assignments, assurances and other instruments of
security whatsoever and give all notices, orders, instructions and directions whatsoever
which the Trustee may reasonably or by normal practice or by Applicable Law require,
in relation to the Secured Assets or in relation to the creation, preservation, perfection
or enforcement of Transaction Security under the Security Documents;
(c) provide all information as may be required by the Trustee for making all requisite
filings in relation to the Security Interest created under the Deed of Hypothecation with
the Central Registry set up under The Security Interest (Enforcement) Rules, 2002;
(d) otherwise do all things that the Trustee may, or shall on receipt of Approved
Instructions, specify for the purpose of complying with any obligations under any
Transaction Document.
21.3 Successors and Assigns
The Company shall not assign or transfer all or any of its rights or obligations under this Deed
except with the prior written consent of the Trustee. The Trustee shall (subject to written
consent of the Debenture Holders pursuant to a Majority Resolution) be entitled to freely assign
its rights under this Deed to any person without the prior consent of the Company.
21.4 Effectiveness and Survival
(a) This Deed shall be effective on and from the date first hereinabove written and shall be
in force till the Final Settlement Date.
(b) The provisions of Clause 15 (Indemnity), Clause 16.3 (Tax Indemnity), Clause 17
(Notices), Clause 19 (Governing Law and Jurisdiction), to the extent relevant or
applicable, shall survive the termination of this Deed.
21.5 Waivers
(a) No implied waiver or impairment
No delay or omission of the Trustee in exercising any right, power or remedy accruing
to it upon any default hereunder shall impair any such right power or remedy or be
construed to be a waiver thereof or any acquiescence in such default, nor shall the action
or inaction of the Trustee in respect of any default or any acquiescence by it in any
default affect or impair any right, power or remedy of the Trustee in respect of any
other defaults nor shall any single or partial exercise of any such right, power or remedy
preclude any further exercise thereof or the exercise of any other right, power or
remedy.
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(b) Express waiver
A waiver or consent granted by the Trustee, acting on Approved Instructions, under this
Deed will be effective only if given in writing (after receiving the Approved
Instructions) and only in the instance and for the purpose for which it is given.
(c) Limitation on rights of others
Nothing in this Deed, whether express or implied, shall be construed to give any Person
other than the Trustee (acting on behalf of the Debenture Holders) or any Debenture
Holder any legal or equitable right, remedy or claim under or in respect of this Deed.
Except as expressly provided in this Deed, any covenants, conditions or provisions
contained herein or in the Security Documents are and shall be construed to be for the
sole and exclusive benefit of the Debenture Holders and the Trustee.
21.6 Set-off
Subject to Applicable Law, until such time as the Debt remain outstanding, in addition to all
liens upon, and rights of set off against the monies, securities or other property of the Company
given to any Secured Party by Applicable Law, each Secured Party shall have a lien upon and
a right of set off against, all monies, securities and other property of the Company now or
hereafter in the possession of or on deposit with such Secured Party, whether held in a general
or special account or deposit, or for safe keeping or otherwise; and every such lien and right of
set off may be exercised without demand upon or notice to the Company, as the case may be.
No lien or right of set off shall be deemed to have been waived by any act or conduct on the
part of any Secured Party, or by any neglect to exercise such right of set off or to enforce such
lien, or by any delay in so doing and every rights of set off and lien shall continue in full force
and effect until such rights of set off or lien is specifically waived or released by an instrument
in writing executed by such Secured Party. In case any Debenture Holder exercises the right of
set–off under this Clause 21.6 (Set-Off), it shall share the proceeds received by it upon exercise
of such right with all the other Debenture Holders on a pari passu basis.
21.7 Severability
Every provision contained in this Deed shall be severable and distinct from every other
provision of this Deed and if at any time any one or more of such provisions is or becomes
invalid, illegal or unenforceable in any respect under any Applicable Law, the validity, legality
and enforceability of the remaining provisions hereof shall not be in any way be affected or
impaired thereby nor the validity or enforceability in other jurisdictions of that or any other
term or provision shall be in any way affected or impaired.
21.8 Counterparts
The Deed may be executed in any number of counterparts, each of which shall constitute an
original and all of which together shall constitute one and the same instrument. Delivery of an
executed counterpart of the signature page to this Deed by facsimile shall be as effective as
delivery of a manually executed counterpart of this Deed.
[Rest of the page is left blank intentionally]
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SCHEDULE 1: TERMS AND CONDITIONS
1. STATUS AND PARI PASSU RANKING
1.1. The Debentures constitute direct, unconditional, senior, unsubordinated and secured obligations
of the Company and shall at all times rank pari passu inter se without any preference or priority
of one over the other or others of them.
1.2. The Debentures issued under this Deed are ‘secured debentures’ for the purposes of the
Companies Act, read with the Companies (Share Capital and Debentures Rules, 2014).
1.3. The Debentures shall at all times rank pari passu with all other present and future direct,
unconditional, unsubordinated and unsecured obligations of the Company (save for such
exceptions as may be provided by mandatory provisions of Applicable Law).
2. REDEMPTION
2.1 Final Redemption
Unless redeemed earlier in accordance with this Deed, the Company shall mandatorily redeem
all the outstanding Debentures in full, and shall pay the Scheduled Redemption Amount on the
Scheduled Redemption Date.
2.2 Redemption upon occurrence of an Event of Default
Notwithstanding anything contained to the contrary contained in this Deed, the Debentures shall
be redeemable at the option of the Trustee at any time prior to the expiry of the term of the
Debentures upon the occurrence of an Event of Default. Upon the occurrence of an Event of
Default, the Company shall redeem all Debentures and discharge all Debt including all accrued
but unpaid Default Interest, Redemption Premium, costs and expenses, as determined by each
such Debenture Holder in accordance with the Transaction Documents.
2.3 Partial Voluntary Redemption
(a) The Company shall have the right but not the obligation to redeem the Debentures in the
following manner upon issuing a prior written notice of not less than 10 (ten) days to the
Secured Parties (“Partial Voluntary Redemption Notice”) from the date of proposed
redemption:
(i) Redemption of 10% (ten per cent.) of the Nominal Value of the Debentures
on the Partial Voluntary Redemption Date with payment of the Partial
Voluntary Redemption Amount; and
(ii) Redemption of all outstanding Debentures on the date falling on the date
which is 36 (thirty six) months from the Pay In Date with payment of:
(A) the Full Voluntary Redemption Amount (A) if 10% (ten per cent.) of
the Nominal Value of the Debentures have been redeemed pursuant to
paragraph (a)(i) above in accordance with this Deed,
(B) the Full Voluntary Redemption Amount (B) if 10% (ten per cent.) of
the Nominal Value of the Debentures have not been redeemed
pursuant to paragraph (a)(i) above in accordance with this Deed,
wherein the above event is referred to as “Partial Voluntary Redemption Event”.
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(b) The Partial Voluntary Redemption Notice shall be irrevocable.
2.4 Other Voluntary Redemption
The Company shall have the right but not the obligation to redeem the Debentures, in part or
full, as may be acceptable to the Trustee after issuing a prior written notice for no less than 10
(ten) days to the Secured Parties (“Voluntary Redemption Notice”), upon the occurrence of
any of the following Voluntary Redemption Events::
(a) the failure of the Parties to arrive at a consensus on the disputed portion of the Response
within the Resolution Period, and for a period of 15 (fifteen) days from the expiry of
the Resolution Period in accordance with Clause 7.6 (h) (Testing) of this Deed,
(“Specified Voluntary Redemption Event”) upon the payment of such Voluntary
Redemption Amounts that shall not exceed the amount required to reduce the Debt such
that the Security Cover Ratio is equal to the Required Security Cover Ratio (as more
particularly set out in the Voluntary Redemption Notice); and/or
(b) any early redemption of the Debentures as may be approved by the Trustee subject to
Applicable Laws, (“Permitted Voluntary Redemption Event”) upon payment of the
relevant Voluntary Redemption Amount as set out in the Voluntary Redemption
Notice.
2.5 Specified Early Redemption
(a) Without prejudice to anything contained herein, the Company shall have the obligation,
if required by the Debenture Holder, to redeem all outstanding Debentures, if, at any
time, it becomes unlawful, in the relevant jurisdiction for any Debenture Holder to hold
the Debentures (“Specified Early Redemption Event”), upon payment of the
Specified Early Redemption Amount.
(b) The Trustee, upon the occurrence of a Specified Early Redemption Event set out in (a)
above, shall, if so required by the relevant Debenture Holder, provide the Company
with a notice (“Specified Early Redemption Notice”) setting out the following
information:
(i) the total number of Debentures outstanding and sought to be redeemed by
such Debenture Holder on the date as specified by the Debenture Holder
which shall be no later than 5 (five) Business Days from the date of the
Specified Early Redemption Notice (“Specified Early Redemption Date”);
(ii) the relevant Specified Early Redemption Amount, which shall include (i)
applicable Redemption Premium (Pro Rata) (and not Redemption Premium
(Make Whole)) if such unlawfulness is caused due to gross negligence or
wilful misconduct of the relevant Debenture Holder; or (ii) applicable
Redemption Premium in all other cases.
(c) The Specified Early Redemption Notice shall be binding on the Company.
For avoidance of doubt, it is clarified that the obligation of the Company to redeem the
Debentures and payment of Specified Early Redemption Amount pursuant to above shall be in
relation to the relevant Debenture Holder for whom it has becomes unlawful to hold the
Debentures, in the relevant jurisdiction in accordance with the above clause and who has issued
a notice in accordance with the above.
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2.6 Others
(a) Any part redemption pursuant to paragraph 2.3 (Partial Voluntary Redemption) and 2.4
(Other Voluntary Redemption) of this Schedule 1 (Terms and Conditions) shall be
made in the reverse chronological order of the redemption instalments and shall be
made on a pro-rata basis to all the Debenture Holders.
(b) Any Debentures redeemed pursuant to this paragraph 2 (Redemption) of this Schedule
1 (Terms and Conditions) shall not be reissued by the Company.
(c) The Company shall promptly obtain all Authorisations, if required required under
Applicable Law in order to effect any redemption under this Deed.
2.7 Redemption Mechanics
(a) No action is required on the part of any Debenture Holder(s) at the time of redemption
of the Debentures. On the relevant Redemption Date, the relevant amounts shall be paid
by the Company, in accordance with paragraph 6 (Payments) of this Schedule 1 (Terms
and Conditions), to those Debenture Holders whose names appear on the Register of
Beneficial Owners as on the Record Date and, for these purposes, a statement issued
by the Depository shall be conclusive evidence in respect thereof.
(b) All Debentures that are redeemed in full on any Redemption Date will forthwith be
cancelled and extinguished through appropriate corporate action. Any partial
redemption of a Debenture on any Redemption Date will to that extent be a good
discharge to the Debenture Holder in respect of the amounts payable by the Company.
3. INTEREST
3.1 Interest payments
(a) The Company shall pay the Interest to the Debenture Holders at the Interest Rate on
each Interest Payment Date.
(b) At the time of redemption of the Debentures on a Redemption Date, the Company shall
pay the Debenture Holders the unpaid Interest on such Debentures accrued up to such
Redemption Date, without requiring any notice or intimation from any Debenture
Holder or the Trustee in this regard.
3.2 Interest on Application Money
The Company shall pay Interest on the Subscription Amount received by it till the applicable
Pay In Date. If the Pay In Date is the same day as the Deemed Date of Allotment, then no
additional Interest shall be payable by the Company on the Subscription Amount.
4. REDEMPTION PREMIUM
The Company shall pay Redemption Premium in relation to the Debentures in accordance with
the terms of this Deed.
5. TAX GROSS UP
The provisions of Clause 16 (Tax Gross Up) of this Deed shall be applicable in terms of tax
gross up.
6. PAYMENTS
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(a) Any payments to be made to the Debenture Holders, including payment of Interest and
payment upon redemption shall be made by the Company using the services of
electronic clearing services (ECS), real time gross settlement (RTGS), direct credit or
national electronic fund transfer (NEFT) into the Debenture Holders Account(s);
provided however, that where direct credit, ECS, RTGS, or NEFT service is not
available, such payment shall be made by the Company by way of bank draft or demand
drafts.
(b) Payment of the principal, all Interest and other monies will be made to the sole holder
of any Debenture and in case of joint holders to the one whose name stands first in
Register of Beneficial Owners.
(c) The Company hereby agrees and covenants with the Trustee that it shall, pay to the
Debenture Holders (on a pro rata basis), a monitoring fee of INR 50,00,000 (Rupees
fifty lakhs only) per month payable on the date falling on the expiry of each Financial
Quarter.
7. SECURITY
The Debt shall be secured by the Transaction Security created or to be created under or pursuant
to the Security Documents or evidenced by the Security Documents.
8. ASSET COVER
The Company shall during the currency of the Debentures maintain an asset cover of at least
100% (one hundred per cent) as required under the Debenture Regulations.
9. TRANSFER OF DEBENTURES
(a) Transfer of Debentures in dematerialised form would be in accordance with the
rules/procedures as prescribed by the Depository and the relevant rules and regulations
of SEBI. The Debentures (or any Interest therein) shall be freely transferable and / or
transmitted in accordance with the provisions of Applicable Law including the
Depositories Act, 1996 and the regulations made thereunder and the rules, regulations
and byelaws of the Depository.
(b) The Debenture Holder(s) shall also have the right to novate, transfer or assign its rights
and/or the benefits under the Transaction Documents and upon such
transfer/transmission of the Debentures without the prior written notice to the Company
and at the Debenture Holders’ own cost and expense. For the avoidance of doubt, it is
clarified that the Company shall not be liable to bear any cost or expense (including
stamp duty on transfer instrument, if any) in relation to the transfer of Debentures or
assignment of any rights under the Transaction Documents.
10. BUSINESS DAY CONVENTION
(a) Any Interest, commission or fee accruing under a Transaction Document will accrue
from day to day and is calculated on the basis of 365 (three hundred and sixty five)
days’ year or where the year is a leap year a 366 (three hundred and sixty six) days’
year, and the actual number of days elapsed.
(b) Any payment (including any payment of Interest, Default Interest or Redemption
Premium) which is due to be made on a day that is not a Business Day shall, subject to
Applicable Law, be made on the preceding Business Day.
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SCHEDULE 2: PROVISIONS FOR MEETINGS OF DEBENTURE HOLDERS
The following provisions shall apply to a Meeting of the Debenture Holders:
1. A Meeting of the Debenture Holders may be convened at any time by the Trustee or the
Company, and shall by convened by the Trustee upon receipt of written request of Debenture
Holders representing not less than 1/10th in value of the nominal amount of the Debentures for
the time being outstanding.
2. The Trustee shall convene a meeting of the Debenture Holders on the happening of any event
which constitutes an Event of Default or the occurrence of any event which in the opinion of
the Trustee affects the interests of the Debenture Holders.
3. A Meeting of the Debenture Holders shall be held at such place in the city where the registered
office of the Company is situated or at such other place as the Trustee shall determine.
4. A Meeting of the Debenture Holders may be called by giving not less than 5 (five) days’ notice
in writing.
5. A meeting may be called after giving shorter notice than that specified in paragraph 4 above or
a meeting may be held by way of passing written resolutions by circulation, if consent is
accorded thereto by the Debenture Holders pursuant to a Majority Resolution.
6. Every notice of a meeting shall specify the place and day and hour of the meeting and shall
contain a statement of the business to be transacted thereat.
7. Notice of every meeting shall be given to:
7.1 every Debenture Holder in the manner provided in the Deed;
7.2 the persons entitled to a Debenture in consequence of the death or insolvency of a
Debenture Holder, addressed to them by name or by the title of ‘representatives of the
deceased’, or ‘assignees of the insolvent’ or by any like description at the address, if
any, in India supplied for the purpose by the persons claiming to be so entitled or until
such an address has been so supplied, by giving the notice in any manner in which it
might have been given if the death or insolvency had not occurred;
7.3 the auditor or auditors for the time being of the Company (wherever applicable) in the
manner authorized by the provisions of the Companies Act (for notice to members of
the company); and
7.4 the Trustee when the meeting is convened by the Company and to the Company when
the meeting is convened by the Trustee.
Provided that where the notice of a meeting is given by advertising the same in a newspaper
circulated in the neighbourhood of the registered office of the Company under the Companies
Act, the statement of material facts referred to in the Companies Act need not be annexed to the
notice as required by that section but it shall be mentioned in the advertisement that the
statement has been forwarded to the Debenture Holders.
8. The accidental omission to give notice to, or the non-receipt of notice by, any Debenture Holder
or other person to whom it should be given shall not invalidate the proceedings at the meeting.
9. There shall be annexed to the notice of the meeting an explanatory statement setting out all
material facts concerning each such item of business, including in particular the nature of the
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concern or interest, if any, therein of every director and the manager, if any, of the Company,
provided that where any item of special business as aforesaid to be transacted at a Meeting of
the Debenture Holders relates to, or affects, any other company, the extent of shareholding
interest in that other company of every director, and the managing director, if any, of the first
mentioned company shall also be set out in the statement if the extent of such shareholding
interest is not less than 20% (twenty per cent) of the paid up share capital of that other company.
10. Where any item of business consists of according of approval to any document by the meeting,
the time and place where the document can be inspected shall be specified in the statement
aforesaid.
11. Debentures Holders that represent 51% (fifty one percent) of the nominal value of Debentures
then outstanding Debentures shall constitute quorum for the Meeting of the Debenture Holders.
Notwithstanding anything to the contrary, it is clarified that for the purpose of passage or
approval of any Critical Majority Resolution, Super Majority Resolution or Majority
Resolution, prior written instructions of the relevant number of Debenture Holders holding the
outstanding Debentures shall be required (and not only on the basis of the Debenture Holders
that are present in a meeting).
12. If, within half an hour from the time appointed for holding a Meeting of the Debenture Holders,
a quorum is not present, the meeting, if called upon the requisition of the Debenture Holders
shall stand dissolved but in any other case the meeting shall stand adjourned to the same day in
the next week, at the same time and place, or to such other day and at such other time and place
as the Trustee may determine and if at the adjourned meeting also a quorum is not present
within half an hour from the time appointed for the holding of the meeting, the Debenture
Holders present shall be a quorum.
13. The nominee of the Trustee shall be the Chairman of the meeting and in his absence the
Debenture Holders personally present at the meeting shall elect one of themselves to be the
Chairman thereof on a show of hands or by way of a poll. It is clarified that any poll for the
purpose of the Debentures shall be undertaken by way of voting or written instructions wherein
each Debenture shall carry 1 (one) vote.
14. If a poll is demanded on the election of the Chairman, it shall be taken forthwith in accordance
with the relevant provisions of the Companies Act and the Chairman elected on a show of hands
shall exercise all the powers of the Chairman under the said provisions.
15. If some other person is elected Chairman as a result of the poll, he shall be Chairman for the
rest of the meeting.
16. The Trustee and the directors of the Company and their respective solicitors may attend any
meeting but shall not be entitled as such to vote thereat.
17. At any meeting, a resolution put to the vote of the meeting shall be decided by way of a poll.
18. A poll demanded on a question of adjournment shall be taken forthwith.
19. A poll demanded on any other question (not being a question relating to the election of a
Chairman) shall be taken at such time not being later than 48 (forty eight) hours from the time
when the demand was made, as the Chairman may direct.
20. At every such meeting each Debenture Holder shall be entitled to 1 (one) vote in respect of
every Debenture of which he is a holder in respect of which he is entitled to vote.
21. Any Debenture Holder entitled to attend and vote at the meeting shall be entitled to appoint
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another person (whether a Debenture Holder or not) as his proxy to attend and vote instead of
himself.
22. In every notice calling the meeting there shall appear with reasonable prominence a statement
that a Debenture Holder entitled to attend and vote is entitled to appoint one or more proxies,
to attend and vote instead of himself, and that a proxy need not be a Debenture Holder.
23. The instrument appointing a proxy and the power of attorney (if any) under which it is signed
or a notarily certified copy of the power of attorney shall be deposited at the registered office
of the Company not less than 48 (forty-eight) hours before the time for holding the meeting or
adjourned meeting at which the person named in the instrument proposes to vote or in case of
a poll, not less than 24 (twenty-four) hours before the time appointed for the taking of the poll
and in default, the instrument of proxy shall not be treated as valid.
24. The instrument appointing a proxy shall:
(a) be in writing; and
(b) be signed by the person appointing or his attorney duly authorised in writing, or if the
appointer is a body corporate, be under its seal or be signed by an officer or an attorney
duly authorised by it.
25. The instrument appointing a proxy shall be in any of the forms set out in the Companies Act
and related rules, and shall not be questioned on the ground that it fails to comply with any
special requirements specified for such instruments by the articles of association of the
Company.
26. Every Debenture Holder entitled to vote at a Meeting of the Debenture Holders of the Company
on any resolution to be moved thereat shall be entitled during the period beginning 24 (twenty
four) hours before the time fixed for the commencement of the meeting and ending with the
conclusion of the meeting to inspect the proxies lodged, at any time during the business hours
of the Company, provided not less than 3 (three) days’ notice in writing of the intention so to
inspect is given to the Company.
27. A vote given in accordance with the terms of an instrument of proxy shall be valid
notwithstanding the previous death or insanity of the principal or the revocation of the proxy or
of the authority under which the proxy was executed or the transfer of the Debenture in respect
of which the proxy is given Provided that no intimation in writing of such death, insanity,
revocation or transfer shall have been received by the Company at its registered office before
the commencement of the meeting or adjourned meeting at which the proxy is used.
28. On a poll taken at any Meeting of the Debenture Holders, a Debenture Holder entitled to more
than 1 (one) vote or his proxy or other person entitled to vote for him, as the case may be, need
not if he votes, use all his votes or cast in the same way all the votes he uses.
29. When a poll is to be taken, the Chairman of the meeting shall appoint 2 (two) scrutinisers to
scrutinise the votes given on the poll and to report thereon to him.
30. The Chairman shall have power, at any time before the result of the poll is declared, to remove
scrutinisers from office and to fill vacancies in the office of scrutinisers arising from such
removal or from any other cause.
31. Of the 2 (two) scrutinisers appointed under this Schedule 2 (Provisions for Meetings of
Debenture Holders), 1 (one) shall always be a Debenture Holder (not being an officer or
employee of the Company) present at the meeting, provided such a Debenture Holder is
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available and willing to be appointed.
32. Subject to the provisions of the Companies Act, the Chairman of the meeting shall have power
to regulate the manner in which a poll shall be taken.
33. The result of the poll shall be deemed to be the decision of the meeting on the resolution on
which the poll was taken.
34. In the case of joint Debenture Holders, the vote of the senior who tenders a vote whether in
person or by proxy shall be accepted to the exclusion of the other joint holder or holders.
35. The Chairman of a Meeting of the Debenture Holders may, with the consent of the meeting,
adjourn the same from time to time and from place to place, but no business shall be transacted
at any adjourned meeting other than the business left unfinished at the meeting from which the
adjournment took place.
36. The demand of a poll shall not prevent the continuance of a meeting for the transaction of any
business other than the question on which a poll has been demanded.
37. The Chairman of any meeting shall be the sole judge of the validity of every vote tendered at
such meeting. The Chairman present at the taking of a poll shall be the sole judge of the validity
of every vote tendered at such poll.
38. A Meeting of the Debenture Holders shall, inter alia, have the following powers exercisable in
the manner hereinafter specified in paragraphs 41 to 44 hereof:
(a) Power to sanction any Critical Majority Resolution Items, by way of a Critical Majority
Resolution;
(b) Power to sanction any Super Majority Resolution Items, by way of a Super Majority
Resolution; and
(c) Anything which does not constitute Critical Majority Resolution Items or Super
Majority Resolution Items shall be exercisable by a resolution passed at a Meeting of
the Debenture Holders duly convened and held in accordance with provisions herein
contained and carried by a Majority Resolution.
For the purpose of paragraph 41 above, the aggregate Nominal Value of the Debentures held
by any Affiliate of a Debenture Holder shall be aggregated with the Nominal Value of the
Debentures held by the Debenture Holders for passing any Critical Majority Resolution, Super
Majority Resolution or Majority Resolution, as the case may be.
39. A resolution, passed at a general Meeting of the Debenture Holders duly convened and held in
accordance with these presents shall, be binding upon all the Debenture Holders, whether
present or not, at such meeting and each of the Debenture Holders shall be bound to give effect
thereto accordingly, and the passing of any such resolutions shall be conclusive evidence that
the circumstances justify the passing thereof, the intentions being that it shall rest with the
meeting to determine without appeal whether or not the circumstances justify the passing of
such resolution.
40. Minutes of all resolutions and proceedings at every such meeting as aforesaid shall be made
and duly entered into books from time to time provided for the purpose by the Trustee at the
expenses of the Company and any such minutes as aforesaid, if purported to be signed by the
Chairman of the meeting at which such resolutions were passed or proceedings held or by the
Chairman of the adjourned meeting shall be conclusive evidence of the matters therein
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contained. Until the contrary is proved, every such meeting in-respect of the proceedings of
which minutes have been made shall be deemed to have been duly held and convened and all
resolutions passed thereat or proceedings taken, to have been duly passed and taken.
41. Notwithstanding anything herein contained, it shall be competent for the Debenture Holders to
exercise the rights, powers and authorities of the Debenture Holders under this Deed by a letter
or letters signed by or on behalf of the holder or holders of the applicable nominal value of
Debentures then outstanding without convening a Meeting of the Debenture Holders as if such
letter or letters constituted a Critical Majority Resolution or a Majority Resolution, as the case
may be, passed at a meeting duly convened and held as aforesaid and shall have effect
accordingly.
42. The Debenture Holders holding the Company Group Debentures will not be entitled to vote at
any meeting of the Debenture Holders or issue of written instructions to the Debenture Trustee,
and all Company Group Debentures will be ignored for the purpose of determining whether a
Critical Majority Resolution, a Majority Resolution or a Super Majority Resolution has been
passed. Provided that this paragraph 45 shall not apply on any day on which the Company
Group Debentures are the only outstanding Debentures.
For the purpose of this paragraph 45, the term “Company Group Debentures” means any
Debentures held by the Group or any of their Affiliates.
43. Where a decision has been taken on any matter pursuant to a Critical Majority Resolution, a
Majority Resolution or an Super Majority Resolution, as applicable, such decision shall be
deemed to be the decision of all Debenture Holders and each Debenture Holder shall in all
circumstances (including without limitation in relation to an insolvency resolution process of
the Company under the IBC or any other similar Applicable Law) shall exercise their voting
right and provide instructions in accordance with such decision.
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SCHEDULE 3: COVENANTS AND UNDERTAKINGS
1. INFORMATION UNDERTAKINGS
1.1 Financial Statements
The Company shall supply to the Trustee:
(a) audited consolidated Financial Statements of the Company, each Financial Half Year
within 60 (sixty) days of the end of the Financial Half Year; and
(b) un-audited consolidated quarterly Financial Statements of the Company for each
Financial Quarter within 30 (thirty) days of the end of each Financial Quarter or the
date falling in the immediately succeeding Financial Quarter when such statements are
furnished to the board of directors of the Company for their adoption, whichever is
later.
1.2 Compliance Certificate
(a) The Company shall supply to the Trustee, along with financial statements submitted by
it in accordance with paragraph 1.1 (Financial Statements) of this Schedule 3
(Covenants and Undertakings) above for Financial Quarter ending on June 30 and
December 31, a Compliance Certificate setting out (in reasonable detail), computations
as to compliance with the relevant covenants set out in paragraph 2 (Financial
Covenants) of this Schedule 3 (Covenants and Undertakings) as at the date as at which
those financial statements were drawn up.
(b) The Company shall furnish to the Trustee, within 7 (seven) days from the end of each
calendar month, a detailed appropriation of cashflows statement generated by the MIS
and the relevant bank statements setting out the breakup cashflows arising from the
Receivables received by the Company from the Secured Trusts (including but not
limited to an itemized statement of amounts received on account of redemption of the
Pledged SRs, the Trust Fees, the upside premium, incentive fees, management fees and
all other Receivables) cash outflows including for payment of taxes, operating
expenses, new investments during the immediately preceding calendar month in the
format as set out in Schedule 16 (Format of Cashflow Statements) of this Deed.
1.3 Requirements as to Financial Statements
(a) Each set of financial statements (both annual and quarterly) delivered by the Company
pursuant to paragraph 1.1 (Financial Statements) of this Schedule 3 (Covenants and
Undertakings) shall be certified by the Company in accordance with the provisions of
the Companies Act as fairly representing its financial condition as at the date as at which
those financial statements were drawn up.
(b) The Company shall ensure that each set of the financial statements supplied under this
Deed gives (if audited) a true and fair view of, or (if unaudited) fairly represents, its
financial condition (consolidated or otherwise) as at the date on which those financial
statements were drawn up.
1.4 Audit report and access to auditors
If the Trustee wishes to discuss the financial position of the Company with the auditors or
accountants of the Company, the Trustee may notify the Company, stating the questions or
issues which the Trustee wishes to discuss with the auditors or accountants of the Company. In
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this event, the Company must procure that the auditors or accountants are authorised (at the
expense of the Company):
(a) to discuss the financial position of the Company with the Trustee on request from the
Trustee; and
(b) to disclose to the Trustee for the benefit of the Secured Parties any information which
the Trustee may reasonably request.
1.5 Meetings
The Company shall have regular meetings with the Trustee and Debenture Holders pursuant to
a Majority Resolution to discuss any performance related and other issues as required by any
Secured Party.
1.6 Information: Debenture Regulations
(a) The Company shall promptly supply or inform (as the case may be) to the Trustee for
the benefit of each Secured Party (in sufficient copies for all the Secured Parties, if the
Trustee so requests):
(i) all documents filed with any Governmental Authority or Stock Exchange in
connection with the Transaction Documents; and
(ii) any other information or document required to be provided by the Company
and the Debenture Holders in accordance with the Debenture Regulations.
(b) The Company shall submit to the Stock Exchange for dissemination, along with the
half yearly financial results, a half-yearly communication, counter signed by the
Trustee as required under the Applicable Laws.
(c) The Company shall submit a quarterly report, certified by an independently practicing
chartered accountant, to the Trustee containing the following particulars:
(i) the list of names and address of all Debenture Holders;
(ii) the details of interest due but unpaid and reasons for the same;
(iii) the number and nature of grievances received from the Debenture Holders and
resolved by the Company;
(iv) a statement that the assets of the Company or any Obligor available as security
are sufficient to discharge the claims of the Debenture Holders as and when the
same become due; and
(v) a statement showing the manner in which the monies have been utilized and
such other information reasonably requested by the Trustee.
1.7 Information: Miscellaneous
The Company shall, supply or inform (as the case may be) , to the Trustee for the benefit of
each Secured Party (in sufficient copies for all the Secured Parties, if the Trustee so requests)
the following:
(a) within 15 (fifteen) days from the Deemed Date of Allotment, the End Use Certificate;
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(b) promptly, all documents with respect to any notice of meeting, minutes, agenda and
such other documents which are dispatched by it generally to its shareholders or class,
if any or its creditors;
(c) promptly, any notice received by the Company in respect of payment of outstanding
taxes that are material in nature;
(d) promptly, such further information regarding the financial condition, business and
operations of the Company or its assets (including any transactions the Company enters
into and business integrity matters), as the Trustee may reasonably request;
(e) promptly, any event which has, or if adversely determined, has or is likely to have a
Material Adverse Effect, together with steps taken by the Company to cure the same;
(f) promptly, upon becoming aware of the breach by the Company of any covenants,
representations or warranties in the Transaction Documents including any change in
the factual position in relation to the subject matter thereto;
(g) promptly notify the Trustee, upon becoming aware of:
(i) any litigation, regulatory or administrative proceedings before any Authority or
arbitral body which has had or, if determined adversely, has or likely to have, a
Material Adverse Effect, notify the Trustee of that event specifying the nature of
that litigation or those proceedings and the steps it is taking or proposes to take
with respect thereto;
(ii) any litigation, administrative regulatory or criminal investigations or
proceedings or any freezing of assets by a governmental Authority in respect of
the Company or its Senior Management with regard to money laundering or
financing of terrorism;
(iii) any Event of Default and any steps the Company is taking, or proposes to take,
to remedy it;
(iv) any decision made by the Company or any Governmental Authority to initiate a
corporate insolvency process (by whatever name called) under the IBC or other
Applicable Laws in respect of the Company;
(v) upon receipt of any information, letter, communication or other document from
any creditor relating to a delay in payments due by the Company to such creditor
or any other document or other information of which the Company becomes
aware or has knowledge of in relation to initiation of a corporate insolvency
process (by whatever name called) by any creditor or an application made or
threatened in writing to be made by any financial creditor in relation thereto, and
(vi) any decision made by the Company to initiate a corporate insolvency process (by
whatever name called) or any discussions by the board of directors of the
Company in respect thereof,
in each case, by electronic mail of such communication or decision or discussions.
(h) promptly, of any material loss or damage, which the Company may suffer due to force
majeure circumstances or act of God against which the Company may not have insured
its properties;
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(i) promptly, copies of all notices of default, termination, or material claims or material
demands made against it or by it under any material contract to which it is a party and
notify the Trustee about any action or event pertaining to or having the effect of,
revocation, repudiation, denial or cancellation of any Authorisation for the conduct of
the business by the Company or a default or event of default (howsoever described)
under any agreement in connection with any Financial Indebtedness of the Company;
(j) promptly, any such change that is likely to result in a Change of Control;
(k) promptly, the details of any proceedings, which are current, threatened or pending,
which materially affects or affect the Debenture Trust Property;
(l) promptly, notice of any change in the authorised signatories to the Escrow Account,
signed by any director or company secretary of the Company, whose specimen
signature has previously been provided to the Trustee, accompanied (where relevant)
by a specimen signature of each new signatory;
(m) promptly upon the happening of any labour strikes, lockouts, shut-downs, fires or any
event likely to substantially affect the Company’s profits or business and the reasons
thereof;
(n) promptly, without any demur or protest, such signed documents and writings and at
such periodic intervals, as may be required by any Secured Party, acknowledging the
outstanding amounts under the Transaction Documents, for the purpose of Section 18
of the Limitation Act, 1963;
(o) promptly, provide any information and documents that may be reasonably required by
the Trustee or the Debenture Holders from time to time under any requirements
imposed by any Governmental Authority or as may be required under Applicable Law;
(p) whenever required by any Secured Party, promptly, full particulars of the Transaction
Security or any part thereof and shall furnish and verify all statements, reports, returns,
certificates and information from time to time and as required by any Secured Party and
furnish and execute all necessary documents to give effect to and perfect the
Transaction Security created under the Transaction Documents; and
(q) provide all information as required under Applicable Laws including: (i) updated list
of holders of the Debentures Holders within 3 (three) days from the Deemed Date of
Allotment; (ii) an updated list of Debenture Holders every 7th (seventh) day of the
succeeding month until the Final Settlement Date; and (iii) each Interest Payment Date
and the relevant Redemption Date on the date falling on the commencement of each
Financial Year.
1.8 Notification of Event of Default and Potential Event of Default
(a) The Company shall, and shall ensure that each other Obligor shall, notify the Trustee
of any Potential Event of Default or any Event of Default (and the steps, if any, being
taken to remedy it) promptly upon becoming aware of its occurrence.
(b) Promptly upon a request by the Trustee, the Company shall, and shall ensure that each
other Obligor shall, supply to the Trustee a certificate signed by it (if an Obligor is a
natural person), the chief financial officer or any authorised signatory of the Company
on its behalf (if such Obligor is a company) or its authorised signatory (if such Obligor
is a body corporate other than a company) certifying that no Potential Event of Default
or Event of Default is continuing (or if a Potential Event of Default or Event of Default
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is continuing, specifying the Potential Event of Default, the Event of Default and the
steps, if any, being taken to remedy it).
1.9 Know Your Customer Checks
The Company shall, and shall ensure that each other Obligor shall, promptly, upon the Trustee’s
request supply, or procure the supply of, such documentation and other evidence as is
reasonably requested by the Trustee (for itself or on behalf of any Debenture Holder (including
for any Debenture Holder on behalf of any prospective new Debenture Holder)) in order for the
Trustee, such Debenture Holder or any prospective new Debenture Holder to conduct and be
satisfied with the results of all necessary “know your customer”, or other similar procedures
under Applicable Law.
1.10 Senior Management
(a) The Company shall promptly notify the Trustee upon becoming aware that any person in
a Senior Management position within the Company or an Obligor:
(i) is named on a Sanctions List;
(ii) is prosecuted by any Governmental Authority for an offence which could on
conviction carry a term of imprisonment exceeding three years;
(iii) is convicted of a criminal offence involving fraud or theft or found to be in material
breach of a regulatory or fiduciary duty;
(b) a director of the Company will change.
1.11 Pledged SRs
The Company shall, at its own costs, promptly upon request from the Trustee and on each
Testing Date provide all information as may be reasonably required by the Trustee in relation
to the Pledged SRs including but not limited to:
(a) all account statements and other documents, in relation to the details of the proceeds
arising out of the Specified NCDs which have been utilised by the Trusts for the
acquisition of the Pledged SRs;
(b) all details in relation to the exposure of the Pledged SRs including all information in
relation to the counterparty, the credit concentration in relation to the underlying loan
receivables, credit information and MIS statements and FMV of the Pledged SRs; and
(c) the register of debenture holders maintained by the Company in relation to the Specified
NCDs including the amounts outstanding, amounts collected as on such date and the
holders of such Specified NCDs.
1.12 Security/Guarantee
The Company shall, on each Testing Date, supply to the Trustee, a certificate issued by the
authorized signatory confirming that the Transaction Security and the Corporate Guarantee
created/granted pursuant to the relevant Security Documents remains in full force and effect.
1.13 Rating
The Company shall promptly, upon the request of the Trustee, furnish the latest available rating
of the Pledged SRs and the Debentures by such accredited rating agency registered with the
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SEBI, as may be required by the Secured Parties.
1.14 Definition
In this paragraph 1 (Information Undertakings) of this Schedule 3 (Covenants and
Undertakings):
“promptly” means:
(a) in relation to obligations of the Company to provide any information or documents
(other than with respect to paragraphs 1.7(g) and 1.8 above), within 5 (five) Business
Days of:
(i) the occurrence of the relevant event; or
(ii) the Company becoming aware of such event,
whichever is earlier.
(b) in relation to obligations of the Company to provide any information or documents set
out in paragraphs 1.7 (g) and 1.8 above, within 3 (three) Business Days of:
(i) the occurrence of the relevant event; or
(ii) the Company becoming aware of such event,
whichever is earlier; and
(c) where the obligation of the Company is triggered only upon demand from a Secured
Party, within 3(three) Business Days of the demand by the relevant Secured Party.
2. FINANCIAL COVENANTS
2.1 Capital Adequacy
The Company shall not breach the capital adequacy ratio of 15% (fifteen per cent.) or such
other applicable capital adequacy norms prescribed under Applicable Laws until the redemption
of all Debentures.
2.2 Security Cover Ratio
The Company shall ensure that at all times the Security Cover Ratio shall be at least equal to
the Required Security Cover Ratio.
2.3 Debt to Total Debt Ratio
The Company shall ensure that the Debt shall, at all times until the Final Settlement Date, not
be less than 34.5% (thirty four decimal five per cent.) of the Total Debt of the Company on a
proforma basis, which for the removal of doubts, shall include all amounts payable in relation
to crystallised and undisputed Financial Indebtedness availed from the operational creditors and
guarantors of the Company).
3. GENERAL UNDERTAKINGS
3.1 Authorisations
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The Company shall, and shall procure that each Obligor shall, promptly obtain, comply with the
terms of and do all that is necessary to maintain in full force and effect (and supply certified
copies to the Trustee of) any Authorisation required to:
(a) enable it to perform its obligations under the Transaction Documents to which it is a
party; and
(b) ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction
of incorporation of any Transaction Document to which it is a party.
3.2 Compliance with laws
(a) The Company shall, and shall procure that each Obligor shall, comply in all material
respects with all laws to which it may be subject and all regulations applicable to it
other than as set out in paragraph (b) below.
(b) The Company shall, and shall procure that each Obligor shall, comply with all Anti-
Money Laundering Laws and Anti-Terrorism Financing Laws.
(c) The Company shall obtain and maintain the SCORES id and password in accordance
with Applicable Law including any regulations made by the Stock Exchange or SEBI.
(d) Without prejudice to the generality of sub-paragraph (a) above, the Company shall, at
all times, be in compliance with all provisions of the Companies Act, the Debenture
Trustee Regulations and the Debt Listing Regulations, the debt listing agreement
entered into with the Stock Exchange and each Information Memorandum.
(e) Notwithstanding anything contained in this Deed, the Company shall not provide any
information which would constitute Unpublished Price Sensitive Information in respect
of the Obligor to the Trustee or any Debenture Holder. For the avoidance of doubt, the
Company agrees and confirms that the information required to be provided under
Clause 1 of Schedule 3 (Covenants and Undertakings) other than: (A) paragraph 1.1.
(Financial Statements); (B) paragraph 1.4 (Audit report and access to reports); and (C)
paragraphs (d) and (j) of Clause 1.7 (Information: Miscellaneous), shall not, in each
case, constitute Unpublished Price Sensitive Information.
3.3 Taxation
(a) The Company shall, and shall procure that each Obligor shall, duly and punctually pay
and discharge all Taxes imposed upon it or its respective assets within the time period
allowed without incurring penalties unless and only to the extent that:
(i) such payment is being contested by it in good faith and in accordance with
relevant procedures;
(ii) adequate reserves are being maintained for those Taxes and the costs required to
contest them which have been disclosed in its latest financial statements
delivered to the Trustee under paragraph 1.1 (Financial Statements) of this
Schedule 3 (Covenants and Undertakings) as required under Applicable Laws;
and
(iii) such payment can be lawfully withheld and failure to pay those Taxes does not
have or is not reasonably likely to have a Material Adverse Effect in the
reasonable opinion of the Trustee acting on Approved Instructions.
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(b) If required by the Trustee, the Company shall, and shall procure that each Obligor shall,
promptly provide the evidence of payment of any Taxes to the Trustee.
(c) The Company shall not, and shall procure that no Obligor shall, be materially overdue
in the filing of any Tax returns.
(d) The Company shall not, and shall procure that no Obligor shall, change its residence for
Tax purposes.
3.4 Change of Business
The Company shall not, and shall procure that no other Obligor shall, materially change the
general nature of its business from that carried on at the date of this Deed without the prior
written consent of the Trustee.
3.5 Merger
The Company shall not, and shall procure that no other Obligor shall, enter into any
amalgamation, demerger, merger, consolidation or corporate reconstruction without the prior
written consent of the Trustee; provided that prior consent of the Trustee shall not be required
for any demerger of any Corporate Guarantor in to one or more corporate entities, if:
(a) The Corporate Guarantee remains in full force and effect and enforceable post such
demerger;
(b) Each of the entities to which any of the assets of such Corporate Guarantor are
transferred pursuant to such demerger: (i) shall continue to be a member of the Group;
and (ii) issues an unconditional and irrevocable guarantee to secure the Debt in the same
form as the Corporate Guarantee, if any, promptly but no later than 1 Business Day
from such demerger becoming effective.
3.6 Preservation of Assets
The Company shall, and shall procure that each Obligor shall, maintain in good working order
and condition (ordinary wear and tear excepted) all assets necessary or desirable in the conduct
of its respective business.
3.7 Pari Passu Ranking
The Company shall, and shall procure that each Obligor shall, ensure that its obligations under
the Transaction Documents shall rank at least pari passu with the claims of all its other
unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law
applying to bodies corporate generally.
3.8 Payment Obligations
The Company shall, and shall procure that each Obligor shall, punctually pay all sums due from
it and otherwise comply with all its respective obligations under the Transaction Documents.
3.9 Disposals and Set-off
(a) The Company shall not, and shall ensure no Obligor shall, enter into a single transaction
or a series of transactions (whether related or not) and whether voluntary or involuntary
to sell, lease, transfer or otherwise dispose of the Secured Assets except as permitted
herein.
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(b) The Company shall not and shall procure that its Affiliates (including any funds managed
by such Affiliates subscribing into the Specified NCDs) shall not approve any
restructuring of any Financial Indebtedness availed by the Company (whether pursuant
to any statutory reorganization or otherwise) that adversely affects the Secured Assets or
the payment obligations of the Obligors in relation to the Debentures.
3.10 Related Party Transactions
The Company hereby confirms that it shall not enter into any arrangement, agreement,
commitment with any Related Party (including without limitation any derivative transaction or
the taking or granting of Financial Indebtedness or investment in any security receipts issued
by a Related Party or security receipts issued by any Person where the trustee, investment
advisor or manager (howsoever described) of such Person is a Related Party) other than any
Specifed Unsubordinated Indebtedness, Subordinated Indebtedness and the Permitted
Shareholder Payout.
3.11 Subordination
(a) All the payment obligations of the Company under the Transaction Documents to the
Secured Parties shall rank at all times senior in right of priority and payment over
Subordinated Indebtedness on or after the Deemed Date of Allotment.
(b) Until the Final Settlement Date, no interest, redemption premium or any other fees,
charges or payments though accrued shall be paid on the Subordinated Indebtedness
(or any part thereof).
(c) The Company undertakes that the Subordinated Indebtedness shall not be transferable
to any person by the Company or any other party thereto.
(d) The lenders of the Subordinated Indebtedness shall not initiate any recovery or
insolvency proceedings against the Company under Applicable Laws, until the Final
Settlement Date.
(e) The Company shall ensure that:
(i) If at any time prior to the Final Settlement Date, the lenders of the Subordinated
Indebtedness receive any payment in respect of the Subordinated Indebtedness (or
any part thereof) from the Company, they shall:
(A) notify the Trustee of such receipt;
(B) hold any payment so received on trust for the Secured Parties in a separate
account; and
(C) pay and distribute any payment so received, or (in the case of a set-off) pay an
equivalent amount, on demand, to the Secured Parties in or towards the balance
of the Debt in accordance with the Transaction Documents, immediately on
demand by the Trustee.
3.12 Books and Records
The Company shall:
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(a) keep proper records and books of account in respect of its business; and
(b) at the risk and cost of the Company, permit the Trustee and/or any professional advisers
and contractors appointed by the Trustee at all reasonable times upon reasonable prior
notice to examine the records and books of account of the Company.
3.13 Changes to Constitutional Documents
The Company shall, and shall procure that each Obligor (which is a body corporate) shall not
amend any of its constitutional documents which is likely to adversely affect the Secured Parties
in the opinion of the Trustee. Provided however, the Company shall have the obligation to
notify the Secured Parties in writing, no later than 7 (seven) days prior to such amendment to
the constitutional documents.
3.14 Intellectual Property
The Company shall, and shall procure that each Obligor shall:
(a) preserve and maintain the subsistence and validity of the intellectual property necessary
for its business;
(b) use reasonable endeavours to prevent any infringement in any material respect of its
intellectual property;
(c) make registrations and pay all registration fees and taxes necessary to maintain its
intellectual property in full force and effect and record its interest in that intellectual
property;
(d) not use or permit its intellectual property to be used in a way or take any step or omit
to take any step in respect of that intellectual property which may materially and
adversely affect its existence or value or imperil the right of the Company or the
relevant Obligor to use such intellectual property; and
(e) not discontinue the use of the intellectual property otherwise than in the ordinary course
of business.
3.15 Security
The Company shall, and shall procure that each relevant Obligor shall, make out a good and
marketable title to the relevant Secured Assets in favour of the Trustee to the satisfaction of the
Trustee and comply with all such formalities as may be necessary or required for the said
purpose within the relevant time periods as stipulated in this Deed.
3.16 Negative Lien
The Company shall not create or permit to subsist any Security Interest over the Secured Assets.
3.17 Inspection
(a) The Company shall, and shall ensure that each Obligor shall, subject to prior notice and
in accordance with Applicable Law, allow the authorised representatives, employees or
nominees of the Trustee, including any auditor, legal counsel, consultants or technically
qualified person, to visit and inspect any installations, sites, works, buildings, properties,
equipment and to conduct concurrent audit on the Company or the Obligors, examine the
records, documents and books of accounts of the Company or any Obligor showing the
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expenditure incurred, utilisation of the Subscription Amounts, the operations and
financial condition of the Company or any Obligor and discuss the affairs, finances and
accounts of the Company or any Obligor with, and be advised as to the same, by its
officers and shall also provide all facilities to enable such persons to report thereon and
take a copy/photocopy of any of such books, records and documents of the Obligors.
(b) All reasonable costs and expenses of inspection, including travelling and all other
expenses, shall be payable by the Company to the Trustee, as applicable, in this behalf.
3.18 Payment of Statutory Dues
The Company shall, promptly on demand, furnish to the Trustee, with a statement of
outstanding statutory liabilities (such as income tax payments, payment of provident fund,
additional emoluments, compulsory deposits, gratuity, etc.) as and when demanded by the
Trustee, in reasonable detail signed by its authorised signatory. Such statement shall also
contain the reasons for increase, if any, of such liabilities from the liabilities appearing in the
previous statement delivered to the Trustee.
3.19 Loans
The Company shall not out of the monies lying in the Escrow Account other than any Permitted
Loans, extend any loans, inter corporate deposit or any other kind of finance or capital
contribution to any Person, without the prior written consent of the Trustee.
3.20 Restricted payments
The Company shall not:
(a) declare, pay or make any dividend or other similar payment or distribution of any kind
(whether in cash, securities, property or other assets) on or in respect of any class of its
shares;
(b) declare or make any payments to any Related Parties other than any Specifed
Unsubordinated Indebtedness and the Permitted Shareholder Payouts;
(c) reduce, return, purchase, repay, cancel or redeem any of its share capital or equity
linked securities;
(d) make any payments to its shareholders other than the Specifed Unsubordinated
Indebtedness and Permitted Shareholder Payouts; or
(e) repay, prepay, or pay any interest or premium on, any Subordinated Indebtedness which
is subordinated to the Debentures.
without consent of the Trustee.
3.21 Acquisitions and Investments
(a) The Company shall not other than in the ordinary course of business, acquire all or part
of the business or undertaking of any other person (or, in each case, any interest in any
of them) or establish or acquire any company without the prior written consent of the
Trustee;
(b) Investment out of Cash Balance lying in Escrow Account shall be in accordance with
this Deed.
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3.22 Specified NCDs
(a) The Company hereby irrevocably undertakes that save and except the payments set out
below, it shall not make any payments to the holders of the Specified NCDs until the
discharge of the Debt to the full and final satisfaction of the Trustee:
(i) payment towards interest payable on the outstanding nominal value of such
Specified NCDs at the rate not exceeding 2% (Two per cent) per annum or the
Excluded Fees, whichever is higher; and
(ii) all Excluded Amounts other than the Excluded Fees.
(b) The Company further undertakes that in relation to a particular series of Pledged SRs,
the Excluded Fees when calculated as a percentage of nominal value of the Specified
NCDs should not be greater than the fees payable to the Company in respect of the
relevant series of Pledged SRs calculated as a percentage to the contribution made by
the Company in relation to such Pledged SRs.
(c) The Company shall not until the Final Settlement Date, issue any Specified NCDs to
any Person other than (i) those mentioned in Schedule 12 (Specified NCDs); and/or (ii)
EFSL and any of its Affiliates.
(d) The Company shall ensure that the ARC(R) for each Secured Trust in respect of a
specified series/tranche of Company SRs which have been funded partly by Specified
NCDs shall be at least equal to or greater than the SNCD(R) calculated in respect of the
same series of Company SRs.
For the purposes of this paragraph:
“ARC(R)” means the ratio obtained by dividing: (a) the total amounts received by the
Company in respect of the specified series of the Company SRs by that specific Secured
Trust less amounts paid to the holders of Specified NCDs; by the aggregate nominal
value of such Company SRs less the nominal value of the relevant Specified NCDs the
proceeds of which have been utilised by the Company to subscribe to such Company
SRs.
“SNCD(R)” means the ratio obtained by dividing: (a) the total amounts received by the
holders of the Specified NCDs in respect of the specified series of Company SRs by
that specific Secured Trust including all amounts received with respect to any
redemption amounts, upside, fees, incentive payment interest and any other monies in
relation to such Specified NCDs (but not including any interest amount paid by the
Company on such NCDs out of other cash accruals); by (b) aggregate nominal value of
the Specified NCDs paid by the subscribers of such Specified NCDs.
3.23 Anti-Bribery and Corruption Law
(a) The Company shall not and shall ensure that no other Obligor shall directly or indirectly
use the proceeds of the Debentures for any purpose which would breach the Bribery
Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar
legislation in other jurisdictions.
(b) Each Obligor shall:
(i) conduct its businesses in compliance with applicable Anti-Bribery and
Corruption Laws; and
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(ii) maintain systems, controls, policies and procedures designed to promote and
achieve compliance with such Anti-Bribery and Corruption Laws;
(c) The Company shall not, and shall ensure that none of its Subsidiaries shall directly or
indirectly use the transaction proceeds for any purpose that would breach any Anti-
Bribery and Corruption Laws.
(d) In connection with the transactions contemplated by this Agreement, no Obligor will,
directly or indirectly, authorize, offer, promise, or make payments of anything of value,
including but not limited to cash, cheques, wire transfers, tangible and intangible gifts,
favours, services, and those entertainment and travel expenses that go beyond what is
reasonable and customary and of modest value to: (i) an executive, official, employee
or agent of a governmental department, agency or instrumentality, (ii) a director,
officer, employee or agent of a wholly or partially government-owned or controlled
company or business, (iii) a political party or official thereof, or candidate for political
office, (iv) a foreign public official, or (v) any other person; while knowing or having
a reasonable belief that all or some portion will be used for the purpose of: (1)
influencing any act, decision or failure to act by any such person in his or her official
capacity, (2) inducing any such person to use his or her influence with a government or
instrumentality to affect any act or decision of such government or entity, or (3)
securing an unlawful advantage; in order to obtain, retain or direct business.
3.24 Accounts
(a) The Company shall, on or prior to the Deemed Date of Allotment establish the Escrow
Account with the Account Bank.
(b) The Company shall ensure that the Escrow Account shall be operated in accordance
with the Transaction Documents.
3.25 Permitted Payouts
(a) So long as no Potential Event of Default or Event of Default has occurred and is
subsisting, the Company shall be permitted to utilise the Cash Balance to:
(i) pay all Taxes (other than income tax) related to the Receivables arising out of the
Secured Trusts from the Escrow Account provided that in the opinion of the
Trustee such Taxes (other than income tax) are clearly accounted for in the
Receivables used for the purpose of Security Cover Ratio;
(ii) pay income taxes which in aggregate is capped at an amount equal to 25% (twenty
five per cent.) of the cumulative Receivables attributable to Trust Fees and which
have been received in the Escrow Account as actual cash; and
(iii) withdraw an amount aggregating up to INR 85,80,00,000 (Eighty Five Crores and
Eighty Lakhs only) per Financial Year from the Escrow Account for meeting its
operational expenses but not more than INR 14,30,00,000 (Rupees Fourteen
Crores and Thirty Lakhs only) in any given calendar month.
Provided that the Company shall not be permitted to make payments pursuant to
paragraphs (i), (ii) and (iii) above if such payments would result in the Security Cover
Ratio (Net) falling below 2.0x as on the most recent Testing Date pursuant to such
payment.
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(b) The Company may withdraw an amount aggregating up to INR 1,788,000,000 (Rupees
One Hundred and Seventy Eight crores and Eighty lakhs only) until the Final Settlement
Date, for the redemption of any Existing Financial Indebtedness and for which the
Company does not have sufficient cash for such redemption provided that any payments
permitted pursuant to this paragraph (b) shall be deducted from the limit reckoned for
the investment permitted to be made by the Company in Permitted SRs in accordance
with Clause 7.7 (a) (Permitted Company SRs) of this Deed.
(c) The Parties further confirm that within 3 (three) days of discharge of the relevant
Existing Financial Indebtedness upon any payments permitted under paragraph (b)
above, the amounts withdrawn from the Escrow Account shall be replaced with such
Secured Assets wherein valuation of such Secured Assets shall be in accordance with
the methodology adopted for the calculation of the Security Cover (Debenture Holder),
and the value of such replaced Secured Assets shall be equal to the amounts withdrawn
under paragraph (b) above. The Company shall provide the Trustee and Independent
Valuer with all reports, documents, information, calculations etc. in relation to the
Secured Assets as may be required by the Trustee..
3.26 Change in Control
The Company shall ensure that there is no Change in Control until the Final Settlement Date.
3.27 Financial Indebtedness
(a) The Company shall not incur or permit to subsist any Financial Indebtedness other than
the Company Permitted Indebtedness.
(b) The Company shall ensure that the Debt shall not be less than 34.5% (thirty four
decimal five per cent.) the Total Debt of the Company on a proforma basis, which for
the removal of doubts, shall include all amounts payable in relation to crystallised and
undisputed Financial Indebtedness availed from the operational creditors and
guarantors of the Company).
3.28 Compliance with the terms of the Transaction Documents
The Company shall comply, and shall procure that each Obligor shall comply with all the
relevant provisions of the Information Memorandum and the other Transaction Documents (to
which the respective Obligor is a party).
Without affecting the obligation of the Debenture Holder to provide documents required under
this Clause 16.2 (Tax Gross Up), it is hereby clarified that the Company shall continue to be
liable in respect of its obligations under this Clause 16.2 (Tax Gross Up) independent of any
information required to be provided by the Debenture Holder under Clause 16.2(c) (Tax Gross
Up) above.
3.29 Debenture Redemption Reserve
The Company agrees and undertakes to create a debenture redemption reserve, if required, in
accordance with the Companies Act and in accordance with any guidelines issued by SEBI, and
if during the currency of these presents any guidelines are formulated (for modified or revised)
by any Governmental Authority having authority under Applicable Law in respect of creation
of the debenture redemption reserve. The Company shall abide by such guidelines and issue
supplemental letters, agreements and deeds of modification, as may be required, by the
Debenture Holders or the Trustee and shall also cause the same to be registered, where
necessary subject to the same being applicable. If a debenture redemption reserve is created,
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the Company shall submit to the Trustee a certificate duly certified by the statutory auditor of
the Company.
3.30 Credit Rating
(a) The Company shall provide all information and extend all necessary cooperation to
such credit rating agency appointed by the Trustee for the purpose of rating of the
Debentures and renewal of the rating for the Debentures and the Company shall comply
with all the terms and conditions of the credit rating letter issued by such credit rating
agency.
(b) The Company shall ensure that the Debentures are rated by an accredited credit rating
agency to the satisfaction of the Trustee on an annual basis or as may be required by
the Trustee. The credit rating awarded by the relevant credit rating agency shall be
forthwith communicated to the Trustee by the Company and/or by the credit rating
agency.
3.31 Further assurance
(a) The Company shall, and shall procure that each Obligor shall, promptly do all such acts
or execute all such documents (including assignments, transfers, mortgages, charges,
notices and instructions) as the Trustee may reasonably specify (and in such form as
the Trustee may reasonably require in favour of the Trustee or its nominee(s)):
(i) to create and perfect the Security Interest created or intended to be created
under or evidenced by the Security Documents (which may include the
execution of a mortgage, hypothecation, charge, assignment or other Security
over all or any of the assets which are, or are intended to be, the subject of the
Security) or for the exercise of any rights, powers and remedies of the Trustee
or the Secured Parties provided by or pursuant to the Transaction Documents
or by Applicable Law;
(ii) to obtain all Authorisations required and do all acts and deeds (including
execution of any document requested by the Trustee) that may be required;
(iii) to confer on the Trustee rights over any property and assets of the relevant
Obligor located in any jurisdiction equivalent or similar to the Security
intended to be conferred by or pursuant to the Security Documents; and/or
(iv) to facilitate the realisation of the assets which are, or are intended to be, the
subject of the Security.
(b) The Company shall, and shall procure that each Obligor shall, take all such action as is
available to it (including making all filings and registrations) as may be necessary for
the purpose of the creation, perfection, protection or maintenance of any Security
conferred or intended to be conferred on the Trustee or the Secured Parties by or
pursuant to the Transaction Documents.
3.32 Change in registered office
The Company shall not, change its registered office to any place outside Mumbai, Maharashtra.
3.33 Insolvency
(a) The Company shall not, and shall procure that no Obligor shall, pass any resolution,
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take any other action in relation to or suffer any resolution of stressed assets,
restructuring, voluntary winding-up, voluntary liquidation, insolvency, insolvency
resolution or any analogues proceedings.
(b) The Company shall not, and shall procure that no Obligor (as applicable) shall, make
any reference (in respect of itself) to the RBI, National Company Law Tribunal or any
other Governmental Authority under IBC or under the Stressed Assets Framework or
any guidelines issued or framework set up by the RBI in relation to resolution of
stressed assets.
(c) The Company shall promptly inform the Trustee of occurrence of any event or action
set out in this paragraph.
3.34 Accounting systems and records
The Company shall maintain an accounting and control system, management information
system and books of account and other records to give a true and fair view of its financial
condition and the results of its operations in accordance with generally accepted accounting
principles.
3.35 Sanctionable Practices
(a) The Company shall not, and shall ensure that no Obligor shall, engage in (nor authorise
any other person acting on its behalf in accordance with authorized instructions) with
respect to the Transaction or any other transaction contemplated by this Deed, any
Sanctionable Practices.
(b) Should any Debenture Holder notify an Obligor of its concerns that there has been a
violation of the provisions of this paragraph or of paragraph 30 (Sanctionable
Practices) of Schedule 4 (Representation and Warranties), the Company shall (or shall
ensure that the relevant Obligor shall) cooperate in good faith with that Debenture
Holder and its representatives in determining whether such a violation has occurred,
and shall (or shall ensure that the relevant Obligor shall) respond promptly and in
reasonable detail to any notice from that Debenture Holder, and shall (or shall ensure
that the relevant Obligor shall) furnish documentary support for such response upon
that Debenture Holder’s request.
3.36 Sanctionable Practice Procedures
The Company shall (and shall ensure that the Obligor will) maintain internal policies and
procedures to ensure that the Company, the Obligor nor any of its directors, employees nor any
person (acting on its behalf in accordance with authorized instructions), engages in any
Sanctionable Practice.
3.37 Sanctions
The Company shall not and shall ensure that each Obligor shall not enter into any transaction
or engage in any activity that would constitute a breach of Sanctions of any Sanctioning Body.
3.38 Access
Upon any Debenture Holder’s request, and with reasonable prior notice to the Company, permit
representatives of the Debenture Holders, during normal office hours, to:
(a) visit any of the sites and premises where the business of an Obligor is conducted;
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(b) inspect an Obligor’s sites, facilities, plant and equipment;
(c) have access to an Obligor’s books of account and all records subject to restrictions
under Applicable Law; and
(d) have access to those employees, Trustees, contractors and subcontractors of an Obligor
who have or may have knowledge of matters with respect to which any Debenture
Holder seeks information,
provided that no such reasonable prior notice shall be necessary if an Event of Default or
Potential Event of Default is continuing or if special circumstances so require.
3.39 Trusts
(a) The Company shall obtain consent of the Trustee in the event the Trusts intend to issue
any security receipts which rank in priority to the Pledged SRs (in terms of payment or
otherwise).
(b) The Company shall forthwith, upon becoming aware of event which is likely to result
in: (i) the revocations of the Trust Funds arising out of the Trusts; (ii) discharge or
removal of the Company as the trustee, of any Trust; (iii) adverse tax consequence in
relation to any of the Trusts; (iv) issuance of security receipts by any of the Trusts which
ranks in priority to the Pledged SRs of such Trust (in terms of payment or otherwise);
or (v) winding up of the Company, notify the Trustee in writing.
(c) Without generality of the foregoing, the Company shall not initiate any action to
liquidate or to dispose off (other than as permitted under the Trust Documents) the
relevant Trust Funds without the prior written consent of the Trustee (acting on
Approved Instructions) and shall promptly inform the Trustee in the event any such
action is initiated by any holder of security receipts issued by the Trusts.
(d) The Company shall ensure that it shall not initiate any action or undertake any step for
revocation of the contributions to the Trusts and shall promptly inform the Trustee if
any action or step is undertaken for revocation of the contributions to the Trusts by any
holder of security receipts issued by the Trusts subject to Applicable Laws.
(e) Except as disclosed from time to time, the Company hereby agrees and acknowledges
that it shall not resign or cease to carry out its functions as the trustee of the Trusts
under the Trust Documents until the Final Settlement Date without the prior approval
of the Trustee.
(f) The Company shall ensure that all payment/repayment or reimbursement of any credit
facilities (in the nature of advances or otherwise) extended to or expenses incurred by
the Company for the Secured Trusts shall be deposited in the Escrow Account and shall
be subject to the Security Interest created pursuant to the relevant Security Documents.
3.40 Information Utility
Without prejudice to anything contained in the Transaction Documents, the Company shall,
from time to time as may be required by the Trustee or any of the Debenture Holders in
accordance with Applicable Laws:
(a) supply to the Secured Parties all information as required by them for submission to the
Information Utilities in such manner and form as may be required under Applicable
Laws (including the provisions of Insolvency and Bankruptcy Code, 2016 and the rules
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and regulations made thereunder (as amended, modified or varied from time to time));
(b) at their own cost, perform (or procure the performance of) all further acts and things
and execute and deliver (or procure the execution and delivery of) such further
documents as may be required by the Trustee or any of the Debenture Holders in terms
of paragraph (a) above; and
(c) not dispute: (i) any information or documents supplied by the Secured Parties for
submission to the Information Utilities, and/or (ii) any other information related to the
Debentures or the Security Interest created under the Transaction Documents submitted
by the Secured Parties to the Information Utility pursuant to the Applicable Laws. In
the event of any disagreement or dispute between the Company and the Secured Parties
regarding any information submitted by the Secured Parties to an Information Utility,
the information supplied by such Secured Parties shall be final and binding on the
Company in the absence of any manifest error.
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SCHEDULE 4: REPRESENTATIONS AND WARRANTIES
1. Status
1.1 The Company is a public limited under the Companies Act.
1.2 The Company is not a non-banking financial company or a core investment company nor is it
required to be registered under Chapter III B of the Reserve Bank of India Act, 1934.
1.3 The Company and each Obligor is a body corporate duly incorporated and validly existing
under the laws of its jurisdiction.
1.4 The Company and each Obligor has the power to own its assets and carry on its business as it
is being conducted.
2. Compliance with Law
2.1 The issuance of Debentures is in compliance with Applicable Laws (including, the Companies
Act and the Debenture Regulations).
2.2 The obligations expressed to be assumed by each Obligor in each Transaction Document (to
which it is a party) are its legal, valid, binding and enforceable obligations.
2.3 No Obligor has violated any Applicable Law that will adversely affect the issuance of the
Debentures or its obligations under the Transaction Documents.
2.4 The Company and each Obligor has not breached any Anti-Money Laundering Laws and Anti-
Terrorism Financing Laws.
2.5 The Company is in compliance with the conditions as set out in its certificate of registration to
operate as an asset reconstruction company in accordance with Applicable Laws.
3. Non-conflict with Other Obligations
3.1 The entry into and performance by each Obligor, and the transactions contemplated by, the
Transaction Documents to which it is a party do not and shall not conflict with:
(a) any law or regulation applicable to it;
(b) its constitutional documents; or
(c) any agreement or instrument binding upon it or any of its assets.
3.2 The issuance of the Debentures does not cause any borrowing, collateralising or similar limits
binding on the Company under Applicable Laws to be exceeded.
4. Power and Authority
Each Obligor has the power to enter into, perform and deliver, and has taken all necessary
action to authorise its entry into, performance and delivery of, the Transaction Documents to
which it is a party and the transactions contemplated by those Transaction Documents.
5. Validity and Admissibility in Evidence
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All Authorisations required or desirable:
(a) to enable each Obligor to lawfully to enter into, exercise its rights and comply with its
obligations in the Transaction Documents to which it is a party;
(b) to make the Transaction Documents to which any Obligor is a party admissible in
evidence in its jurisdiction of incorporation; and
(c) for each Obligor to carry on its business, and which are material,
have been obtained or effected and are in full force and effect.
6. Governing Law and Enforcement
In any proceedings in relation to any Transaction Documents, the choice of Indian law as the
governing law of the Transaction Documents and any judgment obtained in India will be
recognized and enforced in its jurisdiction of incorporation.
7. No Filing or Stamp Taxes
Under Applicable Law it is not necessary that the Transaction Documents be filed, recorded or
enrolled with any court or other authority in that jurisdiction or that any stamp, registration or
similar tax be paid, on or in relation to, the Transaction Documents or the transactions
contemplated by the Transaction Documents in any jurisdiction, except:
(a) filing of the relevant Transaction Documents with the Registrar of Companies, SEBI
and the Stock Exchange;
(b) filing of Form CHG-9 with the relevant Registrar of Companies, in relation to the
Security Interest created under the Deed of Hypothecation;
(c) the filing of each Information Memorandum with the relevant Registrar of Companies
and SEBI;
(d) filing of PAS 3 with the Registrar of Company along with the Information
Memorandum prior to utilisation of Subscription Amounts;
(e) filing of the relevant board resolution and the shareholders resolution with the Registrar
of Companies in form MGT 14 in accordance with the Companies Act;
(f) notarisation of any powers of attorney issued in relation to any Transaction Document;
(g) filings with the depository participants in Form 28 in relation to the Company Pledge
Agreement;
(h) filing with the Central Registry set up under The Security Interest (Enforcement) Rules,
2002 in relation to the Security Interest recorded/created under this Deed;
(i) the stamp duty payable in India on an executed original and counterpart of a Transaction
Document prior to the execution of Transaction Document (in original and counterpart)
by any Party in India.
8. Authorisations
8.1 Except for the Final Listing Approval, no consent is required from any person or any
Governmental Authority for the issue of Debentures or for consummating the transactions
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contemplated under the Transaction Documents.
8.2 Each Obligor has obtained all Authorisations that are required for carrying out its business
activities pursuant to Applicable Law.
8.3 There has been no breach of any of the conditions of any of the Authorisations obtained by any
Obligor and there is no event existing, outstanding or to its knowledge, anticipated, or any event
likely to arise or any allegation of such a thing, which is likely to give rise to any revocation,
suspension, variation, cancellation, termination or rejection of such Authorisation and there is
no event existing, outstanding or anticipated, or any event likely to arise or any allegation of
such a thing, which has or is likely to have a Material Adverse Effect in the reasonable opinion
of the Trustee acting on Approved Instructions.
8.4 No notice has been received, is outstanding or anticipated by it in respect of any revocation or
cancellation or termination or rejection of any Authorisation obtained by any Obligor from any
Governmental Authority.
9. No Potential Event of Default or Event of Default
9.1 No Event of Default or Potential Event of Default has occurred or is continuing.
9.2 No Event of Default or Potential Event of Default might reasonably be expected to result from
issuance of Debentures.
9.3 No other event or circumstance is outstanding which constitutes a default under any other
agreement or instrument which is binding on it or to which its assets are subject.
9.4 No statutory dues are pending in relation to the Secured Assets or any Obligor.
10. No Misleading Information
10.1 All information supplied by the Company or any Obligor and on their behalf, is true, complete
and accurate in all material respects as at the date it was given and was not misleading in any
respect.
10.2 Any financial projections provided by or on behalf of any Obligor in connection with the issue
of the Debentures or any Transaction Document were prepared on the basis of recent historical
information and on the basis of reasonable assumptions.
11. Financial Statements
11.1 Each Obligor’s audited most recent Financial Statements delivered to the Trustee (a) have been
prepared in accordance with applicable GAAP, consistently applied; and (b) give a true and fair
view of its financial condition (consolidated, if applicable) as at the date to which they were
drawn up, except, in each case, as disclosed to the contrary in those Financial Statements.
11.2 Nothing has occurred or been omitted from the information so provided and no information has
been given or withheld that results in the information provided by or on behalf of the Company
being untrue or misleading in any material respect.
11.3 There has been no Material Adverse Effect to its business or financial condition since March
31, 2019.
12. Financial Indebtedness
12.1 The total Financial Indebtedness of each Obligor from whatsoever source does not exceed any
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limitation on its borrowings contained in the articles of association, or in any resolution of its
board of directors or shareholders, or in any deed or document binding on such Obligor.
12.2 No event or circumstance has occurred which is or, with the giving of notice or lapse of time,
determination of materiality or satisfaction of any other condition, would become an event of
default under or a breach of any terms of any Financial Indebtedness of any Obligor or would
entitle any Person to require the payment or repayment of any Financial Indebtedness before its
normal or originally stated maturity or which is or shall be such as to terminate, cancel or render
incapable of exercise any entitlement to draw money or other rights of such Obligor under an
agreement related to any Financial Indebtedness.
12.3 Except for Company Permitted Indebtedness, the Company has not incurred any Financial
Indebtedness and/or created any security in relation to any Financial Indebtedness.
12.4 As on the Deemed Date of Allotment, the Debt availed by the Company is not less than 34.5%
(thirty four decimal five per cent.) of the Total Debt of the Company on a proforma basis which
for the removal of doubts, shall include all amounts payable in relation to crystallised and
undisputed Financial Indebtedness availed from the operational creditors and guarantors of the
Company) excluding the Specified NCDs.
13. Pari Passu Ranking
Each Obligor’s payment obligations under the Transaction Documents to which it is a party
rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors,
except for obligations mandatorily preferred by law applying to companies generally.
14. Insolvency
No corporate action, legal proceeding or other procedure or step described in Clause 11 (g)
(Insolvency Proceedings) or Clause 11 (h) (Creditors’ Process) has been taken or is currently
pending or threatened in relation to any Obligor and none of the circumstances described in
Clause 11 (f) (Insolvency) applies to them.
15. No Proceedings Pending or Threatened
Save and except for any recovery action initiated by the Company as the petitioner in the
ordinary course of business, there are no litigations, arbitrations or administrative, regulatory
or criminal proceedings or investigations of or before any court, arbitral body or agency have
been started or threatened against it.
16. No Immunity
16.1 Each Obligor is subject to civil and commercial law with respect to its obligations under this
Deed and the other Transaction Documents.
16.2 The entry into and performance of this Deed and the other Transaction Documents by each
Obligor constitute private and commercial acts.
16.3 Neither any Obligor nor any of its assets enjoy any right of immunity from set-off, suit or
execution in respect of its obligations under this Deed and the other Transaction Documents.
16.4 The Company agrees that no immunity (if acquired) shall be claimed by it or on its assets in
any proceedings in relation to its obligations under this Deed and the other Transaction
Documents and shall waive any such right of immunity which it or its assets have or may
acquire.
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17. No Material Adverse Effect
No event which has a Material Adverse Effect has occurred or is subsisting or is likely to occur
of which it has knowledge since the date of this Deed.
18. Tax Liabilities
It has complied with all Tax laws in all jurisdictions in which it is subject to Tax and has paid
all Taxes due and payable by it unless contested in good faith and adequate reserves have been
set aside in respect thereof where required by applicable accounting requirements.
19. Insurance
The Company and other relevant Obligors have insured the Secured Assets (where insurable in
nature) and other assets with financially sound and reputable insurers against such risks and in
such amounts as are normally maintained by persons carrying on the same or a similar class of
business as per standard industry practices.
20. Ownership of Assets
The Company and each relevant Obligor has good and marketable title to all or substantially
all its assets, including, without limitation, the Secured Assets, free from any restriction or
onerous covenants. The Secured Assets are free from any Security Interest except the Company
Permitted Security Interest.
21. Security
21.1 The Security Cover Ratio of the Company is 2.26:1 as on the Deemed Date of Allotment
(“Initial Required Security Cover Ratio”).
21.2 The Security Documents when executed, delivered and registered (if applicable) and when
appropriate forms are filed as required under Applicable Law, shall create the Security Interest
expressed to be created thereby over the assets referred to therein and such assets are not subject
to any prior Security (other than the Permitted Security Interest).
21.3 The claims of the Secured Parties in respect of the Transaction Security created under the
Security Documents shall rank in the order of priority stipulated in the Security Documents.
21.4 Each relevant Obligor is the sole legal and beneficial owner of and has good, clear and
marketable title to, and has all rights, title and interests in the Secured Assets, and, has not
created any Security Interest on the Secured Assets in favour of any person other than the
Secured Party nor does it have any obligation to create any Security Interest on such Secured
Assets.
21.5 No Authorisation, consent, waiver, approval or permission of any person or Governmental
Authority is required to create or enforce the Security Interest contemplated under the Security
Documents.
21.6 No consents, waivers, approvals, permissions and Authorisations from any Governmental
Authority, lenders and other third parties is required by the Company in connection with, or in
relation to, (a) the execution and delivery of the Transaction Documents, (b) creation and
perfection of Security Interest pursuant to the Security Documents, (c) the consummation of the
transactions/obligations contemplated therein, (d) enforcement of the Security Interest created
under the Security Documents, and (e) transfer the assets subject to the pledge to any person in
accordance with the relevant Security Documents.
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22. Anti-Bribery and Corruption Laws
(a) Each Obligor has conducted its businesses in compliance with applicable Anti-Bribery
and Corruption Laws and has instituted and maintained systems, controls, policies and
procedures designed to:
(i) detect incidences of bribery and corruption; and
(ii) promote and achieve compliance with the Anti-Bribery and Corruption Laws.
(b) No Obligor shall nor any of its directors, officers, agents or representatives (where such
directors, officers agents or representatives are acting on authorised instructions) have,
for the purpose of gaining or maintaining unlawful or improper benefits for the Obligor:
(i) directly or indirectly, made, offered to make, promised to make or authorized
the payment or giving of, anything of value to any person, while knowing that
all or a portion of such money or thing of value will be offered, given or
promised, directly or indirectly, to a person to influence that person in his or her
official capacity, induce that person to do or omit an act in violation of his or
her lawful duty, or to secure any improper advantage in order to assist in
obtaining or retaining business for or with, or directing business to, any person
that may or may not constitute an “unlawful payment” or “improper transfer of
value” within the meaning of, and is not in any other way in violation of the
Anti-Bribery and Corruption Laws;
(ii) directly or indirectly used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political office or
activity;
(iii) made any direct or indirect unlawful payment or improper transfer of value to
any public official or any company employee from corporate funds;
(iv) received directly or indirectly any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment or improper transfer of value prohibited
under any Anti-Bribery and Corruption Laws;
(v) been (as far as the Company is aware) or is subject to any litigation, arbitration
or administrative, regulatory or criminal proceedings or investigation with
regard to any actual or alleged unlawful payment, improper transfer of value or
other violation of any Anti-Bribery and Corruption Laws;
(vi) directly or indirectly, violated applicable Anti-Bribery and Corruption Laws or
made, undertaken, offered to make, promised to make or authorized the
payment or giving of a prohibited payment;
(vii) directly or indirectly, used funds or other assets, or made any promise or
undertaking in such regard, for the establishment or maintenance of a secret or
unrecorded fund; or
(viii) directly or indirectly, made any false or fictitious entries in any books or records
relating to any prohibited payment with respect to the transactions contemplated
by this Deed.
23. Anti-Money Laundering Laws and Anti-Terrorism Financing
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The operations of the Company and the Obligor are and have been conducted at all times in
compliance with all Anti-Money Laundering Laws and Anti-Terrorism Financing Laws and no
action, suit or proceeding by or before any court or Governmental Agency, authority or body
or any arbitrator involving the Company or the Obligor with respect to Anti-Money Laundering
Laws and Anti-Terrorism Financing Laws is pending and, to the best of the Company's
knowledge, no such actions, suits or proceedings are threatened in writing.
24. Regulatory Declarations
No Obligor and none of their respective directors or promoters is on RBI’s defaulters or caution
list; or on any lender’s defaulter list.
25. Authorised Signatories
Each person specified as an authorized signatory of an Obligor in any Transaction Document
or in any documents delivered to the Trustee pursuant to any Transaction Document, is subject
to any notice to the contrary delivered to the Trustee, authorized to sign all documents and
notices on behalf of such Obligor.
26. Standard Asset
Each Obligor’s account is classified as a ‘standard asset’ by its bankers in accordance with the
guidelines issued by RBI in this regard.
27. Accounts
The Escrow Account has been duly opened with the relevant Account Bank and is being and
shall be operated as per the terms stipulated in the Transaction Documents.
28. Business of the Company and Company Auditor
(a) The Company does not carry out or conduct any business and operations other than the
Business.
(b) The Company Auditor is a Big Four accounting firm or such other internationally
reputed accounting firm as may be acceptable to the Trustee.
29. Transactions with Related Parties
The Company has not executed any contract, agreement, commitment or arrangement with a
Related Party except Specified Unsubordinated Indebtedness and Permitted Shareholder
Payouts.
30. Sanctionable Practices
None of the Obligors, the Company or any person acting on its or their behalf, has committed
or engaged in, with respect to any transaction contemplated by this Deed, any Sanctionable
Practice.
31. Compliance with Sanctions
None of the Obligors, the Company nor any person acting on their behalf (that is acting in
accordance with authorized instructions) has entered into any transaction (i) with, or for the
benefit of, any person or entity listed on any Sanctions List; or (ii) related to any activity
prohibited by any Sanctioning Body.
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32. Proceeds of illegal acts
To the best of its knowledge, no proceeds of any illegal act or act related to drug trafficking,
corruption, bribery, organised crime or terrorism have been received by it, an Obligor, directly
or indirectly, and used as an investment in (including, but not limited to, the purchase of shares
in the Company) or as a contribution to or otherwise to support the activities or business of, the
Company or any shareholder of the Company.
33. Trusts
(a) Each of the Company SRs have been validly issued and each of the Trusts have been validly
constituted in accordance with Applicable Law.
(b) No action has been initiated, or undertaken for revocation of the contributions to the Trusts.
(c) No action has been undertaken which results in the Company being discharged or removed
as a trustee of any of the Trusts.
(d) No action has been initiated or undertaken which may result into any of the Trusts issuing
security receipts which rank in priority to the Pledged SRs (in terms of payment or
otherwise).
(e) Except as disclosed to the Trustee from time to time, the Pledged SRs issued under each
Trust rank pari-passu to all other security receipts issued by such Trust.
34. Specified NCDs
(a) The Company represents that the Excluded Fees, in relation to a specified series/tranche
of Company SRs, when calculated as a percentage of nominal value of the Specified
NCDs should not be greater than the fees payable to the Company calculated as a
percentage to the contribution made by the Company in relation to such Pledged SRs.
(b) The Company represents and warrants that the ARC(R) for each Secured Trust in
respect of a specified series/tranche of Company SRs which have been funded partly by
Specified NCDs shall be at least equal to or greater than the SNCD(R) calculated in
respect of the same tranche/series of Company SRs.
(c) The Company confirms that all Specified NCD are presently held and if, issued in the
future will solely be held by (i) one or more of the entities as set out in Schedule 12
(Specified NCDs); and/or (ii) EFSL and any of its Affiliates.
35. Financial Obligations
The Company has not made any commitment to its shareholders to pay / distribute any minimum
amount of monies to such shareholders, whether as dividend or capital redemption or in any
other manner other than the Permitted Shareholder Payouts and Specified Unsubordinated
Indebtedness.
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SCHEDULE 5: CONDITIONS PRECEDENT
1. Corporate Documents
1.1 A certified copy of the constitutional documents of the Company and the other Obligors.
1.2 A certified copy of a resolution of the board or directors of the Company:
(a) specifically stating the purpose of issuance of the Debentures;
(b) approving the terms of, and the transactions contemplated by, the Transaction
Documents to which it is a party and resolving that it execute the Transaction
Documents to which it is a party in accordance with the provisions of the Companies
Act (including Section 179);
(c) authorising a specified Person or Persons to execute the Transaction Documents to
which it is a party on its behalf;
(d) authorising a specified Person or Persons, on its behalf, to sign and/or despatch all
documents and notices to be signed and/or despatched by it under or in connection with
the Transaction Documents to which it is a party; and
(e) noting that the disclosure document in relation to the Debentures shall be sent to the
initial subscriber in accordance with the provisions of the Companies Act (including
Section 42 of the Companies Act, 2013).
1.3 Specimen signatures of the persons authorised by the resolutions by the Company referred to
in paragraph 1.2 (Corporate Documents) of this Schedule 5 (Conditions Precedent).
1.4 A certified copy of the board resolution passed by the directors of the Company under Section
42 of the Companies Act.
1.5 A certified copy of the special resolution passed by the shareholders of the Company under
Section 180(1)(c) and Section 180 (1) (a) of the Companies Act.
2. Certifications
2.1 A certificate from an authorised signatory of the Company certifying/confirming that:
(a) each copy document relating to it specified in this Schedule 5 (Conditions Precedent)
is correct, complete and in full force and effect as at a date no earlier than the date of
this Deed and the date of the certificate;
(b) borrowing or securing the Debt, as applicable, would not cause any borrowing, security
or similar limit binding on the Company to be exceeded;
(c) assets to be charged as the security for securing the Debt, are the absolute property of
the Company and are free from any Security Interest other than the Company Permitted
Security Interest;
(d) directors of the Company are not disqualified from holding office on the board of
directors of the Company;
(e) the Company has the necessary powers under the constitutional documents of the
Company to issue the Debentures and to enter into the Transaction Documents;
104
(f) that the Company has performed all its obligations under the Transaction Documents
to be performed on or before the Deemed Date of Allotment;
(g) the Company or its directors or shareholders or Corporate Guarantor are not on the
RBI's defaulters or caution list;
(h) no Material Adverse Effect has occurred;
(i) save and except for any recovery action initiated by the Company in the ordinary course
of business, there are no material litigations, arbitrations or or criminal proceedings
before any court, arbitral body or have been pending against it, except as disclosed in
the Information Memorandum;
(j) representations and warranties set out in the Transaction Documents are true and correct
in all material respects;
(k) no consents, waivers, approvals, permissions and Authorisations are required from any
Governmental Authority, other creditors, lessees/tenants and other third parties
including any financial creditors in connection with the execution and delivery of the
Transaction Documents, and the consummation of the transactions/obligations
contemplated therein, other than as set out in the Deed;
(l) no Potential Event of Default or Event of Default has occurred and is continuing or
would result from issue of Debentures;
(m) all licenses required by the Company to continue its business operations are in full force
and effect;
(n) as on the Deemed Date of Allotment, the Debt availed by the Company is not less than
34.5% (thirty four decimal five per cent.) of the Total Debt of the Company on a
proforma basis which for the removal of doubts, shall include all amounts payable in
relation to crystallised and undisputed Financial Indebtedness availed from the
operational creditors and guarantors of the Company) excluding the Specified NCDs;
(o) the Company is in compliance with the Initial Required Security Cover Ratio; and
(p) the issue of the Debentures (A) is permitted by the Applicable Law; and (B) does not
violate any Applicable Law.
2.2 A certificate issued by any authorised signatory setting out the aggregate liability in INR in
respect of pending notices, proceedings, claims, suits or such other demands against the
Company with respect to the Secured Assets under Applicable Laws including under Section
281 of the Income Tax Act, 1961.
3. Issue related documents
(a) A certified true copy of the credit rating letter.
(b) A certified true copy of the consent letter issued by the Trustee.
(c) Evidence that the Company has entered into a tri-partite agreement with the Stock
Exchange and the registrar to the issue of Debentures.
(d) Evidence of filing of the relevant board resolution and the shareholders resolution of
the Company with the registrar of companies in form MGT 14 prior to issuance of the
105
Information Memorandum.
4. Transaction Documents
4.1 The following documents duly executed by each of the relevant Parties:
(a) this Deed;
(b) the Debenture Trustee Agreement;
(c) the Company Pledge Agreement;
(d) the power of attorney to the Company Pledge Agreement and
(e) the Escrow Accounts Agreement; and
(f) the Deed of Hypothecation.
4.2 A copy of the duly executed Information Memorandum filed with the Stock Exchange.
4.3 Evidence in form and manner satisfactory to the Trustee that the Company has completed with
all other requirements (including rating, listing, electronic book building) that are to be
completed before the Deemed Date of Allotment as required under Applicable Laws.
5. Initial Pledged SRs
5.1 A certified true copy of the Form 28 filed by the Pledgors with the depository participant in
relation to creation of pledge on all the Initial Pledged SRs under the Company Pledge
Agreement.
5.2 A certified true copy of the pledge master report from the depository participants confirming
the creation of pledge over the Initial Pledged SRs held by the Company under the Company
Pledge Agreement.
6. Other Documents and Evidences
6.1. Evidence of the payment of a sum of INR 1,000 by the Company to the Trustee for settlement
of the trust.
6.2. Evidence that proper stamp duty has been paid on the relevant Transaction Documents.
6.3. Evidence that Escrow Account has been opened in accordance with the Transaction Documents.
6.4. Evidence of the issuance of the letter by the Company to the trustee of the Secured Trusts for
the deposit of the Receivables into the Escrow Account in the manner as set out in the Escrow
Accounts Agreement.
6.5. Evidence in relation to the completion of formalities required for the Debenture Holders to
subscribe to the Debentures under the voluntary retention route prescribed by the RBI including
the allocation of limits by the relevant Governmental Agency. For the avoidance of doubt, this
condition precedent shall not be required to be fulfilled by the Company.
106
SCHEDULE 6: CONDITIONS SUBSEQUENT
1. Initial Pledged SRs
Within 5 (five) Business Days from the Pay In Date, the Company shall provide the following
documents to the Secured Parties:
(a) receipt of the certified true copy of the Forms No. CHG-9 filed by the Company along
with the payment receipt thereof, filed with the relevant Registrar of Companies in
relation to the Transaction Security created under the Company Pledge Agreement;
(b) receipt of the certificate of registration of charge issued by such Registrar of Companies
in relation to the filing of the Transaction Security pursuant to paragraph (a) above.
2. Retiring Existing Financial indebtedness (External)
Within 5 (five) Business Days from the Pay In Date, the Company shall provide the following
documents to the Secured Parties:
(a) No dues- certificate from the lenders of the Retiring Existing Financial Indebtedness
(External).
(b) all the documents executed in relation to release of the relevant Existing Security
created with respect to the Retiring Existing Financial Indebtedness (External).
(c) a certified true copy of Form CHG- 4, along with the payment receipt thereof, filed
with the relevant Registrar of Companies in relation to satisfaction and release of the
relevant Existing Security created in relation to the Retiring Existing Financial
Indebtedness (External).
(d) a copy of the relevant extract of the updated register of charges of the relevant Obligor
in Form CHG-7 evidencing the relevant entries in relation to release of the relevant
Existing Security with respect to the Retiring Existing Financial Indebtedness
(External).
(e) evidence of creation and perfection of Security Interest over the Company SRs which
shall be pledged upon the discharge of the Retiring Existing Financial indebtedness
(External) including: (A) the certified true copy of the Form 28 filed by the Pledgors
with the depository participant in relation to creation of pledge on all the Pledged SRs
under the Company Pledge Agreement; (B) a certified true copy of the pledge master
report from the depository participants confirming the creation of pledge over the
Company SRs held by the Company under the Company Pledge Agreement; and (C)
within 5 (five) Business Days of the aforesaid pledge creation, a certified true copy of
the Form CHG-9 filed by the Company in relation to the pledge of the Company SRs
required to be pledged under this paragraph and the certificate of charge issued by the
relevant registrar of companies.
3. Acquisition of Company SRs from any member of the Group
(a) Within 1 (one) Business Day from the Pay In Date, the Company shall place the order
on the relevant recognised stock exchange to acquire the Company SRs from the
member of the Group pursuant to paragraph 2.8 (ii) (Purpose) of this Deed, and obtain
delivery of the security receipts within the ‘T+2’ settlement period of the relevant
recognised exchange.
107
(b) Within 5 (five) Business Days from the Pay In Date, the Company shall provide the
following documents to the Secured Parties:
(i) Evidence of creation of Security Interest over the Company SRs that are
acquired pursuant to paragraph 3(a) above, including: (A) the certified true copy
of the Form 28 filed by the Company with the depository participant in relation
to creation of pledge on all the Pledged SRs under the Company Pledge
Agreement; (B) a certified true copy of the pledge master report from the
depository participants confirming the creation of pledge over the Company
SRs held by the Company under the Company Pledge Agreement.
(ii) Within 5 (five) Business Days of Pay In Date, evidence of perfection of Security
Interest over the Company SRs pursuant to the creation of Transaction Security
as required under paragraph (i) above, a certified true copy of the Form CHG-9
filed by the Company in relation to the pledge of such Pledged SRs and the
certificate of charge issued by the relevant registrar of companies.
4. Hypothecation
(a) Within 5 (five) Business Days of Pay In Date, evidence of perfection of Security
Interest over the Hypothecated Assets pursuant to the creation of Transaction Security
as mentioned in the Deed of Hypothecation, a certified true copy of the Form CHG-9
filed by the Company in relation to the perfection of Security Interest of the
Hypothecated Assets.
(b) Receipt of the certificate of registration of charge issued by such Registrar of
Companies in relation to the filing of the Transaction Security pursuant to paragraph
(a) above within no later than 5 (five) days from the Pay In Date.
5. Other Documents and Evidences
(a) Within 15 (fifteen) days of the relevant Deemed Date of Allotment, a certified true copy
of the Final Listing Approval.
(b) Evidence that the fees, costs and expenses then due from the Company pursuant the
Transaction Documents have been paid or will be paid by the Deemed Date of
Allotment.
(c) Within 15 (fifteen) days of the relevant Deemed Date of Allotment, evidence of filing
of the return of allotment in Form PAS 3 with the concerned registrar of companies
(d) A copy of any other Authorisation or other document, opinion or assurance which the
Trustee considers to be necessary or desirable (if it has notified any Obligor
accordingly) in connection with the entry into and performance of the transactions
contemplated by any Transaction Document or for the validity and enforceability of
any Transaction Document.
(e) A certified and acknowledged copy of the prescribed application made by the Company
under Section 281 of the Income Tax Act, 1961 to the Company for creation of security.
(f) Within 30 days from the Deemed Date of Allotment, a certificate issued by an
independent chartered accountant setting out the liability in respect of tax matters
pending before the relevant Governmental Authority including any pending notices,
proceedings, claims, suits or such other demands against the Company with respect to
the Secured Assets under Applicable Laws including under Section 281 of the Income
108
Tax Act, 1961 (“Tax Certificate”).
109
SCHEDULE 7: END USE CERTIFICATE
Date: [●]
To,
[Insert name of the Trustee]
[Insert Address]
Dear Sirs:
Re: [●] (“Company”) – INR [●] debenture trust deed dated [●] (“Debenture Trust Deed”).
1. We refer to the Debenture Trust Deed. This is an End Use Certificate. Terms used in the
Debenture Trust Deed shall have the same meaning in this End Use Certificate.
2. We confirm that the proceeds of the Debentures have been utilised by the Company for the
following purpose:
[Insert Details]
3. This is in accordance with Clause 2.8 (Purpose) of the Debenture Trust Deed.
4. We confirm that no Potential Event of Default or Event of Default has occurred or is continuing.
Signed: …............
Authorised Signatory
Edelweiss Asset Reconstruction Company Limited
110
SCHEDULE 8: EXISTING FINANCIAL INDEBTEDNESS
PART A (COMPANY PERMITTED EXISTING FINANCIAL INDEBTEDNESS)
Name of the Existing
Term Lender
Nature of Credit
Facility
Outstanding Principal
amount of credit
facility as on
November 15,
2019
Security
NCDs issued pursuant
to Debenture
Trust Deed
dated August
12, 2016
NCD Rs. 2,308,400,000 General
hypothecation
NCDs issued pursuant
to Debenture
Trust Deed
dated
December 7,
2017
NCD Rs. 4,887,700,000 General
hypothecation
NCDs issued pursuant
to Debenture
Trust Deed
dated May 10,
2019
NCD Rs. 6,008,100,000 General
hypothecation
HDFC Bank Ltd Term Loan Rs. 312,500,000 Secured against
certain
specific
Company
SRs
HDFC Bank Ltd
(Overdraft
facility of Rs.
10 Cr.)
Overdraft Rs. 85,933,005 Secured against
certain
specific
Company
SRs
IDBI Bank Ltd
(Overdraft
facility of Rs.
32 Cr.)
Overdraft - Secured against
certain
specific
Company
SRs
IDBI Bank Ltd Working Capital
Demand
Loan
Rs. 480,000,000 Secured against
certain
specific
Company
SRs
Specified NCDs NCD Rs. 15,108,786,983 Secured against
certain
specific
Company
SRs
Commercial Paper CP Rs. 720,475,500 Unsecured
NCDs issued pursuant
to Debenture
Trust Deed
dated May 13,
NCD Rs. 300,000,000 Secured against
certain
specific
Company
111
Name of the Existing
Term Lender
Nature of Credit
Facility
Outstanding Principal
amount of credit
facility as on
November 15,
2019
Security
2016 SRs
PART B (RETIRING EXISTING FINANCIAL INDEBTEDNESS) (EXTERNAL)
Name of the Existing
Term Lender
Nature of Credit
Facility
Outstanding Principal
amount of credit
facility as on
November 15,
2019
Security
NCDs issued pursuant
to Debenture
Trust Deed
dated
December 4,
2018
NCD Rs. 4,500,000,000 Secured against
certain
specific
Company
SRs
PART C (RETIRING EXISTING FINANCIAL INDEBTEDNESS) (GROUP)
Name of the Existing Term
Lender
Nature of
Credit
Facility
Outstanding
Principal
amount of
credit
facility as on
November
15, 2019
Security
EDELWEISS RURAL &
CORPORATE
SERVICES
LIMITED
Inter Corporate
Deposit
Rs. 3,250,000,000 Unsecured
EDELWEISS RURAL &
CORPORATE
SERVICES LIMTED
NCD Rs. 1,500,000,000 Unsecured
ECAP EQUITIES LIMITED Loan Rs. 1,400,000,000 General
hypothecatio
n
112
SCHEDULE 9: REQUEST FOR APPROVED INSTRUCTIONS FOR EOD
[on the letterhead of the Trustee]
Date: [●]
To,
[Insert name of the Debenture Holder]
[Insert address]
Dear Sirs,
Re: [●] (“Company”) – INR [●] debenture trust deed dated [●] (“Debenture Trust Deed”).
Sub: Requirement for Approved Instructions
1. We refer to the Debenture Trust Deed. All capitalized terms used herein, shall have the
meanings ascribed to them in the Debenture Trust Deed.
2. In accordance with Clause [●] of the Debenture Trust Deed, we would like to bring to your
attention that an [Event of Default/ Potential Event of Default] has occurred on [●]. [Specify
details of the Event of Default/ Potential Event of Default]
3. We therefore request your written instruction for actions required to be taken in respect of the
abovementioned [Event of Default/ Potential Event of Default].
4. Upon receipt of your assent, we will send the Company an Acceleration Notice.
Yours sincerely,
.............................................................................
For [Insert name of the Trustee]
113
SCHEDULE 10: FORM OF ACCELERATION NOTICE
[on the letterhead of the Trustee]
Date: [●]
To,
Edelweiss Asset Reconstruction Company Limited
[Insert address]
Attention: [●]
Dear Sirs,
Re: [●] (“Company”) – INR [●] debenture trust deed dated [●] (“Debenture Trust Deed”).
Sub: Acceleration Notice
1. We refer to the Debenture Trust Deed. All capitalized terms used herein, shall have the
meanings ascribed to them in the Debenture Trust Deed.
2. In accordance with Clause [●] of the Debenture Trust Deed, we understand that an Event of
Default [please specify] has occurred on [●].
3. Accordingly, the Debenture Holders require that you pay, all outstanding Debt immediately,
and in any event by [●]. Should such payment not be received in full [●], we will exercise our
rights in relation to the abovementioned Event of Default.
Yours sincerely,
.............................................................................
For [Insert name of the Trustee]
114
SCHEDULE 11: COMPLIANCE CERTIFICATE
To: [Insert name of the Trustee]
From: Edelweiss Asset Reconstruction Company Limited
Dated: [●]
Dear Sirs:
Re: [●] (“Company”) – INR [●]debenture trust deed dated [●] (“Debenture Trust Deed”).
1. We refer to the Debenture Trust Deed. All capitalized terms used herein, shall have the
meanings ascribed to them in the Debenture Trust Deed.
2. In accordance with Clause 1.2 of Schedule 3 in the Debenture Trust Deed, we confirm that the
Security Cover Ratio (Company) is [●] as at [June 30 / December 31], [20xx], details of which
can be found in Appendix 1.
3. We confirm that the Security Cover Ratio (Company) is based on the unaudited consolidated
Financial Statements of the Company for the applicable Quarter, and which has been prepared
in accordance with GAAP. (only for June/December)
4. We confirm that no event has occurred or is subsisting which has resulted in the Security Cover
Ratio (Company) falling below the Required Security Cover Ratio as at [June 30 / December
31], [20xx], per Clause 2.2 of Schedule 3 in the Debenture Trust Deed.
5. We confirm that the Company has not breached the 15% capital adequacy ratio threshold Ratio
as at [June 30 / December 31], [20xx], per Clause 2.1 of Schedule 3 in the Debenture Trust
Deed
6. We confirm that the Debt is not less than 34.5% of the Total Debt of the Company Ratio as at
[June 30 / December 31], [20xx], per Clause 2.3 of Schedule 3 in the Debenture Trust Deed
7. We confirm that no Event of Default or Potential Event of Default is continuing, other than
[insert details of any Event of Default and the steps, if any, being taken or proposed to be taken
to remedy it]
Signed:
…............
115
Authorised Signatory
Edelweiss Asset Reconstruction
Company Limited
116
SCHEDULE 12: SPECIFIED NCDs
Party Name Amount Outstanding
(As on 15 Nov 2019)
EC HOLDINGS PTE. LTD. 3,97,63,35,525
EC SPECIAL SITUATIONS FUND 1,74,96,73,422
EDELWEISS INDIA SPECIAL
SITUATIONS FUND 2,97,04,95,957
EW INDIA SPECIAL ASSETS FUND II
PTE. LTD. 2,49,71,48,381
ECAP EQUITIES LIMITED 17,80,00,000
ECL FINANCE LTD 96,63,32,652
EDELWEISS FINVEST PVT LTD 2,77,08,01,046
Total 15,10,87,86,983
It is clarified that in addition to the above entities, the Company is permitted to issue Specified NCDs to
EFSL and/or any of its Affiliates.
117
SCHEDULE 13: DETAILS OF THE TRUST ACCOUNTS
Trust Name Bank Name Account No IFSC Code Branch
EARC Trust SC 114 IDBI Bank Ltd 0004103000066741 IBKL0000004 Nariman point
EARC Trust SC 120 IDBI Bank Ltd 0004103000066608 IBKL0000004 Nariman point
EARC Trust SC 122 IDBI Bank Ltd 0004103000066574 IBKL0000004 Nariman point
EARC Trust SC 126 IDBI Bank Ltd 0004103000066699 IBKL0000004 Nariman point
EARC Trust SC 127 IDBI Bank Ltd 0004103000066705 IBKL0000004 Nariman point
EARC Trust SC 128 IDBI Bank Ltd 0004103000066714 IBKL0000004 Nariman point
EARC Trust SC 129 IDBI Bank Ltd 0004103000069076 IBKL0000004 Nariman point
EARC Trust SC 131 IDBI Bank Ltd 0004103000066787 IBKL0000004 Nariman point
EARC Trust SC 133 IDBI Bank Ltd 0004103000066884 IBKL0000004 Nariman point
EARC Trust SC 134 IDBI Bank Ltd 0004103000066547 IBKL0000004 Nariman point
EARC Trust SC 141 IDBI Bank Ltd 0004103000067500 IBKL0000004 Nariman point
EARC Trust SC 143 IDBI Bank Ltd 0004103000067528 IBKL0000004 Nariman point
EARC Trust SC 144 IDBI Bank Ltd 0004103000067537 IBKL0000004 Nariman point
EARC Trust SC 145 IDBI Bank Ltd 0004103000068208 IBKL0000004 Nariman point
EARC Trust SC 146 IDBI Bank Ltd 0004103000068217 IBKL0000004 Nariman point
EARC Trust SC 151 IDBI Bank Ltd 0004103000068341 IBKL0000004 Nariman point
EARC Trust SC 152 IDBI Bank Ltd 0004103000068350 IBKL0000004 Nariman point
EARC Trust SC 154 IDBI Bank Ltd 0004103000068378 IBKL0000004 Nariman point
EARC Trust SC 162 IDBI Bank Ltd 0004103000069085 IBKL0000004 Nariman point
EARC Trust SC 163 IDBI Bank Ltd 0004103000069128 IBKL0000004 Nariman point
EARC Trust SC 164 IDBI Bank Ltd 0004103000072690 IBKL0000004 Nariman point
EARC Trust SC 173 IDBI Bank Ltd 0004103000069270 IBKL0000004 Nariman point
EARC Trust SC 174 IDBI Bank Ltd 0004103000069261 IBKL0000004 Nariman point
EARC Trust SC 175 IDBI Bank Ltd 0004103000069289 IBKL0000004 Nariman point
EARC Trust SC 176 IDBI Bank Ltd 0004103000069340 IBKL0000004 Nariman point
EARC Trust SC 177 IDBI Bank Ltd 0004103000070027 IBKL0000004 Nariman point
EARC Trust SC 179 IDBI Bank Ltd 0004103000069243 IBKL0000004 Nariman point
EARC Trust SC 182 IDBI Bank Ltd 0004103000069818 IBKL0000004 Nariman point
EARC Trust SC 188 IDBI Bank Ltd 0004103000069748 IBKL0000004 Nariman point
EARC Trust SC 189 IDBI Bank Ltd 0004103000069881 IBKL0000004 Nariman point
EARC Trust SC 190 IDBI Bank Ltd 0004103000069784 IBKL0000004 Nariman point
EARC Trust SC 191 IDBI Bank Ltd 0004103000070744 IBKL0000004 Nariman point
EARC Trust SC 203 IDBI Bank Ltd 0004103000071044 IBKL0000004 Nariman point
EARC Trust SC 207 IDBI Bank Ltd 0004103000070799 IBKL0000004 Nariman point
EARC Trust SC 208 IDBI Bank Ltd 0004103000071062 IBKL0000004 Nariman point
EARC Trust SC 210 IDBI Bank Ltd 0004103000071284 IBKL0000004 Nariman point
EARC Trust SC 212 IDBI Bank Ltd 0004103000071309 IBKL0000004 Nariman point
EARC Trust SC 224 IDBI Bank Ltd 0004103000072344 IBKL0000004 Nariman point
EARC Trust SC 226 IDBI Bank Ltd 0004103000072362 IBKL0000004 Nariman point
EARC Trust SC 227 IDBI Bank Ltd 0004103000072371 IBKL0000004 Nariman point
118
EARC Trust SC 228 IDBI Bank Ltd 0004103000072380 IBKL0000004 Nariman point
EARC Trust SC 230 IDBI Bank Ltd 0004103000072405 IBKL0000004 Nariman point
EARC Trust SC 231 IDBI Bank Ltd 0004103000072414 IBKL0000004 Nariman point
EARC Trust SC 232 IDBI Bank Ltd 0004103000072423 IBKL0000004 Nariman point
EARC Trust SC 233 IDBI Bank Ltd 0004103000072432 IBKL0000004 Nariman point
EARC Trust SC 237 IDBI Bank Ltd 0004103000073228 IBKL0000004 Nariman point
EARC Trust SC 241 IDBI Bank Ltd 0004103000073583 IBKL0000004 Nariman point
EARC Trust SC 245 IDBI Bank Ltd 0004103000073918 IBKL0000004 Nariman point
EARC Trust SC 262 IDBI Bank Ltd 0004103000074111 IBKL0000004 Nariman point
EARC Trust SC 264 IDBI Bank Ltd 0004103000074139 IBKL0000004 Nariman point
EARC Trust SC 266 ICICI Bank Ltd 000405114588 ICIC0000004 Nariman point
EARC Trust SC 267 ICICI Bank Ltd 000405114589 ICIC0000004 Nariman point
EARC Trust SC 268 ICICI Bank Ltd 000405114583 ICIC0000004 Nariman point
EARC Trust SC 269 ICICI Bank Ltd 000405114590 ICIC0000004 Nariman point
EARC Trust SC 270 ICICI Bank Ltd 000405114587 ICIC0000004 Nariman point
EARC Trust SC 271 ICICI Bank Ltd 000405114591 ICIC0000004 Nariman point
EARC Trust SC 272 ICICI Bank Ltd 000405114593 ICIC0000004 Nariman point
EARC Trust SC 291 ICICI Bank Ltd 000405115062 ICIC0000004 Nariman point
EARC Trust SC 292 ICICI Bank Ltd 000405115400 ICIC0000004 Nariman point
EARC Trust SC 299 ICICI Bank Ltd 000405115820 ICIC0000004 Nariman point
EARC Trust SC 301 ICICI Bank Ltd 000405115464 ICIC0000004 Nariman point
EARC Trust SC 302 ICICI Bank Ltd 000405115466 ICIC0000004 Nariman point
EARC Trust SC 305 ICICI Bank Ltd 000405115991 ICIC0000004 Nariman point
EARC Trust SC 307 ICICI Bank Ltd 000405115992 ICIC0000004 Nariman point
EARC Trust SC 309 ICICI Bank Ltd 000405116000 ICIC0000004 Nariman point
EARC Trust SC 310 ICICI Bank Ltd 000405115999 ICIC0000004 Nariman point
EARC Trust SC 311 ICICI Bank Ltd 000405116068 ICIC0000004 Nariman point
EARC Trust SC 312 ICICI Bank Ltd 000405116001 ICIC0000004 Nariman point
EARC Trust SC 313 ICICI Bank Ltd 000405115998 ICIC0000004 Nariman point
EARC Trust SC 322 ICICI Bank Ltd 000405116430 ICIC0000004 Nariman point
EARC Trust SC 328 ICICI Bank Ltd 000405116447 ICIC0000004 Nariman point
EARC Trust SC 332 ICICI Bank Ltd 000405116448 ICIC0000004 Nariman point
EARC Trust SC 333 ICICI Bank Ltd 000405116466 ICIC0000004 Nariman point
EARC Trust SC 334 ICICI Bank Ltd 000405116467 ICIC0000004 Nariman point
EARC Trust SC 338 ICICI Bank Ltd 000405116835 ICIC0000004 Nariman point
EARC Trust SC 339 ICICI Bank Ltd 000405116847 ICIC0000004 Nariman point
EARC Trust SC 340 ICICI Bank Ltd 000405116831 ICIC0000004 Nariman point
EARC Trust SC 341 ICICI Bank Ltd 000405116829 ICIC0000004 Nariman point
EARC Trust SC 343 ICICI Bank Ltd 000405116853 ICIC0000004 Nariman point
EARC Trust SC 345 ICICI Bank Ltd 000405116856 ICIC0000004 Nariman point
EARC Trust SC 346 ICICI Bank Ltd 000405116857 ICIC0000004 Nariman point
EARC Trust SC 347 ICICI Bank Ltd 000405117224 ICIC0000004 Nariman point
EARC Trust SC 348 ICICI Bank Ltd 000405117225 ICIC0000004 Nariman point
119
EARC Trust SC 351 ICICI Bank Ltd 000405117230 ICIC0000004 Nariman point
EARC Trust SC 355 ICICI Bank Ltd 000405117229 ICIC0000004 Nariman point
EARC Trust SC 356 ICICI Bank Ltd 000405117231 ICIC0000004 Nariman point
EARC Trust SC 358 ICICI Bank Ltd 000405117233 ICIC0000004 Nariman point
EARC Trust SC 360 ICICI Bank Ltd 000405117235 ICIC0000004 Nariman point
EARC Trust SC 362 ICICI Bank Ltd 000405117238 ICIC0000004 Nariman point
EARC Trust SC 365 ICICI Bank Ltd 000405118257 ICIC0000004 Nariman point
EARC Trust SC 366 ICICI Bank Ltd 000405118260 ICIC0000004 Nariman point
EARC Trust SC 369 ICICI Bank Ltd 000405118259 ICIC0000004 Nariman point
EARC Trust SC 389 ICICI Bank Ltd 000405120239 ICIC0000004 Nariman point
EARC Trust SC 390 ICICI Bank Ltd 000405120283 ICIC0000004 Nariman point
120
SCHEDULE 14: FORMAT OF COMPANY AUDITOR REPORT
To: Edelweiss Asset Reconstruction Company Limited
From: [Company Auditor]
Dated: [●]
Dear Sirs:
Re: [●] (“Company”) – INR [●] debenture trust deed dated [●] (“Debenture Trust Deed”).
1. We refer to the Debenture Trust Deed. All capitalized terms used herein, shall have the
meanings ascribed to them in the Debenture Trust Deed.
2. In accordance with Clause 7.6 (b) of the Debenture Trust Deed, we confirm that the Security
Cover Ratio (Company) is [●] as at the Testing Date of [●], details of which can be found in
Appendix 1.
3. We confirm that the Security Cover Ratio (Company) is based on the audited consolidated
Financial Statements of the Company for the applicable Financial Half Year, and which has
been prepared in accordance with GAAP.
4. We confirm that the capital adequacy ratio threshold Ratio as at the Testing Date of [●], per
Clause 2.1 of Schedule 3 in the Debenture Trust Deed, is __
5. We confirm that the Total Debt of the Company as at the Testing Date of [●], is as given in
Appendix 2.
Signed:
…............
Authorised Signatory
[Company Auditor]
121
As on [March 31 /
September 30] [20xx]
(In INR crore unless
otherwise stated)
Outstanding
SR Value
FMV of
Secured
Assets
[A]
Gain
(Loss)
FMV of
Trust
Fees
[B]
Cash
Balance
[C]
Security
Cover
(Company)
[A] + [B] +
[C]
Large Assets - Single
Asset Trusts
[•] [•] [•] [•] [•] [•]
Asset 1 [•] [•] [•] [•] [•] [•]
Asset 2 [•] [•] [•] [•] [•] [•]
Asset 3 [•] [•] [•] [•] [•] [•]
Large Assets - Portfolio
Trusts
[•] [•] [•] [•] [•] [•]
Asset 1 [•] [•] [•] [•] [•] [•]
Asset 2 [•] [•] [•] [•] [•] [•]
Asset 3 [•] [•] [•] [•] [•] [•]
Other Portfolio Assets [•] [•] [•] [•] [•] [•]
Asset 1 [•] [•] [•] [•] [•] [•]
Asset 2 [•] [•] [•] [•] [•] [•]
Asset 3 [•] [•] [•] [•] [•] [•]
Total [•] [•] [•] [•] [•] [•]
Sum of (1) Nominal Value ; (2) accrued but unpaid Interest; (3) accrued but
unpaid Default Interest; and (4) the Redemption Premium (Pro-Rata):
[•]
Security Cover Ratio (Company): [•]
122
SCHEDULE 15: FORMAT OF THE INDEPENDENT VALUER REPORT
To: [Trustee]
From: [Independent Valuer]
Dated: [●]
Dear Sirs:
Re: [●] (“Company”) – INR [●] debenture trust deed dated [●] (“Debenture Trust Deed”).
1. We refer to the Debenture Trust Deed. All capitalized terms used herein, shall have the
meanings ascribed to them in the Debenture Trust Deed.
2. In accordance with Clause 7.6 (c) of the Debenture Trust Deed, we confirm that the Security
Cover Ratio (Debenture Holder) is [●] as at the Testing Date of [●], details of which can be
found in Appendix 1.
3. In accordance with Clause 7.6 (d) of the Debenture Trust Deed, we confirm that the Security
Cover (Net) is [●] as at the Testing Date of [●], details of which can be found in Appendix 1.
4. In accordance with Clause 7.6 (d) of the Debenture Trust Deed, we confirm that the Security
Cover Ratio (Net) is [●] as at the Testing Date of [●], details of which can be found in Appendix
1.
Signed:
…............
Authorised Signatory
[Independent Valuer]
APPENDIX 1
As on [March 31 /
September 30] [20xx]
(In INR crore unless
otherwise stated)
Outstanding
SR Value
FMV of
Secured
Assets
[A]
Gain
(Loss)
FMV of
Trust
Fees
[B]
Cash
Balance
[C]
Security
Cover
(Debenture
Holder)
[A] + [B] +
[C]
Large Assets - Single
Asset Trusts
[•] [•] [•] [•] [•] [•]
Asset 1 [•] [•] [•] [•] [•] [•]
Asset 2 [•] [•] [•] [•] [•] [•]
123
Asset 3 [•] [•] [•] [•] [•] [•]
Large Assets -
Portfolio Trusts
[•] [•] [•] [•] [•] [•]
Asset 1 [•] [•] [•] [•] [•] [•]
Asset 2 [•] [•] [•] [•] [•] [•]
Asset 3 [•] [•] [•] [•] [•] [•]
Other Portfolio Assets [•] [•] [•] [•] [•] [•]
Asset 1 [•] [•] [•] [•] [•] [•]
Asset 2 [•] [•] [•] [•] [•] [•]
Asset 3 [•] [•] [•] [•] [•] [•]
Total [•] [•] [•] [•] [•] [•]
Sum of (1) Nominal Value ; (2) accrued but unpaid Interest; (3) accrued but
unpaid Default Interest; and (4) the Redemption Premium (Pro-Rata):
[•]
Security Cover Ratio (Debenture Holder): [•]
Security Cover (Company): [•]
Security Cover (Net): [•]
Security Cover Ratio (Net): [•]
124
SCHEDULE 16: FORMAT OF CASHFLOW STATEMENT
Opening Cash Balance [•]
Cash Inflows INR
Repayment of Advances / Expenses [•]
Gross Management Fees (including GST) [•]
Gross Incentive Fees (including GST) [•]
SR Redemption [•]
SR Upside [•]
Interest / Repayment of Permitted Loans [•]
Further Financial Indebtedness Proceeds [•]
Other [•]
Total Cash Inflows [•]
Cash Outflows INR
Investments in Permitted Company SRs [•]
Investments in Restricted Company SRs [•]
Investments in Permitted Loans to Investee Companies [•]
Investments in Permitted Loans to Trusts for Advances / Expenses [•]
Direct Taxes [•]
Indirect Taxes (GST) [•]
Operational Expenses [•]
Redemption of Existing Financial Indebtedness [•]
Debt Service [•]
Other [•]
Total Cash Outflows [•]
Closing Balance [•]
125
SCHEDULE 17: PERMITTED SHAREHOLDER PAYOUTS
Particulars Annual Limits (in INR set out below)
Rating & Corporate Guarantee Support Fee 107,000,000
Rent, Shared Infrastructure & Other Miscellaneous Costs 250,000,000
Fund Raising Commission to Wealth/ IB 215,000,000
CSR Payment
INR 36,000,000 or as required under
Applicable Laws, whichever is
higher
Payouts towards Specified NCDs Not exceeding Excluded Amounts
CCPS Dividend
0.001% of CCPS amounts being INR
3320 (Rupees three thousand
and three hundred and twenty
only
Interest on Specified Unsubordinated Indebtedness Not exceeding 16% p.a.
Purchase of Loans/ SRs On arm’s length
126
SCHEDULE 18: SPECIFIED EXPOSURE LIMIT
Entity Maximum Exposure in
INR
Arshiya Group 358,000,000
Jai Balaji 358,000,000
GTL Limited 358,000,000
Kohinoor CTL 715,000,000
Tilaknagar Industries 358,000,000
Shah Group Builders Limited, Adhunik Power and Natural Resources
Limited and Modern Steels Limited
Nil
127
SCHEDULE 19: FORMAT OF TESTING COMPLIANCE REPORT
To: [Trustee]
From: Edelweiss Asset Reconstruction Company Limited
Dated: [●]
Dear Sirs:
Re: [●] (“Company”) – INR [●] debenture trust deed dated [●] (“Debenture Trust Deed”).
1. We refer to the Debenture Trust Deed. All capitalized terms used herein, shall have the
meanings ascribed to them in the Debenture Trust Deed.
2. In accordance with Clause 7.6 (b) of the Debenture Trust Deed, we hereby attach the Company
Auditor Report which can be found in Appendix 1.
3. In accordance with Clause 7.6 (b) of the Debenture Trust Deed, we confirm that the Security
Cover Ratio (Company) is [●] as at the Testing Date of [●], details of which can be found in
Appendix 1.
4. We confirm that the Security Cover Ratio (Company) is based on the audited consolidated
Financial Statements of the Company for the applicable Financial Half Year, and which has
been prepared in accordance with GAAP.
5. We confirm that no event has occurred or is subsisting which has resulted in the Security Cover
Ratio (Company) falling below the Required Security Cover Ratio as at the Testing Date of [●],
per Clause 2.2 of Schedule 3 in the Debenture Trust Deed.
6. We confirm that the Company has not breached the 15% capital adequacy ratio threshold Ratio
as at the Testing Date of [●], per Clause 2.1 of Schedule 3 in the Debenture Trust Deed
7. We confirm the Debt is not less than 34.5% of the Total Debt of the Company Ratio as at the
Testing Date of [●], per Clause 2.3 of Schedule 3 in the Debenture Trust Deed
8. We confirm that no Event of Default or Potential Event of Default is continuing, other than
[insert details of any Event of Default and the steps, if any, being taken or proposed to be taken
to remedy it]
Signed:
…............
Authorised Signatory
Edelweiss Asset Reconstruction
Company Limited
128
SCHEDULE 20: INVESTMENT LIMIT CERTIFICATE
To: [Trustee]
From: Edelweiss Asset Reconstruction Company Limited
Dated: [●]
Dear Sirs:
Re: [●] (“Company”) – INR [●] debenture trust deed dated [●] (“Debenture Trust Deed”).
1. We refer to the Debenture Trust Deed. All capitalized terms used herein, shall have the
meanings ascribed to them in the Debenture Trust Deed.
2. In accordance with Clause 7.7 (a) of the Debenture Trust Deed, we hereby attach the
Independent Valuer Report which sets out the Security Cover (Net) of [●] as at the Testing Date
of [●], and which can be found in Appendix 1.
3. In accordance with Clause 7.7 (a) of the Debenture Trust Deed, we confirm that the Investment
Limit for the next Investment Period starting [July 16 / January 16], [20xx], is equal to 17.5%
(seventeen decimal five per cent.) of the Security Cover (Net) per paragraph 2 above or [●].
Signed:
…............
Authorised Signatory
Edelweiss Asset Reconstruction
Company Limited
129
IN WITNESS WHEREOF the signatures of the authorised signatories of the Company has been
hereunto affixed and the Trustee has caused these presents to be executed by its authorised officers the
day and year first hereinabove written in the manner hereinafter appearing.
SIGNED FOR AND ON BEHALF OF
EDELWEISS ASSET RECONSTRUCTION
COMPANY LIMITED the within-named
COMPANY, pursuant to the resolution passed by
its Board of Directors at their meeting held on
_____________ in the presence of Ms.
______________________________, Authorised
Signatorywho has signed in token thereof.
Notice details:
Address: Edelweiss House, Off. CST Road,
Kalina
Email: [email protected]
Fax: +91 22 4019 4900
Attention: Mr. Deepak Nautiyal
130
SIGNED FOR AND ON BEHALF OF SBICAP
TRUSTEE COMPANY TRUSTEE
COMPANY LIMITED the within-named
TRUSTEE
Name: ___________________________
Designation: _______________________
__________________________
Signatory Name:
Designation:
131