TRUSTEESHIP AGREEMENT
ARTICLES OF AGREEMENT made at Mumbai this ……………day of……………. 2000 between ABC Power Generation Company Limited,, a Company registered under the Companies Act, 1956 (1 of 1956) and having its Registered Off ice at.................Mumbai in the State of Maharashtra hereinafter called 'The Company" (which expression shall include its successors and assigns wherever the context or meaning shall so require or permit) of one, part and XYZ Finance Company Ltd. a Company Registered under the Companies Act, 1956 (1 of 1956) having its Registered office at ........................ Mumbai hereinafter called the "Debentures Trustees" (which expression shall include its successors and assigns and the Trustees for the time being wherever the context or meaning shall so require or permit) of the Other part.
ARTICLE I
In terms of the letters dated…………….and……………. issued by ABC Finance Company Ltd. a company registered under the Companies Act, 1956 and having its registered office at Mumbai hereinafter referred to as "the Subscriber" subscribe to the Debentures of the aggregate nominal value of Rs. 47.00 Crores to be agreed to be allotted by the Company on (DME) on private placement basis on the terms and conditions set out in the said letters and accepted by the Company.
The Subscriber and the Company have executed a Subscription Agreement, dated November.26…………….etting out the terms and conditions on which the subscriber will subscribe to the issue of NCDs by the Company.
Words and expressions appearing herein which have been defined in the said Letter of Offer shall have the same meaning as defined therein unless the reference or context requires otherwise.
(i) Interest on debentures outstanding
The NCDs shall carry interest on the principal amount of NCDs outstanding from time to time at the prime lending rate ("PLR") of the Subscriber plus 3.5% per annum plus interest tax as prevailing on the date of each Subscription. The first instalment of interest shall accrue for the broken period from the date of subscription upto the date immediately following 15th June and 15th December as the case may be and subsequently be payable on every 15th June and 15th December. The interest for the broken period shall be payable together with the last instalment of the redemption of the said NCDs.
(ii) The applicable rate of interest would be fixed at the end of the disbursement period on the basis of the weighted average of the interest rate at which the disbursement were made. Such interest shall be payable half-yearly, each year, on the 15th day of June and December.
(iii) In the event of any default in the payment of interest on the NCDs on the dates as stated above, compound interest at half-yearly rests at the said rates will become due and payable for the moneys due for the period of default.
(iv) Review of rate of Interest
Subscriber would have the right to reset the rate of interest at the end of seven years from the date of first disbursement provided that the company will have the right to redeem the NCDs if the reset is adverse to the Company
(v) Further Interest
All interest which shall become due during the currency of the NCDs or any part thereof and for the time being remaining unpaid and all other moneys which have become payable by Company to Debentureholder, in case the same be not paid on the dates on which they accrue due, carry further interest at the maximum lending rate of the Subscriber (top of the Interest Rate Band), as applicable on the date of default or at the applicable rate under the Subscription agreement, whichever is higher, computed from the respective date(s) of such interest of moneys accruing due and all such interest and further interest which have become payable but not paid, shall become payable upon the footing of compound interest with rests taken or made half-yearly as hereinbefore provided.
(vi) Computation of Interest and other charges
In all cases in which it shall be necessary to compute the amount of interest or any other charges which shall have accrued for even periods of six months such computation shall be made on an annual basis. In all other cases, such computation shall be on a daily basis using a 365 days factor.
(vii) The payment of interest shall, however, be subject to deduction of Income-Tax at source at the rates prescribed under the Income-tax Act from time to time.
ARTICLE II
2.1 The Debenture Trustees have confirmed their appointment as
vide their letter No ...........dated…………….
2.2 The terms of acceptance being with remuneration comprising
(a) Initial Fee of Rs.30,000;
(b) Annual Fee of 0.05% of face value of Debentures issued and outstanding.
(c) Reimbursement by the Company of all the costs, charges, expenses including costs towards travelling and out of pocket expenses incurred by the corporation while acting as Trustees for the Debenture holders.
2.3 The Debentureholders have authorised and approved the Debenture Trustees to act as their Trustees for the Debentures proposed to be issued by the Company to the Debentureholders vide Company's Letter of Offer dated and accepted by the Debentureholders.
ARTICLE III
3.1 The Company shall not later than …………………..2000 or within extended time as may be permitted by the Debenture holders create such the following security in favour of the Debenture Trustees to secure the due redemption of the principal amount of the face value of the Debentures, payment of interest on the Debentures, additional interest by way of liquidated damages, 'compound interest, costs, charges , remuneration of the Debenture Trustees and all other expenses due and payable in respect of the said Debentures. The security being:
(a)a first mortgage and charge in favour of the Security Trustee in a form satisfactory to the Subscriber of all the Company's immovable properties both present and future;
(b) a first registered mortgage and charge in favour of the Security Trustee on all of the Company's immovable properties in Maharashtra, its intangible assets both present and future, charge over Project Contracts, insurance proceeds and bank accounts;and
(c) a first charge by way of hypothecation in favour of the Subscriber of all the Company's movables, movables including movable machinery, machinery, spares, tools and accessories company's stocks of raw materials, semi-finished, finished goods, consumable stores, book debts and such other movables present and future. The mortgage and charge referred to above shall rank pad passu with the mortgages and charges created and/or to be created in favour of the Lenders in respect of the financial assistance as set out herein:
3.2 If the Debenture Trustees are of the opinion that at any time during the subsistence of this Agreement, the security provided by the Company has become inadequate to cover the balance of the principal amount then outstanding, then on the Debenture Trustees advising the Company to that effect, the Company shall provide and furnish to the Debenture Trustees to their satisfaction such additional security as may be available with the Company and as may be acceptable to the Debenture Trustees to cover such deficiency.
3.3 The Company shall notify, the Debenture Trustees and the Subscriber in writing of all its acquisitions of immovable properties relating or pertaining to the Company's said units as and when they are made and from time to time and as soon as practicable thereafter make out a marketable title and create in favour of the Debenture Trustees a security on the basis as aforesaid in such form and manner as may be acceptable to the Debenture holders and required by the Debenture Trustees, to secure the Debentures.
ARTICLE IV
4.1 The Company hereby covenants with the Debenture Trustees that the Company will at all times during the subsistence of the Debentures:
(a) Carry on and conduct its business and implement the Project (as defined in the Subscription Agreement) in proper and efficient manner and sound engineering and financial standards and duly pay all rents, cesses and other payments and outgoings payable out of or in respect of the assets to be Mortgaged failing to be paid by the Company and carry out all covenants, obligations, agreements, stipulations, conditions and terms on its part to be performed under or carry out all mortgages, conveyances, grants, leases, pattahs, assignments, contracts, agreements and other deeds and documents affecting the assets to be mortgaged or any part thereof.
(b) Keep proper books of accounts as required by the Companies Act, 1956 and therein make true and proper entries of all dealings and transactions of or in relation to the assets to be mortgaged and the business of the Company and keep the said books of account and all other books, registers and other documents, relating to the affairs of the Company at its Registered Office or where permitted by law at other place or places the said books of Accounts and documents of a similar nature may be kept and the Company will ensure that all entries in the same relating to the assets to be mortgaged and the business relating to the unit of the Company shall at all reasonable times be open for the inspection of the Debenture Trustees and such person or persons or corporation as they shall from time to time in writing for that purpose appoint.
