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Exhibit 10.12
[GRAPHIC OF TWENTY RUPEES CURRENCY OMITTED]
LOAN AGREEMENT
THIS AGREEMENT made this 28th day of September One Thousand Nine
Hundred and Ninety Five between WIPRO FINANCE LIMITED, a company within the
meaning of the Companies Act, 1956 (1 of 1956) and having its Registered Office
at Bakhtawar, 229, Nariman Point, Bombay - 400 021 (hereinafter referred to as
the "Borrower", which expression shall, unless it be repugnant to the subject or
context thereof, include its successors and assigns);
AND
THE INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA LIMITED, a
public company incorporated under the Indian Companies Act, 1913 (7 of 1913) and
having its Registered Office at 163, Backbay Reclamation, Bombay - 400 020 and a
Zonal Office at 'Raheja Towers', East Wing, II Floor, 26-27, M.G. Road,
Bangalore - 560 001 (hereinafter referred to as "the Lender", which expression
shall, unless it be repugnant to the subject or context thereof, include its
successors and assigns);
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ARTICLE I
DEFINITIONS; GENERAL CONDITIONS
I. DEFINITIONS
1.1 The following terms shall have the following meanings :-
(a) 'General Conditions' means the GENERAL CONDITIONS No. GC-I-86 APPLICABLE
TO ASSISTANCE PROVIDED BY FINANCIAL INSTITUTIONS.
(b) 'Project' means the project to be financed as described in Schedule I
hereto;
(c) 'Financing Plan' means the financing plan as described in Schedule II
hereto.
(d) 'ICICI Advance Rate' means the percentage rate per annum decided by ICICI
from time to time as applicable for Rupee Loans to Prime borrowers plus
applicable interest tax or other statutory levy, as notified by ICICI from
time to time.
(e) 'Business Day' means the day on which the Zonal/Branch Office of ICICI, as
described in this Agreement, or such other office as may be notified by
the Lender to the Borrower is open for business.
1.2 GENERAL CONDITIONS
The Loan hereby agreed to be granted by the Lender shall be subject to the
Borrower complying with the terms and conditions set out herein and also
in the General Conditions, a copy of which is annexed hereto. The General
Conditions shall be deemed to form part of this Agreement and shall be
read as if they are specifically incorporated herein.
Provided, however, that the General Conditions shall in their application
to this Agreement stand modified as under:
a) The words "commitment charge" wherever they appear stand deleted.
b) "Section 4.16 - PLACE AND MODE OF PAYMENT BY THE BORROWER" be substituted
by the following :-
"Section 4.16 - PLACE AND MODE OF PAYMENT AND CREDIT
THEREFOR -
All monies payable by the Borrower to the Lender shall be paid to the
Lender at their office at Bombay or at such other place(s) as may be
specified by them by telegraphic, telex or mail transfer to the account of
such office(s) or by cheque or bank draft in favour of the respective
Lenders on a scheduled bank at Bombay or such other place(s) or to such
other account(s) as the Lenders may notify to the Borrower and shall be so
paid as to enable the respective Lenders to realise, at par, the amount on
or before the relative due date.
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Credit for all payments by local cheque/bank draft will be given on the
Lenders' immediately next working day after the date of receipt of the
instrument or the relative due date, whichever, is later.
Credit for all payments by outstation cheque/bank draft will be given only
on realisation or on the relative due date, whichever, is later."
c) Sub clause (v) of Section 7.4 - `Nominee Director' be substituted by the
following :-
(v) The Nominee Director(s) shall be entitled to receive all notices,
agenda, minutes of Board Meetings, etc. and to attend all General
Meetings and Board Meetings and meetings of any Committees of the
Board of which he is a member."
d) "Section - 14.2 EVIDENCE OF DEBT" be substituted by the following : -
"Section - 14.2 EVIDENCE OF DEBT"
a) The Lender shall maintain, in accordance with its usual practice, accounts
evidencing the amounts from time to time lent by and owing to it under the
Loan Agreement and the security documents executed in favour of the
Lender.
b) In any legal action or proceedings arising out of or in connection with
the Loan Agreement, the entries made in the accounts maintained pursuant
to sub-clause (a) above shall be prima-facie evidence of the existence and
amount of obligations of the Borrower as therein recorded".
e) Sub-Clause (i) of Section 4.3 of Article IV 'INTEREST' be substituted by
the following :-
"All interest on the Loans and on all other monies accruing due under the
Loan Agreement shall, in case the same be not paid on the respective due
dates, carry interest/further interest at the maximum lending rate of the
Lenders on Rupee Loan(s) as prevailing from time to time or at the
applicable rate under the Loan Agreement, whichever, is higher. Such
interest will be computed from the respective due dates and shall become
payable upon the footing of compound interest with quarterly rests as
provided in the Loan Agreement. The maximum Lending rate of the Lenders on
Rupee Loan shall until creation of final security for the Loan(s), be
increased by 1.05% per annum".
f) Section 4.1 'TERMS OF DISBURSEMENT' of Article IV be substituted by the
following :-
"Section 4.1 - TERMS OF DISBURSEMENT
i) The Loans will be disbursed by the Lenders in one or more
instalment(s) as may be decided by the Lenders subject to the
Borrower complying with the provisions of the Loan Agreement and
the disbursement procedure stipulated by the Lenders and the
expenditure incurred on the Project being in consonance with the
details mentioned in the Loan Agreement. All disbursements shall be
by cheque(s)/authorisation(s) and the collection/remittance charges
will be borne by the Borrower. The interest on the Loans will
accrue as from the date of the cheque(s)/authorisation(s) of the
Lenders.
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ii) In the event of the Lender(s) agreeing to disburse any amount of
the Loans pending creation of final security as stipulated in the
Loan Agreement, the same may be disbursed on such terms as may be
decided by the Lenders".
g) Section 4.2 'ADJUSTMENT OF OVERDUES' of Article IV be substituted by the
following :
"Section 4.2 - ADJUSTMENT OF OVERDUES
The Lender may deduct from sums to be lent to the Borrower any monies then
remaining due and payable by the Borrower to the Lenders".
h) In Section 4.11 'LIQUIDATED DAMAGES ON DEFAULTED AMOUNTS', "2%" shall be
substituted by "2.1%"
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ARTICLE II
AGREEMENT AND TERMS OF LOAN
2.1 AMOUNT AND TERMS OF LOAN :
The Borrower agrees to borrow from the Lender and the Lender agrees to
lend to the Borrower, on the terms and conditions contained herein as also
in the General Conditions, sum to the maximum extent of Rs.3000 lacs
(Rupees three thousand lacs only) (hereinafter referred to as the 'Loan')
2.2 INTEREST :
(i) The Borrower shall pay to the Lender interest on the principal amount of
the Loan outstanding from time to time, quarterly in each year, on January
15, April 15, July 15 and October 15. The rate of interest for each
disbursement shall be 3.25% over the ICICI Advance Rate as prevailing on
the date of each disbursement out of the Loan.
(ii) The Lender may, in its sole discretion charge interest on the Loan at the
weighted average rates. For the purpose of this clause "weighted average
rates" means the weighted mean of the rates of interest applicable to the
Loan. The Loan shall carry interest at such weighted average rate subject
to the following proviso :-
Provided that the aforesaid ICICI Advance rate will be reset on the expiry
of three years from the date of first disbursement out of the Loan and the
Borrower shall pay interest at such reset rate as may be notified by the
Lender to the Borrower.
Provided further that in the event of an increase in the rate of interest
arising out of such reset, the Borrower shall have the option to prepay to
the Lender on such reset date the entire outstanding of the Loan together
with all outstanding interest and other charges and monies payable
thereon.
(iii) The Borrower shall also pay to the Lender, interest on all other monies
payable to the Lender under this Agreement, at the maximum lending rate of
the Lender on Rupee Loans as prevailing from time to time or at the
Applicable Rate under this Agreement, whichever is higher. Such interest
shall also be paid quarterly on the same dates as referred to in
sub-clause (i) above.
2.3 DRAWDOWN SCHEDULE
The Borrower shall provide to the Lender on or before the signing of this
Agreement a draw down schedule in writing for the entire Loan,
disbursements pursuant to which shall however be subject to the provision
of Section 4.1 of the General Conditions.
2.4 NOTICE OF DRAWAL
The Borrower shall furnish to the Lender a notice of drawal not more than
90 days nor less than 25 Business Days before the draw down date, which
draw down date should be a Business Day.
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2.5 LAST DATE OF WITHDRAWAL
Unless the Lender otherwise agrees, the right to make drawals from the
Loan shall cease on March 31, 1996.
2.6 IMPOSTS, COSTS AND CHARGES
i) The Borrower shall, during the currency of the Loan bear all such
imposts, duties and taxes (including interest and other taxes, if
any) as may be levied from time to time by the Government or other
authority pertaining to or in respect of the Loan;
ii) The Borrower shall pay all other costs, charges (including cost of
investigation of title to the Borrowers properties and protection
of the Lender's interest) and expenses in anyway incurred by the
Lender and such additional stamp duty, other duties, taxes charges
and other penalties if and when the Borrower is required to pay
according to the laws for the time being in force in the State in
which its properties are situated or otherwise.
iii) In the event of the Borrower failing to pay the monies referred to
in sub-clause (i) and (ii), the Lender will be at liberty (but
shall not be obliged) to pay the same. The Borrower shall reimburse
all sums paid by the Lender in accordance with the provisions
contained herein".
2.7 REPAYMENT :
The Borrower undertakes to repay the principal amounts of the Loan in
accordance with the Amortization Schedule set forth in Schedule III
hereto.
2.8 CONVERSION RIGHT IN CASE OF DEFAULT
If the Borrower commits a default in payment or repayment of two
consecutive installments of principal amounts of the Loan or interest
thereon or any combination thereof, then the Lender shall have the right
to convert (which right is hereinafter referred to as "the conversion
right") at its option the whole of the outstanding amount of the Loan,
into fully paid-up equity shares of the Borrower, at par, in the manner
specified in a notice in writing to be given by the Lender to the Borrower
(which notice is hereinafter referred to as the "notice of conversion")
prior to the date on which the conversion is to take effect, which date
shall be specified in the said notice (which date is hereinafter referred
to as the "date of conversion").
It shall not be construed as a default, if the Borrower approaches the
Lender well in advance for postponement of principal or interest, as the
case may be, and the Lender agrees to the same.
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(i) On receipt of notice of conversion, the Borrower shall allot and
issue the requisite number of fully paid-up equity shares to the
Lender as from the date of conversion and the Lenders shall accept
the same in satisfaction of the principal amount of the Loan to the
extent so converted. The part of the Loan so converted shall cease
to carry interest as from the date of conversion and the Loan shall
stand correspondingly reduced. Upon such conversion, the
instalments of the Loan payable after the date of conversion as per
Schedule III hereto shall stand reduced proportionately by the
amounts of the Loan so converted. The equity shares so allotted and
issued to the Lender shall carry, from the date of conversion, the
right to receive proportionately the dividends and other
distributions declared or to be declared in respect of the equity
capital of the Borrower. Save as aforesaid, the said shares shall
rank pari passu with the existing equity shares of the Borrower in
all respects. The Borrower shall, at all times, maintain sufficient
unissued equity shares for the above purpose.
(ii) The conversion right reserved as aforesaid may be exercised by the
Lender on one or more occasions during the currency of the Loan on
the happening of the event specified above.
(iii) The Borrower assures and undertakes that in the event of the Lender
exercising the right of conversion as aforesaid, the Borrower shall
get the equity shares which will be issued to the Lender as a
result of the conversion, listed with the Bombay and Bangalore
Stock Exchanges and those Stock Exchange(s) where the Borrowers
shares are listed.
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ARTICLE III
SECURITY
3.1 SECURITY FOR THE LOAN
(A) The Loan together with all interest, liquidated damages, premia on
prepayment or on redemption, costs, expenses and other monies whatsoever
stipulated in this Agreement shall be secured by an exclusive charge by
way of hypothecation in favour of the Lender of all the Borrower's
moveables (save and except book debts), including movable machinery,
machinery spares, tools and accessories, present and future, acquired/to
be acquired by the Borrower out of the Loan and approved by the Lender, so
as to create security adequate enough to maintain a security margin of at
least 25% on the assets charged to the Lender as security for the Loan
i.e. maintain a fixed assets coverage ratio of at least 1.33 times on the
outstanding amount of the Loan, throughout the currency of the Loan.
The Borrower shall furnish letters from the existing chargeholders, if
any, giving their No-objection for creation of exclusive charge in favour
of the Lender on the assets charged/to be charged to the Lender and
confirming that their charges will not extend to such assets.
3.2 CREATION OF ADDITIONAL SECURITY
If, at any time during the subsistence of this Agreement, the Lender is of
the opinion that the security provided by the Borrower has become
inadequate to cover the balance of the Loan then outstanding, then, on the
Lender advising the Borrower to that effect, the Borrower shall provide
and furnish to the Lender, to the satisfaction of the Lender such
additional security as may be acceptable to the Lender to cover such
deficiency.
3.3 AUDITOR'S CERTIFICATE
The Borrower shall produce a certificate from its Auditors stating that
the assets charged/to be charged to the Lender as security for the Loan
are the absolute property of the Borrower and are free from any charge,
lien or claim thereon, of whatsoever nature.
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ARTICLE IV
APPOINTMENT OF NOMINEE DIRECTOR(S)
The Borrower agrees that in the event of the Borrower committing any
default in meeting its obligations to the Lender under this Agreement, the
Lender shall be entitled to appoint and withdraw from time to time one Director
on the Board of Directors of the Borrower at any time during the currency of
this Agreement.
[ILLEGIBLE]
[SEAL OF ICICI]
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ARTICLE V
SPECIAL CONDITIONS
The Loan hereby granted shall also be subject to the Borrower complying
with the special conditions set out in Schedule IV hereto.
[ILLEGIBLE]
[SEAL OF ICICI]
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ARTICLE VI
EFFECTIVE DATE OF AGREEMENT
This Agreement shall become binding on the Borrower and the Lender on
and from the date first above written. It shall be in force till all the monies
due and payable under this Agreement are fully paid off.
[ILLEGIBLE]
[SEAL OF ICICI]
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SCHEDULE I
THE PROJECT
The Borrower is an existing company engaged in equipment leasing,
hire-purchase and other financial services related activities. To meet a part of
its increased requirement of funds for acquiring industrial assets as part of
its leasing and hire-purchase activity during the year ending March 31, 1996,
the Borrower has approached the Lender with a request for Rupee Term Loan of
Rs.3000 lacs.
[ILLEGIBLE]
[SEAL OF ICICI]
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SCHEDULE II
FINANCING PLAN
WFL'S total requirement of funds for the year ending March 31, 1996 is
projected at Rs.26426 lacs as follows :
( Rs. in lacs )
Increase in leased assets 11250
Increase in hire - purchase assets 11250
Increase in owned assets 50
Increase in current assets 419
Increase in investments 507
Repayment of term loans 2658
Increase in bills discounted 292
outstanding -------
26426
-------
The above requirement of funds is proposed to be financed as follows:
(Rs. in lacs)
Increase in share capital 1500
Rupee term loans from institutions
- existing 1200
- proposed from ICICI 3000
- others 2000
Increase in bank borrowings 8007
Fixed deposits from public 2500
Intercorporate deposits 500
Collection of hire - purchase instalments
(principal portion) 4272
Increase in current liabilities 345
Cash and cash accruals 3102
-------
26426
-------
[SEAL OF ICICI]
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SCHEDULE III
AMORTIZATION SCHEDULE
(Rs. in lacs)
Date Payment Due Payment of Principal Amount
Principal Outstanding after
each payment
---------------- ---------- -----------------
3000.00
July 15, 1996 187.5 2812.50
October 15, 1996 187.5 2625.00
January 15, 1997 187.5 2437.50
April 15, 1997 187.5 2250.00
July 15, 1997 187.5 2062.50
October 15, 1997 187.5 1875.00
January 15, 1998 187.5 1687.50
April 15, 1998 187.5 1500.00
July 15, 1998 187.5 1312.50
October 15, 1998 187.5 1125.00
January 15, 1999 187.5 937.50
April 15, 1999 187.5 750.00
July 15, 1999 187.5 562.50
October 15, 1999 187.5 375.00
January 15, 2000 187.5 187.50
April 15, 2000 187.5 -
[SEAL OF ICICI]
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SCHEDULE IV
SPECIAL CONDITIONS
(i) The Loan may be availed of in one or more instalments, each such
instalment to be not less than Rs. 50 lacs.
(ii) The Borrower undertakes that the Loan will be utilised to finance
creation of industrial capital assets only.
(iii) The Borrower undertakes that it shall comply with all the norms that may
be stipulated by Reserve Bank of India from time to time for Non-Banking
Finance Companies.
(iv) The Lender reserves the right to call upon the Borrower to arrange for
direct payment of rentals receivable from the lessees and/or hirers of
equipment acquired out of the Loan. The Borrower shall execute such
undertakings and also arrange to furnish such letters and undertakings
from its lessees and/or hirers of equipment in favour of the Lender as
may be required by the Lender in this regard.
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IN WITNESS WHEREOF the Borrower has caused its Common Seal to be
affixed hereto and to a duplicate hereof on the day, month and year first
hereinabove written and the Lender has caused the same and the said duplicate to
be executed by the hand of Shri /s/ K.J. Rajasimha authorized official of the
Lender as hereinafter appearing.
THE COMMON SEAL of the WIPRO
FINANCE LIMITED has pursuant to the
Resolution of its Board of
Directors passed in that behalf on
The 20th day of September 1995
Hereunto been affixed in the /s/ G. SRINIVASAN
Presence of Shri G. Srinivasan
Vice President - Marketing,
who has signed these presents in
token thereof and Shri R. Sivakumar,
authorised person who has
countersigned the same in token
thereof.
SIGNED AND DELIVERED BY the
withinnamed Lender by the hand of
Shri R.J. Rajasimha Sr. Vice President an /s/ R.J. RAJSIMHA
authorised official of the Lender.
[SEAL OF ICICI]
