FINANCING ARRANGEMENTS
XXIV FINANCIAL CLOSE
24.1 The Concessionaire shall provide to NHAI, a copy of the Financing Package
furnished by it to the prospective Senior Lenders. As and when such Financing Package is
approved by the Senior Lenders, with or without modifications, a copy of the same shall be
furnished by the Concessionaire to NHAI forthwith.
24.2 Notwithstanding anything to the contrary contained in this Agreement, the
Concessionaire covenants with NHAI that it shall achieve Financial Close within 180 (one
hundred eighty) days from the date of this Agreement. If the Concessionaire shall fail to
achieve Financial Close within the said 180 (one hundred eighty) days period, the
Concessionaire shall be entitled to a further period of 90 (ninety) days subject to an
advance weekly payment by the Concessionaire to NHAI of a sum of Rs.100,000 (Rupees one
hundred thousand) per week or part thereof for any delay beyond the said 180 (one hundred
eighty) day period, as Damages on account of such delay in achieving Financial Close
within the said 180 (one hundred eighty) day period by the Concessionaire.
24.3 Notwithstanding anything to the contrary contained in this Agreement, NHAI shall
be entitled to terminate this Agreement forthwith, without being liable in any manner
whatsoever to the Concessionaire, by a communication in writing to the Concessionaire
pursuant to Clause 35.2 if the Concessionaire shall have failed to pay in advance the
Damages to NHAI under and in accordance with Clause 24.2 above.
24.4 Notwithstanding anything to the contrary contained in this Agreement, if the
Financial Close shall not occur within 270 (two hundred seventy) days as set forth in
Clause 24.2 above, all rights, privileges, claims and entitlements, if any, of the
Concessionaire under or arising out of this Agreement shall be deemed to have been waived
by and to have ceased with the concurrence of the Concessionaire, and the Concession
Agreement shall be deemed to have been terminated by mutual agreement of the Parties.
24.5 Upon Termination of this Agreement under Clauses 24.3 and 24.4, NHAI shall be
entitled to encash the Bid Security or the Performance Security, as the case may be, and
appropriate the proceeds thereof as Damages.
XXV GRANTS
25.1 NHAI agrees to provide to the Concessionaire cash support by way of an outright
Grant (the "Grant") equal to the sum set forth in the Bid of the Bidder and
accepted by NHAI namely, Rs.________ million (Rupees________________ million) in
accordance with the provisions of this Article XXV.
25.2 The Grant may be applied by the Concessionaire partly for funding part of the
equity capital of the Company (the "Equity Support") and partly for meeting its
O&M expenses.
25.3 The Equity Support shall:
not exceed 25% of the Total Project Cost; and
in no case be greater than total equity capital actually subscribed and paid in cash by
the shareholders for meeting the Total Project Cost as set forth in the Financing Package.
25.4 The balance of the Grant (if any) available after deducting therefrom the amount
of Equity Support shall be provided to the Concessionaire in accordance with this Article
XXV for meeting O&M Expenses of the Project (the "O&M Support").
25.5 The whole or any part of the Grant shall be disbursed by NHAI to the
Concessionaire only and only if the Concessionaire is not in Material Breach of this
Agreement at the time of such disbursement.
25.6 The disbursement of the Equity Support pursuant to this Article XXV shall be made
by NHAI to the Concessionaire proportionately alongwith the loan funds disbursed by the
Senior Lenders under the Financing Documents for meeting the Total Project Cost. NHAI
shall disburse each tranche of the Equity Support as aforesaid by credit to the Project
Escrow Account within 15 (fifteen) days of the release of each loan installment by the
Senior Lenders to the Concessionaire provided the Concessionaire has submitted to NHAI
along with each disbursement request a certificate from its Statutory Auditors certifying
the above particulars and has given at least 7 (seven) days to NHAI for processing such
request.
25.7 The O&M Support shall be disbursed by NHAI to the Concessionaire by credit to
the Escrow Account in quarterly instalments and the first such instalment shall be
released within 30 (thirty) days of the COD. Each such instalment shall be a sum equal to
1 (one) per cent of the Total Project Cost and such instalments shall be paid by NHAI
until the Grant is fully disbursed to the Concessionaire. The payment will be subject to
the satisfactory performance of the concessionaire (according to criteria to be defined).
25.8 If NHAI shall fail to disburse any tranche of the Equity Support or the O&M
Support within the periods set forth for the payment thereof to the Concessionaire, NHAI
shall pay interest on such delayed tranche @ SBI PLR plus two per cent.
{XXV PREMIUM ON CONCESSION
FEE}
{25.1 The Concessionaire has offered and agreed that as set forth in the Bid
and accepted by NHAI, the Concessionaire shall pay a premium in addition to the Concession
Fee payable under this Agreement (the "Premium") as follows:
The Premium shall be paid within 90 (ninety) days of the commencement of the year for
which such Premium is due and payable and the provisions relating to Concession Fee shall
apply mutatis mutandis to such Premium.}
XXVI. REVENUE SHORTFALL LOANS
XXVI.1 If the Realisable Fees in any Accounting Year during the Concession Period shall
fall below the Subsistence Revenue Level as a result of an Indirect Political Event, or a
Political Event as set forth in Article XXXII, NHAI agrees to provide to the
Concessionaire such shortfall support, by way of a loan ("Revenue Shortfall
Loan") with interest thereon @ SBI PLR per annum. Provided, however, that any
reserves of the Concessionaire and any sums received or likely to be received by the
Concessionaire through insurance claims (to exclude insurance payments for physical loss
used to carry out requisite repairs) or payments by NHAI under Article XXXII shall first
be deducted and only the balance remaining shall be disbursed as the Revenue Shortfall
Loan.
XXVI.2 For the purposes of claiming disbursements on
account of Revenue Shortfall loans pursuant to Clause 26.1 above in any Accounting Year,
the Concessionaire shall:
Submit a detailed account of the Indirect Political
Event or the Political Event, as the case may be, and its impact on total revenues of the
Concessionaire as soon as feasible and submit weekly reports thereafter;
Provide to NHAI, the Schedule of Debt Service Payments under the Financing Documents
for the Accounting year for which Revenue Shortfall Loans are claimed;
Provide to NHAI the details of O&M Expense budget for such Accounting Year and the
expenditure incurred in that year out of such budget;
Within 15 (fifteen) of the close of each Accounting Year in which the shortfall in the
referred to in Clause 26.1 shall occur, provide a certificate from the statutory Auditors
of the Concessionaire certifying the Subsistence Revenue Level, the Realisable Fees and
the Revenue Shortfall Loan Requirement after deducting reserves of the Concessionaire, if
any, and
Submit a written request to NHAI under the hands of a Director of the Concessionaire
requesting for disbursement of the Revenue Shortfall Loan to the Concessionaire by payment
thereof into the Escrow Account.
XXVI.3 Upon the receipt of the request and documents
as set forth in Clause 26.2 above and provided the same is not found by NHAI to be wrong
or incorrect, NHAI shall disburse the Revenue Shortfall Loan within 30 days (thirty) days
thereof.
XXVI.4 In the event Realisable Fees during the first six
months of an Accounting Year shall fall as a result of an Indirect Political Event or a
Political Event and the amount of such Realisable Fees is less than the Debt Service
Payments due for the first six months of such Accounting Year, NHAI shall upon request
provide an advance to the Concessionaire for meeting the shortfall in such Debt Service
Payments. For claiming such advance, the Concessionaire shall make a demand to NHAI
accompanied by a certificate from the Statutory Auditors setting forth the Realisable Fees
during the first six months of the Accounting Year, the reserves of the Concessionaire and
the outstanding amount on account of Debt Service Payments due in the first nine months of
such year. The Statutory Auditors shall also certify the amount of advance required by the
Concessionaire from NHAI for meeting such Debt Service Payments after deducting such
Realisable Fees and the reserves of the Concessionaire. Within 15 (fifteen) days of
receiving such demand, NHAI shall disburse the advance due to the Concessionaire at an
interest rate equal to SBI PLR. Not later than 60 (sixty) days after completion of such
Accounting Year, the Concessionaire shall either refund such advance with interest to NHAI
or adjust it against such Revenue Shortfall Loan as may be due to the Concessionaire under
this Article.
XXVI.5 The Revenue Shortfall Loans disbursed by NHAI pursuant hereto and the interest
thereon shall be repaid by the Concessionaire in a sum equal to 50% (fifty per cent) of
the Net Cash flow of the Concessionaire as and when made and such repayments shall be made
in one or more years as necessary.
XXVI.6 Notwithstanding anything to the contrary contained in Clause 26.4, the
Concessionaire shall repay the entire Revenue Shortfall Loan and interest thereon at least
two years before the expiry of the Concession Period. If any sum remains due or
outstanding from the Concessionaire under this Article XXVI at any time during a period of
two years preceding the Termination Date, it shall constitute a Concessionaire Event of
Default under Article XXXV and NHAI shall be entitled to Terminate this Agreement under
Clause 35.2.
XXVII ESCROW ACCOUNT
27.1 The Concessionaire shall within 60 days from the date of this Agreement open and
establish the Escrow Account with a Bank (the "Escrow Bank") and all funds
constituting the financing package for meeting the Total Project Cost shall be credited to
such Escrow Account. During Operations Period all Fees collected by the Concessionaire
from the users of the Project Highway shall be exclusively deposited therein. In addition,
all Fees collected by NHAI in exercise of its rights under this Agreement during the
Concession Period and all disbursements or payments by NHAI pursuant hereto shall also,
subject to the rights of deductions and appropriations therefrom of NHAI under this
Agreement, be deposited by NHAI in the Escrow Account
27.2 Disbursements from Escrow Account
(This clause and Schedule ‘Q’ will be subject to revision in the light of the
terms and conditions of the Facility Agreement(s) between the Concessionaire and its
Senior Lenders)
27.2.1 The Concessionaire shall give, at the time of the opening of the Escrow Account,
irrevocable instructions by way of an Escrow Agreement substantially in form set forth in
Schedule `Q’ (the "Escrow Agreement") to the Escrow Bank instructing, inter
alia, that the deposits into the Escrow Account shall subject to Clause 27.2.3, be
appropriated in the following order every month and if not due in a month then
appropriated proportionately in such month and retained in the Escrow Account and paid out
therefrom in the month when due unless otherwise expressly provided in the Instruction
Letter:
All taxes due and payable by the Concessionaire;
All expenses in connection with and relevant to the construction of Project Highway by
way of payment to the EPC Contractor and such other persons as may be specified in the
Financing Documents;
O&M Expenses including Fees collection expenses statutory liabilities and taxes
pertaining to O&M of the Project Highway incurred by the Concessionaire directly or
through O&M Contractor and/or Tolling Contractor, if any, subject to the items and
ceiling in respect thereof as set forth in the Financing Documents but not exceeding 1/10
(one tenth) of the annual liability on this account;
The whole or part of the expense on repair work or O&M Expense including Fees
collection expenses incurred by NHAI on account of exercise of any of its rights under
this Agreement provided NHAI certifies to the Escrow Bank that NHAI had incurred such
expenses in accordance with the provisions of this Agreement;
All Concession Fees due to NHAI from the Concessionaire under this Agreement;
Monthly proportionate provision of Debt Service Payments due in an Accounting Year and
payment of Debt Service Payments in the month when due;
Any payments and Damages due and payable by the Concessionaire to NHAI pursuant to this
Agreement, including repayment of Revenue Shortfall Loans; and
Balance in accordance with the instructions of the Concessionaire.
27.2.2 The Concessionaire shall not in any manner modify the order of payment specified
in this clause 27.2 except with the prior written approval of NHAI.
27.2.3 In the event of the Grant to the Concessionaire shall exceed 10% of the Total
Project Cost, all disbursements on account of Total Project Cost, other than those to the
EPC Contractor in accordance with the EPC Agreement, shall be made in accordance with the
express provisions contained in that behalf in the Financing Documents. Provided, however,
that if the total of such disbursements exceed 10% of the Total Project Cost, prior
written consent of NHAI shall be required in respect of the disbursement arrangements for
such excess amounts, and such consent shall not be unreasonably withheld by NHAI.
27.3 Notwithstanding anything to the contrary contained in the Escrow Agreement and
subject to the provisions contained in Clauses 36.5 and 37.1, upon Termination of this
Agreement, all amounts standing to the credit of the Project Escrow Account shall be
appropriated and dealt with in the following order:
- all taxes due and payable by the Concessionaire;
- all Concession Fees due and payable to NHAI under this Agreement;
- all Debt Due to Senior Lenders;
- any payments and Damages due and payable by the Concessionaire to NHAI pursuant to this
Agreement, including Termination claims and repayment of Revenue Shortfall Loans;
- all accrued O&M Expenses;
- any other payments required to be made under this Agreement; and
- balance, if any, on the instructions of the Concessionaire.
27.4 The instructions contained in the Escrow Agreement shall remain in full force and
effect until the obligations set forth in Clause 27.3 have been discharged.
XXVIII STATE SUPPORT AGREEMENT
28.1 The Concessionaire acknowledges that for the performance of its obligations under
this Agreement, it requires support and certain services from STG. The nature and scope of
such support and services required by the Concessionaire from STG are fully described in
the draft State Support Agreement set forth at Schedule ‘R’
28.2 The Concessionaire acknowledges that the obligation to enter into the State
Support Agreement is solely of the Concessionaire and accordingly the Concessionaire
agrees and undertakes to enter into at its cost and expense the State support Agreement
with STG substantially in form and content as set forth in Schedule ‘R’.
XXIX [NOT USED]
XXX INSURANCES
30.1 Insurance during the Construction Period: The Concessionaire shall effect and
maintain, or cause to be effected and maintained, at no cost to NHAI during the
Construction Period such insurances upto such maximum sums as may be required under and in
accordance with the Financing Documents and/or such insurance as the Concessionaire may
reasonably consider necessary or desirable in accordance with Good Industry Practice
and/or such insurance as are specified in Schedule ‘U’. The Concessionaire shall
also effect and maintain such insurance as may be necessary for mitigating the risks that
may devolve on NHAI as a consequence of any act of omission by the Concessionaire during
the Construction Period.
30.2 Insurance during the Operations Period: Not later than 4 months prior to the
anticipated Completion of the Project Highway, the Concessionaire shall obtain and
maintain at no cost to NHAI during the Operations Period in respect of the Project Highway
and its operations such insurance as may be required under any of the Financing Documents,
Applicable laws and/ or such insurance as the Concessionaire may reasonably consider
necessary or desirable in accordance with Good Industry Practice and/or such insurance as
are specified in Schedule ‘U’.
For the sake of brevity, the aggregate of the maximum sums insured under insured under the
insurance taken out by the Concessionaire pursuant to this Article XXX are herein referred
to as the "Insurance Cover".
30.3 Evidence of Insurance Cover: All insurance obtained by the Concessionaire in
accordance with this Article XXXX shall be maintained with insurer or insurers, and on
terms consistent with General Industry Practice. Within thirty days of obtaining any
insurance cover, the Concessionaire shall furnish to NHAI, copies of certificates of
insurance, copies of the insurance polices signed by an authorised representative of the
insurer and copies of all premia payment receipts in respect of such insurance received
from each insurance carrier, and such insurance will not be cancelled, changed or not
renewed until the expiration of at least 45 (forty five) days after written notice of such
cancellation, change of non-renewal has been received by NHAI.
30.4 Remedy on Failure to Insure: If the Concessionaire shall fail to effect and keep
in force the insurance for which it is responsible pursuant hereto, NHAI shall have the
option to keep in force any such insurance, and pay such premia and recover the costs
thereof from the Concessionaire, or for the purposes of computation of payments to the
Concessionaire pursuant to Article 32 treat the insurance cover i.e. the maximum sums
which such insurance was providing for had it been in force and effect as being deemed to
have been received by the Concessionaire.
30.5 Waiver of Subrogation: All insurance policies supplied by the Concessionaire shall
include a waiver of any right of subrogation of the insurers thereunder against, inter
alia, NHAI, and its assigns, subsidiaries, affiliates, employees, insurers and
underwriters and of any right of the insurers of any set-off or counterclaim or any other
deduction, whether by attachment or otherwise, in respect of any liability of any such
person insured under any such policy.
30.6 Concessionaire Waiver: The Concessionaire hereby further releases, assigns and
waives any and all rights of recovery against, inter alia, the NHAI, and its affiliates,
subsidiaries, employees, successors, permitted assigns, insurers and underwriters, which
the Concessionaire may otherwise have or acquire in or from or in any way connected with
any loss covered by policies of insurance maintained or required to be maintained by the
Concessionaire pursuant to this Agreement (other than third party liability insurance
policies) or because of deductible clauses in or inadequacy of limits of any such policies
of insurance.
30.7 Application of Insurance Proceeds: The proceeds from all insurance claims, except
life and injury, shall be paid to the Concessionaire by credit to the Escrow Account
(unless otherwise required by the Financing Documents) who shall, subject to its
obligations under the Financing Documents, and notwithstanding anything contained in
Article XXVII, apply such proceeds for any necessary repair, reconstruction,
reinstatement, replacement, improvement, delivery or installation of the Project Highway.
XXXI ACCOUNTS AND AUDIT
31.1 The Concessionaire shall maintain full accounts of all Fees including realisable
Fees and other revenues derived/collected by it from and on account of use of the Project
Highway and of O&M Expenses and other costs paid out of the Project Escrow Account and
shall provide copies of the said accounts duly audited and certified by the
Concessionaire’s Statutory Auditors within 120 (one hundred twenty) days of the close
of each Accounting Year to which they pertain, during the subsistence of this Agreement.
Such audited accounts shall form the basis of various payments by either Party under this
Agreement. The Concessionaire shall also furnish, within one week of its publication, a
certified copy of the audited accounts and annual report published by the Company under
the Applicable Laws.
31.2 The Concessionaire shall appoint and have during the subsistence of this Agreement
as its Statutory Auditors a firm of Chartered Accountants duly licensed to practice in
India out of the mutually agreed list of 10 (ten) independent and reputable firms of
Chartered Accountants in India (the "List of Chartered Accountants"). The
criteria for preparing the List of Chartered Accountants are set forth in Schedule
‘T’. The Concessionaire may terminate the appointment of any Statutory Auditor
appointed in accordance with this Article, subject to the approval of the NHAI (not to be
unreasonably withheld) and to the replacement Statutory Auditors being appointed from the
List of Chartered Accountants. The fees and expenses of the Statutory Auditors shall be
borne by the Concessionaire.
31.3 On or before the fifteenth day of April each Year, the Concessionaire shall
provide for the preceding Accounting Year a statement duly audited by its Statutory
Auditors giving summarised vehicle/user wise information on (I) the traffic count for each
category of vehicles using the Project Highway and liable for payment of Fees therefor,
and (ii) Fees charged and the amount of Fees received, realisable Fees and other revenues
derived from the Project Highway and such other information as NHAI may reasonably
require.
31.4 Notwithstanding anything to the contrary contained in
this Agreement, NHAI shall have the right but not the obligation to appoint at its cost
another firm of chartered accountants from the List of Chartered Accountants at Schedule
(the "Additional Auditor") to audit and verify all those matters, expense,
costs, realisations and things which the Statutory Auditors of the Concessionaire, are
required to do, undertake or certify pursuant to this Agreement.
31.5 Where a Grant has been provided , NHAI shall have the right to appoint for the
duration of the Construction Period as Concurrent Auditor a firm of Chartered Accountants
from the List of Chartered Accountants (the "Concurrent Auditor") who shall
undertake concurrent audit of the Concessionaire during the Construction Period. The
charges and expenses of such Concurrent Auditor shall be borne by the NHAI. After such
Construction Period, NHAI may at its option have concurrent audit done at such time and
for such period as NHAI may deem appropriate at its cost and expenses.
31.6 In the event of their being any difference between the
finding of the Additional Auditor or the Concurrent Auditors, as the case may be, and the
certification provided by the Statutory Auditors of the Concessionaire, such Auditors
shall meet to resolve such differences and if they are unable to resolve the same such
disputed certification shall be resolved by recourse to the Dispute Resolution Procedure.
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