| ESCROW ACCOUNT AGREEMENT |
BETWEEN
COMPANY
AND
BANK 1
AND
BANK 2
AND
BANK 3
This ESCROW ACCOUNT AGREEMENT is made on the _____ day of __________________, 2002:
BETWEEN
| 1. | THE BORROWER | COMPANY 1House No. 13, Road No. 12
Dhanmondi Residential Area Dhaka-1209. |
| 2. | THE AGENT & THE ESCROW BANK | BANK 1Head Office
1, Dilkusha Commercial Area (3rd floor) Dhaka-1000. |
| 3. | THE LENDERS | BANK 1Head Office
1, Dilkusha Commercial Area (3rd floor) Dhaka-1000; BANK 2 Head Office G. P. O. Box No. 3522 BCIC Bhaban 30-31, Dilkusha Commercial Area Dhaka-1000; BANK 3 OF BANGLADESH LIMITED Head Office Printers Building 5, RAJUK Avenue Dhaka-1000. |
WHEREAS :
A. The Borrower is a private limited company incorporated under the relevant Companies Act to set up a 600-tpd cement clinker grinding plant on the bank of river Shitalakkhya, Murapara, Rupganj, Narayanganj.
B. By a Facility Agreement dated _________, 2002 entered into between the Borrower, the Agent and the Lenders (“the Facility Agreement”), the Lenders have agreed to grant the Borrower a Term Loan Facility of a maximum amount of Tk. 15,00,00,000.00 (Taka fifteen crore) only and a Overdraft Facility of a maximum amount of Tk. 4,00,00,000.00 (Taka four crore) only on the terms and conditions therein.
C. Pursuant to the Facility Agreement, the Borrower and the Lenders have agreed to enter into this Agreement under the terms and condi
NOW IT IS HEREBY AGREED as follows
1. Interpretation
1.1 For the purposes of this Agreement, unless otherwise defined herein, capitalized terms used but not otherwise defined herein shall have the meanings as set forth in the Facility Agreement, and the following terms shall have the meanings specified below:
“AUTHORISED SIGNATORY” means at any time any officer of the Borrower authorised by the Board of Directors, provided that, there has been delivered to the Agent and the Escrow Bank at least 5 business days beforehand the specimen signature of such officer duly certified by a Director of the Borrower.
“COLLECTION ACCOUNT” means one or more designated accounts into which all operation inflows of the Borrower should be paid into
“DEBT SERVICE RESERVE ACCOUNT” means a bank account opened by the Borrower with the Escrow Bank to allow the Borrower to hold funds to meet future principal repayments and interest payments.
‘DISBURSEMENT ACCOUNT’ has the same meaning as ascribed to it under the Facility Agreement.
“ESCROW ACCOUNT” or “EA” means the Escrow account opened pursuant to this agreement into which all funds accrued in all accounts of the Borrower permitted under this Agreement shall be paid into and in respect of which the Borrower shall give irrevocable instructions to the bankers of such accounts to transfer the proceeds thereof to EA in accordance to the terms of this Agreement.
“PROJECT COSTS” means expenditures incurred during construction of the Project and other outgoing payables by the Borrower (including principal repayments, interest payments and Financing Costs) for the purposes of the Project;
“MAJORITY LENDERS” has the same meaning ascribed to it in the Facility Agreement.
“OVERDRAFT” has the same meaning ascribed to it in the Facility Agreement.
“REFERENCE PERIOD” means the period beginning on the first Principal Repayment Date and ending on the following Principal Repayment Date and each subsequent period beginning on the day after a Principal Repayment Date and ending on the following Principal Repayment Date;
“PRINCIPAL REPAYMENT DATES” has the same meaning ascribed to it in the Facility Agreement.
“SECURITY DOCUMENTS” has the same meaning ascribed to it in the Facility Agreement.
“TERM LOAN” has the same meaning ascribed to it in the Facility Agreement.
1.2 In this Agreement, any reference to:
a “business day” shall be construed as a reference to a day (other than a Friday or a Saturday or such other day construed as a weekend in future) on which banks are open for business in Bangladesh;
a “Clause” or a “Schedule” shall be construed as a reference to a clause hereof or a schedule hereto;
a “person” shall be construed as a reference to any individual, firm, company, corporation, supranational juridical person, government, state or political sub?division thereof or agency of a state or political sub?division thereof or any association or partnership (whether or not having separate legal personality) of two or more of the foregoing; and
“tax” shall be construed so as to include any tax, levy, impost, duty or other charge of a similar nature.
1.3 In this Agreement “Taka” denotes the lawful currency of Bangladesh.
1.4 Any reference in this Agreement to:
this or any other agreement or document shall be construed as a reference thereto as from time to time amended, varied, novated or supplemented (in each case, with the approval of the Banks); and
any party or other person includes such party’s or person’s successors and assigns;
2. Opening of the Escrow Account
2.1 Within ______ days from After the date of this Agreement, but no later than the date of the first Drawdown, the Borrower shall establish the Escrow Account, Disbursement Account and the Debt Service Reserve Account with the Escrow Bank in the name of the Borrower but to be operated and maintained in accordance with the provisions of this Agreement.
2.2 The Escrow Account, Disbursement Account and the Debt Service Reserve Account will be maintained by the Escrow Bank at its office in Dhaka, or such other place as the Borrower, the Escrow Bank and the Agent may agree from time to time.
2.3 If the Borrower for any reason receives any moneys which by the terms hereof are to be paid into the Escrow Account, or has the power to direct the disposition thereof, the Borrower shall as soon as possible deposit the same, or cause the same to be deposited, into the Escrow Account. Provided that if any such moneys cannot lawfully be so deposited, whether due to exchange control restrictions or for any other reason, the Borrower will use its best endeavours to procure any consents, licences or other approvals required for such deposit and will thereafter make or cause to be made such deposit as soon as legally permissible.
2.4 If any sum fails to be credited to the Escrow Account on any day and the currency of denomination of such sum is not Taka, then such sum shall be exchanged for the equivalent amount in Taka on such day and shall be paid into the Collection Account or the Escrow Account as soon as possible thereafter.
3. Restriction on bank accounts
3.1 The Borrower shall not maintain any bank accounts after the first drawdown under the Facility Agreement other than the accounts contemplated under this Agreement without the prior written consent of the Agent, such consent shall not be unreasonably withheld.
3.2 Upon execution of this Agreement, the Borrower shall provide the Agent details of accounts maintained by the Borrower.
3.3 Prior to establishment of any Collection Account by the Borrower, the Agent shall be notified in writing and the Borrower shall give irrevocable instructions to remit the proceeds in such Collection Account to the Escrow Account from time to time as soon as the credit balance exceeds Tk. ________________ (Taka ____________________) only.
3.4 An account which is not the Escrow Account, Disbursement Account or the Debt Service Reserve Account shall deem to be a Collection Account.
4. Payments into the Escrow Account
4.1 The Borrower shall, to the extent it has power lawfully to do so, pay or cause to be paid all sums to which it becomes entitled from any source whatsoever directly into the Escrow Account.
4.2 Without limiting the foregoing, the Borrower shall pay into the Escrow Account all of the following sums:
(a) Amounts held by the Borrower at the date of opening the Escrow Account;
(b) All capital contributions or investment in the Borrower during the term of the Facility Agreement;
(c) All amounts borrowed or raised by the Borrower during the term of the Facility Agreement;
(d) Revenues from sales;
(e) Penalties, damages, compensations or any monies derived from such turnkey contracts for which the Borrower is a party;
(f) Insurance proceeds; and
(g) Any other operating revenue from whatsoever source.
5. Withdrawals from the Escrow Account
5.1 Provided that:
(i) the security provided for in the Security Documentation has not become enforceable;
(ii) the Escrow Account is not overdrawn;
(iii) the Borrower’s instruction to the Escrow Bank is not countermanded by the Agent under Clause 5.2; and
(iv) no withdrawals shall be made at the request or instruction of the Borrower at any time within the period of 7 business days ending on a Principal Repayment Date except (a) where that request or instruction was received by the Escrow Bank before the start of that period or (b) to the extent that the aggregate amount thereof does not exceed the amount which the Borrower has instructed the Escrow Bank to set aside (to be carried forward on the Escrow Account) on such Principal Repayment Date;
the Borrower may instruct the Escrow Bank to make withdrawals from the Escrow Account in accordance with this Clause.
5.2 During a period an Event of Default has occurred and that Event of Default has not bee remedied, the Escrow Bank may, if so instructed by the Agent, stop the Borrower from making withdrawals from the Escrow Account.
5.3 The Borrower may make withdrawals from the Escrow Account for any purpose whatsoever using standard banking procedures for withdrawing funds.
5.4 For the purpose of calculating, initiating and effecting the payments required on any Principal Repayment Date, the Escrow Bank shall make all relevant calculations (including calculations of currency equivalents) as of the third business day before such Principal Repayment Date and make such payments on the basis of such calculations, taking into account the balance on the Escrow Account as of the seventh business day before such Principal Repayment Date, any withdrawals already requested due to be made on or before such Principal Repayment Date and any interest to be credited to the Escrow Account on or before such Principal Repayment Date.
6. Debt Service Reserve Account
6.1 From ___________ , From the date of First Disbursement of the Term Loan, the Borrower shall ensure that the minimum amounts be deposited in the Debt Service Reserve Account, which shall be the aggregate of:
i) the principal amount of the Term Loan being:
– for the period of one month before a Principal Repayment Date, the principal amount is 2/3 of the principal repayment due on the next Principal Repayment Date;
– for the periods between each month before a Principal Repayment Date, the principal amount is 1/3 of the principal amount due on the next Principal Repayment Date; and
– at all other times the principal amount is zero.
ii) the interest amount of the Term Loan being:
– for the periods of one month before an Interest Payment Date, the interest amount is 2/3 of the interest payment due on the next Interest Payment Date;
– for the periods between one and two months before an Interest Payment Date, the interest amount is 1/3 of the interest payment due on the next Interest Payment Date;
– at all other times the interest amount is zero.
iii) the interest amount of the Overdraft being:
– for the periods of one month before an Interest Payment Date, the interest amount is 2/3 of the interest payment due on the next Interest Payment Date;
– for the periods between one and two months before an Interest Payment Date, the interest amount is 1/3 of the interest payment due on the next Interest Payment Date;
– at all other times the interest amount is zero.
6.2 The Escrow Bank is hereby authorised and instructed by the Borrower to make interest payments and principal repayments from the Debt Service Reserve Account or such other accounts with the Escrow Bank on the relevant Principal Repayment Date and Interest Payment Date.
7. Powers, Duties and Liabilities of the Escrow Bank
7.1 The Escrow Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties and the Escrow Bank shall not be obliged to enquire as to the grounds for it being given and, in particular, the Escrow Bank may rely as aforesaid:
(i) on any notification from the Agent (acting where relevant on information received by it from the Majority Banks) concerning:
(a) any decision, opinion, instruction, determination or agreement of the Banks or Majority Banks;
(b) whether or not the security over any part of the Escrow Account has become enforceable;
(c) whether or not the Borrower is in all material respects in compliance with its obligations under this Agreement (and, if the Agent notifies the Escrow Bank that any instruction or request of the Borrower is not in compliance herewith, then the Escrow Bank shall disregard that instruction or request accordingly);
(ii) on any notification from the Borrower concerning:
(a) any withdrawal from or other operation of the Escrow Account (including notices of withdrawals, copy of invoices and any other documentation provided by the Borrower);
(b) the amount, currency and payee in respect of any payment or transfer requested by it or otherwise to be made by the Escrow Bank hereunder.
7.2 The Escrow Bank shall have no duties or liabilities in relation hereto save for those specifically provided for herein and any other necessarily incidental thereto. Any such duties or liabilities are contractual only and are owed solely to the Borrower on and in accordance with the terms of this Agreement. The Escrow Bank shall have no liability to any party or other person whatsoever (other than the Borrower) arising as a result of its carrying out or otherwise acting on any instructions given to it as contemplated herein nor any other liability as a result of its taking or omitting to take any action in relation to this Agreement or otherwise as arising in its capacity as Escrow Bank. As between the Escrow Bank and the Borrower, the relationship shall be one of banker and customer.
7.3 The operation of the Escrow Account by the Escrow Bank is subject to the same complying in all respects with relevant provisions of applicable law in the place where the same is maintained.
7.4 The Escrow Bank may assume compliance by the Borrower with all the provisions of this Agreement and the Security Documentation unless and until notified to the contrary by the Agent. In particular, the Escrow Bank may assume the accuracy of, and shall have no obligation to challenge or query, any instructions or requests of the Borrower relating to the operation of the Escrow Account. Notwithstanding the foregoing, if the Escrow Bank shall at any time consider any such instruction or request to be, in its sole judgement, unusual, questionable or noteworthy for any reason, it shall notify the Agent and the Borrower accordingly.
7.5 If there are insufficient funds to the credit of the Escrow Bank to make any withdrawal of funds from the Escrow Account on the relevant date therefor the Escrow Bank shall forthwith notify the Agent and the Borrower of such fact.
7.6 The Escrow Bank hereby irrevocably waives and agrees not to exercise any banker’s lien, right of set?off, right to combine accounts or any similar lien or right, against funds held in the Escrow Account in respect of any amounts owing to the Escrow Bank by any person save to any extent expressly contemplated or necessarily to be implied herein.
7.7 All sums of whatsoever nature which are payable by the Borrower hereunder and which are now or at any time hereafter become subject to any tax, levy or duty shall be deemed to be exclusive of such tax, levy or duty and the Borrower in addition to such sums will indemnify each of the other parties hereto from and against all claims and liabilities whatsoever in respect thereof.
7.8 If the Borrower fails to pay any amount due from it to the Escrow Bank, then the Escrow Bank may deduct an amount equal thereto from the Escrow Account.
7.9 The Escrow Bank does not assume and shall not have any liability or responsibility for consequences arising out of the interruption of its business by acts of God, riots, civil commotion, insurrections, wars or any other causes beyond its control, or by any strikes or lockouts.
7.10 The Escrow Bank may for the purposes of and in connection with this Agreement:
(i) assume that:
(a) any representation made by the Borrower or any other person in connection herewith is true; and
(b) the security over the Escrow Account has not yet become enforceable;
unless it has actual knowledge or actual notice, or has been notified by the Agent, to the contrary;
(ii) engage and pay for the advice or services of any lawyers, accountants or other experts whose advice or services may to it seem necessary, expedient or desirable and rely upon any advice so obtained;
(iii) rely as to any matters of fact which might reasonably be expected to be within the knowledge of the Borrower or any other person upon a certificate signed by or on behalf of the Borrower or any other person;
(iv) rely upon any communication or document believed by it to be genuine; and
(v) exercise or (as the case may be) refrain from exercising any right, power, function or discretion vested in it in its capacity as Escrow Bank hereunder as it may in its sole and absolute discretion consider appropriate.
7.11 Notwithstanding anything to the contrary expressed or implied in this Agreement the Escrow Bank shall not:
(i) be bound to enquire as to:
(a) whether or not any representation made by the Borrower or any other person in connection herewith is true;
(b) whether or not the security over the Escrow Account shall have become enforceable; or
(c) the performance by the Borrower or any other person of its obligations hereunder;
(ii) be bound to account for the Borrower, the Agent or any other person for any sum or the profit element of any sum received by it for its own account;
(iii) be bound to disclose to any other person any information relating to the Borrower or any other person obtained or acquired by it otherwise than in its capacity as Escrow Bank hereunder or if any disclosure of any such information relating to the Borrower or any other person obtained or acquired by it in its capacity as Escrow Bank would or might in its opinion constitute a breach of any law or regulation or be otherwise actionable at the suit of any person;
(iv) be under any obligations other than those for which express provision is made herein or which are necessarily incidental thereto; or
(v) disclose any confidential information concerning the Borrower or the Escrow Account except (a) to the Agent, (b) where it is under legal compulsion to do so, (c) internally, or to its professional advisers or regulatory authorities, or (d) where to do so does not constitute a breach of its duty of confidentiality to the Borrower.
7.12 The Escrow Bank does not accept any responsibility for the accuracy and/or completeness of any information supplied by the Borrower or any other person in connection with this Agreement or for the legality, validity, effectiveness, adequacy or enforceability of this Agreement.
7.13 Each party hereto agrees that it will not assert or seek to assert against any director, officer or employee of the Escrow Bank any claim it might have against any of them in respect of the duties, liabilities, powers, rights, functions or role of the Escrow Bank herein.
7.14 For the purposes of this Agreement, knowledge or awareness of the Escrow Bank shall refer to the actual knowledge of officers or employees of the Escrow Bank within that office of the Escrow Bank dealing with the matters contemplated hereby.
7.15 Nothing in this Agreement shall require the Escrow Bank to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties, or in the exercise of any of its rights, powers, functions and discretion hereunder, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not assured to it.
7.16 Where at any time the Escrow Bank is required to make a payment hereunder, it shall make the same by transfer to an account with a bank in the principal financial centre in the currency of denomination of such payment or in such other manner as the Escrow Bank may agree. If any date for payment hereunder is not a date when banks are open for the transaction of business in the relevant financial centre then such payment shall be made by the Escrow Bank on the next following day when such banks are so open, for value as of such date. Where, in order to make a payment, it is necessary for the Escrow Bank to exchange one currency for another currency in which to make the payment, that exchange will be effected at the equivalent rate and the payment will be made on the third business day after the date on which the Escrow Bank initiates the payment, unless the Escrow Bank and the Borrower otherwise agree.
7.17 The Borrower shall send to the Agent a copy of any written instruction or request delivered by it to the Escrow Bank at the same time as it sends the original to the Escrow Bank.
7.18 The Borrower shall notify the Escrow Bank (with a copy to the Agent) of the amount, currency and payee in respect of any payment or transfer which the Escrow Bank is required to make on any Principal Repayment Date at least 7 business days before such Principal Repayment Date from the Debt Service Reserve Account. If the Escrow Bank does not receive such a notification at least 7 business days before any Principal Repayment Date, it shall promptly notify the Borrower and the Agent accordingly.
7.19 The Escrow Bank shall from time to time as may be agreed between it and the Agent notify the Agent of the various balance on the Escrow Account.
8. Acknowledgements
8.1 The Borrower hereby acknowledges that, whether or not there are, at any given time, sufficient funds in the Escrow Account to meet its relevant obligations as they fall due as contemplated herein, nothing in this Agreement shall be deemed in any way to lessen or absolve the Borrower from such obligations to any other party hereto or to any other person.
8.2 The Borrower and the Escrow Bank acknowledge that all right, title and interest of the Borrower in the Escrow Account, Disbursement Account and Debt Service Reserve Account have been charged and assigned by the Borrower to the Lenders as a continuing security under the Security Documents.
8.3 At any time after any security over the Escrow Account in favour of the Agent has been unconditionally released and discharged, the Agent and the Escrow Bank agree that this Agreement may, if the Borrower so elects, become inoperative (although without prejudice to any accrued rights or obligations of any party).
9. Borrower’s Covenant
9.1 The Borrower hereby agrees to comply with and be bound by the Security Documents and all relevant provisions of this Agreement and the Facility Agreement.
10. Fees (banking, processing fees, etc.)
10.1 The Borrower shall pay to the Escrow Bank for its own account the fees specified in the letter of even date herewith from the Escrow Bank to the Borrower and accepted by the Borrower at the times, and in the amounts, specified in such letter.
11. Costs and Expenses
11.1 The Borrower shall, from time to time within 7 days of demand of the Escrow Bank, reimburse the Escrow Bank for all reasonable costs, charges, losses and expenses (including legal fees (together with any applicable value added tax or similar tax in respect thereof)) incurred by it in good faith in connection with the negotiation, preparation and execution of this Agreement and the performance of its duties as herein contemplated and shall pay all stamp, registration and other taxes and fees and shall, from time to time on demand, indemnify the other parties hereto against any liabilities, costs, claims and expenses resulting from any failure to pay or any delay in paying any such tax or fees.
11.2 The Escrow Bank shall deduct from payments/distributions out of any of the accounts of the Borrower maintained with the Escrow Bank if it is required by law to make such deduction or withholding taxes.
12. Benefit of Agreement
12.1 This Agreement shall be binding upon and inure to the benefit of each party hereto and its successors and assigns.
13. Partial Invalidity
13.1 If, at any time, any provision hereof is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions hereof nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected or impaired thereby.
14. Notices
14.1 Each notice to be made hereunder shall be made to the addresses and in accordance to the manner set forth in the Facility Agreement.
15. Counterparts
15.1 There shall be 4 (four) engrossment of this Agreement on stamp papers, each to be furnished to each of the Lenders and the Borrower, all are the same document and shall constitute the original.
A S W I T N E S S the hands of the parties hereto or their duly authorised representatives the day and year first above written.
| THE BORROWER : | COMPANY 1By___________________________Name: Mir Zahir Hossain
Title: Managing Director Address: House No. 13, Road No. 12 Dhanmondi Residential Area Dhaka-1209 Telephone No.: Fax No.: |
| WITNESS : | By__________________________Name:Title:
Address:
|
| THE AGENT &THE ESCROW BANK: | BANK 1 By___________________________
Name: Shah Md. Nurul Alam Title: President & Managing Director Address: 1, Dilkusha Commercial Area (3rd floor), Dhaka-1000 Telephone No.: Fax No.: |
| WITNESS : | By__________________________Name:Title:
Address: |
| THE LENDERS : | BANK 1 By___________________________
Name: Shah Md. Nurul Alam Title: President & Managing Director Address: 1, Dilkusha Commercial Area (3rd floor), Dhaka-1000 Telephone No.: 9550088, 9550081-85 Fax No.: 9550093 |
| WITNESS : | By__________________________Name:Title:
Address:
|
| BANK 2 By___________________________
Name: Abu Haniff Khan Title: Joint Managing Director Address: 30-31, Dilkusha Commercial Area Dhaka-1000 Telephone No.: Fax No.: |
|
| WITNESS : | By__________________________Name:Title:
Address:
|
| BANK 3OF BANGLADESH LIMITEDBy___________________________
Name: Title: Address: Telephone No.: Fax No.: |
|
| WITNESS : | By__________________________Name:Title:
Address:
|
Drafted by:
For: “The Lawyers & Jurists”
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