ESCROW ACCOUNT AGREEMENT
BETWEEN
COMPANY 1.
as Borrower
AND
BANK 1
as Escrow Bank, Agent and Lender
AND
BANK 2
as Lender
AND
BANK 3
as Lender
AND
BANK 4
as Lender
AND
BANK 5
as Lender
AND
BANK 6
as Lender
This ESCROW ACCOUNT AGREEMENT is made on the _______ day of ____________________, 2005:
BETWEEN
| THE BORROWER | : | COMPANY 1.
House No. 1/10, Block K Rupnagar I/A, Mirpur-2 Dhaka |
|
AND
|
||
| ESCROW BANK AND THE AGENT | : | BANK 1
Head Office 61, Dilkusha Commercial Area Dhaka-1000 |
| AND
|
||
| THE LENDERS | : | 1. BANK 1
Head Office 61, Dilkusha Commercial Area Dhaka-1000
2. BANK 2 Head Office Printers Building 5, RAJUK Avenue Dhaka-1000
3. BANK 3 Head Office 90, Motijheel Commercial Area Dhaka-1000 4. BANK 4 Head Office Jiban Bima Bhaban (2nd floor) 10, Dilkusha Commercial Area Dhaka-1000 5. BANK 5 Head Office Building No. 98 Main Road, Dhaka Cantonment Dhaka-1206 6. BANK 6 Head Office 1, Gulshan Avenue, Gulshan Dhaka-1212 |
WHEREAS:
A. The Borrower is a private limited company incorporated under the Companies Act, 1994 and presently is engaged in the project of setting up a textile spinning mills at _________________;
B. By a Facility Agreement dated ____________ entered into between the Borrower, the Agent and the Lenders (the “Facility Agreement”), the Lenders have agreed to grant the Borrower a syndicated term loan facility of a maximum amount of Tk. 48,00,00,000.00 (Taka forty eight 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 conditions set forth hereunder.
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:
‘COLLECTION ACCOUNTS’ means one or more designated accounts into which all operation inflows of the Borrower should be paid into.
‘ESCROW ACCOUNT’ or ‘EA’ means the current 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 with the terms of this Agreement.
‘ESCROW BANK’ has the same meaning as ascribed to it under the Facility Agreement.
‘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’ means the syndicated term loan of an aggregate amount of Tk. 48,00,00,000.00 (Taka forty eight crore) only granted/to be granted by the Lenders in terms of the Facility Agreement.
‘FACILITY AGREEMENT’ means the Facility Agreement dated ________ between the Borrower, the Agent and the Lenders.
1.2 In this Agreement, any reference to:
a “business day” shall be construed as a reference to a day on which (i) Lenders and the foreign exchange market are open for business in Dhaka and (ii) dealings in Taka are carried on in the Dhaka interbank market;
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);
any party or other person includes such party’s or person’s successors and assigns;
2. Opening of the Escrow Account
2.1 After the date of this Agreement but before the date of the first draw down under the Facility Agreement, the Borrower shall establish the Escrow Account in its name with the Escrow Bank which are to be operated and maintained in accordance with the provisions of this Agreement
2.2 The Escrow 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 deposition 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 endeavour 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, which shall not be unreasonably withheld.
3.2 Upon execution of this Agreement, the Borrower shall provide the Agent with the 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 the banker of the Collection Accounts to remit the proceeds in such Collection Account to the Escrow Account from time to time as soon as the credit balance exceeds Tk. 2,00,000.00 (Taka two lac) only.
3.4 An account which is not the Escrow 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 to which the Borrower is a party;
(f) Insurance proceeds;
(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 Documents 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;
(iv) an amount equivalent to 1 quarterly instalment (consisting of principal and interest) in respect of the Term Loan under Section 7.1 of the Facility Agreement stand in credit in the Escrow Account (over and above the amount proposed to be withdrawn);
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 been 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 Repayment Date and Interest Payment Date, the Escrow Bank shall make all relevant calculations (including calculations of currency equivalents) as of the third business day before such Repayment Date and Interest Payment Date (as the case may be) 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 Repayment Date and Interest Payment Date.
6. Disbursement and Repayment of Term Loan
6.1 All amounts to be advanced by the Lenders to the Borrower under the Facility Agreement shall be remitted in cleared funds not later than 10.00 hours (Bangladesh time) on the date of drawdown in the Drawing Notice to the Escrow Account and the Escrow Bank shall make the same available to the Borrower on the same day by payment in Taka to such account and bank as shall have been specified in the relevant Drawing Notice. If the Escrow Bank makes available to the Borrower any amount which has not been made unconditionally available to the Escrow Bank by any Lender, the Borrower shall forthwith on notice from the Escrow Bank repay the same to the Escrow Bank.
6.2 The Borrower shall make all payments due to it by the Lenders under the Facility Agreement to the Escrow Account.
6.3 On each Repayment Date, the Escrow Bank shall remit to each Lender from the proceeds of the Escrow Account, provided that funds are available in the Escrow Account, its due proportion thereof by transfer to such account as such Lender shall previously have notified to the Escrow Bank. The failure on the part of the Escrow Bank in making such payment to the Lenders shall under no circumstances whatsoever, absolve the liability of the Borrower to make all repayments and payments under the Facility Agreement on their due dates.
6.4 In case the proceeds in Escrow Account is insufficient for servicing debt on any Repayment Date, the Borrower shall deposit such funds required to meet up the deficiency immediately upon notification by the Escrow Bank.
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 concerning:
(a) any decision, opinion, instruction, determination or agreement of the Lenders;
(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 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. Save that the Lenders have entered into the Facility Agreement on reliance of the existence and administration of the Escrow Account by the Escrow Bank.
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 Documents 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 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 to 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 save to the Lenders with respect to any sum with respect to the Facility Agreement, a Loan Document or a Security Document;
(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;
(v) each Lender is entitled to request the Agent to obtain information on the Escrow Account or its sub-accounts from the Escrow Bank, and the Agent shall promptly furnish such information to the Lender; or
(vi) 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 for 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 Repayment Date at least 7 business days before such Repayment Date from the Escrow Account. If the Escrow Bank does not receive such a notification at least 7 (seven) business days before any Repayment Date, it shall promptly notify the Borrower and the Agent.
8. Change in Escrow Bank
8.1 The Escrow Bank may at any time notify the Borrower and the Lenders of the proposed termination of its agency. After the giving of any notice of proposed termination, the Majority Lenders may in writing appoint, on behalf of the Lenders, a successor as Escrow Bank. If such successor has not accepted in writing the appointment within 30 (thirty) days after the notice of proposed termination, the Escrow Bank may within a further 30 (thirty) days appoint, on behalf of the Lenders, a successor which shall be a Bank with an office in Dhaka. Upon the written acceptance (in such form as the Lenders may approve) by the successor of its appointment as Escrow Bank:
8.1.1 as regards the Borrower and each of the Lenders, such successor shall become bound by all the obligations of the Escrow Bank and become entitled to all the rights, privileges, powers, authorities and discretion of the Escrow Bank hereunder;
8.1.2 the responsibility of the retiring Escrow Bank shall terminate, but without prejudice to any liabilities which the retiring Escrow Bank may have incurred prior to the termination of its function as an escrow bank;
the provisions of this Agreement shall continue in effect for the benefit of any retiring Escrow Bank in respect of any actions taken or omitted to be taken by it or any event occurring before the termination of its function as an escrow bank.
9. Acknowledgements
9.1 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.
9.2 The Borrower and the Escrow Bank acknowledge that all right, title and interest of the Borrower in the Escrow 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.
9.3 At any time after any security over the Escrow Account in favour of the Agent have 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).
10. Borrower’s Covenant
10.1 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.
11. Fees (banking, processing fees, etc.)
11.1 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.
12. Costs and Expenses
12.1 The Borrower shall, from time to time within 7 (seven) 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.
12.2 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.
13. Benefit of Agreement
13.1 This Agreement shall be binding upon and inure to the benefit of each party hereto and its successors and assigns.
14. Partial Invalidity
14.1 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.
15. Notices
15.1 Any notice, request or other communication required or permitted to be given or made under this Agreement shall be in writing. Such notice, request or other communication shall be deemed to have been duly given or made where it shall be delivered by hand or post to the party to which it is required or permitted to be given or made at the address as mentioned in this Agreement before. Any communication or document to be made or delivered to Escrow Bank shall be effective only when received by the Escrow Bank.
16. Counterparts
16.1 There shall be one original copy of this Agreement which will be retained by the Agent for the interest and benefit of the Lenders and each Lenders and the Borrower shall be provided with a copy of this Agreement duly certified to be true copy by the authorised signatory of the Agent.
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 1.By___________________________ Name: Title: Address: House No. 1/10, Block K Rupnagar I/A, Mirpur-2 Dhaka Telephone No.: Fax No.: |
| WITNESS | By__________________________
Name: Title: Address: House No. 1/10, Block K Rupnagar I/A, Mirpur-2 Dhaka
|
| ESCROW BANK AND THE AGENT
|
BANK 1
By___________________________ Name: Title: Address: 61, Dilkusha Commercial Area Dhaka-1000 Telephone No.: 9559333 Fax No.: 9561213 |
| WITNESS | By__________________________
Name: Title: Address: 61, Dilkusha Commercial Area Dhaka-1000 |
| THE LENDERS
|
BANK 1
By___________________________ Name: Title: Address: 61, Dilkusha Commercial Area Dhaka-1000 Telephone No.: 9559333 Fax No.: 9561213 |
| WITNESS | By__________________________
Name: Title: Address: |
| BANK 2
By___________________________ Name: Title: Address: Printers Building 5, RAJUK Avenue Dhaka-1000 Telephone No.: Fax No.: |
|
| WITNESS | By__________________________
Name: Title: Address: Printers Building 5, RAJUK Avenue Dhaka-1000 |
| BANK 3
By___________________________ Name: Title: Address: 90, Motijheel Commercial Area Dhaka-1000 Telephone No.: Fax No.: |
|
| WITNESS | By__________________________
Name: Title: Address: 90, Motijheel Commercial Area Dhaka-1000 |
| BANK 4
By___________________________ Name: Title: Address: Jiban Bima Bhaban (2nd floor) 10, Dilkusha Commercial Area Dhaka-1000 Telephone No.: 9556360 Fax No.: 9562364 |
|
| WITNESS | By__________________________
Name: Title: Address: Jiban Bima Bhaban (2nd floor) 10, Dilkusha Commercial Area Dhaka-1000 |
| BANK 5
By___________________________ Name: Title: Address: Building No. 98 Main Road, Dhaka Cantonment Dhaka-1206 Telephone No.: Fax No.: |
|
| WITNESS | By__________________________
Name: Title: Address: Building No. 98 Main Road, Dhaka Cantonment Dhaka-1206 |
| BANK 6
By___________________________ Name: Title: Address: 1, Gulshan Avenue, Gulshan Dhaka-1212 Telephone No.: Fax No.: |
|
| WITNESS | By__________________________
Name: Title: Address: 1, Gulshan Avenue, Gulshan Dhaka-1212 |
Drafted by:
For: “The Lawyers & Jurists”
M.L.Hotel Tower Ltd,
208,Shahid Syed Nazrul Islam Sarani,
Bijoy Nagar, Dhaka-1000.
www.lawyersnjurists.com