Explain in brief the principal documents involved in issuance of GDRs/Foreign Currency Convertible Bonds.

The following principal documents are involved: Subscription Agreement Subscription agreement provides that Lead Managers and other managers agree with the company, to subscribe for GDRs at the offering price. It may provide that obligations of managers are subject to certain conditions precedent. Subscription agreement may also provide that for certain period from the date of the issuance of GDR the issuing company will not authorise the issuance of, issue offer, accept subscription for, sell, contract to sell or otherwise dispose off, whether within or outside India; or deposit into any depository receipt facility, any securities of the company of the same class as the GDRs or the shares or any securities in the company convertible or exchangeable for securities in the company of the same class as the GDRs. Subscription agreement also provides, an option to be exercisable within certain period after the date of offer circular, to the lead manager and other managers to purchase up to a certain prescribed number of additional GDRs solely to cover over-allotments, if any. Depository Agreement Depository agreement lays down the detailed arrangements entered into by the company with the Depository. It also sets forth the rights and duties of the depository. In deposit agreement, the company agrees to indemnify the depository, the custodian and certain of their respective affiliates against any loss, liability, tax or expense of any kind which may arise out of or in connection with any offer, issuance, sale, resale, transfer, deposit or withdrawal of GDRs, or any offering document. Copies of deposit agreement are to be kept at the principal office of Depository and the Depository is required to make available for inspection during its normal business hours, the copies of deposit agreement and any notices, reports or communications received from the company. Custodian Agreement Custodian works in co-ordination with the depository and has to observe all obligations imposed on it including those mentioned in the depository agreement. The custodian is responsible solely to the depository. In the case of the depository and the custodian being same legal entity, references to them separately in the depository agreement or otherwise may be made for convenience and the legal entity will be responsible for discharging both functions directly to the holders and the company. Agency Agreement In case of Foreign Currency Convertible Bonds (FCCBs), the company has to enter into an agency agreement with certain persons known as conversion agents. In terms of this agreement, these agents are required to make the principal and interest payments to the holders of FCCBs from the funds provided by the company. They will also liaise with the company at the time of conversion/ redemption option to be exercised by the investor at maturity. Trust Deed In respect of FCCBs the company enters into Trust Deed with the Trustee for the holders of FCCBs, guaranteeing payment of principal and interest amount on such FCCBs and to comply with the obligations in respect of such FCCBs.