ARTICLES OF AGREEMENT made at Mumbai this ……………day of……………. 2000 between ABC
Power Generation Company Limited,, a Company registered under the Companies Act, 1956 (1 of 1956)
and having its Registered Off ice at……………..Mumbai in the State of Maharashtra hereinafter called ‘The
Company” (which expression shall include its successors and assigns wherever the context or meaning
shall so require or permit) of one, part and XYZ Finance Company Ltd. a Company Registered under the
Companies Act, 1956 (1 of 1956) having its Registered office at …………………… Mumbai hereinafter
called the “Debentures Trustees” (which expression shall include its successors and assigns and the
Trustees for the time being wherever the context or meaning shall so require or permit) of the Other part.

ARTICLE I

In terms of the letters dated…………….and……………. issued by ABC Finance Company Ltd. a
company registered under the Companies Act, 1956 and having its registered office at Mumbai
hereinafter referred to as “the Subscriber” subscribe to the Debentures of the aggregate nominal value of
Rs. 47.00 Crores to be agreed to be allotted by the Company on (DME) on private placement basis on
the terms and conditions set out in the said letters and accepted by the Company.
The Subscriber and the Company have executed a Subscription Agreement, dated
November.26…………….etting out the terms and conditions on which the subscriber will subscribe to the
issue of NCDs by the Company.
Words and expressions appearing herein which have been defined in the said Letter of Offer shall have
the same meaning as defined therein unless the reference or context requires otherwise.
(i) Interest on debentures outstanding
The NCDs shall carry interest on the principal amount of NCDs outstanding from time to time at the prime
lending rate (“PLR”) of the Subscriber plus 3.5% per annum plus interest tax as prevailing on the date of
each Subscription. The first instalment of interest shall accrue for the broken period from the date of
subscription upto the date immediately following 15th June and 15th December as the case may be and
subsequently be payable on every 15th June and 15th December. The interest for the broken period shall
be payable together with the last instalment of the redemption of the said NCDs.
(ii) The applicable rate of interest would be fixed at the end of the disbursement period on the basis of the
weighted average of the interest rate at which the disbursement were made. Such interest shall be
payable half-yearly, each year, on the 15th day of June and December.
(iii) In the event of any default in the payment of interest on the NCDs on the dates as stated above,
compound interest at half-yearly rests at the said rates will become due and payable for the moneys due
for the period of default.
(iv) Review of rate of Interest
Subscriber would have the right to reset the rate of interest at the end of seven years from the date of
first disbursement provided that the company will have the right to redeem the NCDs if the reset is
adverse to the Company
(v) Further Interest
All interest which shall become due during the currency of the NCDs or any part thereof and for the time
being remaining unpaid and all other moneys which have become payable by Company to
Debentureholder, in case the same be not paid on the dates on which they accrue due, carry further
interest at the maximum lending rate of the Subscriber (top of the Interest Rate Band), as applicable on
the date of default or at the applicable rate under the Subscription agreement, whichever is higher,
computed from the respective date(s) of such interest of moneys accruing due and all such interest and
further interest which have become payable but not paid, shall become payable upon the footing of
compound interest with rests taken or made half-yearly as hereinbefore provided.
(vi) Computation of Interest and other charges
In all cases in which it shall be necessary to compute the amount of interest or any other charges which
shall have accrued for even periods of six months such computation shall be made on an annual basis.
In all other cases, such computation shall be on a daily basis using a 365 days factor.
(vii) The payment of interest shall, however, be subject to deduction of Income-Tax at source at the rates
prescribed under the Income-tax Act from time to time.

ARTICLE II
2.1 The Debenture Trustees have confirmed their appointment as
vide their letter No ………..dated…………….

2.2 The terms of acceptance being with remuneration comprising
(a) Initial Fee of Rs.30,000;
(b) Annual Fee of 0.05% of face value of Debentures issued and outstanding.
(c) Reimbursement by the Company of all the costs, charges, expenses including costs towards
travelling and out of pocket expenses incurred by the corporation while acting as Trustees for the
Debenture holders.
2.3 The Debentureholders have authorised and approved the Debenture Trustees to act as their
Trustees for the Debentures proposed to be issued by the Company to the Debentureholders vide
Company’s Letter of Offer dated and accepted by the Debentureholders.

ARTICLE III

3.1 The Company shall not later than …………………..2000 or within extended time as may be permitted
by the Debenture holders create such the following security in favour of the Debenture Trustees to
secure the due redemption of the principal amount of the face value of the Debentures, payment of
interest on the Debentures, additional interest by way of liquidated damages, ‘compound interest, costs,
charges , remuneration of the Debenture Trustees and all other expenses due and payable in respect of
the said Debentures. The security being:
(a)a first mortgage and charge in favour of the Security Trustee in a form satisfactory to the Subscriber of
all the Company’s immovable properties both present and future;
(b) a first registered mortgage and charge in favour of the Security Trustee on all of the Company’s
immovable properties in Maharashtra, its intangible assets both present and future, charge over Project
Contracts, insurance proceeds and bank accounts;and
(c) a first charge by way of hypothecation in favour of the Subscriber of all the Company’s movables,
movables including movable machinery, machinery, spares, tools and accessories company’s stocks of
raw materials, semi-finished, finished goods, consumable stores, book debts and such other movables
present and future. The mortgage and charge referred to above shall rank pad passu with the mortgages
and charges created and/or to be created in favour of the Lenders in respect of the financial assistance
as set out herein:
3.2 If the Debenture Trustees are of the opinion that at any time during the subsistence of this
Agreement, the security provided by the Company has become inadequate to cover the balance of the
principal amount then outstanding, then on the Debenture Trustees advising the Company to that effect,
the Company shall provide and furnish to the Debenture Trustees to their satisfaction such additional
security as may be available with the Company and as may be acceptable to the Debenture
Trustees to cover such deficiency.
3.3 The Company shall notify, the Debenture Trustees and the Subscriber in writing of all its acquisitions
of immovable properties relating or pertaining to the Company’s said units as and when they are made
and from time to time and as soon as practicable thereafter make out a marketable title and create in
favour of the Debenture Trustees a security on the basis as aforesaid in such form and manner as may
be acceptable to the Debenture holders and required by the Debenture Trustees, to secure the
Debentures.

ARTICLE IV

4.1 The Company hereby covenants with the Debenture Trustees that the Company will at all times
during the subsistence of the Debentures:
(a) Carry on and conduct its business and implement the Project (as defined in the Subscription
Agreement) in proper and efficient manner and sound engineering and financial standards and duly pay
all rents, cesses and other payments and outgoings payable out of or in respect of the assets to be
Mortgaged failing to be paid by the Company and carry out all covenants, obligations, agreements,
stipulations, conditions and terms on its part to be performed under or carry out all mortgages,
conveyances, grants, leases, pattahs, assignments, contracts, agreements and other deeds and
documents affecting the assets to be mortgaged or any part thereof.

(b) Keep proper books of accounts as required by the Companies Act, 1956 and therein make true and
proper entries of all dealings and transactions of or in relation to the assets to be mortgaged and the
business of the Company and keep the said books of account and all other books, registers and other
documents, relating to the affairs of the Company at its Registered Office or where permitted by law at
other place or places the said books of Accounts and documents of a similar nature may be kept and the
Company will ensure that all entries in the same relating to the assets to be mortgaged and the business
relating to the unit of the Company shall at all reasonable times be open for the inspection of the
Debenture Trustees and such person or persons or corporation as they shall from time to time in writing
for that purpose appoint.
(c) Give to the Debenture Trustees or to such person as aforesaid such information as they or he or any
of them shall require as to all matters relating to the business, property and affairs of the Company’s said
unit and at the time of the issue thereof to the Debenture Trustees copies of every report, balance sheet,
profit and loss account, circular or notice issued to the shareholders and Debenture Trustees shall In the
event of default be entitled, if they think fit, from time to time nominate an accountant or agent to examine
the books of account, documents and property relating to the said unit of the Company or any part
thereof and to investigate the affairs thereof and the Company shall allow any such accountant or agent
to make such examination and investigation and shall furnish him with all such information as he may
require and shall pay all costs, charges and expenses incidental to such examination and investigation;
(d)Keep all buildings, erections and structures forming part of the assets to be mortgaged and all plant,
machinery, fixtures/fittings, vehicles, implements, tools utensils and other effects thereon or therein in a
good state of repair and in good working order and condition and permit the Debenture Trustees and
such persons as they shall from time to time in writing for that purpose appoint, to enter into or upon and
to view the state and condition of all the assets to be mortgaged and pay the travelling, hotel and other
expenses of any agent whom the Debenture Trustees may depute for the purpose of such inspection and
if the Debenture Trustees shall for any reason decide that it is necessary to employ an expert, to pay the
fees and the travelling, hotel and other expenses of such expert;
(e)Not to pull down or remove any buildings or structures (except any temporary structure) on the lands
for the time being forming part of the assets to be mortgaged or the fixed plant and machinery or any
fittings or fixtures annexed to the same or any of them without the previous consent in writing of the
Debenture Trustees except in the ordinary course of repair and maintenance or Improvement or
replacement or otherwise in the course of and for the purposes of carrying on the business of the
Company and will in such cases forthwith, restore or procure to be restored such buildings, structures,
plant, machinery, fixtures or fittings as the case may be or replace the same to be replaced by others of a
similar nature and of atleast equal value;
(f)Punctually pay all rents, royalties, taxes, cesses, rates, levies, assessments, impositions and
outgoings, governmental or municipal or otherwise in respect of or relating or pertaining to lawfully
imposed upon or payable by the Company as and when the same shall become payable and when
required by the Debenture Trustees produce the receipts of such payment and also punctually pay and
discharge all debts and obligations to or in respect of clerks, servants, workmen, labourers and others
and all other debts and liabilities which may by the laws of India have priority over the security hereby
created and observe, perform and comply with all covenants and obligations which ought to be observed
by the Company in respect of or any part of the assets to be mortgaged;
(g) Apply for and use the best endeavours to obtain renewal of the leases under which any of the
leasehold lands forming part of the assets to be mortgaged are or may be during the subsistence of the
Debentures held as and when the same shall be renewable in accordance with the provisions thereof
and duly vest in the Debenture Trustees all such renewed leases in such manner as .the Debenture
Trustees may direct;
(h) (i) Insure and keep insured in the joint names of the Debenture Trustees and of the Company or any
other person or institution having an insurable interest in the properties of the Company such of the
assets to be mortgaged as are of an insurable nature against loss or damage by fire, flood, storm,
tempest, lightning, explosion and other acts of God and also by riot or other civil commotion or evolution
as also by acts of enemies during war or other risks of war or emergency or such of them including
marine risks or such other risks as may be required by the Debenture Trustees/the Debenture holders
from time to time in an insurance office or offices and Company shall duly pay all premia or other sums
payable for the purpose and effect renewal of such insurance and deliver to and leave with Debenture
Trustees every such policy of insurance and the receipt for the last premium payable thereunder;

(ii)Agree that, in the event of failure on the part of the Company o insure the properties or to pay the
insurance premia or other ums referred to above, the Debenture Trustees may, but shall not be obliged
to, get the properties insured or pay the insurance premia and other sums referred to above as the case
may be and the Company shall forthwith on receipt of a notice of demand from the Debenture Trustees
reimburse them all sums so paid by them together with interest thereon at the same rate as specified in
clause 1.3 hereinbefore in respect of the financial assistance with half yearly rests from the date of
payment and until such reimbursement-by the Company the same shall be debited to the Company’s
Loan account and shall stand secured under the security created in terms of Article III hereof.
(i)Forthwith give notice In writing to the Debenture Trustees of commencement of any proceedings
directly affecting the assets to be mortgaged;
(ii)not pay out of its net earnings or profits any dividend to any shareholders for any year or other period
or any interest or principal or any part of interest or principal which may be secured or payable to any
subsequent encumbrances or any interest or the sums which may have been paid to- the Company by
any shareholders under the Article’s of Association of the Company unless and until the Company shall
have first paid the instalment of principal and interest then clue and payable on the Debentures or has
made provision satisfactory to the Debenture Trustees for asking such payments and will not, during the
subsistence of the Debentures, unless and until the Company shall have first paid all instalments of
principal, make gratuitous payment under piny of the provisions of the Memorandum or Articles of
Association of, the Company nor accept any surrender of shares from or by any shareholder to the
prejudice of the Debenture holders;
(k)not sell or dispose off the assets to be mortgaged, lien or charge by way of hypothecation, pledge or
otherwise howsoever or other encumbrances of any kind whatsoever to the intent and purpose that the
assets to be mortgaged and all parts thereof shall remain and continue to remain free from any further
encumbrances whatsoever during the subsistence of the Debentures PROVIDED FURTHER and to the
extent that, the., Debenture Trustees may agree generally or specifically in regard to any of the above
matters as authorised by the Debenture holders;
(l)Keep the Debenture Trustees in close touch with the progress construction of the project and
subsequently, and to this end, the Company agrees that
(i) The Debenture Trustees or such person or persons not exceeding three as the Debenture Trustees
shall from time to time in writing appoint may inspect the assets purchased for the Company’s project
and the sites, works, etc., relating to the project and may also inspect the plant installations, equipment,
etc., during its operation. The cost of such inspection and, the out-of-pocket expenses incurred during
such inspection by the Debenture Trustees or by such person or persons not exceeding three as the
Debenture Trustees shall from time. to time in writing for the purpose appointed will be paid by the
Company;
(ii) The Company shall maintain records showing the expenditure of the moneys relating to. the project,
the progress and cost of the project and its operations and financial conditions of the Company. Such
records shall be open to examination by the Debenture Trustees or such person or persons not
exceeding three as, the Debenture Trustees shall from time to time in writing for that purpose appoint;
(iii) The Company shall inform the Debenture Trustees promptly of the happening of any event likely to
have a substantial effect on the Company’s profits or business if for instance there are delays in or
during the construction of the project or if after the project has been, completed, the monthly production
or sales are quite different from the projections furnished by the Company, the Company shall inform the
Debenture Trustees accordingly with an explanation or reasons therefor;
(iv) The Company shall give intimation to the Debenture Trustees of all arrangements made or to be
made with the banks or Financial Institutions or other persons for borrowings from them. If so required by
the Debenture Trustees, the Company ,shall furnish to them copies of all documents in respect of such
arrangements;
(v) The Company shall also supply such other data and information about the project as the Debenture
Trustees may require subject always to the Company’s obligations to third parties as to secrecy provided
further that the right of inspection and examination will ordinarily be restricted to two inspections and two
examinations in a year;
(m) Make out,.a marketable title to, the assets to be mortgaged to the satisfaction of the Debenture
Trustees;

(n) To Keep separate accounts and separate bank accounts for the project and no diversion of funds
from the project to other projects for under the control of the Company shall be allowed without prior
consent of the Debenture Trustees;
(o) Keep the Debenture Trustees informed of any change that may occur in the composition of its Board
of Directors, and
(p)During the subsistence of the Debenture duly pay the rent reserved under the leases and shall duly
and punctually make all payments and observe and perform all the terms, covenants and conditions
therein contained to be paid, observed and performed by the Company thereunder, and shall not do or
permit to be done any act, deed or thing- whereby the leases shall be invalidated or become void or
liable for forfeiture in any manner whatsoever or so as to affect or prejudice the security created in favour
of the Debenture Trustees under these presents and shall forthwith inform the Debenture Trustees of any
notice of breach, of default or of the happening of any events which might affect prejudicially the security
in favour of the Debenture Trustees and further thaf the Company shall take effective steps to renew the
leases in accordance with the provisions for renewals contained therein and shall duly comply with the
requirements of the leases. thereunder in that behalf.
4.2 During the subsistence of the Debentures, the Company shall not without the prior permission of the
Trustees/Debenture holders obtained in writing, which consent will not be unreasonably withheld:
(a)Undertake any new project or expansion of the project;
(b)Invest the funds by way of deposits, loans, subscription to share capital other than by way of right
shares or otherwise of any other concerns (including its subsidiary or associate companies) except
Authorised Investments (as defined in the Subscription Agreement) provided howsoever that this
provision shall not be construed to restrict or limit the right of the Company to deposit temporarily such
funds as may be necessary with parties who may insist on such deposits as a condition of the transaction
by them of normal business with the Company or with the Company’s bankers in normal course or make
temporary loans or advances to staff, contractors, or suppliers in the ordinary course of its business;
(c)Raise any further loans and/or debentures provided however that the Company may
(i) Obtain from the banks, bank’s overdraft or other facilities
against hypothecation of the Bankers Goods; and
(ii) Accept any unsecured time deposits;
(d)Radically change its accounting system;
(e)Change its Memorandum and Articles of Association;
(f)Appoint in future any Managing Director(s)/Whole-time Director;
(g)Effect any scheme for amalgamation, merger or reconstruction during the period of the Debentures or
any part thereof remain outstanding;
(h)Utilise any portion of the Debentures for purposes other than those for which the same are issued;
(i)Other than in accordance with the Financing Plan attached to the Subscription Agreement, create any
charge or lien or other interest or in any assets to be mortgaged in favour of the machinery suppliers or
bankers or contractors or others on account of deferred payments and/or guarantees arranged therefor
save as may be agreed by the Debenture Trustees;
4.3 That the Company shall duly observe and perform all the terms, conditions, covenants and
stipulations in respect of the Debentures, and shall not commit any breach or default thereof.
4.4 The Company shall as soon as practicable issue Debenture certificates in such, form and in such
numbers as may be required by the Debenture holders in respect of the Debentures allotted after
obtaining the requisite certificate of registration of charge from the Registrar of Companies in respect of
mortgage and charge when created by the Company in favour of the Debenture Trustees as provided in
Article III hereof.
4.5 The Debenture Trustees agree that they shall, within a period of twelve months after the creation of
security by the Company as specified in Trust Deed in a Article III execute and cause to be registered a
Debenture form and manner acceptable to the Debenture Trustees terms of Article III hereof
4.6The Creditor Agreement by which the securities already created and those Debenture Trustees
further agree to enter into an Inter to be created as mentioned in Article III hereof are made to rank in the
manner specified therein.
4.7 The Company shall pay all such stamp duty (including any additional stamp. duty) other duties,
cesses, taxes, charges and penalties if and when the Company may be required to pay in respect f the
securities to be created in favour of the Debenture Trustees according to the laws for the time being In

force in each of the states in which its properties are situated, and in the event of the Company failing to
pay such stamp duty, other duties, cesses, taxes and penalties as aforesaid, which failure In the opinion
of the Debenture Trustees is likely to prejudice the interest of the Debenture holders, the Debenture
Trustees will be at liberty (but shall not be bound) to pay the same either by way of contribution or an
advance or loan made for the purpose ,of protection and preservation of the assets to be mortgaged to
the Debenture Trustees or for enforcement of the Security by the Debenture Trustees and the Company
shall repay the same to the Debenture Trustees and/or the Debenture holders on demand with Interest
thereon at the same rate as specified in clause 1.3 of this agreement.
ARTICLE V

5. The Debenture Trustees may, from time to time, or at any time waive off such terms. and conditions as
to them shall seem expedient, any breach by the Company of any of the covenants and provisions in
these presents contained without prejudice to the rights of the Debenture Trustees in respect of any
subsequent breach thereof.

ARTICLE VI

6. The Debentures shall be deemed forthwith to have become due and payable and the security therefor
shall become enforceable upon occurrence of an Event of Default under the Subscription Agreement.

ARTICLE VI I

7. The Debenture Trustees shall exercise such rights and powers as are usually exercised by Trustees in
this respect under the Indian Trusts Act, 1882 and the Transfer of Property Act, 1882 and in particular the
following:
(a) The Debenture Trustees may in relation to these presents act on the opinion or advice of
or any information obtained from any solicitors, counsel, advocates, valuer, surveyor, broker,
auctioneer, accountant or other expert whether obtained by the Company or by the Debenture
Trustees or otherwise and shall not be responsible for any loss occasioned by so acting;
(b) The Debenture Trustees shall be at Liberty to accept a certificate signed by a Director of
the Company as to any fact or matter prima facie within the knowledge of the Company as
sufficient evidence thereof;
(c) The Debenture Trustees may accept without inspection, Inquiry, or requisition such title
as the Company may have to the mortgaged assets or assets to be mortgaged and shall not be
bound or concerned to examine or inquire into or be liable for any defect in or any insufficiency
of the title of the mortgaged assets or the assets to be mortgaged or any part thereof or anything
relating thereto
(d) The Debenture Trustees shall not be bound to take any steps to ascertain whether any
event has happened upon the happening of which the security may become enforceable;
(e) The Debenture Trustees shall not, be responsible for acting upon any resolution purporting to
have been passed at any meeting of the Debenture holders even through it may subsequently
be found that there was some defect in the constitution of the meeting or the passing of the
Resolution or that for any reason the Resolution was not valid or binding upon the Debenture
holders;
(f) Without prejudice to the right to indemnify by law given to the Debenture Trustees the
Debenture Trustees shall be entitled to be indemnified out of the mortgaged premises In respect
of all liabilities and expenses incurred by them in the execution or purported execution of the
authorities or discretions vested in them including liabilities and expenses consequent upon any
mistake, oversight, error of judgment, forgetfulness or want of prudence on the part of the
Debenture Trustees or any such appointee and against all actions, proceedings, costs, claims
and demands in respect of any matter or thing. done or ommitted In anywise relating to the
mortgaged assets and “the Debenture Trustees may retain and pay out of any moneys in their
hand upon the trusts of these presents the amount of any such liabilities and expenses
necessary to effect such Indemnity and also the remuneration of the Debenture Trustees as
herein provided and the Debenture Trustees shall have a lien on the mortgaged assets for all
moneys payable to them. under this clause or otherwise howsoever arising out of and in
connection with these presents or the issue of the Debentures;
(g) The Debenture trustees shall not incur any responsibility in respect of realisation of the
proceeds of the mortgaged assets or be under any obligation to see the application thereof;
(h) The Debenture Trustees shall not be liable for any default, omission, delay in performing or
exercising any of the powers or trusts herein expressed or contained or any of them or in
enforcing the covenants herein contained or any of them
ARTICLE VIII

8. Upon proof given to the reasonable satisfaction of the Debenture or Trustees that all the Debentures
for the time being issued pursuant to the said Deed have been paid off or satisfied and upon payment of

all, charges and expenses incurred by the Debenture Trustees in relation to these presents (including the
remuneration of the Trustees and all- interest thereon) the.Debenture Trustees shall at the request and
cost of the Company, release or reassign to the Company as the Company may direct the mortgaged
assets free and discharged from the security to be created as stipulated in Article III hereof.

ARTICLE IX

9. This agreement shall be effective on and from the date first herein above written and shall be in force
till all monies in respect of the Debentures have been fully paid off.
IN WITNESS WHEREOF the Company and Debenture Trustees have caused this Agreement to be
executed on the day, month and year first above written.
The Common seal of the within named ABC POWER GENERAT ION COMPANY LIMITED have been
hereunto affixed pursuant to a resolution of Its Board of Directors passed on the day of, 2000 and in the
presence of………………Director of the Company and of the Company who have signed the same in
token thereof.
Signed and delivered by within named the XYZ FINANCE COMPANY Ltd., by the hand of Sri ……………..
an authorised official of the Debenture Trustees.