THIS AGREEMENT is made on the……………day of………….2000 between:
(1) ABC Power Generation company Limited, a company registered under Companies Act, 1956
(1) of 1956, having its registered office at ……………………….. Mumbai, State of Maharashtra
(hereinafter referred to as the “Borrower” which expression shall. unless it be repugnant to the
subject or context thereof, include its successors and assigns);
(2) XYZ Finance Company Limited (XYZF), a company registered under the Companies Act,
1956 and having its registered office at ” ………………………………… Mumbai as security trustee for
the Lenders/Lead Institution (hereinafter referred to as the “Security Trustee/Lead Institution
which expression shall, unless it be repugnant to the subject or context thereof, include its
successors and assigns); and
(3) ABC Bank (ABCB), a banking company within the meaning of the Banking Regulation Act,
1949 (the “Account Bank”) and GHI Bank Limited (GHIB), a banking company within the meaning
of the Banking Regulation Act, 1949 (the “Account Bank”) ABC and GHI collectively referred to as
Account Banks which expression shall, unless it be repugnant to the subject or context thereof,
include their successors and assigns
NOW IT IS AGREED BETWEEN THE PARTIES as follows:
1. Definitions and construction
1. 1 Definitions
“Acceptance Date” means the date on which the Lenders’ Engineer certifies to the Borrower that
the performance and guarantee tests In relation to the Plant have been successfully completed in
accordance with the EPC Contract and the Performance Acceptance Tests as specified in
Schedule F to the PPA have been successfully completed;
“Account” means each of the Trust and Retention Account, the PPA Collection Account, the
Dollar Construction Account, the Current Debt Service Accounts, the Commitment Charges
Guarantee Account, the Overhaul Reserve Account, the Tax Escrow Account and the
Contingency Account with the ABC Bank and the Debt Service Reserve Accounts and the
Establishment Expenses Account with GHI Bank and “Accounts” means all of them collectively;
“Account Bank” means, for the purposes of the Trust and Retention Account, the Dollar
Construction Account, the Current Debt . Service Accounts, the Commitment Charges Guarantee
Account, the Contingency Account, the Tax Escrow Account and the Overhaul Reserve Account,
the ABC Bank, Mumbal Main Branch at Mumbal, for the purposes of the PPA Collection Account,
the ABC Bank …………….Calcutta Main Branch, at Calcutta and for the purposes of the Debt
Service Reserve Accounts the GHI Bank, Mumbai Branch and for purposes of the Establishment
Expenses Account, the GHI Bank, Calcutta Branch;
“MSEB” means the Maharashtra State Electricity Board;
“Authorised Investment” shall have the meaning given in the Loan Agreements and Guarantee
Agreements, provided that no Authorised Investment in respect of amounts in:
(a) the Debt Service Reserve Account shall, have a maturity in excess of 6 months;
(b) the Current Rupee Debt Service Account shall have a maturity in excess of the earlier of 3
months or the next Payment Date;
(c) the Current Dollar Debt Service Account shall have a maturtty in exoess, of the
earlier of 6 months or the next Payment Date;
(d) the Commitment Charges Guarantee Account shall have a maturity in excess of 3 months;
(e) the Overhaul Reserve Account shall have a maturity in excess of 12 months; the
Dollar Construction Account shall have a maturity in excess of 1 month;
(g) the Establishment Expenses Account and the Contingency Account shall have a
maturity in excess of 1 week; and
(h) the Tax Escrow, Account shall have a maturity in excess of 5 days;

“Average Debt Service Coverage Ratio” shall have the meaning given in the Loan Agreements
and Guarantee Agreements;
“Budgeted Operating Costs” means in relation to the relevant calendar, month:
(i) the costs included in the Operating Budget for such month;
(ii) plus and/or minus such unbudgeted additional amounts as may be notified by the
Borrower to the Account Bank, after approval by the Security Trustee/Lead Institution
and/or;
(iii) plus such further amounts as may be notified by the Borrower to the Account Bank,
provided that the aggregate amount notified by the Borrower under this paragraph
(iii)during each Year included in the Operating Budget, for costs other than fuel costs,
emergency operations, overhaul and maintenance, costs and costs resulting from
changes in, law. and tax rates, shall not exceed 10% of ‘the total budgeted amount for
such year without the approval of the Security Trustee/Lead Institution.

“Business Day” means any day on which banks are generally open for business in Mumbai , in
relation to any notice or communication to be made under this Agreement, a day on, which. banks
are open for business in the place of receipt of such notice or communication;
“Commitment Charge” shall have the meaning ascribed thereto in the Fuel Supply Agreement;
“Commitment Charges Financing Documents” shall mean collectively the agreements,
instruments and other documents entered into by the Company and the Commitment Charge
Lenders or any part thereof, under which funding or guarantee assistance is extended to the
Company;
“Commitment Charges Guarantee Account” means the account so named which is
established and maintained by the Borrower pursuant to this Agreement;
“Commitment Charge Lenders” shall mean the Lenders providing fund based or non fund
based financial assistance for securing Commitment Charges under the Fuel Supply Agreement;
“Construction Costs” means the liabilities, costs and expenses Incurred. by the Borrower in
connection with the engineering, procurement, manufacturing, construction and commissioning of
the Project and as mentioned in the Financing Plan, provided any deviation from the Financing
Plan shall be approved by the Security Trustee/Lead Institution and provided to the Account
Bank(s);
“Construction Costs Budget” means each cash budget (the “Budget”) prepared by the
Borrower and approved by the Security Trustee/Lead Institution in writing for the construction of
the Project. The Budget shall be substantially in a form attached hereto as Annexure 1 or as
amended by the Borrower (with the prior r approval of the Security Trustee/Lead Institution);
“Contingency Proceeds” means proceeds of any insurance effected by or on behalf of the
Borrower, proceeds of any third party claims or employers claims, performance shortfall damages
under the EPC Contracts, delay damages under the EPC Contracts and liquidated damages
under the Fuel Supply Agreement;
“Counter Guarantors” shall mean DEF Bank, GHI Bank and JKL Bank Limited.
“Current Debt Service Accounts” means the Current Rupee Debt Service Account and Current
Dollar Debt Service Account;
“Current Dollar Debt Service Account” means the account so named, which is established and
maintained by the Borrower pursuant to this Agreement;
“Current Rupee Debt Service Account” means the account so named which is established and
maintained by the Borrower pursuant to this Agreement;
“Debt Service Reserve Accounts” means the Dollar Debt Service Reserve Account and the
Rupee Debt Service Reserve Account;

“Distribution Date” means the day of each calendar month or if such day is not a Business Day,
the immediately preceding Business Day, on which payments have to be made under the
Financing Documents or this Agreement, as the case may be;
“Dollar” or “$” means the lawful currency of the United States of America;
“Dollar Budgeted Operating Costs” means the Budgeted Operating Costs denominated in
Dollars;
“Dollar Construction Account” means the account so named which is established and
maintained by the Borrower pursuant to this Agreement;
“Dollar Debt Service Reserve Account” means the account so named which is established and
maintained by the Borrower pursuant to this Agreement;
“Dollar Lenders” mean the ABC Bank, XYZ Finance Company Ltd, STR Development Bank,
Power Finance Corporation Limited and Asian Development Bank;
“Enforcement Notice” means a notice from the Security Trustee/Lead Institution to the Account
Banks of the acceleration of amounts due and owing under the Financing Plan and/or any
enforcement procedure commenced by the Security Trustee/Lead Institution under any of the
Security Documents;
“Event of Default” means an event of default as defined under the Financing Documents;
“Establishment Expenses Account” means the account established pursuant to clause 2.1 (xi)
“Financing Documents” means the Guarantee Agreements and the ~ Loan Agreements;
“Financing Plan” means the financing plan annexed to the Loan Agreements and the Guarantee
Agreements, as amended;
“Foreign Currency Loan Agreements” mean each of the following:
(i) the Foreign Currency., Loan Agreement between the Borrower and ABC Bank,
dated December 5, 2000;
(ii) the Foreign Currency Loan Agreement between the Borrower and the STR Development
Bank, dated December 5, 2000;
(iii) the Foreign Currency Loan Agreement between the Borrower -and the XYZ Finance
Company Ltd., dated November 26, 2000;
(iv) the Foreign Currency Loan Agreement between the Borrower and Power Finance
Corporation Limited, dated November 18, 2000; and
(v) the Foreign Currency Loan Agreement between the Borrower and The Asian
Development Bank, dated November 26, 2000.
“Guarantee Agreements” means each of the following:
(i) the Guarantee Agreement, dated November 26, 1998 between the Borrower and the
Industrial Finance Corporation of India;
(ii) the Guarantee Agreement, dated December 5, 2000 between the Borrower and ABC
Bank;
(iii) the Guarantee Agreement, dated December 5, 2000 between the Borrower and the STR
Development Bank;
(iv) the Guarantee Agreement, dated November 30, 2000 between the Borrower and GHI
Bank;
(v) the Guarantee Agreement, dated December 2, 2000 between the Borrower and DEF
Bank;
(vi) the Guarantee Agreement, dated December 2, 2000 between the Borrower and The JKL
Bank Limited;
“Guarantee Commission” means the guarantee commission payable to the Guarantors under
the Guarantee Agreements;

“Guarantors” means the ABC Bank, the GHI Development Bank and the XYZ Finance Company
Ltd.;
“Independent Engineer” means a person appointed by the Lenders, as the independent
engineer;
“ABCP” means ABC Power Generation Company Limited;
“Lenders” has the meaning ascribed thereto in the Rupee Loan Agreements, Foreign Currency
Loan Agreements, Guarantee Agreements and Subscription Agreement;
“Loans ” has the meaning ascribed thereto in the Rupee Loan Agreements, Foreign Currency
Loan Agreements and Subscription Agreement;
“Loan Agreements” means the Rupee Loan Agreements and the Foreign Currency Loan
Agreements
“Operating Budget” means each cash budget (the ‘Budget”) prepared by the Borrower,
approved by the Independent Engineer and the Security Trustee/Lead Institution in writing for the
operation and maintenance and any other costs of the Project, including fuel (by tonnage), major
overhaul costs (by event), establishment and insurance costs, taxes, capital expenditures and
debt service but excluding Construction Costs. The Budget shall be substantially In a form
attached hereto as Annexure 2 or as amended by the Borrower (with the prior approval of the
Security Trustee/Lead Institution) and shall be prepared on an annual basis and shall include
projected monthly costs over a two year period except that the first Budget shall be prepared for
the period commencing on execution of this agreement and ending on March 31, 2000. The
second and subsequent Budgets, for the two-year period commencing April 1, 1999, shall be
provided to the Security Trustee/Lead Institution one-month prior to the end of the financial year.
Each Budget will be reviewed by the Borrower no less frequently than once every three months
with any amendment thereto being submitted first to the Independent Engineer and then to the
Security Trustee/Lead Institution for approval in writing and for delivery thereafter to the Account
Banks;
“Overdraft Facility” has the meaning ascribed in section 3.2.3.
“Overhaul Costs” means those costs projected to be incurred during scheduled major overhaul
outages and excluding costs to be incurred for routine annual overhaul and more frequent
maintenance outages as specified in Annexure 2;
“Overhaul Reserve Account” means the account so named which is established and
maintained by the Borrower pursuant to this Agreement;
“Payment Date” means:
(i) in relation to the Loan Agreements, the dates specified for scheduled payments of fee,
expenses, principal and interest;
(ii) in relation to the Guarantee Agreements, the dates specified for scheduled payments of
fees and guarantee commissions;
“Permitted Payment” means the payments to and/from the Accounts contemplated by this
Agreement;
“Power Purchase Agreement” means the Power Purchase Agreement, dated 31st March, 1999
between ABCP and MSEB;
“PPA Collection Account” means the account so named, established – and maintained by the
Borrower pursuant to this Agreement for the purposes of deposit of payments under the Power
Purchase Agreement;
‘Project” has the meaning given to it in the Loan Agreements;
“Project Contracts” has the meaning ascribed thereto in the Loan Agreements;

“Project Proceeds” means all cash proceeds payable to the Borrower, in, connection with the
Project from any source including refund of taxes, other than- (i) Commitment Charge Refunds
under the Fuel Supply Agreement and any interest income or return earned thereon, (ii) amounts
deposited into the Dollar Construction Account to be disbursed as dollars in accordance with the
Financing Plan, and (iii) Contingency Proceeds;
“Quarter” means each three month period ending on March 31, June 30, September 30 and
December 31;
“Required Balance” means, on any Distribution Date:
(i)in relation to the Current Dollar Debt Service Account, an amount in Dollars equal to the product
of (a) and (b) where,
(a) Is a fraction, the denominator of which is 6 and the numerator of which is 6, minus the
number of months remaining until the next following Payment Date, under the Foreign
Currency Loan Agreements pursuant to which half yearly payments have to be made,
and a fraction, the denominator of which is 3 and the numerator of which is 3, minus the number
of months remaining until the next following Payment Date, under the Foreign Currency Loan
Agreements pursuant to which quarterly payments have to be made (for the avoidance
of doubt, the numerator shall not be less than zero); and
(b) is the aggregate amount of interest (including interest tax) and principal payable under the
Foreign Currency Loan Agreements, on such Payment Date (for the avoidance of
doubt, any amounts due more than six months and three months, respectively
after such Distribution Date shall not be taken into account), less Interest income
accrued;
(ii) in relation to the. Current Rupee Debt Service Account, an amount in Rupees equal to the
product of (a) and (b) where:
(a) is a fraction, the denominator of which is 3 and the numerator of which is 3 minus the
number of months remaining until the next following Payment Date under the Rupee Loan
Agreements with Rupee Lenders and the Guarantee Agreements with the Guarantors (for
the avoidance of doubt, the numerator shall not be less than zero); and
(b) is the aggregate amount of Interest (including interest tax) and principal payable under the
Loan Agreements with Rupee – Lenders and the Guarantee Commission payable to the
Guarantors under the Guarantee Agreements on such Payment Date (for the avoidance of
doubt, any amounts due more than three months after such Distribution Date shall not be
taken into account), less interest income accrued;
(iii) in relation to the Dollar Debt Service Reserve Account, an amount in Dollars equal to the
principal and interest (including interest tax) scheduled to be paid under the Foreign
Currency Loan Agreements on the next two quarterly and one semi-annual Payment Date;
and
(iv) in relation to the Commitment Charges Guarantee Account, an amount in Rupees equal to
the Commitment Charges Guarantee Commission scheduled to be paid under the
Commitment Charges Financing Documents on the next two Payment Dates; and
(v) in relation to the Rupee Debt Service Reserve Account, an amount in Rupees equal to the
principal and interest (including interest tax) and Guarantee Commission scheduled to be
paid under the Rupee Loan Agreements and the Guarantee Agreements on the next two
Payment Dates; and
(vi) (vi) in relation to the Overhaul Reserve Account, an amount in Rupees (and in
Dollars if necessary -and approved by the Reserve Bank of India) for Overhaul Costs;
“Rupee” or “Rs.” means the lawful currency of India;
“Rupee Budgeted Operating Costs” means the Budgeted Operating Costs denominated in
Rupees;
“Rupee Debt Service Reserve Account” means the account so named which is established
and maintained by the Borrower pursuant to this Agreement;
“Rupee Lenders” mean Power Finance Corporation Limited, the XYZ Finance Company Ltd.,
AAA Finance and Insurance Company Ltd, BBB Finance Company Ltd, The JKL Bank Limited
and DEF Bank;
“Rupee Loan Agreements” mean each of the following:

(i) the Rupee Loan Agreement between the Borrower and Power Finance Corporation dated
December 4, 2000;
(ii) the Subscription Agreement between the Borrower and the XYZ Finance Company Ltd.,
dated November 26, 2000;
(iii) the Rupee Loan Agreement between the Borrower and the AAA Finance and Insurance
Company Ltd., dated December 1, 2000;
(iv) the Rupee Loan Agreement between the Borrower and the BB13 Finance Company Ltd.,
dated December 1, 2000;
(v) the Rupee Loan Agreement between the Borrower and The JKL Bank Limited, dated
December 2, 2000; and
(vi) the Rupee Loan Agreement between the Borrower and r DEF Bank,’dated December 2,
2000;
“Security” means the security created in favour of the Security Trustee/Lenders under the
Financing Documents;
“Security Documents” has the meaning ascribed thereto in the Financing Documents;
“Security Trustee” means the XYZ Finance Company Ltd., appointed as Security Trustee by the
Lenders.
‘”TRA Default” shall have the meaning ascribed, thereto in this Agreement;
“Working Capital Facility” shall mean the overdraft or other credit facilities availed by the
Borrower from the Working Capital Lenders;
“Working Capital Lenders” has the meaning ascribed thereto in the Financing Documents; and
“year” means each twelve month period or each lesser period ending on March 31.
1.2 Construction
In this Agreement:
(A) reference to an Account. includes a reference to any sub-account of that Account; ,
(B) unless otherwise expressly defined in this Agreement, capitalised terms which are defined
in the Loan Agreement have the same meaning in this Agreement;
(C) unless the context otherwise requires, the singular includes the plural and vice versa;
(D) headings and the use of bold typeface shall be ignored in Its construction;
(E) a reference to a Clause or Schedule Is, unless indicated to the contrary, a reference to a
clause or schedule to this Agreement;
(F) references to this Agreement shall be construed as references to any separate or
independent stipulation or greement contained in it;
(G) the words “other”, ‘or otherwise” and “whatsoever” shall not be Constructed ejusdem
generis or be construed as any limitation upon the generality of any preceding
words or matters specifically referred to;
(H) references to the word “includes’ or “including” are to be construed without limitation;
(I) references to a person shall include such person’s successors and permitted assignees or
transferees;
(J) all references to agreements, documents or other instruments include (subject to all
elevant approvals) a reference to that agreement, document or instrument as amended,
supplemented, substituted,, novated. or assigned from time to time;
(K) words importing a particular gender Include all genders;
(L) “person” includes any individual, partnership, firm, trust, body corporate, government,
governmental body, authority, agency, unincorporated body of persons or
association;
(M) any reference to a public organisation shall be deemed to Include a reference to any
successor to such public organisation or any organisation or entity which has
taken over the functions or responsibilities of such public organisation;
(N) references to “Party” means a party to this Agreement and references to “Parties” shall be
construed accordingly; and
(O) references to any law shall include references to such law as it may, after the date of this
Agreement, from time to time be amended, supplemented or reenacted.

2. The accounts
2.1 Establishment of the accounts
The Borrower and the Account Banks confirm that the Borrower has-established in the name of
the Borrower with the ABC Bank Mumbai Main Branch.at Mumbai an. Account………… No
………………entitled ABC Power Generation Company Limited – Trust and Retention Account, an
account No ……………… with ABC Bank ……………… Branch entitled the PPA
Collection Account, and with the GHI Bank ………………Branch, accounts entitled Rupee Debt
Service Reserve Account and Dollar Debt Service Reserve Account and with GHI Bank
Calcutta………………Branch an account entitled the “Establishment Expenses Account” and
reference to the Trust and Retention Account in this Agreement shall include reference to Rupee
Debt Service Reserve Account, the Dollar Debt Service Reserve Account and the Establishment
Expenses Account, unless the context otherwise requires. The Trust and Retention Account shall
have the following sub-accounts for the purposes of this Agreement, namely:
(i) a sub-account No ………………denominated in Rupees entitled the OPPA Collection
Account” for the purpose of receipt and same day credit to the Trust and Retention
Account of all amounts payable by MSEB under the Power Purchase Agreement;
(ii) a sub-account No………………denominated In Dollars entitled the ‘Dollar Construction
Account’ it being understood that, this account is for the purpose of
receipt of principal received from the Dollar Lenders and for receipt of foreign equity for
application towards Construction Costs;
(iii) (iii) a sub-account No………………denominated in Rupees entitled the “Current
Rupee Debt Service Account it being understood that, this account is for the purpose of
accumulation on a monthly basis of one third or more of the aggregate principal
and interest due to the Rupee Lenders and payable on the next quarterly
Payment Date;
(iv) a sub-account No ……………….denominated in Dollars entitled the ‘Current Dollar Debt
Service Account” it being understood that, this account is for the purpose of
accumulation on a monthly basis of one third or more of the aggregate principal and interest due
to the Dollar Lenders and payable on the next quarterly Payment Date and of one sixth or more
of the aggregate principal and interest due to the Dollar Lenders on the next
semi-annual Payment Date, as the case may be;
(v) a sub-account No ………………….denominated in Rupees entitled Commitment Charges
Guarantee Account it being understood that, this account is for the purpose of
accumulation on a monthly basis of one third or more of the aggregate Commitment
Charges Guarantee Commission due under the Commitment Charge Financing
Documents and payable on the next quarterly Payment Date;
(vi) a sub-account No ………………….denominated in Rupees entitled the “Rupee Debt
Service Reserve Account” it being understood that, this account is for the purpose of retention of
principal and interest due to Rupee Lenders for the instalments of 6 months principal and
interest following the current instalment;
(vii) a sub-account No ………………denominated in Dollars entitled the Dollar Debt Service
Reserve Account” it being understood that, this account Is for the purpose of
retention of principal and interest on, dollar Loans Lowed to Dollar Lenders by..the Borrower for
the instalments of 6 months principal and interest Following current instalment;
(viii) a sub-account No ……………… denominated in Rupees entitled the “Tax Escrow Account”
it being understood that, this account is for the purpose of retention of amount
and payment of taxes on income reimbursed by MPEB the Borrower;
(ix) a sub-account No ………………entitled the “Overhaul Reserve Account” it being
understood that, this account is for the purpose of retention of amounts towards
Overhaul Costs projected to be Incurred during the next 12 months as
per the Operating Budget;
(x) a sub-account No……….entitled “Contingency Account” it being understood that, this
account is for retention and use of Contingency Proceeds in accordance with this
Agreement;
(m) a sub-account No………………entitled the “Establishment Expenses Account” it being
understood that, this account is for the purpose of retention of amounts payable
towards expenses, in accordance with the Operating Budget but excluding those
amounts paid from the Trust and Retention Account under the Fuel Supply
Agreement and Operations and Maintenance Agreement and for Overhaul Costs, etc. in
accordance With Annexure 2; and

(xii) Such other accounts as may be agreed -between the Borrower and the Security
Trustee/Lead Institution.
2.2 Declaration of trust
The Borrower hereby settles on trust with each of the Account Banks the sum of Rs.100. The

Borrower also hereby declares that all rights, title and interest in and to the trust, Trust and-
Retention Account and the Authorised Investments made from the Trust and Retention Account

shall be vested in the Account Banks, the Lenders and the Borrower in accordance with the terms
of this Agreement and their respective interests are provided for herein. The Account Banks
hereby accept the above amount of Rs, 100 in the trust hereby declared and upon the terms and
conditions set -forth in this Agreement. Amounts deposited in the Trust and Retention Account
from time to time shall be held in trust, received and applied as provided In this Agreement. No
person other than the Guarantors, the Lenders and the Borrower shall have any rights hereunder
as the beneficiaries of or as third party beneficiaries under, this Agreement.
2.3 Maintenance of the accounts
The Account Banks shall, save as otherwise provided herein, maintain the Trust and Retention
Account in accordance with the terms of this Agreement and its usual practices and applicable
regulations and, if permitted by applicable regulations, pay the maximum rate of interest payable
to Its customers on the balance from time to time of the Trust and Retention Account as agreed
between the Borrower and each of the Account Banks individually from time to time.
2.4 Operating procedures
The Account Banks and the Borrower have prior to execution of this Agreement agreed (after
consultation with the Security Trustee/Lead -Institution) on the detailed mandates, terms and
conditions and Operating Procedures for the Trust and Retention Account, (as set out in Annexure
3 to this Agreement), provided however, in the event of any inconsistency between this
Agreement and such mandates, terms and conditions or procedures, this Agreement shall prevail.
2.5 Sub-accounts
The Borrower shall be permitted to instruct the Account Banks to make transfers to and from a
sub-account provided that the Required Balances are maintained.
2.6 General right of withdrawal with Security Trustee/Lead Institution Consent
Notwithstanding any other provision of this Agreement, the Borrower may, at any time, with the
prior written consent of the Security Trustee/Lead Institution, instruct the Account Banks to
withdraw amounts from any Trust and Retention Account and pay the same to an Account
designated by the Borrower (irrespective of whether such withdrawal and payment falls on a
Distribution Date), provided that such consent shall not be required If the Required Balance is
maintained in relation to the Trust and Retention Account and there is no TRA Default or an Event
of Default which has occurred and is then subsisting. The consent of the Security Trustee/Lead
Institution should indicate the details of any beneficiary of payments.
2.7 Withdrawals to make payments prior to distribution date
Notwithstanding any of the provisions of this Agreement:
(A) the Borrower may instruct the Account Banks to make withdrawals from the Current
Rupee Debt Service Account ,or the Current Dollar Debt Service Account in
order to make any payments under the Financing Plan or Operating Budgets which fall
due prior to a Distribution Date; and
(B) if a Distribution Date is not a date on which banks are generally open for business in the
place, where any account is held (being a place other than Mumbai), the Borrower shall
be entitled to instruct the Account Banks to make payment to or withdrawal from
such account (and the corresponding withdrawal from or payment to any other account)
on the immediately preceding day on which banks are generally open for business In such
place, provided that-any such payments and withdrawals would have been permitted on
such Distribution Date.

2.8 The restrictions in this Agreement on withdrawal of funds from the Trust and Retention
Account shall not affect the obligations of the Borrower under the Financing Documents.
2.9 Any payment instructions of the Borrower to the Account Bank under this Agreement shall be,
as regards Operating Costs, in accordance , with the Operating Budget and as regards other
payments, in, accordance with the Financing Documents.
3. The Trust and Retention Account
3.1 Account
The Trust and Retention Account shall ,be established in the name of the Borrower.
3.2 Deposits
3.2.1 The Borrower:
(A) shall procure that all Project Proceeds (other than interest income accumulated in the
Current Debt Service Accounts, and in the Debt Service Reserve Accounts and
the Overhaul Reserve Account until the Required Balances are attained)
shall be credited to or deposited in the Trust and Retention Account upon
payment thereof;
(B) shall procure that all amounts deposited by APSEB in the PPA Collection Account shall be
credited/deposited Into the Trust and Retention Account upon the same day as
deposit Into the PPA Collection Account;
(C) shall procure that. all amounts credited/deposited in the Dollar Construction Account in
excess of Dollar disbursements under the Financing Documents, shall be
credited/deposited into the Trust and Retention Account on the same
day as they are debited/withdrawn from the Dollar Construction Account unless
,credited/deposited into the Current Dollar Debt Service Account;
(D) shall procure that all amounts drawn by the Borrower pursuant to the Overdraft
Facility extended by each of the Working Capital Lenders. shall be credited or
deposited in the Trust and Retention Account;
(E) shall procure the deposit of Contingency Proceeds into the Contingency Account;
(F) shall procure that any surplus in any of the accounts shall be deposited into the Trust and
Retention Account unless retained in, or transferred from the Dollar Debt Service
Reserve Account to the Current Dollar Debt Service Account to meet future
obligations; and

(G) may make other voluntary deposits of the Borrower’s funds into the Trust and Retention
Account at any time.
3.2.2 The Account Banks shall procure that all interest, if any, on balances in the Trust and
Retention Account and interest on Authorised Investments made from the Trust and Retention
Account, not otherwise used for the purposes for which the Debt Service Reserve Accounts, the
Current Debt Service Accounts the Overhaul Reserve Account and the Establishment Expenses
Account are established, shall be credited to or deposited In the Trust and Retention Account.
3.2.3 While the Borrower is using a Working Capital Facility (the “Overdraft Facility”) with an
Account Bank so long as there is no TRA Default or an Event of Default which has occurred and
Is then subsisting, any credit balance remaining uninvested in the Trust and Retention Account
and/or the Establishment Expenses Account at the end of each day shall be automatically
credited against the Overdraft Facility provided by such Account Bank until the Overdraft Facility
balance is reduced to zero.
Any deficiency in the Trust and Retention Account and/or the Establishment Expenses Account at
the end of each day shall big automatically funded from the Overdraft Facility to bring such
deficiency to zero (provided that borrowing capacity remains under the Overdraft Facility).
3.3 Withdrawals
The Account Banks shall withdraw amounts from the Trust and Retention Account on each
Distribution Date in accordance with the Borrower’s instructions only for the following purposes
And in the following order of priority.

(A) to pay
(i) Rupee Budgeted Operating Costs In accordance with the Operating Budget towards, inter
afia fuel charges, costs payable under the Operations and Maintenance Agreements,
costs payable towards insurance charges, establishment charges, taxes, capital, etc.; and
(ii) Dollar Budgeted Operating Costs in accordance with the Operating Budget; in each case,
for the calendar month in which such Distribution Date occurs in accordance with
Annexure 11;
(B) to pay
(i) an amount to the Current Rupee Debt Service Account equal to the Required Balance in
relation to the Current Rupee Debt Service Account; and
(ii) an amount to the Current Dollar Debt Service Account equal to the Required Balance in
relation to the Current Dollar Debt Service Account;
(B1) to pay
(i) an amount to the Commitment Charges Guarantee Account equal to the Required
Balance in relation to the Commitment Charges Guarantee Account;
(C) to pay
an amount to the Overhaul Reserve Account, unt 11 the amount projected to be required to fund
Overhaul Costs during the ensuing twelve months has been accumulated;
(D) to pay
(i) an amount to the Rupee Debt Service Reserve Account equal to:
(a) the Required Balance in relation to the Rupee Debt Service Reserve Account;
minus
(b) the amount standing to the credit of the Rupee Debt Service Reserve
Account; and

(ii) an amount to the Dollar Debt Service Reserve Account equal to:
(a) the Required Balance in relation to the Dollar Debt Service Reserve Account;
minus
(b) the amount standing to the credit of the Dollar Debt Service Reserve Account;
(E) to pay
dividends to the shareholders of the Borrower as provided in section 15 of this Agreement.
3.4 Application of Insufficient Funds
3.4.1 As provided In section 3.3, the application of funds in the Trust and Retention Account shall
be applied in the order of priority set forth therein. If the funds available for payment to an Account
are sufficient to pay a portion, but not all, of the amount required to be paid to any Account, the
Borrower shall instruct the Account Bank to pay the available funds, to the . relevant Account, with
the prior consent of the Security Trustee/Lead Institution
3.4.2 If, on any Distribution Date,
(A) the, balance in the Trust and Retention Account for payment towards Operating Cost is
less than the amounts referred to in section 3 1 ,3(A), the Account Bank shall pay
that portion of available Required Balances., first from (D).,hereof, second from
(C) and third from (B) to make up such shortfall; or
(B) the funds available for payment to the Current Debt Service Accounts are less than the
amounts referred to in section 3.3 (B), the Borrower shall instruct the Account
Bank to pay the portion of available Required Balances first from (D)

hereof and then from (C) to make such shortfall;

(C) the funds available for payment to the Overhaul Reserve Account are less than the
amounts referred to in section 3.3(C), the Borrower shall instruct the Account
Bank to pay the portion of available Required Balances from (D) hereof
to the Overhaul Reserve Account as directed by the Borrower in accordance with the
Operating Budget; or

(D) the funds available for payment to the Debt Service Reserve Accounts are less than the
amounts- referred to in section 3.3(D), the Borrower shall instruct the Account Bank to pay
the earliest available funds to the Rupee Debt Service Reserve, Account and. the Dollar
Debt Service Reserve Account pro rata in order to attain the respective Required
Balances applicable to such Accounts on such date.
3.4.3 For the purpose of calculating the amount of pro rata payments In accordance with clause
3.4.2, the Borrower shall calculate the Required Balances in Rupees based on the exchange rate
in effect at such time but the payments , shall be made in the currency in which relevant Account
Is denominated. For this purpose the Account Bank can rely on the calculations provided to It by
the Borrower in writing.
4. PPA Collection Account
4.1 Account
The PPA Collection Account shall, be established in the name of the Borrower.
4.2 Deposits
The Borrower shall procure payments of amounts due and payable by MSEB under the Power,
Purchase Agreement into this Account.
4.3 Withdrawals
Any amount deposited in the PPA Collection Account shall be credited on the same day as the
deposit to the Trust and Retention Account.
5. Dollar Construction Account
5. 1 Account
The Dollar Construction Account shall be established, subject to the approval of the Reserve
Bank of India, in the name of the Borrower.
5.2 Deposits
The Borrower shall procure that all amounts (i) drawn down under the Foreign Currency Loan
Agreements, other than that with The Asian Development Bank, for application towards
Construction Costs and (ii) of equity received from the foreign shareholders of the Borrower are
deposited into this Account.
5.3 Withdrawals
The Account Bank shall withdraw amounts in the Dollar Construction Account and make
payments towards Dollar amounts due and payable under the EPC contracts and also for
payment of Dollar amounts due and payable towards. non-EPC costs in accordance with the
Financing Plan and on the instructions of the Borrower. Any amounts remaining in the Dollar
Construction Account at any time which are not required to make Dollar payments.in accordance
with the Financing Plan will, on the instructions of the Borrower, with the consent of the Security
Trustee/Lead Institution, be converted into Rupees for deposit into the Trust and Retention
Account. Provided that any surplus amount in the Dollar Construction Account after Project
Completion (as defined in the EPC Contract) shall be used to prepay the Loans on a pro rata
basis.
6. Establishment Expenses Account
6.1 Account

The Establishment Expenses Account shall be established in the name of the Borrower.
6.2 Deposits
Deposits to the Establishment Expenses Account shall be made in accordance with the Operating
Budget under section 3.3 (A) above.
6.3 Withdrawals
The Account Bank shall withdraw amounts from the Establishment Expenses Account in
accordance with the Operating Budget.
7. Current Debt Service Accounts
7.1 Account
The Current Debt Service Accounts shall be established in the name of the Borrower. The Current
Dollar Debt Service Account shall be denominated in Dollars and the Current Rupee Debt Service
Account shall be denominated In Rupees.
7.2 Deposits
(A) Deposits to the Current Rupee Debt Service Account
Deposits to the Current Rupee Debt Service Account shall be made by the Account Bank in
accordance with sections 3.3(13)(J) and 9.3(B).
(B) Deposits to the Current Dollar Debt Service Account
Deposits to the Current Dollar Debt ‘Service Account shall be made by the Account Bank in
accordance with Sections 3.3(B) (h) and 9.4(B).
7.3 Withdrawals from the Current Rupee Debt Service Account
The Account Bank shall withdraw amounts from the Current Debt Service Account on a
Distribution Date:
(A) on the instructions of the Borrower to pay amounts due under the Financing Plan on such
date; or
(B) on the instructions of the Borrower with the prior written consent of the Security
Trustee/Lead Institution.
7.4 Withdrawals from the Current Dollar Debt Service Account
The Account Bank shall withdraw amounts from the Current Dollar Debt Service Account on a
Distribution Date:
(A) on the instructions of the Borrower to pay amounts due under the Financing Plan on
such date; or
(B) on the instructions of the Borrower with the prior written consent of the Security
Trustee/Lead Institution.
7.5 Application of Insufficient Funds
If the amounts available in a Current Debt Service Account are insufficient to pay amounts due
under Loan Agreements and the Guarantee Agreements In the order of priority listed in the Loan
Agreements and the Guarantee Agreements, the Borrower shall instruct the Account Bank to pay
the available amounts pro rata to the aggregate-, of each of the amounts due there under and in
accordance with the priority in the Loan Agreements and the Guarantee Agreements. For this
purpose the Account Bank can rely on the calculations provided to it by the Borrower in writing
with the approval of the Security Trustee/Lead Institution.
7A. Commitment Charges Guarantee Account

7A. 1 Account
The Commitment Charges Guarantee Account shall be established in the name of the Borrower.
The Account shall be denominated in Rupees.
7A.2 Deposits
Deposits to the Commitment Charges Guarantee Account shall be made by the Account Bank in
accordance with section 3.3(131)(1).
7A.3 Withdrawals
The Account Bank shall withdraw amounts from the Commitment Charges Guarantee Account on
a Distribution Date:
(A) on the instructions of the Borrower to pay amounts due under the Commitment
Charge Financing Documents on such date; or
(B) on the instructions of the Borrower with the prior written consent of the Security
Trustee/Lead Institution.
8. Overhaul Reserve Account
8.1 Account
The Overhaul Reserve Account shall be established in the name of the Borrower. The Account
shall be denominated in Rupees until such time as an additional Overhaul Reserve Account,
denominated in Dollars, is required and approval of the Reserve Bank of India to open such an
account is obtained.
8.2 Deposits
Deposits to the Overhaul Reserve Account shall be made by the Account Bank in accordance
with section 3.3(C), provided the amount to be maintained in the Account for any projected twelve
months Overhaul Costs will be reduced by any cash and Authorised Investments retained by the
Borrower in excess of cash and/or Authorised Investments required for the Current Debt Service
Accounts and Debt Service Reserve Accounts.
8.3 Withdrawals
(A) The Account Bank shall withdraw amounts from this Account on the instructions of the
Borrower for payment of Overhaul Costs in accordance with the Operating Budget.
(B) In the event there are amounts in excess of the projected requirements, the Borrower may, at
its option, direct the Account Bank to transfer any such excess to be transferred to the Trust and
Retention Account.
9. Debt Service Reserve Accounts
9.1 Account
The Debt Service Reserve Accounts shall be established in the name of the Borrower. The Dollar
Debt Service Reserve Account shall be denominated in Dollars and the Rupee Debt Service
Reserve Account shall be denominated in Rupees.
9.2 Deposits to the Debt Service Reserve Account
(A) Deposits to the Rupee Debt Service Reserve Account
Deposits to the Rupee Debt Service Reserve Account shall be made by the Account Bank in
accordance with sections 3.3(13)(t).
(B) Deposits to the Dollar Debt Service Reserve Account

Deposits to the Dollar Debt Service Reserve Account shall be made by the Account Bank in
accordance with sections 3.3(13)(fi).
9.3. Withdrawals from the Rupee Debt Service Reserve Account
The Account Bank shall withdraw amounts from the Rupee Debt Service Reserve Account on a
Distribution Date:
(A) on the instructions of the Borrower to make payments to the Current Rupee Debt Service
Account to the extent that the amount standing to the credit of such account is less than
the Required Balance; or
(B) on the instructions of the Borrower to make payments to the Overhaul Reserve Account to
the extent that the amount standing to the credit of such account is less than the Required
Balance; or
(C) to the extent that the balance of the Rupee Debt Service Reserve Account exceeds its
Required Balance, on the instructions of the Borrower to pay the excess in the Rupee
Debt Service Reserve Account (or such lesser amount as the Borrower may specify)
solely to the Trust and Retention Account; or
(D) on the instructions of the Borrower with the prior written consent of the Security
Trustee/Lead Institution.
9.4 Withdrawals from the Dollar Debt Service Reserve Account

The Account Bank shall withdraw amounts from the Dollar Debt Service Reserve Account on a
Distribution Date:
(A) on the instructions of the Borrower, to make payments to the Current Dollar Debt Service
Account to the extent that the amount standing to the credit of such Account is less than
the Required Balance; or
(B) to the extent that the balance of the Dollar Debt Service Reserve Account exceeds its
Required Balance, on the instructions of the Borrower, to pay the excess in the Dollar
Debt Service Reserve Account (or such lesser amount as the Borrower may specify)
solely to the Trust and Retention Account; or
(C) on the instructions of the Borrower with the prior written consent of the Security
Trustee/Lead Institution.
9A. Tax Escrow Account
9A. 1 Account
The Tax Escrow Account shall be established in the name of the Borrower.
9A.2 Deposits
The Borrower shall procure deposit amounts paid by APSEB towards reimbursement ,of taxes on
Income of the Borrower under the Power Purchase Agreement into this Account.
9A.3 Withdrawals
The Account Bank shall, on the instructions of the Security Trustee/Lead Institution, utilise such
amounts towards payment of taxes on income of the Borrower as provided in the Rupee
Operating Budget.
9B. Contingency Account
9B.1 Account
The Contingency Account shall be established in the name of the Borrower.

9B.2 Deposits
The Borrower shall procure deposit of all Contingency Proceeds into this Account.
9B.3 Withdrawals
The Account Bank shall withdraw amounts from the Contingency Account:
(i) being insurance proceeds at the instructions of the Borrower to make good any repair or
loss;
(ii) being proceeds of third party and employers’ liability claims at the instructions of the
Borrower for payment to the person to whom liability is due unless the claim has been
previously settled by the Borrower, in which case the proceeds shall be deposited in the
Trust and Retention Account;
(iii) being proceeds of liquidated ‘damages under the EPC Contract at the instructions of the
Borrower to pay damages payable under the Power Purchase Agreement or other Project
Contracts as a result of events which gave rise to liquidated damages;
(vi) being proceeds of liquidated damages under the Fuel Supply Agreement to pay damages
payable under the Power Purchase Agreement or other Project Contracts as a result of
events which gave rise to liquidated damages; and
(v) to the extent of any surplus remaining after the application of funds as provided in (i) to (iv)
above, to the extent Required Balances have not been I attained, at ,the option of the
Lenders to prepay the Loans or retain the surplus In the Trust and Retention, Account,
provided that if the Required Balances have already been attained, the surplus shall be
transferred to the Trust and Retention Account.
10. Currency Conversion
For the purposes of ensuring that the proceeds of any withdrawal made hereunder from the Trust
and Retention Account are denominated in the currency in which the same are to be applied
hereunder, the Borrower shall instruct the Account Banks to convert the amount of any such
withdrawal from the currency in which the same is denominated into the currency in which the
proceeds thereof are to be applied at the then appricable exchange rate offered by the Account
Bank in the normal course of its business or to transfer such withdrawal to any other banking
institution selected by the Borrower for the sale or purchase of currency, in accordance with
applicable approvals from the Reserve Bank of India from time to time. If the conversion is made
prior to the relevant withdrawal date, the Account Banks shall retain the funds so converted in a

Rupee or Dollar subaccount maintained in connection with such Account or, if no such sub-
account is required to be so maintained, a sub-account in the relevant currency established for

such purpose:
Provided that any amounts payable by MSEB required to be converted into Dollars to meet Dollar
obligations shall be converted into Dollars promptly after deposit into the Trust and Retention
Account in accordance with this Agreement.
Any currency conversion by the Borrower shall be in accordance with the approval of the Reserve
Bank of India.
11. Authorised Investments
11. 1 Power to invest
The Account Banks shall invest in Authorised Investments on the instructions of the Borrower,
subject as provided in this Agreement, from such part of the amounts standing to the credit of any
of the Trust and Retention Account. Section 20 of the Indian Trusts Act, 1882 shall not apply to
investments of amounts in the Trust and Retention Accounts.
11.2 Procedure for investments
11.2.1 All Authorised Investments shall be made and/or realised by the Account Banks in
accordance with the Borrower’s instructions.
11.2.2 All documents of title or other documentary evidence of ownership with respect to
Authorised Investments made out of any Account will be held in the custody of the Account Bank

under the name and for the account of the Borrower.
11. 3 Realisations
Upon the realisation of any investment made under this Section, the proceeds of realisation shall
immediately be credited to the relevant Account by the Account Banks or immediately invested in
another Authorised Investment in accordance with the Borrower’s instructions.
11.4 Mandatory realisations
In the event, that the Borrower becomes aware that any Authorised Investment has ceased to be
an Authorised Investment, the Borrower shall immediately instruct the Account Banks on a best
efforts basis to realise such Authorised Investment on its maturity date or earlier if so instructed
by the Borrower.
11.5 Accounts Include Investments
Any reference in this Agreement to the balance standing to the credit of an Account
shall be deemed to include a reference to the principal and interest accrued thereon of
Authorised Investments in which all or part of such balance is invested.
11.6 Interest on Investments
Except as otherwise described herein, any interest or other income paid in respect of Authorised
Investments shall be paid to the Trust and Retention Account.
11. 7 Enforcement notice
On receipt of an Enforcement Notice from the Security Trustee/Lead Institution, the Account
Banks shall realise the Authorised Investments, whether such investments have matured or not,
on a best efforts basis and apply the proceeds as directed by the Security Trustee/Lead Institution
(who shall act in accordance with the Security Documents).
12. Withdrawals following event of default
12.1 Events of default
If the Security Trustee/Lead Institution notifies the Account Banks that an Event of Default has
occurred, and is continuing, then, until such time as the Security Trustee/ Lead Institution has
notified the Account Banks that the. Event of Default has been cured or waived under the relevant
Loan Agreements and/or the Guarantee Agreements only upon receipt of Instructions from the
Security Trustee/Lead Institution the Account Banks shall act and make withdrawals from the
Accounts In accordance with the instructions of the Security Trustee/Lead Institution.
12.2 Enforcement notices
The Account Banks, at any time after the notification to them by the Security Trustee/ Lead
Institution of the occurrence of an Enforcement Notice and until such time as it is notified by the
Security Trustee/Lead Institution that such Enforcement Notice has been revoked by the Security
Trustee/Lead Institution, shall:
(A) not be obliged to act on the instructions of the Borrower pursuant to this Agreement in
relation to any sums at such time standing to the credit of the Accounts except with the
prior written consent of the Security Trustee/Lead Institution;
(B) be entitled to pay to the Security Trustee/Lead Institution any sums standing to the credit
of the Accounts for application by the Security Trustee/Lead Institution in or towards the
payment and discharge of any amounts owing to the.Lenders under the Financing
Documents in accordance with the Security Documents;
(C) not honour any cheques or other payment instructions of the Borrower without the consent
of the Security Trustee/Lead Institution.
Upon an Enforcement Notice, the Borrower undertakes not to issue any cheque or payment
instructions, to the, Account Banks without the consent of the Security Trustee/ Lead Institution.

13. Account banks provisions
13.1 The Account Banks and the Lenders
The Borrower hereby appoints the Account Banks to act as trustee for the Security Trustee/Lead
Institution and the Borrower in connection herewith, and authorises the Account Banks to exercise
such rights, powers, authorities and discretions as are specifically delegated to the Account
Banks by the terms hereof, together with all such rights, powers, authorities and discretions as
are reasonably incidental hereto, and the Account Banks accept such appointment pursuant to
the terms hereof.
13.2 Particular Duties of the Account Bank
The Account Bank:
(A) may, in the absence of bad faith or gross negligence on its part, rely as to any matters of
fact which might reasonably be expected to be within the knowledge of the Borrower upon
a certificate signed by or on behalf of the Borrower;
(B) may, in the absence of bad faith or gross negligence on its part, rely upon the authenticity
of any communication or documents believed by it to be authentic;
(C) shall, within 5 business days after receipt, deliver a copy to the Security Trustee/ Lead
Institution of any notice or document received by the Account Banks in their capacity as
Account Banks from the Borrower -or any other person hereunder or in connection
herewith; and
(D) shall, within 5 business days after receipt, deliver a copy tothe Borrower of any notice or
document received by the Account Banks from the Security Trustee/ Lead Institution or
any of the Lenders in connection herewith..
13.3 Segregation of Funds
Monies and other property received by the Account Banks under this Agreement shall, until used
or applied in, accordance with this, Agreement, be hold in trust for, the purposes for which they
were received and shall be segregated from other funds and property of the Account Banks.
13.4 Termination
13.4.1 This Agreement shall remain in full force and effect so long as, amounts remain
outstanding from the Borrower under the Financing Plan, unless terminated earlier by the mutual
consent of the parties or otherwise in accordance with the provisions of this Section by written
notice from the Security Trustee/Lead Institution to the Account Banks.
13.4.2 The Borrower may, by not less than 45 days prior notice to the Account Bank(s) and the
Security Trustee/Lead Institution, terminate this Agreement and appoint one or more Account
Banks, provided that the new Account Bank(s) War& acceptable to the Security Trustee/Lead
Institution and arrangements are made satisfactory to the Security Trustee/Lead Institution for
transfer of amounts deposited in the Accounts to new Accounts established with the successor
Account Bank(a).
13.4.3 The Account Banks shall be entitled to terminate this Agreement if the Borrower fails to
comply with any of its material obligations to the Account Banks under this Agreement and fails to
remedy the failure within 45 days after receipt of notice thereof from the Account Banks to the
Borrower and the Security Trustee/Lead Institution, provided the Borrower appoints new Account
Banks acceptable to the Security Trustee/ Lead Institution and arrangements are made
satisfactory to the Security Trustee/Lead Institution for transfer of amounts deposited in the
Accounts to now Accounts established with successor Account Banks.
13.5 Fees
The Borrower shall pay the Account Banks fees in an amount and at such times as may be
agreed between the Account Banks and the Borrower.
13.6 Books and Records

The Borrower authorises the Account Banks to give the Security Trustee/Lead Institution
unrestricted access to review the books and records of the Account Banks, subject to restrictions
in law and right of confidentiality of the Account Banks. The Borrower irrevocably grants the
Security Trustee/Lead Institution access to review the books and records of the Trust and
Retention Account and irrevocably waives any right of confidentiality, which may exist in respect
of such books and records to the Security Trustee/Lead Institution.
13.7 Statement of Investments
Upon the request of the Security Trustee/Lead -Institution, not later than 5 business days after the
end of any calendar month, the Borrower will deliver to the Lenders a schedule of investments
acquired or disposed off during that month in respect of the Trust and Retention Agreement, in
such detail as the Lenders may reasonably require.
Xcp.df
13.8 Notice of Breach
The Account Banks undertake to the Security Trustee/Lead Institution that It shall notify the
Security Trustee/Lead Institution of any breach by the Borrower (to the best of its knowledge) of
the provisions of this Agreement.
14. TRA defaults
If the Borrower is in breach of. any of its obligations under this Agreement and, following notice of
default from the Security Trustee/Lead Institution, falls to remedy the same:
(A) in the case of a failure to deposit funds received by the Borrower in the appropriate
Account in accordance with this Agreement, by depositing the same in such appropriate
Account within five business days of receipt of such notice;
(B) in the case of a breach consisting of causing the Account Banks to transfer funds to any
Account in breach of the terms of this Agreement, by depositing the relevant funds in the
Account in which such transfer should have been made (or, in the case of a transfer to the
Trust and Retention Account, by requesting the Security Trustee/Lead Institution to
authorise the transfer of amounts incorrectly deposited in such Account to the Account to
which the transfer should have been made) within five business days of receipt of such
notice;
(C) in the case of a breach of the Borrower’s obligations under section 12, by instructing the
Account Banks to realise any investment made in, breach of section 12 within five
business days of receipt of such notice;
(D) in case the Average Debt Service Coverage Ratio is less than 1.2; or
(E) (E) in the case of any other breach, within 30 days of suc
(F) (F) h notice; such default shall be deemed to be a “TRA Default “, and the
Security Trustee/Lead Institution shall promptly authorlse the Account Banks to make
transfers required pursuant to paragraph (B) above.
15. Dividends
If there has not occurred an (i) Event of Default, or (ii) a TRA Default and if the Required Balance
in the Debt Service Reserve Accounts, the Overhaul Reserve Account and the Current Debt
Service Accounts is in compliance with the amount specified in this Agreement, or (iii) there is no
claim pending against the Borrower which has not been contested by the Borrower or provided for
by means of a reserve in the Trust and Retention Account, and (iv) the Security Trustee/Lead
Institution is satisfied that amounts in the Trust and Retention Account are adequate to meet the
Operating Costs in accordance with the Annual Operating Budget for the month in which dividend
is proposed to be declared, then the Security Trustee/Lead Institution shall allow the Borrower to
pay the maximum dividend permitted under law, provided the Average Debt Service Coverage
Ratio for the four calendar quarters Immediately prior to, the proposed dividend payment date and
the four calendar quarters subsequent thereto, Including the quarter in which the dividend is
proposed to be paid, Is 1.4 or greater provided that the calculation of the Average Debt Service
Coverage Ratio shall be subject to the prior written approval of the Security Trustee/Lead
Institution.
16. Representation and warranties of the account bank and the Borrower

Each of the Account Banks and the Borrower represent and warrant. that, it is duly organised and
validly existing under the laws of India, with power to enter into this Agreement and tax exercise
its rights and perform its obligations hereunder and has taken all corporate and other actions
required for the execution of this Agreement and the performance of its obligations hereunder.
17. Miscellaneous
17.1 Closure of Accounts
The Account Banks shall, at the request of the Borrower made on or after the payment by the
Borrower of all outstanding amounts under the Loan Agreements and Guarantee Agreements (for
this purpose, excluding the ADB Loan Agreement) and the Guarantee Agreements as confirmed
by the Security Trustee/Lead Institution, close the Accounts and pay any amount standing to the
credit thereof to the Borrower.
17.2 Restriction on Assignment
Save as provided in section 13.4, neither the Borrower, the Security Trustee/Lead Institution nor
the Account Banks shall assign or transfer any part of their respective rights or obligations under
this Agreement without the prior consent of the other, provided that the Security Trustee/Lead
Institution may assign or transfer its rights and obligations to a successor Security Trustee/Lead
Institution, with the consent of the Borrower (which shall not be unreasonably withheld) and this
section 17.2 shall not prevent any Lender from assigning or transferring its rights under the Loan
Agreements and the Guarantee Agreements, in accordance with the terms thereof.
17.3 Successors and assignors
This Agreement shall be binding on and shall Inure to the benefit of the Parties and their
respective successors and permitted assigns.
17.4 No set off
The Account Banks agree not to claim or exercise any right of set off, banker’s lien or other right
or remedy with respect to amounts standing to the credit of the Trust and Retention Accounts. For
the avoidance of doubt, it is declared by the Account Banks that the monies and properties held
by the Account Banks shall not be considered as part of the assets of the Account Banks and,
being trust property, shall in the case of a bankruptcy or liquidation of the Account Banks be
wholly excluded from the assets of the Account Banks in such bankruptcy or liquidation.
17.5 Notices
17.5.1 All notices or other communications to be given or made under this Agreement shall be in
writing and shall either be delivered personally or sent by courier, registered or certified mail or
facsimile. The address for service of each Party and its facsimile number is set out under its
name on the signature pages hereof. All notices shall be effective upon actual receipt, save that
where a notice is transmitted by facsimile and is received after 5.30 p.m. on a business day or on
a day that is not a business day, such notice shall be deemed to be received on the first business
day following the date of actual receipt. Without prejudice to the foregoing, a Party giving or
making a notice or communication by facsimile, shall promptly deliver a copy of such notice or
communication personally, by courier or mail to the addressee of such notice or communication.
17.5.2 Any Party may by notice change the addresses and/or addresses to which such notices
and communications to it are to be delivered or mailed. Such change shall be effective when all
the Parties have written notice of it.
17.6 Waiver
Failure by any Party at any time to enforce any provision of this Agreement or to require
performance by the other Parties of any provision of this Agreement, shall not be construed as a
waiver of such provision and shall not affect the validity of this Agreement or any part of it or the
right of the relevant Party, to enforce any provision in accordance with its terms.
17.7 Severability

If any condition, Section or provision of this Agreement not being of a fundamental nature is held
to be illegal or unenforceable, the validity or enforceability of the remainder of this Agreement
shall not be affected thereby.
17.8 Amendments
No amendment to this Agreement shall be binding unless in writing and signed by the duly
authorised representatives of the Parties.
17.9 Governing law
This Agreement shall be governed by and construed in accordance with Indian law.
17. 10 Regulatory approvals
Each of the Account Banks shall use its best efforts to procure and shall thereafter, maintain and
comply with all regulatory approvals required for it, to establish and operate the Accounts. Each of
the Account, Banks represent and warrant to the Borrower that, it is not aware of any reason why
such regulatory approvals will not be ordinarily granted to the Account Bank.
17.11 Notification of balances
Within 7 days following the end of each calendar monthly reporting date, the Account Banks shall
notify the Security Trustee/Lead Institution of the respective balances in the Accounts a statement
of the deposits into and payment out of the Accounts, as at the close of business of such calendar
month.
IN WITNESS whereof the Borrower has caused its Common Seal to be affixed hereto and to a
duplicate hereof on the date first above written and the Account Banks and the Security
Trustee/Lead Institution have caused the same and the said duplicate to be executed by the hand
of an authorised official.
SIGNED AND DELIVERED by the within named ABC BANK by the hand of……………. an
authorized official of the Account Bank
Address for notice
ABC Bank
Branch
Fax No.
SIGNED AND DELIVERED by the within named THE GHI BANK LIMITED by the hand
of……………….an authorised official of the Account Bank
Address for notice
GHI Bank
SIGNED AND DELIVERED by THE XYZ FINANCE COMPANY LIMITED within named Security
Trustee by the hand of……………….an authorised. Official of the Security Trustee/Lead Institution
acting as trustee for the Lenders.
Address for notice
The XYZ Finance Company Ltd.
………………………………….
…………………………………..
Mumbai Fax No.

THE COMMON SEAL of ABC
POWER GENERATION COMPANY LIMITED pursuant to the Resolution of its Board of Directors
passed in that………………behalf on the day of…………..2001 hereunto been affixed in
the presence of …………………… Director and …………..Secretary who have signed these
presents in token thereof
Address for notice
………………….
…………………..

…………………..

ANNEXURE1

FORM OF CONSTRUCTION, COSTS BUDGET

The Construction Costs Budget may be amended by mutual agreement of the Borrower and the
Security Trustee/Lead Institution.

ANNEXURE2

FORM OF OPERATING BUDGET

The Operating Budget may be amended by mutual agreement of the Borrower and the Security
Trustee/Lead Institution.

ANNEXURE3
OPERATING PROCEDURES

The Operating Procedures may be amended by agreement of the Borrower, the Security
Trustee/Lead Institution and the Account Banks.