TRUST AND RETENTION AGREEMENT
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
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(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)